Professor To Lead Chile’s Economy

Chile’s president-elect has chosen a Harvard professor to lead South America’s fourth-largest economy.

Andrés Velasco, the Sumitomo professor of international development at the Kennedy School of Government, will serve as finance minister of Chile under Michelle Bachelet’s new government.

The president-elect appointed Velasco, who is on sabbatical from the Kennedy School, to the cabinet position on Monday.

“It’s very exciting and a tremendous honor,” Velasco said in a phone interview yesterday. “This is going to be a path-breaking government in Chile.”

Bachelet also announced the rest of her cabinet, fulfilling her promise of gender equality by offering half of the posts to women.

Velasco said he was optimistic about the plans of the new Chilean government.

“Dr. Bachelet has a very ambitious agenda and I’m proud to be part of the effort,” Velasco said.

As finance minister, Velasco plans to continue the work of his predecessors, focusing on the budget and fiscal policy, while also taking part in some new initiatives proposed by Bachelet.

The plans Velasco mentioned include revamping the education system by creating universal access to pre-school, reforming labor markets to increase participation in the workforce, and continuing to focus on technological innovation.

"As Dr. Bachelet has said, her government is going to be a mixture of continuity and change,” Velasco said.

Bachelet is the fourth consecutive president from her party, the Concertación. Velasco said he expects her to “not only preserve, but deepen” the achievements of her party.

Those who have worked with Velasco are optimistic that he will be a successful finance minister.

Hariri Professor of International Political Economy Dani Rodrik, who has worked on research projects with Velasco, said that his colleague would be a great asset to the Chilean government.

“I think he is one of those rare people who can combine the world of theory with the messy world of politics, and he’s equally adept at both,” Rodrik said. “I think our loss in this case is a great gain for Chile.”

Rodrik said that, in addition to being a talented economist, Velasco is a gifted novelist. Velasco has published two Spanish-language novels—“Vox Populi,” in 1995, and “Lugares Comunes,” in 2003.

Sebastian “Seba” Brown ’05, who worked with Velasco during Bachelet’s campaign, also praised the incoming finance minister.

“Professor Velasco is young and is one of the leaders of the ‘new generation’ of public servants that Bachelet pledged to incorporate to her government during her campaign,” Brown said. “He has impeccable professional credentials which will give Chilean economic policy a lot of credibility in Chile and abroad.”

Velasco said that his experiences at Harvard will serve him well in Chile.

“I am proud to have been a part of a dream team in the Kennedy School of some of the best economists in the world,” Velasco said. “I learned a lot from my colleagues. I learned a lot from my students.”

As Velasco prepares for his new position, he still holds his Harvard days in high esteem.

“I think my years at Harvard have been extraordinarily good training for the years to come,” Velasco said.

“It’s been two days since my appointment and I’ve been rushing around from government building to government building, but some days I will miss the peace and quiet of the academy and the green parks and the river in Cambridge,” he said.

Velasco, who earned tenure at New York University in 1995, joined Harvard’s faculty a half-decade later.

—Staff writer Claire M. Guehenno can be reached at guehenno@fas.harvard.edu.