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3/3/10

Chile earthquake: A must-read analysis

The best analysis on the Chile earthquake by the best analyst in Chile is yours for the reading here (permission granted by the author). Published yesterday evening, it's Armen Kouyoumdjian at his incisive, irreverent and politically incorrect best. Enjoy


HERE, SEBASTIAN, IT IS ALL YOURS TO FIX
Big Earthquake in Chile, Many Reputations Killed

By Armen Kouyoumdjian (kouyvina at cmet dot net)

March 2nd , 2010

It is my habit to react quickly to major events, but an 85-hour power cut in our neighbourhood made me incommunicado by any electronic means, also cutting me off from TV coverage. We were also without water for much of that time. My main source of information were the two groups of radio stations which worked in chain and provided an excellent way of keeping in touch with what is going on. Now that services have been restored, here is my first look at the events of the past 4 days. I am glad to say that both myself and my family, as well as our house, suffered no consequences to speak off.

I am not a seismic engineer, but some years ago I undertook a fairly extensive study about the possible effects on Chile of a major natural phenomenon, for the InterAmerican Development Bank, so I am fully aware of various technical aspects. I even think I mention there the particular risk of the Concepción area, (I have to find the file, but I just want to prevent the Roubini-type aparecidos, who will claim they all forecast it. An Israeli-born Turk! No faltaba menos. How much lower can you get?). However, this paper will mainly concentrate to other aspects.

THE QUAKE AND ITS COVERAGE From what we hear, the strength at the epicentre of this quake was the fifth most powerful since records have been kept. Also, the extent of the areas touched was unusual, ranging from the capital and central coast down to the south-central area of Concepción, the country’s third largest town, and surrounding areas where the main thrust was.

For many journalists, both Chileans and foreign, the whole exercise for evaluating the damage was the body count. With the Chilean toll so far under 800 (but due to augment as many Tsunami victims have yet to be accounted for), when set against the 300,000 deaths of Haiti, the conclusion should be that “we’re OK, then”. With all respects to those dead, they have no more links to this valley of tears, and it is better to concentrate on those alive, and the physical damage.

The self-serving conclusions that came out of this misreading were amazing. Several publications talked about the “little damage” due to the quality of Chilean management. One publication even headlined “Milton Friedman Saves Chile”. All forecast “a quick recovery”. Well, let us look at the truth, starting with just the earthquake damage.

On an early estimate, half a million dwellings may have been damaged beyond repair, leaving some 2 million people (one in eight of the population) homeless. Luckily there is still three weeks to summer, though the weather down South knows no seasons. Another million houses may have been damaged. Only 7 % of dwellings in Chile are covered by earthquake insurance.

Much of the road infrastructure in the epicentre region is in a bad way. Unfortunately, it is where forestry and other activities take place. The country’s main harbours have had their moorings and jetties damaged, and are operating at best at half capacity. The wine industry has suffered an estimated U$ 600 million of damage, just as the grape harvest was starting. This is equivalent to half a year of exports, for a sector already beleaguered by competition and an overvalued peso. The fruit export industry is also in dire problems as power shortages and transport difficulties will affect the massive export trade.

With the US and several EU countries having advised against travelling to Chile, where the airport is unlikely to be operating in both directions until Friday, seminars, business and tourist trips have been cancelled and more will follow. Many tourists used to head towards the epicentre zone, but even in our neighbourhood Valparaiso, 400 kms from the centre of the quake, no less than 17 hotels have been damaged. The airport terminal building, operated by Vancouver airport, is a disaster area, and passengers are being processed in a tent on the tarmac. That is how it happened in the 1920’s. The fuel tanks are also damaged. There used to be another airport in the south of Santiago, but it was dislodged to favour some property speculators with links to some high officials.

In Viña del Mar, no less than half a dozen high rise buildings of recent construction have to be demolished, as will several in Santiago too. Even dwellings which are OK from the outside have suffered major damage to the contents, which not everyone can afford to replace. In my son’s bedroom, a printer flew from a shelf onto the bed at the other side of the room, one of the few such examples we suffered, but most others were not so lucky.

Public buildings gave not fared better. Shopping malls, theatres, historic buildings and even the Congress building in Valparaiso (where the March 11 change of government is to take place) and the seat of the foreign ministry in Santiago are in doubt. The newly built legal centre is close to collapse. Remember all this is 400 km away from the epicentre. You can imagine the state of houses and public buildings in the south. An 84 km underground water pipe supplying much of the Valparaiso area has a long stretch of damage, and we will have to be without water for a new bout of 48 hours when they decide to repair it.

In a country where most of internal merchandise moves by road, the situation of the roads is bound to affect the flow of the supply chain at all levels.

In all the country, 17 hospitals are heavily damaged of which 11 probably beyond repair.

THE DAMAGE’S CAUSES Chile has strict anti-seismic construction norms, but much of the damage in the south, and older properties in general, were built before the norms, or from materials such as adobe (sun-dried mud bricks), which do not resist well. Inspection quality is not that good either through municipal personnel, and that of concessioned infrastructure either. Two stretches of the new Santiago ring road collapsed. These types of constructions were built under the “supervision” of 22-year recently graduated female Spanish civil engineers who were sent to Chile by the company actually holding the concession, but were more interested in spending time in Bellavista night spots picking up who they would shag that night. They had neither the experience nor authority to impose proper quality control on the already careless Chilean worker. A disaster waiting to happen.

THE OFFICIAL CALLOUS RESPONSE Except for the foreign journalists writing rubbish from their desks in Brooklyn and the aptly named Foggy Bottom area of Washington, there is a consensus that the official management of disaster relief has been, to put it mildly, seriously lacking.

There are various reasons. One is laziness, particularly because there was less than 2 weeks left of their tenure, so ministers, undersecretaries and other non-established employees basically did not care much. Many were on their last days of summer holidays, and they would be damned if they were going to explain to their wife and children that they had to get home 48 hours early because 2 million people were homeless and hungry. Applying this warning to the likes of France, Spain and Italy (referring to August), this habit of closing down the fucking country, office or institution for a whole month and go away has to stop. IT HAS TO STOP!”. You can take holidays in the Summer only one year out of two, and the hell with what your spouse and children think. Government officials, senior staff, medical personnel and other such important people will have to be obliged to work one summer out of two, and those who are away be locumed by someone of their own level. No minister to be replaced in the interim by a director general (that would be lucky!), no admiral by a Lt. commander, etc..You don’t like it, become a beach bum. Life does not stop because you are in Gstaad, Cancun or Buzios. When people ask me if there could be another Allende in Chile, I generally answer that I do not think so, but I do wish there is a Pol Pot.

Specific ministers showed where they priorities lay. The Defence minister delayed his first press conference because “I need a smoke first”. He might as well have smoked the whole packet because he then spoke to say that “a tsunami in Chile is the same as a tsunami in Burundi. “. Burundi being a country with no sea-shore, it would have been a difficult contest, but I could not write to El Mercurio to point to the failures of the teaching of geography in the country. It took four days for another reader to do so.

René Cortazar, minister of transport and telecommunications, two areas particularly crucial to the situation, was seen jogging near his house a few hours after the quake, instead of being in his office. Possibly the prize goes to the Interior Minister for commenting: “24 hours after the quake is too early to start looting in despair”.

It is not that nobody was expecting them. Emergency “committees” were organised years ago. Coastal cities have signs (bilingual if you please) advising the “tsunami evacuation route”. I think it was Von Moltke who said that “no battle plan survives the first contact with the enemy”. I would add, “particularly in Latin America”.

The same specialist fire teams which were sent to Haiti only a few weeks ago, were ready to fly to look into a Concepcion building where 90 people were trapped. It took over 2 days to fly them out, and when they arrived to Concepcion airport, they found out that no ground transport had been arranged to take them into town. Once they started working, their equipment became useless but there were no replacements. There was also no fuel.

THE VIOLENCE On April 6, 2008, nearly two years ago, I wrote a futuristic paper about a Chile overtaken by uncontrollable violence, in 2010! Though it was kindly translated in Spanish too and widely circulated, nobody took it seriously. If you apologise for your past indifference, you can have a copy, but let me cite an extract (written TWO YEARS AGO).

“However, the most serious situation was in the Eastern residential suburbs. The protesters had reached 100,000, and it was not a demonstration, nor a riot. It was an uprising. The crowds went through district after district, looting, raping, burning and killing, but not before asking for the keys of all the cars parked outside, which they filled with all the goods they could carry. Police forces were sent in quantities, but they had neither the numbers, nor the equipment (and even less the enthusiasm) for a pitched battle of such proportions”

Armen Kouyoumdjian Chile 2015: The Alternative Scenario (The Uprising of Winter 2010)

The year 2015 being the finality of the events was taken in parallel with a very optimistic paper (in fact written in a psychedelic trance) by a Chilean academic economist, which predicted that in 2015 Chile would be like Switzerland whereas the rest of Latin America, dressed in rags, would be fighting over stray rats to eat. I wanted to give the alternative scenario. Interestingly, the economist lives in the USA.

For nearly three days, all law and order broke down in Concepcion and surrounding small towns. Gangs of several dozen started by looting supermarkets, initially to look for food, but then moved on to more expensive goods like electronics and clothing. Then they looted the chemist shops and the petrol stations. When there were no more businesses to loot, they started to enter private houses, both abandoned and occupied, and took away anything which had survived the quake. This then extended to parts of Santiago, not just the suburbs but some central parts of the capital.

The authorities thought they could control the situation by trebling the number of police, but the looters hardly took notice. In one area the police intervened not to arrest the culprits but ask them to queue and loot in an orderly fashion in order to avoid a stampede (I am not inventing this, I assure you).

It is only on the third day that the military, initially 6,000, now up to 14,000, entered the area, and imposed a curfew, but as far as business is concerned, most of the damage was already done. It is not clear if the insurance held by the large companies whose premises were affected includes riots and such public disorder. An initial estimate of their exposure (which is not the same as the amount of damage) by Chilean insurers is for U$ 2.6 bn of claims. Many if not most small businesses are not insured against anything.

As a result of the violence, many people (including 90 % of the staff at the country’s largest public hospital, which happened to be in Concepcion) have stayed away from work to protect their family and belongings. This causes many other problems.

THE INVOLVEMENT OF THE ARMED FORCES Many people were surprised as why the armed forces, whose every purchase from the satellite to helicopters is described as designed to help with natural catastrophes, took some three days to get involved.

Before that, there was the incident about the tsunami alert. There is the old American joke about the sign hanging over a bar, which read: “we have an agreement with the banks : they do not sell beer and we do not cash cheques”. It is not clear why in the XXIst century the navy should be in charge of civilian coastal matters, but quite frankly friends (and many are well known to me), please stay away of meteorology and seismology . I often laugh when in the early morning the local radio says the Navy weather service is predicting a cloudy day with no sunshine, when I see a bright blue sky from my window. As for earthquakes, there are just 7 specialists in Chile, and their number should be increased and a separate service set up.

This being said I do believe the Navy’s version that they did warn of a possible tsunami, and it is probable that the authorities decided to ignore it (“we did not understand it” was their excuse, although it was pretty clear), in order to avoid a “panic” (obviously considered worse than many deaths), but even more probably because they could not be bothered with all the logistics of an evacuation.

Now to the involvement of the military in relief logistics and maintaining order. On the first aspect, they cannot take initiatives of that kind without civilian orders. The air force said it was ready with all its available aircraft (what there is of it, how long are we going to wait before the Russian helicopter contract is signed? What were any helicopters doing when so many towns and coastal villages were isolated by road?), soon after the quake, but nobody told them to transport anything.

On law and order, the matter is more sensitive. The analysis that follows is my own for which I take sole responsibility. With states of exception and curfews imposed, and a shoot to kill policy, and despite the different circumstances, the similarity with the Pinochet years makes them nervous. In recent years, hundreds were prosecuted and many jailed for abuses, true enough, committed during the military government. However, the judges’ wrath was limited to the uniformed executors whereas the civilians who gave the orders are prosperous politicians, businessmen, or consultants (or all the above). The military once again were made to carry the can for protecting the private sector from the “Bolshevik hordes”, and got a kick in the back as a thank you. It is very easy to kill innocent people in the midst of looting and rioting, and I can quite understand that they were reluctant to be involved. On the other hand, their strong participation now has allowed them to show that far from being obsolete, they are still very much needed institutions.

The Navy and the Air force have particular problems. The navy’s major base in Talcahuano, the port city of Concepcion, including its ASMAR shipyard, were heavily damaged. ASMAR repairs and builds vessels for other countries too. The Air Force has to decide if it cancels or maintains the FIDAE 2010 air show, due that the end of march. There is no news if the ad hoc installations in the base next to Santiago airport were damaged to any extent, and the slow return to normality of the airport itself is a hindrance. On the other hand, preparations by organisers and exhibitors alike are very advanced and a cancellation may mean a loss of credibility and put at risk the whole future of the show.

THE REACTION OF BUSINESS A lot of businesses (in some small towns near the epicentre, and in Concepcion itself) have been pillaged, so the shortage of supplies has been accompanied by a rise in price, just in areas where people lost everything. From bread to public transport, prices have as much as doubled.

Big business has also been its usual heartless self . When asked by the government to donate food for distribution, Horst Paulmann of CENCOSUD, the Gauleiter of retail in Chile, answered that they would sell it to the authorities and it was up to them if they wanted to donate it. He also insisted that the press should not cover lootings because “it encouraged others”.

THE END OF MODERNITY AND OTHER CONSEQUENCES Thank heavens for small mercies, at least the quake happened before any nuclear power stations were built. With the same approach to security, we would all be irradiated by now.

The Piñera administration will have to reshuffle its whole game plans and instead of progress and modernisation, will mainly have to reconstruct and heal. The only way they can show they are different is to build real houses rather than shacks. Prospects are not good, as it has not been done in other earthquake zones when only a few thousand people were involved. What about two million?

Let this tropical striptease by the “modern” country the OECD thought it was giving its membership card to, be a lesson to all the blind analysts and journalists. I am also appalled that all these countries who always claim they have no money to pay for modest consultancy fees suddenly find millions to help a country’s inept management, on top of inviting them to freebie trips abroad. Just wait until you ask me for help next time. I will shake more than a terminal Parkinson patient.

HUEVADA DE LA SEMANA To all the useless idiots who thought life was limited to mobile phones, Facebooks and Twitter messages. The emergency and police services who replaced their old fashioned radios by mobile phones, were left high and dry like eunuchs at an orgy. Now people use their mobiles to communicate, to take photographs, to listen to radio or loaded music archives, as an alarm clock, a torchlight and even as a sexual stimulator, they should realise that once the power runs out you have NOTHING. If I had no power for 85 hours in an undamaged house 400kms from the epicentre, just imagine how easy it is to communicate in the Concepcion area.

This was another warning by the Gods to those who think they have dominated the elements nad all aspects of life.

FROM PSALM 5:5-6 “Thou shalt destroy them that speak leasing”