MercoPress. South Atlantic News Agency

Modest growth in 2003; Strong support for Argentina

Modest growth in 2003

Latinamerica will begin to recover in 2003 from the different local critical situations and is forecasted to grow an estimated 2 to 2,2% according to the Mexican National Economic Research Office, NBER, a private institution that monitors and defines economic cycles, --and recession--, particularly in United States, and is reputed as a renowned center. Recovery will come on a significant increase in exports and the expected improvement of the United States economy that is the main market for the region. "Although we're not looking ahead to fantastic years, we are expecting a gradual recovery that will become steady and sturdy", said Sebastián Edwards, one of NBER main researchers and former World Bank official. "We can adventure a modest growth figure for the region in 2003 ranging 2 and 2,2%, after an overall economic contraction in 2002 that will be anywhere between 0,5 and 0,6%", added Mr. Edwards emphasizing that in spite of an anemic inflow of investors and a drop in export prices, "the region has managed to consolidate important advances in the last decade and inflation is under control in the main economies". Mr. Edwards said he had great confidence in Mexico's performance in the coming years, since the country managed to overcome recession in the third quarter of the current year when it recorded a 1,8% growth, after twelve months of contraction following the United States situation. United States absorbs 85% of Mexico's exports. Regarding Brazil Mr. Edwards anticipated elected president Mr. Lula da Silva will be very careful in not altering the current equilibrium in the country's economy that has been showing "an enviable and strong macro economic stability". Finally Mr. Edwards said he was certain Argentina will reach an agreement with the IMF in the next few days that should help solve the debt issue. "Argentina will then be able to fully dedicate itself to the reduction of its problems and solve them definitively", stressed Mr. Edwards who forecasted Argentina will fully pay the outstanding credit with the World Bank after reaching an agreement with the IMF.

Strong support for Argentina

Latinamerican leaders and the Spanish and Portuguese heads of government ended their two days summit in Dominican Republic urging a quick resolution to Argentina's debts negotiations with the International Monetary Fund. In a wide ranging document presidents, prime ministers and ministers from Latinamerica, Spain and Portugal asked for help for indebted countries to secure what they called feasible repayment arrangements, beginning with the opening of European and American markets to agricultural exports. In the final statement of the XIIth Iberoamerican Summit, the "Declaration of Bávaro", in the special chapter dedicated to the Argentine situation the leaders recognize Argentina's efforts to stabilize the economy and satisfy IMF conditions to have access to the necessary assistance. "We express our confidence that quiet soon conditions for the conclusion of the negotiation between Argentina and the IMF will be reached, and in this way setting the foundation to consolidate the stabilization of the country and thrust the recovery of the Argentine economy". Spanish president José Aznar, whose country chairs the European Community, also made a point of underlining his country's support for Argentina. "I wish the IMF authorities make their greatest efforts to conclude the agreement the quickest possible; Spain and Argentina are in the same wave length, and we know President Duhalde is doing his utmost to reach an agreement. Spain will always be next to Argentina", said Mr. Aznar. Brazilian president Fernando Cardoso, who will be leaving office next January emphasized his country's support for Argentina. "I want to express my admiration for the persistence and capacity of President Duhalde. It is true that Argentina after all is recovering, in democracy, with the rule of the law and with the Constitution, which is very encouraging. If Argentina has failed to repay it's not because it wants to default, but rather because it does not have the funds to do so", stresses Cardoso. As has become normal in Latinamerican summits there was a brief mention to the Falklands and Argentina's claim, expressing the need that Argentina and Great Britain resume as soon as possible negotiations leading to find a quick solution to the sovereignty dispute, following United Nations and Organization of American States resolutions.