CHILE MEDIA REPORT - DECEMBER 16

UNCLAS SANTIAGO 001103 SIPDIS STATE FOR R/MR, I/PP, WHA/BSC, WHA/PDA, INR/IAA E.O. 12958: N/A TAGS: KMDR KPAO PGOV ECON PREL SNAR EFIN CI SUBJECT: CHILE MEDIA REPORT - DECEMBER 16 Lead Stories -------------- ¶1. All dailies highlighted Claudia Serrano's appointment as the new Labor Minister. Dailies also highlighted the Comptroller's warning over the continuous use of emergency funding to finance the Transantiago public transport system. U.S.-Related News -------------- ¶1. The Superintendency of Banks and Financial Institutions has asked local banks to report if they have suffered the effects from fraud committed in the United States by Bernard Madoff. Spanish-owned Banco Santander has reported a US$1.9 million loss. Asked about this case, Finance Minister Andres Velasco said, "It's just one more piece of information of a series of problems regarding transparency and financial market policy in the United States, which we fortunately don't have in Chile" (El Mercurio, conservative, influential newspaper-of-record, circ. 129,000, 12/16; La Segunda, conservative, afternoon, circ. 33,000, 12/15). ¶2. Editorial: "A report leaked to the press this weekend prepared by a federal ad hoc agency... noted that U.S. initiatives to rebuild Iraq amounted to a 'US$100 billion-dollar failure'.... The invasion lost legitimacy when it became evident that there were no weapons of mass destruction in Iraq... no serious post war plan, and when a strong sectarian violence emerged in the absence of a government to impose order.... Launching a unilateral invasion based on justifications that turned out to be false and getting involved in a difficult reconstruction exercise has been a strong blow for the world's primary superpower. It also poses questions about what will happen with this key geopolitical area and what the United States can do to regain its reputation and power after the Iraq adventure launched in 2003" (La Tercera, conservative, independent, circ. 101,000, 12/16). Local -------------- ¶3. President Bachelet will travel to Honduras on February 8 and then to Cuba for the Havana book fair. She will travel with a delegation of opposition and government coalition congressmen and entrepreneurs. Congress already passed the Economic Complementary Agreement that will allow investment in new areas and expand bilateral trade between both countries. At this point, neither country has an accredited ambassador, a situation that should be resolved in January (La Nacion, government-owned, editorially independent, circ. 4,200, 12/16). ¶4. The price of copper on the London Exchange Market (LEM) yesterday closed at US$1.40/lb. Estimates are that for every cent of a dollar that the price of copper drops, Chile ceases to receive US$120 million. The drop in revenues from low copper prices now amounts to US$7.5 billion (El Mercurio, 12/16). ¶5. The Chilean Comptrollers' Office warned the government over the permanent use of a constitutional 2% emergency fund to finance the Transantiago in 2009. First, because it undermines resources set aside for disaster relief, and second, because it is always a risk when a temporary solution turns into a permanent mechanism to cover a deficit (La Tercera, 12/16). ¶6. President Bachelet appointed socialist Claudia Serrano as Labor Minister. "I am a pragmatist and leftists," said Serrano, adding that labor rights and employment are her primary concerns at this point. Luis Schmidt, President of the National Agricultural Society (SNA),believes that Serrano will help revive the private-public sector alliance to be better prepared to face the effects of the international financial crisis. Andres Concha, of the Manufacturers' Association, said the minister should focus on unemployment insurance and making labor laws more flexible. An Entrepreneurial Generation Survey shows that 77% of entrepreneurs and economists alike would like the government to improve labor laws by making the system more flexible in terms of hours. They would also like to have a labor force better prepared to carry out multiple tasks. The overall view is that at this moment in time, it is more important to provide job security and prevent layoffs than to pass initiatives to promote investment (El Mercurio, 12/16). Cuba -------------- ¶7. Article by Andres Oppenheimer on Cuba: "Fifty years after Fidel Castro took power in Cuba, the big question is whether the Cuban revolution was justified and worth the sacrifice. The evidence shows it was clearly not worth it.... ¶8. "A look at the statistics shows that that although Cuba has eradicated poverty... the standard of living is lower and people have less opportunities than five decades ago.... Cuban government estimates is that Cuba's per capita income is US$6,000... but the government refuses to use international standards for this estimate. The same is true regarding the poverty rate.... Cuba blames the U.S. embargo for its economic problem, but... the United States is Cuba's main exporter of food products and many other American products enter the island through third countries.... The island is a giant playland, where everyone has a guaranteed subsistence, but where the government decides where individuals study and where they work and whether they can travel abroad.... The Cuban dictatorship has improved some social indicators, but other Latin American countries have done the same without sacrificing basic civil rights, and at a much lower human cost and suffering by the Cubans (El Mercurio, 12/16). ¶9. A Russian fleet will dock in Havana on December 19 -- the first time that this fleet docks in Cuba since the collapse of the Soviet Union in 1991 (La Tercera, 12/16). SIMONS