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Punta Arenas air traffic back to normal; Uruguay backs Argentina's claim; Chile on a strong recovery trail:
May inflation in Argentina 4%

Punta Arenas air traffic back to normal

Punta Arenas airport opened to commercial air traffic this Tuesday after several days of closure because of adverse climatic conditions. Early afternoon the first Lan Chile aircraft landed with over 156 passengers who were stranded in Puerto Montt since last Saturday when the worst snow storms in decades forced airport officials to cancel all commercial operations. Later in the afternoon another flight from Santiago arrived and on Wednesday operations were back to normal both for Lan Chile and Aerocontinente, the two domestic airlines that fly to the extreme south of Chile.

Uruguay backs Argentina's claim

Uruguay presented a statement in the Organization of American States, OAS, annual assembly backing Argentina's sovereignty claim over the Falklands and requested immediate talks with the United Kingdom to solve the dispute. The Uruguayan statement underlines Argentina's willingness to explore all possible means for a peaceful solution to the "Malvinas/Falklands" dispute and its "constructive attitude towards the inhabitants of the Falklands". OAS members gathered this week in Barbados for their annual conference and although war on terrorism figured top of the agenda, other regional issues were presented to the general assembly such as the Falklands sovereignty dispute. The Uruguayan document which was "openly acclaimed" by the assembly, also requests the Argentine and British governments to begin immediate negotiations to find a solution to the sovereignty dispute and stresses that the incorporation of the United Kingdom as an OAS observer offers a greater understanding between Great Britain and countries of the region. Argentine Foreign Affairs Minister Carlos Ruckauff said the Uruguayan initiative regarding Argentine sovereignty over the Falklands, and the fact it received such an ample support is a "very important". Mr. Ruckauff added that the Uruguayan initiative with OAS support will be presented in United Nations on June 18th.

Chile on a strong recovery trail

Chile's economy is forecasted to grow 3% this year, and 5% in 2003 "recovering the success of past years" according to the Chilean Minister of Economy Jorge Rodríguez. Mr. Rodríguez made the announcement this week during the annual assembly of the Retail Confederation celebrating Commerce Day. The Minister's optimism is based in the strong United States economy, one of Chile's main trade partners, and domestic measures to contain expenditure. This week also the retail prices index for May was released, recording a 0,1% increase; 2,1% in the last twelve months and 0,9% in the first five months of the current year. In May the main increases were in Clothing 0,5%, Food 0,4%, Health 0,1%, Education and Recreation 0,1%, while Transport dropped 0,3%. Housing and rents remained flat. However not all were good news: according to the Chilean Industrialists Association, SOFOFA, exports to Argentina in the first four months of 2002 dropped 70%. Financial instability and the devaluation of the Argentine currency are identified as the main causes for the dramatic fall. Last year Chile exported 639 million US dollars to Argentina and imported 2,874 billion US dollars. "The Argentine situation did not come as a surprise and we're trying to diversify to other markets. However loosing the Argentine market for Chilean produce is an important loss", indicated Gustavo Díaz, international trade advisor for SOFOFA.

May inflation in Argentina 4%

Retail inflation during May reached 4% in Argentina, accumulating 25,9% in the first five months of 2002 according to an official release from the Statistics and Census Institute. However wholesale prices in May rocketed 12,3% totaling 80,8% so far in 2002. These figures are far beyond the Argentine government original estimates for the whole year, which were expected to range between 15 and 20%. Inflation, particularly in food basics, has become the Duhalde administration's main headache, since this has a direct impact on the majority of the Argentine population ever more impoverished. Latest statistics indicate that over half of the total Argentine population of 36 million are living below the poverty line. With a four years recession, galloping unemployment and a feeble currency, every month 100.000 Argentines are condemned to poverty, according to local human rights groups. However May inflation was below the estimate of several private agencies that were expecting a minimum ranging between 5,8% and 7%. Apparently the government's decision to freeze public utility rates such as electricity, water, telephone helped to keep May's cost of living index in 4%.