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CHILE
Growing isolation
Pascale Bonnefoy
8/5/2004
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Chile has allied itself with the United States and isolated itself from the rest of Latin America.

More than 6,000 US sailors descended from the USS Ronald Reagan into the port city of Valparaíso on June 26, but no one shouted "Yankee, Go home." Instead, in the port and neighboring Viña del Mar, they were greeted by 1,500 sex workers and a sea of U.S. flags hung by businesses. The local government cleaned streets, spruced up parks and distributed 10,000 condoms to local residents.

Over the weekend, 500,000 Chileans flocked to Valparaíso to get a glimpse of the massive nuclear-powered aircraft carrier and 16 other fighter ships that would later participate in the 2004 Unitas Operation held off the coast of neighboring Peru throughout July. Fifteen thousand sailors from the United States and 14 countries from the region took part in the war games.

In addition to taking a peak at the boat, Chileans were interested getting a share of the estimated US$900,000 the US sailors would leave behind during their tour of the region.

Chilean Foreign Minister Soledad Alvear commented that the choice of Chile as a port of call for the world’s largest aircraft carrier before the Unitas operations got underway was a reflection of the country’s serious nature.

"I think that one should always care about what Chile means in all areas. Chile is a serious country, a country inserted into the globalized world," she said after visiting the ship.

Hand in hand with the US

US-Chilean relations have never been better, despite the fact that Chile withstood pressure last year from President George W. Bush’s administration to vote in favor of the UN Security Council resolution that would have authorized the invasion of Iraq.

The two countries overcame that impasse, ratifying a few months later a free-trade agreement that many analysts believed was floundering.

Chile has been trying to make up for its rebel behavior. This past March, only hours after the US administration called on countries to send troops to Haiti in the wake of Jean-Betrand Aristide’s resignation, Chile announced that 300 soldiers already had their bags packed.

The following month, Chile made the last-minute decision to back a resolution presented by the United States in the UN Human Rights Commission condemning Cuba. The vote confirmed the political loyalties of President Ricardo Lagos. Chile’s principal allies in the region — Argentina and Brazil — abstained from voting on the UN resolution.

The political behavior of the Lagos administration is not much different than that of the previous governments in the 14 years since country returned to democracy. What has changed is the position of Chile’s major Latin American allies. Governments cut from the same cloth and with the same political dependence on the United States have given way to presidents who are liberal on political and social issues, less open to letting market forces run the economy and keenly interested in developing a more regional and Latin American focus.

In its third period in power, the ruling coalition is merely looking on as its major partners in the region consolidate alliances and build a bloc opposed to US political impositions, such as the Free Trade Area of the Americas (FTTA).

Chile, on the other hand, is looking north where it feels more comfortable. The governing coalition has followed to the letter the commercial and financial dictates the US administration has preached to the neighbors in its backyard.

Chile has not increased regulations or restrictions on foreign capital and, over time, has actually reduced those already in place. It has unilaterally and progressively reduced the 11-percent tariff on imports and has not strengthened labor laws or environmental standards. Important public services, such as telecommunications, gas and electricity, and the bulk of banks are now in foreign hands.

 

"Rich kid on the block"

For a long time now, Chile has felt removed from the "third word," with its misery, political crises, social and economic problems, inflation and high unemployment.

With an economy considered "the most stable in Latin America" by the UN Economic Commission for Latin America and the Caribbean, Chile consistently has ranked highest in the region in competitiveness and lowest for risk.

Chile certainly believes itself to the "rich kid on the block," as The New York Times labeled it in a recent editorial. Despite all the praise, it remains a country dependent on the export of natural resources and is highly dependent on just one — copper — which represents 40 percent of its annual exports.

While public spending has increased, helping to reduce the number of people living in poverty from 38.6 percent in 1990 to 21.7 percent in 1998 and absolute poverty from 12.9 percent to 5.6 percent, income distribution has not changed much since 1990, remaining one of the worst in the region. The poorest 10 percent of the population holds only 1.5 percent of the country’s overall wealth, which the richest 10 percent concentrates nearly 42 percent.

Despite a pro-Latin America discourse and agreements with other nations — Chile has cooperation, free-trade and double taxation treaties with most other countries in the region — it continues to exclude itself from the continent.

"The real question is why the image of Chile as an arrogant nation has grown throughout the region. Europeans tend to say that the Swiss are cheap, boring and aloof, but no one says they are isolated. Let’s not confuse being aloof with isolation," says José Rodríguez Elizondo, a lawyer and former ambassador.


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