Communications tailored to investors, voters seen as vital for Chile

Unrest has dented Chile’s solid country image but not irreversibly – and the right communications strategy will be vital on the road ahead, BNamericas was told.

Chile’s strengths include macroeconomic stability and an investor-friendly environment. Nurtured over the past several decades, these have helped bring billions of dollars into the Andean nation and reduce poverty - and are often highlighted by government officials.  

But following the social unrest that began on October 18, authorities must rethink how they communicate the country’s economic fortunes, Sebastien Leroux, executive director of global brand consultancy FutureBrand’s Chilean office, told BNamericas.   

Tailoring messages to different audiences is vital, he said.

Indeed, the likes of GDP readings and forecasts must be repackaged for citizens so that they are fully aware of how this will impact their day-to-day lives, what it really means for them.

If you do not tailor the message, they are simply macroeconomic figures that do not mean anything to voters, said Leroux.

“And that is the big change that Chile needs to start making,” he said. “How to communicate, from an emotion-based perspective, to the man or woman in the street versus how to communicate in a numeric manner that generates calm among investors. These are two different audiences and it involves handling them differently.”

Leroux spoke to BNamericas following the publication of FutureBrand’s regional country brand report, where Chile is ranked third overall, behind Argentina and Peru.

For Chile, in terms of communicating with investors and other external audiences, providing clarity on its policy response to the issues behind the protests, in a timely manner, is vital to ease concerns, Leroux said.

“Chile still has the opportunity to leverage its track record of being a country that is historically stable - but it is vital that the right measures are taken and future rules are clearly laid out as soon as possible,” Leroux said.

“We have the chance to revert this [weakening indicators] quickly. And it could be an opportunity for Chile to show that it is a country that has really understood the issue of social development and how to develop as a powerful, globalized nation that can stand among any country in the world. Or it could show that the country’s not that well prepared and will remain as a nation in development.”

KEY CHANGES IN THE PIPELINE

Myriad demands have been made during the protests, with the bulk relating to living costs and inequality. In response the government has announced a raft of measures and amended existing bills in congress.  

Among the biggest legislative initiatives is a tax reform bill that has undergone various changes since first submitted in 2018 and which is expected to be approved this month. Meanwhile, senate president Ricardo Lagos Weber has indicated a second reform could follow and that lawmakers would, this half, put current tax exemptions under the microscope. A key aim is helping ensure authorities have a sustainable revenue flow to cover a forecast increase in government expenditure linked to measures designed to combat inequality. Finance minister Ignacio Briones has indicated taxes will eventually have to rise. 

Another key reform in congress concerns the private pensions system - which has come under fire for the small pensions many Chileans receive. Although lawmakers continue to debate the actual details of the reform, changes would likely be introduced gradually and call for employers to start making contributions to both employee pension pots and a state-administered group fund. Home secretary Gonzalo Blumel told press that officials aimed to get the reform through congress this quarter.

And in April, Chileans are due to be asked whether they want a new constitution and, if so, who should draft it - a constituent assembly comprising private citizens chosen in a local election or a mixed body comprising serving members of congress and elected private citizens. If Chileans do vote in favor of a new constitution, they would then need to elect the people who will draft it. Under the agreement struck in congress, a two-thirds majority would be required to approve new articles. 

The final text would be put to a second plebiscite and, if approved, would be in place by the end of 2021.

THE RANKING

Meanwhile, in this year’s FutureBrand Latin America country brand ranking, Argentina retains the top spot, largely thanks to its tourism sector and products.   

Peru’s tourism and heritage are key drivers behind its No. 2 ranking, while quality of life and business potential largely underpin third-place Chile.

Globally, the top ranked country is Japan.

FutureBrand looked at countries’ so-called dimensions of purpose and experience, which encompass the likes of quality of life, business potential, heritage and culture and products and services.

A REGIONAL VIEW

A major challenge for Latin America is upping its game in terms of the dimension of purpose, Leroux said, highlighting the likes of business potential.

“In 2019, and even before the social unrest seen in different countries, we’ve witnessed a downward trend in the dimension of purpose. This is basically because we have a region that is very unstable from a political point of view,” he said.

In 2019, unrest was seen in Chile, Peru, Colombia, Bolivia and Ecuador. Meanwhile regional heavyweights Brazil and Argentina have undergone political shifts, to the right and left, respectively.

Leroux said this has generated uncertainty among the international investment community and dented the region’s image as a whole.