Page last updated at 15:09 GMT, Wednesday, 10 March 2010

Sebastian Pinera sees Chile plans jolted by earthquake

Sebastian Pinera stands by destroyed cars in Concepcion on 28 February
Sebastian Pinera says his will be a government of reconstruction

By Gideon Long
BBC News, Santiago

Sebastian Pinera will face one of the most daunting challenges ever confronted by a Chilean president when he takes office on Thursday, less than two weeks after the country was hit by a massive earthquake.

He has already acknowledged that his pre-election plans have largely gone up in smoke, and he will have to reassess everything in the light of the catastrophe.

It's still too early to know how much the reconstruction effort will cost, but estimates vary between $12bn (£8bn) and $30bn.

For a relatively small country like Chile, that represents up to 20% of gross domestic product, and Mr Pinera will have to divert funds from other areas to finance the rebuilding.

A responsible government has to refocus, re-evaluate and redesign its programme - but we won't use the earthquake as an excuse to abandon the key promises of our campaign
Rodrigo Hinzpeter
Pinera campaign manager

Even before he has taken his seat in the presidential palace, it seems that the die of his government has been cast.

"Ours will be a government of reconstruction," he said in a sombre news conference last week.

Mr Pinera made some bold promises during the election campaign: 6% annual growth over the next four years and the creation of a million new jobs.

Many analysts questioned those pledges at the time. Now they are even more sceptical.

So far, the new president has said little about how his plans will change, and those fine details are likely to emerge only in the next week or so, once he is in power.

But his interior minister and campaign manager, Rodrigo Hinzpeter, suggested there would have to be a major reassessment.

"It's as if you've been studying for an exam and then just when you're about to take it they change the subject," Mr Hinzpeter told Chilean newspaper El Mercurio at the weekend.

A fireman places a Chilean flag amid the rubble of buildings  in Dichato
Chilean flags are flying in the unlikeliest places

"A responsible government has to refocus, re-evaluate and redesign its programme. But we won't use the earthquake as an excuse to abandon the key promises of our campaign."

Despite the enormity of the challenge, the earthquake and its aftermath could well play into Mr Pinera's hands.

Firstly, he is assuming office amid a tremendous outpouring of solidarity and patriotism.

Chileans have donated millions of dollars to help survivors of the 27 February quake, and everywhere you look in Santiago there are red, white and blue national flags draped across buildings.

If Mr Pinera can harness that feeling of goodwill and national defiance in the face of adversity, it could propel his government forward.

Secondly, the new president is likely to benefit from a bounce in the economy in the second half of this year, as the reconstruction effort kicks in. Analysts say the building boom will generate employment and offset much of the negative economic impact of the earthquake.

Thirdly, the mood in the country chimes with Mr Pinera's own centre-right agenda. During the election, for example, he campaigned on a tough law-and-order ticket, promising to crack down on crime.

After seeing survivors of the quake looting supermarkets - and in some cases making off with television sets and washing machines - Chileans might feel that Mr Pinera is on the right track.

'Off the hook'

When the army was deployed to stop the looting, many Chileans applauded. The public appears to have adopted a tougher, no-nonsense attitude towards crime and, so long as that persists, Mr Pinera might well prosper.

"It feels like there's been a shift to the political right," said Raul Sohr, a Chilean political analyst. "Suddenly people want someone in charge with a firm hand and that's what Pinera is offering."

Mr Sohr also said that to some extent, the quake "lets Pinera off the hook".

"If he meets his targets he can take the credit for it and if he doesn't he can always blame it on the impact of the earthquake."

President Michelle Bachelet during a news conference with UN Secretary general Ban Ki-moon on 5 March
President Bachelet bows out enjoying high approval ratings

Mr Pinera has already taken some specific steps to confront the catastrophe.

Last week, he appointed new heads of regional government for the worst hit areas. They included two senior directors of major Chilean construction firms.

For now, Mr Pinera appears to have the public on his side.

A poll in El Mercurio at the weekend found that 56% of Chileans regarded his government as well-prepared for the task ahead.

On Thursday, he will take over from outgoing President Michelle Bachelet in a deliberately austere handover ceremony.

The sumptuous dinners have been cancelled and, instead, Ms Bachelet will simply hand him the red, white and blue presidential sash and wish him well.

From then on, this quake-shattered country is in his hands.

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