Page last updated at 21:46 GMT, Friday, 12 March 2010

Chile puts quake damage at $30bn

Chilean President Sebastian Pinera (with sash) parades through Santiago, 11 March
Sebastian Pinera's own inauguration was rattled by an aftershock

Chile's new President, Sebastian Pinera, has said it will cost at least $30bn (£20bn) to rebuild the country after January's earthquake.

Speaking on his first full day in office, he said loans and budgetary savings would be used to rebuild infrastructure, homes and industry.

Other nations would be asked to help, Mr Pinera told reporters in Santiago.

The 8.8 magnitude quake on 27 February killed nearly 500 people, with hundreds others missing and 1.5m homes damaged.

A 6.9-magnitude aftershock rattled the country as Mr Pinera's inauguration was being held.

The businessman is the first centre-right politician to come to power in Chile since the end of military rule in 1990.

Copper income

Mr Pinera told Friday's news conference that a special fund would be set up to rebuild around 300,000 houses plus hospitals, schools and roads.

He acknowledged that he would have to re-allocate funds from other projects to pay for the reconstruction, and that the process would take years, not months.

Some of the work would be paid for with income from exports of copper, of which Chile is the world's biggest producer.

Residents of Constitucion run from their homes after an aftershock, 11 March
Thursday's aftershock sent people running from their homes

"Fortunately we have had a strong, stable price for copper," he said.

As well as budget trimmings, the country would raise money through debt issues and would dip into savings from past copper income saved in investments abroad.

Finance Minister Felipe Larrain earlier said that the government had not yet determined how much debt the government would issue.

Chile, a model of economic stability in Latin America, can raise money relatively cheaply on international markets because it has an investment grade rating and is considered low-risk, Reuters news agency notes.

But $30bn represents nearly 20% of Chilean GDP and would make a significant dent in the state coffers, the BBC's Gideon Long reports from Santiago.

Shortly after he was sworn in on Thursday, Mr Pinera flew to some of the areas worst affected by the original quake.

In the city of Rancagua, he urged residents to remain calm as the government continued its efforts to reach all those in need.

"I want to tell all Chileans that the government will always respond in an effective and timely manner in catastrophes such as the one we have witnessed in order to save all the lives that we can and so that we can quickly reach those people needing help," he said.

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