Chile Rocked by Powerful Earthquake

A devastating earthquake measuring 8.8 on the Richter scale hit Chile before dawn on Saturday (27 February). Several aftershocks have been felt since then. The epicentre was offshore, 90 kilometres from the city of Concepción and 300 kilometres south-west of the capital, Santiago. The quake has caused extensive damage in Concepción, Chile's second most important city, destroying infrastructure and private residences, and the number of homes affected is estimated at 1.5 million. At the time of writing the death toll has reached 711, although there are many still unaccounted for. The number of fatalities could easily rise to more than a thousand, and so far two million people have been affected by the quake. Electricity distributors have been struggling to restore power supply in the most affected regions, but they have made significant progress over the weekend. Electricity is vital to allow hospitals to operate and public water utilities to produce and distribute drinkable water. Other risks became evident in the aftermath of the quake: a 9-metre-high tsunami hit Chile's Robinson Crusoe Island in the Pacific, sweeping through the San Juan Bautista village and killing at least five people. On the mainland, the port in the coastal city of Talcahuano suffered severe damage and, according to the BBC, at least 20 boats were "swept ashore and dumped in the streets by the waves". The local media has reported that at least 350 people died as a result of the tsunami in the coastal city of Constitución, 350 kilometres from Santiago. President Michelle Bachelet had initially played down the tsunami alert in the Pacific—an alert that saw an immediate evacuation to higher ground in the U.S. state of Hawaii and some areas of Japan. However, several of Chile's coastal towns were hit by what were later recognised as tsunami waves. Defence Minister Francisco Vidal admitted yesterday that the "navy committed an error" in not alerting the population about the potential risk of a tsunami, AFP reports.

Operational Risk Mounts

In the meantime, the transport system has been paralysed in much of the country over the weekend as metre-wide cracks continue to disrupt traffic on the main motorways. Santiago International Airport was shut down after the earthquake as a result of damage to the actual buildings, although its landing strips and runways remained operable. Yesterday it was reopened and some flights were allowed to land, although operations are still much reduced. Roads also suffered significant damage, and several bridges gave way, resulting in some smaller towns being cut off. In Concepción a substantial bridge over the Bío-Bío river, the largest watercourse in Chile, collapsed. Isolated fires have broken out, including one in a university chemistry faculty. Mining operations were halted at some mines in central Chile, including state-run Codelco's El Teniente, as result of interruptions in electricity supply. Nevertheless, since most mining operations in the Andean country are located in the north, far from the quake's epicentre, the impact on this sector was limited. Authorities are still assessing the damage to infrastructure, but the extent of the destruction so far and the current death toll warrant a downgrade in IHS Global Insight's Operational Risk Rating from 2.25 to 2.50.

Government Sends In the Army

President Bachelet has declared a state of emergency in two of the country's provinces, Maule and Biobío. She has ordered two military officers to assume control of the situation in these two regions by co-ordinating relief efforts and by providing security to the general public. Around 10,000 soldiers have been deployed in these areas so far, where looting from supermarkets and other services has been seen. Bachelet and part of her cabinet met with supermarket representatives to reach an accord to provide basic food staples and bottled water freely and in an orderly fashion to those affected by the quake. Moreover, socialist president Bachelet also met with her successor, president-elect Sebastian Piñera (the first democratically elected conservative president in 52 years, poised to take office next week). Bachelet has shown her willingness to provide him with the latest information and to bring him up to speed with regard to all government actions being implemented to deal with this event. Piñera, a billionaire entrepreneur, has responded positively, promising to launch a reconstruction plan known as "Levantemos Chile" (Rise, Chile) after he takes office. The reconstruction plan will count on heavy involvement from the private sector, which will be given a boost under Piñera's presidency.

Outlook and Implications