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UNCLAS SANTIAGO 001035 
 
SIPDIS 
 
STATE FOR R/MR, I/PP, WHA/BSC, WHA/PDA, INR/IAA 
 
E.O. 12958: N/A 
TAGS: KMDR KPAO PGOV OPRC PREL PGOV EFIN CI
SUBJECT:  CHILE MEDIA REPORT - NOVEMBER 26 
 
Headline Stories 
---------------- 
¶1.  Peruvian President Alan Garcia phoned President Bachelet to 
apologize for the remarks made by his Commander-in-Chief, noting the 
General is being retired.  Congress approved the 2009 budget that 
includes a 5.7% increase in public expenses compared to 2008.  A 
Russian fleet docked in Venezuela. 
 
U.S.-Related News 
------------------ 
¶2.  The Natural Resources Defense Council (NRDC), an NGO affiliated 
with Robert Kennedy Jr., sent 18,000 letters to the GOC urging it to 
reject the construction of the HidroAysen Project, which consists of 
five massive planned dams in Chile's far south.  The letters say the 
project will "damage the Chilean Patagonia, which is one of the less 
altered areas in the world, and therefore one of the most important 
on the planet."  The letters were received in Chile by Environmental 
Minister Ana Lya Uriarte.  Kennedy is NRDC's lead prosecutor and met 
with Bachelet in March of this year to state the reasons for the 
organization's opposition to the project (La Segunda, conservative, 
afternoon, circ. 33,000, 11/26). 
 
¶3.  Geotermia del Pacifico, a branch of American GeoGlobal Energy, 
will participate in the government's bid for projects to obtain 
energy from geysers fund in the First Region.  The U.S. company has 
already been studying the places to drill (Estrategia, business and 
financial daily, circ. 30,000, 11/26). 
 
¶4.  The low dollar exchange rate is the reason why Chilean fruit 
exports to the United States dropped 13.7% in the 2007-2008 season. 
The exports went mainly to Europe (La Tercera, conservative, 
independent, circ. 101,000, 11/26). 
 
¶5.  Conservative think tank Libertad y Desarrollo invited Timothy 
Geithner a month ago to be the main speaker at its 19th anniversary 
ceremony in March 2009.  This was before Geithner's new appointment. 
 LyD is now looking for a new speaker (El Mercurio, conservative, 
influential newspaper-of-record, circ. 129,000, 11/26). 
 
Editorial: "New U.S. Rescue Plan" 
--------------------------------- 
¶6.  "The U.S economy received a new loan so that it can leave behind 
the biggest crisis it has experienced since the Great Depression, 
which has the rest of the world buried in an extended recession.... 
Is the announcement positive or negative?  The answer is not 
obvious, because the Fed's decision once again shows that the 
concern of the authorities with the crisis has another side to it 
that is tied to the depth of the crisis and its repercussions.... 
What is the limit to the bailout of financial institutions?  The 
answer is not at all evident and nothing seems to show that the 
crisis has yet touched bottom" (Diario Financiero, business and 
financial daily, circ. 30,000, 11/26). 
 
Nuclear Energy 
-------------- 
¶7.  Argentina, Finland, Russian and the UK are competing in the 
government's first bid to draft a nuclear energy framework to study 
the development of this type of energy in Chile (La Tercera, 11/26). 
 
 
Chile-Peru 
---------- 
¶8.  Peruvian Commander-in-Chile General Edwin Donayre said during a 
toast in a reception earlier this year:  "Be assured that we will 
not let anyone from our southern neighbor (Chile) cross (into Peru). 
 Our position is that any Chilean who crosses will leave in a box, 
and if there are not enough boxes, in plastic bags."  His remarks 
were posted on YouTube.  Chile's Foreign Ministry considered the 
remarks "tactless" and instructed its Ambassador in Peru to express 
the government's "dismay and surprise."  In the afternoon Peruvian 
President Alan Garcia phoned Bachelet to provide an explanation and 
inform her that the General would be retired.  The General is also 
facing accusations of corruption in his country (La Tercera, 11/26). 
 
 
Local Economy 
------------- 
¶9.  Congress yesterday approved the 2009 budget, which considers a 
5.7% growth in public expenses and a 7.8% increase in social 
expenses.  The budget includes a permanent subsidy for Transantiago 
and reinstated resources for public works in connection to the 
transportation system, education and housing. 
 
Venezuela 
--------- 
¶10.  A four-vessel Russian fleet headed by the nuclear ship Peter 
the Great docked yesterday in the Venezuelan port of La Guaria to 
start joint exercises in the Caribbean on Monday.  The United States 
was not indifferent to the fleet's arrival and said it would closely 
observe the exercises, but denied that it saw them as a provocation 
or a challenge to its influence in the region.  Latin America has 
become one of Russia's priorities and President Medvedev's visit to 
the region is just one element in Moscow's strategy to increase 
economic ties and influence in an area that has been traditionally 
considered of U.S influence.  But experts believe Russia will have 
to work hard to gain influence in those areas where countries such 
as China and India have gained in the last decade.  The figures 
speak for themselves. 
 
¶11.  Last year, trade between Russia and Latin America amounted to 
US$11 billion, while trade with China amounted to US$102 billion 
during the same period.  Estimates are that Russia's efforts to 
improve commercial exchange with Latin American could work and 
increase by 50%.  But in the political arena, things are more 
complex because of the implications.  Experts are questioning 
Russia's decision to expand ties with countries that are considered 
"unstable" allies, such as Venezuela under Hugo Chavez (El Mercurio, 
11/26). 
 
SIMONS