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Chilean President Michelle Bachelet has defended her administration's reforms to reinvigorate the economy, especially the declining metallurgical and metal-mechanic industrial sector.
At a dinner held by metallurgical and metal-mechanic association Asimet, Bachelet said that the current economic model based on the export of raw materials is suffering from fatigue and impacting the overall economy.
"That's one of the reasons we're proposing changes in Chile," Bachelet said.
Chile's metallurgical sector is experiencing its worst cycle in 20 years. In August, it posted its 22nd consecutive month of negative results.
Production in January-August contracted 11.1% from the previous year, and Asimet president Gastón Lewin said that, if the trend continues, the sector could lose about 20,000 jobs by the end of the 2013-14 period.
Asimet has made numerous calls for the industry to reinvent itself in light of the negative results.
The economy ministry, in charge of a US$1.5bn productivity and innovation agenda unveiled earlier this year, will see a 22% budget increase in 2015 to meet some of the sector's challenges, Bachelet said. The ministry's average increase in the previous four budgets was 2.4%.
Bachelet has also ordered her economic team to review all permitting processes to eliminate red tape.
"We've taken on the challenge of modernizing our productive structure, which hasn't seen any significant changes in 30 years," she said.