Aftershocks a reality check for Chilean President Sebastián Piñera
Friday, March 12, 2010
SANTIAGO, CHILE -- Sebastián Piñera pledged during his presidential campaign to bring fiscal prudence to Chile, but moments before his inauguration Thursday, he received a jolting reminder of how last month's 8.8-magnitude earthquake has shredded that promise.
A quick succession of aftershocks left dignitaries, including several Latin American presidents, smiling nervously and eyeing the ceiling at a ceremony in the congressional building in coastal Valparaiso. Piñera later toured the area that had been rattled by the tremors, one of them a 6.9-magnitude quake nearly as powerful as the one that hit Haiti in January.
The aftershocks did not cause fatalities or crippling damage. But the image of a new president and his aides rushing to a disaster zone underscored the impact of the Feb. 27 quake and tsunami on Piñera's plans for the next four years. The billionaire businessman had vowed to generate 6 percent economic growth a year and hundreds of thousands of jobs. Instead, he will be forced to spend billions to revive a region of ruined hamlets, collapsed bridges and shuttered industries.
"Man plans, God laughs -- it's one of those situations," said Cynthia Arnson, director of the Latin American program at the Woodrow Wilson International Center for Scholars in Washington. "Whatever planning for the transition had been underway was certainly taken off the table when the earthquake hit."
In his first stop Thursday, in the city of Rancagua, 70 miles west of the epicenter of the biggest aftershock, the new president tried to convey an image of composure and competence. He urged calm while promising speedy delivery of assistance.
"You should know that there is a government that is acting as fast as possible," Piñera, 60, told residents.
Officials have estimated that last month's quake, among the largest on record, may have caused more than $15 billion in damage. Roads, ports and hospitals collapsed, and hundreds of thousands of homes were destroyed or seriously damaged.
"We lost everything, everything," Maria Teresa Mios, a schoolteacher, said recently as she searched for belongings in the remains of her home. "We lost what we had worked all our lives to have."
Andrés Bianchi, a former Central Bank president, described the quake as a blow to a prosperous region that churns out a variety of export products. The timber industry has been hobbled by the loss of ports and factories, he said. Fishing fleets were wiped out, and one of Chile's signature export industries, wine, is facing tens of millions of dollars in losses after irrigation systems buckled and huge holding vats toppled.
Bianchi said that although Piñera's vision of 6 percent growth might have been overly optimistic, the economy under his predecessor, Michelle Bachelet, had been humming. Inflation was low, the price of Chile's most vital export, copper, was high, and forecasters predicted that economic growth would top 5 percent this year.
Still, Bianchi and other economists say Chile is perhaps the best-prepared country in Latin America to handle a major disaster.
It has $11.3 billion in savings from this past decade's commodities boom, according to the latest government statistics. And Standard & Poor's has rated the country A+, the region's highest rating, which means it has access to financing from abroad at low interest rates.