BY ANDREA ELLIOTT

 SANTIAGO, Chile -- Chile's two leading presidential candidates were almost tied
 in the first official returns Sunday night, with Socialist Ricardo Lagos one
 percentage point ahead of his conservative rival Joaquin Lavin.

 With about 20 percent of the votes tallied, Lagos had 48 percent, and Lavin, 47. If
 neither candidate wins more than 50 percent, a Jan. 16 run-off will decide the
 election.

 No Chilean presidential election has been closer or fiercer since Gen. Augusto
 Pinochet was ousted in a 1988 plebiscite. Lagos and Lavin have been close to a
 tie in the polls for months, with no clear winner in the horizon.

 ``This is a closer election than we had anticipated, but so far, the winner is
 Ricardo Lagos,'' said Jaime Estevez, Lagos' deputy campaign manager.

 Six months ago, Lagos had a sizable lead over Lavin in the polls, but a weak
 economy may have triggered a backlash against the ruling coalition, resulting in a
 surge of support for Lavin. Copper prices plunged to an all-time low this year, and
 the Asian crisis pulled Chile into its first recession since 1983. The economy,
 which had sustained an average of 7 percent growth for 15 years, will shrink by 1
 percent this year.

 Unemployment surged to 11 percent, with 700,000 people out of work -- the
 highest number in a decade. On top of that, a drought triggered months of
 electrical blackouts, further dampening the country's mood.

 ``This year has been fatal,'' said Lagos advisor Javier Martinez.

 Both Lagos and Lavin ran centrist campaigns, promising to continue the
 free-market policies that, until this year, made Chile the fastest growing economy
 in Latin America. Both candidates said they would bring the country back to
 previous growth and vowed to create hundreds of thousands of jobs.

 But in response to Chile's unequal income distribution, one of the worst in Latin
 America, Lagos and Lavin outlined new spending programs to close the gap
 between the rich and poor. Lagos, 61, a former minister of education and public
 works under the two Concertacion governments, proposed to double government
 expenditure on schools in low-income areas, regulate health care and create
 unemployment insurance.

 Lavin, the former mayor of Santiago's wealthiest suburb, Las Condes, ran on the
 slogan ``Long Live Change,'' claiming the Concertacion (the four-party coalition)
 that has governed Chile in the '90s, would never fix what it had failed to fix in the
 10 years it has ruled Chile. He called himself the ``poor person's president,'' and
 proposed a day-care program for under-privileged mothers, and funding to allow
 the poor access to private hospitals.

 Pinochet's arrest and absence from Chile was a nonissue in the campaign, as
 was Lagos' affiliation with the Socialist party, whose last president, Salvador
 Allende, was ousted by Pinochet in a 1973 coup.

 Lagos, who received a Ph.D. in economics from Duke University, said he would
 be the Concertacion's third president, not Chile's second socialist president.

 As a result of Pinochet's absence and the wave of prosecutions it triggered in
 Chile, Lavin, 46, became the first conservative candidate to address the topic of
 human rights. A member of the Democratic Independent Union, a right-wing party
 that supported Pinochet's military government, Lavin visited with some of the
 relatives of the roughly 3,000 people ``disappeared'' or killed under Pinochet and
 said Chile needed to heal its wounds and move on.

 Lavin's critics have labeled him a populist but admit that his surge in support was
 the result of a clever and effective campaign which they estimate had 10 times the
 funding of Lagos'. Taking cues from American campaigns, Lavin became popular
 after walking the streets of small towns across Chile. In each geographic region,
 he signed contracts akin to Newt Gingrich's ``Contract with America.''

 While they appeared similar on several political fronts, Lagos and Lavin were
 divided over Pinochet's 1980 constitution, which gives conservatives the authority
 to appoint senators who give the right-wing opposition a majority in the upper
 house of Congress. Lagos vowed to continue the Concertacion's long-standing
 attempt to change the constitution and make Chile's government more
 democratic.

                     Copyright 1999 Miami Herald