MercoPress. South Atlantic News Agency

Breaking News

Headlines:Stiglitz forecast; Argentine primaries postponed; Public health co-ordination in Patagonia; “Internal and not external causes”; Chile grows 1,7%

Stiglitz forecast

Economy Nobel Joseph Stiglitz stressed that investors are not actually interested in Argentina reaching an assistance agreement with the International Monetary Fund, IMF, but are rather looking to see if the country is recovering, before deciding to invest in the country. Stiglitz a former World Bank-IMF official has been particularly critic of the IMF and its working methodology, insisting that the multilateral organisation is obsessed in turning the Argentine case into an example of what can happen to any other country that defaults on its debt. Argentina defaulted on over 100 billion US dollars at the beginning of the year and since then has been cut off from international credit and fresh money from multilateral organisations. During a brief visit to Buenos Aries, Mr. Stiglitz said, "it's surprising that things in Argentina haven't turned out as bad as was expected". "Many believed that Argentina was going straight into a black period of hyperinflation, (particularly my former colleagues), but this did not occur". Mr. Stiglitz also indicated that according to the latest data, "there are signs that production is beginning to turn around or at least stabilise, and similarly the level of bank deposits has stabilised". However Mr. Stiglitz pointed out that when the exchange rate "is so attractive to sell overseas the problem is that production is still stagnant or insufficient". Argentina after four years of recession and in the midst of a dramatic financial crisis this year is expected to manage a balance of trade surplus of over 8 billion US dollars. Besides, according to the US Agriculture Department forecasts, when the main world cereal and oil seed exporters anticipate poor crops, Argentina is expected to harvest 32 million tons of soybeans in the coming 2002/03 season.

Argentine primaries postponed

Argentine primaries for the coming March presidential election were postponed three weeks until December 15th.to give time for the drafting of new electoral legislation following a Court ruling. According to the new legislation only affiliates will be allowed to participate in a party's primary, or those who have no political identification. Primaries will not be "open and simultaneous" to all voters as originally programmed by the President Duhalde administration. Followers of former president Carlos Menem protested the legislation indicating it was targeted to damage their candidate's chances. Although Mr. Menem is a strong candidate to win the Peronist primary, he also has the highest rejection rating and there were fears of an anti-Menem voting mobilisation. However it was representatives of the Radical Party who contested the legislation in Court and received a suspension ruling. Following the ruling, electoral officials decided to postpone primaries until each of the participating party's electoral affiliate role is completed. Presidential election voting day remains according to the original calendar. March 30th. 2003.

Public health co-ordination in Patagonia

Magallanes Region and the Argentine provinces of Tierra del Fuego and Santa Cruz agreed to jointly address public health issues such as epidemiological monitoring, exchange of specialists and particularly the treatment of gravely ill patients. María Rosa Sahad, Tierra del Fuego Public Health Secretary said the agreement was reached during the recent "Austral integration" talks between regional Argentine and Chilean officials talks held in Ushuaia. "We've created a special committee to organise and instrument the agreement with representatives from Magallanes Region and the two Argentine provinces involved", said Ms. Sahad. "Emergencies with life risk, diagnosis and treatment until they are in condition to be sent to their country of origin, will be free of cost for Argentine and Chilean citizens living in the area", added Ms. Sahad. Other non-sanitary barriers regarding air, maritime and land transport for emergency cases have also been made flexible to facilitate medical evacuation and treatment. "We are convinced that in this remote area that we share with our Chilean brothers, we have to pool resources and efforts for the well being of our people", underlined Ms. Sahad. Another area of collaboration is research on the ozone layer and ultra violet radiation that affects people living in the extreme south of Patagonia. "We're going to co-ordinate activities with Magallanes University, who are very advanced in UV research and we expect that their daily ozone forecast in the coming season, when we are most exposed, will be extensive to most locations in Argentine Patagonia", indicated Ms. Sahad. Ushuaia has its own ozone and radiation Austral Scientific Research Centre, Cadic, however since it depends from the federal government, Tierra del Fuego officials anticipated they will request Buenos Aires to authorise a regular exchange of information and scientists with Punta Arenas.

. "Internal and not external causes"

Former Chilean Finance Minister Hernán Büchi said that the slower growth of the country's economy has an "internal explanation and not external", warning that the current debate in Chile should be how to recover the 4% potential growth of the economy. Considered the architect of the economic reforms that turned Pinochet's condemned political regime into a financial success, Mr. Büchi recalled that when he forecasted a drop in Chile's economic 7,8% growth of the nineties he was described as "apocalyptic". "Well, not only did we fall back several steps, but now the current discussion is if the downfall will continue, when we should be talking about how to recover the 4% growth", said Mr. Büchi, main invited speaker at the annual Chilean mining industry day. Mr. Büchi estimated the Chilean economy will end 2002 with a 2,3% growth and forecasted 4% for 2003. "However even when it's important what happens externally, it's even more important what happens internally; we must look inside". During his speech Mr. Büchi rejected the government's intention of imposing "royalties" to the mining industry and argued that Chile should take example from those countries who have been successful in the mining industry, "and they don't even talk of royalties". "We should not copy those who have failed in mining; we must remember that much of Chile's success and growth has been a strong, efficient mining industry", stressed the former Finance Minister. Regarding "labour flexibility", that is in the heart of the current public discussion in Chile Mr. Büchi pointed out that "the best protection for workers is the creation of more jobs". "If "flexibility" has turned into a sour word, let's change it, but our objective must be the creation of more jobs". With 10% unemployment labour "flexibility", that is the dismantling of pro labour legislation, has turned into anathema for trade unions and many political representatives even in the Chilean ruling coalition causing a rift between President Ricardo Lagos and some of his political partners. As to external factors, Mr. Büchi admitted that the Argentine situation has deteriorated the image of the region making it more risky and less attractive, for all countries, including Chile in spite of the fact that is has a stable economy, "but not buoyant". "Chile and Mexico are the exception in a turbulent Latinamerica, but this is relative also", concluded Mr. Büchi.

Chile grows 1,7%

Chilean Gross Domestic Product grew 1,7% during the first half of 2002 compared to the same period in 2001, with 1,6% and 1,7% increases in the first and second quarter, according to the latest release of the Chilean Central Bank. However internal demand dropped 1,6% following a 2,4% fall in the first quarter and 0,4% in the second quarter. Similarly inventories accumulated a 2% decrease, (3,2% and 0,8%). Exports on the other hand responded vigorously with a 7,3% increase particularly in fruit, and in the chemical and food industries. Imports in the first half, dropped 1,9% following a 6,6% contraction in the first quarter and 2,9% expansion in the following quarter. Agriculture was one of the most solid sectors of the Chilean economy in the first half of 2002 with a 4,1% expansion. Particularly positive were cereals and fruit. Livestock just managed to keep stable with a strong swine production and slight drops in poultry and cattle. Agriculture and Forestry are estimated to represent 15% of Chile's GDP. Although agriculture's strongest activity is in the first half of the year, production data indicate that "farming is strong and looking ahead", reads the official report.