Russians draw lessons from the Chilean pension system By Marta Sánchez [La Tercera, 7 December 1997] "Russians only know Chilean wines and juices," Russian Deputy Prime Minister Boris Nemtzov told La Tercera. The high-level official of only 38 years of age and the third person in Russia’s chain of command traveled to Chile this weekend for a very special reason: to learn at the source the Chilean pension system to apply it in his country. There the state pays around $2 billion annually to over 36 million Russian pensioners. That is precisely the reason the authorities in that country have to reform the social security system in January at the latest. "In December or January we must make the decision and there is a heated debate in Russia on whether the private system, which works everywhere, is good or bad [for Russia]," pointed out Russia’s Deputy Prime Minister, Boris Nemtzov. He is nonetheless convinced that the best retirement system for his country is the Chilean system. -Why did you choose the Chilean system? "Because the social security system now in place in Russia is the same Chile had until the 1980s. That is to say, it is 100 percent government-run and we can take advantage of the [Chilean] experience to achieve an adequate transition between the two systems." -In Chile the system is completely private. Will you privatize the whole system in Russia? "I believe there will be a transition period during which the state system would be phased out and the private system would be introduced gradually, just as you did in your country. Perhaps we would maintain a safety net as insurance, in the event that we have to cover expenditures before the new system consolidates." -What other issues are you interested in reviewing in your economic relations with Chile? "It is very important to us to strengthen our economic ties with Chile, because those ties are unfortunately very weak, especially as they relate to trade and investment. But without a doubt our goal is to be able to apply the Chilean pension system. Russia could be the first [European] country to apply it."