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Bachelet inherits smooth-running country, but big gaps remain(EFE Ingles Via Thomson Dialog NewsEdge)By Marcial Campos Maza. Santiago, Mar 10 (EFE).- Michelle Bachelet takes the helm of a well-functioning democracy whose economy is sailing crisply on the winds of free trade accords and China's hunger for copper. But what is hailed by some as the Chilean "miracle" also drags the ballast of eye-catching social inequity, the principal challenge facing the determined Socialist being inaugurated Saturday. China's explosive demand for the red metal has given an additional boost to Chile's economy, since it is the world's leading producer of the resource. The Asian nation's sustained industrial and energy demands have kept the price of copper on an unstoppable upward spiral for the past three years, tripling its value over the period and for the first time topping $4,550 per ton. For Chile, each cent of the annual average price of copper pours more than $40 million into the nation's coffers. Free trade treaties with the European Union, Mexico, Canada, United States, South Korea, New Zealand, Singapore and recently China have been responsible for raising Chile's foreign trade to the equivalent of 60 percent of gross domestic product (GDP). The South American nation is currently negotiating other such agreements with India and Japan The treaties presume the duty-free entry of Chilean exports into 47 countries with more than 2 billion consumers around the world. Nevertheless, more than a million poor people living in the environs of Santiago represent the continuing travails of many in Chile. The streets conforming a ring of poverty, crime and drug addiction contrast with the building boom and shiny new SUVs rolling through the upscale east end of the Chilean capital with its six million residents. The free-market capitalism imposed by the 1973-1990 dictatorship, with low wages and growth based on foreign trade, was not modified by succeeding democratic governments, which chose to boost social justice along with efficiency but never came close to ending the marked contrast between haves and have-nots. Lower-middle-class Chileans traveling the world, owning new cars from Japan, South Korea and soon some low-priced models from China, as well as watching the most technologically advanced televisions in their homes, are shining examples of this "economic miracle." Chileans' per-capita income has surged from $4,568 in 2003 to $7,300 in 2005, while the forecast for 2006 is an economic growth of between 5.5 and 6 percent, very close to 2005 which, according to preliminary statistics, reached 6.3 percent. On the other hand, Chile's trade surplus in 2005 amounted to $9.24 billion. These figures allowed Chile's GDP for the first time to reach more than $110 billion. On the dark side, however, is the rising personal debt with which the average Chilean is saddled, thanks to the ease of obtaining credit both from banks and stores. Even so, the average Chilean family is only about half as indebted as the average German one, and a third of the chronically in-the-red average U.S. household. According to Arturo Martinez, president of the Unitarian Workers Central (CUT), Bachelet's big challenge will be convincing big business that "they have made so much money with free-trade treaties" that they can reach in their pockets and pay "decent wages." Martinez told EFE that in Chile, 0.5 percent of its population of 15 million "are very rich and have all the power." "He believes that Chile, in spite of its efficient macroeconomy, "will never become a developed country if it doesn't end the huge gap between rich and poor." Economic analysts say that the richest 5 percent of Chileans earn 220 times more than the poorest 5 percent, while 80 percent of Chileans earns less than 300,000 pesos ($576) per month. EFE mc/cd |