Posted on 26-8-2004

Chile Stands Alone With USA
by Pascale Bonnefoy. Aug 5, 2004

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.