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Checking in on Chile: Pinera taps copper fund

March 18, 2010 |  3:54 pm

Pinera chile

Chile is still actively recovering from the magnitude 8.8 earthquake of Feb 27. Roads, infrastructure, and the wine and oil industries continue to rebuild. On Thursday, the Justice Ministry announced a plan to declare any missing person officially dead if not found or accounted for 90 days after the quake hit. At least 500 people died in the earthquake or in the tsunami waves that followed.

To boost reconstruction in the most affected areas, newly inaugurated President Sebastian Pinera has decided to tap into the country's "rainy day" copper fund, The Times reports. From Chris Kraul:

Chile is among a few countries, including Norway and Kuwait, that have set aside funds generated by the sale of natural resources to act as a hedge against the vagaries of global commodities prices and provide a buffer to economic crises.

In Chile's case, the Copper Stabilization Fund, which totals about $11 billion, has been fed since the early 1990s mainly by profit from copper, the nation's leading export. Copper prices have tripled since 2003, benefiting the state-owned Codelco mining company, the world's largest producer and the principal contributor to the fund.

After being an active presence in the earthquake response effort even before taking office, Pinera was inaugurated last week as the first conservative leader elected since the end of the dictatorship two decades ago. During his inauguration ceremony at Chile's Congress in the coastal city of Valparaiso, a magnitude 7.2 aftershock struck, producing dramatic images of Bolivian President Evo Morales and Paraguayan President Fernando Lugo glancing nervously up to the ceiling.

Pinera, a billionaire investor (recently listed among Forbes' wealthiest), is facing public pressure to sell his shares of stock in LAN, Chile's national airline, as he promised to do. "The president could be involuntarily sending a message to young people, that it does not matter if you fulfill promises made in the public sphere. Is that what we call 'excellence'?" wrote Cristian Warnken, a blogger at the daily El Mercurio.

La Moneda, the presidential palace, has responded to the criticism by saying that Pinera's LAN interests are "not a government matter."

Online activism in Chile surged in the aftermath of the quake. On Facebook, more than 3,500 users have joined a group page dedicated to identifying firms that constructed new buildings that collapsed or were damaged beyond repair in the earthquake. Twitter users in Chile keep one another actively updated on aftershocks and pertinent information as recovery efforts continue.

One user, A_ndrea, tweeted on Pinera's inauguration day: "Sort of dizzy so much aftershocks."

-- Daniel Hernandez in Mexico City

Photo: Newly inaugurated Chilean President Sebastian Pinera. Credit: Agence-France Presse.

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