Andres Velasco Interview, from Monocle Magazine

Last fall Chilean Finance Minister Andres Velasco garnered attention for actions that sound paradoxical: he purposely slowed the economic growth of his country. It was a fiscal maneuver that embodied the long-term strategic vision that has been his hallmark, both as a professor at Harvard’s Kennedy School of Government, and at the Finance Ministry, where he’s served on and off since 1990.

Velasco was born in 1960, and left with his family in the mid-1970s, for Los Angeles. He later studied at Yale, and at Columbia for his PhD. Since then, he’s consulted for the IMF, the World Bank, and was Chile’s negotiator for the 1995 NAFTA treaty. In his spare time, he wrote a pair of best-selling novels that featured much football and some heartbreak. On a Sunday evening two weeks ago, Velasco and his wife, Consuela Saavedra, the young anchor for Chilean TV’s evening news, invited Monocle to their home. In a quiet neighborhood, the 1960s low-slung modern, built around a greeny courtyard, was furnished with Saarinen pieces, abstract painting, and an undue number of books for such a minimalist environment. Consuela bustled about, preparing for her first workday since maternity leave. For a moment the minister, wearing shorts and a t-shirt, was left holding the baby.

JSL: You were away from Chile for many years, but you returned to work on the campaign for the 1988 plebiscite.

AV: If there’s one day in my life where I thought the things one did could make a difference, it was that day, when the dictatorship conceded that they had lost the plebiscite, and would have to hold elections and leave power. I’d helped with some of the ads, mostly conducting background research, and on the day of the vote, I was assigned to be in charge of the team of poll-watchers for downtown Santiago.

JSL: Odd, the idea of a vote over the future of a dictatorship.

AV: Odder, for non-Chileans, that a dictatorship, when it loses a vote, decides to accept the result. The armed forces recognized that the cost of turning back would be too great. Another reason they accepted it was they knew that the opposition was conducting a parallel count. An ingenious sampling method was designed Edgardo Engel, and election results were reported to an undisclosed location. By 7 pm we had a preliminary count, well before the government.

JSL: And when you knew the results?

AV: At about midnight, a large group of us who’d been involved in the campaign—young student leaders, activists, etc.-- walked together peacefully down the main avenue across the city. By three in the morning it was joyous, particularly for the exiles who’d come home. We couldn't believe that without a single shot being fired, simply through the ballot box, the dictatorship had been defeated. That campaign was successful mostly because it had courage and wit and a lot of creativity.

JSL: What do you mean by creativity?

AV: A group of us came up with a concept for some ads that at the time was very controversial within the opposition. Our idea was not to confront the dictators, but rather to soothe people's fears, whether fears about retaliation, or fears that things would become unhinged. One powerful ad showed a demonstrator running away from a policeman during a street demonstration. The kid trips, and the policeman raises his club, and as he is about to strike him the video freezes, and a circle appears around the fallen demonstrator, then a voice-over says, “This Chilean wants no more violence.” You think that’s the end of the ad, but the interesting turn came next because then another circle appears around the policeman, and the voice-over adds: “This Chilean doesn't want any more violence either.” It made it seem that we were all on the same side. And it worked.

JSL: Could you speak about Pinochet’s legacy?

AV: Pinochet stopped being a factor in Chilean politics long before he died. Associations with the former dictator tend not to be a source of votes. Observers from abroad tended to overemphasize his continued presence, and the shadow of that legacy.

JSL: What do you make of Milton Freedman’s assertion that the effect of a free economy leads generally to the end of centralized control of society?

AV: Let me say first that under no circumstance were the dictatorship or violence necessary. As to your question--economic growth unleashes many forces, some of which make difficult the maintenance of an authoritarian regime, whether of the left or of the right. Marx himself said that capitalism is a revolutionary force. On that score, Marx, unlike on many others, was right.

JSL: You've been in government and academia for years. Are these roles complementary?

AV: Problems recur across time and geographic boundaries, so it helps to know how they’ve been handled. One way to think about Chile is the following: Small country. Very well-endowed with natural resources. Geographically removed from the largest world markets but with good human skills. In that sense, Chile looks somewhat like the Finland of thirty years ago. One should ask: how did Finland develop so quickly? We saw that Finland fostered interchange between business, particularly high tech-business, and academia. That would be one interesting way forward.

JSL: Can a country's natural resources be a curse?

AV: It’s a problem when your economy is held hostage to their price cycles.

JSL: Is this why you’ve adopted policies that sometimes slow economic growth?

AV: Taking account of the effects of commodity cycles has been a key to our policy. When this government came in, we gathered a committee of experts and asked them their best estimate for the long-term price of copper. The average opinion was $1.21 dollars per pound, while at the time the price was approaching $3.5 per pound. From that we constructed our budget, saying if that is long-term price of copper we should spend that and no more. The rest we would save for those years when the price of copper is below its long-term price. That meant that in the course of 2006 we ran a budget surplus. Recently, the price of copper has fallen, from a peak of almost four, to around two and a half dollars today. Traditionally, you would expect that as the price of copper goes down the Chilean economy would be in trouble, but we can look at the future without fear because we have managed to save a good deal of the 2006 windfall. This is a policy that breaks with two centuries of boom and bust cycles.

JSL: This is your so-called counter-cyclic fiscal policy?

AV: That's another way of phrasing it: when your income is high, you save. When your income is low, because the economy is low, because the price of copper is low, you spend more than you would otherwise to move against the cycle. This stabilizes economic activity and provides for an economy that grows more smoothly during economic fluctuations.

JSL: Why have you put the government savings abroad, in dollars, rather than pesos?

AV: These savings belong to all Chileans, and we want diversification to protect them. We tend to save abroad when the price of copper is high because those are times when the Chilean peso buys quite a few dollars. We bring those savings back to Chile at a time when the price of copper is low because then the US dollar would buy quite a few pesos. This also stabilizes our exchange rate and so safeguards our export potential.

JSL: Would Chile consider adopting the Euro as a reserve currency?

AV: The creation of these reserve funds dates back only to January first of this year, so this is a process that is just beginning. We're not limited to investing in dollars, and there is no one reserve currency.

JSL: Please tell me about Chile’s privatized pension scheme.

AV: Chile has long had a pension system where your employer directs ten percent of your paycheck toward your own individual retirement account. This system has worked well for people with regular jobs in the formal labor market, where deposits into your account are made regularly. A large portion of people over 65 are now well-protected for old age. However, the system leaves too many people outside. Also, fees are too high because competition among pension-fund administrators is too low. All this is under a wide-ranging review.

JSL: Would those concerns apply to a similar scheme the US is considering?

AV: Certainly, but the United States faces the issue of a pay-as-you-go system; namely, when demographics change, the number of people getting pensions goes up and the number of people financing those pensions goes down. Something has to be done. US experts disagree on how imminent a threat this is. Should the solution to the US pension problems have an element of private accounts in it? Why not?

JSL: Are free markets inherently destabilizing to developing countries?

AV: The problem with many of the free market reforms in emerging market countries was that they were sometimes not accompanied by fiscal policies that would be stabilizing, or there were instances of capital flows from abroad that were eventually reversed and so turned out to be destabilizing. One of the challenges in running an emerging market is to show that you can follow market-based policies, and at the same time foster a predictable economic environment. That is precisely why policies such as budget rules, the counter-cyclical fiscal strategy, and surplus savings abroad are so important.

JSL: How does one make trade fair?

AV: Chile sees trade as an opportunity not as a threat. We were, under Pinochet, rather closed to world trade. Today, we are one of the most open economies in the world. This shift in policies has meant that our exports have grown tremendously, creating economic growth and jobs. When I first joined government in 1990, I wrote a speech in which I included the prediction that Chilean exports would someday reach fifteen billion dollars. I was told to go back and revise that figure because it was so large as to be incredible. Some fifteen years later Chilean exports have reached sixty billion dollars.

JSL: There’s no controversy in passing free-trade legislation?

AV: It passes unanimously, because it’s paid off.

JSL: Is there a dream policy you’ve wanted to implement?

AV: Not so much a policy, but many of my generation have a vision of what kind of a country we should build. The most important thing was that democracy be reinstated. Since then, the country has become more prosperous, with more mobility and opportunity than ever. That said, in Chile, who your family is still matters too much. The neighborhood in which you grew up still matters too much. The name of the school to which you went still matters too much. Chile should be a place where effort is rewarded, and everyone has a fair chance.

JSL: You're married to a woman powerful in her own right. How do you find that?

AV: When we walk down the street, many more people recognize her than me.

JSL: How did you and Consuela meet?

AV: I was a guest on her television show. She asked me about the economy, inflation and so forth…

JSL: You talked to her about economics… and that worked?

AV: Perhaps not. I didn’t see for a very long time, except on TV.

JSL: Are you working on another novel?

AV: A novelist friend of mine gave me a little moleskine notebook and I’ve recently taken some notes.

JSL: Do you still get to follow football?

AV: I was once a devoted fan of the University of Chile team. My team has not been doing very well recently, and the demands of the job have limited my visits to the stadium.

JSL: But at least Chile’s wine industry is doing well.

AV: Foreign sales in particular have flourished. It’s a good example of how foreign trade, and investment of foreign capital and expertise, can work for the benefit of a local industry.

JSL: We mentioned that you were away from your country for many years…

AV: I was away from the country for many years, because one Friday… August 6, 1976… as I was coming out of a football game at school, someone told me my father had been kidnapped. Chile, then, was a dangerous place. My father was a prominent lawyer and academic, and head of the Social Democratic Party. After the coup, he became very active in the defense of people who’d been arrested. In June of 1976, some foreign delegations were convening in Chile, and he arranged to have a say among them. He and some other lawyers provided the visiting foreign ministers with evidence of killings and torture. This, as you can imagine, caused quite an uproar. Soon after the foreign ministers left, my father was arrested, and taken illegally to Argentina. Argentina, then, under that regime, was not a good place for someone who’d been arrested by the Pinochet government. Somehow, he was smuggled into the Venezuelan embassy, left Argentina on a Venezuelan plane, and eventually made his way to Los Angeles.

JSL: What an awful time. That feels far away.

AV: This is a country with a deeply-rooted tradition of electoral politics. When I was a little boy, on election day, my father would put me on his shoulders and take me to vote. That was part of life here. You go, and even if it's hot, or even if it's cold, you stand in line and you vote. There's been concern recently about why voting has gone down from 95 to more recently 80-something vote, which is still very high. Election day is always a Sunday. The country stops and that’s all you talk about. They’re typically in December, which is early summer here, so the weather's nice, just like today. Some people put on a barbecue, and everyone pulls out their TV, and while you grill your fish, you watch the election results as if it were a sporting event. My father died in 2001, and one of the last things we did together was, when the election came, he said, “Take me to vote.” I wheeled him out, pushed his wheelchair to the school where voting always takes place, and stood outside the booth while he cast his ballot. That's the essence of this country. And that's why it was such a painful shock, at a time when we were the only country in Latin America with a democracy, a country with a democratic tradition stretching back almost two hundred years, to have that taken away… taken away for seventeen years. If you're Chilean that's the one thing that you're allowed to get teary-eyed about.

Interview by James Scott Linville, January 2007. An abbreviated version of this appeared in the debut issue of Monocle magazine.

TMP interview with Consuela Saavedra

Consuela Saavedra is the anchor for the evening news for Chilean public television, and wife of Finance Minister Andres Velasco. At the time of the interview, late January, she was on her last evening of maternity leave following the birth of her second daughter.

JL: Tomorrow you return to work. How long were you away?

CS: We have very long maternity leaves in Chile—eighteen weeks. Six weeks before, and twelve after, standard, and I enjoyed it very much. Until then that I’d thought that maternity leaves were too long, a burden for the system. Having just had one I think it's a very good idea.

JL: Who funds the leaves?

CS: Generally, the public system subsidizes them, up to a certain amount, and then it's up to one’s employer to provide additional subsidies.

JL: Michelle Bachelet has been president for more than a year now. Was it surprising to people for a woman to be elected? Was the country simply ready for that?

CS: It was a very particular phenomenon. She became a massive figure, everybody loved her and everyone was talking about her; but the coalition actually had two women competing for the post. She hadn’t had any traditional political career at all. The other half of the coalition decided to put up another woman to compete to see if they could win too, and the other candidate had been in politics for longer, was more traditional. But the first election of a woman wasn't a process as much as a leap. Perhaps people were tired of traditional politicians.

JL: Remarkable… but not controversial?

CS: Everyone talked about it, but no. Interestingly, to compete with a woman candidate the right-wing parties put up a businessman who was supposedly very in touch with people; in a sense not a traditional political candidate either. That election was a different kind of political theater.

JL: How did you and Andres meet?

CS: We had friends in common but the first time we actually met was on TV during an interview.

JL: Discussing?

CS: Inflation, the price of lettuces and tomatoes. It was an interview about economics for a current events program. He was this newly-appointed Harvard professor, some kind of the golden boy, and I had to talk with him about macroeconomics and microeconomics.

JL: For the benefit of other economists, would a discussion of macroeconomics or microeconomics be a better topic in such a situation?

CS: It wasn’t a date, and we didn’t see each other again for years… but I’d say microeconomics definitely, it’s more fun. That said, Andres’s specialty is macro.

JL: Andres tells me you're more recognized here than he is.

CS: Well, I've been on TV here in Chile since '95. My first job, as anchor, was in 1995 at a new TV station for young people, called Rock and Pop. It was fun, but an economical disaster. All of the people who worked there were very close friends, and all are still in the media, now doing fine. Did Andres not tell you that when he went to the Central Market a while ago, someone did recognize him. The man insisted he’d seen him on a certain soap opera.

JL: Did you ever have a chance to interview Pinochet?

CS: Unfortunately not. I tried very hard.

JL: And you were on maternity leave when he died.

CS: The big story. All those years I covered him. I’d even traveled to London when he was arrested, and covered the extradition trial. It would have actually been illegal for me to go to work during my maternity leave to cover his funeral, so I had to sit still and watch it on TV. Of course, I go back to work tomorrow, and now we’re waiting for Fidel to die. News people, we’re all the time waiting for someone to die.

JL: Chile is doing well. Does that make things less interesting for journalists?

CS: For journalists? We can find stuff everywhere.

JL: Is it fair to say that the better job he and his colleagues in the government do, the more challenging it becomes for you journalists?

CS: Exactly right.

Interview by James Scott Linville

Rugby, Husbands, Paris, etc... by Janine di Giovanni

… a recent missive from TMP's Paris-based friend and correspondent…

A few months ago, my husband came home and calmly announced: "It's the rugby world cup this year so you won't see me for a few months."
Whatever. Rugby, like most sports, means nothing to me. I grew up in a household of four brothers, all athletes, and a father who was a track and field star. I was, and am, a terrible athlete. The worse tennis player, a pathetic ice skater, a mediocre skier, a panting runner.
More important, I hate sports on television. The racket of my brothers crammed in a room watching The Super Bowl left scars. All that testosterone turned me into a bookworm who hid in the kitchen baking cookies with my mother.
There are many reasons men and women are different species, and this is one of them. Why would anyone sit in front of a box watching bulky men kick around a ball when you can read a good book, take a walk or lie in the bath?
And so, it was my karmic fate to marry a man who was the French equivalent of my brothers. There is not an ounce of feminine yin in him, not a touch of metro sexual. And Rugby is the most male of all sports. It is, as one male friend (gay) told me, "American football without padding."
I did not realise how serious my husband was about the rugby until a few weeks after his declaration, when he said he was leaving for New Zealand. He was going to film a mythic group of men called the All Blacks for about three weeks. It had been his dream since he was 12 years old and a budding rugby player in Burgundy. His father took him to Paris to see the All Blacks.
"They are masters," he says in the same reverent voice he talks about the Cohen brother films or the trumpet player Lee Morgan.
We do not have a conventional marriage, or life, for that matter, so I did not complain, and off he went for three weeks. He packed his cameras and left whistling for the airport. I don't think, aside from the day we got married (I like to think) I have ever been so happy.
"Do you understand what this means?" he said. "it's the ALL BLACKS."
What is weird is that my husband is a journalist like me who usually reports foreign affairs and conflicts for a major French television network. He was the Africa correspondent for years and is more at home in a coup d'etat than interviewing rugby stars.
A few months ago, he interviewed Mohammed Ahmedinejad, the Iranian president who is impossible to get an interview with. He called me from Teheran totally blasé.
But the All Blacks, no, that to him was a real score, more important than Iran building a nucelar weapon. Even their name, dark and sinister boggles my mind. My husband shows me a film of them doing something called The Haka. It’s an aggressively fierce dance meant the opposing team. They remind me of the monsters in my son’s book WHERE THE WILD THINGS ARE.
It was all so weird that I did not believe Bruno had really gone half way round the world to meet them until he started calling me from Auckland.
When he came back, he had ALL BLACK t-shirts for my son, and him (not for me, I got some kind of Maori necklace) and they sat together like a different breed watching rugby DVDs and hooting. My son is three.
And so, rugby has divided the males and lone female in my household. And I think I am not the only woman experiencing this. The country is engulfed in Rugby fever. At the Galleries Lafayette, the Harrod's of Paris, there is an evening of Rugby dating planned for single fans so no one feels left out.
And every metro stop I passed today had a pink or purple poster with weird 1960s lettering: PARAMOUR DU RUGBY 1987-2007. Paramour du Rugby? For the love of rugby? Where does all this passion come from? WHAT ABOUT ME?
"Rugby," my wise friend Ariane explained to me when I whined. "is the yuppie sport, the more chic sport. Everyone is following it these days because it's cool. Football is for peasants."
My husband confirmed this, sort of. "It is bobo," he said, using the French term for bohemian beaugoise, which I guess is what people in Notting Hill are (and I guess what we are). "but it also has roots in the LAND." He talked about the roots in the Southwest where Basque players are short, dark and bulky. "REAL MEN," he said.
I try to enlighten myself. In bed, I read Suite Francaises, a weepy romantic novel, while he reads the sports pages of Le Journal du Dimanche. He pointed out that there is a new book I might buy, written by a wife of a rugby player called LE PETIT GUIDE DU RUGBY POUR LES FILLES. "It will help you," he said sweetly.
I am not so sure. Still, as each day goes by I watch him transformed by the excitement of the world cup, into a different being. He even told me that Poilane, the famous French bakery on Rue du Cherche Midi, has a bread baked into a rubgy ball and perhaps I should buy one.
Rugby has also brought out a sexist side to him.
"Can I go with you to a rugby match?" I asked when he left to go to meet his film crew for a "rugby meeting."
"No." he said. "it's not a game for little girls."
I would like to point out that I am 5'8", nearly the same size as him. And before we were married, when we were posted on the same reporting assignments, I was always the one who managed to get further to any front line, much to his annoyance. So much for little girls.
But I do have a secret weapon. He's called Sebastian Chabal, aka The Caveman or The Anesthesiologist (because if he touches you, you're down for the count). All over France, neglected World Cup women have fallen in love with him. He plays for the French team and is beautiful, in a scary, Neanderthal kind of way.
"He's a monster," my husband sneered.
Still, I detect jealousy. Perhaps The Caveman has had the desired effect. My husband asked me out on a romantic date tonite, just the two of us, and no rugby in sight.

Janine Di Giovanni is the author of "The Place at the End of the World" and other books. Posted to TMP by JSL

Chateau Maravenne

... near La Londe, at the western end of the Massif des Maures, is Chateau Maravenne. This past August, late one afternoon, I stumbled upon it by chance when we were looking for a room. We'd spent the day near Cabasson at a beach (rustic, with white sand, and half-empty except for families with sandpails and shovels). Afterward, we decided to stay nearby rather than push on, and so we scanned phone book listings. The Chateau, a mile or two north of a light industrial park, was an old manor house, half-renovated, half shambolic, and set among vineyards. More about those vineyards in a moment.

Yes, they had a room, said Luc, a hulking mustachioed Provencal in shorts and flip-flops.

Was there somewhere we could eat?

He squinted and held up a knife... a paring knife. In his other hand was peach, a spiral of peach-skin hanging down from it.

After stowing our bags in a room upstairs, showering, a moment relaxing on the terrace outside our room, we took one of the half dozen tables in the garden. We ordered a bottle of rose, a product of those vines nearby. Fifteen euros and superb. Photo from my phone of that bottle at the end of the meal posted above. The plan offered bread with olive and anchovy spreads, home-made gravlax with creme fraiche, then osso buco Provencal... with local herbs as well as orange peel, and then tarte tatin. Twenty euros.

The next morning, before departure, browsing down among the wine barrels, we saw a farmer fill up a large plastic container from what looked like a gasoline hose in the wall. Two gallons of red to go.

We'd soon be staying with friends in Plascassier, and so bought them a bottle of the Reserve, twelve euros. That evening our copains kindly opened our gift and shared it out. Our host, after the first taste, pulled a face, as if he wished he'd put it back for himself rather than shared it out immediately.

Very good, he said. Yes, very good.

Retribution by Nicole Burdette

I.

He turned around like Orpheus and fire was everywhere

I can’t remain here he said
Clumsy and hell-bent
He gave her chocolates wrapped in white
And paced in small spaces

It’s a tough racquet – confessing
As a wolf rises in the heart
He won’t escape his father’s sins this time around
Or his brother’s

Walking down hereditary roads reluctant and slow
It’s an incandescence that only blood knows
Distant like he was for all his success and sorrow
He closes his eyes, with their white Irises
There’s hardly a soul left in eyes that blue

He swears he’ll put his hand in the fire for her
He reads the Greeks define truth
As ”what is not forgotten”
And listens to what’s false

Like twigs broken on a trail
A voice distracts him
He says good-bye and - looks back
As the fog lowers on the other side of the world
Plunged into the water, down fast – helpless, lightless
Down an isle of cypress

Trailed by the furies, who so loudly follow him
He begs them to remember;
“I once led sailors to their destination safely
I drown out the temptation of sirens
I knew the seas”

Now across the ocean that reaches far east
He walks across this eternal prairie
And remembers the fruits of the desert; apricots, roses and peaches
And riding in an elevator in Monterey
A dove-drawn picture flooded with memory and cunning desire



II.

At home visitors come home in from the rain
He’s praying for Dutch courage
Standing under a stoic flag
Why is his devotion so numb?

He remembers the night she sent him into a storm
These supposed Eden’s ride like waves under him
Captured by lust and bedeviled by simpatico
He finds he can not hide this anymore than a fugitive
Can hide himself

The scene changes again
Further down – past the volcano
Are oxcarts and dirty, closed gates
The crowds have had the romance beaten out of them
They mill on the cobblestones
Plaintive and damaged

It was never a question of character
He’d always find what was distinguished in what other people overlooked
But this cloud that hovered tonight, boy
Was surely the shadow of the world
The royal palms and bent coconut palms swung and snapped
Only the paper weights – whose use had seemed minimal
Before, decorative at best
now saved all he had left

He usually picked words
And saved them for another time
Words like ambrosia or deterred
At a loss of words so often
He found it best to do the other thing
And chips fall where they may

Like the genetic creasing of a Stetson hat
Dirty and trampled on – a gift from a relative
Then there’s words again
The ones he’d actually put down
And ones he spoke
He even spoke her words sometimes
It was getting hard to know the difference

III.

Old letters just left
To love like that, sloppy, and have it spill over –
To divulge like that and vanish
Letters, in a box, in a closet, in an attic, in the sky
He didn’t like to be buried like that

The forest was not far off but full of erotic suspicion
Better to watch the towering abandonment of the surf
As it piles up on the beach
It’s been a pilgrimage (defined in 1750 as)
A ‘confused voyage of devotion’

He’d not have altitude sickness this time
He’d grown used to the heights
And surrendered to the falls
He knew humanity could not be objective
And that he had survived the waste
And extravagance of his own tolerance

After a lifetime of black dogs – retribution came
Like an obedient rebel
Even the scholar of fainting American meadows
is witness

He stands behind a heavy door
The wild honeysuckle perfume is potent
It drowns out the mixture of passionflowers and orchids
Even the hummingbirds from Brazil
Or the hours in the afternoon playing chess
Against his infant thoughts of locusts and mulberries
Behind the grove of oak and beeches
He’s living a noble lie; the nobility of impulse
Which was always as chaotic as the void surrounding him

His Olympian detachment –
His crudeness worthy of a turbulent sky
He’d have to exercise courtliness to understand savagery
He had loved
Out there among the Dutch elms and mango trees of exile
He knew, as Einstein said, that
“The moon exists even if no one is watching it”

Posted with the author's permission