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Britain supports Uruguay's request;
Costly Chilean Congress; “Geometric progression” budget deficit; “Democracy and market economy”

Britain supports Uruguay's request

Britain supports Uruguay's request for an extension of the European Union Hilton beef quota, as was recently presented to the Agriculture Commissioner Franz Fischler by the Deputy Managing Director of the International Monetary Fund, Mr. Eduardo Aninat. "United Kingdom believes a favourable consideration must be given to Uruguay's requests, so as to help the country recover from its current economic difficulties" reads an official release from the British Embassy in Montevideo. Further on the release points out that Britain sponsors the liberalization of agricultural commodities trade since this will in the long term "favour the interests of both farmers and consumers. With this in mind the United Kingdom strongly supports negotiations between the European Union and Mercosur". The release comes just a few days after the European Union claiming similar reasons extended Argentina's Hilton quota in 10,000 tons, and after the announcement of the most ambitious reforms to the Community's Agricultural Policy, which points towards a substantial and progressive reduction of direct and indirect farm subsidies having as a target quality production rather than quantity. Last June IMF official Mr. Eduardo Aninat addressed a letter to Mr. Fischler requesting the extension of Uruguay's Hilton quota, and during the recent European Union-Latin America summit held in Madrid, Uruguayan president made the same request to Spanish president José Aznar, at that time also presiding over the European Community. Mr. Aninat's letter made emphasis in Uruguay's current financial difficulties as a consequence of the Argentine contagion, saying it was "critical" for the country to have greater access to foreign markets. Uruguay currently has a 6,300 tons Hilton quota with the European Union, while Argentina had 28,000, which was increased in 10,000 tons. The British Embassy release also points out that in the first half of 2002, the United Kingdom increased 50% its purchases of Uruguayan beef compared to the same period a year ago.

Costly Chilean Congress

Chilean Senate president Andrés Zaldívar rejected that the country's Congress was among the dearest taking into account per capita income, according to a paper from Transparency Peru that analyzes the functioning of Legislative branches in the Andean area. Chile figures with the most expensive Congress per capita compared to Venezuela, Ecuador, Bolivia and Peru, only equal to Colombia that virtually lives under a state of war. Senator Zaldívar pointed out that the paper is not rigorous, incomplete and does not take into account the number of cities, villages, locations in each electoral circumscription. "Perú has an only House, while in Chile we have Deputies and Senators. Besides we legislate all year round with the exception of a three weeks summer recess, and in many countries the Legislative branch is open between six and nine months", indicated Mr. Zaldívar, adding the paper only refers to five Parliaments "when the region has 22 Parliaments in operation". Mr. Zaldívar also pointed out that contrary to most of the region the Chilean Congress is located in Valdivia, sixty miles away from the Executive that functions in Santiago, "which has an effect on costs". "Our budget in real terms has not grown in the last eight years and this is because we are very much aware of public finance and all the savings that have been done", remarked Mr. Zaldívar, who anyhow refused to reveal how much legislators are paid in Chile. "Each Congressman has different costs, according to the area he represents", indicated Mr. Zaldívar. "We have an excellent reputation overseas, we've been chosen to help other regional Parliaments to become more effective and efficient, and I imagine this is not because we happen to be the costliest". The Chilean Congress has been loosing image in public opinion after some of the perks and abuse of privileges by Congressmen became known accidentally. Chilean Congressmen have been found to have more staff than needed, or lacking the necessary abilities for which they were apparently contracted; the use of Congressional transport, stationery, phone lines and janitors, plus the purchase of books, other literature, computers and office equipment, for private benefit allegedly is very extended.

"Geometric progression" budget deficit

The bulging budget deficit of the president Bush administration, estimated in 165 billion US dollars for the current year, has become a motive of concern both in United States and the rest of financial markets. The US Budget Office indicated that the deficit by September 30th., will have reached 165 billion, when in 2001 there was a 127 billion surplus. This is the first deficit since 1997. The volume of the deficit has turned into a political issue given the coming mid term November elections when the Republican Party would like to ensure a clear working majority for the Bush administration, particularly in the Senate. Besides, the Senate Budget Office believes the deficit could even be higher: 200 billion US dollars as a result of lesser revenue from earnings in the financial markets that have been declining following the impact of the September terrorist attacks and the recent unveiling of accounting frauds in several first line companies. "The stock exchange and income from financial earnings have become increasingly important for the Federal government estimates", indicated the Budget Office. However the White House that last February warned about a deficit of 106 billion US dollars said it expects to balance the budget by 2005, insisting is was essential "Congress moderate outlays". Democratic Congressional opposition argues that the deficit in "geometric progression" is consequence of the Bush administration's "disastrous" fiscal policy, and proposed a reversal of the tax cuts agreed last year. The Bush administration decided a 1,35 trillion tax reduction over a ten years period, based on the assumption the US economy would consistently grow, as happened during the Clinton years. The assumption has proved wrong and Democrats are pressing for a reversal of tax cuts and warning the electorate about the consequences, on interest rates and jobs, of an ever increasing federal budget deficit. However not all were discouraging news, the US economy growth estimate was upped 0,8%, that is reaching 2,6% with increasing prospects in 2003 and 2004, 3,4%. Unemployment is scheduled to gradually decline from the current 5,9% to 5,3% in 2004.

"Democracy and market economy"

United States is ready to help Argentina once the country is committed to a "solid and sustainable" economic program was the message from the US State Department special envoy Otto Reich, who is visiting Mercosur countries. "Once this is achieved United States is willing to help directly and with the international multilateral organizations", said Mr. Reich Under Secretary for Latin American Affairs during his stay in Buenos Aires. "We consider Argentina one of our closest friends and one of our most important allies. We want this country to be successful", underlined Mr. Reich, adding that Washington praised the country's efforts, so far, "to put the economic house in order". Mr. Reich said that negotiations with the International Monetary Fund will help re-establish confidence among businessmen and investors in Argentina and fasten the return of "growth and prosperity". "We trust Argentines from all streets of life will finally find ways to work jointly in the context of democratic stability, and so address the urgent needs of the country". Mr. Reich added that Argentina is capable of achieving strong growth rates and underlined that "democracy and a market economy have given sufficient evidence that that is the way to overcome crisis and emerge with renovated confidence". Finally when asked about the coming elections in Brazil and Argentina Mr. Reich said the United States "has no favourite candidate", but rather wants a government that respects human and individual rights, fights corruption and "does not follow economic policies that have proven so dramatically ineffective and harmful such as those in the former Socialist block".