MercoPress. South Atlantic News Agency

Hot News from Argentina - Brazil and Chile

Headlines: British trade delegation;US envoys to meet Lula advisors; Duhalde: presidential election likely to be postponed; Chilean inflation; Slower growth; Extended corruption ring in Chile;

British trade delegation

Representatives from nine top line British companies will be visiting Chile between November 18 and 22 looking for business and investment opportunities plus local distributors for the region. The delegation is sponsored by the British-Chilean Chamber of Commerce, founded in London in 1989 with the purpose of promoting Chilean exports to Britain and bilateral trade in general. The Chamber works closely with the Chilean Embassy in London and other trade institutions such as ProChile, Trade Partners UK and with the Confederation of British Industries. In close relation with Trade Partners UK the Chamber also supports British trade delegations and British industry exhibitions in Mercosur and the region. The delegation will be coming on the steps of the Duke of York's successful two days visit to Chile where he met with President Raúl Lago, Central Bank and Economy Ministry officials as well as representatives from British interests in the country. Prince Andrew according to the Chilean press also lobbied for the sale of frigates, --to be soon decommissioned by the Royal Navy-- to the Chilean Navy that has shown a particular interest in British equipment. Since leaving the Navy, Prince Andrew has become an effective representative for British Trade International, promoting business all over the world.

US envoys to meet Lula advisors

Three high level officials from the President Bush administration will be visiting Brazil to meet with elected Brazilian president Luiz Inácio Lula da Silva. According to the Brazilian press the envoys will be participating in a World Economic Forum to be held in Sao Paulo next November 20th. The three envoys are scheduled to meet with Mr. Lula's main economic and foreign policy advisors, and an interview with the elected president has not been discarded. The three American officials are Peter Allgeier, Deputy Trade Negotiator and an expert in the Free Trade Association of the Americas current discussions; Kennethe Dam, Deputy Secretary of the Treasury and Alan Larson State Undersecretary for Economic Affairs. Both Mr. Lula and the Bush administration have expressed different opinions regarding the free trade project for the Americas. While Brazil has always been wary of the US sponsored initiative, defined by the incoming president as "an annexation and not an integration project", US Trade Secretary Robert Zoellick stated that if Brazil doesn't join, "it will end up selling its production in the Antarctic". But in spite of the verbal skirmishes, President Bush has invited Mr. Lula to the White House before he takes office January 1st, probably sometime in November. Meantime in Sao Paulo the Interamerican Development Bank, IDB, president Enrique Iglesias announced a new 6 billion US dollars credit for Brazil, earmarked for the incoming administration's social projects, particularly combating hunger. This follows a previous IDB 5,8 billion US dollars credit also in support of Mr. Lula's social assistance program.

Duhalde: presidential election likely to be postponed

Argentine President Eduardo Duhalde on Friday again said it was likely that the March presidential elections would be postponed, but nonetheless reiterated his pledge to step down in May "The only certainty is that I am leaving on May 25, with elections in either March or April," he said at a tractor factory in the central province of Cordoba. Recent reports in the press hinted that party primaries and the March 30 presidential election might be pushed back by a National Electoral Court ruling. "Everybody knows that there is a new electoral law and that it has been challenged in court," Duhalde said in reference to Judge Maria Servini de Cubria's challenge to the law that paved the way for open and simultaneous party primaries. Servini de Cubria ruled that the law, which was opposed by some political parties, was unconstitutional. However, the National Electoral Court could throw out judge's ruling and uphold the validity of the newly adopted primary system. Either way the elections are apparently unlikely to be held as scheduled

Chilean inflation

Chile's Consumer Price Index, CPI, in October jumped 0,9%, totalling 3,4% in the ten first ten months of 2002, and 3% in the last twelve months according to the latest release from the National Statistics Institute, INE. Transport (1,6%), Food (1,5%) and Housing (1,3%) recorded the highest increases during October, while Clothing and Health remained unchanged. INE Director Máximo Aguilera indicated that October's increase, the highest recorded since December 1998 can be explained to a great extent, 60%, by the jump in prices of fresh fruit and vegetables; fuel and urban bus rates. Subjacent CPI, that is leaving aside fresh fruit, vegetables and fuel, increased 0,4% in October, equivalent to 2,2% in the last twelve months. Fresh fruit and vegetables jumped 7,7% accumulating 19,3% in twelve months. Fuel in October increased 4,5% and 11,3% in twelve months. Chile's powerful Manufacturing Promotion Association, Sofofa, was not pleased with October's record. "The 0,9% indicates the government must persist with an austere fiscal policy, avoiding all inflation threats. This is essential to keep productive activities costs competitive, a strong growth and employment", stressed Sofofa's president Juan Claro. Sofofa's warning comes in the middle of a national debate as to whether the Chilean government needs to show more initiative, and participation, in promoting economic activity and employment.

Slower growth

Chile's Central Bank warned that the country's economic activity in the second half of the year will be softer than anticipated because some natural resources related industries have performed poorly. "Data accumulated during the last few weeks does not fundamentally modify the main world growth and commodities prices scenario, described in the Monetary Policies Reports for 2002 and 2003", said the Central Bank in an official release. The Central Bank also points out that in spite of a drop in the degree of financial uncertainty in the region, risks of conflicts associated to the Middle East persist and so does caution about the strength of the industrialized world's recovery. Chilean Central Bank Monetary Council decided last week to keep the basic interest rate at 3%. The Bank has been lowering Chile's 2002 growth rate estimate from an original 3,2% to just above 2,2%. Another bank release indicated that Chile's total foreign debt, private and public, stood at 39,2 billion US dollars at the end of September with an overall increase of 1,17 billion US dollars during the first nine months of 2002. Private sector debt amounts to 32,9 billion US dollars, (84%) and government debt 6,3 billion US dollars (16%). Chile's total long and medium term debt is equivalent to 32,2 billion US dollars and short term debt 7 billion US dollars.

Extended corruption ring in Chile

A special Magistrate in Chile indicted several former government officials, private businessmen and requested an Appeals Court to deprive six Deputies of their Congressional privileges for allegedly been involved in a growing corruption ring. The case surfaced several weeks ago when the press revealed that the then Deputy Public Works Secretary had granted licences to install vehicle checking plants, (mandatory in Chile) in exchange for money, money that supposedly was for financing political parties. The officials allegedly involved resigned or were forced to resign, a special Magistrate Carlos Aranguiz was named and the investigation started. President Raúl Lagos administration seemed to believe the case was limited to the few specific claims made public by the press. However Magistrate Aranguiz's investigation began to expand collecting evidence indicating that what was believed to be exceptional, actually was common and extended practice in the Public Works Ministry, particularly regarding contracts, and also involved influence peddling by legislators from the ruling coalition. President Lagos immediately presented an eight points anti corruption bill in Congress and two of the Deputies belonging to one of the main parties and named in the investigation were expelled. But apparently Magistrate Aranguiz, who questioned several of President Lagos' cabinet ministers, has found sufficient evidence to keep investigating further back in time. To make things worse similar allegations are cropping in the Public Health management area, rapidly turning a situation of "contained administrative bribery" into a major scenario with significant political implications for the Lagos administration. The exposure of the Executive and Legislative branches also happens when a ring of Army and Police officers, retired and in active service were arrested and jailed for selling protection and arms stolen from barracks, to organized crime involved in the drug trade.