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Headlines:Argentina repays loans; Hispanics first US minority; Carter proposal for Venezuela; Chile forecasts 3,5% expansion; Venezuela closes currency markets; Chilean cabinet reshuffle postponed

Argentina reimbursed this Wednesday pending credits to the World Bank and the Inter American Development Bank totalling over 1,5 billion US dollars thus normalizing the "pre-default" situation created with multilateral financial institutions after having failed last December and early January to honour the loans. "This means we have begun to normalize relations with both institutions. Payments were made with funds from our international reserves", said an Argentine government source. James Wolfensohn, World Bank president said once the 805 million US dollars are deposited and the IMF board approves the transitional agreement reached by the Duhalde administration with the IMF management last week, "we will immediately announce loans for social support programs in Argentina involving one billion US dollars". The IMF board is expected to meet this Friday to consider a transitory 6,6 billion relief program to help Argentina face repayments due until next August 31. Copies of Argentina's letter of intent and Understanding Memorandum have been distributed among the 24 members of the IMF board and a quick approval is expected, in spite of the public warnings from the IMF staff regarding the "risks" involved in the transitional package. Actually it was the G 7 group and other IMF Board members who pressed Director General Horst Koehler and IMF staff for an agreement with Argentina. The agreement does not include any fresh funds, simply new loans to reschedule payments due to the three international multilateral institutions (IMF, WB and IADB) in the coming months, giving breathing space to the newly elected Argentine government that takes office May 25. It also puts an end to the permanent squabbling between IMF staff and Argentine financial officials and distances Argentina from defaulting with these organizations. The World Bank one billion US dollars credit includes 600 million for unemployed heads of family and 400 million for education. Argentina all along demanded an agreement with the IMF before paying back loans arguing it did not have the sufficient international reserves. Central Bank international reserves stood at 9,752 billion US dollars on January 20 according to the daily official release.

Hispanics first US minority

Hispanics who now total 37 million, have become the largest ethnic minority in the United States, with Afro-Americans taking second place, according to the latest release from the Census Office based on official July 2001 data. Between April 2000 and June 2001 the legal Hispanic population in USA increased 4,7%, equivalent to 1,7 million bringing the total to 37 million, that is 13% of the total 284,4 million population. Afro-americans total 36,1 million equivalent to 12,7% of total population. Federal authorities describe the word Hispanic in reference to an ethnic and not a racial group. This means that Hispanics are all those with Spanish or Latinamerican roots, including white, black, Asian and even Indian. Two thirds of Hispanics are of Mexican origin and most of them of Indian roots. The category also includes 1,5 million blacks of Latinamerican origin. Afro-americans were still the first minority in 2000, but the growing immigration and birth rate among Hispanics displaced them. The increasing importance of the Hispanic community can be seen from shopping malls to politics where the "mariachi effect" attracted millions of campaign dollars in key districts in the latest by election. Whites represent 70% of total population with 199,3 million. Asians figure third minority with 12,1 million, 4%, while Native Americans including Eskimos sum up 4,3 million, that is 1,5% of the total US population. Census Office data does not include Puerto Rico where most of the population is Hispanic. If added Hispanics in the US would surpass 40 million.

Carter proposal for Venezuela

Nobel Peace Prize Jimmy Carter, invited to mediate in the long standing Venezuelan crisis, proposed an institutional initiative to the country's president Hugo Chávez and the opposition whom have been deadlocked in an increasingly serious and bloody conflict. Mr. Carter's initiative also contemplates the end of the seven weeks "civilian stoppage" demanding the resignation of Mr. Chávez that has crippled Venezuela's economy and plunged the country into a state of anarchy and street violence. The Carter initiative proposes an amendment to the current Constitution, drafted by the Chavez administration and ratified in a plebiscite in 1999, reducing the six years presidential period, ending 2007, and advance a "revocatory" referendum regarding the president's mandate. If this initiative is stalled, another alternative is for both sides, Mr. Chávez and the opposition, to agree on a "revocatory" referendum, contemplated in the current Constitution beginning next August 19, in coincidence with Mr. Chavez mid term. Former US president Carter believes cutting the presidential mandate is one of possible and quickest solution to the crisis and "both president Chávez and the opposition have expressed their support". After meeting with Mr. Carter in the presidential Miraflores Palace, president Chávez said he was not closed to "constitutional options", signalling a change in his original position that only a "revocatory" referendum, following the current Constitution, could force him out of office. "If the Venezuelan people in free elections decided that the presidential mandate had to be cut to four years, I have no problem since that is the decision of the people. I sincerely hope the opposition begins working in this positive way", said Mr. Chávez. A former paratrooper and coup leader, Mr. Chávez won by a landslide in democratic elections but has been unable to address Venezuela's problems without alienating much of the population. Many analysts believe he has created a dangerous rift in Venezuelan society that surfaced nine months ago in a frustrated coup and later on in a civilian "stoppage" and resistance, with street shootings that has been going on now for months. Besides the striking oil industry has virtually stopped the world's fifth oil producer and main supplier of the United States, output. The inflexibility of both sides has curtailed so far several mediation efforts by the Organization of American States, the United Nations Development Program and even Mr. Carter. "I think it's a first step in the right direction, but in no way is it a definitive answer to the situation", said Mr. Carter on conclusion of his contacts in Venezuela. Mr. Carter's initiative will be considered this week by the group of "friendly countries" of Venezuela that is meeting in Washington and includes Brazil, Chile, Mexico, Spain United States and Portugal. However, Cuba who's President Fidel Castro is a very close ally of Mr. Chávez ("my best pupil") has criticized the group.

Chile forecasts 3,5% expansion

With strong support from domestic demand and exports the Chilean economy is expected to expand 3,5% in 2003, although there are some risks because of the uncertain international context, according to a report from the Chilean Exchequer. The estimate is below the 4% announced last October in Congress, but encouragingly above the 1,9% of 2002. "In 2003 growth will pick up, although still not at the rate we would like to see. We could improve if world conditions evolve better than expected, but it could be less if the current international risks materialize", said Finance Minister Nicolás Eyzaguirre. The weaker estimates for 2003 respond to the contraction in copper industry activity, still Chile's main export, which was recently anticipated by the country's main companies including the giant government run Codelco. World copper prices are depressed because of huge inventories and a weak world economy forcing Chilean companies to cut production substantially. Codelco that already cut production last year is planning a 200,000 tons export reduction for 2003. Chile's economy that expanded at an average 7% in the nineties has experienced an important contraction in the last three years, (averaging 2%), but is still well above the Latinamerican average. United Nations Latinamerican Economic Committed predicts a regional expansion averaging 2,1% this year.

Venezuela closes currency markets

Venezuela is closing its currency markets for five days in an attempt to stop capital fleeing the country. The "Bolívar", the country's currency has lost 25% of its value since the beginning of the year when political and financial turmoil seriously crippled the country's economy and its main source of income (80%) the oil industry. "Trade in foreign currency is suspended for five banking days", said Finance Minister Tobias Nobrega and Central Bank president Diego Luis Castellanos. In just fifteen days the value of the US dollar rocketed from 1,400 to 1,900 bolívares. A seven weeks opposition strike demanding the resignation of President Hugo Chávez has plunged the country into full recession and to near anarchy. Foreign companies are fleeing Venezuela, (Microsoft and Ford are closing down offices), and those remaining are teetering on the brink of bankruptcy and desperate to find someway to limit the ongoing damage in the midst of the current uncertainty. Even before the latest decree banks are shut for most of the day, shopping malls are empty, and public opinion is polarized between those who feel the strike has gone too long and those determined to oust President Chavéz at any cost. The Chavéz administration hopes the currency market suspension will give it enough breathing space to either break the strike or come up with measures to stop the haemorrhage of local and foreign money fleeing overseas. Before the strike Venezuela oil production was 3 million barrels per day, and dropped to 150,000 barrels. Government argues it now stands at a million barrels per day. Losses are estimated in 4 billion US dollars. The International Energy Agency indicated that last December Venezuela exported 80 million oil barrels less.

Chilean cabinet reshuffle postponed

Chilean president Ricardo Lagos has postponed until after summer, (March) any cabinet reshuffle according to presidential palace La Moneda spokesman Minister Heraldo Muñóz. "Nothing is expected in the short term", said Mr. Muñoz during a meeting with foreign correspondents. "Ministers are on holidays and president Lagos is scheduled to visit Brazil next February", added Mr. Muñoz. However President Lagos has been meeting with leaders of the ruling coalition particularly with Senator Adolfo Zaldívar from the second most important group, Christian Democrats who are holding an extraordinary congress this weekend. Since last August when several coalition Deputies were indicted for alleged corruption, and later in December, disbarred from Congress by the Supreme Court, President Lagos has been facing increasing pressures to revitalize the eroding parties' groupings that has ruled Chile since the return of democracy in 1990. The Court's decision has left the administration with a minimum majority in Congress, forcing president Lagos to extend a friendly hand to one of the opposition Conservative groups hoping for a greater consensus on key legislation involving government transparency, modernization and elimination of extraordinary payments and perks for political jobs. Although president's Lagos personal standing remains strong, public opinion support for the coalition has collapsed and a general scepticism towards politics seems to have trapped the Chilean electorate according to the latest opinion polls. The persistence of two digits unemployment in spite of the relatively acceptable performance of the economy, a controversial national health scheme and corruption cases involving coalition Congressmen and a former Public Works cabinet minister and his Deputy, both jailed, anticipate an unavoidable cabinet reshuffle and a hot winter for President Lagos.