Chile Makes Preliminary Estimate of Damage After Earthquake
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A preliminary estimate shows Chile needs US$30 billion for repair following the 8.8-magnitude earthquake on February 27, President Sebastian Pinera said Tuesday.
The cost accounts for 18 percent of the country's gross domestic product (GDP), Pinera said while meeting with leaders of the right-wing Coalition for Change.
Pinera said more than half of the money will be paid by the government, while between US$5 billion to US$8 billion will be covered by insurance.
Repairing houses will cost some US$10 billion and restoring public infrastructure, 3 billion dollars, he said, adding the current problem is a tight budget.
According to Pinera, the administration of former President Michelle Bachelet increased the fiscal expenses in 2009 by 17 percent, higher than the predicted 14 percent. Besides, she overdrafted the 2010 budget by some US$2 billion between January and February, making the national budget of the year surpass US$40 billion, Pinera said.
To solve this problem, the government is considering raising taxes, but has yet to present a concrete proposal. However, it will first try to reassign international loans in order to ease inflationary pressure.
Pinera's estimate of the damage and reconstruction costs is seen as an attempt to lower public expectations towards the government's capability to face the catastrophe.
The government has before launched a campaign to explain the complex situation and try to correct the impression the former president has given to the public that the country has enough resources and is fully capable of surviving the crisis.
Chile's Minister of National Defense Jaime Ravinet on Monday called on the country's conscripts to fulfil their military duty and voluntarily extend their service to the end of the year to assist in the reconstruction efforts.
Rodrigo Hinzpeter, Chile's interior minister, demanded members of the parliament's ruling coalition to inform the government of any possible social conflicts in their districts, which had been one of the main concerns of President Pinera before he was sworn in.
Furthermore, after touring the southern part of Chile, Pinera pledged to build makeshift schools so that school in the affected regions could reopen before April 26. More than 1.2 million students could not go to school in 2010 because of the damage caused by the earthquake.
The new president also set March as the deadline to restore basic services and food supplies in the most affected regions, and announced measures to help small and medium enterprises resume business.(Xinhua News Agency March 17, 2010)