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E.O. 12958: N/A 
TAGS: KMDR KPAO PGOV ECON PREL SNAR EFIN CI
SUBJECT:  CHILE MEDIA REPORT - FEBRUARY 23 
 
Leading Stories 
--------------- 
¶1.  Volcanologists warn that the Chaiten volcano in southern Chile 
could collapse, burying the town of Chaiten under ashes, volcanic 
material, and mud slides.  The Minister of Interior underscores that 
that it is not possible at this stage to rebuild Chaiten and local 
government authorities started the relocation of their facilities in 
the area of El Amarillo. 
 
U.S.-Related News 
----------------- 
¶2.  Change is the word that characterizes the new U.S. 
administration.  It's also what the world is expecting, and Latin 
America is no exception.  Many are waiting to see a sign that a new 
era has begun.  But the pressure of the economic crisis and the 
situation of U.S troops in Iraq and Afghanistan have not given Obama 
time to look at Latin America or appoint the officials in the White 
House and the Department of State who are responsible for relations 
with the region.  However, there is one individual who seems to have 
the best chances of heading the office of Western Hemispheric 
Affairs in the Department of State:  Chilean Arturo Valenzuela, 
Director of the Center for Latin American Studies in Georgetown 
University and Clinton advisor since 1992 (El Mercurio, 
conservative, influential newspaper-of-record, circ. 129,000, 
2/22). 
 
¶3.  Although Latin America was not a priority during Obama's 
campaign, there were signs that the lack of interest shown by the 
previous administration could change.  In June, Obama said, "There 
is a natural connection between the United State and Latin America," 
and even offered Chile and Argentina assistance in nuclear 
development.  But nothing has yet happened and there seems to be no 
plan for the short-term.  The best example of this is that Assistant 
Secretary for Westerns Hemispheric Affairs Thomas Shannon, appointed 
by Bush in 2005, has been asked to stay until the summit of the 
Americas in April.  No one knows what will happen after that.  One 
expert said that although Shannon's work has been highly rated and 
he is a respected diplomat, he is nevertheless a symbol of the 
previous administration's policy, which could hurt the beginning of 
relations between Latin America and the Obama administration (El 
Mercurio, 2/22). 
 
¶4.  Alvaro Vargas Llosa:  "Vacuum" is the word that best describes 
the policy of the new U.S. administration toward Latin America, 
because there is no policy and no one to execute it.  The U.S. 
government is fully absorbed by domestic affairs and in other 
regions of the world, such as the Middle East and Asia.  Obama has 
had no time to come up with a plan or make the appropriate 
appointments and has asked Thomas Shannon, the respected diplomat 
who now heads the office of affairs with Latin America, to remain in 
place until April.  The same has been asked of Hector Morales, U.S. 
representative to the OAS.  In the context of these requests and 
Obama's campaign announcement of a change in policy toward the 
region, the Department of State can only be prudent in its action. 
According to an "Andean diplomat" some Washington allies in the 
region are concerned that this power vacuum is perceived as a U.S. 
weakness, and therefore encouraging activities that are contrary to 
U.S. interests, such as the recent visits of numerous heads of state 
to Cuba to meet with Fidel Castro (La Tercera, conservative, 
independent, circ. 101,000, 2/22). 
 
¶5.  Two years ago the United States Trade Representative (USTR) 
placed Chile on its Priority Watch List for IPR.  Today, local 
experts believe Chile has made significant progress to be taken off 
the list:  Congress has ratified the Patent Cooperation Treaty, 
Customs and the police have tightened significantly their control of 
piracy, the Investigations Police (PDI) created the special 
Intellectual Property Crimes Brigade in 2008 (Diario Financiero, 
business and financial, circ. 30,000, 2/23). 
 
¶6.  Editorial:  "Obama Shows his Foreign Policy Cards" 
"Although Obama is focusing on domestic problems ... he has not 
neglected the external front, and he fulfilled the U.S. presidential 
tradition of making his first official trip abroad to Canada.... 
Although the economy is today a priority in the United States and in 
the world, the wars in Iraq and Afghanistan occupy an important 
place in Obama's agenda....  Meanwhile, eyes are set on what foreign 
leaders Obama will meet first and this will be the Japanese Prime 
Minister...  which is considered as a special gesture toward a 
'fundamental' ally that George W. Bush had put somewhat aside .... 
If the intention was to send the message that the White House wants 
to improve its image abroad, it seems this was has been 
accomplished.  The new strategy seems to use more 'soft power,' 
rather than force or military might (El Mercurio, conservative, 
influential newspaper-of-record, circ. 129,000, 2/23). 
 
¶7.  Editorial:  "Obama's Tough Economic Beginning" 
"The rescue plans have lacked clarity and the macroeconomic scenario 
is discouraging, which has prevented markets from regaining 
confidence.  But the new administration has not just sat and waited. 
 On February 10, the administration announced a financial 
stabilization plan....  It was criticized because the plan did not 
address the one element that is causing more uncertainty, which is 
what to do with the 'toxic' assets that have U.S. banks paralyzed. 
Three day later... Congress approved a US$787 billion stimulus 
plan... and this week Obama announced a million dollar financial aid 
plan for those who have mortgaged their homes....  In spite of the 
magnitude of these plans, markets have not yet picked up.  This 
would show that regardless of the spectacular sums involved, the 
true problem has not yet been resolved.  In the short term, 
Washington will have to take a clear stance on how to eliminate the 
toxic assets....  Without this, Wall Street will have a difficult 
time recovering" (El Mercurio, conservative, influential 
newspaper-of-record, circ. 129,000, 2/23). 
 
¶8.  Editorial:  "President Obama's Stimulus Plan" 
"Last Monday, President passed the law that activates his economic 
stimulus plan... accentuating the fall of the U.S. stock market.... 
A reason for this uncertainty is the loss of capital in the 
financial system....  The only plausible strategy to grow again is 
to recapitalize this sector, which calls for adequate resources and 
the right approach....  But the damage that the financial sector has 
suffered, the questions on the reactivating effects of fiscal 
expenses, and the fear over the long term impact of the aggressive 
monetary and fiscal policies applied today will maintain a high 
degree of tension and uncertainty" (La Tercera, conservative, 
independent, circ. 101,000,  2/22). 
 
Chile -- other countries 
------------------------ 
¶9.  A delegation of Chilean ministers of state will visit Ecuador in 
August to meet with their counterparts and ratify border treaties. 
This visit occurs as Peru is preparing to file a claim with the 
International Court of Justice at The Hague in March, questioning 
the tri-border treaties signed with Chile in 1952 and 1954.  Ecuador 
is closely watching that process, because those treaties also 
established its borders with Peru (La Tercera, 2/23). 
 
Cuba 
---- 
¶10.  The controversy created by Fidel Castro's column on President 
Bachelet's trip to Cuba, and especially his endorsement of Bolivia's 
maritime claim, yielded good results for Foreign Minister Alejandro 
Foxley.  The minister objected to the trip from the beginning, but 
Bachelet was not willing to refuse the invitation to visit Cuba and 
chose to ignore the minister to the point of excluding him from the 
preparation of the trip.  This made Foxley lose leverage.  But after 
the impasse, Foxley is in a better position with Bachelet, who would 
be more willing to let him handle foreign policy issues (El 
Mercurio, 2/21). 
 
¶11.  Cuban Ambassador to Chile, Ileana Diaz Arguelles, will arrive 
in Santiago on Thursday and present her letters credentials on March 
¶3.  Her mission is to improve cooperation on agriculture, health, 
biotechnology and culture and strengthen the Chile-Cuba Friendship 
Group in the parliament (Government-owned, editorially independent 
La Nacion, 2/23). 
 
SIMONS