11 March 2009

Chile to Spend Savings in ‘Lean Times,’ Bachelet Says

By Nathan Gill and Sebastian Boyd
March 11 (Bloomberg) -- Chile will spend savings accumulated from record copper prices to fight unemployment and will emerge stronger from the global economic slowdown, President Michelle Bachelet said.

The government’s $4 billion economic stimulus package offers long-term solutions rather than populism, she said today in a speech to students and teachers in Santiago, were she was distributing the first of 30,000 computers her government is providing to pupils from low-income families.
Chile’s government, which owns Codelco, the world’s biggest copper miner, had $22 billion of savings from the commodity boom stashed away at the end of January. The government plans to use some of that money on extra spending that it expects will add 1 percentage point to economic growth this year.
“We didn’t lose our sense of direction when the price of copper was high, we saved for difficult times,” Bachelet said. “The lean times have arrived. Today we aren’t saving the money, we’re putting all our meat on the barbecue.”

Bachelet’s popularity rating rose to the highest since April 2006 last month after she announced the extra spending. This month, the government is handing out 40,000 peso ($66.63) bonuses for each dependent of 1.7 million poor families.