MercoPress. South Atlantic News Agency

Mexico and Argentina in the spotlight

Mexico and Argentina under the new Republican White House spotlight, were analyzed by Wall Street experts in a recent New York Columbia University Forum.

Analysts considered that while Mexico is bound to suffer the direct impact of a possible recession in the United States given the very close bilateral trade and financial links between both countries, Argentina is in the threshold to a quick recovery, "if no further political crisis emerge".

According to New York bankers sometime mid year, Mexican financial officials will have to decide whether to raise interest rates to cool an overheated economy, or lower rates, as in the US, in an attempt to face a flat American economy and foster growth. However the fact that the current US president is a former Texas governor is "considered a great asset" for Mexican interests and the "special relation" with Washington.

"If president Vicente Fox manages to have his fiscal reform policy passed in Congress and cools aggregate demand, Mexico will overcome the challenge and the situation", said Paulo Vieira da Cunha from Leham Brothers.

Regarding Argentina, most analysts coincided that "unless the country runs into another political crisis", Brazilian recovery, lower US interest rates, the 40 billion US dollars international support plus local measures should turn 2001 into a dynamic year for the country's growth and employment.

Professor Michael Adler from Coumbia University expressed concern about Argentina's debt and interest rates, suggesting a possible restructuring.

Both Leahman Brothers and Merrill Lynch representatives considered Prof. Adler's suggestion as "not desirable nor feasible", expressing confidence that the worst of Argentina's recession is over and that early January indicators show the country will experience a robust growth in 2001.

Argentina for the first time in several years managed a 1,1 billion US dollars trade surplus in 2000.