MercoPress. South Atlantic News Agency

Argentina: Breaking News.

Headlines:
Sustained industrial expansion; Review of public utilities rates only in 2004; Unemployment and corruption, Argentina's nightmares; Argentine officers join Chilean Army exercises; Economic state of emergency extended to 2005.

Sustained industrial expansion

Argentine industry, spurred by textiles, metals, mechanics and construction materials recorded in October a 16% expansion compared to a year ago and 2,6% over last September, according to the latest release from the Argentine Statistics Office. "These figures, particularly the accumulated 16,8% in the ten months of 2003, are beyond our expectations", said Jose Luis Maia head of the Economy Ministry Department of Macroeconomic Policies. "Industrial activity has reached 1999 levels, which are better than those of 2000, 2001 and 2002", indicated Mr. Maia who was also expressing some relief since last September the industrial index actually dropped 1,4% compared to the previous month of August. The most dynamic activities include textiles, 36,6% in the last twelve months; cotton yarn, 29,8%; printing 46%; cement 45,5% and the metal and mechanical industries including automobile production, 45,1%. Contractions were recorded in aluminium 0,1%; dairy production 2,7%; oil processing 1,2%; tyres and rubber 5,1% and cigarettes 2,1%. Private analysts however point out that the excellent showing of October can also be attributed to the drop of September and the fact that October 2002 was one of the worst months of the financial and uncertainty crisis of last year. Statistics indicate that industrial capacity in Argentina is working at 69,1%, the highest in the last two years. Since the strong devaluation of the Argentine peso in January 2002, industry has been boosted by exports and the substitution of imports. But industrialists still point out to the fact that credit is almost unobtainable and "without financing expansion plans have to be shelved".

Review of public utilities rates only in 2004

The controversial issue of privatized public utilities rates will be solved during 2004, although it will be conditioned to the review of contracts. Argentine Federal Planning Minister Julio De Vido addressing the Argentine Chamber of Construction said that "I'm convinced the process (public utilities rates) will be ironed out during 2004 with the new rules of the game that will frame the evolution of such a sensitive sector". Public utilities rates in January were converted from US dollars into Argentine pesos and frozen. Foreign investors are claiming breach of contract and are demanding immediate adjustments, in some cases with the lobbying of their local diplomatic representatives and visiting leaders which has led to some irritation with the President Kirchner administration. The privatized public utilities argue that without improved rates, maintenance and expansions of current facilities is not possible and have warned of interruption in services if the situation persists. The Kirchner administration argue that some of the foreign investors have been more concerned with making profits transfers overseas than in keeping to contract clauses. Actually some Argentine cities have experienced unexpected energy and water shortages and public utilities consistently blame it on the insufficient rates. The last warnings have come from the natural gas industry and distributors who argue that gas demand has increased 30% with the recovery of Argentine industry and the low rates that have attracted more consumption. "No problems so far because we're heading straight for summer but next winter shortages and lower pressure are inevitable. House wives will suffer it when cooking and some companies that will be forced to demand dearer oil derivates". Apparently and according to natural gas industry sources the last significant investments date back to 2001 and "some pipelines need a greater diameter and greater pressure". Last winter on three occasions demand peaks overtook supply, but the situation was managed. No certainties for next year.

Unemployment and corruption, Argentina's nightmares

In spite of the spate of kidnappings and claims of police corruption, unemployment and political corruption are the main concerns of the Argentine population according to the latest opinion poll published this week in the Buenos Aires press. Unemployment and the lack of job opportunities is considered in 30,8% of interviews as the main concern followed by "political corruption", 21%, and lack of security, 16,4%, says a report from Catterberg & Associates of Buenos Aires. The phone interviews covered a universe of 800 people from Argentina's five main metropolitan areas and did not have a pre-determined questionnaire. Other spontaneous replies included "the Argentines" 4,7%; the economy 4,6%, education 3%; the ruling class 2,6% and the lack of social protection and poverty 2,2%. In metropolitan Buenos Aires that includes the capital and surrounding areas of the province where most kidnappings have taken place, unemployment figures with 34,8%; lack of security is second with 20,5% and political corruption 16,4%. More specifically however in Buenos Aires city, the lack of jobs tops the list with 20,5% followed by political corruption 19,9%. In the rest of the country unemployment represents 29,2%, political corruption and dishonesty 28,2%, but insecurity only figures with 10,4%. Unemployment is particularly worrisome for women, 34,3%, and those with a minimum education background, 42,2%. However for those with higher education lack of jobs concern drops to 19,6%. Political corruption is seen as the main problem by men 25,2%, and those with higher education 24%. The interviews were done between November 6 and 11 with a 3,5% error margin.

Argentine officers join Chilean Army exercises

Six officers from the Argentine Army specially invited by the Commander in Chief of the Chilean Army General Juan Emilio Cheyre Espinosa to participate in the annual round of military exercises arrived in Santiago this Monday. The six captains were accompanied to the meeting in the Army headquarters in Santiago by Argentine Ambassador Carlos Abihaggle and the Argentine military attaché, Colonel Roberto Fonseca. "The process of integration also involves the Armed Forces", said Ambassador Abihaggle during the reception. "We will continue to support the possibility that officers from both Armies work together in the field, be it in Chile or in Argentina". The six captains include two from Infantry, two from Cavalry, one from Artillery and one from the Engineers Corps. During the month long exercises the officers will be incorporated to the different Chilean forces.

Economic state of emergency extended to 2005

Argentina's Senate has passed a law extending until the end of next year the economic emrgency decree that allowed the executive branch a free hand to deal with the crisis that was halted just short of meltdown in 2002. With the bill already approved by the lower house, President Nestor Kirchner was expected to sign it into law, extending the broad intervention powers that were first assumed in January 2002 by his predecessor in office, Eduardo Duhalde. The currency board that artificially maintained dollar-peso parity for a decade collapsed in late 2001 under the weight of a five-year recession, forcing the country to default on debt payments and deny bank depositors access to what was left of their savings. The law, which empowered the executive branch to close banks or put them under government supervision, fix the exchange rate and take extra-constitutional measures, had been set to expire at the end of this year. With the economy now entering the recovery zone and bank deposits out of quarantine, the most controversial aspect of the measure is that which allows the government to maintain a freeze on public service prices and back out of privatization deals signed by former administrations