World

Chile expects quick economic recovery from earthquake

Homes and apartment buildings here have collapsed. Looters have destroyed a dozen businesses.

A major bridge is down to one lane, and a state shipbuilding company has shut down. A major private employer, a steel mill, has stopped operations to repair its damaged furnace.

Chile's massive Feb. 27 earthquake has shut down trade and commerce in a swath of coastal villages and medium-size cities that includes Hualpen, which is some 350 miles south of Santiago, the capital.

But the picture is far from gloomy. Economists expect Chile's economy to take a short-term hit but will recover beginning mid-year as the government, private companies and individuals dramatically boost spending to replace the billions of dollars in losses.

"After a disaster, you always get an initial decline in employment and in the overall economy," said Tony Villamil, dean of the School of Business at St. Thomas University in Miami. "But I am still projecting overall growth for Chile in 2010. I don't see any long-lasting impact."

Villamil pointed out that Miami's economy recovered within a year after Hurricane Andrew devastated the region in 1992.

He noted that Chile enjoys enormous resources compared to Haiti, which was struck by a 7.0-magnitude earthquake on Jan. 12. More than 200,000 people died in Haiti, its capital lies in ruins and the estimated cost of reconstruction -- more than $8 to $10 billion -- is about equal to the size of the country's total economy, Villamil said.

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