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Cablegate: Chile's "Next President" Will Propose a "New

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DE RUEHSG #0249/01 0771408
ZNY CCCCC ZZH
R 171408Z MAR 08
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 2961
INFO RUEHBO/AMEMBASSY BOGOTA 1986
RUEHBU/AMEMBASSY BUENOS AIRES 0850
RUEHCV/AMEMBASSY CARACAS 1690
RUEHLP/AMEMBASSY LA PAZ MAR LIMA 5498
RUEHQT/AMEMBASSY QUITO 1826
RUEAIIA/CIA WASHDC

C O N F I D E N T I A L SANTIAGO 000249

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/12/2018
TAGS: PGOV PINR PREL CI
SUBJECT: CHILE'S "NEXT PRESIDENT" WILL PROPOSE A "NEW
DEAL": A TAD EARLY FOR COMPARISONS TO FDR


Classified By: E/Pol Counselor Juan A. Alsace for reasons 1.4 (B) & (d)

------
Summary
-------

1. (C) Billionaire businessman and all-but-certain 2009
opposition presidential candidate Sebastian Pinera told the
Ambassador that the center-right - led by him - has a
"wonderful opportunity" to win the 2009 presidential
elections, given the "incompetence and corruption" besetting
the governing Concertacion coalition. Pinera described
President Bachelet as a "good woman, but bad president,"
whose foreign policy on issues such as Venezuela is contrary
to Chilean interest. He painted Bachelet as wrong on
domestic priorities, particularly education, but also labor,
innovation and public security, all of which contributed to
"voter fatigue" with Concertacion, now in power for nearly
twenty years. Pinera is short on offering solutions,
however. Moreover, he acknowledged his confidence is based
on current political realities (as he sees them), "which are
always subject to change." End summary.

2. (U) The Ambassador paid a call March 13 on Sebastian
Pinera who, as the center-right candidate, ran against
President Bachelet in 2005, losing by 54 to 46 percent. The
billionaire businessman - he made his nut in the
telecommunications, credit, and aviation industries - is
gearing up for another run in 2009, and is the presumptive
candidate of the opposition Alianza. The Ambassador was
accompanied by E/Pol Counselor.

------------------
Back to the Future
------------------

3. (C) Pinera said that 20 months before Chileans head to
voting booths to replace Michelle Bachelet, the opposition
has a "wonderful opportunity" to win the 2009 presidential
elections. "All polls," he claimed, show Chileans "losing
hope" and tired of the Concertacion, now in power for nearly
20 years. Current problems - energy shortages, corruption
and incompetence - are the result of failed Concertacion
policies. Moreover, giving the opposition a turn in power
would be good for democracy. When E/Pol Counselor noted
Bachelet had seemingly arrested her drop in polls (she has
recently rebounded from the high 30's to the mid-40's),
Pinera attributed it to her personal charisma, but insisted
her policies remain unpopular.

4. (C) The Ambassador asked if the Alianza would present new
ideas or resort to negative campaigning; Pinera replied the
Chilean press "never focuses on the positive." For example,
he had the day before presented a plan on energy
diversification but was only questioned afterwards on his
views about alleged misuse of funds at the Ministry of
Education. Pinera noted there is internal disagreement
within Alianza as to campaign strategy. Senator Allemand (of
Pinera's moderate right Renovacion Nacional (RN)) militates
for "total war" against the Concertacion. Joaquin Lavin, of
the hard right Union Democratica Independiente (UDI), and who
Pinera defeated in 2005 in first round presidential
elections, before going on to lose to Bachelet in the second,
is for a more conciliatory stance. Pinera said he would opt
for a "New Deal" approach, maintaining the opposition's
traditional role as "fiscalizador" (watchdog), while also
seeking areas for cooperation. (Comment: Pinera may have
decided on this tack after seeing Lavin recently resurrect
himself in the polls by claiming to be a
"Bachelitista-Alianzista," who would work with Concertacion
for the common good, an approach Chileans apparently
appreciated. Still, when E/Pol Counselor noted Lavin's rise,
Pinera said Lavin had "bloomed for a day only.")

-----------------------
Bachelet Not Up to Task
-----------------------

5. (C) Pinera claimed to have "600 professionals" (300
purportedly with advanced degrees) working on what a Pinera-
led government would do in areas of education, health, and
energy. But when the Ambassador pressed for specifics,
Pinera replied only that his efforts "aren't politics," and
repeated that the current government wasn't delivering. He
said President Bachelet is "a good woman, but bad president."

On foreign policy, Pinera criticized her for her "too close
ties to Chavez," including having wanted to support (in 2006)
Venezuela's campaign for a UNSC seat. Chavez had been wrong
on the Ecuador-Colombia dispute, sought close ties to Iran,
and is a destabilizing force in the region. All of Chavez's
positions are contrary to Chilean interests. Pinera
continued that had he been President he would have told
Ecuador's Correa (who was in Santiago March 9-12) that "Yes,
the issue of sovereignty is important, but so also is
combatting terror."

6. (C) On domestic issues, Pinera panned Bachelet's efforts
on education reform, noting that much money had been spent
"but not well." The GOC is incorporating "bad practice" from
the fully subsidized public school system into the
semi-subsidized private system, despite the fact that the
latter has shown better results with less resources. Part of
the problem, according to Pinera, is that "the top seven
persons in the Ministry of Education have poor backgrounds in
education and none speak English." (Comment: The
Harvard-educated Pinera flashed his elitist side here, noting
these seven had all attended "mediocre schools.") Pinera
also panned Concertacion policies on labor, innovation, and
public security, adding that Bachelet really "doesn't believe
in free trade or open economies." In short, he concluded,
the GOC has no working agenda.

7. (C) The Ambassador noted that the Embassy is working with
the GOC on energy cooperation, including diversification and
energy efficiency strategies. Pinera said he is in
disagreement with environmental groups seeking to block
construction of major hydroelectric projects in Patagonia.
Chile needs "to double its overall energy generation capacity
in the next ten years." That said, it is also necessary to
recognize the legitimate concerns of the environmentalists.
A good approach would be to restructure the Patagonia project
to partially accomodate the environmentalist -- by taking
measures such as stringing power lines to "bypass" around
environmentally sensitive or especially scenic areas, and
partially reducing the footprint of the dams. While these
measures would add "ten percent" to the cost of a project,
they would reduce environmental impact "by a third," while
remaining profitable for investors.

------------
I Am the Man
------------

8. (C) E/Pol Counselor asked if the October 2008 municipal
elections would be a harbinger of results for the 2009
presidential and parliamentary elections. Pinera replied
that in 2004, Alianza had "been in the ascendant" but that a
poor showing in the municipals that year had hurt the
opposition in the 2005 national elections. While he did not
expect Alianza to win the 2008 municipals, he believed
Alianza would do well, lessening any negative impact in the
2009 national elections. Pinera dismissed any possibility of
the UDI putting up a credible presidential candidate,
predicted there would be no primary to select the opposition
nominee, and said flat out he would be the Alianza candidate
in 2009. He supposed Concertacion would put up either former
President Lagos or OAS SecGen Insulza against him, but noted
he ran 12-15 percent ahead of both in the polls.
Nonetheless, he acknowledged, "in politics, anything can
change."

-------
Comment
-------

9. (C) The numbers may look good for Pinera today and given
Concertacion's current difficulties (a loss of majority in
both houses of parliament, a new round of corruption
allegations, public concerns over a spike in crime), he has
every right to be confident. But in an aside on economic
policy, Pinera also revealed his vulnerable flank, commenting
that Concertacion's having maintained the Pincohet regime's
economic policies was wise: "You don't tear down the
pyramids because you lost lives building them." This
somewhat cavilier attitude towards the human rights abuses of
the Pinochet regime is one Achilles heel of the center-right,
a stance that does not play well with Chile's majority
center-left voters, and one which Concertacion will be sure
to use as it paints Pinera as a business lackey and Pinochet
sympathizer. As Insulza pointed out in a recent interview,

Pinera is currently "running alone." That will change
shortly, as Pinera himself implicity understands. End
comment.

SIMONS

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