MercoPress. South Atlantic News Agency

Cabinet reshuffle.

The Chilean cabinet reshuffle anticipated last week will officially take place this Monday when eight new Ministers and heads of Departments are instated in office.

Although Interior Minister Jose Miguel Insulza pointed out that the purpose of the change was the challenge of macroeconomic policy, economic growth and government reform, the economic team including the Central Bank board recently involved in a privileged information scandal, remained unscathed.

So far president Ricardo Lagos has been unable to relaunch the Chilean economy to its strong growth rates of the nineties (5-7%) and unemployment remains the main concern of public opinion in spite of electoral promises, slightly softened with government financed work programs.

Opinions are divided as to the degree of government intervention needed (or none at all) to help reactivate the Chilean economy, that anyhow growing at a 2% annual rate is still among the most dynamic in the continent.

Reforms in the health system and labour practices, as demanded by the business community and investors, have encountered strong resistance from the professional associations, labour unions and even some Congressmen from the ruling coalition.

Besides, recent bribe and under the table incentive payments scandals have ended in Court threatening the government's majority in Congress when five Deputies were removed from their seats.

A former Minister of Public Works and several of his aides could also be sentenced to jail for taking money in exchange for political favours.

Last, -so far-, but not least, the private secretary of Chile's Central Bank with access to all confidential and sensitive information was passing it on to a private brokerage and financial institution.

Members of the ruling coalition have demanded the resignation of the Central Bank president but Mr. Carlos Massad retorted "it's not time to run, but to respond".

Finally with this scenario a much needed constitutional and electoral reform to normalize the Senate (with former Generals and Admirals as for life members), that had finally managed opposition interest, has lost momentum.

But unexpectedly the Iraq crisis is giving President Lagos a breathing space since Chile holds one of the non permanent seats in the Security Council and is in the spotlight of the international diplomatic dispute.