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C O N F I D E N T I A L SECTION 01 OF 03 SANTIAGO 000282 
 
SIPDIS 
 
FOR THE VICE PRESIDENT FROM AMBASSADOR SIMONS 
 
E.O. 12958: DECL: 03/20/2019 
TAGS: PGOV PINR PREL PHUM CI
SUBJECT: SCENESETTER FOR THE VISIT OF VICE PRESIDENT BIDEN 				
TO CHILE 				
				
Classified By: Ambassador Paul Simons for reasons 1.4(B/D). 				
				
¶1.  (C) Embassy Santiago warmly welcomes you to Chile -- the first visit to Latin America by a senior Obama White House representative.  Your participation in the Progressive Governance Summit and subsequent bilateral meeting with President Bachelet will bolster our relationship with a close ally whose development model and strong institutions set an example for other countries in the region.  Your visit also will help debunk the widely-held perception that the United States does not pay enough attention to Latin America, providing an important opportunity to meet with key hemispheric leaders on the eve of the Summit of the Americas. 				
				
Chile:  A Leader in Latin America and Beyond 				
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¶2.  (C) The Bachelet administration is eager to establish a solid relationship with the Obama team Chileans see themselves, along with Brazil and Mexico, as reliable anchors for U.S. policy initiatives in the hemisphere.   Your visit and the upcoming Summit of the Americas are important opportunities to solidify this relationship.  President Bachelet wants to ensure the Summit is a success and is willing to weigh in with Latin American leaders with whom we may run into difficulty.  While estranged from Venezuela, Chile maintains good relations with Ecuador, Bolivia, and Argentina, and views itself as an important voice for strengthening democracy, free markets, and social inclusion in the hemisphere.  Chile and Peru also maintain a solid relationship, despite frustration with Peru's pending case at the International Court of Justice challenging the maritime 
border with Chile. 				
				
¶3.  (C) The Bachelet administration has responded effectively to the global financial crisis, drawing down on its soverign wealth fund to finance a USD 4 billion economic stimulus 	program to create jobs through quick-disbursing infrastructure projects and targeted tax cuts.  Chile is keen to gain a seat at the G-20 table, a move we favor as Chile's strong finance team is well-suited to offer constructive input on international economic issues.  Chile is rightly proud of its sustained poverty-reduction efforts, which have helped cut poverty by two-thirds since the return of civilian rule.  Chile's export-led economic model and openness to foreign investment have been crticial to this progress.  A committed free trader, Chile is very concerned that the global response to the economic crisis not move in the direction of protectionism. 				
				
¶4.  (C) One of our top objectives for Chile has been to expand its leadership role in Latin America and beyond the hemisphere -- drawing on diplomatic, military, and economic tools.  Chile has been proactive and helpful on the Iran nuclear issue at the International Atomic Energy Agency and is a valued contributor in APEC and WTO forums.  Chile is also an important partner in peacekeeping efforts, with more than 500 personnel deployed in Haiti and smaller numbers in 	Bosnia and Kosovo.  Chile's strong institutions, such as its highly-respected police with superb trainers, make it a prime candidate to make further contributions both inside the region, from Paraguay to Central America -- to eventually beyond -- in Afghanistan and the Middle East. 				
				
¶5.  (C) Along with many other Latin leaders, President Bachelet would welcome a change in U.S. policy toward Cuba. She coordinates with OAS Secretary General Jose Miguel Insulza, a fellow Chilean, and is willing to work with us to help encourage Cuba's opening.  President Bachelet knows firsthand the difficulties of dealing with the Castro regime. Her February trip to Havana created a political storm at home when Fidel divulged their private conversation and backed Bolivia's claim to territory that for more than a century has belonged to Chile. 				
				
Chile Today 				
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¶6.  (C) Michelle Bachelet -- Chile's first female President Socialist Party, Bachelet is the fourth consecutive president from the center-left Concertacion coalition, which has been in office since the end of Pinochet's military dictatorship in 1990.  A pediatrician by profession, Bachelet previously served as Health Minister and as Latin America's first female Defense Minister.  She is a single parent and the daughter of an air force general who died in a Pinochet jail.  She is 		
				
SANTIAGO 00000282  002 OF 003 				
				
fond of the United States, having attended school in Maryland when her father was assigned to the Chilean Embassy in Washington in the 1960s. 				
				
¶7.  (SBU) With high approval ratings (nearly 60%), President Bachelet takes pride in her administration's sound management of the economy and the financial crisis.  That said, she views her legacy primarily in the social sphere.  Bachelet's pension reform added a government-supported social pillar to Chile's privatized pension scheme.  Her integrative early childhood protection program, Chile Crece Contigo (""Chile Grows With You""), offers services in preventive health care, basic nutrition, and childcare, through a nationwide network of daycare centers, free for families with incomes in the lowest 40%.  Bachelet has also expanded access to health care and the type of diseases treated with government funding.  A major public education reform bill is nearing passage in the Congress, and Bachelet recently introduced labor subsidies for youth workers as part of her economic stimulus plan. 				
				
¶8.  (C) In a cabinet shuffle earlier this month, President Bachelet announced a new Foreign Minister who is a well known friend of the United States:  Ambassador Mariano Fernandez, who left the Chilean Embassy in Washington to assume this new role.  We have enjoyed an excellent relationship as well with Jose Goni, the former Defense Minister, who will replace Fernandez in Washington as Ambassador to the U.S.   Francisco Vidal, the former Chilean government spokesman, is the new Defense Minister.  Chile's talented Finance Minister, Andres Velasco, is a chaired economic professor on leave from Harvard. 				
				
¶9.  (C) Chileans intently observed the U.S. election process and are preparing for their own presidential and parliamentary elections in December.  Interestingly, both top candidates are attempting to portray themselves as agents of change, akin to a ""Chilean Obama"".  Billionaire entrepreneur Sebastian Pinera, representing the center-right Alianza coalition, has a 10 to 15 point lead over likely Concertacion candidate Eduardo Frei, a senator and former President (1994-2000).  You may meet Frei at the Progressive Governance Summit.  Either candidate would continue our strong bilateral relationship as President. 				
				
A Strong and Dynamic Bilateral Relationship 				
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¶10.  (C) The solid U.S.-Chile relationship has expanded 	notably to take on 21st century challenges:  innovation, education, technology, energy, and the environment.  This agenda supports both U.S. interests and Chile's aspirations to become a developed nation by 2025. 				
				
¶11.  (C) The U.S. is Chile's largest trading partner, with bilateral trade expanding by more than 200% (approaching $20 billion) since our bilateral Free Trade Agreement (FTA) went into effect in 2004.  Chile's top exports to us are copper, fruit, and seafood, while we send Chile a wide variety of manufactured products. 				
				
¶12.  (C) Like President Obama, Bachelet sees developing clean energy as a top priority.  We expect strong Chilean support for a Summit of the Americas energy partnership.  Chile seeks to diversify its energy matrix, which is now heavily 	dependent on domestic hydro-electric power and unreliable natural gas imports from Argentina.  Chile is eager to establish a renewable energy research center and to launch a large solar pilot project in Chile's northern desert. President Bachelet is likely to raise these two promising initiatives, which the Embassy supports, as potential Summit of the Americas deliverables. 				
				
¶13.  (SBU) Educational improvement has been a keystone of the Bachelet administration, and an area of strong bilateral cooperation.  We have expanded our mix of education programs beyond Fulbright scholarships to also provide support for English language study in Chile and to create opportunities for less advantaged Chileans with limited English to pursue PhDs in the United States. 				
				
¶14.  (SBU) The new Chile-California Partnership for the 21st Century, launched by President Bachelet and Governor Schwarzenegger in June 2008, touches on many of these areas of collaboration.  The partnership highlights the economic and geographic similarities between Chile and California and fosters collaboration between individuals, government, and the private sector in agriculture, energy efficiency, environmental resource management, and education. 				
				
¶15.  (C) Chile and the U.S. have a uniquely strong military to military relationship characterized by frequent joint exercises, officer exchanges, and visits by senior officials. Admiral Mullen, Chairman of the Joint Chiefs of Staff, visited Chile in early March.  In April, Chile will launch a State Partnership Program with the Texas National Guard. Chile has also expanded its purchases of U.S. military equipment, with potential sales approaching $1 billion over the next few years. 				
				
A Timely Visit 				
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¶16.  (C) Your trip to Chile will be seen here as exceptionally timely and important.  At the summit, leaders from five South American countries (Argentina, Brazil, Chile, Paraguay and Uruguay) will be eager to hear about the Obama administration's plan for the region, including the upcoming Summit of the Americas and your views on how we can move together in overcoming the global financial crisis.  We look forward to your arrival.  Welcome to Chile! 				
SIMONS