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Cablegate: Chile Media Report - December 16

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TAGS: KMDR KPAO PGOV ECON PREL SNAR EFIN CI
SUBJECT: CHILE MEDIA REPORT - DECEMBER 16

Lead Stories
------------
1. All dailies highlighted Claudia Serrano's appointment as the new
Labor Minister. Dailies also highlighted the Comptroller's warning
over the continuous use of emergency funding to finance the
Transantiago public transport system.

U.S.-Related News
-----------------
1. The Superintendency of Banks and Financial Institutions has
asked local banks to report if they have suffered the effects from
fraud committed in the United States by Bernard Madoff.
Spanish-owned Banco Santander has reported a US$1.9 million loss.
Asked about this case, Finance Minister Andres Velasco said, "It's
just one more piece of information of a series of problems regarding
transparency and financial market policy in the United States, which
we fortunately don't have in Chile" (El Mercurio, conservative,
influential newspaper-of-record, circ. 129,000, 12/16; La Segunda,
conservative, afternoon, circ. 33,000, 12/15).

2. Editorial: "A report leaked to the press this weekend prepared
by a federal ad hoc agency... noted that U.S. initiatives to rebuild
Iraq amounted to a 'US$100 billion-dollar failure'.... The invasion
lost legitimacy when it became evident that there were no weapons of
mass destruction in Iraq... no serious post war plan, and when a
strong sectarian violence emerged in the absence of a government to
impose order.... Launching a unilateral invasion based on
justifications that turned out to be false and getting involved in a
difficult reconstruction exercise has been a strong blow for the
world's primary superpower. It also poses questions about what will
happen with this key geopolitical area and what the United States
can do to regain its reputation and power after the Iraq adventure
launched in 2003" (La Tercera, conservative, independent, circ.
101,000, 12/16).

Local
-----
3. President Bachelet will travel to Honduras on February 8 and
then to Cuba for the Havana book fair. She will travel with a
delegation of opposition and government coalition congressmen and
entrepreneurs. Congress already passed the Economic Complementary
Agreement that will allow investment in new areas and expand
bilateral trade between both countries. At this point, neither
country has an accredited ambassador, a situation that should be
resolved in January (La Nacion, government-owned, editorially
independent, circ. 4,200, 12/16).

4. The price of copper on the London Exchange Market (LEM)
yesterday closed at US$1.40/lb. Estimates are that for every cent
of a dollar that the price of copper drops, Chile ceases to receive
US$120 million. The drop in revenues from low copper prices now
amounts to US$7.5 billion (El Mercurio, 12/16).

5. The Chilean Comptrollers' Office warned the government over the
permanent use of a constitutional 2% emergency fund to finance the
Transantiago in 2009. First, because it undermines resources set
aside for disaster relief, and second, because it is always a risk
when a temporary solution turns into a permanent mechanism to cover
a deficit (La Tercera, 12/16).

6. President Bachelet appointed socialist Claudia Serrano as Labor
Minister. "I am a pragmatist and leftists," said Serrano, adding
that labor rights and employment are her primary concerns at this
point. Luis Schmidt, President of the National Agricultural Society
(SNA), believes that Serrano will help revive the private-public
sector alliance to be better prepared to face the effects of the
international financial crisis. Andres Concha, of the
Manufacturers' Association, said the minister should focus on
unemployment insurance and making labor laws more flexible. An
Entrepreneurial Generation Survey shows that 77% of entrepreneurs
and economists alike would like the government to improve labor laws
by making the system more flexible in terms of hours. They would
also like to have a labor force better prepared to carry out
multiple tasks. The overall view is that at this moment in time, it
is more important to provide job security and prevent layoffs than
to pass initiatives to promote investment (El Mercurio, 12/16).

Cuba
----
7. Article by Andres Oppenheimer on Cuba: "Fifty years after
Fidel Castro took power in Cuba, the big question is whether the
Cuban revolution was justified and worth the sacrifice. The
evidence shows it was clearly not worth it....

8. "A look at the statistics shows that that although Cuba has
eradicated poverty... the standard of living is lower and people
have less opportunities than five decades ago.... Cuban government
estimates is that Cuba's per capita income is US$6,000... but the
government refuses to use international standards for this estimate.
The same is true regarding the poverty rate.... Cuba blames the
U.S. embargo for its economic problem, but... the United States is
Cuba's main exporter of food products and many other American
products enter the island through third countries.... The island is
a giant playland, where everyone has a guaranteed subsistence, but
where the government decides where individuals study and where they
work and whether they can travel abroad.... The Cuban dictatorship
has improved some social indicators, but other Latin American
countries have done the same without sacrificing basic civil rights,
and at a much lower human cost and suffering by the Cubans (El
Mercurio, 12/16).

9. A Russian fleet will dock in Havana on December 19 -- the first
time that this fleet docks in Cuba since the collapse of the Soviet
Union in 1991 (La Tercera, 12/16).

SIMONS

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