And I want to greet Sebastián Claro, the new Board member of the Bank, who I am sure will quickly be immersed in the spirit prevailing in this institution. I believe that everyone here today share a legitimate pride because of the place this Bank has achieved both in the Chilean society and at the world level. Let me tell you what happened to me four years and seven months ago, when President Lagos asked me if it would be a problem to me to be appointed Board member and Governor of the Central Bank for such limited period, which was the remaining of the term of my predecessor, Mr. Carlos Massad. I replied that it was not a problem, because it gave me time enough to propose and develop an agenda. It is no secret that I came to an institution that was living a crisis. My predecessor, in an act of great integrity, had chosen to resign in order to avoid the criticism that was building up against the Bank from affecting its institutional capital irreparably. I was aware then that, by accepting the post, I was assuming an enormous responsibility, which consisted essentially in protecting and strengthening its institutional capital. It was, therefore, a major task, that started precisely by introducing policies of riskmanagement, transparency and efficiency that would protect the Bank’s institutionality and autonomy. In global terms, it was tantamount to placing the Central Bank at the same level in management as it was in monetary and financial policy matters.

Technological changes, increased demands for stable supplies and intensified international competition have made enterprises in many industries  ever more vulnerable to even short operational disruptions. The employers’ ability and willingness to take on open labour conflicts have therefore diminished. On the other hand, corporate boards and management are responsible for decisions on expansions, closures, rationalisation, location and workforce increases. Unions have little direct influence on these matters. If company costs increase, either productivity must be improved, production closed or relocated to another country. This is the companies’ arena. Their decisions concerning operations, investment and location are in turn determined by the required rate of return that owners set to keep their capital in the company. Under these operating parameters, developments in labour costs essentially reflect employees’ and their organisations’ assessment of the trade-off between real wage growth and employment. These organisations cannot assume that others can safeguard their members’ jobs when they determine how high pay increases should be. The pay increases for white-collar workers in the business and financial sector and academics in the public sector have been particularly high. For a long period, this mirrored the high wage growth for liberal professions, consultancy firms, law firms and the IT industry. However, wage growth for whitecollar workers and academics appears to be holding up even with weaker labour market conditions for these groups. In many places in our country, public sector wages are higher than the level that can be sustained by local businesses in a less favourable economic environment.