Economic Impact from Chile’s Earthquake

CHILE, March 5, 2010 - On Saturday, February 27, the Central and Southern regions of Chile were struck by a devastating earthquake registering 8.8 on the Richter scale, followed by a tsunami.  Over 790 people have died, with many more injured and homeless. Since then, the country has experienced hundreds of aftershocks. Preliminary estimates are that total damages could be in the $15 to $20 billion range.  Buildings, hospitals, schools, roads, bridges, ports and industries, especially in the Southern part of the country, were heavily damaged. The Chilean Government is currently concentrating on supplying food and provisional shelter to the more than two million inhabitants affected by the quake. As devastating as the earthquake is, rebuilding should not be as difficult for Chile as it can be for other parts of the world that have experienced catastrophic disasters.  Chile has $11.3 billion in reserves and can easily tap international loans, as it is a net creditor country. Prior to the earthquake, the country's GDP was expected to grow 4.5 percent to 5.5 percent during 2010. Chilean economists estimate that such growth can still be achieved, although growth may be lower in the first two quarters, and larger in the last ones. The Chilean government has accepted foreign aid and is prioritizing its needs. The most immediate needs are:

• Field hospitals and prefabricated clinics (10 large hospitals, amounting to 4,000 beds, must be demolished, as well as dozens of rural clinics.)
• Satellite communication equipment to establish communication with isolated areas
• Bailey bridges
• Diesel-powered energy units
• Portable dialysis units
• Small desalinization plants   For the medium- and long-term, the rebuilding effort will be concentrated mainly in building new homes, repairing damaged ones, repairing the road infrastructure (roads, overpasses, bridges, etc), hospitals, schools, ports and miscellaneous industries hit by the earthquake.  There are opportunities for companies to supply equipment and machinery related to this rebuilding effort, specifically:
• New and used road building heavy construction machinery (bulldozers, graders, excavators, etc.)
• New and used general construction machinery
• Building and construction tools (drills, power tools, other tools, etc.)
• Building materials (panels, sidings, glass, etc.)
• Hospital equipment and supplies
• Steel (68 percent of the country's capacity will be out of production for at least three months)

The majority of the damaged hospitals are owned by the government of Chile.  Chilean government procurement opportunities for medical as well as other related goods and services can be found on the web at www.chilecompra.cl.  However, it is much easier for bids to be submitted by Chilean importers and/or distributors, rather than international firms. While U.S. firms may bid directly, the process is much more complicated.  The U.S. government is assisting with some of the items needed immediately. For information, contact the Chile Task Force Santiago at [email protected]. Companies that already have relationships with distributors in Chile will be well-positioned to respond to these needs.  Companies seeking such relationships are encouraged to talk to the Georgia Department of Economic Development and the Commercial Service of the U.S. Department of Commerce, which can match qualified Georgia suppliers with potential representatives in Chile.   The State of Georgia has been represented in Chile since 2005. Brian Wilson is the Managing Director of the Georgia office and is responsible for developing business opportunities for Georgia companies in Chile and providing them with U.S. export assistance, as well as promoting Georgia's economic development interests in Chile. For information on opportunities in Chile, please send an email to [email protected] or call 404-962-4036.