Chile drought looms as La Niña takes toll
By Staff Writers
Santiago, Chile (UPI) Feb 10, 2011 Chile has ordered nationwide contingency planning to prepare for damaging effects of a drought triggered by La Niña weather phenomenon, already seen behind low rainfall and poor agricultural harvests in Argentina. A succession of natural disasters has put unexpected financial pressures on President Sebastian Piñera’s announced plans to catapult Chile into the 21st century. Major parts of urbanized Chile were devastated in a February 2010 earthquake that depleted the country’s cash surplus soon after Piñera took office. A tsunami and floods caused further damage. The natural disasters followed adverse effects of the 2009 financial crisis on Chilean economy, which caused the economy to contract 1.5 percent at that time. The government has set a goal of a 6 percent annual growth in gross domestic product. Despite the 8.8-magnitude earthquake, Piñera said Chile maintained a robust growth through 2010. … The oncoming drought caused by La Niña is a different matter. The Chilean economy is already under pressure from an overvalued peso that threatens to undermine the country’s exports. A chronic shortage of rain during the year will impact on agricultural harvests and hit exports, analysts said. An onset of drought would also challenge the president’s election pledge of creating 1 million new jobs and raising per capita income from $14,341 in 2009 to $20,000 within his term of office. … La Niña is complicating government efforts to regulate the economy. Hydroelectric power generation has suffered as low rainfall has begun to empty the reserves. Chile produces about half of its energy though hydroelectric power. Officials said the shortfall was already estimated to be about 10 percent of the total hydroelectric production feeding into the grid.
