PR Team: Larkspur Communications
Campaign: Chile’s personal pensions scheme
Timescale: November 1995 to May 1996
Budget: Around pounds 12,000 per month for full country image campaign
Memories of Pinochet’s brutal military coup, and subsequent
dictatorship, and the unstability of wider Latin America often eclipse
Chile’s current status as a democracy with the strongest economy in the
region. Larkspur, which has been handling Chile’s UK PR since June 1995,
sought to fly a more up-beat Chilean flag.
To emphasise Chile’s financial credentials and stability.
Larkspur decided to highlight Chile’s private pension scheme. Under the
Administradoras de Fondos de Pensiones or AFPs system, workers pay no
social security tax but have at least ten per cent of their pay credited
to an investment account.
Since their introduction in 1980, around 90 per cent of Chilean workers
have taken out AFPs. Pensions are now 50 to 100 per cent higher than
under the old state-run scheme; dollars 25 billion - equivalent to 40
per cent of Chile’s GNP - has been saved, and largely due to the success
of AFPs, GDP growth has averaged at 6.4 per cent for more than a decade.
Larkspur kicked off the campaign with releases quoting influential
third-parties sanctioning Chile under the theme: Chile, the Switzerland
of Latin America.
To demonstrate this progress to the UK, Labour’s social security team
was then advised about AFPs, leading to requests for further information
from the then Labour social security spokesman Donald Dewar.
Various public policy think tanks were contacted, one of which, the Adam
Smith Institute, was about to publish a report on the UK’s social
security system. The report, commissioned by social security secretary
Peter Lilley, already cited Chile’s model as a possible alternative to
the UK system.
With ASI agreement, Larkspur attended the report’s House of Commons
launch with its own media release. Simultaneously, it contacted Sunday
Telegraph economics editor Bill Jamieson, who based his next column on
how AFPs had transformed the Chilean economy.
Larkspur also arranged meetings between Jamieson and Chilean ministers,
and other key figures - including pension scheme architect Jose Pinera -
to coincide with a trip the journalist was already making to Chile.
Following Jamieson’s piece, which sparked more media coverage, the
social security select committee requested more information. An agency-
arranged visit by Pinera to the UK followed, during which he give
televised evidence to the committee and met Peter Lilley.
Larkspur is now assisting the select committee prior to a fact-finding
visit to Chile.
The pensions scheme gained wide and positive coverage in the quality
press and on TV and radio. It also captured the time and interest, of
politicians from both main parties, including Peter Lilley, think-tanks
and the social security select committee.
By promoting Chile’s innovative private pensions system at a time when a
social security overhaul, and the stakeholder economy, were on the
agenda, Larkspur managed to give the media, and politicians, what they
wanted, when they wanted it.
The spotlight may, of course, have fallen on Chile’s pensions anyway.
Radhika Ajmera, a director of fund managers Abtrust, says Chile has been
seen as a model for Latin America for several years and that the
financial community is aware of the benefits of its pension scheme.
However, Larkspur was, undeniably, fundamental in fuelling this year’s
interest. As the Sunday Telegraph’s Bill Jamieson says: ‘Without the
agency, my article wouldn’t have been written. It’s certainly put Chile
on the map.’