Andrés Pérez, MPP'15, Fights the Climate Crisis and Inequality in Chile

As a boy growing up in Santiago, Chile, Andrés Pérez loved soccer, a sport that has traditionally held a grip on the Chilean psyche.

He also was a fervent fan of the Chicago Bulls and economics, two slightly more curious passions, except when considering what was happening at the time.

Andrés was barely nine years old in 1990, when Chile became a democracy following 17 years of military rule under Augusto Pinochet. Over the next decade, the nation’s economy experienced what the International Monetary Fund called “vigorous and unprecedented expansion.” During that same period, the Chicago Bulls won six National Basketball Association titles, led by charismatic superstar Michael Jordan.

All of it, taken together, made an impact.

Three decades later, Pérez has become a prominent figure in international financial innovation, playing a crucial role in positioning Chile as a global leader in sustainable finance and leading the team that designed and implemented the country’s robust economic response to the COVID-19 pandemic. He is the 2021 recipient of the Harris School of Public Policy’s Rising Star Award, which acknowledges recent alumni who distinguish themselves early in their career by creating a positive impact in the execution of public policy.

“Yes, I was young,” Pérez, MPP’15, said of his early interest in economics, which included regularly reading The Economist. “But when you’re growing up in a landscape where the city is changing and developing very fast, you witness how this fast-paced growth is having an impact on levels of income and falling levels of poverty. You see the different shades of inequality.

“During the ‘90s,” he said in an interview from Santiago, “you’d turn on the TV and there were specials on how people were getting access to different kinds of goods that significantly improved the livelihoods of households—appliances, color TVs and cars, for example—goods that weren’t available in the past. And those goods were going to be considerably cheaper than they had been in the past.”

Apart from profound change in Chile, China was opening its economy, and joining the World Trade Organization, Pérez recalled.

The local, national, and global socioeconomic dynamics fascinated him, instilling in him a strong desire to help those left out of the rising wave. Studying economics and public policy was a logical pursuit.

At the international school he attended in Santiago, he became aware that University of Chicago-trained economists had significant influence on Chile’s economy in the late 1970s and 1980s. He also knew of the University’s preeminent reputation in economics, demonstrated in part by 32 Nobel laureates in economics having been affiliated with UChicago—the latest, former faculty member David Card, named a Nobel laureate in economics in October.

In addition, a close friend, Victor Lima, MA'96, PhD'01, was finishing his PhD in economics at UChicago and encouraged Pérez to consider the school. Today, Dr. Lima is a Senior Instructional Professor in Economics and the College and Co-Director of Undergraduate Studies in Economics at the University.

But economics wasn’t all that brought Pérez to Chicago and Harris. Michael Jordan’s crew helped nudge the budding economist, too.

“Yes, the Bulls also drew my interest in Chicago,” Pérez said, chuckling. “Unfortunately, I never got to see Michael Jordan play in Chicago.”

The Jordan disappointment aside, however, he did get to fully embrace his academic experience in Chicago.

“The value added at Harris Public Policy was not only the strong analytical foundations that are always present and that characterize Harris,” Pérez said, “but also the diversity of its student body, being able to share experiences with other fellow students from very diverse backgrounds.”

Especially relevant for his career, he added, were the interactions with other students from Latin America who now work in influential positions—some in central banks or directly in the policy arena.

“They’re in Peru, Mexico, Colombia, all across the region,” Pérez said. “But these relationships stretch back to our time as graduate students. That’s something that is very important—not only the theoretical, conceptual foundations that are developed in the classroom, but the relationships formed in the classrooms have developed further since.”

Those experiences are why he routinely encourages friends, acquaintances, and colleagues to pursue graduate studies at his alma mater.

From Boston to Santiago, Chicago, fatherhood and beyond

His journey to Chicago and Harris started in Boston, where he and his brother were born in the early eighties to a mining company executive and a registered nurse. Pérez and his family moved to Chile in the mid-1980s. After deciding as a teenager that UChicago looked to be the best fit, Pérez applied early to the College and was accepted.

He earned his BA in Economics in 2003, then worked for tech importing firm Gasei, based in Santiago, until 2009, when he returned to academia, enrolling in graduate school at Pontifical Catholic University of Chile to study economics. He also completed two years of training to become a Chilean Navy Reserve Officer—his father is a retired Navy captain—and is a Second Lieutenant.

In 2011, Pérez moved to Washington, D.C., where he became advisor to the World Bank Group’s executive director for Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay. A year later it was back to UChicago and Harris.

He earned the Irving B. Harris Fellowship and Becas Chile Scholarship and enrolled in the Booth School of Business in 2013—receiving the Chicago Booth 1898 Scholarship for outstanding academic achievement and exceptional leadership. He completed his MBA studies the same year he finished at Harris.

He also became a father in Chicago. His wife, Begoña, an attorney, gave birth to the couple’s first child, Santiago, in 2014. A daughter, Sofia, arrived in 2016.

After completing his graduate studies at UChicago, Pérez was off to the Federal Reserve Bank in New York, where he worked in international finance and economic policy analysis; then came a return to Chile as a senior economist at the Central Bank of Chile.

His next career move, in 2018, brought him international attention. Green bonds, which raise funds for projects that fight climate change, was the vehicle.

Finding the green way to raise capital

In 2018, Pérez became Head of International Finance for Chile’s Ministry of Finance. The world was—and is—experiencing a global climate crisis, particularly troublesome for Chile, which is especially vulnerable to climate shocks.

Pérez discerned that issuing green bonds, designed by a group of Swedish investors in 2006, could be effective responses to those challenges and another priority: raising significant capital for Chile at a reasonable cost, while the country was managing a fiscal deficit.

“I was convinced that in order for the government to get favorable terms, we had to differentiate ourselves from other peers,” he said. “One way was to issue these bonds.”

He was able to persuade the minister of finance. In 2019 Chile became the first nation in the Americas to issue green bonds, proceeds from which are being used primarily for green transportation initiatives. That issuance led to similar endeavors: issuing social impact bonds, which raise funds for projects with positive social outcomes, and sustainable bonds, defined by NASDAQ as those used “to finance projects that bring clear environmental and socio-economic benefits.”

To date, Chile has issued about US$25.7 billion in the labelled bonds, Pérez said. A total of US$7.7 billion are green bonds; US$16.5 billion are social impact bonds; and US$1.5 billion are sustainable bonds. Labelled bonds represent 24.6 percent of central government debt, one of the highest shares in the world, he added.

They are, he added, “definitely… a success story for several reasons.”

First, the issuance showed that innovative financing to address a pressing societal concern could be achieved with lower borrowing costs, Pérez said. Second, the labelled bonds diversified Chile’s investor base and positioned the country as a leader in international sustainable finance.

The initiatives also showed the path for Chilean corporations and other countries to issue labelled bonds, Pérez noted.

Chile’s labelled bond issuances have garnered nearly a dozen awards from financial organizations and drawn frequent invitations for Pérez to speak to institutions, including the World Bank and Inter-American Development Bank.

Pérez’s role in Chile’s pandemic response also has been viewed favorably.

The economic and financial pieces of the response, which Pérez and his team developed, made cash transfers directly to households, provided state-backed guarantees for commercial loans and protected workers from losing income.

Chile also was very assertive in vaccinating its population and increased spending on its healthcare system.

The Organisation(cq) for Economic Cooperation and Development called the policy response “swift and bold to preserve the economy and cushion an unprecedented shock for… households and firms.”

The results were impressive: Despite a pandemic second wave, Chile’s economic activity in April 2021 had risen 14 percent from a year earlier.

Pérez said the response mitigated a deeper economic downturn, noting that the labor market has recovered faster than most anticipated and that overall damage to the economy appears to be temporary.

“Now is the time to draw lessons and prepare for other crises that will eventually take place,” he said.

Latest career shift: the private sector

In August, Pérez went to work for Banco Itau in Santiago, as chief economist for Chile and Colombia, a position that appealed to him, he said, to see “how decisions are made from a different role” and to broaden his professional experience.

He’s optimistic about the recovery from the pandemic and continued growth of the economies of Chile and Colombia, but sees structural issues, including unacceptably high levels of poverty and inequality.

Financial institutions can play an important role in tackling those challenges, he said. He’s looking forward to finding ways he can work on those interests from this new position.

“Where I’m going to be in five years? Not exactly sure,” he said, “but the drive is going to continue.”

And, Pérez said, he’ll continue persuading friends and colleagues to pursue graduate studies at his alma mater.