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INFO RHEFDIA/DIA WASHINGTON DC
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RUEAIIA/CIA WASHINGTON DC
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UNCLAS SANTIAGO 000188 
 
SIPDIS 
STATE FOR R/MR, I/PP, WHA/BSC, WHA/PDA, INR/IAA 
 
E.O. 12958: N/A 
TAGS: ECON KMDR KPAO PGOV PREL SNAR EFIN CI
SUBJECT: Santiago Feb. 6-8 Media Report 
 
Lead 
 
¶1.      President-elect Sebastian Pi????era will announce his cabinet 
tomorrow at 6 p.m. (All dailies, 2/8). 
 
 
 
Chile-U.S. 
 
¶2.      Asked about Chile's relation with the United States, 
Foreign Affairs Minister Mariano Fernandez said: "Relations between 
Chile and the United States have been excellent for some years now. 
An example of this is the Chile-California program... which gives 
bilateral ties a qualitative difference from the purely economic, 
commercial, and political approach to relations....  Before 
becoming president, Barack Obama already felt admiration for 
Bachelet... because of her life experiences and her ability to 
govern from such a special perspective....  There is ... an 
extraordinary chemistry between the U.S. President and Bachelet.... 
I hope that the (new) government of Chile maintains the same level 
of cooperation and understanding.  But I note that there is a very 
personal relationship between Presidents Obama and Bachelet that 
goes beyond the good political and diplomatic relation that Chile 
has with the United States"  (Government-owned, La Nacion, 2/8). 
 
 
 
¶3.   It is possible that Secretary of State Hillary Clinton will 
attend the presidential swearing-in ceremony in Valparaiso on March 
¶11. Presidents Cristina Fernandez (Argentina), Fernando Lugo 
(Paraguay), Rafael Correa (Ecuador), and Lula da Silva (Brazil) 
have confirmed their attendance (La Tercera, 2/7). 
 
 
 
¶4.  The Environmental Protection Agency (EPA) said that "black 
liquor" does not qualify as a clean energy fuel and cannot, 
therefore, apply for subsidies from 2010 to 2012. "It was what we 
were hoping for," said Jose Campino, of Chile's s Wood Corporation, 
CORMA (Conservative, influential El Mercurio 2/6). 
 
 
 
Defense 
 
¶5.      The International Institute for Strategic Studies "2010 
Military Balance" report concludes with regard to Latin America: 
Military expenses are on the rise in spite of the economic crisis, 
border and energy issues are neutralizing diplomatic efforts, and 
cooperation efforts such as the recently created South American 
Defense Council have been unable to establish an institutional 
framework to provide a context for goodwill in the area of defense. 
 
 
 
 
In 2006, the region spent 1.25% of its GDP in military expenses; in 
2009 it was up to 1.35%. Colombia has the highest defense expense 
rate (2.4 %), while Brazil increased its expenses by 25% for 2009 
compared to the previous year and spends 1.7% of its GDP. 
Colombia's determination to be militarily prepared is related to an 
eventual border conflict with Venezuela, and not just its fight 
against narcotics guerrillas. The agreement for U.S. military 
presence in Colombian military bases is perceived as part of a 
design that goes beyond Colombia's internal struggles. The United 
States is still fundamental for Colombia's preventive surveillance 
capabilities. In sum, the report confirms that military 
institutions in the region are increasingly isolated and 
cooperation has not moved forward as it has in the diplomatic 
arena. The arms race is unstoppable for now, as the United States 
chooses not to get involved in internal affairs or in stopping the 
military expansion.  Its participation is restricted to Plan 
Colombia, Plan Merida, and SOUTHCOM activities related to narcotics 
trafficking (Alvaro Vargas Llosa article, conservative, independent 
La Tercera, 2//7). 
 
Peru 
 
¶6.   Interview with Peruvian Foreign Minister Jose Antonio Garcia 
Belaunde:  "When President Pi????era tells us that the topic of the 
(Peru's) maritime demand will be settled in The Hague and that we 
can unfreeze relations to move forward on other issues, our answer 
is that we are anxious do to this and that he can count on our most 
sincere support" (La Tercera, 2/7). 
 
 
 
Haiti 
 
¶7.   20 Chilean Carabineros policemen were deployed to Haiti at the 
request of United Nations to guard the 46 banks in Port-au-Prince 
and that are starting to operate (La Tercera, 2/7). 
 
 
 
OAS 
 
¶8.   Foreign Minister Mariano Fernandez answers a question on the 
reelection of OAS secretary General Jose Miguel Insulza:"We have 
the necessary votes... Several have been made public, such as 
Mercosur, Dominican Republic, and Colombia; Then there are those 
who have given us their support and are confirming it in writing... 
but asked that their vote not be revealed until the day of the 
election" (La Nacion, 2/8). 
 
 
 
¶9.  OAS Secretary General Insulza is already in campaign for his 
reelection: "The least I expect is an evaluation of what has been 
done. ... It must be clearly said that we have acted with 
determination and in depth in cases of crisis," said Insulza (El 
Mercurio, 2/6). 
 
 
 
Local Politics 
 
¶10. Breakdown of a part of Pi????era's program: 
 
--  Social protection: A special bonus for March, creation of a 
Social Ministry, extension of postnatal period to six months; 
 
--  Employment: Fast reaction mechanisms to promote investment; 
subsidy to hire manual labor; creation of agencies to improve labor 
environment for the most vulnerable sector of society; 
 
--  Security: Bill that creates an electronic surveillance device 
for individuals accused of a crime; increase the number of 
policemen on the streets; pass the bill already in Congress that 
creates the Ministry of Interior and Citizen Security. 
 
--  Education: Pass the bill already in Congress to create an 
entity that oversees education, create a mechanism for the 
appointment of headmasters to public schools (El Mercurio, 2/8). 
 
 
 
¶11.  In 2005, President-elect Pi????era bought full ownership of 
television station Chilevision.  He has now decided to transfer all 
his shares to a non-profit foundation that will administrate his 
shares for as long as he is in office.  The means that profits 
generated by the station and that are not reinvested in the station 
will go to charity.  It also means that Pi????era will retain station 
ownership.  Pi????era will name the foundation's board. The 
foundation's by-laws say that Pi????era can appoint or remove the 
president of the foundation at any given time and assume himself 
that office (La Tercera, 2/7). 
 
¶12. Fulvio Rossi, president of the Socialist Party: "It's a scam 
and a way to keep ownership (of the station).  Pi????era should have 
included the station in his blind trust."  Jose Joaquin Brunner, 
former TV station board member:  "This will not solve the future 
president's conflict of interests" (La Tercera, 2/8). 
 
 
 
¶13. President Bachelet appointed General Cristian Le Dantec Joint 
Chief of Staff, in accordance to the recent law that reorganizes 
the Ministry of Defense (La Tercera, 2/6). 
URBAN