SEBATIÁN PIŇERA looked shaken, rather than jubilant, as he was sworn in as Chile’s president on Thursday March 11th. Minutes before he was reminded of the scale of the task he faces in rebuilding a large swathe of the country after a massive earthquake on February 27th. The same area was hit by an aftershock that, with a 6.9 magnitude, was only slightly smaller than the quake that devastated Haiti in January.
Three other large tremors followed during the inauguration ceremony in the National Congress in Valparaíso on the coast of central Chile. Outside people started to head for the hills as the national emergency office issued a tsunami warning. The sea, in fact, remained calm but Mr Piñera cancelled a lunch with visiting foreign leaders—some of whom did not look as if they could have eaten much anyway. After sending Rodrigo Hinzpeter, his new interior minister, to the capital, Santiago, to co-ordinate a response to the emergency, the new president boarded a helicopter to the aftershock’s epicentre in the O’Higgins Region, just south of Santiago.
Some towns were again left without water or electricity but the shocks caused relatively little damage and only one death, from a heart attack, was reported. In his first act as president Mr Piñera declared the region a “catastrophe zone”, putting it under military control. “Prevention is better than cure”, he argued in a reference to criticism of his predecessor, President Michelle Bachelet. Her government’s delay in sending soldiers to the Maule and Bío-Bío regions farther south, the epicentre of the original earthquake, allowed widespread looting to break out.
His prompt decision was generally welcomed. The various earthquakes have left nerves frayed and, as Mr Hinzpeter suggested, Chileans are anxious for a semblance of security. The earthquake and particularly the pillaging that followed dented their pride in a country they believed to be largely law-abiding and well prepared to cope with natural disasters. “Like some parts of the coast, Chileans’ self-image subsided as a result of the earthquake,” noted one local newspaper columnist.
But Mr Piñera, a wealthy businessman who heads Chile’s first right-wing government since the restoration of democracy in 1990, will have to restore more than frayed nerves. According to his finance minister Felipe Larraín, replacing or repairing damaged infrastructure, mostly in the Maule and Bío-Bío regions, will cost $20 billion-30 billion, or 13-19% of GDP.
The private sector, which is reasonably well insured, will cover part of the bill but the rest will have to be financed out of the public purse. The outgoing government estimated that the state will have to invest $3.6 billion in rebuilding public hospitals, $1.6 billion in schools and $1 billion in roads and ports. Some 500,000 families, of Chile’s total population of 17m, have lost their homes. Ahead of the southern hemisphere winter, temporary housing is being installed but many will require more government help.
Money should not be a problem. Chile has just over $11 billion in a sovereign fund, saved when the price of copper, its main export, was at record level. It helps, too, that the country has high credit ratings and so should have little difficulty in borrowing additional funds (although exporters worry that an inflow of foreign funds could push up the exchange rate and hurt their competitiveness).
Still, Mr Piñera faces a daunting task. During a visit on Thursday afternoon to Constitución, a fishing village on the Maule coast that was devastated by the February earthquake, he warned Chileans that “we have to dry our tears…and roll up our sleeves”. How effectively his government does that will be crucial in determining the speed with which Chile recovers from one of the worst disasters of its recent history.