Transcript The Role of National Development Banks: The Case of Chile`s CORFO

THE ROLE OF NATIONAL DEVELOPMENT BANKS:
THE CASE OF CHILE´S CORFO
STEPHANY GRIFFITH-JONES AND MARÍA LUZ MARTÍNEZ SOLA
15 DE SEPTIEMBRE DE 2016
BNDES-CAF-IPD CONFERENCE., RIO DE JANEIRO
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OUTLINE
1. CORFO AT A GLANCE
2. STRUCTURAL TRANSFORMATION
3. INNOVATION AND ENTREPRENEURSHIP
4. GUARANTEES
5. COUNTER-CYCLICAL ROLE
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CHILE´S FINANCIAL MARKET
COMPARATIVE PERSPECTIVE
Credit and Capital Market Size
(% GDP)
160%
140%
120%
100%
80%
60%
135%
123%
79%
40%
51%
20%
68%
28%
0%
Chile
Germany
Domestic Credit to Private Sector % GDP
Brazil
Market Capitalization % GDP
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CORFO AT A GLANCE
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HISTORICAL APPROACH
1939
1940s -1970s
1973 – 1990
CREATION
Chillán earthquake
STATE-OWNED FIRMS:
PRIVATISATIONS
2000s
 Innovation
 Enterpreneurship
2005 - CNIC
 Steel Company – CAP
 Electricity – ENDESA
 Oil - ENAP
 Airline - LAN
1990
 Non-performing loans: 54%
 From first to second-tier bank
 Focus on SMEs
2008/9
Currently
COUNTERCYCLICAL
ROLE
´Chile Transforms´ - 2014:
Focus on Structural Transformation
Selected 10 strategic sectors
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CORFO
DISBURSEMENTS 2015
LOANS
SUBSIDIES
GUARANTEES
U$S 14 MM
U$S 192 MM
U$S 1,267 MM
TOTAL FINANCIAL SUPPORT : U$S 1,473 MM
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CORFO – COMPARATIVE PERSPECTIVE
STOCK 2015
Assets/GDP - CORFO vs BNDES and KfW
13%
15%
14%
14%
14%
13%
BNDES
17%
17%
KfW
17%
19%
19%
15%
CORFO
3%
3%
4%
3%
4%
3%
2010
2011
2012
2013
2014
2015
Source: prepared by the author, based on CORFO, KfW and BNDES reports.
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CORFO – COMPARATIVE PERSPECTIVE
PROFITS
Net Income/Equity - CORFO vs BNDES and KfW
15%
15%
16%
16%
BNDES
20%
-
KfW
-
6%
1%
-23%
CORFO
-4%
2010
2011
0%
17%
12%
13%
13%
4%
28%
15%
1%
-
2012
2013
2014
2015
Source: prepared by the author, based on CORFO, KfW and BNDES reports.
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STRUCTURAL
TRANSFORMATION
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CHILE´S PRODUCTIVITY
CHILE´S ECONOMY COMPLEXITY RANKING - 1964 to 2014
RATE OF GROWTH
TOTAL FACTOR PRODUCTIVITY
Período
TFP Chile
1990 - 1999
2,4
1993 - 1999
1,7
2000 - 2009
0,6
2010 - 2014
0,4
Source: prepared by the author, based on Bitran, 2016
Source: prepared by the author, based on MIT Atlas, Observatory of Economic Compexity
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´CHILE TRANSFORMS´
Source: prepared by the author, based on Bitran, 2016
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OTHER PROGRAMS
 PROFO: promotes associativeness, 786 projects in 2015
 PDP: stimulates local providers and value chains, 2214 projects in 2015
 STRATEGIC NODES: stimulates competitiveness, 255 projects in 2015
 INTEGRATED DEVELOPMENT INITIATIVE: stimulates techological upgrade (mínimum U$S 2,000)
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INNOVATION AND
ENTERPRENEURSHIP
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INNOVATION AND ENTERPRENEURSHIP
INNOVA CHILE
Innovative Firms (%)
2003-2004
37.9%
2005-2006
32.7%
2007-2008
 2015 - 98% increase
- > 80% SMEs
31.0%
2009-2010
19.2%
2011-2012
23.7%
2013-2014
0.0%
 U$S 49 million
 Programs:
16.6%
10.0%
20.0%
30.0%
40.0%
Source: prepared by the author, based on Innovation Survey, Ministry of Economy in Chile
– Seed Capital – 118 beneficiaries 2015
– Start Up Chile – 272 beneficiaries 2015
VENTURE CAPITAL
 2015 – new program of U$S 120 MM
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GUARANTEES
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GUARANTEES
1. IGR – Institutions of Reciprocal Guarantees
 10,111 beneficiaries
 U$S 93 million
2. Guarantee Programs:
FOGAIN (Investments/Working Capital) + COBEX (Export) + PRO-INVESTMENT
 66,000 operations
 U$S 2,000 financial increase
 99% SMEs
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COUNTERCYCLICAL
ROLE
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FINANCIAL CRISES 2008
CHILE INCREASED 15% ITS GOVENERMENT EXPENDITURES
CORFO:

WIDELY RECOGNISED BY ITS COUNTERCYCLICAL ROLE, NOT HAMPERED FOR DEPENDING ON
NATIONAL BUDGET.

DUPLICATED ITS BUDGET FROM U$S 870 IN 2008 TO U$S 1,991 IN 2009

INCREASED ITS GUARANTEE PROGRAMMES BY SEVEN TIMES FROM 2007 TO 2011
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THANKS!
STEPHANY GRIFFITH-JONES AND MARÍA LUZ MARTÍNEZ SOLA
15 DE SEPTIEMBRE DE 2016
BNDES-CAF-IPD CONFERENCE, RIO DE JANEIRO
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