MercoPress. South Atlantic News Agency

Chile's Bachelet admits mistakes and opens the wallet

Chilean president Michelle Bachelet, suffering from a significant downfall in her popularity caused by a controversial (and collapsed) public transport system in Santiago admitted Monday people had the right to be angry but promised that the problems will be overcome.

"People have all the right to be anxious and angry. I understand their anger and impotence", said Bachelet on Monday during her annual state of the nation speech to Congress. To correct the difficulties that have been ongoing for months, President Bachelet announced a package of measures including a request to Congress for 290 million US dollars to help subsidize the Santiago private public transport until the end of the year. She also proposed the creation of a "transport tsar" post that will have direct responsibility over the Transantiago project and name an official supervisor in case the company needs to be intervened. "Let's not allow pessimism to distract us from the route", said Bachelet who acidly criticized the conservative opposition and its attitude towards her administration. During her one tour 45 minutes speech the Chilean president emphasised that regional integration remains her government's main foreign policy goal and promised to strengthen the Rio Group. She also talked about improving links with Argentina, Bolivia and Peru, the three countries with which Chile has borders. Regarding the strong Chilean currency, propped by booming exports of copper at record prices, which is hindering the export sector, Bachelet announced that pension funds will be allowed to hold 45% of their assets overseas, from the current 30%. Pension funds assets in Chile total 100 billion US dollars. President Bachelet also promised an additional 650 million US dollars for education which takes the total appropriation to five billion US dollars, a record sum. Chile has suffered reiterated protests, --and on occasions rioting-- from students complaining about the accesses to and quality of education. Finally she announced that the mandate which forces the Chilean government to save the equivalent of 1% of GDP from the national budget structural surplus will be lowered to 0.5% liberating more funds for social spending. "I've decided to reduce the structural surplus target to 0.5% of GDP, beginning with the 2008 national budget", said President Bachelet.