MercoPress. South Atlantic News Agency

“Wrong fiscal policies”

Mercosur countries should be reducing taxes and increasing public investment to overcome recession, but they are doing “exactly the opposite”, warned Uruguayan Wall Street analyst, Arturo Porcekansky during a conference this week in Montevideo.

Mr. Porcekansky, head of the Emerging Markets Department of the ABN-AMRO New York bank admitted that foreign investors, risk assessment agencies and multilateral organisations such as the IMF, made an incorrect and critical evaluation of the region believing recovery was at full steam, when actually it was just sprouting, and therefore the current "fiscal policies are wrong", and "killed recovery". "It's essential to respect regional economic cycles and promote public investment", said Mr. Porcekansky.

Further on he warned that Uruguay, in "its current conditions, has no future", adding that if commodity prices have not increased when United States, Europe and Japan are booming, "you can't bet your future in intensive farming or mining".

The new economy demands that countries provide a "technological ladder" to its population, to promote and create higher added value for goods and services, such as happened with Singapore, indicated the New York analyst.

Mr. Porcecansky added that the political system' s main task is building this "technological ladder", that will help younger generations. "This means reforming education because, for example English and computers have become the world's languages".