CHILEAN RIGHT WING STILL LUKEWARM ON PINERA IN

C O N F I D E N T I A L SANTIAGO 000901 SIPDIS TREASURY FOR DAS BRIAN O'NEILL E.O. 12958: DECL: 10/05/2018 TAGS: ECON EFIN IDB PGOV PREL CI SUBJECT: CHILEAN RIGHT WING STILL LUKEWARM ON PINERA IN 2009; EXPECTS MODEST GAINS IN 2008 MUNICIPAL ELECTIONS REF: SANTIAGO 893 AND PREVIOUS Classified By: Ambassador Paul E. Simons for reasons 1.4 (b and d). -------------- Summary -------------- ¶1. (C) The doctrinaire wing of the center-right Alianza remains undecided as to whether it will give its support in 2009 to the presidential ambition of the opposition coalition's front-running but more moderate Sebastian Pinera. The results of the October 2008 municipal elections, as well as whether the governing Concertacion coalition runs multiple presidential candidates, will help shape its decision. End summary. ¶2. (SBU) The Ambassador and E/Pol Counselor met October 6 with Senator Juan Antonio Coloma, president of the Union Democrata Independiente (UDI),one of two parties (the other being the Renovacion Nacional) that make up the center-right Alianza opposition. The UDI is considered the more doctrinaire of the two parties but, as Coloma noted, the UDI has had to move from seeking to influence policy through standing on ideological principle to the practical reality of adopting positions which can win elections. Coloma was joined by UDI SecGen Senator Victor Perez. -------------- A Shifting Electoral Panorama -------------- ¶3. (C) Coloma believes that the Alianza can cut into the Concertacion's 2004 municipal election edge of 10 percentage points by "two or three points," a modest gain that would augur well for the 2009 presidential elections. As importantly, the Alianza would do well in so-called "emblematic" municipal races such as for mayor of central Santiago, where the Alianza's populist Pablo Zalaquet is neck and neck with the Concertacion's Jaime Ravinet, a former defense minister (and mayor of Santiago). A strong showing for the Alianza in the municipals would signal as well the continued weakening of the Democracia Cristano (DC),the "right wing" of the center-left Concertacion; Coloma predicted the DC would drop to being the third largest party nationwide. ¶4. (C) Coloma said press reports over the previous weekend, wherein former president Ricardo Lagos had declared he would not seek the presidency in 2009 where not as definitive as they seemed. "All ex-presidents want to return to power and Lagos is no different." Lagos believes "he is the Concertacion" and is concerned that the party's reputation - and so his - have suffered over issues such as the Transantiago mass transit debacle. Coloma predicted Lagos may not be a candidate "today" but will accept should Concertacion ask him next year. ¶5. (C) Asked whether the UDI would support the RN's Pinera as the sole Alianza candidate for president in 2009 (Pinera is far and away the leading candidate in all polls),Coloma said the UDI would be "pragmatic." It was yet too early to make that determination. If the Alianza did badly in the municipals (i.e., loses by 10 or more points) then support for Pinera would have to be reevaluated. Likewise, if the Concertacion puts up multiple candidates (i.e, Lagos or OAS SecGen Jose Manuel Insulza from the Socialist party or former president Eduardo Frei or Soledad Alvear (both of the DC)) then the Alianza may do so as well. In all events, Coloma continued, we are "not obsessed" with the question of whether to back Pinera and are not opposed to doing so if circumstances warrant it. (Note: Another UDI heavyweight, Senator Pablo Longuiera, declared the very next day that the RN's recent announcement to run its popular SecGen, Lily Perez, for a Senate seat (against Coloma) in 2009 was a virtual declaration of war, and would almost guarantee that UDI would run its own presidential candidate. End note). -------------- Other Issues -------------- ¶6. (C) Coloma and the Ambassador touched on several other matters, including: -- IDB financing of Transantiago: Coloma and Perez noted that without "substantial redesign" of the troubled Transantiago mass transit reform plan, the Senate is unlikely to approve new funding for the system. Coloma said as well that there is "unhappiness" over the manner in which the IDB's USD 400 million dollar loan to the GOC for Transantiago was handled. Chile's Supreme Court ruled the loan inconstitutional; moreover, given that it was public knowledge the Congress was opposed to a bailout, the loan appears like "interference" in an internal domestic dispute. -- Bolivian Crisis: Coloma expressed his concern over the development of an "axis of countries" which are putting into place "failed policies of the past." Chavez's model was outdated even when he was proposing it ten years ago. The Ambassador noted that Chile's institutions are strong and that we are working closely with the GOC to find ways to promote the Chilean model in the region. -- Policies of an Alianza Government: In response to the Ambassador's query, Coloma said the priorities of an Alianza-led government would be to improve security and eliminate delinquency, implement educational reform, encourage innovation and development of new technologies, and foster the private sector. "We must get away from the notion that ideas germinate (solely) in goverment." -- IPR: The Ambassador stressed the Embassy would continue to press the GOC to improve its record on IPR and expressed his hope Coloma could help move along proposed new copyright legislation now before the Congress. -- ICC: Coloma said he remains opposed to the very concept of an International Criminal Court - "I don't trust international law" - and hinted he would work to keep the GOC's efforts to ratify the Rome Treaty bottled up in the Senate. -------------- Comment -------------- ¶7. (C) The Alianza's historical inability to defeat the Concertacion in national elections stems at least in part from the center-right's failure to unify enthusiastically behind a single candidate. While Coloma did not raise the fact that the RN is now targeting his seat, his lukewarm support for Pinera couldn't have been more obvious. Still, with the UDI having nobody in the wings that registers even in the low single digits, Pinera remains the Alianza's best and probably only hope for ending the Concertacion's twenty year hold on power, a fact the UDI may eventually, if reluctantly, come around to accepting. End comment. SIMONS