CHILE MEDIA REPORT - JULY 10

UNCLAS SANTIAGO 000643

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 - JULY 10

Leading Story
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1. The Central Bank lowered the interest rate from 0.75 to 0.5%,
which will also lower the cost of consumer loans and mortgages. The
bank will maintain this rate for at least six months.

Chile-Russia Military
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2. Defense Minister Francis Vidal confirmed there have been talks
with his Russian counterpart on the eventual acquisition of MI17
helicopters. Vidal said, however, "There is no signed contract,
only an evaluation" with Russia (La Nacion, government-owned,
7/10).

Chile-U.S.
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3. Foreign Affairs Minister Mariano Fernandez wrote the Senator Max
Baucus a letter and Ambassador Goni met with Department of State and
Commerce officials to relay the interest among Chilean wood
producers in the elimination of the subsidy given to U.S. cellulose
producers. The bill goes to Congress today (Diario Financiero,
business and financial, 7/10).


4. Commentary on the Chile-California partnership: A Model for the
21st Century": "Rather than depending on traditional government
bureaucracies... contemporary international relations are moving
toward establishing ties among like-minded regions and countries....
Such is the case of the Chile-California partnership... The
association is convenient for Chile and the United States, because
Washington has problems in the region and needs a new model based on
shared interest"(Karin Ebensperger; El Mercurio, conservative,
influential newspaper-of-record, 7/10).

Obama-Africa/Iran/Russia
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5. In an interview with AllAfrica.com, President Obama said it was
time for Africa to stop blaming colonialism for its problems. "For
years we've been saying that corruption and poor governance are
somehow the consequence of neo-colonialism and an oppressive and
racist west. But I am not a believer in excuses," said the U.S.
President, adding that there can be no stability in Africa as long
as there is corrupt governance, because there is a "direct
correlation between good government and prosperity"(La Tercera,
conservative, independent, 7/10).


6. President Obama wants Brazil to act as a mediator between the
G-8 and Iran with regard to the latter's nuclear program. White
House spokesperson Robert Gibbs said Brazil has "a unique
opportunity to act as a mediator given its good commercial relations
with Teheran" (La Nacion, 7/10).


7. Editorial: "Several American presidents overestimated their
ability to influence Soviet and Russian leaders... but Obama did not
fall into that trap. On the contrary, he found areas of common
interest... where the main outcome was an agreement to reduce
nuclear warheads and missiles.... Although today the main nuclear
threat is to be found on Russia's periphery, the agreement is an
important accomplishment.... The government and people of Russia
hope, above all, to regain the power, influence and respect they
enjoyed in the past... and this 'resetting' of relations with
Washington is a step in that direction. But Russia should also
review its hard drive to recall the weaknesses and mistakes
committed by those governments that it glorifies" (La Segunda,
conservative, afternoon, 7/9).


8. "The announcement of nuclear disarmament (between Russia and the
U.S. ... is key to improving relations between Washington and
Moscow, which were severely eroded by the G.W. Bush
administration.... Today the greatest threat comes from
non-democratic and unstable countries such as North Korea and others
that could have access to this technology and share it with similar
countries or terrorist groups. Obama and Medvedev showed there is a
good understanding between them and although not all issues on their
agenda were resolved... their talks seem to have set the foundation
of a new era of understanding that will benefit the entire world"
(El Mercurio, 7/10).

Nuclear Energy
--------------


9. Energy Minister Marcelo Tokman said the government has opened a
bidding process for new studies on the construction of nuclear
plants. Tokman underscored the positive impact of nuclear-electric
generation on climate change since it does release CO2 to the
atmosphere (El Mercurio, 7/10).


10. A report submitted by the School of Engineers to the GOC
proposes the construction of nuclear plants in the coastal areas of
Tocopilla, San Antonio, and Papudo. The mayor of Papudo was
appalled that the government was even considering such a project in
an area that has more seismic activity than the average Chilean
coastal area(Subway daily, Publimetro, 7/10).

Honduras
--------------

11. Editorial: "The passivity of the OAS with regard to the
situation in Honduras before the crisis and with regard to other
ALBA countries... that use their legitimate democratic origins to
weaken democratic institutions... indicates some sort of harmony
between those countries and the OAS.... The OAS must... prove its
importance and value in a region that has legitimate reasons to
question its role" (La Tercera, 7/10).


12. Editorial: "Zelaya is not innocent in the events affecting
Honduras today. But saying this does not mean agreeing with the use
of force to remove a leader. It simply puts the events in a broader
perspective" (Diario Financiero, 7/10).

URBAN