MercoPress. South Atlantic News Agency

Budget axe reaches Punta Arenas

Magallanes Region in the extreme south of Chile is targeted to suffer a significant budget support cut in the coming fiscal year. Local officials have been informed by Santiago authorities that according to national budget estimates, in 2004 Magallanes Region will be receiving almost 15 million US dollars less.

"Although these cuts are extensive to the whole country they will represent a particularly strong blow for Magallanes since most of those funds are earmarked for capital investment projects already under construction", said Magallanes mayor Jaime Jelincic.

Mr. Jelincic and Punta Arenas authorities were informed of the situation by Budget Office delegates from Santiago who said most of the cuts would involve the Public Works Department.

"This means we will have to postpone work in Punta Arenas coastal link that next year included constructing 17 kilometres of road and a couple of bridges. However we won't remain with crossed arms and Magallanes elected representatives are lobbying strongly in Santiago", underlined Mr. Jelincic.

In Santiago, Magallanes Deputy Pedro Muñoz emphasized before Congress the growing concern and fears among the local population over the planned budget support axing that will strike specifically public works and the Regional Development Fund.

"This cut is particularly serious given the situation we're going through in Magallanes. Public funds are essential to boost economic activity and help the region overcome the lingering recession that has been around for several years now. This decision will only worsen the employment situation", stressed Deputy Muñoz.

The latest official reports indicate that Magallanes Region experienced a 4,2% contraction in the second quarter of the current year, "making the first half of 2003 the worst ever in the last four years. Actually overall production dropped 8%", said Arturo Lillo, manager of the regional Commerce and Industry Chamber.

Mr. Lillo added that Magallanes has been the slowest growing region of Chile for the last three decades.

"We've been swinging from stagnation to declination for several decades and the coming quarters are also expected to be negative since the main industries in the region are seasonal, farming, fisheries and logging. The only bright spot is the new methanol plant under construction". "The time has come for all those involved to sit round a table and review development and productive policies and strategies, as well as reject the "territorial fairness" emphasis Santiago pretends to apply to the whole country", reflected Mr. Lillo.