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In Chile, many are optimistic that prosperity is coming

 Volunteers finish building a house for needy family in Valparaiso, Chile. More than 400,000 homes have been built under President Michelle Bachelet.
Volunteers finish building a house for needy family in Valparaiso, Chile. More than 400,000 homes have been built under President Michelle Bachelet. (Reuters)

Today, Pinochet-era reforms such as a policy of privatizations and low import tariffs remain in place.

Chile's openness to trade is combined with generous social spending. In recent years, Chile has accelerated spending on education and day care. Forty percent of youths now go on to universities or other institutions beyond high school, authorities say, and 70 percent of those are the first in their families to do so.

Prudent economic management, officials here say, not only helped Chile go from being a debtor nation to a net creditor, but also protected it from the worldwide economic meltdown. Velasco, the finance minister, said Chile created a rainy-day account funded with the billions generated by a commodities boom earlier this decade.

When the financial crisis spread, that money was used to help realize one of the world's most ambitious stimulus programs, Velasco said. Chile's economy will contract this year but is expected to grow 4.5 percent in 2010.

"You do the same thing as a sensible family would do," Velasco said. "You spend on the basis of what you estimate to be your permanent income, and, if you get a windfall on top of that permanent income, you save it."

But not everyone is impressed.

Manuel Riesco, an economist with the Center for National Studies of Alternative Development, a left-leaning think tank in Chile, said the economic liberalization benefited big companies and foreign firms and failed to resolve the nation's historical inequities.

Fredy Acosta, 37, a chef for a catering company, said the middle class has been ignored. "There is economic growth, but there is also growth in narco-trafficking, drug use with children, growth in a bunch of bad things," he said. "I'm middle class, and I do not feel that is such a great Chilean miracle."

Still, the prosperity in Santiago -- where a third of Chileans live -- is noticeable beyond the districts with glittering office towers and chic boutiques.

Under Bachelet, 446,068 homes have been constructed, reserved for poor families debt-free or subsidized for the working class. Another government fund is helping 250,000 families renovate old homes.

Paulina Muñoz, a housing official, said the goal is not just to wipe away slums by early next year, but also to provide homes in urban developments that feature parks and schools. "The idea, really, is to increase standards, increase square footage," she said while providing a tour of 150 new homes.

One of the new homes in that development will belong to Floripa Lizama and her husband, Leonel Vasquez, 56. Walking up a half-finished staircase, the couple marveled that they would have three bedrooms to share with their children.

"We have always lived in the camps," Vasquez said. "Now, we have our own home."

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