PREVIEW: Earthquake shifts new president's plans, hopes for Chile

Mar 10, 2010, 8:45 GMT

Santiago - When conservative businessman Sebastian Pinera is inaugurated Thursday as Chile's new president, he will find a country that is very different from the one he had hoped to lead.

An 8.8-magnitude earthquake shattered much of Chile on February 27, and with it also knocked off its pedestal a country that was confident of its path to progress.

In his election campaign, Pinera, 60, had dreamed of significantly boosting Chile's Gross Domestic Product (GDP) by the time he left office in 2014.

The country appeared to have everything going for it: Inflation was under control, there was a solid budget surplus coupled with economic recovery, and the Pinera government was set to have a privileged relationship with Chile's business establishment, to which the president-elect himself belongs.

But then came the earthquake, followed by a tsunami that ravaged much of the southern Chilean coast, and the entire scenario has changed radically for Pinera's incoming administration - for at least the next three years, reconstruction is likely to be its main priority.

Chile has lost an estimated 4.8 billion dollars in the damage wrought on hospitals and other critical infrastructure as a result of the disaster.

Nobody has come up with reliable public estimates of how much it might cost to repair the country's schools and housing, after the authorities reported that at an estimated 2 million homes were damaged.

The crisis, which will still be at the health- and food-emergency stage by the time Pinera takes office, has also led him to ask outgoing socialist President Michelle Bachelet to allow him to keep her team in place in the regions for a few months - the same team he had long criticized for their poor performance.

In Chile, regional governors and provincial leaders are appointed by the president, and only mayors are elected. Pinera was originally expected to appoint close to 60 governors and about 150 regional representatives of his ministries.

The right has not held power in Chile in the 20 years since the end of the dictatorship of Augusto Pinochet (1973-90).

Like Pinera himself, who owns a television channel and a major stake in Chilean airline LAN Chile, among others, many of his aides come from the business community and have no experience in public administration, which could be a handicap as they seek to tackle rebuilding efforts immediately after they take office.

But the charismatic, optimistic Pinera has already told his compatriots that 'better times are coming,' and he has stressed that he would not like to be remembered only as the president who led the country's reconstruction.

'Only God knows why he sent us this tragedy,' he said earlier.

Pinera has made frequent calls to forge unity. Seeking consensus with the centre-left opposition, he is to negotiate a new budget for the year, which will allow the country to focus spending on reconstruction and on reactivating the economy. Nobody has opposed these plans, so far.

But Pinera will also have to assess whether the ministerial team that he had designed before the earthquake is also the best possible option in the current circumstances. He had picked business managers and consultants in the effort to boost the country's productivity, but that is no longer the primary task at hand.