VZCZCXYZ0010
RR RUEHWEB

DE RUEHSG #0632/01 1891829
ZNR UUUUU ZZH
R 081829Z JUL 09
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC 5177
INFO RUEHAC/AMEMBASSY ASUNCION 4060
RUEHBO/AMEMBASSY BOGOTA 2473
RUEHBU/AMEMBASSY BUENOS AIRES 1574
RUEHBR/AMEMBASSY BRASILIA 0992
RUEHCV/AMEMBASSY CARACAS 2160
RUEHPE/AMEMBASSY LIMA 6272
RUEHMN/AMEMBASSY MONTEVIDEO 4478
RUEHQT/AMEMBASSY QUITO 2475
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SANTIAGO 000632 
 
SIPDIS 
 
STATE FOR R/MR, I/PP, WHA/BSC, WHA/PDA, INR/IAA 
 
E.O. 12958: N/A 
TAGS: KMDR KPAO PGOV ECON PREL SNAR EFIN CI
SUBJECT:  CHILE MEDIA REPORT - JULY 8 
 
Leading Story 
------------- 
¶1.  President BacheletQed a second dQree in a month related to 
AH1N1. The decree instructs clinics and hospitals to give priority 
to individuals with respiratory diseases and regulates the 
indiscriminate sale and distribution of antiviral medication. It 
also grants regional health officials the authority to cancel large 
public events, if necessary. Chile has 9,135 confirmed cases of 
AH1N1, of which 381 are in serious condition. 
 
Chile-U.S. Military Sales 
------------------------- 
¶2.  Headline:  "White House Pressures Chile over its Purchase of 
Russian Helicopters."  U.S. Secretary of Commerce Gary Locke handed 
the Chilean Embassy in Washington a letter dated July 1, expressing 
the USG's "disappointment" with the Chilean Air Force's (FaCh) 
decision to buy five transportation helicopters from Russia. 
American company Sikorsky was bidding with Black Hawks, but they 
cost twice as much as the Russians. 
 
¶3.  The complaint is of special importance given the recent 
Obama-Bachelet bilateral.  The fact that it was Locke and not 
another official who filed the complaint puts more pressure on the 
issue. The Foreign Ministry saQaint was a "delicate 
matter." 
¶4.  Defense sources said that although the deal with Russia is not 
officially sealed, it's a given that Chile will go ahead with it. 
Bachelet visited Moscow in April with an agenda focusing on defense, 
trade, and the eventual conclusion of an FTA with Russia. 
Therefore, Chile's helicopter acquisition would be a gesture to 
confirm its true interest in strengthening ties with Moscow. 
 
¶5.  The daily claims it repeatedly tried to get Secretary Locke's 
office to comment. Locke has plans to attend the Competitiveness 
Forum of the Americas in Santiago in September (El Mostrador, on 
line news agency, 7/7). 
 
¶6. Under Secretary of Foreign Affairs Undersecretary Alberto Van 
Klaveren downplayed Secretary Locke's letter:  "We mustn't magnify 
situations such as these.  It's common for a country that has lost a 
bid to manifest its disagreement" (El Mostrador, 7/8). 
 
¶7.  Defense Ministry sources said yesterday that Chile would buy 
US$275 million worth of weapons from the United States, pending U.S. 
congressional approval.  This would be the largest investment the 
Chilean army has made in decades. The request was placed with the 
Defense and Security Cooperation Agency (DSCA) just days before the 
Bachelet-Obama bilateral on June 23 (El Mercurio on-line, 7/7). 
 
¶8.  The list of material to be sold includes long-range artillery 
with transportation vehicles (M109 A5 and M109 A3 Howitzers), 
Command Post Carriers (M577 A2), Armored Personnel Carriers (M113 
A2), Logistics Carriers (M548 A1), mid-range artillery, automatic 
grenade launchers, two mobile Firefinder electronic radars to locate 
artillery, and a unspecified amount of ammunition. Germany had 
offered the same package, but at a much higher price. The 
acquisition of this material would make Chile's army the best 
equipped with heavy artillery in South America, surpassing even 
Brazil (El Mercurio on-line, 7/7). 
 
¶9.  The U.S. Department of Defense notified Congress in June about 
the possible sale of military equipment to Chile for US$275 million. 
 The announcement of the deal coincides with yesterday's press 
report of the USG's "disappointment" over Chile's decision to buy 
Russian helicopters, rather than U.S. manufactured Black Hawks La 
Tercera, conservative, independent, 7/8). 
 
Honduras 
-------- 
¶10.  After meeting with Honduran President Zelaya, Secretary of 
State Hillary Clinton announced that President Oscar Arias, of Costa 
Rica, would be the mediator in the crisis.  He displaces OAS 
Secretary General Insulza. Clinton urged Zelaya to avoid situations 
such as last Sunday's, when his attempt to return provoked a 
military reaction that left one person dead. Clinton called on both 
parties to "abstain from resorting to acts of violence and to look 
for a peaceful, constitutional, and long-lasting solution" (Alvaro 
Vargas Llosa, conservative, independent La Tercera, 7/8). 
¶11.  Clinton's announcement was perfect for Micheletti, who 
publicized he had spoken to Arias. A high-level USG source said that 
the United States had been looking for a mediator to remove Hugo 
Chavez from the limelight and one that both parties would accept. 
OAS Secretary General Insulza was perceived as being too close to 
Zelaya.  Michelletti promptly informed the United States that he 
accepted Arias as mediator (Alvaro Vargas Llosa, La Tercera, 7/8). 
 
URBAN