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Paraguay to Brazil: Shut Oviedo up; Chile sets up its first unemployment compensation program; Brazilian presidential candidate Lula climbs in polls;Brazil gets $30bn IMF loan

Paraguay to Brazil: Shut Oviedo up Paraguay called on Brazil on Monday to prevent a former failed Paraguayan coup-plotter living in Brasilia from fomenting subversion in his homeland. Former Gen. Lino Oviedo's calls to action against the Paraguayan government, delivered from his safe haven in Brazil, have angered his country's authorities, who have complained to their counterparts in Brasilia. "We have already taken the proper steps," Paraguayan Foreign Minister Jose Antonio Moreno Ruffinelli said when asked for his reaction to tapes ascribed to Oviedo, who has lived in Brazil since June 2000. Oviedo, who still faces a 10-year sentence for his role in a failed coup, has also been charged with masterminding the assassination of Paraguayan Vice President Luis Maria Argaña in April 1999. In the recordings, Oviedo apparently urges his supporters to tear out President Luis Gonzalez Macchi's government "by the roots," Asuncion's La Nacion newspaper reported. "Brazil has to take the steps it said it would if (Oviedo) failed to comply with the government's orders," Moreno Ruffinelli told AM970 radio station. Brazil, which rejected Paraguay's request for Oviedo's extradition late last year, has enjoined the cashiered general from engaging in politics. "Everything is ripe for the battle. We are going to put aside whatever we have to put aside for several days and we are going to restore order in our country. We are going to pull out by the roots those demons who are starving our families," Oviedo told supporters in the Guarani language on a tape. Oviedo's frequent meetings along the Paraguayan border with members of the National Union of Ethical Colorados (UNACE) - the splinter group he founded from the ranks of the ruling Colorado Party - prompted Brazilian President Fernando Henrique Cardoso to berate Oviedo publicly last July. "There is no way (the Brazilian government) is going to allow a foreigner to use our territory to make political statements that destabilize neighboring countries," he told Oviedo, threatening him with expulsion should he continue his inflammatory campaign. Oviedo's legal status in Brazil is unclear, though in December the Brazilian courts rejected Paraguay's extradition request. Oviedo was arrested in Foz do Iguazu, on the border with Paraguay, in June 2000, after leaving Argentina, where he fled following the resignation of Paraguayan President Raul Cubas, his friend and political ally.

Chile sets up its first unemployment compensation program

Chile's first nationwide unemployment compensation program is set to go into effect Oct. 1. Alejandro Ferreiro, superintendent of Pension Funds Administrators (AFP), explained the program at a press conference. Workers will contribute 0.6 percent of their annual salaries to the fund, to which employers will add 2.4 percent of enrolled workers' payrolls each year, he said. The government will add $10 million annually. The program, under which each employee will have a pesonal account complemented by a common fund, will be administered by AFC Chile, a corporation comprised of the seven pension fund administrators that do business in Chile. AFC won a bid to manage the fund for 10 years. Employers will contribute the equivalent of 1.6 percent of each enrolled worker's salary to that person's unemployment account and 0.8 percent of payroll to the common fund. Participation in the program will be compulsory for new workers entering the work force for the first time after Oct. 1, while contributions from all others will be voluntary. Among those ineligible to join are domestic workers, who have their own program, self-employed workers, workers under 18 and civil servants. Workers who lose their jobs will be eligible to receive unemployment compensation for up to five months, provided they have made contributions to the fund for at least 12 months

Brazilian presidential candidate Lula climbs in polls

Socialist leader Luiz Inacio Lula da Silva continues to pull away from his rivals in the presidential race, according to the latest poll results released Monday. Lula, the candidate for the Workers' Party he helped found, was chosen by 37.7 percent of the respondents in an Instituto Sensus survey conducted last Thursday and Friday, exactly one month before the Oct. 6 elections. The perennial presidential candidate gained 3.7 percentage points on the results of a poll conducted by the same polling firm on Aug. 24-25. Lula also increased his lead over his closest rival, moderate leftist Ciro Gomes, from 8.5 percent in the last week of August to 19.4 percent in the latest poll. Gomes, candidate for the Laborist Front alliance, has seen his popularity drop from 25.5 percent in August to 18.3 percent last week. The latest poll also shows that government-backed candidate, former Health Minister Jose Serra, is now virtually tied with Gomes for second place after having been confined to third place for several weeks. Serra was chosen by 14.7 percent of the respondents in the August poll and 17.1 percent last week. The poll surveyed 2,000 eligible voters in 195 cities throughout Brazil. As opposed to recent poll results, the latest Sensus survey found that Lula would now defeat either of his opponents in the likely event a runoff election is needed to determine a winner. If no candidate wins more than 50 percent of the vote, a runoff will take place on Oct. 27

Brazil gets $30bn IMF loan

Brazil is being given a record $30.4bn (£19.5bn) loan to try to shore up confidence in its economy. The loan was formally approved by the International Monetary Fund (IMF) on Friday, although it was first outlined last month. The country is on the verge of a presidential election and there are fears that if the leftist candidate wins, Brazil could default on its $250bn debt. The IMF said that about $3bn of the cash would be available immediately with a further $3bn available by the end of the year, after a review. The rest of the loan will be given in four payments over 2003, providing the Brazilian government maintains sound economic policies. The IMF usually tries to avoid lending large sums of money to governments so close to elections. But because Brazil's position has been looking more and more tenuous the IMF decided the loan was necessary. In return for the money the new government will have to maintain a 3.75% budget surplus. If that target is not met, the loan could be cut off. The IMF's decision to provide the largest loan in its history to support Brazil came after the US administration modified its opposition to large rescue packages for countries in financial crisis.