Chile's new government

Chile's new government

Running to rebuild a shaken country

Lacking his predecessor's popular touch, Sebastián Piñera (below) and his team of business technocrats will face pressure from Chileans for quick results

Mar 18th 2010 | SANTIAGO | From The Economist print edition

HE HAS always been hyperkinetic. But taking office as Chile's president just 12 days after a devastating earthquake has thrown Sebastián Piñera into a frenzy of activity. No sooner had he been sworn in on March 11th as the country's first elected right-of-centre leader in half a century than he was off on a helicopter tour of the damage from a big aftershock, cancelling lunch with seven visiting Latin American presidents. Having set up an emergency committee under his interior minister to handle the disaster, Mr Piñera is doing much of the work himself, holding cabinet meetings late into the night and making whistle-stop visits to the worst-affected areas in south-central Chile.

He has a big task ahead of him. The ground is still shaking. Parts of the coast have been raised by two metres. The death toll (at around 500) is lower than at first feared. An official in the outgoing government reckons that 150,000 families were made homeless (down from an initial guess of 500,000). Even so, the new team guesses that the earthquake has caused damage to infrastructure, businesses and homes of some $30 billion (a sum equal to around a fifth of GDP), though it will be weeks before an accurate tally is made.

The damage is concentrated in the regions of Maule, Bío-Bío and O'Higgins, all to the south of Santiago. A string of coastal towns and villages were flattened by a tsunami triggered by the quake. They are thick with the stench of rotting fish, thrown ashore by the waves.

Schools and hospitals were destroyed or damaged. In all, some 250,000 people still lack access to primary health care according to the Pan American Health Organisation. The quake coincided with the start of the school year. Pupils from damaged schools are doubling up in others, or will use temporary classrooms. Mr Piñera has given orders that all classes must resume by April 26th.

Water and electricity were quickly restored in most places. All the main roads were made passable within a few days, although some still have temporary bridges. But some minor roads in coastal areas are still blocked or can be used only by light vehicles. Santiago airport is working again, though passengers must use tents because the main terminal building was badly damaged. So was the big fishing port at Talcahuano, in the south, as well as quays in many smaller fishing towns.

As the southern-hemisphere summer turns to autumn, the priority is shelter. A Catholic charity has begun to build emergency housing for 20,000 families. It is basic: small, uninsulated wooden huts without kitchens or bathrooms. How robust they will prove in the winter storms that typically whip south-central Chile is unclear. And another 40,000 more are needed. One local mayor has refused the huts out of fear that they will become permanent shanty towns—something Chile's governments had all but eliminated over the past 25 years of rising prosperity.

The country is far better placed to rebuild itself than it was after the previous big earthquake in 1985, let alone the one in 1960 which was of similar massive force to that of February 27th. Stricter building standards limited the damage. Insurance will cover around a quarter of the total bill, and is mostly reinsured abroad. Mr Piñera can draw on savings of over $11 billion, piled up in an offshore sovereign fund by his fiscally prudent centre-left predecessor, Michelle Bachelet. The government has almost no debt and an investment-grade credit rating. Ordinary Chileans are better able to help each other too: a telethon held earlier this month for the housing charity raised $59m, twice its target.

Chile's big copper mines, which produce around half its total exports, lie north of the quake zone and were unaffected. But many labour-intensive export industries—forestry, fishing, wine and fruit—were hurt. A strong economic recovery, after last year's recession, has been dented, though investment in reconstruction will boost growth by the end of the year.

All this will be a big test for Mr Piñera, a successful businessman whose political skills are relatively unproven. Ms Bachelet's natural empathy with ordinary Chileans meant that she left office with an approval rating of over 80%, even though her government's immediate response to the earthquake was not faultless.

Chileans will look to Mr Piñera for results. His cabinet is stuffed with technocrats, most of them educated at private schools and Santiago's Catholic University. Many have close ties to Chile's main private business groups. Respect for their technical skills and efficiency could easily turn to resentment in a country that has just become poorer and even more socially unequal. The new president had better keep running.

FUENTE: The Economist
Saludos,

 

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