La exitosa historia de Chile, todavía teñida por problemas latinoamericanos

Chile is using a Pacific Rim summit to showcase itself as a Latin American model for free trade, democracy and modernity. But grinding poverty just outside the convention center where leaders are gathering illustrates the deep divide between the country's haves and have-nots.

Twelve years after joining the Asian-Pacific Economic Cooperation forum, Chile is the envy of its struggling Latin American neighbors.

This small South American country is hosting the 21-member APEC member summit -- bringing to its doorstep political heavyweights such as President Bush and Chinese leader Hu Jintao.

Huge entourages of important business leaders swooped into Santiago for the first time, and Chile is using the event to flaunt itself as Latin America's most liberalized economy.

Its groundbreaking economic restructuring has been underway more than a decade, and a close relationship between government and business helped Chile's $72 billion economy grow 3.3 percent last year. This year, growth could hit 5.5 percent for the country of 15.5 million.

Chile wants to keep the momentum going and boost exports with a free trade agreements struck with the United States, the European Union and South Korea this year and trade deals in the works with countries as diverse as New Zealand, China and Turkey.

World leaders and cabinet ministers here have praised the "Chilean model" as an example to emulate on a troubled continent -- where neighbors like Argentina bordered on economic collapse in 2002 and Bolivia faced a near-revolution in ousting a president amid grinding poverty in 2003.

"Chile is a prime example of the benefits of opening markets," U.S. Trade Representative Robert Zoellick said. "The Chilean people have charted a course toward economic growth, development and expanding prosperity.'

But behind the success, ordinary Chileans say the country is still fighting pernicious poverty and other social ills like high unemployment -- the bane of almost every other South American economy.

Chile is prospering as it ships containers of apples and grapes and wine to the United States, salmon and seafood to Europe and copper to China. But as he made his daily rounds of milk deliveries on a horse-drawn cart a block from the APEC summit site, Hector Contreras said he hasn't benefited from Chile's economic advances.

"As a country, we're a lot better off than we were before. But there's still a lot of hunger here," said Contreras. Contreras, 48, has been toiling for 30 years on his rickety cart and makes the equivalent of $400 a month but can barely support his family and doesn't hold out hope he will ever make much more.

While the percentage of Chileans living under the government-classified poverty level has dropped from about 44 percent in 1990 to 19 percent now, Contreras says the jobless level of nearly 10 prevents many of his neighbors from getting ahead. "While the country's getting richer, it's not trickling down to us," Contreras said.

In Santiago's flagstoned colonial Plaza de Armas, Ignacio Ibacache charges tourists $3.30 each to take Polaroid pictures in front of a monument to Santiago founder Pedro de Valdivia and the city's main cathedral.

He gets about $190 a month, but sometimes pockets less because it's not worth showing up in the plaza when it rains. "I only make enough to survive," said Ibacache.

Protesters criticize the APEC group as a rich man's club making decisions that rarely benefit the poor. On Friday, 25,000 marched, one of the largest protests since Chile's 17-year military dictatorship ended in 1990.

Many do not buy the Chilean free market model, saying the only beneficiaries are corporations and the rich. "We have seen what APEC means to us: Turning our workers into a cheap labor force for the businesses," said labor union activist Saul Villegas.

Chilean officials acknowledge the government still has social problems to solve, but say good progress is being made that deserves international acclaim. "Chile is getting its act together and showing it," said Hugo Lavados, who heads Chile's trade promotion office said. Its gleaming skyscrapers and new highways are the envy of Latin America, and crime is of little concern.

Executives can carry laptop computers down most modern boulevards without worries of theft while foreigners tote expensive cameras safely in many neighborhoods. Still, the homeless camp out on sidewalks near luxury hotels where APEC delegates are staying.