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SOUTH
AMERICA |
Chile's New Government
Promises Change, Faces Challenges
SANTIAGO - The government of new Chilean
President Sebastian Pinera, which took
office on Thursday, will have to first focus
on the emergency created by the Feb. 27 8.8-
magnitude earthquake, before fulfilling
Pinera's campaigning promises of boosting
efficiency and creating jobs.
As if to underline the overwhelming
importance of the emergency, a 7.2-magnitude
aftershock struck at 11.41 a.m. local time
Thursday, delaying Pinera's swearing-in
ceremony at the Congress in Chile's central
city Valparaiso. Two other quakes measuring
above 6 on the Richter scale followed within
25 minutes.
Pinera promptly declared a state of
catastrophe for Rancagua, the capital of the
O'Higgins region where the epicenter of
Thursday's major aftershock was located.
Officials there told local radio that a
footbridge had collapsed close to a highway
in the city.
Pinera made his first journey as president
to Rancagua to see the damage caused by the
earthquake there. Pinera's team had
estimated that Chile needs 30 billion
dollars to bounce back from the Feb. 27
quake. Thursday's events can only have added
to that bill.
Chile will be helped by the fact that it was
prepared for such natural disasters and that
its two biggest industries in gross domestic
product (GDP) terms -- copper mining with
16.4 percent of the GDP and financial
services with 16 percent -- are least
affected by the quake, which killed at least
529 people and wrecked 500,000 homes.
The National Copper Corporation of Chile (Codelco)
told media on Thursday that its mines, the
largest in the nation, are largely
untouched. Chile is the world's biggest
copper exporter, with a more-than-10-percent
share of the global market.
Chile also has the advantage of a history of
government frugality. It has 11 billion
dollars saved in a fund established in times
when copper prices were high. The country
can count on its citizens to provide help
too. A telethon organized on Friday and
Saturday last week raised close to 60
million dollars in pledges from citizens,
and the money will go to non-governmental
organizations that provide shelter.
In purchasing power parity terms Chile has
the highest gross domestic product per
capita in Latin America, with 14,300 dollars
per person, according to World Bank data.
Chile was frequented by major earthquakes in
history, which helped the Chilean government
and people to be better prepared for the
disasters. The world's strongest quake ever
recorded, which measured 9.5 on the Richter
scale, occurred in southern Chilean city
Valdivia in 1960. Chile's buildings have
strict construction codes and most of the
cities closest to the epicenter reported few
building collapses, though power and
sanitation services were interrupted.
However, the challenges brought by the
earthquake were still quite grave for
Pinera's government. Billions of dollars is
needed in the relief and reconstruction
efforts, while some industries were also
severely impacted.
A tsunami triggered by the earthquake
destroyed ports and fishing vessels on
Chile's Pacific coast. Fishing represents
only 3 percent of the country's GDP, but the
destruction of ports would have a
far-reaching impact on industries with a
dependence on export and import activities.
Meanwhile, the oil refineries in Bio Bio and
Aconcagua, which produce 380,000 barrels a
day in total, will be out of service for
three months, affecting both state revenues
and downstream industries like chemical
production, which represents nearly 5
percent of the GDP.
As a successful businessman with a personal
wealth of 2 billion dollars, Pinera may be
better prepared for the difficulties that
strike industries, but he will also have to
face lots of social problems. Around 500,000
homes have been destroyed, according to Red
Cross estimates. The southern hemisphere
winter is about to begin and the homeless
people are mostly living in tents and
therefore at the risk of contracting
contagious diseases.
Michelle Bachelet, Pinera's predecessor who
left office on Thursday, has already
launched a vaccination program targeting
hepatitis and started to tackle health
risks. However, the ex- president, also an
epidemiologist, pointed out at a recent
press conference that 13 hospitals in the
country have become unusable after the
quake, while 130 others suffered damage of
varied extent.
The new president also needs to rebuild the
reputation of government agencies in charge
of emergence response and management. The
National Emergency Office (Onemi) has been
fiercely criticized by the public and media
for its slow response, while the Navy-run
Oceanography and Hydrology Office (Osha) has
been accused of failing to warn about the
post-quake tsunami in time. The heads of
both agencies have lost their jobs.
Obviously Pinera has been drawing lessons
from the previous administration. While the
Bachelet government waited four days before
sending in troops to stop rampant mob
looting in the quake- hit city of
Constitucion, Pinera has promised to send
troops to Rancagua and nearby areas as early
as Thursday night should they be needed to
prevent a breakdown of public order. |
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