Chile leader announces $4 billion anti-crisis plan

Mon Jan 5, 2009 9:21 PM EST

business, lt, meltdown, chile, michelle-bachelet

SANTIAGO — President Michelle Bachelet on Monday announced a $4 billion plan to help Chile fight the global economic crisis and create as many as 100,000 jobs.

The plan, which contains some measures that must be approved by Congress, includes $700 million for public works projects such as street paving and the repair of public schools and clinics, Bachelet said.

"It will generate economic activity and jobs and leave projects that will benefit the entire community for decades," she said.

The plan should ensure that Chile's economy grows by 2 percent to 3 percent this year, the president added.

Bachelet's announcement came just hours after the Central Bank said the nation's economy expanded by only 0.1 percent in November, its slowest pace since March 2002. Growth slowed to 3.7 percent in the 12 months through November, down from 4.4 percent in the previous 12-month period.

Bachelet's measures include granting a one-time payment of $63 for all poor children under 18. The payments, to be made in March when the school year starts, are aimed at helping 3.7 million people.

Low-salaried workers ages 18 to 24 will receive government subsidies equaling 10 percent of their salaries, as will their employers, Bachelet said.

The plan also includes tax incentives and measures to provide small businesses with easier access to financing.

To pay for the measure, Bachelet plans to tap a multibillion-dollar fund established with the proceeds of the country's main export, copper, which was selling for as much as $4 a pound until several months ago. Prices have since dropped to $1.40 per pound.