Chile Heats Up: Currents in the Political, Economic, and Geographic Arenas

Chile, a string bean of a country stretched out between the deep blue Pacific Ocean and the snow-capped Andes, anticipates a relatively quick recovery from the global economic downturn as it prepares for national elections in December 2009. Its current President, the popular Michelle Bachelet, is barred from running in consecutive elections; and her coalition's choice, Eduardo Frei, who last reigned as President in 1994-2000, is much less popular, considered elitist, unsympathetic, and, worst of all, unexciting. An opposition candidate, the right-wing Alianza coalition's usual nominee Sebastian Pinera, a self-made billionaire, has enjoyed a recent surge in interest according to polls but may merely be benefiting from an amorphous public discontent with Bachelet's centrist Concertacion coalition, which has run the country since the end of the Pinochet era in 1989. An interesting third-party candidate has also recently emerged--Marco Enriquez-Ominani, a Congressman who made his fortune in the film industry and whose campaign theme revolves around "change." His efforts to appeal to young people and to marginalized people, such as the indigenous Mapuche, appear to be paying off as do his challenges on the environmental front. However, experts predict that the December election will likely elevate none of these candidates above the 50% goal and, therefore, would necessitate a run-off vote, with Enriquez-Ominami's supporters probably needing to choose between either the Concertacion or the Alianza standard-bearer.

On the economic front, Chile's problems and solutions are mostly related to copper, a government-controlled commodity whose price has plummeted, although signs of its leveling off and even rising slightly are apparent, but whose past profits were banked in expectation of a rainy day in a so-called sovereign wealth mutual fund. Copper is a major export for the country, and the price decline has not only cut government revenues but has led to job losses and mining-industry turmoil. On the other hand, copper-related funds saved by the government in the special fund are now available for stimulus payments, tax breaks, and assorted public-works projects. The country's banking industry is regarded as strong and healthy, as is its housing sector.

Another important export for Chile is farm-raised salmon. Problems in this industry include heavy use of antibiotics, including medicines not approved by the U.S. Food and Drug Administration for such use, and inability to stem the spread of infectious anemia among fisheries specializing in the Atlantic salmon variety. New government regulations are under review but may not be stringent enough to save an industry which employs thousands of people, many in remote locations with few other job opportunities.

On the international front, Chile enjoys good relations with the U.S and with most South American countries; it has also secured bilateral trade agreements with many nations around the globe, including China, India, Japan, and the European Union. There are, however, a few unresolved territorial disputes, such as land-locked Bolivia's claim for a corridor to the sea and Peru's insistence on changing the maritime border. Former Cuban leader Fidel Castro recently spoke out in support of Bolivia's petition and embarrassed the then-visiting Chilean President Bachelet. Peru has taken its claim to the International Court of Justice.

Chile's varied geography, featuring arid desert, glaciers, and gorgeous beaches, also harbors smoldering volcanoes. A whole new town is under construction for victims of the eruption of the Chaiten volcano, quiescent for thousands of years but suddenly active again in May 2008. Another volcano, Llaima which is well known for frequent eruptions, provided a scare for local residents in April of 2009.

Jason Tockman, "Independent Candidate Challenges Chilean Political Establishment", Upside Down World
"Chile economy falls again in June, recovery seen", Reuters
"Winds of change", The Economist
Alexei Barrionuevo, "Chile Takes Steps to Rehabilitate Its Lucrative Salmon Industry", New York Times
"Courting Castro", The Economist
"Construction of a new town has begun in southern Chile", Geographical/Highbeam
"Peru denies Hague court petition against Chile will harm Bolivia's sea access", BBC Monitoring/Highbeam