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Cablegate: Oct. 9 Media Report

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SUBJECT: Oct. 9 Media Report

Lead Story

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1. Chile ranked fourth on the World Economic Forum
financial stability index for 2009. The report included 55
countries, where the UK ranked first (Conservative, influential El
Mercurio, 10/9).

Salitre Exercise

------------------

2. Chile changed the hypothetical background of the "Salitre"
exercise at the suggestion of the United States. In a Chile-Peru
meeting of intelligence Air Force officers on Wednesday, Chilean
officials discussed with their Peruvian counterparts the scenario
of the exercise. They did not state it as a change, though. But a
few hours later Peruvian Foreign Minister Garcia-Belaunde announced
in Lima that Chile had "changed" the scenario of the exercise. The
government first denied any change, but on Thursday Chilean Defense
Minister said, "The exercise, in its planning, is fundamentally the
same. The only thing that the Air Force has done is make a small
technical adjustment for the purpose, once more, to show Chile's
goodwill." The original scenario involved an allied force versus a
"northern country," but now involves a peace force neutralizing a
rebel African leader.

Although the issue became public on Wednesday, the change actually
occurred almost two weeks ago when the U.S. government sent Chile
the message that it was interested in "specifying" the hypothetical
scenario of the military exercise. The reason is that Peru had
complained to Washington that the exercise was "offensive." After
the United States sent Chile the message, Santiago notified the
other participants of the adjustment in the scenario. Yesterday
Foreign Minister Fernandez said that the Defense Ministry had the
lead on the matter, but Vidal said that the change had been made
"with the government's authorization" (El Mercurio, 10/9).

3. Chilean Defense Minister Francisco Vidal announced that the
Chilean Air Force had made a "technical" adjustment of the
"Salitre" exercise. The Chilean Foreign Ministry and Peru's Defense
Ministry believe the controversy on this matter has ended. In fact,
diplomatic sources in Lima said Peru is considering now sending its
Ambassador to the exercise. The incident exposed lack of
coordination among the Air Force and the defense and foreign
relations ministries in Chile (Conservative, independent, La
Tercera, 10/9).

4. Chilean senators view the change in the script of the
exercise "prudent," although they question the inability of the
Chilean authorities to take into account the sensitivities of
neighboring countries in the designing of the exercise. They add
that any change can be perceived as yielding to pressure from Peru.
"Lima cannot and should not be giving Chile directions, least of
all on military activities," said Senator Victor Perez
(Conserative, afternoon La Segunda, 10/8).

5. "We have made this adjustment so that there is not even a
minor suspicion. The government hopes that with this change... it
is finally understood that the exercise is a peace operation based
on a hypothetical United Nations mandate," said Defense Minister
Francisco Vidal (Government-owned, La Nacion, 10/9).

U.S.-Related News

-----------------------

6. 2008 Nobel Price award winner for economics Paul Krugman
will be in Santiago at the end of the month to speak on the recent
global crisis and "the new economy" (Independent on-line El
Mostrador, 10/9).

7. According to "Higher Education Magazine" ranking, the 20
best universities worldwide are either in the United States or the
UK. Harvard University ranked first, followed by Cambridge
University (UK), and Yale. In the area of engineering and
technology, the top three are MIT, University of
California-Berkeley, and Stanford University. The Catholic
University of Chile ranked 277 (La Tercera, 10/9).

Indigenous Affairs

----------------------

8. Minister Secretary General to the Presidency and Indigenous
Affairs Coordinator Jose Antonio Viera Gallo said the government
would buy the land necessary to fulfill the demands of 115
indigenous Mapuche communities. Viera Gallo said that since 1999,
the government has transferred 650,000 hectares to Mapuche
communities and that by the end of the year it will have
transferred another 33,000. This means that every family will have
an average of 12.7 hectares. Viera Gallo also spoke about the new
"Land Bank," which will both buy and transfer land for indigenous
communities. He said this will avoid price speculation and will
free the indigenous communities from having to negotiate directly
with private land owners (La Nacion, 10/9).

Honduras

-----------

9. The OAS delegation in Honduras concluded its visit and set
the terms for future negotiations: Assurance for direct
negotiations between de facto government and Zelaya delegates, the
restoration of constitutional rights, Zelaya's direct access to his
delegate. Zelaya's representative said October 15 was the deadline
to resolve the crisis. The United States refused to label the talks
a failure stating that the parties involved had begun a "direct
dialogue" under the direction of the international community (La
Tercera, 10/9).
SIMONS

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