The Telegraph
Tuesday , March 23 , 2010
Since 1st March, 1999
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Fishing in troubled waters

Just a few weeks ago, some 2,000 fishermen who ply the waters of the port city of Talcahuano, Chile, for sardines and mackerel were busy preparing for the start of the four-month fishing season.

But the tsunami that barrelled through here after last month’s 8.8-magnitude earthquake washed away the fishing industry before the fishermen could cast their first net.

The waves tossed around fishing boats and truck-size shipping containers as if they were wood blocks in a toddler’s sandbox. Boats landed several blocks inland, resting battered and broken on city streets.

The effect on the economy of this city of 2,50,000 residents, for whom fishing is the main industry, will be far-reaching, with city officials estimating that it could take up to a decade to rebuild homes and port facilities. And this year’s fishing season is lost, fishermen said.

“The disturbance in the sea caused the fish to emigrate, to disappear from here,” said Alfonso Alvear, 69, a fisherman. “It’s as if we have to discover this fishing region all over again.”

How severely the February 27 earthquake will rattle Chile’s overall economy, which has been the envy of Latin America for the past decade, remains to be seen. Most economists are betting that Chile’s prudent economic management leading up to the disastrous quake, and the intense rebuilding effort now needed in some parts of the country, will help it weather the economic shocks better than most countries could.

But for a few months at least, a major slowdown is expected in several Chilean industries, including fishing, pulp and paper, wine and agriculture. Seaside areas like Talcahuano that were ravaged by the tsunami could take much longer to pick themselves back up.

“The harder part will be in small villages and towns along the coast, many of which lost their local economy like the fishermen did, and the lady that owned a mini market, and the guy who owned a campground,” said Rodrigo Jordan, chairman of the Foundation for Overcoming Poverty, a research institute in Santiago.

The quake devastated nearly a third of the fishing industry in the south-central part of the country, where the tremor struck hardest. It destroyed more than 12 per cent of the stock of Chile’s wine industry. And it knocked out an important pulp and paper mill in Constitucion that could take months to repair.

Then there were the more subtle effects. The seemingly endless aftershocks — more than 300 in a few days — have kept many on edge, and even stressed out cows, which are producing less milk since the quake, said Marta Lagos, a Santiago economist and pollster.

The two regions affected most by the quake — Maule and Bio Bio — account for 13 per cent of Chile’s gross domestic product and nearly 20 per cent of its industrial output. Concepcion, Chile’s second largest city and an industrial hub, was close to the quake’s epicentre and was extensively damaged.

Chile’s most important industry, copper, was unscathed, as the quake did little to mines in the far north of the country. Several ports will need to be repaired, which could slow exports in a variety of goods. The south-central zone damaged by the quake handles more than 20 per cent of the cargo in and out of Chile, said Claudio Ortiz, frigate captain of the maritime government of Talcahuano.

The movement of goods to ships is going to slow down,” said Sebastian Edwards, an economics professor at UCLA who specialises in Latin America.

But Edwards and other economists also contend that Chile could emerge with a stronger economy a year or so after the earthquake than it had before last month. The nation owes much of that rosy prognosis to the fiscal management of the past two moderate leftist governments, which have given the new president, Sebastian Pinera, palatable options for financing reconstruction, which is expected to exceed $30 billion.

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