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Cablegate: Santiago Nov. 24 Media Report

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FM AMEMBASSY SANTIAGO
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E.O. 12958: N/A
TAGS: ECON KMDR KPAO PGOV PREL SNAR EFIN CI
SUBJECT: Santiago Nov. 24 Media Report

Lead Story

1. The dollar exchange rate dropped to 492 pesos, the lowest
in the last 16 months. Meanwhile, copper reached a new record of
3.15????, the highest since September 2008 (Conservative, influential
El Mercurio, 11/24).

2.

U.S.-Related News

2. In his debut before the OAS Permanent Council, Assistant
Secretary of State for Western Hemisphere Arturo Valenzuela said
that although the presidential election in Honduras on Sunday "is
consistent with the constitutional mandate to renew the President
and Congress," "it is not enough" to bring democratic normality
back to Honduras. Valenzuela also answered to Zelaya's accusation
that the United States is being "ambiguous": "The United States and
all OAS members reached the unanimous decision that the
president-elect of Honduras had been removed from office by a coup.
There is no other word to describe the abrupt and forced exile of a
head of state," said Valenzuela (Conservative, influential El
Mercurio, 11/24).

3. Assistant Secretary Valenzuela said that the United States
would resort to international and U.S. observers to determine if
the election in Honduras this Sunday developed in accordance to
international standards. The Assistant Secretary said that
regardless of what other countries believed, Washington would
recognize Sunday's election. Valenzuela also called on the two
parties to comply with the Tegucigalpa/San Jose agreement by
setting up a unified government after the election and for Congress
to vote on Zelaya's reinstatement. The absence of international
observers to legitimize the election is one of the main problems
that Micheletti is facing, which means that thus far there is no
one to guarantee that the democratic process will develop in
accordance to those international standards to which Valenzuela
alluded. The position of the United States regarding Zelaya's
reinstatement differs significantly from that in most OAS
countries, which believe that although the San Jose agreement does
not mandate Congress to reinstate Zelaya, his return to office is
necessary. Thus far the United States and Panama are the only two
governments that would validate the election (Government-owned La
Nacion, 11/24).

Chile-Peru

4. In both Chile and Peru, there is consensus that the tension
between the two countries has decreased. Chilean Foreign Minister
Mariano Fernandez said there is now more "reason and serenity" and
his Peruvian counterpart Jose Garcia Belaunde indicated, "We hope
that the situation will start to clear up in the next days and that
we will receive a satisfactory answer" (El Mercurio, 11/24).

5. Amid Peru's criticism over Chile's weapons acquisitions, the
U.S. government notified Congress of a possible military sale to
Peru of two used tank landing ships for approximately $82 million
(El Mercurio, 11/24).

6. Peruvian Foreign Minister Garcia Belaunde confirmed that Peru
would not promote Jose Miguel Insulza's reelection to the OAS (El
Mercurio, 11/24).

Environment

7. A Global Footprint Network study shows that Chile's
"ecological footprint" - the amount of raw material produced versus
how much of it is used per capita-- is 3.1 "global hectares"; The
global average rate is 2.9. This raises concern regarding Chile's
sustainability. The ecological footprint takes into account, among
other elements, harvested lands, grazing, forests, land used for
building, and food processing versus the energy used in these
activities (Financial daily Diario Financiero, 11/24).

8. A Pricewater House Cooper study shows that Chile has one of
the lowest rates of economic fraud in the world. The study
included 3,000 CEOs in 54 countries. One third of those polled
said they had encountered fraud in their companies over the last
year versus one fifth in Chile. The territories with the highest
economic fraud are Russia (71%), South Africa (62%), Kenya (57%),
and Canada (56%); those with the least are Japan (10%), Hong Kong
(13%), Holland (15%), Rumania (16%) and Chile (21%) (Conservative,
independent La Tercera, 11/24).

9. Central Bank figures show that Chile's exports dropped 16%
overall in the last quarter of this year, but increased 69% to
China primarily due to copper exports (Diario Financiero, 11/24).

Terrorism

10. Undersecretary of Interior Patricio Rosende said the
recent bomb threats in the city have coincided with the anarchist
summit that took place in Santiago from November 16th to the 23rd
(Government-owned La Nacion, 11/24).
SIMONS

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