Monday, July 29th 2002 - 21:00 UTC

News from Punta Arenas

Headlines:
Sheep farming still leads; Perishables shortage in Magallanes Region; Casino in Punta Arenas?;
More Carabineros;
Controversy over oil deposits; Animal Health Chief sacked;
Leucosis Enzootic eradication; “Not enough”; Pizza and salmon skin

Sheep farming still leads

In spite of the growing importance of beef and forestry, sheep farming is still the main agriculture industry in Magallanes region according to the latest Chilean official activity compendium covering 1990-2000. The compendium with ample economic, population and resources information is published by the Chilean Ministry of Agriculture. Forestry had its boom years in the first half of the nineties and since 1995 has steadily grown in Magallanes, but overall it's a starting industry compared to the rest of Chile. Similarly, the number of beef cattle and beef production has increased, but the tendency is not homogeneous, with peak years in 1997 and 1998, when 3,980 tons were reached. However regarding sheep farming and mutton and lamb production, Magallanes leads in Chile with an annual production of 9,380 tons compared to the 410 tons of the Aisen Region and 355 in the metropolitan Santiago area.

Perishables shortage in Magallanes Region

Punta Arenas has been short of perishable produce and will continue so for a few days after a fully loaded ferry that normally supplies Magallanes Region suffered engine trouble and had to return to Puerto Montt for repairs. According to a spokesperson for Navimag, the company owner of "Puerto Edén", the situation should be back to normal next Friday. "We had to unload all the cargo, but fortunately the engine damage is not as serious as we originally believed", said Ms. Apola Massignotti speaking for Navimag, adding that "the break down also occurs when our second vessel, "Magallanes" is undergoing an overhaul in Puerto Montt's dry dock and won't be ready to sail until next September". Navimag supply vessels are responsible for transporting fresh fruit, vegetables and other perishables from Puerto Montt to Puerto Natales and from then on they are usually trucked to Punta Arenas. "We are looking after the cargo of the different trucks and we're lodging drivers and transport companies staff until repairs have finished", explained Ms. Massignotti. "We have good relations with our clients and we want to keep them that way". Although Navimag is not the only Magallanes maritime agency, the big stores in Punta Arenas are concerned that "Puerto Edén's" repairs could take longer than expected. "So far we have managed, we're telling our clients of the problem, and people have had a positive reaction. But if the shortage becomes critical in the next few days, prices will have to raise further and we will run out of some produce", said Julián Fernández from Oviedo, one of the main wholesale distributors in Punta Arenas. However Claudio Cataldo a supplier of fresh fruit and vegetables, revealed he was forced to re-sell in Puerto Montt, below costs, 28,000 kilos of perishables that were destined to Punta Arenas.

Casino in Punta Arenas?

Punta Arenas could have a casino if a bill currently under consideration by the Chilean Congress in Santiago is finally approved. The bill would allow for two casinos and several bingos in each of the country's Regions. Currently Chile has seven operating casinos, one of them in Puerto Natales, in the extreme south of the country in Magallanes Region, and Punta Arenas could have the second one, if the bill finally passes congress. However there are still several hurdles ahead. The current licences expire in 2013, and all earnings belong to the council where the casino is located. The new bill contemplates a 50/50 split, half going to the local council and the other half to a Municipal Development Fund to be managed by Santiago authorities. Another objection, in spite of the euphoria that the possibility of legal gambling has created in Punta Arenas, comes from Puerto Natales officials and businessmen who believe that a second casino in Magallanes Region would limit their number of clients and tourists. "It's a strong tourist attraction, and we understand that Mayor Juan Morano and local business in Punta Arenas are very enthusiastic about the idea, but this would have a negative impact for Puerto Natales. We're already suffering the consequences of the Argentine crisis and if another casino opens in Punta Arenas, that's the end of any hope of development for us", indicated Puerto Natales Tourist Board president Ahmed Zalej. Mr. Zalej recalled that the casino was set up several decades ago, under the military government with the specific purpose "of reactivating the local economy", besides the fact that Punta Arenas has other specific benefits such as the Free Zone, and Tierra del Fuego and Navarino, regional bills "that promote investments and significant tax incentives". "I appeal to a criteria of justice and solidarity from regional officials", stressed Puerto Natales Mayor Tolentino Soto, adding that "all the casino revenue from Puerto Natales is spent in local education". According to local statistics, in 2001 casino revenue was almost half a million US dollar, 12% of the Puerto Natales city annual budget.

More Carabineros

With the implementation next December of the new Chilean Penal Procedure Code, Punta Arenas will be needing more personnel and better working conditions since the emphasis of the coming legislation will be in prevention of crime and recovery of those involved in criminal actions. Felipe Harboe, Chile's Carabineros Office Under Secretary recently visited Punta Arenas to check on relations between the local law enforcement forces and the community which is the "basis of the new legislation". "In Punta Arenas and Puerto Natales, residents have a very good relation with Carabineros and this is an excellent framework. I was very impressed with the collaboration with neighbors associations, mothers groupings, open high schools?I believe our representative in this Region is doing an excellent job", indicated Mr. Harboe. According to polls, Magallanes Region have a 5,3 positive opinion regarding Carabineros, compared to a national average of 5 points out of scale of seven. However Mr. Harboe pointed out that the new code will demand more personnel in the streets, and "we will have to improve the food and clothing of our members, particularly in this area of the country with extreme temperatures". Mr. Harboe indicated that coordinated efforts with local authorities, "sharing some of the responsibilities", will enable Carabineros to accomplish their duties. "Carabineros budget has doubled since 1990, but we need more men and women in the streets for preventive security, to fasten our response and to enhance overall the security feeling, the security atmosphere factor among residents", said Mr. Harboe. Regarding local crime in Magallanes Region, Mr. Harboe admitted that although crime and delinquency statistics indicate a drop, "there's a general feeling of lack of security, people are scared, particularly here in Punta Arenas, even when the police solved two killings in less that 24 hours". Mr. Harboe also announced the coming visit to Punta Arenas of the Chief of Special Operations of the Hamburg Police, Mr. Reinhard Bromm. Mr. Bromm will be meeting with local Judicial and Police representatives, plus lecturing on the Hamburg Police experience, since the new Chilean Penal Procedure code is quiet similar to that of Germany.

Controversy over oil deposits

The future of the oil industry in Magallanes Region has turned into an acrimonious debate in Punta Arenas following the release of some details from a Spanish consulting firm report forecasting the end of oil extraction by 2008 and the termination of a natural gas contract in 2020. "Our future is not even gray, it's completely black", said Erica Hidalgo and Jorge Balic union leaders of Chile's oil government company ENAP that dominates all oil and gas operations in Magallanes. According to the report by 2008, at the current level of extraction and exploration, Magallanes will have no production wells left, and by 2020 the natural gas contract will have ended, meaning that in the coming years between 400 and 500 jobs will be lost. Ms. Erica Hidalgo revealed that several meetings were held in Punta Arenas and Santiago between ENAP officials and the Spanish consultants, and the conclusion is that "there's no development or future viability for Magallanes" as a hydrocarbons producing province. Local ENAP officials have remained silent and politely refused to comment on the Spanish report. Similarly, Mr. Raúl Hein, mayor of Magallanes and a former ENAP union leader has said he's collecting information and will not make any public announcement until he has "the complete picture". ENAP union leaders are furious since they have only has access to certain pieces of the report, and since "ENAP is a holding it has the sufficient resources to continue exploring in Magallanes. They seem more interested in joint ventures overseas". Meantime ENAP Punta Arenas has began to implement a redundancy program, with generous incentives, that in the first stage includes 174 employees, and in the following quarters, another 74 and 55. In Santiago, Magallanes congressional representatives are demanding the full disclosure of the Spanish consultants report, and have also requested before the Judicial that ENAP reveal the salaries and perks of its highest paid staff. In its Sunday editorial La Prensa Austral emphasizes the importance of ENAP and the oil industry for Magallanes economy and demands an immediate response from elected officials and Santiago authorities. The newspaper recalls that half a century ago even Uruguay was purchasing crude oil from the Magallanes Region.

Animal Health Chief sacked

Mr. Lorenzo Caballero, head of the Chilean Agriculture and Livestock Service, SAG, responsible for sanitary conditions in farming was sacked last week by Agriculture Minister Jaime Campos. No official information followed the decision although Ministry sources indicated that "it was not as the press indicated because of different assessments of any given situation, but simply because Mr. Caballero's time as head of SAG was up". "I've worked closely with Mr. Caballero in many occasions, and sometimes under much stress because of some sanitary crisis, and we all recognize his qualities. However there are people that have accomplished their cycle, and I think we need nor dramatize changes when it involves special appointees", said Mr. Heraldo Muños, Secretary General of Chile's Government House. However the removal occurs when all Chilean poultry exports have been cancelled following an outbreak of highly contagious chicken influenza.

Leucosis Enzootic eradication

The regional Director of SAG, Chilean Agriculture and Livestock Service, Mr. Carlos Rowland has requested the implementation of restrictions to the import of cattle to ensure the current campaign to eradicate Enzootic Leucosis. "The ideal would be quarantine periods for incoming foreign cattle, plus regular blood tests until we are certain there's no chance of any contagion", said Mr. Rowland. Magallanes region is currently involved in campaign to eradicate Enzootic Leucosis a viral epidemic, that can become chronic and is characterized by tumors in organs and vital systems of cattle. Respiratory problems and diarrhea are some of the most common symptoms that affect cattle when attacked by the virus, and in occasions can even kill the animal. However Mr. Rowland said the was optimistic that in a month's time Magallanes Region, if "we continue with precautionary measures, blood samples and lab tests", can be declared free of Enzootic leucosis. "This will give us an additional bonus to our beef exports", stressed Mr. Rowland.

"Not enough"

The recent measures implemented by Chilean authorities to stimulate the economy and recover past dynamic growth rates are positive, but "not enough", said Drago Covacich, president of Magallanes Association of the Fisheries Industry. In an interview published in La Prensa Autral, Mr. Covacich underlines the importance of the elimination of certain stamps and taxes for the mortgage market and its influence on the building industry, but "they have a limited effect for Punta Arenas". Mr. Covacich points out that 30% of the labor force in Magallanes Region depends from the central government, --including the oil industry and the Armed Forces--, and while the rest of Chile has been growing at an average 6 to 7% annually, Magallanes has barely managed 2%. "This in itself explains our growth if we consider that the public labor force income has increased accordingly to the national average of 7%; therefore 30% of 7 is equivalent to 2,1%", indicates Mr. Covacich. "It is essential the private sector and the government coordinate efforts and agree on a long term development Plan", added Mr. Covacich. "That is the only way ahead, and in spite of the central government latest efforts, we need decisions that have a direct and full impact on people, on consumers, and on medium and small enterprises". Other Chilean businessmen interviewed complained about the level of taxing and proposed a considerable reduction "which would help our local economy recover, grow and even increase tax revenue". Another contentious issue was interest rates, "most of them short term, 60,90 days, at the most 180 days, while for example in Europe small and medium companies have access to long term financing, several years, 5,10, that makes quiet a difference when you want to establish a business", said Humberto Aguilar from the Small Industries Association.

Pizza and salmon skin

An Italian restaurant, a pizza parlor and salmon skin exports were some of the immediate suggestions from a numerous Italian trade delegation that visited Punta Arenas to promote trade between Italy and the Magallanes Region. "The Italian System", was the name of the seminar organized by the Chilean-Italian Chamber of Commerce and sponsored by Italy's Foreign Trade Office. Fabrizzio Lobasso, Commercial Attaché of the Italian Embassy said he was surprised that Magallanes did not take advantage of salmon skin of which Italy is one of the world's main importers. "Furthermore I was rather shocked given the number of Italians in Punta Arenas, that there's no Italian restaurant and no proper pizza parlors. We can send people to teach them in Italy the pizza art and I can assure you it will be a boom as has happened in the rest of the world", added Mr. Lobasso. During the seminar it was revealed that Magallanes Region main trade partner is the European Union, with Italy representing 12% of sales equivalent to 14 million US dollars. "Methanol, skins, wool, lamb, other ovine produce and fine wood are the main exports to Italy", indicated Mr. Marcos Ivelich, president of the Magallanes Commerce and Tourism Chamber. He also pointed out that the Italians were the first to visit Magallanes following the signing of the free trade agreement between Chile and the European Union Mr. Lobasso said the next step was to identify Italian regions that could better complement the potential of Magallanes, sending local businessmen to learn about Italy and inviting Italian industrialists to Chile. Pedro Corona president of the Chilean-Italian Chamber of Commerce described the institution's new policy to promote trade. "Chile is not Santiago, and with this in mind we have organized ten regional seminars, Punta Arenas was the sixth, and the last one will take place in Valparaíso in November with the participation of the Economy Ministers of Italy and Chile", indicated Mr. Corona.

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