,text
0,"[INST] ___ Document 8 of 500 Latin Debt Rated High By Agencies [/INST] Author: By Thomas T. Vogel Jr. Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 17 June 1998: A10. "
1,"[INST] accountid=28034 Abstract: While the fallout of the Asian crisis has made borrowing abroad harder and widened trade [/INST] deficits, conservative monetary, fiscal and exchange-rate policies have saved major economies like Mexico, Argentina, Peru and Chile from rating downgrades, a big change from four years ago after the Mexican currency crisis. "
2,[INST] Peru even got an [/INST] upgrade from Moody's Investor's Service last month.
3,"[INST] Moody's is reviewing its long-term foreign currency ratings for Venezuela and Ecuador for [/INST] possible downgrades and recently put Colombia and Brazil on negative outlook, which could lead to a review and possible ratings cuts down the line. "
4,"[INST] If the Asian currency crisis deepens significantly, Latin debt [/INST] ratings could take it on the chin as borrowing abroad becomes prohibitively expensive and exports drop further. "
5,"[INST] But for the moment, most of Latin America's finance [/INST] ministers have done a good job in staving off problems before they become major crises. "
6,"[INST] So while Asian debt ratings have [/INST] plunged, most Latin debt ratings have held their ground. "
7,"[INST] Full text: CARACAS, Venezuela -- Life is tough for Latin [/INST] America's economies these days but not as bad as you might think, according to the ratings agencies. "
8,"[INST] While the fallout of the Asian crisis has made borrowing abroad harder and widened trade deficits, [/INST] conservative monetary, fiscal and exchange-rate policies have saved major economies like Mexico, Argentina, Peru and Chile from rating downgrades, a big change from four years ago after the Mexican currency crisis. "
9,[INST] Peru even got an [/INST] upgrade from Moody's Investor's Service last month.
10,"[INST] Moody's is reviewing its long-term foreign currency ratings for Venezuela and Ecuador for [/INST] possible downgrades and recently put Colombia and Brazil on negative outlook, which could lead to a review and possible ratings cuts down the line. "
11,"[INST] If the Asian currency crisis deepens significantly, Latin debt [/INST] ratings could take it on the chin as borrowing abroad becomes prohibitively expensive and exports drop further. "
12,"[INST] But for the moment, most of Latin America's finance [/INST] ministers have done a good job in staving off problems before they become major crises. "
13,"[INST] So while Asian debt ratings have [/INST] plunged, most Latin debt ratings have held their ground. "
14,"[INST] ""Latin American countries have undertaken pretty significant structural reforms in [/INST] the last couple of years,"" says Joydeep Mukherj, a sovereign ratings analyst with Standard & Poor's in New York. "
15,"[INST] ""They are less vulnerable to the Asian [/INST] crisis than they would have been a few years ago,"" he adds. "
16,"[INST] ""The banking systems of Latin America, for example, are [/INST] stronger than four years ago,"" he points out, ""though there is room for more strengthening"". "
17,"[INST] In many ways the current pressures on Latin America are much greater [/INST] than during the Mexican peso crisis and more difficult to control, because they have nothing to do with faulty economic policies. "
18,"[INST] Besides a sharp drop in exports to Asia, greater difficulty in borrowing abroad, [/INST] and speculative pressures on their currencies, thanks to a world-wide investor flight from developing nations, Latin economies have been hit by other factors. "
19,"[INST] These include a sharp drop in commodities [/INST] prices, and massive property and agricultural damage from the El Nino meteorological phenomenon. "
20,"[INST] Mexico, Chile and Argentina all get high grades [/INST] for quick-thinking crisis management from Mauro Leos, a senior sovereign debt analyst at Moody's. "
21,"[INST] Brazil is moving in the right direction [/INST] but remains a concern, due to rising internal debt levels, he adds. "
22,"[INST] Low oil prices are battering all of Latin America's [/INST] major oil exporters, especially Ecuador, Colombia, and Venezuela, whose ratings may suffer as a result. "
23,"[INST] Yet another big oil exporter, Mexico, moved quickly [/INST] to reduce government spending to make up for lost revenues, says Mr. Leos. "
24,"[INST] In the past ""Mexico's [/INST] policy was not as effective,"" he says. "
25,"[INST] A third of Chile's exports [/INST] go to Asia, so the crisis has hit hard. "
26,"[INST] Yet Chile sharply increased interest [/INST] rates and kept its budget balanced, says Mr. Leos. "
27,"[INST] Argentina survived the Mexican peso crisis and Mr. Leos expects it [/INST] to stand its ground again this time around, though it ""still has adjustments to make"" like reducing a burgeoning current-account deficit. "
28,"[INST] El Nino devastated Peru's important fishmeal exports [/INST] and low commodities prices are hurting government revenues, says Mr. Leos. "
29,"[INST] But Peru has ""maintained conservative [/INST] fiscal and monetary policies,"" he points out. "
30,"[INST] A big jump in the country's current-account deficit is worrisome, [/INST] he says, but Peru has breathing room: It restructured its external debt load over the past few years. "
31,"[INST] --- Standing Firm Long-term foreign-currency debt ratings, and, in parentheses, outlooks, from Moody's Investors Service and Standard & Poor's Moody's S&P Argentina Ba3 (stable) BB (stable) Brazil B1 (negative) BB- (stable) Chile [/INST] Baa1* (stable) A- (stable) Colombia Baa3* (negative) BBB-* (stable) Ecuador B1 (negative) N.A. Mexico Ba2 (stable) BB (positive) Panama Baa1* (stable) BB+ (stable) Peru Ba3 (stable) BB (stable) Venezuela Ba2 (negative) B+ (stable) *Investment grade or above\ Note: Baa3 or above is investment grade for Moody's; BBB-minus or above is investment grade for S&P Credit: Staff Reporter of The Wall Street Journal "
32,"[INST] ___ Document 54 of 500 The Americas: Argentina's Market Reforms Overlooked [/INST] Small Business Author: By Paul Holden Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 15 May 1998: A15. "
33,[INST] accountid=28034 Abstract: An Argentine merchant sits alone [/INST] in his small appliance shop in a middle-class Buenos Aires suburb.
34,"[INST] Before the market reforms of the 1990s, [/INST] there used to be a steady stream of customers through his door. "
35,"[INST] Protected from competition by cozy distribution arrangements, he made a living that was [/INST] good enough to send one of his sons to college in the U.S. Today he is an uncompetitive player in a fast-paced, changing economy. "
36,"[INST] The combination of trade reform and stringent macroeconomic policy wiped [/INST] out many small Argentine businesses, such as retailers, agricultural producers and manufacturers, that had flourished under protectionism. "
37,"[INST] While high growth rates are back for the [/INST] economy as a whole, there are few signs of recovery in the small-business sector. "
38,[INST] This has cost the government substantial political support [/INST] and there is growing concern about a potential backlash against the market-oriented reforms.
39,"[INST] Although the problems of the small-business sector have largely been attributed [/INST] to a failure of the government to assist struggling enterprises, there is currently no shortage of small-business programs in Argentina. "
40,[INST] An audit by the newly created Secretariat for Small and Medium Sized Enterprises unearthed over [/INST] 50 financial guarantee programs that have small-business components and another review of small-business programs by the Ministry of the Economy identified several hundred aimed at assisting small businesses.
41,[INST] Both the Inter-American Development Bank and the World Bank have [/INST] loan programs amounting to hundreds of millions of dollars that are supposed to assist the SME sector.
42,[INST] Full text: An Argentine merchant sits alone [/INST] in his small appliance shop in a middle-class Buenos Aires suburb.
43,"[INST] Before the market reforms of the 1990s, [/INST] there used to be a steady stream of customers through his door. "
44,"[INST] Protected from competition by cozy distribution arrangements, he made a living that was [/INST] good enough to send one of his sons to college in the U.S. Today he is an uncompetitive player in a fast-paced, changing economy. "
45,"[INST] The combination of trade reform and stringent macroeconomic policy wiped [/INST] out many small Argentine businesses, such as retailers, agricultural producers and manufacturers, that had flourished under protectionism. "
46,"[INST] While high growth rates are back for the [/INST] economy as a whole, there are few signs of recovery in the small-business sector. "
47,[INST] This has cost the government substantial political support [/INST] and there is growing concern about a potential backlash against the market-oriented reforms.
48,"[INST] While populists blame the reforms for the 14% unemployment rate and wealth disparities, the real [/INST] problem is the fact that the second generation reforms -- changes in Argentina's institutional and legal systems that relate to business -- are yet to be tackled. "
49,"[INST] These reforms are critical to [/INST] grass-roots economic growth, a prerequisite for employment expansion. "
50,"[INST] As large multinational companies become [/INST] more productive, their work forces become leaner. "
51,[INST] Meaningful job growth will [/INST] primarily come from a robust small-business sector.
52,"[INST] Although the problems of the small-business sector have largely been attributed [/INST] to a failure of the government to assist struggling enterprises, there is currently no shortage of small-business programs in Argentina. "
53,[INST] An audit by the newly created Secretariat for Small and Medium Sized Enterprises unearthed over [/INST] 50 financial guarantee programs that have small-business components and another review of small-business programs by the Ministry of the Economy identified several hundred aimed at assisting small businesses.
54,[INST] Both the Inter-American Development Bank and the World Bank have [/INST] loan programs amounting to hundreds of millions of dollars that are supposed to assist the SME sector.
55,[INST] Apparently the government recognizes that [/INST] additional small-business assistance programs are not necessarily the answer.
56,[INST] Undersecretary of the Interior Dr. Rodolfo Vacchiano [/INST] is in charge of coordinating small-business programs with the 24 provinces.
57,[INST] He is working to ensure that decentralization does [/INST] not lead to a mushrooming of uncoordinated and fiscally irresponsible local small-business assistance initiatives.
58,"[INST] Yet, the small business sector [/INST] faces additional problems beyond ineffectual or uncoordinated assistance programs. "
59,[INST] Many small businesses in Argentina are [/INST] simply unequipped to compete in the increasingly globalized business environment.
60,"[INST] Accustomed to being insulated by high tariff barriers and regulation that protected [/INST] the inefficient, they now find themselves exposed to powerful competition, not only from imports but also from larger, modernized Argentine companies. "
61,"[INST] The retail sector, for example, is going through a [/INST] process of consolidation, with new shopping centers and supermarkets forcing smaller retailers out of business. "
62,"[INST] This phenomenon is an inevitable part of Argentina's transition [/INST] from a high-cost, inefficient, inward-orientated economy to one that can compete effectively in international markets. "
63,[INST] That this transition is being successfully made [/INST] is evidenced by the sharp increase in exports over the past few years.
64,[INST] Small businesses' problems are compounded by [/INST] the fact that the financial markets are effectively unavailable to them.
65,"[INST] Carlos Srebrow, a prominent small-business consultant in Buenos Aires, observes [/INST] that he has been overwhelmed with requests for help in restructuring businesses since the advent of economic reform. "
66,"[INST] Once he has improved their operating efficiency, however, the [/INST] owners ask him to help them find financing to take advantage of the new opportunities. "
67,"[INST] ""Taking a client to a bank [/INST] to obtain a loan is extremely difficult,"" he says. "
68,[INST] Underlying this problem is not an absence of guarantee programs or directed-credit programs for [/INST] small businesses but rather an institutional inadequacy which makes it risky to lend to any but large companies or those with large real estate holdings.
69,[INST] Long term growth for successful businesses [/INST] is also limited by the absence of structured venture capital markets.
70,[INST] The legal framework for the [/INST] pledging of business assets to secure loans is insufficient.
71,"[INST] As a result, accounts receivable, capital [/INST] equipment and inventory cannot be used as collateral for business loans. "
72,"[INST] Since owner equity of many small and medium- size businesses has been eroded as [/INST] they struggled to survive in the newly competitive business environment of Argentina, it is no wonder that there have been record numbers of small business failures. "
73,[INST] There are some stirrings [/INST] of a revival in the small-business sector.
74,"[INST] Foreign banks, with more sophisticated lending technology, have entered [/INST] Argentina and are more willing than the domestic banks to make loans to small businesses. "
75,[INST] Some progressive government officials recognize the need for [/INST] institutional reform and are attempting to persuade a reluctant Congress to change the legal framework.
76,[INST] Laws to reform the secured transactions framework [/INST] have been drafted but they are languishing between the bureaucracy and the legislature.
77,"[INST] The World Bank is implementing a judicial-reform project, [/INST] but it is not clear that there is political will for such changes. "
78,[INST] Labor laws are still very restrictive [/INST] by international standards although they have been relaxed for small companies.
79,[INST] High payroll taxes and the cost [/INST] of firing workers place heavy burdens on small businesses.
80,"[INST] When the barriers to establishing new businesses are minimized [/INST] and the constraints to small business growth are eliminated, this sector appears set to create countless jobs. "
81,"[INST] Rather, the government should eliminate [/INST] regulatory and legal constraints that hurt the small-business sector. "
82,[INST] It is an effort that will take several [/INST] years but the reward should be a vibrant small business sector in Argentina.
83,"[INST] --- Mr. Holden is the director of [/INST] the Enterprise Research Institute for Latin America, a Washington-based think tank. "
84,"[INST] ___ Document 64 of 500 The Americas A Trade Deficit Is Just [/INST] What Argentina Needs Author: By Carlos A. Rodriguez Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 08 May 1998: A15. "
85,[INST] accountid=28034 Abstract: During 1997 Argentina [/INST] broke many of its own macroeconomic performance records.
86,"[INST] With an annual inflation rate [/INST] of only 0.3%, gross domestic product grew by 8.4%. "
87,"[INST] The unemployment rate fell by almost [/INST] 3 percentage points and 810,000 new jobs were created. "
88,[INST] This was accomplished in the context of a stand-by loan [/INST] program with the International Monetary Fund that limited the size of the public-sector deficit to 1.4% of GDP.
89,"[INST] My forecast for 1998 is zero inflation, GDP [/INST] growth of at least 6% and a fiscal deficit of 1% of GDP. "
90,"[INST] Despite this combination of robust growth and fiscal [/INST] restraint, some analysts continue to climb a wall of worry about the Argentine economy. "
91,"[INST] This stems largely from traditional -- and wrongheaded [/INST] -- concerns about a current-account deficit, which in Argentina today is 4% of GDP. "
92,[INST] In order to understand why this deficit does not threaten [/INST] stability -- and why it is central to growth -- one must understand how it has come about.
93,[INST] The continuing current-account deficit is the result [/INST] of the confidence of foreign investors in Argentina's new economic system.
94,"[INST] IRSA, a property company that is partially bankrolled by George Soros, [/INST] is buying urban property (office space and malls), Luciano Benetton is buying ranchland and Hong Kong & Shanghai Banking Corp. "
95,[INST] of the U.K. and Banco [/INST] Santander of Spain are buying our larger private banks.
96,"[INST] If we want to balance our current account, the only alternative short [/INST] of turning the small fiscal deficit into a large surplus would be to discourage genuine foreign investors from coming to our country. "
97,"[INST] In fact, if the only goal is to reduce the [/INST] current-account deficit, a smaller fiscal deficit might backfire since it would reduce country risk, encouraging more private inflows. "
98,[INST] Full text: During 1997 Argentina [/INST] broke many of its own macroeconomic performance records.
99,"[INST] With an annual inflation rate [/INST] of only 0.3%, gross domestic product grew by 8.4%. "
100,"[INST] The unemployment rate fell by almost [/INST] 3 percentage points and 810,000 new jobs were created. "
101,[INST] This was accomplished in the context of a stand-by loan [/INST] program with the International Monetary Fund that limited the size of the public-sector deficit to 1.4% of GDP.
102,"[INST] My forecast for 1998 is zero inflation, GDP [/INST] growth of at least 6% and a fiscal deficit of 1% of GDP. "
103,"[INST] Despite this combination of robust growth and fiscal [/INST] restraint, some analysts continue to climb a wall of worry about the Argentine economy. "
104,"[INST] This stems largely from traditional -- and wrongheaded [/INST] -- concerns about a current-account deficit, which in Argentina today is 4% of GDP. "
105,[INST] In order to understand why this deficit does not threaten [/INST] stability -- and why it is central to growth -- one must understand how it has come about.
106,[INST] The fuel behind the unprecedented [/INST] economic achievements of 1997 was domestic and foreign investment.
107,[INST] Imports of capital goods and other [/INST] inputs grew by 37% and represented 44% of all imports.
108,"[INST] This investment is a result of a shift toward [/INST] a market economy, begun in 1989, which has radically changed the composition of foreign investment. "
109,"[INST] The first investment wave, in [/INST] 1990-94, came from the privatization of many Argentine companies. "
110,"[INST] But it was unfortunately disrupted by the [/INST] 1994 Mexican ""Tequila"" crisis which prompted investors to move to the sidelines. "
111,"[INST] By mid-1996 the Tequila recession was over but the Argentine ""country- risk"" premium [/INST] was costing the country 800 basis points -- as measured by the spread between yields on Argentine dollar-denominated ""Brady"" bonds and U.S. Treasuries. "
112,"[INST] Since then the minister of the economy, Domingo Cavallo [/INST] has stepped down, the Peronist party has lost control of Congress and the Asian crisis has hit. "
113,"[INST] In spite of these shocks, the risk premium has fallen [/INST] by 60% (to a level of 310 basis points) and international reserves have grown by $4.2 billion (22%). "
114,"[INST] Along with our increasing prosperity, [/INST] we now have a large current-account deficit. "
115,[INST] The government can be blamed only [/INST] for about one percentage point of this 4% of GDP deficit.
116,[INST] The continuing current-account deficit is the result [/INST] of the confidence of foreign investors in Argentina's new economic system.
117,"[INST] IRSA, a property company that is partially bankrolled by George Soros, [/INST] is buying urban property (office space and malls), Luciano Benetton is buying ranchland and Hong Kong & Shanghai Banking Corp. "
118,[INST] of the U.K. and Banco [/INST] Santander of Spain are buying our larger private banks.
119,"[INST] If we want to balance our current account, the only alternative short [/INST] of turning the small fiscal deficit into a large surplus would be to discourage genuine foreign investors from coming to our country. "
120,"[INST] In fact, if the only goal is to reduce the [/INST] current-account deficit, a smaller fiscal deficit might backfire since it would reduce country risk, encouraging more private inflows. "
121,[INST] Asset prices are well below 1991 and [/INST] 1992 levels and consumption grew less in percentage terms than GDP last year.
122,"[INST] The government's foreign debt stands at only 23% of GDP and the financial requirements for [/INST] 1998 are $14.4 billion, an amount that in no way threatens available reserves, which exceed $37 billion (including liquidity requirements and an IMF stand-by facility of $7 billion). "
123,"[INST] In January, the IMF reduced Argentina's growth-rate projection for 1998 to 4% and [/INST] in March an IMF consulting mission report indicated that the economy should be cooled down since it is growing at more than 8%. "
124,[INST] This sharp change in views indicates the need [/INST] for a more complete understanding of what causes Argentina's current growth and the current-account deficit.
125,[INST] The key lies in the causal [/INST] relationship between the capital inflows and the structural reforms implemented.
126,"[INST] Productive investment is the engine of our growth [/INST] and it responds to fundamentals, not to ad hoc rules like limiting current-account deficits. "
127,"[INST] The best way to instantly solve our external deficit would be to create panic [/INST] so that capital flees, output falls and imports are cut, as happened in the hyperinflation years of 1989-90, when we ran the two largest trade-account surpluses ever. "
128,[INST] Economic analysis indicates that a [/INST] change towards sound economic policy produces confidence.
129,"[INST] Confidence brings in foreign investment, [/INST] which increases absorption, and thus the current-account deficit rises. "
130,[INST] The experience of the 1990's confirms this hypothesis: during 1991-97 GDP [/INST] grew at a compound rate of 6.1% while the current account showed an average deficit of 2% of GDP.
131,"[INST] Bad economic policy, on the other hand, [/INST] generates capital outflow that reduces absorption and thus ""improves"" the current account. "
132,[INST] The experience of the 1980s illustrates the results of such economic [/INST] policies: during 1981-90 the current account showed an average surplus of 1.1% while GDP fell at an annual rate of 1.4%.
133,[INST] Argentina is not likely to generate current-account surpluses for some [/INST] time as the opportunities for foreign investment are being widened by the political consolidation of economic reforms.
134,"[INST] No significant political party calls for changes in the [/INST] new basic rules of the game: a currency board, fiscal balance, and an open market economy. "
135,"[INST] The country has signed a three year extended fund facility with [/INST] the IMF that incorporates several structural targets, among them reforms in the labor regime and tax and revenue sharing systems. "
136,[INST] It aims at solving the taxation bias against employment while at [/INST] the same time closing several loopholes that had significantly eroded the tax base -- particularly regarding the income and value-added taxes.
137,"[INST] If this tax law is passed, Argentina will have [/INST] advanced another step towards becoming a viable market economy and this will further boost foreign investment. "
138,"[INST] After decades of stagnation and [/INST] capital flight, Argentina is a capital thirsty country. "
139,"[INST] The political and economic transformations that we are experiencing in the 1990s provide the ideal [/INST] conditions for this capital -- both physical and human -- to be supplied partly from abroad, similar to what has happened with the U.S. during the last 220 years. "
140,[INST] --- Mr. Rodriguez is secretary of economic [/INST] policy of Argentina and president of CEMA University in Buenos Aires.
141,"[INST] ___ Document 77 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 01 May 1998: A11. "
142,[INST] accountid=28034 Abstract: Olympic Airways [/INST] got a tongue lashing from its owner.
143,"[INST] The Greek government, in a strong rebuke, compared [/INST] the nation's flag carrier to a ""black hole"" that gobbles up taxpayers' money. "
144,[INST] The nation's foreign minister went so far [/INST] as to call for the government to shut down the debt-ridden airline.
145,[INST] The outburst came after a wave of strikes in recent months -- triggered [/INST] by plans to cut jobs to make the company more competitive -- left thousands of travelers stranded at airports in Greece and elsewhere.
146,"[INST] But more important, it may be a sign of Greece's increasing frustration as it finds itself [/INST] far behind other nations in the European Union that have been selling off state assets and reforming the way they do business ahead of European economic and monetary union. "
147,[INST] A slight but better-than-expected gain in first-half earnings [/INST] at British food and beverage concern Allied Domecq wasn't good enough for investors.
148,[INST] The group's failure to unveil a comprehensive strategy [/INST] when it released the latest results yesterday pushed its shares down 1.4% in London trading.
149,"[INST] The prospects of Allied Domecq, which reported a 1% increase in earnings to GBP 320 million ($534.3 [/INST] million) for the six months through February, have been called into question following the merger of its two main rivals, Guinness and Grand Metropolitan, to form the food and drinks giant Diageo. "
150,[INST] There is concern that Diageo's strength will cut [/INST] sharply into Allied's earnings unless it makes significant changes soon to its corporate structure.
151,[INST] British transport group Stagecoach Holdings is in [/INST] an acquisitive mood once again -- this time both at home and abroad.
152,[INST] It said it secured deals valued at GBP 148 million to buy [/INST] Glasgow's Prestwick International Airport and a stake of as much as 28% in a Hong Kong group that builds roads in China.
153,[INST] The purchase of the Scottish airport [/INST] is noteworthy because it marks Stagecoach's entry into the aviation market.
154,[INST] The company says Prestwick will become part of a new subsidiary that [/INST] will seek more deals in the United Kingdom and overseas; it is already on a short list to purchase Skavsta airport in Stockholm.
155,[INST] Full text: EUROPE Athens Criticizes Olympic Airways [/INST] As Reforms Lag Olympic Airways got a tongue lashing from its owner.
156,"[INST] The Greek government, in a strong rebuke, compared [/INST] the nation's flag carrier to a ""black hole"" that gobbles up taxpayers' money. "
157,[INST] The nation's foreign minister went so far [/INST] as to call for the government to shut down the debt-ridden airline.
158,[INST] The outburst came after a wave of strikes in recent months -- triggered [/INST] by plans to cut jobs to make the company more competitive -- left thousands of travelers stranded at airports in Greece and elsewhere.
159,"[INST] But more important, it may be a sign of Greece's increasing frustration as it finds itself [/INST] far behind other nations in the European Union that have been selling off state assets and reforming the way they do business ahead of European economic and monetary union. "
160,[INST] Foreign Minister Theodoros Pangalos spread the [/INST] blame for the airline's troubles across a wide spectrum.
161,"[INST] He cited the current and previous governments, [/INST] the airline's management and intransigent employees for creating Olympic's fiscal woes. "
162,"[INST] Even sadder, the foreign minister conceded in an interview with [/INST] Athens daily Eleftherotypia that the airline isn't unique, saying such problems are shared by other state-owned Greek companies. "
163,[INST] U.K. Food Giant Disappoints Investors A slight but better-than-expected [/INST] gain in first-half earnings at British food and beverage concern Allied Domecq wasn't good enough for investors.
164,[INST] The group's failure to unveil a comprehensive strategy [/INST] when it released the latest results yesterday pushed its shares down 1.4% in London trading.
165,"[INST] The prospects of Allied Domecq, which reported a 1% increase in earnings to GBP 320 million ($534.3 [/INST] million) for the six months through February, have been called into question following the merger of its two main rivals, Guinness and Grand Metropolitan, to form the food and drinks giant Diageo. "
166,[INST] There is concern that Diageo's strength will cut [/INST] sharply into Allied's earnings unless it makes significant changes soon to its corporate structure.
167,"[INST] Japan Brewer to Lift European Role In a part of the world where nations such as [/INST] Belgium and Germany take pride in the vast selection and quality of their beers, it would seem to be a tough market for an Asian brewer to make much headway. "
168,"[INST] But one of Japan's biggest beer makers, Asahi [/INST] Breweries, says it's willing to spend more money to go against the best of them. "
169,"[INST] It will establish a European subsidiary to strengthen [/INST] its business in the region, where it already exports its popular Asahi Super Dry brand. "
170,[INST] The establishment of the new unit in London follows Japanese rival [/INST] Kirin Brewery's announcement this week that it will acquire a controlling 45% interest in New Zealand brewing concern Lion Nathan.
171,[INST] Stagecoach to Buy Glasgow Airport British transport group Stagecoach [/INST] Holdings is in an acquisitive mood once again -- this time both at home and abroad.
172,[INST] It said it secured deals valued at GBP 148 million to buy [/INST] Glasgow's Prestwick International Airport and a stake of as much as 28% in a Hong Kong group that builds roads in China.
173,[INST] The purchase of the Scottish airport [/INST] is noteworthy because it marks Stagecoach's entry into the aviation market.
174,[INST] The company says Prestwick will become part of a new subsidiary that [/INST] will seek more deals in the United Kingdom and overseas; it is already on a short list to purchase Skavsta airport in Stockholm.
175,[INST] BRIEFLY: -- France got some encouragement on the jobless [/INST] front as the nation's unemployment rate slipped to 12% in March from 12.1% the previous month.
176,[INST] -- The European Commission cleared the creation of [/INST] a joint venture between Belgian retail bank Banque Bruxelles Lambert and American Express.
177,"[INST] The venture will group the two companies' [/INST] business travel activities in Belgium, and their business and leisure interests in Luxembourg. "
178,[INST] -- British Aerospace says it will acquire a 35% [/INST] interest in Swedish aerospace group Saab from parent Investor in a deal valued at GBP 269 million.
179,[INST] -- German pharmaceutical company Bayer saw its first-quarter [/INST] earnings jump 21% to 858 million marks ($477.8 million) on a 8.3% rise in sales.
180,"[INST] -- Royal Bank of Scotland Group and U.K. insurer General Accident were fined GBP [/INST] 290,000 and GBP 120,000, respectively, by a British watchdog for their part as trustees to the mutual funds of a former Deutsche Morgan Grenfell fund manager. "
181,[INST] --- ASIA/PACIFIC Singapore Sends Signal on Forecast Singapore [/INST] pooh-poohed talk by analysts that it could register negative growth in the current year.
182,"[INST] But the nation's deputy prime minister, Lee Hsien Loong, conceded that economic [/INST] growth could fall below the 2.5%-to-4.5% forecast issued by the government earlier this year -- but only if the regional crisis worsens. "
183,"[INST] Mr. Lee, who is also chairman of the Monetary Authority of Singapore, [/INST] said the city-state hasn't escaped unscathed from the problems of its troubled neighbors, adding that retail sales and tourism have been hard hit. "
184,"[INST] Analysts agree that lower spending by Singaporeans in the face [/INST] of the uncertain outlook, along with fierce global competition and slowed investments point to slower growth this year. "
185,"[INST] Bangkok Searches Soul Amid Crisis Thailand is likely to name names next week [/INST] over who is to blame for its economic travails, and the nation's central bank governor could show up at the top of the list. "
186,"[INST] More than half the employees at the Bank of Thailand came [/INST] to work dressed in black yesterday to protest what they believe is Bangkok's plan to oust their boss, Chaiyawat Wibulswasdi. "
187,"[INST] While the names of several qualified candidates [/INST] for the post have surfaced, most say they don't want the job. "
188,"[INST] One exception: Chatumongol Sonakul, former permanent secretary of the Ministry of Finance, who has been [/INST] highly critical of the central bank's economic policy -- which included paying out billions of dollars in foreign reserves in a futile attempt to prop up the Thai currency. "
189,"[INST] But if appointed he may face vigorous resistance [/INST] from the institution's rank and file, who are fiercely loyal to Mr. Chaiyawat. "
190,"[INST] Japan Housing Industry Posts a Slump Japanese construction orders and housing starts fell steeply [/INST] for the year ended March 31, and analysts say a massive fiscal stimulus package during the current year will do little to produce a recovery. "
191,"[INST] The latest figures show that construction orders received by 50 [/INST] leading contractors dropped 8.9% to 18.525 trillion yen ($139.94 billion), while housing starts tumbled 17.7% to 1.34 million units. "
192,"[INST] The 16.65 trillion yen ($125 billion) economic stimulus package unveiled by the government [/INST] last week includes fresh public works spending, but traders say it will probably give no more than a modest lift to the sluggish construction industry. "
193,"[INST] BRIEFLY: -- Thailand's central bank says local financial institutions can [/INST] now charge higher interest rates to borrowers for funds to support exports, the agricultural sector and some other industries. "
194,[INST] -- Official Chinese reports hint at resistance from localities at implementing [/INST] the ban on direct sales that has generated rioting and thrown thousands out of work amid rising national unemployment.
195,[INST] -- Major Japanese telecommunications provider KDD and Teleway [/INST] Japan failed to reach agreement on their planned merger by yesterday's target date.
196,"[INST] -- A group of 140 creditors has agreed in principle [/INST] to allow Thai Petrochemical Industry to delay repayment of foreign-currency debts totaling $3 billion, the company said. "
197,"[INST] --- THE AMERICAS Canada Forestry Firm Posts a Loss International Forest Products of Canada [/INST] posted a loss of 14.2 million Canadian dollars (US$9.9 million) for the first quarter, linking its woes to the slump in the Japanese building industry. "
198,[INST] The company says 36% of [/INST] its sales are generated in the Japanese market.
199,"[INST] Meanwhile, the group said that despite consolidation in the [/INST] global forest-products industry, it isn't pursuing merger or acquisition opportunities -- at least not now. "
200,[INST] Argentine Judge Insists on Testimony The Argentine judge investigating allegations that the local unit [/INST] of International Business Machines paid bribes to win a state contract insisted yesterday that four executives from IBM's U.S. headquarters must give evidence in Buenos Aires.
201,"[INST] IBM said Wednesday the four executives were ready to give [/INST] evidence in the U.S., but it said they were ""not Argentine citizens nor employees of IBM Argentina"". "
202,[INST] He is probing allegations that IBM Argentina paid [/INST] bribes to win a $250 million contract in 1993 with state-owned Banco Nacion.
203,[INST] BRIEFLY: -- Mexican electoral authorities will set up a committee [/INST] to study how laws could be changed to give the vote to Mexicans living or working abroad.
204,"[INST] -- Uruguay's economic output rose 5.1% [/INST] in 1997 from a year earlier, the central bank said. "
205,"[INST] ___ Document 101 of 500 U.S. Aims to Reassert Influence Over [/INST] Latin Trade Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 14 Apr 1998: A17. "
206,[INST] accountid=28034 Abstract: The FTAA is the most ambitious attempt by the [/INST] U.S. to integrate itself more deeply into Latin trade since the 1993 North American Free Trade Agreement with Mexico and Canada.
207,"[INST] While Latin leaders support the FTAA, they are [/INST] working harder these days on their own regional agreements, where the U.S. has little influence. "
208,"[INST] The reason: A loss of confidence in U.S. [/INST] leadership on trade since Congress denied President Clinton ""fast track"" authority in November. "
209,[INST] Fasttrack authority means that Congress must [/INST] vote on trade accords as negotiated by the cabinet without amendment.
210,[INST] Latin American leaders convening for the summit believe [/INST] the White House will have fast-track authority by the FTAA deadline in 2005.
211,"[INST] While negotiating timetables are set for [/INST] the FTAA, the efforts to strengthen regional accords are picking up. "
212,"[INST] For example, Mercosur -- a trade bloc whose members are Argentina, Brazil, Uruguay [/INST] and Paraguay, with Chile and Bolivia as associate members -- is initiating a new round of trade talks with Andean and Central American nations. "
213,"[INST] Full text: BUENOS AIRES -- At a time when commerce is [/INST] growing with Latin America, the U.S. finds itself in the awkward position of having diminished influence over Latin trade policies. "
214,"[INST] President Clinton will try to [/INST] regain the U.S. initiative in Santiago, Chile, this week. "
215,"[INST] The Chilean capital is host to the second Summit of the Americas, where the president [/INST] will start negotiations on the Free Trade Area of the Americas, an attempt to create a common market among 34 countries with 800 million consumers by 2005. "
216,[INST] The FTAA is the most ambitious attempt by the U.S. to [/INST] integrate itself more deeply into Latin trade since the 1993 North American Free Trade Agreement with Mexico and Canada.
217,"[INST] While Latin leaders support the FTAA, they are [/INST] working harder these days on their own regional agreements, where the U.S. has little influence. "
218,"[INST] The reason: A loss of confidence in U.S. [/INST] leadership on trade since Congress denied President Clinton ""fast track"" authority in November. "
219,[INST] Fasttrack authority means that Congress must [/INST] vote on trade accords as negotiated by the cabinet without amendment.
220,"[INST] ""What we predicted would happen in the absence of fast [/INST] track is happening: an acceleration toward subregional arrangements, which exclude the U.S.,"" says U.S. Trade Representative Charlene Barshefsky. "
221,"[INST] ""We have taken ourselves out of the picture at the point in [/INST] time when we are the world's most competitive economy and at a time when this hemisphere is ready to move in our direction"". "
222,[INST] Latin American leaders convening for the summit believe [/INST] the White House will have fast-track authority by the FTAA deadline in 2005.
223,"[INST] While negotiating timetables are set for [/INST] the FTAA, the efforts to strengthen regional accords are picking up. "
224,"[INST] For example, Mercosur -- a trade bloc whose members are Argentina, Brazil, Uruguay [/INST] and Paraguay, with Chile and Bolivia as associate members -- is initiating a new round of trade talks with Andean and Central American nations. "
225,"[INST] For local economies, there are [/INST] huge benefits to deepening regional trade deals. "
226,[INST] Growth is so strong that U.S. companies can't [/INST] do nothing while they wait to compete in the lower-tariff regime of a future FTAA.
227,"[INST] Instead, they are moving plants into South [/INST] America to operate within the low tariff structures of Mercosur, for example. "
228,"[INST] The U.S. is also concerned that regional accords pay little [/INST] more than lip service to important issues such as respect for intellectual property, patents and environmental safety. "
229,[INST] The Washington trade group Phrma estimates that [/INST] U.S. drug companies lose $500 million a year to piracy in Argentina alone.
230,"[INST] ""If the U.S. isn't in the position to shape these arrangements, that would [/INST] be at the expense of the hard-working men and women of this country,"" says Thomas ""Mack"" McLarty, President Clinton's special envoy to the Americas. "
231,[INST] The U.S. remains an enormously [/INST] attractive market for any country in Latin America.
232,"[INST] But expectations shape economies, and regional accords are advancing [/INST] because Latin America's private sector is also taking a much closer look at hemispheric markets. "
233,"[INST] Argentine retail groups now run [/INST] grocery store chains in Chile, and vice versa. "
234,"[INST] YPF SA, the Argentine oil concern, is expanding [/INST] all over the region in a quest to become a Latin American oil giant. "
235,"[INST] ""We are seeing a much more strategic look at [/INST] Mercosur"" by local companies, says Michael Liikala, counselor for commercial affairs at the U.S. Embassy in Argentina. "
236,"[INST] ""They are supportive of the FTAA, [/INST] but to our chagrin they are looking at another strategy"". "
237,"[INST] Adds, Raul Rivera, head of Boston Consulting Group's Buenos Aires office: ""The [/INST] FTAA is an idea that may come to fruition if all the stars align and all the political things go right. "
238,"[INST] Mercosur is here, it is a [/INST] reality, and there are a lot of companies betting on it"". "
239,[INST] --- A Commonality of Interests While [/INST] Trade Agreements in the Americas Sometimes Exclude the U.S. ...
240,[INST] Trade agreements involving Central and Latin American countries -- Free Trade [/INST] Area of the Americas (pending): aims to create a common market between 33 countries and the U.S. by 2005.
241,"[INST] -- North America Free [/INST] Trade Agreement: Canada, the U.S. and Mexico. "
242,"[INST] -- Mercosur: Brazil, Argentina, Uruguay [/INST] and Paraguay; Chile and Bolivia participate as associate members. "
243,"[INST] -- Andean Community: Venezuela, Ecuador, Peru, [/INST] Colombia and Bolivia; Panama plans to join this year. "
244,"[INST] -- Central American Common Market: [/INST] Costa Rica, Guatemala, El Salvador, Honduras and Nicaragua. "
245,[INST] Sources: Global Trade Information Services; Office of [/INST] U.S. Trade Representative Credit: Staff Reporter of The Wall Street Journal
246,"[INST] ___ Document 111 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 08 Apr 1998: A17. "
247,[INST] accountid=28034 Abstract: One of Australia's two major dock operators and the government have [/INST] been trying to reduce the influence of trade unions in Sydney and other key ports in an effort to cut the high costs of exports.
248,[INST] Yesterday Patrick Stevedores made an attempt [/INST] to resolve the labor issue once and for all.
249,"[INST] It dismissed its entire unionized work force [/INST] of 1,400 employees, following a series of strikes against the company. "
250,"[INST] But the most interesting twist in all this is that the move [/INST] won the whole-hearted support of the government, which views the action as part of an industrywide effort to restructure the nation's docks. "
251,[INST] Hong Kong's provisional legislature rushed through a measure in its final [/INST] days that grants China's official news agency and a few other Chinese government bodies exemptions from the territory's laws.
252,"[INST] The Hong Kong government says the change is merely a ""technical"" [/INST] move that will transfer to the state the legal immunity that the British Crown enjoyed for so many years. "
253,[INST] But others say it will undermine Hong Kong's autonomy from the rest [/INST] of China and create a legal system in which other entities connected with the mainland could also be above the law.
254,[INST] Some businessmen say they fear [/INST] that mainland-backed Chinese companies could eventually enjoy legal immunity.
255,"[INST] In a major boost for Indonesia, Japan's Export-Import Bank pledged [/INST] $1 billion in loans to that nation for companies that need help getting back on their feet. "
256,[INST] It's the first such commitment from the [/INST] Japanese institution to Indonesia since the Asian currency crisis erupted last summer.
257,"[INST] The money could be dispursed within weeks, depending [/INST] on progress made in talks between Indonesian officials and the International Monetary Fund. "
258,[INST] Jakarta was poised to announce a revised [/INST] economic-reform program today that it hoped would win the confidence of investors.
259,[INST] Two earlier bailout plans stumbled amid concerns that President [/INST] Suharto was avoiding the tough decisions needed to end Indonesia's worst economic crisis since the 1960s.
260,[INST] Full text: ASIA/PACIFIC Australia Backs Wholesale Firing Of Dock Workers One of Australia's two major dock [/INST] operators and the government have been trying to reduce the influence of trade unions in Sydney and other key ports in an effort to cut the high costs of exports.
261,[INST] Yesterday Patrick Stevedores made an attempt [/INST] to resolve the labor issue once and for all.
262,"[INST] It dismissed its entire unionized work force [/INST] of 1,400 employees, following a series of strikes against the company. "
263,"[INST] But the most interesting twist in all this is that the move [/INST] won the whole-hearted support of the government, which views the action as part of an industrywide effort to restructure the nation's docks. "
264,"[INST] Canberra said the wholesale dismissal of the workers -- who were immediately replaced by [/INST] contracting out the work -- would give Australia ""the opportunity to have a waterfront which will allow us to compete against the best in the world"". "
265,"[INST] Trade-union officials disagree, signaling that the move would [/INST] spark further strikes by the Maritime Union and other labor unions across Australia. "
266,"[INST] The nation's stevedoring industry has been dominated for years by two companies, [/INST] Patrick and the Australian unit of Britain's Peninsular & Oriental Steam Navigation, both of which hire dockworkers from the same union. "
267,[INST] Hong Kong Uneasy Over Exemptions Hong Kong's provisional legislature rushed through a [/INST] measure in its final days that grants China's official news agency and a few other Chinese government bodies exemptions from the territory's laws.
268,"[INST] The Hong Kong government says the change is merely a ""technical"" [/INST] move that will transfer to the state the legal immunity that the British Crown enjoyed for so many years. "
269,[INST] But others say it will undermine Hong Kong's autonomy from the rest [/INST] of China and create a legal system in which other entities connected with the mainland could also be above the law.
270,[INST] Some businessmen say they fear [/INST] that mainland-backed Chinese companies could eventually enjoy legal immunity.
271,"[INST] Japan Ex-Im Bank to Help Indonesia In a major boost for Indonesia, [/INST] Japan's Export-Import Bank pledged $1 billion in loans to that nation for companies that need help getting back on their feet. "
272,[INST] It's the first such commitment from the [/INST] Japanese institution to Indonesia since the Asian currency crisis erupted last summer.
273,"[INST] The money could be dispursed within weeks, depending [/INST] on progress made in talks between Indonesian officials and the International Monetary Fund. "
274,[INST] Jakarta was poised to announce a revised [/INST] economic-reform program today that it hoped would win the confidence of investors.
275,[INST] Two earlier bailout plans stumbled amid concerns that President [/INST] Suharto was avoiding the tough decisions needed to end Indonesia's worst economic crisis since the 1960s.
276,"[INST] China's Growth Target May Be Too High China is aiming to achieve [/INST] economic expansion of 8% this year, but a leading Chinese economist says growth of 5% to 6% would be closer to the mark. "
277,[INST] Fang Hanting of the Chinese Academy of Social Sciences [/INST] says Beijing is expecting too much from plans to reform the nation's vast housing sector.
278,"[INST] Though the idea of shedding decades of communist thinking and letting the masses [/INST] buy their own homes will help the economy, he says it will only add about half a percentage point to growth in 1998. "
279,[INST] That's because incomes are too low and [/INST] people still don't have enough savings to enter the housing market.
280,"[INST] Rather, the economist says, the main [/INST] source of growth this year likely will come from increased investments. "
281,[INST] Taiwan Is Poised for Lower Rates A lower-than-expected 1.6% rise in consumer prices in [/INST] Taiwan for the first three months of this year is expected to give the island more breathing room from the economic turmoil pummeling much of Asia.
282,"[INST] Analysts say the latest figures indicate that interest rates [/INST] are poised to ease, promising a boost to an economy being hit by lower exports. "
283,[INST] Economists had expected a far steeper rise in prices [/INST] in the wake of a more than 15% fall in the value of Taiwan's currency since October.
284,[INST] But stiff competition among retailers has made [/INST] it difficult for businesses to pass on higher prices to consumers.
285,"[INST] BRIEFLY: -- Coca-Cola's India subsidiary expects to see sales grow 20% [/INST] this year, and like other soft-drink companies has been lobbying the government to lower the tax on beverage products. "
286,[INST] -- Shanghai said its growth [/INST] in output was 8% in the first quarter.
287,[INST] It was the first time in [/INST] years that the city's official growth rate slipped into single digits.
288,[INST] --- THE AMERICAS IMF Urges Argentina to [/INST] Raise Taxes The International Monetary Fund sent a tough message to Argentina.
289,[INST] It urged the nation's leadership to take a series [/INST] of steps to clamp down on domestic consumption to avoid further deterioration in the country's trade accounts.
290,[INST] The IMF warned in a memorandum that the country's balance of trade [/INST] in goods and services could erode to a deficit equal to 4.75% of the nation's output if corrective measures aren't taken soon.
291,"[INST] The international organization suggested Argentine authorities cut federal [/INST] spending, raise taxes, reduce bank lending and deepen reform of the nation's work rules. "
292,"[INST] But the government says it hasn't decided [/INST] what measures, if any, it will take to appease the IMF. "
293,"[INST] Spanish Bank Unveils Argentine Deal [/INST] Pursuing its Latin American expansion, Spain's Argentaria Corp. "
294,[INST] Bancaria de Espana reached an agreement to [/INST] acquire 50% of Argentina's largest fund manager from Citicorp's Citibank for $280 million.
295,"[INST] The New York bank will retain the remaining [/INST] 50% stake in Grupo Siembra, while sharing management responsibilities with Argentaria, Spain's third-largest banking group. "
296,"[INST] Meanwhile, a local newspaper reported that Citibank is also selling as much [/INST] as 15% of its majority stake in Argentine media company CEI Citicorp Holding, but the companies wouldn't comment on the reports. "
297,"[INST] Tequila Makers to Open U.S. Office To protect the integrity of [/INST] Mexican tequila and keep imitators at bay, makers of the fiery brew are opening a trade office in Washington. "
298,[INST] The announcement comes only months [/INST] after a similar Mexican move in Madrid.
299,"[INST] The director of the Tequila Regulatory Council in Guadalajara says the Washington venue [/INST] will allow the industry to lobby to ensure that the product is sold under ""official norms"" in the U.S. to protect the label. "
300,"[INST] Though there haven't been major problems [/INST] with copycats in the U.S. market, this is serious business. "
301,"[INST] The European Union has given denomination of origin status to [/INST] tequila, a protection similar to that given to champagne, which must come from the Champagne region of France. "
302,[INST] BRIEFLY: -- The Global Telecom consortium won a cellular license [/INST] for the southern Brazilian states of Parana and Santa Catarina with a bid of 773.9 million reals ($684 million).
303,"[INST] --- EUROPE Deutsche Telekom Request Is Denied [/INST] Once again, German regulators are cutting Deutsche Telekom down to size. "
304,"[INST] Not only are they rejecting as too high the fees the former phone [/INST] monopoly wants to charge consumers that switch to rival phone companies, but they are also nixing the idea of any charge at all. "
305,[INST] Deutsche Telekom proposed a one-time fee of 49 marks [/INST] ($26.62) for households that switch to a competitor but want to keep their old telephone number.
306,"[INST] In denying the request, the regulator [/INST] elevated an individual's phone number to a special status. "
307,"[INST] It said customers are entitled to use their phone number in the same [/INST] way they are entitled to use their street address, and that neither Deutsche Telekom nor anyone else has the right to take it away. "
308,[INST] British Coal Firm Comes Under [/INST] Fire Britain's RJB Mining had a tough day yesterday.
309,"[INST] Hours after it announced that earnings dropped 9% last year, the coal concern was [/INST] handed a verbal mauling by an influential parliamentary committee that scoffed at the group's request for a state rescue package for the domestic coal industry. "
310,"[INST] 10 Downing Street should attempt to establish a level playing [/INST] field for RJB by confronting European Union members Germany and Spain ""diplomatically but forcefully"" over their coal subsidies. "
311,[INST] BRIEFLY: -- Honeywell of the U.S. challenged in a European Union court [/INST] the EU's approval of 140 million francs in French government aid to an Anglo-French project to develop a flight-control system for Airbus Industrie.
312,[INST] -- French hotels group Accor beat its own forecast by turning [/INST] in a 42% increase in earnings last year to 1.51 billion francs ($244.8 million) on a 12% jump in revenue.
313,[INST] -- France's Dassault Aviation saw earnings jump [/INST] 47% last year to 1.35 billion francs on a 62% jump in revenue.
314,[INST] -- Swedish forestry group AssiDomaen struck a preliminary deal [/INST] with the Karelian Republic in Russia to sell the group's 57% stake in a paper mill.
315,"[INST] Details weren't disclosed, but the company hopes to [/INST] salvage a sizable part of the $22 million it lent to the Karelian concern. "
316,[INST] -- German chemical and pharmaceutical group Merck AG reported that per-share [/INST] earnings jumped 50% last year to 4.25 marks ($2.31) and said it expects 1998 to be a growth year.
317,"[INST] ___ Document 123 of 500 Argentina, Its Economy Sizzling, Is Cool [/INST] to IMF Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 02 Apr 1998: A14. "
318,"[INST] accountid=28034 Abstract: Argentina's economy is growing at a much faster rate than forecasters expected, but the [/INST] country's trade deficit also appears to be deteriorating toward levels that may cause a team of International Monetary Fund officials visiting the country this week to urge some cool-down measures. "
319,"[INST] Leading indicators show the economy expanding at a surprising 6.5% [/INST] to 7% rate in the first quarter compared with the year-earlier period, thanks to robust investment and rising consumption. "
320,[INST] Wall Street economists figured the impact of Asia's economic crisis [/INST] on world demand would slow Argentina's economy down to 4% annual growth from an estimated 8.4% in 1997.
321,"[INST] But Argentina has already set off one alarm at the IMF by [/INST] overshooting a rolling 12-month target on the trade deficit by $385 million in January, says Pedro Lacoste, an independent economist here. "
322,"[INST] At current rates of economic growth, Mr. Lacoste estimates the country will also overshoot the [/INST] consensus forecast on the current-account deficit of around 4% of gross domestic product and push it to 5% of GDP, which is a widely perceived limit of investor tolerance. "
323,[INST] (The current account is the widest [/INST] definition of a country's imports and exports of goods and services.
324,"[INST] ) Full text: BUENOS AIRES -- Argentina's economy is growing at a much faster rate than forecasters [/INST] expected, but the country's trade deficit also appears to be deteriorating toward levels that may cause a team of International Monetary Fund officials visiting the country this week to urge some cool-down measures. "
325,"[INST] Leading indicators show the economy expanding at a surprising 6.5% [/INST] to 7% rate in the first quarter compared with the year-earlier period, thanks to robust investment and rising consumption. "
326,[INST] Wall Street economists figured the impact of Asia's economic crisis [/INST] on world demand would slow Argentina's economy down to 4% annual growth from an estimated 8.4% in 1997.
327,"[INST] ""The numbers are coming in, and in fact we are [/INST] seeing the Asian crisis has had very little effect"" on Argentina's growth, Finance Undersecretary Miguel Kiguel said. "
328,"[INST] But Argentina has already set off one alarm at the IMF by [/INST] overshooting a rolling 12-month target on the trade deficit by $385 million in January, says Pedro Lacoste, an independent economist here. "
329,"[INST] At current rates of economic growth, Mr. Lacoste estimates the country will also overshoot the [/INST] consensus forecast on the current-account deficit of around 4% of gross domestic product and push it to 5% of GDP, which is a widely perceived limit of investor tolerance. "
330,[INST] (The current account is the widest [/INST] definition of a country's imports and exports of goods and services.
331,"[INST] ) With a presidential election year looming in 1999 and [/INST] unemployment still uncomfortably high at 13.8%, finance-ministry officials bristle at suggestions that growth should slow to correct trade accounts. "
332,"[INST] ""Our view is that the current-account deficit doesn't represent a [/INST] threat to Argentina,"" Mr. Kiguel told investors and analysts at a conference sponsored by Deutsche Morgan Grenfell this week. "
333,"[INST] Mr. Kiguel said the government ""might agree"" to postpone [/INST] about $400 million in federal expenditures and to a boost in bank-reserve requirements to slow loan growth. "
334,"[INST] ""But if they [the IMF] want further [/INST] measures, it will be much more difficult to get,"" he said. "
335,"[INST] Such a pugnacious attitude toward the IMF is surprising in light of the fact that just about every major [/INST] Latin nation has tightened policies in some way to adjust to the impact from the Asian economic crisis, which has caused a deep decline in prices of key commodities that many of these countries export. "
336,[INST] Mr. Lacoste notes that Argentina's export sales appear to be flattening [/INST] largely because the average price of products sold abroad has fallen by 13.8% since the third quarter of 1996.
337,"[INST] ""Exports are stagnant due to [/INST] the reduction of commodity prices,"" he says. "
338,[INST] Nobody can say for sure whether the downturn [/INST] in commodity prices is a short-term cyclical phenomenon or a long-term secular trend.
339,"[INST] What matters is how Argentine companies adjust to lower export [/INST] prices, and some companies are showing impressive agility, which may be why business confidence here remains high. "
340,"[INST] Officials at Acindar SA, the country's largest producer of nonflat steel with around [/INST] $600 million in sales, say they will recover lost exports to Asia (formerly about 13% of total exports) by focusing more on South American customers. "
341,"[INST] ""We are looking at extraregional markets [/INST] as opposed to export markets,"" says Arturo Acevedo, Acindar's president. "
342,"[INST] To protect markets from Asian commodity steel producers and to tighten [/INST] its grip on customers, Acindar plans on customizing its products by bending and shaping steel before it arrives on the job. "
343,"[INST] Some of that machinery will no doubt be imported, an [/INST] example of why Mr. Kiguel, the finance undersecretary, believes Argentina's trade deficit is a sign of health. "
344,"[INST] ""A country that grows fast is [/INST] likely to import more capital goods from abroad,"" said Mr. Kiguel. "
345,"[INST] Nevertheless, analysts say, Argentina's economy is growing so strongly today that it [/INST] must opt for corrective measures now or risk instability at the most undesirable time -- during the election year of 1999. "
346,"[INST] ""This economy has a real momentum of its own, and [/INST] a little tinkering won't do the job,"" says Geoffrey Dennis, Deutsche Morgan Grenfell's global emerging-market equity strategist. "
347,"[INST] ""The recommendation [on the stock market] is to sell [/INST] into strength"" because Argentina will have to wrench down growth sooner or later, he says. "
348,"[INST] ___ Document 143 of 500 Whistle-Blower: P&G Calls the Cops As It Strives to Expand Sales in Latin America --- Noted [/INST] Marketer Tries to Sell Antitrust Notions in Bid To Catch Its Giant Rivals --- Sending In Legal Precedents Author: By Tara Parker-Pope and Jonathan Friedland Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 20 Mar 1998: A1. "
349,"[INST] accountid=28034 Abstract: The spots were advertising an obscure toilet-seat [/INST] maker, Ariel del Plata SA, which, P&G learned, has ties to its big rival, Unilever Group. "
350,"[INST] Locked in a global brawl with the [/INST] Anglo/Dutch conglomerate, P&G is convinced that the ad campaign was a calculated smear. "
351,[INST] But P&G's response was [/INST] out-of-character: The mighty multinational complained to regulators.
352,"[INST] The maker of Tide, Crest and Pampers employs more than [/INST] two dozen lawyers in Latin America, with fully one-third of their time devoted to exposing practices it considers prejudicial. "
353,[INST] It has systematically collected regulatory rulings from mature markets in the U.S. [/INST] and Europe and turned them over as suggested precedents to guide Latin American regulators trying to interpret newly enacted antitrust laws.
354,[INST] It also has funneled reams of [/INST] data to trustbusters to show how competitors' practices might harm consumers.
355,"[INST] It is ""very, very insistent,"" says [/INST] Manuel Sandoval, an official of Mexico's Federal Commission on Competition. "
356,"[INST] P&G certainly isn't the household name in [/INST] Latin America that it is in the U.S., Europe and Japan. "
357,"[INST] At a time when economic-stabilization policies have snuffed out inflation and [/INST] triggered a spending spree by consumers, Latin America accounts for only 6% of P&G's $35 billion in global sales. "
358,"[INST] Colgate, by contrast, generates [/INST] 26% of its revenue in the region. "
359,"[INST] In terms of market share, [/INST] P&G lags behind Unilever, Colgate and Kimberly-Clark. "
360,"[INST] Full text: BUENOS AIRES -- [/INST] Last year, television viewers here saw an extraordinary commercial. "
361,"[INST] For more than a year, it [/INST] had been preparing to launch its Ariel laundry detergent in Argentina. "
362,"[INST] Suddenly, an ad was telling all [/INST] Buenos Aires that ""`Ariel' is synonymous with toilet seats"". "
363,"[INST] The spots were advertising an obscure toilet-seat maker, [/INST] Ariel del Plata SA, which, P&G learned, has ties to its big rival, Unilever Group. "
364,"[INST] Locked in a global brawl with the [/INST] Anglo/Dutch conglomerate, P&G is convinced that the ad campaign was a calculated smear. "
365,[INST] But P&G's response was [/INST] out-of-character: The mighty multinational complained to regulators.
366,"[INST] In fact, P&G is becoming [/INST] the biggest corporate whistle-blower south of the border. "
367,"[INST] A latecomer to Latin America, the consumer-goods giant is scrawny in the [/INST] region and is using a blossoming antitrust climate to help it catch up by filing lawsuits and snitching to antitrust cops. "
368,"[INST] Although businesses around the world routinely seek to gain advantage over competitors by [/INST] appealing to regulators, the scope and intensity of P&G's efforts to use Latin America's regulatory system to improve its competitive status are extraordinary. "
369,"[INST] The maker of Tide, Crest and Pampers employs more than [/INST] two dozen lawyers in Latin America, with fully one-third of their time devoted to exposing practices it considers prejudicial. "
370,[INST] It has systematically collected regulatory rulings from mature markets in the U.S. [/INST] and Europe and turned them over as suggested precedents to guide Latin American regulators trying to interpret newly enacted antitrust laws.
371,[INST] It also has funneled reams of [/INST] data to trustbusters to show how competitors' practices might harm consumers.
372,"[INST] It is ""very, very insistent,"" says [/INST] Manuel Sandoval, an official of Mexico's Federal Commission on Competition. "
373,"[INST] Some early results: In Brazil, P&G helped [/INST] make less valuable Colgate-Palmolive Co.'s $1 billion acquisition of Kolynos do Brasil Ltda. "
374,"[INST] And in Mexico, it helped [/INST] derail a tissue-paper near-monopoly created when Kimberly-Clark Corp. "
375,"[INST] ""It's been an ongoing effort on our part to try [/INST] to get to a level playing field,"" says Jorge P. Montoya, P&G's point man in Latin America. "
376,[INST] Competitors say P&G simply can't adapt to fluid [/INST] and unfamiliar markets and instead is relying on regulators to shore up its business.
377,"[INST] P&G ""is trying to keep false arguments before the public [/INST] in an attempt to justify its lack of commercial success,"" says Miguel Gonzalez Abella, Unilever's corporate-affairs manager in Argentina. "
378,"[INST] What P&G really needs to penetrate the region [/INST] is creative marketing, adds Eduardo Orteu, president of a major Argentine retailer, Supermercados Disco SA. "
379,"[INST] ""The regulatory system isn't [/INST] a solution to Procter's problems,"" he says. "
380,"[INST] P&G certainly isn't the household name in [/INST] Latin America that it is in the U.S., Europe and Japan. "
381,"[INST] At a time when economic-stabilization policies have snuffed out inflation and [/INST] triggered a spending spree by consumers, Latin America accounts for only 6% of P&G's $35 billion in global sales. "
382,"[INST] Colgate, by contrast, generates [/INST] 26% of its revenue in the region. "
383,"[INST] In terms of market share, [/INST] P&G lags behind Unilever, Colgate and Kimberly-Clark. "
384,"[INST] For consumer-goods makers, no emerging [/INST] market is more important than Latin America. "
385,"[INST] With Asia in an economic crisis, Latin America is [/INST] the world's fastest-growing region, with gross domestic product expected to grow nearly 4% this year. "
386,"[INST] For years, however, P&G steered clear of Latin America and its [/INST] economic and political volatility, even as Colgate and Unilever bought up big local brands and, overnight, acquired market share. "
387,"[INST] Until 1987, P&G ran its Latin American business from [/INST] its corporate headquarters in Cincinnati and sold only detergents and a few cleaning products in the region. "
388,"[INST] Mr. Montoya, who in 1985 had taken charge of [/INST] the Latin American business at age 39, moved the regional headquarters to Caracas in 1987. "
389,[INST] The Peruvian native bought local Latin American brands [/INST] and started new ones in a decade-long push that expanded sales by 20% a year.
390,"[INST] The buying binge included a detergent maker [/INST] in Colombia, two cleaning-products companies in Argentina and a disposable-diaper maker in Venezuela. "
391,"[INST] By 1994, P&G's Latin American [/INST] sales had grown 400% to $2.25 billion. "
392,"[INST] Wary of the growing power of big business [/INST] in the wake of market-liberalization programs, legislators began rewriting antitrust and fair-competition laws. "
393,"[INST] Their original target was public [/INST] utilities, which had been privatized earlier in the decade. "
394,"[INST] But the upshot was to make private [/INST] companies, particularly large ones, more accountable for decisions significantly affecting consumers. "
395,"[INST] In Argentina, for example, a plan to make long-distance calls cheaper while [/INST] raising local phone rates stirred up howls of protest, and it has been stymied by lawsuits filed by consumer groups and politicians. "
396,"[INST] ""The balance of power is shifting,"" [/INST] says Congresswoman Graciella Fernandez Meijide, a popular opposition politician in Argentina. "
397,[INST] At least six Latin American countries have [/INST] begun revising legislation governing their versions of the U.S. Federal Trade Commission.
398,"[INST] One high-profile agency is Conselho [/INST] Administrativo da Defesa Economica, Brazil's antimonopoly commission. "
399,"[INST] Newly armed in mid-1994 with sweeping powers to investigate anticompetitive practices, the [/INST] CADE in December 1994 vetoed the sale of an auto-parts maker and a cement-company merger, holding that both deals would create monopolies. "
400,"[INST] Just one month later, [/INST] P&G had its own crisis in Brazil. "
401,"[INST] Colgate, which had about 27% of the toothpaste market [/INST] there, offered $1 billion to acquire Kolynos, which had about 52%, from American Home Products Corp. "
402,"[INST] P&G also had been bidding for Kolynos, but Colgate offered about [/INST] 40% more money than any other bid and ended P&G's chances of quickly establishing itself in Brazil's toothpaste market. "
403,"[INST] After a phone call from Cincinnati alerted P&G executives in Latin America that [/INST] the company had lost out on the bidding, Mr. Montoya shifted to Plan B: Foil Colgate by persuading the CADE to halt the acquisition. "
404,[INST] P&G executives around the [/INST] world began compiling information on similar cases.
405,"[INST] Colleagues in Europe sent Brazil precedent [/INST] upon precedent, rulings about mergers stymied by European regulators. "
406,"[INST] In Mexico, they assembled detailed market histories to [/INST] show how consumers had been damaged by the dominance of companies such as Colgate. "
407,[INST] P&G argued that Colgate has delayed [/INST] launching new products unless pressured by a robust competitor.
408,"[INST] For example, it told regulators that Colgate's Maximum Fluoride [/INST] Protection toothpaste, launched in the U.S. in 1969, wasn't brought to Mexico for 17 years. "
409,"[INST] And years after Colgate had introduced [/INST] flexible toothpaste tubes, Mexican consumers were still using harder-to-use aluminum ones. "
410,"[INST] ""If they didn't do it in Mexico, they [/INST] wouldn't do it here,"" says Yolanda Leite, P&G's legal and public-affairs counsel in Brazil. "
411,"[INST] ""We were saying, in [/INST] the end, the consumer benefits from competition"". "
412,"[INST] Colgate says it targets ""the needs of different [/INST] socioeconomic groups with a range of products offering different benefits at different prices"". "
413,"[INST] It adds that it now has ""fluoride in all [/INST] its toothpastes"" and that it still offers some aluminum tubes ""to help keep prices affordable"". "
414,"[INST] After a nearly two-year review, the CADE in [/INST] September 1996 made Colgate pull the Kolynos brand off the market for four years. "
415,[INST] P&G had hoped the commission would also force Colgate to [/INST] sell off a piece of its oral-care empire; P&G would have been all set to buy it.
416,"[INST] Although Colgate was allowed to launch a new brand, Sorriso, Colgate's share [/INST] of the Brazilian toothpaste market isn't the 79% that the merger might have given it, but 73%, according to AC Nielsen Corp. "
417,[INST] P&G has doubled its market [/INST] share in Brazil but still holds only 0.4%.
418,"[INST] Seven months after Colgate's initial bid for Kolynos, P&G faced similar [/INST] trouble in Mexico, where the Scott merger would give Kimberly-Clark control of about 90% of the country's tissue business. "
419,"[INST] So, in early 1996, P&G cranked up its [/INST] market-research machine and began sending streams of data about the Mexican tissue business to regulators. "
420,"[INST] P&G wasn't shy about pointing out that regulatory agencies in the [/INST] U.S. and Europe had already ruled on the merger, requiring, among other things, that Kimberly sell off its world-wide baby-wipes operations. "
421,"[INST] P&G Chairman John Pepper flew down to Mexico [/INST] City, made P&G's case before Mexico's competition commission and followed up with frequent phone calls. "
422,"[INST] In March 1996, Mexican regulators ruled that Kimberly-Clark would have to [/INST] sell the popular Regio brand of tissue, which had about 20% of the market -- and the merger went through. "
423,"[INST] P&G then bought another tissue [/INST] maker, Loreto y Pena Pobre SA, for $170 million. "
424,"[INST] 2 player, with about a [/INST] 20% share of Mexico's tissue market, behind Kimberly-Clark's 55%. "
425,"[INST] In early 1996, it faced a $40 million judgment [/INST] in Ecuador when a distributor of its Vicks products sued it for canceling its contract. "
426,"[INST] Viewing the law cited in the suit as unfair, P&G [/INST] lobbied Ecuador's congress relentlessly, and that March Mr. Pepper wrote a personal plea to President Fabian Alarcon. "
427,"[INST] But the issue remains alive, [/INST] as Ecuadorian courts continue to enforce the old law. "
428,"[INST] So, Mr. Montoya recently flew to New [/INST] York to appeal again to President Alarcon, who was attending a meeting there. "
429,"[INST] Last October, following the toilet-seat commercial, P&G lawyers met with [/INST] the National Commission for the Defense of Competition, an antitrust agency whose powers are being bolstered by the legislature. "
430,"[INST] Among other things, the commission has [/INST] doubled the size of its investigative staff to 35. "
431,"[INST] P&G, which trails Unilever in the [/INST] Argentine detergent market, 11% to 72%, laid out numerous grievances. "
432,"[INST] In mid-1995, P&G was planning to launch Ariel, the overseas version of its Tide laundry [/INST] detergent, and developed an ad campaign that was to feature a well-known talk-show host, Maria Laura Santillan, and testimonials on Ariel's cleaning power from washing-machine maker Whirlpool Corp. "
433,"[INST] P&G contacted all the participants, [/INST] but then decided to put the campaign on hold. "
434,"[INST] Enrique Banuchi, P&G's legal counsel in Argentina, says he was amazed a year later, when Unilever began [/INST] airing an ad for its Skip laundry soap, with Ms. Santillan starring as a reporter and Whirlpool and INTI as endorsers -- just as P&G had planned for its own ads. "
435,[INST] Mr. Banuchi fired off a [/INST] letter asking Unilever to withdraw the commercial.
436,[INST] Unilever says the idea was [/INST] its own and has been used in other campaigns.
437,[INST] P&G also told the commission that [/INST] Unilever had paid wholesalers to stop carrying P&G's Duplex detergent.
438,[INST] Mr. Banuchi says Unilever offered wholesalers [/INST] generous payments that often exceeded the wholesalers' total sales of Duplex.
439,"[INST] Unilever says, ""None of our [/INST] actions impeded the free choice of the consumer"". "
440,"[INST] The toilet-seat maker's logo, previously a black deer, [/INST] now resembled P&G's own Ariel detergent logo, with red letters on a green background. "
441,"[INST] P&G lawyers learned that Ariel del Plata, with annual [/INST] sales of just $6 million, had been used by Unilever as an endorser of its CIF cleanser. "
442,"[INST] Also, the disputed commercial was prepared by Ammiratis Puris [/INST] Lintas, the same ad agency that crafted the Skip campaign, and one of Unilever's main global agencies. "
443,"[INST] Neither Unilever nor Ariel del Plata responded to faxed [/INST] questions, and Alberto Betancort, president of Interpublic Group's Lintas unit in Argentina, declines to be interviewed. "
444,[INST] P&G did some soul-searching before [/INST] taking its allegations to the antitrust agency.
445,"[INST] Protesting a merger is one thing, but [/INST] accusing a competitor of unfair trade practices is a weightier matter. "
446,"[INST] P&G says it contacted Unilever managers in Argentina, [/INST] Caracas and even Britain to reach some kind of agreement, but to no avail. "
447,"[INST] At that point, P&G's general manager in Argentina, Carlos Paz [/INST] Soldan, and Mr. Montoya telephoned Cincinnati and planned strategy with its president and chief operating officer, Durk I. Jager. "
448,"[INST] Shortly after P&G filed its case, the commission raided [/INST] the offices of Lintas, Ariel del Plata and Unilever and hauled away boxes of documents. "
449,[INST] It is expected to [/INST] complete its investigation within a few months.
450,"[INST] If it finds Unilever at [/INST] fault, the case will go to Argentina's courts. "
451,"[INST] Mr. Montoya says P&G decided to wage the regulatory battle because it [/INST] wants a chance to compete fairly, but he won't predict whether the strategy ultimately will help increase sales in the region. "
452,"[INST] ""It's the consumer who has to decide [/INST] whether our products or our competitors' products are better,"" he says. "
453,"[INST] ___ Document 154 of 500 The Americas: Argentines Tire of Menem's [/INST] Politicized Justice Author: By Horacio Verbitsky Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 13 Mar 1998: A17. "
454,"[INST] accountid=28034 Abstract: During October's midterm elections, millions of voters deserted President Carlos Menem's [/INST] Justicialist Party for the new opposition, Alliance for Justice, Education and Work, which promised to hold the government more accountable to the nation's laws. "
455,[INST] These results are widely viewed as the beginning of a popular [/INST] struggle for the impartial justice that has been lacking in the more than nine years of the Menem regime.
456,"[INST] A key issue, interestingly enough, will be [/INST] Mr. Menem's now evident desire to run for a third term. "
457,[INST] This is a legal matter because [/INST] Argentina's constitution clearly forbids more than two presidential terms.
458,"[INST] Mr. Menem carefully selected members [/INST] of Argentina's Supreme Court, which was itself controversial. "
459,"[INST] But if he tries as well to persuade that court [/INST] to reinterpret, in his favor, the term limit in the constitution, there is likely to be a furor. "
460,"[INST] Argentines are not particularly happy with the court [/INST] even now, because of a widespread belief that Mr. Menem has politicized the judiciary. "
461,"[INST] Nor, if the polls are [/INST] accurate, are they pleased with Mr. Menem himself. "
462,"[INST] Nevertheless, in his last address to congress, [/INST] Mr. Menem showed that he still dreams of a third term in office. "
463,[INST] Mr. Menem rationalized packing the Supreme Court -- a [/INST] la FDR's failed attempt -- in order to garner legal support for his market-oriented economic reforms.
464,[INST] But none of the original five members of the [/INST] Supreme Court were hostile to the free market or had any socialist or populist sympathies.
465,"[INST] On the contrary, one of the surviving [/INST] justices drafted the ruling that backed the privatization of the national airline. "
466,"[INST] Another of the original justices affirmed the [/INST] freezing of all financial deposits, decreed by Mr. Menem to fight hyperinflation. "
467,[INST] And a third wrote a decision strongly sought by local and foreign investors [/INST] as a condition to join the privatization process: the authorization to strip the workers in the state-run public services of their good-old-times labor rights.
468,"[INST] Full text: BUENOS AIRES -- During October's midterm elections, millions of voters deserted President [/INST] Carlos Menem's Justicialist Party for the new opposition, Alliance for Justice, Education and Work, which promised to hold the government more accountable to the nation's laws. "
469,[INST] These results are widely viewed as the beginning of a popular [/INST] struggle for the impartial justice that has been lacking in the more than nine years of the Menem regime.
470,"[INST] A key issue, interestingly enough, will be [/INST] Mr. Menem's now evident desire to run for a third term. "
471,[INST] This is a legal matter because [/INST] Argentina's constitution clearly forbids more than two presidential terms.
472,"[INST] Mr. Menem carefully selected members [/INST] of Argentina's Supreme Court, which was itself controversial. "
473,"[INST] But if he tries as well to persuade that court [/INST] to reinterpret, in his favor, the term limit in the constitution, there is likely to be a furor. "
474,"[INST] Argentines are not particularly happy with the court [/INST] even now, because of a widespread belief that Mr. Menem has politicized the judiciary. "
475,"[INST] Nor, if the polls are [/INST] accurate, are they pleased with Mr. Menem himself. "
476,"[INST] Nevertheless, in his last address to congress, [/INST] Mr. Menem showed that he still dreams of a third term in office. "
477,[INST] One of Mr. Menem's first presidential decisions in 1990 was [/INST] to use his party's majority in Congress to increase the Supreme Court to nine members from five.
478,"[INST] Two of the sitting justices resigned, perhaps [/INST] not coincidentally, which allowed him to appoint six new members in all. "
479,"[INST] His nominations went to congress on a Thursday afternoon and [/INST] the Senate confirmed them on Friday morning, in a seven-minute secret session, without the attendance of the opposition legislators. "
480,"[INST] There was no previous screening of the [/INST] candidates, no public hearings; only the weight of an automatic majority, recklessly used. "
481,"[INST] His official resume reveals that he has published ""some [/INST] articles on Municipal Law"" and was chief of police in La Rioja province, Mr. Menem's own Arkansas. "
482,[INST] The vice president of the Supreme Court is the brother-in-law of [/INST] the chief of the Intelligence Service; his most eminent previous assignment was as president of the country's Tennis Association.
483,[INST] Mr. Menem rationalized packing the Supreme Court -- a [/INST] la FDR's failed attempt -- in order to garner legal support for his market-oriented economic reforms.
484,[INST] But none of the original five members of the [/INST] Supreme Court were hostile to the free market or had any socialist or populist sympathies.
485,"[INST] On the contrary, one of the surviving [/INST] justices drafted the ruling that backed the privatization of the national airline. "
486,"[INST] Another of the original justices affirmed the [/INST] freezing of all financial deposits, decreed by Mr. Menem to fight hyperinflation. "
487,[INST] And a third wrote a decision strongly sought by local and foreign investors [/INST] as a condition to join the privatization process: the authorization to strip the workers in the state-run public services of their good-old-times labor rights.
488,"[INST] Eight years and hundreds of rulings later, it appears to many that there was a less [/INST] idealistic objective for packing the court: to hamper the system of constitutional checks and balances that Argentina imported from the U.S. in the 19th century to prevent absolute executive branch power. "
489,[INST] Mr. Menem's control over the court was possibly meant to protect not [/INST] entirely up-and-up political and electoral maneuvers from close judicial scrutiny and thereby protect him and his relatives and collaborators from legal sanctions.
490,[INST] But Mr. Menem did not [/INST] stop at hand picking the Supreme Court.
491,"[INST] In the federal branch of the judiciary in [/INST] the city of Buenos Aires, he managed to get the resignation of all six judges. "
492,[INST] He doubled the number of tribunals [/INST] and public prosecutors and appointed 12 judges and 24 prosecutors.
493,[INST] He also created a new Higher [/INST] Chamber of Appeals and nominated all 13 of its justices.
494,"[INST] This means that in the most crucial branch of the [/INST] federal law enforcement, the city of Buenos Aires, Mr. Menem has appointed 90% of the top officials. "
495,[INST] The president's criteria were well illustrated by the appointment [/INST] of the son of his tarot fortune teller -- who was later convicted of impersonating a lawyer.
496,"[INST] More than 100 of Mr. Menem's cabinet members, other [/INST] high-ranking officials and relatives (such as his sister-in-law Amira Yoma) have been investigated on corruption charges. "
497,"[INST] As the press investigates these [/INST] cases, Mr. Menem regularly insults and sues journalists. "
498,[INST] He has drafted at least three gag bills -- which [/INST] include jail terms and heavy fines to silence critics in the press -- that Congress has refused to pass.
499,"[INST] ""The judicial system is subject to political [/INST] influence,"" reads the chapter on Argentina in the U.S. State Department's Jan. "
500,"[INST] As this degradation has pervaded even the lowest [/INST] rank of the courts, public outrage against the Menem administration's impunity has begun to overflow. "
501,"[INST] One case was the 1997 murder [/INST] of photojournalist Jose Luis Cabezas, who had been investigating police corruption. "
502,"[INST] The public also has demanded justice for Maria Soledad Morales, [/INST] who was raped and murdered during a cocaine party with sons of political officials in the state of Catamarca. "
503,"[INST] Likewise, there is a loud outcry for [/INST] justice in the beating death of soldier Omar Carrasco in an army barracks. "
504,"[INST] While the government insists that the 1994 bombing of a Buenos Aires Jewish community center [/INST] is being properly investigated, the relatives of the victims march regularly to protest what they say is a government coverup or a lack of will to investigate the crime. "
505,[INST] Public outrage has produced some changes: Mr. Menem sent a [/INST] federal intervention to investigate the Morales case and there were finally -- after seven years -- convictions.
506,"[INST] Eduardo Duhalde divided the Buenos Aires [/INST] Police into 18 sections, after dismissing the entire top brass. "
507,[INST] A dozen police officers have [/INST] been jailed in the Jewish community center bombing case.
508,[INST] These results stemmed from the [/INST] intense public activism against the evils of impunity.
509,"[INST] The October 1997 elections, in which the bottom line wasn't the economy [/INST] but the state of the country's institutions, suggest that maybe Argentina is finally on its long way to becoming a full-fledged law-abiding nation. "
510,[INST] One test will be how [/INST] Mr. Menem fares if he tries for re-election.
511,"[INST] --- Mr. Verbitsky is a columnist for Pagina/12 magazine [/INST] and author of ""The Flight: Confessions of an Argentine Dirty Warrior"" (The New Press, 1996). "
512,"[INST] ___ Document 163 of 500 The Americas: How to Make a Currency Board [/INST] Work in Indonesia Author: By Domingo F. Cavallo Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 06 Mar 1998: A15. "
513,"[INST] accountid=28034 Abstract: Today in Argentina there is a wide consensus among political and [/INST] economic leaders, as well as academic and professional economists, about the importance of the role that the 1991 Convertibility Law played in stabilizing the economy. "
514,"[INST] The macroeconomic data are more than eloquent: Between [/INST] 1990 and 1997 inflation fell continuously to an annual rate of 1% from over 1,000%. "
515,"[INST] During the same period, gross domestic product grew [/INST] more than 50%, or at an average annual rate of more than 6%. "
516,"[INST] -- The Argentine peso is convertible to dollars at a fixed [/INST] parity, but the central bank is not obliged to buy all the dollars that are offered in the market. "
517,"[INST] Therefore, Argentine monetary policy is determined by the [/INST] U.S. Federal Reserve, but only because the peso is weaker than the dollar. "
518,"[INST] Argentina could have an active monetary policy if the situation were [/INST] reversed, for instance with the Fed adopting an inflationary monetary policy while Argentina pursued a more conservative price stability target. "
519,"[INST] -- Through successive crises, Argentine monetary authorities have proven that they are [/INST] willing to permit the complete dollarization of the economy rather than abandon the commitment to convertibility or promote extremely high interest rates. "
520,"[INST] In this sense, the management of the [/INST] Argentine monetary system is unlike that of Hong Kong's currency board. "
521,"[INST] During the Asian crisis Hong Kong's monetary authorities have used monetary activism to force a [/INST] significant rise in interest rates, demonstrating that they do not want to allow a shift from Hong Kong dollars to U.S. dollars in the portfolio of currency holders. "
522,"[INST] As a consequence, Hong Kong's U.S. dollar reserves have increased more [/INST] than $15 billion since July; equity and real estate prices have fallen more than would have occurred without such a policy. "
523,"[INST] In Argentina, on the other hand, the Convertibility [/INST] Law minimized the increase in interest rates, even when the country's demand for dollars increased. "
524,"[INST] Full text: BUENOS AIRES -- Today in Argentina there is a wide consensus among [/INST] political and economic leaders, as well as academic and professional economists, about the importance of the role that the 1991 Convertibility Law played in stabilizing the economy. "
525,"[INST] The macroeconomic data are more than eloquent: Between [/INST] 1990 and 1997 inflation fell continuously to an annual rate of 1% from over 1,000%. "
526,"[INST] During the same period, gross domestic product grew [/INST] more than 50%, or at an average annual rate of more than 6%. "
527,"[INST] Since the public debate over Indonesia's possible adoption of a currency board [/INST] began, I have been frequently asked if such a system would be as successful in Indonesia as monetary convertibility has been in Argentina. "
528,"[INST] This question is apropos, since the crisis [/INST] in Indonesia has similar characteristics to Argentina's monetary chaos in 1990. "
529,"[INST] The Indonesian rupiah has fallen to [/INST] 9,700 to the U.S. dollar from 2,400 in July 1997. "
530,"[INST] With hyperinflation a predictable outcome of [/INST] such a monetary collapse, serious measures are in order. "
531,"[INST] The successful results of the Argentine Convertibility Law [/INST] can be explained, in part, by the virtues of this monetary system itself. "
532,"[INST] But also, perhaps more fundamentally, because the government has [/INST] harnessed the popular support generated by stability to implement deep structural changes in the country's economy. "
533,"[INST] First, let me explain the three key characteristics of the Argentine [/INST] system: -- There are two currencies circulating and they are broadly used: the Argentine peso and the U.S. dollar. "
534,[INST] This means that a decision by Argentines to use [/INST] more dollars and fewer pesos does not necessarily produce a credit crunch in the economy.
535,"[INST] -- The Argentine peso is convertible to dollars at a fixed [/INST] parity, but the central bank is not obliged to buy all the dollars that are offered in the market. "
536,"[INST] Therefore, Argentine monetary policy is determined by the [/INST] U.S. Federal Reserve, but only because the peso is weaker than the dollar. "
537,"[INST] Argentina could have an active monetary policy if the situation were [/INST] reversed, for instance with the Fed adopting an inflationary monetary policy while Argentina pursued a more conservative price stability target. "
538,"[INST] -- Through successive crises, Argentine monetary authorities have proven that they are [/INST] willing to permit the complete dollarization of the economy rather than abandon the commitment to convertibility or promote extremely high interest rates. "
539,"[INST] In this sense, the management of the [/INST] Argentine monetary system is unlike that of Hong Kong's currency board. "
540,"[INST] During the Asian crisis Hong Kong's monetary authorities have used monetary activism to force a [/INST] significant rise in interest rates, demonstrating that they do not want to allow a shift from Hong Kong dollars to U.S. dollars in the portfolio of currency holders. "
541,"[INST] As a consequence, Hong Kong's U.S. dollar reserves have increased more [/INST] than $15 billion since July; equity and real estate prices have fallen more than would have occurred without such a policy. "
542,"[INST] In Argentina, on the other hand, the Convertibility [/INST] Law minimized the increase in interest rates, even when the country's demand for dollars increased. "
543,[INST] The Convertibility Law was not implemented as a [/INST] means to avoid or postpone any of the measures demanded by economic restructuring.
544,"[INST] Simultaneous with its implementation, the economy [/INST] was opened, legal monopolies were eliminated and the financial system reformed. "
545,"[INST] Monetary stability helped economic policy makers, political leaders and [/INST] the public to understand the need for these changes because distortions and vested interests became more evident. "
546,[INST] The available information on the Indonesian initiative does not make clear [/INST] whether the proposed currency board for the rupiah would include and also enable financial intermediation in both rupiah and dollars.
547,"[INST] As a consequence, it is still unclear whether Indonesian authorities are willing [/INST] to give up the power of monetary policy activism or to accept the possibility of an eventual dollarization of the economy. "
548,[INST] Most financial analysts have suggested that [/INST] an Indonesian currency board might require very high interest rates.
549,"[INST] This assumes that in the case of a continuous run against the rupiah, the [/INST] Indonesian monetary authority would imitate the monetary activism of Hong Kong, and thus prevent the high degree of dollarization that Argentina was willing to accept. "
550,"[INST] The International Monetary Fund and the U.S. Treasury Department seem to suspect that the [/INST] currency board is being proposed as a substitute for the reforms that President Suharto agreed to, rather than as a tool to facilitate those vital changes. "
551,"[INST] These doubts, justified or not, greatly reduce [/INST] the chances that the currency board will create credibility among international investors. "
552,"[INST] Given its current situation, Indonesia does not appear [/INST] to meet the conditions that determined the success of the Convertibility Law in Argentina. "
553,"[INST] Still, considering the high risks faced by Indonesia today and [/INST] given our experience in Argentina, I would dare to make what I hope is a constructive suggestion. "
554,[INST] The Indonesian government should now set [/INST] aside the idea of implementing a Hong Kong-style currency board.
555,[INST] Instead it should make additional efforts to convince domestic and foreign [/INST] policy makers and investors that it is committed to implementing the economic reforms already agreed to with the IMF.
556,"[INST] It should firmly decide which banks are in condition to remain open [/INST] and which should unquestionably be closed, a step that is critical for allowing and recreating adequate financial intermediation in rupiah and dollars. "
557,"[INST] Of course, credit in rupiah should be financed with deposits in that [/INST] currency while credits in dollars with dollar deposits, limiting the currency risks that financial institutions can take in either of the two monies. "
558,"[INST] At the same time, Indonesia should invite the IMF, the U.S., [/INST] Japan and possibly Singapore to discuss a mechanism to stabilize the value of the rupiah at the lowest possible interest rate. "
559,"[INST] My prediction is that within a few weeks, [/INST] such talks would produce a plan not terribly unlike the Argentine Convertibility Law. "
560,"[INST] In fact, in Argentina and abroad the ""Argentine currency board"" [/INST] came to be known as such three years after the new monetary system was set in place. "
561,[INST] Much more important than the name [/INST] is achieving the minimum consensus necessary to make it credible.
562,"[INST] What is most clear is that the stabilization of [/INST] the rupiah should help accelerate, never prevent, the financial and economic reforms that Indonesia so urgently needs. "
563,"[INST] Mr. Cavallo, a former minister of economy, public works [/INST] and services of Argentina, is publisher of the new Forbes Global Business & Finance magazine. "
564,"[INST] ___ Document 169 of 500 Concerns Over Persistent U.S. Economic Strength, Expectations of Payroll [/INST] Report Pull Bonds Lower Author: By Gregory Zuckerman and Brian Blackstone Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 04 Mar 1998: C20. "
565,"[INST] accountid=28034 Abstract: Concern over stronger-than-expected housing data, remarks by Federal Reserve Chairman [/INST] Alan Greenspan, and expectations of a strong employment report this Friday led investors to sell bonds, extending the Treasury markets' recent weakness. "
566,"[INST] ""I thought we'd do better, but there's a sour taste out there and no one wants to step up to [/INST] the plate and buy,"" said David Ging, Treasury market strategist at Donaldson, Lufkin & Jenrette Securities Inc. ""There's also been a lot of supply of new bonds (in the past week) that the market is trying to digest"". "
567,[INST] Testimony by Mr. Greenspan before the Senate Appropriations Committee -- he [/INST] was testifying with Treasury Secretary Robert Rubin on funding for the International Monetary Fund -- put further pressure on Treasurys.
568,[INST] Mr. Greenspan reiterated that the probability of the [/INST] Asian crisis having unexpectedly large negative effects on the U.S. economy is small.
569,"[INST] Full text: NEW YORK -- Concern over stronger-than-expected housing data, remarks by Federal [/INST] Reserve Chairman Alan Greenspan, and expectations of a strong employment report this Friday led investors to sell bonds, extending the Treasury markets' recent weakness. "
570,"[INST] In late trading, the bellwether 30-year Treasury bond [/INST] fell 29/32, or $9.0625 for a bond with $1,000 face value, to 100 18/32. "
571,"[INST] The bond's yield, which moves in [/INST] the opposite direction of its price, rose to 6.074% from 6.009%. "
572,"[INST] Treasurys were weak from the outset of trading, and [/INST] although some buying interest picked up in the afternoon, the market limped to a finish. "
573,"[INST] Some market participants were surprised the bond's yield, which closed [/INST] above 6% Monday for the first time in almost three months, did little to inspire buying interest. "
574,"[INST] ""I thought we'd do better, but there's a sour taste out there and no one wants to step up to [/INST] the plate and buy,"" said David Ging, Treasury market strategist at Donaldson, Lufkin & Jenrette Securities Inc. ""There's also been a lot of supply of new bonds [in the past week] that the market is trying to digest"". "
575,"[INST] Robust housing data helped the market get off on the wrong foot, as investors [/INST] expressed concern that U.S. consumer spending will continue to spark strong economic growth, and discourage the Fed from cutting interest rates, in the months ahead. "
576,"[INST] The Commerce Department reported a 10.3% surge [/INST] in new-home sales to a seasonally adjusted annual rate of 877,000 for January. "
577,"[INST] ""The housing numbers are absolutely over the top,"" [/INST] said Brian McMahon, president of the Thornburg Funds, which manages $1.8 billion in fixed-income assets. "
578,[INST] The housing figures mean it will take a [/INST] lot of weakness from Asia to offset the clear strength in the U.S. economy.
579,[INST] Testimony by Mr. Greenspan before the Senate Appropriations Committee -- he [/INST] was testifying with Treasury Secretary Robert Rubin on funding for the International Monetary Fund -- put further pressure on Treasurys.
580,[INST] Mr. Greenspan reiterated that the probability of the [/INST] Asian crisis having unexpectedly large negative effects on the U.S. economy is small.
581,"[INST] ""There's been a sharp reversal in [/INST] terms of sentiment,"" said Bob Walton, a trader at Nomura Securities. "
582,"[INST] ""Asia is not as [/INST] big a problem from the economy's standpoint"". "
583,"[INST] Elsewhere, the Conference Board reported [/INST] that the leading indicators index for January was unchanged. "
584,"[INST] The BTM/Schroder retail chain store sales index rose 0.2% [/INST] in the week ended Saturday from the week before, on a seasonally adjusted comparable-store basis. "
585,"[INST] Recent economic data, including the National Association of Purchasing Management [/INST] index for February, has demonstrated that U.S. domestic demand has offset the negative impact from Asia so far. "
586,"[INST] And while some investors await the true effect of the Asian downturn [/INST] on the U.S. economy, others are reluctantly concluding that visions of a 5.5% long-bond yield this year are becoming less clear. "
587,[INST] The focus of the market [/INST] is now on the payroll figures for February.
588,"[INST] According to the median estimate of 20 economists surveyed by Dow Jones [/INST] Newswires, nonfarm payrolls are expected to have increased by 250,000, with the unemployment rate falling to 4.6% from 4.7% in January. "
589,"[INST] While the report's release has caused consternation in the bond market [/INST] in recent days, the declines in bond prices in the past few days have given some traders a ray of hope. "
590,"[INST] ""The employment report now is a source of hope [/INST] for the market, because we've discounted a lot of bad news,"" said Mr. Ging of DLJ. "
591,[INST] Junk Bonds Syndicate officials held up pricing a $200 million five-year [/INST] Yankee bond offering from Argentine energy giant YPF SA to include protection from possible changes in Argentina's tax law.
592,"[INST] The deal, originally expected earlier [/INST] this week, is now scheduled to price tomorrow. "
593,[INST] The Argentine government last week said it is [/INST] considering a 15% tax on the interest payments of the country's corporate-debt deals.
594,[INST] One emerging markets analyst said the [/INST] change would affect an estimated $10 billion of Argentine corporate debt.
595,"[INST] ""It's one clause of a broad tax reform process"" [/INST] under way in Argentina, said David Roberts, director of sovereign research at NationsBanc Montgomery Securities. "
596,"[INST] ""But it's extremely unclear what [/INST] in fact will happen"" with the plan. "
597,[INST] Corporate Bonds Cable & Wireless Communications PLC sold $1.8 billion of [/INST] debt in what the company said was the largest Yankee bond offering ever sold by a United Kingdom-based issuer.
598,"[INST] The deal, which was increased from a planned $1 billion, marked [/INST] the first large offering during a week that is expected to bring as much as $10 billion in new corporate supply. "
599,[INST] And that isn't counting $4.75 billion in three-year and 10-year benchmark [/INST] notes priced yesterday by Fannie Mae and a possible $3 billion to $5 billion deal from the World Bank.
600,"[INST] Cable & Wireless also set the tone for the week, [/INST] in which the largest offerings are being increased in size despite the volume of bonds competing for attention. "
601,"[INST] KN Energy Inc. is now planning to [/INST] sell $2.3 billion of bonds, up from an announced $1.5 billion. "
602,"[INST] And supermarket operator Fred Meyer Inc. has [/INST] increased its debt offering by $250 million, bringing the total to $1.75 billion. "
603,"[INST] Municipal Bonds Municipal bonds were about 1/2 point lower in [/INST] late cash-market dealings, having stumbled once again due to the Treasury bond market's ongoing slump and heavy new supply. "
604,"[INST] Among actively traded munis, Harris County, Texas, [/INST] 5 1/8s of 2022 were off 1/2 at 96 3/4-97 1/4, yielding 5.33%. "
605,"[INST] June muni futures settled 10/32 lower at [/INST] 120 21/32, outperforming the June Treasurys that finished 1/2 weaker at 118 27/32. "
606,"[INST] Treasurys -- which weakened as much as 3/4 in the long end of the [/INST] cash market -- were injured by factors including news about unexpectedly strong January new-home sales data and expectations of another robust, monthly employment report Friday. "
607,"[INST] Although the Federal Reserve isn't expected to change its monetary policy anytime soon because [/INST] of Asia's financial crisis, Treasurys have declined for a number of days on concerns about persistent U.S. economic strength, and have taken munis down with them. "
608,"[INST] ___ Document 187 of 500 Argentine Visionary Bets Big on Tourism --- Media [/INST] Mogul Plans U.S.-Style Motels Across Nation Author: By Jonathan Friedland Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 24 Feb 1998: A18. "
609,[INST] accountid=28034 Abstract: Argentina's Eduardo Eurnekian is a hard-charging [/INST] visionary who has built an almost $1 billion media empire in the past decade.
610,"[INST] Now, this local version of [/INST] Citizen Kane wants to become Argentina's tourism king. "
611,"[INST] Earlier this month, a consortium led by Mr. [/INST] Eurnekian won a 30-year concession to run 33 of the country's main airports. "
612,[INST] He has bought the Howard [/INST] Johnson's master franchise for Argentina from Cendant Corp.
613,[INST] of the U.S. and plans to [/INST] pepper this vast country with U.S.-style hotels and motels.
614,[INST] And he's engaged in talks [/INST] to invest in a regional airline company.
615,"[INST] It had better be, given the size of [/INST] the commitments made by Mr. Eurnekian and his partners in the airport deal. "
616,"[INST] and Italy's Assaeroporti SpA, the [/INST] operator of Milan's airport, Mr. Eurnekian's Corp. "
617,[INST] America Sudamericana SA has pledged to pay more than $5 [/INST] billion to the government and to make $2.2 billion in new investments during the life of the concession.
618,"[INST] Currently, only two of the 33 airports [/INST] are profitable and even those are in need of a major overhaul. "
619,[INST] Full text: BUENOS AIRES -- Argentina's Eduardo Eurnekian is [/INST] a hard-charging visionary who has built an almost $1 billion media empire in the past decade.
620,"[INST] Now, this local version of [/INST] Citizen Kane wants to become Argentina's tourism king. "
621,"[INST] Earlier this month, a consortium led by Mr. [/INST] Eurnekian won a 30-year concession to run 33 of the country's main airports. "
622,[INST] He has bought the Howard [/INST] Johnson's master franchise for Argentina from Cendant Corp.
623,[INST] of the U.S. and plans to [/INST] pepper this vast country with U.S.-style hotels and motels.
624,[INST] And he's engaged in talks [/INST] to invest in a regional airline company.
625,"[INST] ""Tourism is going to be a geometric [/INST] growth business in Argentina,"" says the 65-year-old Mr. Eurnekian in a rare interview. "
626,"[INST] He says the Argentina of today is like the U.S. of [/INST] the Eisenhower era: a place of newly affluent people who, coming out of years of hardship, want to stretch their legs. "
627,"[INST] It had better be, given the size of [/INST] the commitments made by Mr. Eurnekian and his partners in the airport deal. "
628,"[INST] and Italy's Assaeroporti SpA, the [/INST] operator of Milan's airport, Mr. Eurnekian's Corp. "
629,[INST] America Sudamericana SA has pledged to pay more than $5 [/INST] billion to the government and to make $2.2 billion in new investments during the life of the concession.
630,"[INST] Currently, only two of the 33 airports [/INST] are profitable and even those are in need of a major overhaul. "
631,"[INST] A decade ago, he correctly foresaw that a [/INST] combination of democratic government and free-market reforms would spur a media boom in Argentina. "
632,"[INST] More recently, he has been at the forefront of investors, including George [/INST] Soros of the U.S. and Italy's Benetton family, who believe Argentina will once again be one of the world's great agricultural powers. "
633,[INST] He has purchased a giant tract in the [/INST] north of the country and is planting half of it with cotton for export.
634,"[INST] ""Eduardo is a visionary who also has [/INST] a real knack for business,"" says Eric Pfeffer, president of Cendant Corp. "
635,"[INST] 's hotel division in Parsippany, [/INST] N.J. ""He's a real find for us"". "
636,"[INST] While Mr. Eurnekian's foreign partners have nothing but [/INST] praise for the way he does business, his image in Argentina is more controversial. "
637,"[INST] The son of Armenian immigrants, he started out in the family [/INST] textile business, which by the early 1980s had fallen on hard times because of the disastrous state of the Argentine economy. "
638,"[INST] Like many other companies in the textile industry, Mr. Eurnekian kept his [/INST] companies afloat by borrowing tens of millions of dollars from a government development bank that was never repaid, people in the industry say. "
639,"[INST] Because of runaway inflation, the companies all contended that [/INST] the loans were worthless, despite the government bank's insistence that they be indexed to inflation. "
640,"[INST] During the 1980s, Mr. Eurnekian's brother and business [/INST] partner held a senior economic post in the government of then President Raul Alfonsin. "
641,[INST] Mr. Eurnekian denies ever borrowing [/INST] money from the now-liquidated Banco Nacional de Desarrollo.
642,[INST] The official in charge of the liquidation process at [/INST] the economy ministry here says he can't confirm whether Mr. Eurnekian's companies borrowed money from the bank.
643,"[INST] What is clear is that by [/INST] 1988, the future wasn't getting any brighter for the family business. "
644,[INST] Trade barriers were being pulled down [/INST] and local companies were swamped by a flood of cheap imports.
645,"[INST] ""I thought, how can [/INST] I be a pioneer like my father""? "
646,"[INST] recalls Mr. Eurnekian, who has [/INST] never married and works legendarily long hours. "
647,"[INST] That year, he invested in an [/INST] almost-bankrupt cable-television company and bought a small business newspaper. "
648,"[INST] He set to work buying up cable licenses for greater Buenos [/INST] Aires, a region of 13 million people, and, as his cash flow grew, bought a television channel and a radio station. "
649,[INST] His main textile plant was [/INST] gradually gutted and filled with journalists and technicians.
650,"[INST] Attracted by President Carlos Menem's aggressive free-market [/INST] policies and Argentina's relative affluence, U.S. cable operators began scouting for acquisitions here. "
651,"[INST] In 1994, Mr. Eurnekian sold a 51% stake in [/INST] his Cablevision SA, then Argentina's second-largest cable operator, to Tele-Communications International Inc. of Denver for $350 million. "
652,"[INST] Last year, he netted $320 million by selling [/INST] most of his remaining shares to local investment giant CEI Citicorp Holdings SA. "
653,[INST] Mr. Eurnekian has since used his profits [/INST] from the Cablevision sale to plunge into the tourism and agriculture businesses.
654,"[INST] But he retains his closely [/INST] held media properties, even though most apparently are unprofitable. "
655,[INST] Some journalists employed by Mr. Eurnekian say [/INST] that's because he finds their work useful as a bargaining chip with authorities.
656,"[INST] As the airport bidding entered its final round, for instance, Mr. [/INST] Eurnekian pulled the plug on a hard-hitting interview program called ""Dia D"" that had frequently uncovered scandals in the Menem government. "
657,"[INST] The host of the program, Jorge Lanata, says he [/INST] believes the sudden cancellation of his highly rated show was a quid-pro-quo for the airport deal. "
658,"[INST] ""I don't use my journalists [/INST] to further my business interests,"" he insists. "
659,"[INST] ""I don't interfere with the [/INST] news, although I reserve the right to do so"". "
660,[INST] Mr. Eurnekian's subordinates say their boss personally vets the contents [/INST] of news broadcasts and often subjects his staff to scathing outbursts when he disagrees with an issue.
661,"[INST] Richard Ablon, the chairman of Ogden, says [/INST] that Mr. Eurnekian's reputation as an autocrat doesn't bother him in the least. "
662,"[INST] ""But he's a tremendously successful [/INST] businessman and one who is quick to make decisions. "
663,"[INST] ___ Document 188 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 23 Feb 1998: A17. "
664,[INST] accountid=28034 Abstract: Swedish truck maker Scania AB [/INST] is set to kick off a new production line in Latin America.
665,[INST] But its new operations there could pose difficulties for a [/INST] company that is beginning to get back on track after an ill-received initial public offering in 1996.
666,"[INST] At least one analyst says he sees a turnaround for Scania this year, but [/INST] concedes that Latin America -- where truck orders fell 18% in last year's fourth quarter -- and the Asian financial crisis will make it a struggle. "
667,"[INST] Regardless, Scania has high hopes for [/INST] the launch of its new 4-series trucks in South America. "
668,"[INST] During the first half of this year, the company will [/INST] gear up the new facilities in Brazil, which should see 15,000 trucks a year roll off the assembly lines. "
669,"[INST] The papers are stacked high on the desks of trade officials in Mexico [/INST] City as the nation moves closer to a free-trade pact with Honduras, Guatemala and El Salvador as well as an expanded agreement with Chile. "
670,"[INST] The long process of negotiating a free-trade deal with the 15-nation European Union will probably [/INST] begin within months, and Mexico may also achieve such agreements this year with Peru and Panama, according to Jaime Zabludovsky Kuper, deputy minister for commerce and international trade. "
671,"[INST] Mexico, apart from being a partner with the U.S. and Canada in [/INST] the North American Free Trade Agreement, already has free-trade deals in place with Chile, Colombia, Venezuela, Costa Rica, Bolivia and Nicaragua. "
672,"[INST] Though construction is set to begin later this year, [/INST] a $1.5 billion South American natural-gas pipeline project will go on without Petrolera Argentina San Jorge SA. "
673,"[INST] The Argentine energy concern bowed out of the deal amid concerns about [/INST] the market's ability to support the pipeline, which will carry gas from northeastern Argentina, across an area that includes Brazil, Paraguay and Uruguay. "
674,"[INST] San Jorge says it ceded its 25% stake to Canada's [/INST] Alberta Energy Co., whose AEC Pipelines unit will operate the pipeline and already holds a 25% interest. "
675,[INST] Full text: THE AMERICAS Sweden's Scania Pins Its Hopes On [/INST] Latin Operation Swedish truck maker Scania AB is set to kick off a new production line in Latin America.
676,[INST] But its new operations there could pose difficulties for a [/INST] company that is beginning to get back on track after an ill-received initial public offering in 1996.
677,"[INST] At least one analyst says he sees a turnaround for Scania this year, but [/INST] concedes that Latin America -- where truck orders fell 18% in last year's fourth quarter -- and the Asian financial crisis will make it a struggle. "
678,"[INST] Regardless, Scania has high hopes for [/INST] the launch of its new 4-series trucks in South America. "
679,"[INST] During the first half of this year, the company will [/INST] gear up the new facilities in Brazil, which should see 15,000 trucks a year roll off the assembly lines. "
680,"[INST] For all of 1997, Scania's earnings were little changed [/INST] from a year earlier at 1.99 billion kronor ($245.9 million) on a 3.2% drop in sales. "
681,"[INST] In Asia, the biggest challenge for [/INST] the truck maker will be to save its local distribution networks. "
682,"[INST] Since July, it has been in continuous dialogues with [/INST] all of its Southeast Asian partners to try to make sure none of them go under. "
683,"[INST] Scania isn't present in the U.S. [/INST] and Canadian markets, where truck orders have been booming. "
684,"[INST] Ecuador Shakes Up Customs Agency If you have had [/INST] a complaint going through customs at the airport in Quito, Ecuador, apparently you're not the only one. "
685,[INST] The government has declared the customs department in a [/INST] state of emergency and has called in the armed forces to put things in order.
686,"[INST] According to a report in the newspaper El Comercio, Ecuador's president [/INST] is concerned over possible ""irregularities and corruption"" in the operations, which are set to be privatized by the government. "
687,[INST] But there is very likely a political side to [/INST] all this: legislation that would have done just that has been stalled in Congress for months.
688,"[INST] Mexico Near Several Free-Trade Deals The papers are stacked high on the desks of trade [/INST] officials in Mexico City as the nation moves closer to a free-trade pact with Honduras, Guatemala and El Salvador as well as an expanded agreement with Chile. "
689,"[INST] The long process of negotiating a free-trade deal with the 15-nation European Union will probably [/INST] begin within months, and Mexico may also achieve such agreements this year with Peru and Panama, according to Jaime Zabludovsky Kuper, deputy minister for commerce and international trade. "
690,"[INST] Mexico, apart from being a partner with the U.S. and Canada in [/INST] the North American Free Trade Agreement, already has free-trade deals in place with Chile, Colombia, Venezuela, Costa Rica, Bolivia and Nicaragua. "
691,[INST] Brazilian State Delays Key Sale Brazil's stock market regulator [/INST] didn't like the way the Sao Paulo state government was going about a key privatization.
692,"[INST] State officials and the company have agreed to postpone indefinitely [/INST] the planned March 18 auction of Elektro, the newly created distribution arm of state energy utility Cia. "
693,"[INST] Seeking to avoid a possible legal showdown, the company will begin negotiating [/INST] a better way to go about the bidding process after Brazil's annual pre-Lenten Carnival festivities draw to a close later this week. "
694,"[INST] Argentine Firm Quits Pipeline Deal Though construction is set to begin [/INST] later this year, a $1.5 billion South American natural-gas pipeline project will go on without Petrolera Argentina San Jorge SA. "
695,"[INST] The Argentine energy concern bowed out of the deal amid concerns about [/INST] the market's ability to support the pipeline, which will carry gas from northeastern Argentina, across an area that includes Brazil, Paraguay and Uruguay. "
696,"[INST] San Jorge says it ceded its 25% stake to Canada's [/INST] Alberta Energy Co., whose AEC Pipelines unit will operate the pipeline and already holds a 25% interest. "
697,"[INST] BRIEFLY: -- Mexico levied a $9,000 fine [/INST] against a South Korean-owned Tijuana automotive plant for health and safety violations. "
698,"[INST] The Han Young de Mexico factory, which makes truck chassis for Hyundai Precision [/INST] America, was fined just after the U.S. launched a probe of the plant, which has been the site of labor strife for months. "
699,[INST] -- Argentine supermarket chain Supermercados Metro SA [/INST] will invest 100 million pesos ($100 million) to expand into the country's interior.
700,[INST] EUROPE/MIDEAST Spain Set to Tackle Budget Deficit Spain hopes to [/INST] take advantage of a rapidly expanding economy to reduce its budget deficit even more than it had planned.
701,[INST] Finance Minister Rodrigo Rato says the economy [/INST] could expand faster than the 3.4% growth rate forecast for this year.
702,"[INST] With that head start, Madrid will introduce strict spending controls in a bid to [/INST] slash the budget deficit to 2.4% or less of the nation's economic output this year from an estimated 2.8% in 1997 and 4.4% in 1996. "
703,"[INST] But to meet its deficit goal, described by the finance minister as Spain's top policy priority as it [/INST] gears up for Europe's planned unified currency, the government will have to back down somewhat on its electoral promise to cut taxes sharply -- a decision that's certain to cause consternation in the business community. "
704,"[INST] Europeans Cool to U.S.-Iraq Standoff European stock, bond and currency markets [/INST] have looked at the possibility of another war in the Persian Gulf and decided that no reaction is the best reaction. "
705,"[INST] Last week, regional markets sniffed at the [/INST] Iraq-U.S. showdown, with stocks and bonds barely reacting to the goings on. "
706,"[INST] On Friday, shares in London, Paris [/INST] and Frankfurt all climbed, but less than a percentage point. "
707,[INST] Compared with the last time the U.S. threatened such [/INST] an attack on Iraq -- in response to the 1990 invasion of Kuwait -- everything is different.
708,"[INST] In the buildup to battle [/INST] in 1991, brent oil prices peaked above $41. "
709,"[INST] Rank's Earnings Lift Investors British leisure and entertainment company Rank [/INST] Group PLC posted underlying earnings of #303 million ($496.1 million) for 1997, up from #297 million a year earlier. "
710,"[INST] But Rank has been beset by reports of boardroom battles, concerns about what is perceived [/INST] as the slow integration of its Hard Rock division and a stock that has lost significant ground in the past year -- even with a share buyback program. "
711,"[INST] The management troubles, some say, stem from the unwillingness of Rank's old-style [/INST] management to adapt its beliefs and methods to those of its recently appointed chief executive, who is attempting to revive the group's performance. "
712,"[INST] Dresdner Bank Details Asia Exposure Germany's Dresdner Bank AG has set aside 600 [/INST] million marks ($330.4 million) of risk provisions for claims on borrowers in Indonesia, South Korea and Thailand, where it has exposure totaling 4.1 billion marks. "
713,"[INST] Although it has a 1.2 billion mark exposure [/INST] in Malaysia, it sees no need for additional risk provisioning for that market. "
714,"[INST] Despite all this, the big German [/INST] bank's earnings jumped 20% to 3.3 billion marks last year. "
715,"[INST] BRIEFLY: -- Russian natural-gas giant RAO Gazprom is cutting back on its [/INST] massive plan to develop gas fields in far northern Siberia, a plan analysts have long attacked as a Soviet-era white elephant. "
716,[INST] ASIA/PACIFIC Malaysia's Pitch for Yankee Dollars Malaysia is [/INST] the place for investors to go if they want to get more for their dollars.
717,[INST] At least that's the sales pitch that [/INST] Malaysian Prime Minister Mahathir Mohamad is giving foreign investors these days.
718,"[INST] The government notes that since July, the ringgit has [/INST] fallen about 35% against the dollar -- giving foreign direct investors more for the buck. "
719,[INST] But the premier dismisses suggestions that foreign [/INST] investors have lost confidence in Malaysia because of the country's economic turmoil.
720,"[INST] ""Long-term investors have continued to [/INST] have faith in the country,"" he says. "
721,"[INST] ""They have not pulled out and if they [/INST] have to reduce somewhat their production, it is because the world market has shrunk"". "
722,"[INST] Perdue Plans to Build Plant in China Perdue Farms Inc. [/INST] for years has been exporting chicken parts to China -- including chicken feet, considered a delicacy there. "
723,[INST] Now it's building its first [/INST] overseas production facility in that vast nation.
724,"[INST] The Maryland poultry giant says it entered into a joint venture deal [/INST] with Dah Chong Hong, a large export customer of Perdue, and a group of Chinese partners to establish a poultry-processing complex outside Shanghai. "
725,"[INST] After the processing plant is complete, sales efforts [/INST] will focus on getting the birds into supermarkets and restaurants in the Shanghai area. "
726,[INST] China to Increase International Flights [/INST] China is expanding its reach through aviation.
727,[INST] It says it will increase the number [/INST] of international air routes to 124 from the current 106 by July.
728,"[INST] At that point it will have flights to 62 [/INST] cities in 32 countries, and 26 air routes connecting the Chinese mainland with Hong Kong and Macau. "
729,"[INST] Meanwhile, the number of passengers traveling on China's international [/INST] flights climbed 14.7% to 5.05 million in 1997 from a year earlier, the government said. "
730,"[INST] Travelers to Hong Kong and Macau on [/INST] Chinese airlines reached 3.45 million, up from 3.34 million in 1996. "
731,"[INST] Professor Goes Toe to Toe With IMF Over Indonesian Crisis --- Fan of a `Currency Board' Woos Suharto, [/INST] but Fund Manages to Block Plan --- Side Job With Trading Firm Author: By Bob Davis and Jay Solomon Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 23 Feb 1998: A1. "
732,"[INST] accountid=28034 Abstract: A couple of months ago, Mr. Hanke was [/INST] an obscure Johns Hopkins University professor who flooded indifferent reporters with notes and news releases on his work. "
733,"[INST] Then, suddenly, he became a top economic adviser and [/INST] sometime spokesman for President Suharto, who is intrigued by Mr. Hanke's ideas for monetary reform. "
734,"[INST] As the world's fourth-most-populous country struggles with a battered currency, a [/INST] wrecked economy and civil unrest, the U.S. economist is squired around Jakarta by an entourage of the nation's elite. "
735,[INST] A former cabinet minister calls [/INST] him Mr. Suharto's dukun -- a Javanese medicine man.
736,"[INST] For several weeks, Mr. Hanke bested the elite economists of the [/INST] International Monetary Fund and the U.S. Treasury, who consider him a crank and fervently oppose his prescriptions for Indonesia. "
737,[INST] They were caught by surprise [/INST] when he turned up at Mr. Suharto's side.
738,"[INST] 2 audience with the president, a top [/INST] Treasury official found out only when a reporter mentioned it two days later. "
739,[INST] IMF Managing Director Michel Camdessus threatened to [/INST] suspend the $43 billion IMF-led bailout if Indonesia pursued Mr. Hanke's plan.
740,"[INST] President Clinton telephoned Mr. Suharto on Friday, [/INST] for the second time in a week, to lobby against Mr. Hanke's advice. "
741,"[INST] Leaders of Germany and Japan weighed in, as [/INST] did finance ministers from leading industrial nations at a weekend meeting in London. "
742,"[INST] Full text: JAKARTA, Indonesia -- Steve H. Hanke, [/INST] economic missionary, may be losing his grip on his most prominent convert ever, President Suharto. "
743,"[INST] If so, that comes only after [/INST] extraordinary pressure from leaders of the world's richest countries. "
744,"[INST] A couple of months ago, Mr. Hanke was an [/INST] obscure Johns Hopkins University professor who flooded indifferent reporters with notes and news releases on his work. "
745,"[INST] Then, suddenly, he became a top economic adviser and [/INST] sometime spokesman for President Suharto, who is intrigued by Mr. Hanke's ideas for monetary reform. "
746,"[INST] As the world's fourth-most-populous country struggles with a battered currency, a [/INST] wrecked economy and civil unrest, the U.S. economist is squired around Jakarta by an entourage of the nation's elite. "
747,[INST] A former cabinet minister calls [/INST] him Mr. Suharto's dukun -- a Javanese medicine man.
748,"[INST] For several weeks, Mr. Hanke bested the elite economists of the [/INST] International Monetary Fund and the U.S. Treasury, who consider him a crank and fervently oppose his prescriptions for Indonesia. "
749,[INST] They were caught by surprise [/INST] when he turned up at Mr. Suharto's side.
750,"[INST] 2 audience with the president, a top [/INST] Treasury official found out only when a reporter mentioned it two days later. "
751,[INST] IMF Managing Director Michel Camdessus threatened to [/INST] suspend the $43 billion IMF-led bailout if Indonesia pursued Mr. Hanke's plan.
752,"[INST] President Clinton telephoned Mr. Suharto on Friday, [/INST] for the second time in a week, to lobby against Mr. Hanke's advice. "
753,"[INST] Leaders of Germany and Japan weighed in, as [/INST] did finance ministers from leading industrial nations at a weekend meeting in London. "
754,[INST] A top Indonesian monetary official said over [/INST] the weekend that the government has suspended plans to implement Mr. Hanke's ideas.
755,"[INST] Treasury Secretary Robert Rubin said that would be ""a [/INST] constructive step"" and announced that he is dispatching an envoy to Jakarta to clarify the situation. "
756,"[INST] Even so, Mr. Suharto hasn't pushed aside the American economist, who [/INST] on Friday night was on a television station controlled by one of the president's sons to promote his plan. "
757,[INST] Some analysts in Jakarta believe that Mr. [/INST] Suharto will never formally renounce Mr. Hanke for fear of losing face.
758,[INST] They suggest that the American will [/INST] simply disappear from Jakarta as suddenly as he appeared.
759,[INST] His hotel says he is booked to [/INST] stay in town at least through the end of the week.
760,"[INST] A self-described ""farm boy from Iowa,"" he earned his doctorate at the University of Colorado, taught [/INST] for a time at the University of California at Berkeley and worked as a natural-resources economist for the White House Council of Economic Advisers early in the Reagan administration. "
761,"[INST] ""He was only there one [/INST] year,"" says former council member William Niskanen. "
762,"[INST] For the past several years, the [/INST] 55-year-old professor has written a column for Forbes magazine. "
763,"[INST] In the early 1990s, Mr. Hanke became intrigued by ""currency boards,"" under which [/INST] a country fixes its currency to a strong foreign currency, eliminating its central bank's ability to change the money supply or adjust interest rates. "
764,[INST] Such boards have worked well [/INST] elsewhere to restore market confidence and combat inflation.
765,"[INST] Nobel Prize-winning economist Merton Miller praises [/INST] Mr. Hanke as ""the leading expert"" on currency boards. "
766,"[INST] He is also their single most dogged advocate and [/INST] says he played a role in establishing currency boards in Argentina, Bulgaria, Estonia and Lithuania. "
767,"[INST] ""He was invited by [Finance Minister Domingo] Cavallo to advertise [/INST] the success of the Argentinian currency board,"" says economist Guillermo Calvo, a Latin American specialist and former IMF staffer. "
768,"[INST] But he was only called in at the [/INST] end, and he didn't play any instrumental role in setting up the planning in Argentina"". "
769,"[INST] He is also vice chairman of a [/INST] U.S. subsidiary of Friedberg Mercantile Group, a Toronto money manager and currency trader. "
770,"[INST] Friedberg says it made major profits trading Asian currencies in the [/INST] 1997 fourth quarter, some of which came from selling Indonesia's rupiah short -- that is, betting it would decline. "
771,"[INST] ""The Asian crisis theme remains, in our opinion, [/INST] a profitable source of trading opportunities,"" the company said in its fourth-quarter report. "
772,"[INST] Albert Friedberg, its director and general partner, says [/INST] Mr. Hanke doesn't pick investments but operates as a kind of salesman for the firm. "
773,"[INST] ""He'll go to Argentina and see Cavallo, and [/INST] when he's there, he'll help try to get clients for us,"" Mr. Friedberg says. "
774,"[INST] ""The pension funds listen to [/INST] him more because he's an adviser to Cavallo"". "
775,"[INST] Friedberg's Internet site promoting its Argentina mutual fund pictures Mr. Hanke and [/INST] identifies him as president of the company that manages the fund and an ""active consultant"" to Argentine President Carlos Saul Menem. "
776,"[INST] When Mr. Hanke's clients place an order [/INST] with Friedberg Mercantile, Mr. Friedberg says, Mr. Hanke gets a commission. "
777,"[INST] Mr. Friedberg says Mr. Hanke has called him once [/INST] so far from Jakarta to discuss ""technical issues"" and complained that his phone might be bugged. "
778,"[INST] ""We have zero position [/INST] in the rupiah now,"" Mr. Friedberg says. "
779,[INST] Then every hedge fund in [/INST] America will want to buy the rupiah.
780,"[INST] Do I expect him to call me when [/INST] he leaves Suharto's office and say, `It will be signed in three hours'? "
781,[INST] Mr. Hanke didn't submit to an interview [/INST] or answer questions faxed to him in Jakarta for this article.
782,"[INST] His wife, who accompanied him to Indonesia, [/INST] said he didn't want to answer The Wall Street Journal's questions. "
783,"[INST] In an earlier interview with the Journal, [/INST] Mr. Hanke said he refuses payment for his government advisory work. "
784,"[INST] ""It would not look good as [/INST] an adviser if I'm also getting paid,"" he said. "
785,"[INST] A onetime collaborator and fellow currency-board advocate, Kurt [/INST] Schuler, a Virginia economic consultant, says Mr. Hanke discloses his business interests to clients. "
786,"[INST] ""He doesn't use the multiple roles in [/INST] a way that would generate a conflict of interest,"" Mr. Schuler says. "
787,[INST] A country that adopts a [/INST] currency board puts its monetary policy on autopilot.
788,[INST] It is as if Alan Greenspan were [/INST] replaced by a personal computer -- and not a fancy one.
789,"[INST] When dollars flow in, the board issues more [/INST] domestic currency and interest rates fall; when dollars flow out, interest rates rise. "
790,"[INST] The government sits back and watches, [/INST] even if interest rates skyrocket and a recession ensues. "
791,"[INST] When they work, currency boards have several [/INST] advantages: They arrest any tendencies in an economy toward inflation or budget deficits. "
792,[INST] They assure citizens and foreign investors that the [/INST] domestic currency can always be exchanged for dollars (or some other strong currency).
793,"[INST] And, by creating confidence, [/INST] they promote trade, investment and economic growth. "
794,[INST] But even some fans of currency boards -- first used by [/INST] the British empire to make colonial administration more efficient -- question whether they are the right solution for Indonesia.
795,"[INST] It isn't coming out of an era [/INST] of hyperinflation, as Argentina was when it successfully adopted a currency board. "
796,"[INST] And unlike Hong Kong, another successful case, [/INST] Indonesia doesn't have the robust banking system that such a board requires. "
797,"[INST] A government that adopts a currency board also has to [/INST] maintain huge foreign-currency reserves, and it has to be willing to bear whatever economic pain interest rates inflict. "
798,[INST] If the government buckles -- and currency traders are [/INST] likely to test its will -- it may be left with a situation worse than before.
799,"[INST] Mr. Hanke is ""oversimplifying the requirements and downplaying the risks"" of adopting a [/INST] currency board, contends economist John Greenwood, who was awarded the Order of the British Empire for his work in creating Hong Kong's successful currency board. "
800,"[INST] In Indonesia, the case [/INST] is complicated further by corruption and cronyism. "
801,"[INST] A rupiah value fixed well above the early Monday morning 9,400 or so to the U.S. dollar -- about [/INST] 5,500 to the dollar, Mr. Hanke is believed to favor -- would give the nation's wealthy elite, including Mr. Suharto's children and associates, a chance to trade their rupiah for dollars and deposit them overseas. "
802,"[INST] If they did so, interest rates [/INST] would climb and batter what is left of the economy. "
803,"[INST] In talk after talk in Jakarta [/INST] and Washington, Mr. Hanke has brushed aside the concerns. "
804,"[INST] Money will flow into Indonesia, not out, he [/INST] told a gathering of Indonesia's journalism union, thanks to new international confidence in the currency. "
805,"[INST] A currency board ""is the [/INST] least risky option for the Indonesian economy,"" he says. "
806,"[INST] As for corruption, a currency board ""completely takes [/INST] out the political element"" from monetary policy, he explained in an earlier interview. "
807,"[INST] Recently Mr. Hanke met with a group of Indonesia's top economic [/INST] minds, led by Sumitro Djojohadikusumo, who, as a Suharto adviser, helped craft the long economic surge that preceded today's crisis. "
808,"[INST] After listening to the group's criticisms of the currency-board idea [/INST] for a short while, Mr. Hanke lost patience, says Mohammad Sadli, a former Suharto minister of mines and energy. "
809,"[INST] ""If you don't listen, I'll [/INST] leave,"" Mr. Hanke said, according to Mr. Sadli. "
810,"[INST] ""He said that he had work [/INST] to do and that [my criticisms] were simply nitpicking"". "
811,"[INST] Former U.S. Ambassador to Indonesia Paul Wolfowitz says, ""Hanke is basking [/INST] in the moment of his glory, but the great fear is that his plan is just too radical to work"". "
812,[INST] Mr. Wolfowitz heads the School of Advanced International [/INST] Studies at Johns Hopkins; Mr. Hanke is a professor of applied economics at the university.
813,"[INST] Explaining how Mr. Hanke's Indonesian role came about, his business [/INST] colleague Mr. Friedberg says that early this month, Mr. Hanke told him simply, ""The big man called"". "
814,"[INST] A receptionist at the luxurious Shangri-La Hotel, where he is registered under the pseudonym [/INST] Simon Holland, says his room is booked by PT Astra International, an Indonesian conglomerate whose chairman is Mohamad ""Bob"" Hasan -- Mr. Suharto's oldest golfing buddy. "
815,"[INST] An Astra director, Rini Soewandi, accompanies [/INST] Mr. Hanke on some of his rounds in Jakarta. "
816,"[INST] Government officials say Mr. Hanke's first meeting [/INST] with Mr. Suharto was organized by the president's eldest daughter, Siti Hardiyanti Rukmana. "
817,"[INST] At a time when Indonesia's economy was failing to respond to the [/INST] bitter medicine the IMF had prescribed, such as budget discipline and the closing of failing banks, Mr. Hanke had a more optimistic message. "
818,"[INST] Instead of focusing only on painful economic reforms that could take [/INST] months to help, Mr. Hanke was saying he could get the country back on track in as little as three weeks. "
819,"[INST] Last week, he explained to 200 bankers at the [/INST] Jakarta Financial Club how currency boards had been used successfully from early 20th-century Russia to Bulgaria today. "
820,[INST] He also mentioned that a solution to Indonesia's [/INST] problem of $74 billion in private-sector debt had come to him over coffee.
821,"[INST] He offered no specifics but said [/INST] the problem ""can be taken care of in a week"". "
822,"[INST] IMF officials, deeply skeptical of such advice, say they [/INST] have been in three meetings with Mr. Hanke and concluded it isn't possible to budge him. "
823,"[INST] In one meeting, Mr. Hanke sparred with IMF special [/INST] envoy Prabhakar Narvekar, each trying to get the other to commit on paper to a plan. "
824,"[INST] Neither did, say participants, because each feared [/INST] the other would trash it during private meetings with the president. "
825,"[INST] In the first, Mr. Suharto seemed taken with the [/INST] Hanke plan, but during the second meeting, last Tuesday, the president indicated he was open to alternatives. "
826,"[INST] By Mr. Clinton's call on Friday, Mr. Suharto had bowed [/INST] further to pressure and said that the Hanke plan was only one of several he was considering. "
827,[INST] The IMF appears to have succeeded in its immediate goal: Get Mr. Suharto to put off a currency [/INST] board for at least several months -- an eternity in the fast-moving Asian crisis -- while Indonesia cleans up the banking mess that the IMF believes is a major cause of the nation's problem.
828,"[INST] Nevertheless, IMF officials complain that the Hanke [/INST] controversy has distracted them and their Indonesian counterparts from moving ahead. "
829,"[INST] One thing the IMF is currently trying to do is get Indonesia to make [/INST] its food subsidies for the poor a clear part of its budget, rather than hide them through currency gimmicks that the financially savvy could exploit for profits. "
830,"[INST] This week, the Fund [/INST] also wants to tackle Indonesia's debt-repayment problems. "
831,[INST] Officials in Jakarta already are pointing [/INST] to progress made in recent days on some issues.
832,"[INST] On Friday, Japan announced that it would provide [/INST] a $1 billion credit line for trade insurance for Japanese companies trading with Indonesian concerns. "
833,"[INST] Tokyo also announced plans to help [/INST] Indonesia deal with shortages of food and medicine, and Messrs. "
834,[INST] Clinton and Suharto discussed [/INST] similar plans in their Friday telephone call.
835,"[INST] A nagging row preventing bankers and debtors from beginning to tackle private-sector debt may also [/INST] be over, with all parties agreeing on David Brougham, a Hong Kong-based executive director of Britain's Standard Chartered PLC, to serve as chairman of the bankers' steering committee. "
836,[INST] Even the dogged Mr. Hanke admits to [/INST] some doubts about whether his ideas will be adopted in Indonesia.
837,"[INST] He told reporters on Thursday that [/INST] ""speed is of the essence"" in creating a currency board. "
838,"[INST] Asked if Mr. Suharto was going to heed [/INST] this advice, the American economic missionary responded: ""You'll have to ask the president. "
839,"[INST] (See related letter: ""Letters to the Editor: Assaulting the [/INST] Power Of Economic Havoc"" -- WSJ March 17, 1998) Credit: Staff Reporters of The Wall Street Journal "
840,"[INST] ___ Document 197 of 500 Rally Round the Rupiah [/INST] Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 19 Feb 1998: A22. "
841,"[INST] accountid=28034 Abstract: Indonesia's rupiah has again been reeling, with [/INST] President Suharto and the International Monetary Fund dueling over how to save the country's battered currency. "
842,[INST] Yesterday came hints of a potential compromise [/INST] that would mainly postpone the rescue -- and further damage Indonesia.
843,"[INST] We'd like to suggest that there is a better solution [/INST] available, but only if the titans and technocrats of Indonesian finance would stop dickering long enough to notice. "
844,"[INST] The problem is this: Mr. Suharto wants to set up a [/INST] currency board, which would end massive market uncertainty about the value of the rupiah by automatically fixing it to the dollar. "
845,[INST] The IMF fears that in Indonesia a currency board would be abused as an escape route [/INST] for capital belonging to the same set of Suharto family members and cron-ies who for more than three decades now have practiced skimming the cream off the Indonesian economy.
846,"[INST] Beyond that, the IMF also worries that fixing the [/INST] rupiah to the dollar could send Indonesian interest rates high enough to vaporize the domestic banking system. "
847,"[INST] Full text: Indonesia's rupiah has again been reeling, with [/INST] President Suharto and the International Monetary Fund dueling over how to save the country's battered currency. "
848,[INST] Yesterday came hints of a potential compromise [/INST] that would mainly postpone the rescue -- and further damage Indonesia.
849,"[INST] We'd like to suggest that there is a better solution [/INST] available, but only if the titans and technocrats of Indonesian finance would stop dickering long enough to notice. "
850,"[INST] The problem is this: Mr. Suharto wants to set up a [/INST] currency board, which would end massive market uncertainty about the value of the rupiah by automatically fixing it to the dollar. "
851,[INST] The IMF fears that in Indonesia a currency board would be abused as an escape route [/INST] for capital belonging to the same set of Suharto family members and cron-ies who for more than three decades now have practiced skimming the cream off the Indonesian economy.
852,"[INST] Beyond that, the IMF also worries that fixing the [/INST] rupiah to the dollar could send Indonesian interest rates high enough to vaporize the domestic banking system. "
853,"[INST] So the IMF has been threatening that if Mr. Suharto goes ahead [/INST] with a currency board, the Fund will cut off the $43 billion rescue package it has been administering to Indonesia's stricken economy. "
854,"[INST] Even President Clinton has weighed in, phoning [/INST] Mr. Suharto last week to urge that Jakarta comply with IMF wishes. "
855,"[INST] Meanwhile, the folks bearing the brunt of this wrangle are ordinary [/INST] Indonesians, who desperately need enough economic stability so that they can again start to find work and feed their families. "
856,[INST] Imagine if only someone could come up [/INST] with a way to at one swoop fix this whole caboodle.
857,"[INST] Back in 1995, Argentina, which already had [/INST] a currency board, faced similar problems in defending the peso against speculative attack. "
858,"[INST] In that case, the IMF -- to its [/INST] credit -- helped back the currency board by helping to shore up the banks. "
859,[INST] But what also made a [/INST] difference was Argentina's effort to help itself.
860,"[INST] Knowing that even in crisis at least a few wealthy Argentines could rustle up cash if they wanted [/INST] to, Argentina's Economic Minister Domingo Cavallo set up a special patriotic fund to help tide the country's private banks through the bout of sky-high interest rates brought on by sticking with the currency board. "
861,"[INST] The beauty of this fund was that it called on [/INST] the wealthiest Argentines to put their money not into Swiss banks, but into defense of their country's economy. "
862,"[INST] Called the ""fiduciary fund for bank capitalization,"" [/INST] Argentina's fund was designed to provide liquidity to banks during the crisis. "
863,[INST] Argentine tycoons were asked to [/INST] show their patriotism by subscribing to this fund.
864,"[INST] Everyone, including the patriotic tycoons, could concentrate again not [/INST] on hustling capital out of the country, but on making themselves and their nation rich. "
865,[INST] Mr. Suharto could set up a patriotic [/INST] fund to tide domestic banks through the rigors of establishing a currency board.
866,[INST] He could ask Indonesia's own tycoons [/INST] to show their good faith by buying into it.
867,[INST] Such a deal would send a [/INST] clear signal that Indonesians have confidence in their own plans.
868,[INST] It would turn the cronies -- cause [/INST] of legitimate complaints about corruption -- into an asset in reviving the economy.
869,"[INST] And Mr. Suharto would then be able to [/INST] remind the IMF that it backed this kind of arrangement in Argentina, with great success. "
870,"[INST] Conveniently enough, should Mr. Suharto go for [/INST] this idea, Forbes magazine published a listing last July of the world's billionaires. "
871,[INST] In it we find a rundown of [/INST] Indonesians best fixed to pay into a patriotic fund to support the rupiah.
872,"[INST] Topping the list is Mr. Suharto himself, who [/INST] last July was estimated by Forbes to be worth some $16 billion, from family businesses. "
873,"[INST] Next comes the Wonowidjojo family, with [/INST] a tobacco empire that last year was worth some $7.3 billion. "
874,"[INST] There are others, such as Liem Sioe Liong -- and his $4 [/INST] billion -- who have long presided over big chunks of Indonesian business, and would be well placed to recruit patriotic help now. "
875,"[INST] Not least, there is Mochtar Riady, who [/INST] in 1996 showed himself willing to help finance President Clinton's re-election. "
876,[INST] Surely he could show at least as [/INST] much zeal for a project of financing the recovery of his own country.
877,"[INST] Of course, Forbes calculated these Indonesian crony fortunes at last July's [/INST] pre-crash rupiah exchange rate of 2,400 to the dollar -- about four times what the rupiah has plunged to since. "
878,[INST] But that devastation of the currency is exactly why Mr. Suharto and his rich family [/INST] and friends might find it worthwhile to put their dwindling fortunes into a fund to help a currency board restore the value and stability of the rupiah.
879,[INST] It's also the reason why -- for the sake [/INST] of the other 207 million or so Indonesians -- the IMF should give them the chance.
880,"[INST] ___ Document 201 of 500 Argentina's Experience With Currency Board Suggests Indonesia [/INST] Must Endure Discipline, Pain Author: By Jonathan Friedland Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 13 Feb 1998: A12. "
881,[INST] accountid=28034 Abstract: But what worked [/INST] for Argentina won't necessarily work for Indonesia.
882,"[INST] Far from a quick fix, the Argentine experience shows the successful replacement of a traditional central bank with a currency [/INST] board -- which fixes an exchange rate and has the reserves in hand to fully back that rate -- requires iron political discipline and a willingness to sustain repeated and often severe economic pain in defense of the currency. "
883,[INST] Indonesia's currency has lost as much as 80% of its [/INST] value over the past several months as currency speculators targeted Asian countries with growing current account deficits.
884,"[INST] Efforts so far to restore confidence in the rupiah, including the announcement of a $43 billion International Monetary [/INST] Fund-led rescue program, have been undermined by policy waffling by Mr. Suharto and fears over the 76-year-old leader's ability to control growing ethnic and religious tension and to ensure an orderly succession process. "
885,[INST] It is also a far cry [/INST] from where Argentina was when it adopted its currency board.
886,"[INST] When Mr. Menem decided to fix the local currency [/INST] to the dollar, 50 years of mismanagement had gutted what had once been the world's seventh-largest economy. "
887,[INST] Decades of profligate government spending covered up by a central [/INST] bank that did little more than print money had triggered a vicious cycle of devaluation and inflation.
888,"[INST] Full text: BUENOS AIRES -- Seven years ago, President Carlos Menem [/INST] adopted the most inflexible of fixed-exchange-rate regimes to bring the Argentine economy back from the edge of an abyss. "
889,[INST] That move is now widely viewed as a masterstroke [/INST] that has underpinned the country's transformation from perennial economic basket case to a darling of emerging-market investors.
890,"[INST] Halfway around the world, President Suharto of Indonesia is contemplating [/INST] the same step as a means of shoring up the rupiah and reviving confidence in his country's beleaguered economy. "
891,"[INST] Far from a quick fix, the Argentine experience shows the successful replacement of a traditional central bank with a currency [/INST] board -- which fixes an exchange rate and has the reserves in hand to fully back that rate -- requires iron political discipline and a willingness to sustain repeated and often severe economic pain in defense of the currency. "
892,"[INST] ""In Argentina, a currency board was a direct solution to [/INST] the main problem,"" says Adam Schwarz, a Council on Foreign Relations fellow who has lived in both countries. "
893,"[INST] ""In Indonesia, it's only part of a solution to [/INST] a very complex set of problems and that in itself makes it less likely to succeed"". "
894,[INST] Indonesia's currency has lost as much as 80% of its [/INST] value over the past several months as currency speculators targeted Asian countries with growing current account deficits.
895,"[INST] Efforts so far to restore confidence in the rupiah, including the announcement of a $43 billion International Monetary [/INST] Fund-led rescue program, have been undermined by policy waffling by Mr. Suharto and fears over the 76-year-old leader's ability to control growing ethnic and religious tension and to ensure an orderly succession process. "
896,"[INST] That is a far cry from a year ago, when Indonesia was being lauded [/INST] as a great economic success story and Mr. Suharto hailed as a visionary leader who managed to knit together a potentially fractious island nation of 200 million. "
897,"[INST] Over the past decade, Indonesia's economy grew more [/INST] than 6% annually, powered by investment in everything from car factories to petrochemical plants. "
898,[INST] It is also a far cry [/INST] from where Argentina was when it adopted its currency board.
899,"[INST] When Mr. Menem decided to fix the local currency [/INST] to the dollar, 50 years of mismanagement had gutted what had once been the world's seventh-largest economy. "
900,[INST] Decades of profligate government spending covered up by a central [/INST] bank that did little more than print money had triggered a vicious cycle of devaluation and inflation.
901,"[INST] It took Mr. Menem four economy ministers -- one of whom died of a heart [/INST] attack after only six days on the job -- and 10 emergency economic plans to finally put the Argentine economy into what he termed ""surgery without anesthesia"". "
902,"[INST] The centerpiece of the plan, devised by thenEconomy Minister Domingo Cavallo, was the fixed link [/INST] between local currency and the dollar, backed by a law barring the printing of new money unless backed by dollar or gold reserves or certain government paper. "
903,[INST] Mr. Cavallo was helped in his task [/INST] by the fact that there wasn't much of a currency base to cover.
904,"[INST] ""Thanks to hyperinflation, the banking sector had shrunk [/INST] to almost nothing,"" recalls Guillermo Calvo, an economist at the University of Maryland. "
905,"[INST] By contrast, Indonesia's banking [/INST] sector has expanded aggressively in recent years. "
906,[INST] Mr. Cavallo was also ironically favored by [/INST] the fact that Argentina was effectively in default to its creditors.
907,[INST] Indonesia's currency-board proposal comes at a time when it is [/INST] trying to avoid default by renegotiating $80 billion in offshore corporate debt with a myriad of worried bankers.
908,[INST] Mr. Cavallo also had the means at [/INST] his disposal to attract the dollars to get the Argentine economy growing again.
909,"[INST] That is key to making a currency [/INST] board work because it brings down inflation and thus, nominal interest rates. "
910,"[INST] He slashed longstanding trade barriers and opened up formerly [/INST] closed sectors to foreign investors, privatizing over a four-year period some $30 billion in assets. "
911,[INST] It long ago liberalized most of its [/INST] economy and has already privatized many of its most valuable possessions.
912,"[INST] And as long as the succession issue remains unresolved, [/INST] investors are likely to remain nervous, Mr. Schwarz of the Council on Foreign Relations says. "
913,"[INST] That means Mr. Suharto's commitment to [/INST] convertibility will be frequently tested, just as has Mr. Menem's. "
914,"[INST] When investors fled Latin America after Mexico devalued its peso in [/INST] 1994, Argentina suffered skyhigh interest rates, a brutal year-long recession and an unemployment rate of 18% in defense of its currency. "
915,"[INST] That said, few observers gave Argentina's [/INST] currency board much chance of success when it was launched, either. "
916,[INST] J.P. Morgan & Co. economist Alfonso Prat-Gay recalls putting out [/INST] a study in early 1991 boldly predicting that convertibility would last through the end of the year.
917,"[INST] ""We were the only ones on the Street [/INST] who thought that,"" he said of his former colleagues in an economic consultancy here. "
918,"[INST] Economic fundamentals for Argentina at the end of 1990, before it adopted a currency peg, and estimates for Indonesia at the end of 1997 Argentina Indonesia Gross domestic [/INST] product (year-to-year change) -1.3% +4.8% Inflation (year-to-year change in consumer prices) 2,314% 8% M3 Money Supply (year-to-year growth) +719% +17% Public-Sector Fiscal Deficit (as % of GDP) 6.1% 1.0% Note: M3, the most comprehensive measure of a country's money supply, includes currency in circulation, commercial and private deposits and overnight and time-repurchase agreements. "
919,[INST] Source: J.P. Morgan Credit: [/INST] Staff Reporter of The Wall Street Journal
920,"[INST] ___ Document 224 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 28 Jan 1998: A12. "
921,"[INST] accountid=28034 Abstract: According to the latest proposal, which is still preliminary, Deutsche Telekom [/INST] will charge the companies a one-time fee of 42.24 marks ($23.52) for the switch, down from the original transfer charge of 95 marks. "
922,"[INST] Because Deutsche Telekom says it will now have to pick up more than half of the [/INST] costs of the changeover, it is touting the latest plan as ""a significant contribution"" on the part of the former monopoly to opening competition in the German phone market. "
923,"[INST] The proposal still needs the approval of other service providers and [/INST] German regulators, who are expected to sign off on some sort of a deal by the end of this month. "
924,"[INST] The Paris Bourse is betting that with the launch next year of [/INST] Europe's unified currency, the euro, it will begin to rival the mighty London stock exchange as a hub of pan-European share trading. "
925,"[INST] The Paris exchange says it will be ready to quote and trade in euros on the first business day of [/INST] 1999, and adds that moves are afoot to develop closer alliances with other exchanges on the Continent, many of which -- unlike Britain's -- hope to be part of European economic and monetary union right from the start. "
926,"[INST] The Paris exchange boasts that it had the biggest gain in [/INST] volume, 67%, among European exchanges last year and that it was second only to London in new stock listings. "
927,[INST] But the Bourse still has [/INST] a long way to go to match London.
928,"[INST] Paris's combined domestic and international volume amounted to the equivalent of [/INST] about GBP 165 billion ($273 billion) in 1996, nowhere near the GBP 890 billion reported in the trading rooms of London. "
929,"[INST] Germany's Bayerische Motoren Werke AG may be applying some calculated pressure in its quest for Rolls-Royce Motor Cars Ltd. [/INST] On more than one occasion in recent days, the Bavarian auto maker has made it clear that it will compete in the market for super-luxury motor vehicles -- and it will do it with or without Rolls-Royce. "
930,"[INST] BMW is one of several companies, along with a bevy [/INST] of well-heeled car enthusiasts, interested in acquiring the famous British auto maker from its current owner, Vickers PLC. "
931,"[INST] BMW is widely considered the front-runner to win the [/INST] hand of Rolls-Royce, though Vickers has said repeatedly that BMW wouldn't be given any special treatment. "
932,"[INST] In the past week, BMW Chairman Bernd Pischetsrieder has begun [/INST] telling people the German company might do its own thing if doesn't get the nod from Vickers. "
933,[INST] Such a move would add to the [/INST] competitive pressure on Rolls-Royce in the event that it weren't sold to BMW.
934,[INST] Full text: Europe/Mideast Deutsche Telekom Offers a [/INST] Truce In Fee Dispute Deutsche Telekom AG finally seems to be coming around.
935,[INST] The German phone giant now plans to slash in [/INST] half the controversial fee it was charging for switching long-distance service to a rival carrier.
936,"[INST] And in a particularly interesting twist, the consumer [/INST] will no longer be the target of all this -- at least not directly. "
937,"[INST] Deutsche Telekom now wants to levy the charge on its competitors, [/INST] a process that will allow its rivals to do the same thing if the ball is in the other court. "
938,"[INST] According to the latest proposal, which is still preliminary, Deutsche Telekom will [/INST] charge the companies a one-time fee of 42.24 marks ($23.52) for the switch, down from the original transfer charge of 95 marks. "
939,"[INST] Because Deutsche Telekom says it will now have to pick up more than half of the [/INST] costs of the changeover, it is touting the latest plan as ""a significant contribution"" on the part of the former monopoly to opening competition in the German phone market. "
940,"[INST] The proposal still needs the approval of other service providers and [/INST] German regulators, who are expected to sign off on some sort of a deal by the end of this month. "
941,"[INST] Paris Bourse Eyes Broader Role The Paris Bourse is betting that with the launch [/INST] next year of Europe's unified currency, the euro, it will begin to rival the mighty London stock exchange as a hub of pan-European share trading. "
942,"[INST] The Paris exchange says it will be ready to quote and trade in euros on the first business day of [/INST] 1999, and adds that moves are afoot to develop closer alliances with other exchanges on the Continent, many of which -- unlike Britain's -- hope to be part of European economic and monetary union right from the start. "
943,"[INST] The Paris exchange boasts that it had the biggest gain in [/INST] volume, 67%, among European exchanges last year and that it was second only to London in new stock listings. "
944,[INST] But the Bourse still has [/INST] a long way to go to match London.
945,"[INST] Paris's combined domestic and international volume amounted to the equivalent of [/INST] about GBP 165 billion ($273 billion) in 1996, nowhere near the GBP 890 billion reported in the trading rooms of London. "
946,"[INST] BMW Steps Up Pressure for Rolls Deal Germany's Bayerische Motoren Werke AG may be applying some calculated pressure in its quest for [/INST] Rolls-Royce Motor Cars Ltd. On more than one occasion in recent days, the Bavarian auto maker has made it clear that it will compete in the market for super-luxury motor vehicles -- and it will do it with or without Rolls-Royce. "
947,"[INST] BMW is one of several companies, along with a bevy [/INST] of well-heeled car enthusiasts, interested in acquiring the famous British auto maker from its current owner, Vickers PLC. "
948,"[INST] BMW is widely considered the front-runner to win the [/INST] hand of Rolls-Royce, though Vickers has said repeatedly that BMW wouldn't be given any special treatment. "
949,"[INST] In the past week, BMW Chairman Bernd Pischetsrieder has begun [/INST] telling people the German company might do its own thing if doesn't get the nod from Vickers. "
950,[INST] Such a move would add to the [/INST] competitive pressure on Rolls-Royce in the event that it weren't sold to BMW.
951,[INST] France Plans to Sell Polish Debts The appetite [/INST] for emerging-market debt is slowly reappearing in the wake of the Asian financial crisis.
952,[INST] Now France plans to sell off some of [/INST] the 21 billion francs ($3.49 billion) owed to it by Poland to institutional Eurobond investors.
953,"[INST] In the past week, Hungary, Argentina and Turkey have all tapped into [/INST] the Eurobond market, and Turkey is expected to begin road shows shortly for its first U.S. dollar-denominated offering of the year. "
954,"[INST] While French officials and their bankers insist Poland is a good credit [/INST] risk, the yield premiums that investors demand for owning the East European nation's paper has yet to return to pre-Asian crisis levels. "
955,[INST] EU Ruling Near on Freezer Debate Those small corner grocery stores in Ireland are likely to find more room in their freezers for ice [/INST] cream products made by companies other than Ireland's HB Ice Cream Ltd. That's because the European Commission is apparently ready to order that the Irish unit of Anglo-Dutch consumer-products group Unilever PLC stop forcing Irish shop owners to stock rival ice-cream brands in a separate freezer.
956,"[INST] Such a decision, which an individual at the European [/INST] Union says is in the works, would mark a victory for U.S. confectionery group Mars Inc "
957,"[INST] It complained to the EU's executive body in 1991 that by [/INST] excluding rival products, Unilever was in practice closing off competitors because most small shops don't have room for a second freezer. "
958,[INST] EgyptAir Faces Rivals in Home Market EgyptAir is getting its [/INST] first competition in the domestic airline market since the 1952 uprising that forced King Farouk to abdicate.
959,[INST] Aviation officials have broken the flag carrier's stranglehold [/INST] on its home market by licensing two private competitors to fly daily domestic scheduled flights.
960,[INST] Aircraft Maintenance Co. has begun doing [/INST] a brisk business plucking end-of-Ramadan holiday travelers off EgyptAir's waiting lists.
961,"[INST] However, the other company, Shorouk Air, a [/INST] joint-venture between EgyptAir and Kuwait Airways, has yet to begin service. "
962,"[INST] BRIEFLY: -- Business confidence among British manufacturers has suffered [/INST] its sharpest fall since October 1995, according to the Confederation of British Industry's quarterly industrial-trends survey. "
963,[INST] The survey is seen as adding [/INST] weight to the argument to leave interest rates unchanged.
964,[INST] -- German electronics company Siemens AG's earnings jumped 19% to [/INST] 569 million marks ($316.8 million) in its fiscal first quarter on an equally strong jump in sales.
965,"[INST] -- Spain's Banco Central Hispanoamericano saw earnings surge 44% last year [/INST] to 63.5 billion pesetas ($417.1 million), boosted by gains in its retail-banking business and increased income from investment funds. "
966,"[INST] -- Russian telecommunications holding company AO Svyazinvest says there is little hope of stopping a [/INST] controversial share issue that has caused a sharp fall in the shares of one of its affiliates, Moscow City Telephone Co. The issue increased authorized share capital by 50%. "
967,"[INST] ASIA/Pacific Report Targets U.S. Japan Policy Despite prospects for [/INST] Japan's trade surplus to continue rising, the U.S. will probably maintain its policy favoring a strong dollar. "
968,"[INST] It says that as long as Tokyo pursues the [/INST] combination of loose monetary policy and tight fiscal policy, the nation's trade surplus will inevitably climb. "
969,"[INST] However, the report adds that Washington will [/INST] probably step up its pressure on Japan to boost domestic demand. "
970,"[INST] The U.S. sees Tokyo's policy failures as triggering an [/INST] economic deterioration, and considers Japan's economic weakness as contributing to aggravating Asia's financial crisis, the report adds. "
971,"[INST] Softbank, Morningstar Plan Venture With an [/INST] eye to the coming deregulation of Japan's financial markets, Softbank Corp. "
972,"[INST] , a Japanese wholesaler of personal-computer software, is establishing a joint venture with U.S. mutual-fund tracker Morningstar Inc. The new company, to [/INST] be called Morningstar KK, will be capitalized at about 400 million yen ($3.2 million), and is being set up to provide investment information services in anticipation of a surge in demand for such data when the barriers come tumbling down all over Japan. "
973,"[INST] BRIEFLY: -- The shipbuilding industry in Japan retained its world [/INST] leadership role for the fourth straight year in 1997, with South Korea's shipyards close behind, preliminary industry figures show. "
974,[INST] The Americas Canadian Firm Seeks Spanish Gold A Canadian company has [/INST] begun hunting for gold in a region of Spain where such exploitation dates back to at least Roman times.
975,[INST] Toronto-based Rio Narcea Gold Mines Ltd. says it expects to extract from five [/INST] to six grams of gold from each ton of material removed and anticipates tapping the mine in Spain's northern Asturias region for about 17 years.
976,"[INST] Rio Narcea believes the area, right now [/INST] better known for its coal than its gold, is Europe's biggest gold mine. "
977,[INST] Argentina Eases an Auto Import Rule Argentina has decided to ease up on one [/INST] of its trade restrictions and let some auto makers import vehicles from Brazil without having to export an equal number to its giant northern neighbor.
978,[INST] The move will affect those companies [/INST] with operations in Argentina that don't have subsidiaries in Brazil.
979,"[INST] It will be effective only until the year 2000, when it [/INST] will be replaced by an accord governing auto shipments among the members of Mercosur, which includes Argentina, Brazil, Paraguay and Uruguay. "
980,"[INST] BRIEFLY: -- Gillette Co. is considering construction of [/INST] a production plant in Argentina or Brazil, but still hasn't decided on the final location. "
981,"[INST] -- After years of cutting immature sugar cane to meet [/INST] production targets, Cuba says it will sharply trim its harvest this year in hopes of better yields to come. "
982,"[INST] ___ Document 243 of 500 Treasurys Tread Water Amid Mixed Signals; Argentina Opts to Postpone [/INST] a Big Debt Offering Author: By Richard C. ten Wolde and Carol S. Remond Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 16 Jan 1998: C23. "
983,"[INST] accountid=28034 Abstract: Elsewhere, Argentina's government decided [/INST] against going ahead with a large bond offering for now. "
984,[INST] had been talking on Argentina's behalf [/INST] with potential buyers of a $500 million to $750 million issue.
985,"[INST] The price of the benchmark 30-year Treasury bond fell [/INST] 2/32, or 62.5 cents for a bond with $1,000 in face value, to 105 13/32. "
986,"[INST] The yield, which moves in the opposite [/INST] direction from the price, was at 5.735%, about the same as late Wednesday. "
987,"[INST] Treasurys drew modest support early in the [/INST] session after declines in some Asian equities markets, including Hong Kong's. "
988,"[INST] But the U.S. market then edged lower after the Federal Reserve Bank of Philadelphia [/INST] said its monthly index of area business activity rose to 17.3 in January from 9.2 in December, indicating an increase in the regional economy's strength. "
989,[INST] Full text: NEW YORK -- Bond prices [/INST] ended little changed after spending the session in a narrow range.
990,"[INST] Elsewhere, Argentina's government decided against [/INST] going ahead with a large bond offering for now. "
991,[INST] had been talking on Argentina's behalf [/INST] with potential buyers of a $500 million to $750 million issue.
992,"[INST] The price of the benchmark 30-year Treasury bond fell [/INST] 2/32, or 62.5 cents for a bond with $1,000 in face value, to 105 13/32. "
993,"[INST] The yield, which moves in the opposite [/INST] direction from the price, was at 5.735%, about the same as late Wednesday. "
994,"[INST] Treasurys drew modest support early in the [/INST] session after declines in some Asian equities markets, including Hong Kong's. "
995,"[INST] But the U.S. market then edged lower after the Federal Reserve Bank of Philadelphia [/INST] said its monthly index of area business activity rose to 17.3 in January from 9.2 in December, indicating an increase in the regional economy's strength. "
996,"[INST] ""The modest overnight [Treasury] gains were shed early on [/INST] when the Philly Fed printed stronger-than-expected numbers,"" said Patrick Dimick, government bond strategist at UBS Securities LLC. "
997,[INST] Treasurys were also pressured by [/INST] more than $3.6 billion of U.S. corporate debt issuance.
998,[INST] Such issuance sometimes prompts selling of [/INST] Treasury securities by investors and underwriters of corporate offerings.
999,"[INST] The bond market may lack direction for [/INST] some time, said Kevin McClintock, head of taxable fixed-income at Dreyfus Corp. "
1000,"[INST] He cited the possibility of continuing turmoil in Asian markets and [/INST] questions about how much impact that would have on the U.S. ""All that needs to be shaken out,"" he said. "
1001,"[INST] Bond trading halts at 2 p.m. today ahead [/INST] of Monday's Martin Luther King Jr. holiday, when the market will be closed entirely. "
1002,"[INST] Meanwhile, had the 10-year global bond offering by Argentina gone [/INST] ahead, that nation would have been the first sovereign borrower to tap the U.S. market this year. "
1003,[INST] Investment bankers said work on the deal was halted when the [/INST] government balked at paying additional yield to compensate investors for market instability generated by the financial woes of Asian countries.
1004,"[INST] ""They decided that the premium they would have to [/INST] pay was higher than they would like and scrapped the deal,"" one investment banker said. "
1005,"[INST] In a statement yesterday, Argentina's Economy Ministry said that it ""gave [/INST] no mandate to issue a new dollar bond"" and that it's ""not currently working on a plan of that sort"". "
1006,[INST] Argentina would apparently have had to pay an additional yield [/INST] margin over U.S. Treasurys of 0.25 to 0.5 percentage point compared with its Eurobonds due 2006 issued in 1996.
1007,[INST] Those were trading at a [/INST] yield 4.35 percentage points higher than comparable Treasurys.
1008,"[INST] The government has decided to wait for more [/INST] stable conditions before returning to the dollar-denominated international capital market, according to bankers. "
1009,[INST] Argentina can afford to wait because it has already [/INST] secured $2.85 billion of the $3.5 billion it needs for the first quarter of this year.
1010,"[INST] Bond sales in the Argentinian domestic [/INST] market, or nondollar markets, could help with the remainder. "
1011,[INST] Argentina has previously said it needs [/INST] to raise about $8 billion in the international markets this year.
1012,"[INST] Still, analysts said continued market volatility could [/INST] soon put Argentina and other emerging economies in a difficult position. "
1013,"[INST] The Asian crisis, they noted, has virtually [/INST] closed international capital markets to these countries, even though many need financing. "
1014,"[INST] ""If this goes into the second quarter, then several governments in Latin America will have [/INST] to rethink their strategy, maybe seeking funds from the International Monetary Fund or perhaps considering devaluations,"" said Walter Molan, head of Latin America economic research at SBC Warburg. "
1015,"[INST] Corporate Bonds Nabisco Inc., [/INST] a unit of RJR Nabisco Holdings Corp. "
1016,"[INST] , broke new ground yesterday, selling the largest corporate bond issue [/INST] ever to employ a new structure that exploits both bond and derivatives markets in order to cut the issuer's costs. "
1017,"[INST] That deal was part of a session that saw [/INST] $3.6 billion in new supply, dominated by Nabisco and a $1.75 billion offering from Ameritech Capital Funding. "
1018,[INST] Nabisco's $1 billion three-part offering used a technique where a put [/INST] option is separated from the rest of the bond and sold to derivatives users who will pay a higher price.
1019,"[INST] A put option gives the holder the right [/INST] to sell the bond to the issuer at par, regardless of market movements. "
1020,[INST] The extra value obtained by separating [/INST] the put option reduces Nabisco's total cost of borrowing.
1021,"[INST] Joint lead managers of the deal were Morgan Stanley Dean [/INST] Witter and UBS Securities Inc., both of which have underwritten similar but smaller structures in the past. "
1022,"[INST] Following the issue, underwriters predicted that the successful [/INST] placement of such a large deal would spur more large offerings using the structure. "
1023,"[INST] ___ Document 249 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 14 Jan 1998: A15. "
1024,[INST] accountid=28034 Abstract: TRICOM SA wasn't the source for [/INST] an item in the World Watch column Wednesday reporting that the Dominican Republic's No.
1025,[INST] 2 phone company planned a global [/INST] share offering to be listed on the New York Stock Exchange.
1026,"[INST] 16, 1998) The problems rocking Asia's troubled [/INST] economies apparently are lighting a fire under the leadership in Poland. "
1027,"[INST] After eight long years of an on-again, off-again [/INST] privatization program, Warsaw looks set to get serious about selling some of its biggest companies. "
1028,"[INST] And many economists agree that the East European nation, the largest economy in the region, [/INST] had better do some fast selling to maintain its strong economic growth and avoid the problems that economies on the other side of the globe have been facing. "
1029,"[INST] But market players are eager for more details on the Polish initiative to see if these long-delayed [/INST] privatizations -- possibly including phone monopoly Telekomunikacja Polska SA, the country's largest bank Polska Kasa Opieki SA, oil giant Nafta Polska SA and the Polish flag carrier Lot -- will be attractive investments. "
1030,[INST] France's Aerospatiale SA will create a subsidiary for [/INST] its Airbus Industrie activities and transfer them to a new centralized Airbus company.
1031,[INST] The move marks a breakthrough in Airbus's plans to [/INST] transform itself from a loose four-nation consortium to a centralized aircraft manufacturing concern by early next year.
1032,"[INST] Reflecting France's pride in its aviation heritage, Aerospatiale had [/INST] previously resisted transferring key assets such as its vaunted design operations to the new company. "
1033,"[INST] But apparently the aerospace unit of Daimler-Benz AG and British Aerospace PLC, Airbus's German and [/INST] British partners, won out in the end, arguing that the management of a new Airbus needs direct control over all crucial aircraft-making assets in order to maximize efficiency. "
1034,[INST] Full text: Corrections & Amplifications TRICOM SA wasn't the [/INST] source for an item in the World Watch column Wednesday reporting that the Dominican Republic's No.
1035,[INST] 2 phone company planned a global [/INST] share offering to be listed on the New York Stock Exchange.
1036,"[INST] 16, 1998) EUROPE Italian Phone Giant Gives New Chief Much Broader Role [/INST] With the opening up of Italy's phone market, it appears that it won't be business as usual at Telecom Italia SpA. "
1037,[INST] Its hiring of Gian Mario Rossignolo as its chairman on Monday included a deal that [/INST] will give the holder of that post broad new powers that should ease the group's transformation from a state-controlled company to a private one with a wide shareholder base.
1038,"[INST] The board's move came just six weeks after the resignation of the previous chairman, [/INST] Guido Rossi, who threw up his hands in frustration over his inability to change the mentality of a company long run as a state utility. "
1039,"[INST] Mr. Rossignolo, a well-known executive who has spent [/INST] his entire career in the private sector, will see to new corporate governance rules. "
1040,[INST] The board also gave him the power to hire [/INST] and fire -- something the previous chairman never had -- and an oversight role in internal audits.
1041,[INST] Telecom Italia is facing competition for the first time [/INST] this year in its fixed-line business because of the European Union's mandated liberalization of the sector.
1042,[INST] It is also under heavy pressure from the EU to [/INST] clean up its act amid accusations that it has hampered competition and enjoys privileged treatment from the Italian government.
1043,[INST] Poland Outlines Privatization Plans The problems rocking [/INST] Asia's troubled economies apparently are lighting a fire under the leadership in Poland.
1044,"[INST] After eight long years of an on-again, off-again [/INST] privatization program, Warsaw looks set to get serious about selling some of its biggest companies. "
1045,"[INST] And many economists agree that the East European nation, the largest economy in the region, [/INST] had better do some fast selling to maintain its strong economic growth and avoid the problems that economies on the other side of the globe have been facing. "
1046,"[INST] But market players are eager for more details on the Polish initiative to see if these long-delayed [/INST] privatizations -- possibly including phone monopoly Telekomunikacja Polska SA, the country's largest bank Polska Kasa Opieki SA, oil giant Nafta Polska SA and the Polish flag carrier Lot -- will be attractive investments. "
1047,[INST] Airbus Conversion Gets a Lift France's Aerospatiale SA will [/INST] create a subsidiary for its Airbus Industrie activities and transfer them to a new centralized Airbus company.
1048,[INST] The move marks a breakthrough in Airbus's plans to [/INST] transform itself from a loose four-nation consortium to a centralized aircraft manufacturing concern by early next year.
1049,"[INST] Reflecting France's pride in its aviation heritage, Aerospatiale had [/INST] previously resisted transferring key assets such as its vaunted design operations to the new company. "
1050,"[INST] But apparently the aerospace unit of Daimler-Benz AG and British Aerospace PLC, Airbus's German and [/INST] British partners, won out in the end, arguing that the management of a new Airbus needs direct control over all crucial aircraft-making assets in order to maximize efficiency. "
1051,"[INST] Novartis to Close Some Plants Now that the dust has settled on its huge [/INST] merger, Swiss pharmaceutal giant Novartis AG is planning to shut down, outsource or sell more than half of its 62 drug production facilities by the year 2000. "
1052,"[INST] While the restructuring process in Europe has already reached an advanced stage, [/INST] plants in the U.S., Latin America and Asia will be the next to be targeted, according to a Swiss news report. "
1053,"[INST] The costs for the latest revamping of the group, [/INST] created from the merger of Ciba-Geigy AG and Sandoz AG, is estimated at $230 million. "
1054,[INST] Philips's Deal May Be in Trouble A fight over money is [/INST] bogging down Philips Electronics NV's plan to sell a stake in its Origin BV computer-services subsidiary to Price Waterhouse.
1055,[INST] Analysts had welcomed Price Waterhouse's letter of intent to acquire a stake [/INST] of about 20% in Origin as a boost to the consulting giant's presence in the fast-growing global market for information-technology services.
1056,[INST] The two parties were [/INST] scheduled to complete the deal by Dec.
1057,[INST] But according to people close to the planned transaction [/INST] the deal is now in jeopardy because of disagreements between Price Waterhouse and Philips over Origin's value.
1058,"[INST] If the final talks fail, it could [/INST] have far-reaching consequences for unprofitable Origin, which needs drastic cost cuts and reorganization. "
1059,"[INST] BRIEFLY: -- Britain's Barclays PLC could take restructuring provisions of as much [/INST] as GBP 450 million ($729.7 million) against 1997 earnings as the result of its piecemeal exit from investment banking, analysts say. "
1060,"[INST] -- Jobless protesters in Paris took over [/INST] the capital's chamber of commerce yesterday, before riot police moved in. "
1061,"[INST] Meanwhile, thousands marched in [/INST] several French cities seeking increased jobless benefits. "
1062,[INST] -- Britain's Cable & Wireless Communications [/INST] PLC plans to reorganize its $1.5 billion debt to cut costs.
1063,[INST] It says the move will [/INST] lead to annual savings of GBP 40 million.
1064,[INST] -- French car maker PSA Peugeot Citroen saw auto [/INST] sales jump 5.3% to 2.1 million vehicles in 1997 amid inroads made in neighboring European countries.
1065,"[INST] predicts that Japan's total steel exports to South Korea will tumble 80% from [/INST] the current level of 700,000 tons a quarter because of the economic crisis affecting its neighbor on the other side of the Sea of Japan. "
1066,"[INST] The steel group said the large drop in exports to South Korea would [/INST] be temporary, but didn't specify how long it was expected to last, or give figures for Nippon Steel's own exports to the country. "
1067,"[INST] Steel exports to South Korea by Japanese steel makers for the [/INST] fiscal year ended March 1997 totaled 3.3 million tons, while those to all other Asian countries stood at 16.1 million tons. "
1068,"[INST] Despite all the uncertainty, Nippon Steel says [/INST] it has no plans to revise its outlook at the present time. "
1069,[INST] Hong Kong Delays Airport Opening In the short-term it may [/INST] hurt the pride of city that is used to getting projects done on time -- or ahead of time.
1070,[INST] But most observers say Hong Kong's decision to [/INST] delay the opening of its new airport to July from April makes sense.
1071,"[INST] The government says that before the first commercial flight takes off [/INST] it wants the special rail link to the city's downtown area up and running, and apparently that was the hitch. "
1072,[INST] The express train will take 23 minutes to [/INST] reach the downtown business district from the new Chek Lap Kok airport on Lantau Island.
1073,"[INST] Cathay Pacific Airways, which has invested 4.9 billion [/INST] Hong Kong dollars (US$633 million) in facilities there, called the decision ""sensible and prudent"". "
1074,"[INST] The airline added that given the current [/INST] economic situation, it is in no rush to expand its flight schedules anyway. "
1075,[INST] Hanoi Asks Pilots to Screen Visitors Vietnam has joined [/INST] the list of countries checking for signs of bird flu among visitors from Hong Kong.
1076,[INST] Health officials in Hanoi have asked pilots flying commercial [/INST] jets between Hong Kong and Vietnam to alert them if any of their passengers take ill.
1077,"[INST] Vietnam joins Taiwan, the Philippines and other [/INST] Asian countries screening passengers for signs of the new strain of flu. "
1078,"[INST] BRIEFLY: -- An investment-management firm affiliated with Dongbu Group, one of [/INST] South Korea's top 30 conglomerates, is negotiating to sell an equity stake in itself to a major U.S. investment company. "
1079,"[INST] --- THE AMERICAS Dominican Firm to List on Big Board [/INST] In what would be the first global share offering from the Dominican Republic, Tricom SA, the island nation's No. "
1080,"[INST] 2 phone company, says it's [/INST] preparing to list on the New York Stock Exchange. "
1081,"[INST] -based Motorola Inc., is seeking to [/INST] raise as much as $100 million to expand its wireless services. "
1082,"[INST] Pending market conditions, the issue should be launched by the middle of this year via lead-manager Morgan Stanley [/INST] & Co., and co-manager Bear Stearns & Co. Argentine Phone Firm to Cut Staff Telecom Argentina Stet-France Telecom SA plans to trim 600 employees from its ranks, but there's a humanitarian side to the tale. "
1083,[INST] The Argentine phone company says it will retrain [/INST] those workers and then seek to place them in positions at other companies.
1084,[INST] But Telecom Argentina didn't say why it's laying off the [/INST] workers in the first place or the potential savings that it expects to gain from the move.
1085,"[INST] Meanwhile, a local news report says the South American nation's other [/INST] local phone company, Telefonica de Argentina SA may eliminate 1,000 workers, though the company denies having any such plans. "
1086,[INST] BRIEFLY: -- Brazil's central bank discarded any possibility of a [/INST] devaluation of its real currency in the wake of renewed predictions of a speculative attack against the currency.
1087,"[INST] It said any such action [/INST] would be ""like submitting to the turbulence"". "
1088,"[INST] -- A unit of U.S. investment bank Donaldson, Lufkin & [/INST] Jenrette Inc. will invest $40 million in Argentine wine and soft-drinks maker Penaflor SA, the beverage company said. "
1089,"[INST] ___ Document 252 of 500 Saving Asia, 101 [/INST] Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 12 Jan 1998: A20. "
1090,"[INST] An Asian economy starts to sink, the International Monetary [/INST] Fund starts to bail, the local currency -- baht, rupiah, won -- hits a record low. "
1091,"[INST] And headline writers world-wide rummage daily for fresh verbs [/INST] to describe Asian currencies continuing to tumble, dive, spiral, plummet and plunge to new record lows. "
1092,"[INST] The plunging currencies devastate wages and global buying power [/INST] of industrious Asian citizens, halve the income of exporting industries and double the liability to foreign banks. "
1093,"[INST] So all of South Korea is worth [/INST] half of what it was a few months ago, and Indonesia a quarter. "
1094,[INST] It makes no sense except [/INST] in terms of a self-feeding downward spiral.
1095,[INST] Devaluations and bailout loans are [/INST] not the only approaches to exchange rate problems.
1096,"[INST] The other approach is to use whatever resources are available [/INST] to stop devaluation, or more precisely to deal with the consequences of the policies necessary to do this. "
1097,[INST] Devaluation of won or baht or [/INST] whatever can be stopped by restricting the supply of them.
1098,"[INST] That is, instead of sterilizing currency inflows and [/INST] outflows, the central bank should let redemptions of its currency reduce its supply. "
1099,"[INST] Doing this will of course increase internal [/INST] interest rates, slow the internal economy and endanger tottering banking systems. "
1100,"[INST] But these costs are likely to be [/INST] much cheaper than the costs Korea, let alone Indonesia, suffers already. "
1101,"[INST] In the last Latin crisis, [/INST] we had a real-world experiment with the two approaches. "
1102,"[INST] Argentina stood with its exchange [/INST] rate, using international aid to stem bank runs. "
1103,"[INST] The Mexican approach has become a model for the [/INST] IMF, and more significantly the Clinton-Rubin-Summers Treasury -- for reasons not apparent in the real-world results. "
1104,[INST] Full text: The first clue to solving [/INST] the crisis in Asia is to recognize that it's a monetary crisis.
1105,"[INST] Expelling crony capitalism and rescheduling loans and privatizing state [/INST] companies are all of course good things, but the immediate problem is to stabilize exchange rates. "
1106,"[INST] An Asian economy starts to sink, the International Monetary [/INST] Fund starts to bail, the local currency -- baht, rupiah, won -- hits a record low. "
1107,"[INST] And headline writers world-wide rummage daily for fresh verbs [/INST] to describe Asian currencies continuing to tumble, dive, spiral, plummet and plunge to new record lows. "
1108,"[INST] The plunging currencies devastate wages and global buying power [/INST] of industrious Asian citizens, halve the income of exporting industries and double the liability to foreign banks. "
1109,"[INST] So all of South Korea is worth [/INST] half of what it was a few months ago, and Indonesia a quarter. "
1110,[INST] It makes no sense except [/INST] in terms of a self-feeding downward spiral.
1111,[INST] Devaluations and bailout loans are [/INST] not the only approaches to exchange rate problems.
1112,"[INST] The other approach is to use whatever resources are available [/INST] to stop devaluation, or more precisely to deal with the consequences of the policies necessary to do this. "
1113,[INST] Devaluation of won or baht or [/INST] whatever can be stopped by restricting the supply of them.
1114,"[INST] That is, instead of sterilizing currency inflows and [/INST] outflows, the central bank should let redemptions of its currency reduce its supply. "
1115,"[INST] Doing this will of course increase internal [/INST] interest rates, slow the internal economy and endanger tottering banking systems. "
1116,"[INST] But these costs are likely to be [/INST] much cheaper than the costs Korea, let alone Indonesia, suffers already. "
1117,"[INST] In the last Latin crisis, [/INST] we had a real-world experiment with the two approaches. "
1118,"[INST] Argentina stood with its exchange [/INST] rate, using international aid to stem bank runs. "
1119,"[INST] The Mexican approach has become a model for the [/INST] IMF, and more significantly the Clinton-Rubin-Summers Treasury -- for reasons not apparent in the real-world results. "
1120,"[INST] What is apparent by now is that in weathering the [/INST] crisis, Argentina with its stable peso greatly outperformed Mexico with its devaluation, as the chart nearby shows. "
1121,"[INST] Over the past three years, Argentina's gross [/INST] domestic product grew in dollar terms by a total of 14%. "
1122,"[INST] Mexico still has not recovered from the [/INST] initial plunge, with its 1997 dollar GDP still 4% below 1994. "
1123,"[INST] In the year following the 1994 dive of the [/INST] peso, Mexicans suffered peso inflation of 52%, and a GDP drop, in dollar terms, of 31.8%. "
1124,"[INST] Argentines, as their nation went through the comparable stretch of [/INST] recovery, had annual inflation running less than 2%, and Argentina's GDP, in 1995, shrank less than 1%. "
1125,"[INST] For Mexico, even the supposed [/INST] export advantage of devaluation was inflated away. "
1126,"[INST] The Mexican peso hovered around 7.8 to [/INST] the dollar through most of 1997, a 129% devaluation from 3.4 in 1994. "
1127,"[INST] Between December 1994 and [/INST] November 1997, Mexico's price index rose 122%. "
1128,"[INST] In defending Argentina's peso, the job of Finance Minister Domingo Cavallo was made [/INST] somewhat easier because he and President Carlos Menem had already set up a currency board, in 1991, to end years of high inflation. "
1129,[INST] A currency board is an arrangement that [/INST] leaves the government no latitude to fiddle with the exchange rate.
1130,"[INST] Instead, the government fixes its money -- say, [/INST] the peso -- to some other currency, usually, as in Argentina, the dollar. "
1131,"[INST] The deal is that all pesos must [/INST] be fully backed by dollar reserves, and the peso must be freely convertible. "
1132,[INST] This makes for a system in which [/INST] the peso money supply must fall when pesos are redeemed for dollars.
1133,"[INST] The market sends clear signals, and businessmen have [/INST] some clue of the terms on which they can expect to do business. "
1134,"[INST] Even Mexicans, at least since 1996, [/INST] have come to see some virtue to aspects of this approach. "
1135,"[INST] Mexico has fared better in recent times, as the government [/INST] has stopped trying to offset, or sterilize, the forces of supply and demand in the foreign exchange market. "
1136,"[INST] For Asians, watching their currencies vanish with IMF [/INST] blessings into the abyss, the Argentina solution may be simpler than it now seems. "
1137,"[INST] For an example close to [/INST] home, they can look to Hong Kong. "
1138,"[INST] The former Crown Colony already operates a currency [/INST] board, set up back in 1983 to stop a run on the Hong Kong dollar. "
1139,"[INST] This has served well, setting the tone for years [/INST] of growth and more recently helping Hong Kong defend its currency while most around it fell. "
1140,"[INST] Economist Steve Hanke, who advised Argentina on linking its peso to the dollar, suggests that the plunge [/INST] in Asian currency values actually lends itself right now to setting up currency boards, should South Korea, or Indonesia, or any of the other plungers and spiralers choose to go that way. "
1141,"[INST] With the value of the monetary base halved or worse [/INST] after all these devaluations, it takes less in reserves to set up a solid link to the dollar. "
1142,[INST] For the IMF to put its bailing billions toward this goal [/INST] would actually help plug the leaks that have so far made a lot of the bureaucratic aid pretty pointless.
1143,"[INST] Whether Asia's stricken economies go with currency boards or simply trust [/INST] their central banks to pick a rate of exchange and defend it, is a question of local political tactics. "
1144,"[INST] The first step is to pick an exchange [/INST] rate to defend, preferably one above the ridiculous levels to which these currencies have plunged. "
1145,[INST] Step two is to suffer through interest rates high enough to [/INST] make good the defense -- though in all likelihood lower than interest rates would be if a devaluation inflation takes hold.
1146,"[INST] In this, the IMF could actually be a help, as [/INST] it was in Argentina, and the U.S. Treasury could provide moral support instead of advice of dubious relevance. "
1147,"[INST] They will not begin so long as these currencies go [/INST] on ""floating,"" while what they're really doing is sinking, and dragging down with them otherwise viable economies. "
1148,"[INST] ___ Document 260 of 500 Yesterday's Diplomats Are Today's Entrepreneurs in [/INST] Argentina Author: By Jonathan Friedland Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 08 Jan 1998: A5. "
1149,"[INST] accountid=28034 Abstract: James Cheek, who left Buenos Aires in December 1996, [/INST] and his predecessor, Terence Todman, both represent groups bidding today on a 30-year concession to run 33 of Argentina's airports. "
1150,"[INST] In the run-up to the bid, they [/INST] have been busy lobbying U.S. and Argentine officials, including President Carlos Menem. "
1151,"[INST] Last year, Mr. Cheek also [/INST] lobbied here on behalf of AMR Corp. "
1152,"[INST] , parent of American Airlines, before [/INST] its purchase of a stake in former state-owned carrier Aerolineas Argentinas. "
1153,"[INST] Last month, it was Mr. Todman who explained to Argentine [/INST] politicians and media owners a $605 million deal by a U.S. investor-backed local buyout firm called Exxel Group. "
1154,"[INST] Mr. Todman is a director of Exxel, which bought two companies that, in [/INST] the past, have been linked to Alfredo Yabran, a local businessman accused by former economy minister Domingo Cavallo of being an organized-crime boss. "
1155,"[INST] Mr. Yabran, who denies any wrongdoing and [/INST] hasn't been convicted of any crimes, is suing Mr. Cavallo, alleging libel. "
1156,"[INST] Separately, Mr. Cheek has taken on advisory [/INST] work for another company that previously was linked to Mr. Yabran. "
1157,"[INST] The company, printer Ciccone Calcografica SA, is part of a group bidding [/INST] on the $600 million-plus contract to computerize registries of all Argentine residents and visitors and to print and distribute identity cards. "
1158,"[INST] Mr. Cheek, who during his stint here pushed for beefed-up border controls to combat transnational [/INST] crimes such as drug trafficking and terrorism and was a frequent critic of Mr. Yabran, says he helped Ciccone last year on matters unrelated to the registries job. "
1159,"[INST] Full text: BUENOS AIRES -- It seems that whenever there's [/INST] a big and controversial business deal in Argentina nowadays, a former U.S. ambassador is in the thick of it. "
1160,"[INST] James Cheek, who left Buenos Aires in December 1996, and [/INST] his predecessor, Terence Todman, both represent groups bidding today on a 30-year concession to run 33 of Argentina's airports. "
1161,"[INST] In the run-up to the bid, they [/INST] have been busy lobbying U.S. and Argentine officials, including President Carlos Menem. "
1162,"[INST] Last year, Mr. Cheek also [/INST] lobbied here on behalf of AMR Corp. "
1163,"[INST] , parent of American Airlines, before [/INST] its purchase of a stake in former state-owned carrier Aerolineas Argentinas. "
1164,"[INST] Last month, it was Mr. Todman who explained to Argentine [/INST] politicians and media owners a $605 million deal by a U.S. investor-backed local buyout firm called Exxel Group. "
1165,"[INST] Mr. Todman is a director of Exxel, which bought two companies that, in [/INST] the past, have been linked to Alfredo Yabran, a local businessman accused by former economy minister Domingo Cavallo of being an organized-crime boss. "
1166,"[INST] Mr. Yabran, who denies any wrongdoing and [/INST] hasn't been convicted of any crimes, is suing Mr. Cavallo, alleging libel. "
1167,"[INST] Separately, Mr. Cheek has taken on advisory [/INST] work for another company that previously was linked to Mr. Yabran. "
1168,"[INST] The company, printer Ciccone Calcografica SA, is part of a group bidding [/INST] on the $600 million-plus contract to computerize registries of all Argentine residents and visitors and to print and distribute identity cards. "
1169,"[INST] Mr. Cheek, who during his stint here pushed for beefed-up border controls to combat transnational [/INST] crimes such as drug trafficking and terrorism and was a frequent critic of Mr. Yabran, says he helped Ciccone last year on matters unrelated to the registries job. "
1170,"[INST] Cheek and Todman have taken pains to emphasize they no longer represent the U.S. [/INST] government and have endlessly noted that none of this work is illegal under U.S. laws governing retired executive-branch officials, their high profiles here have raised eyebrows. "
1171,"[INST] Former President Raul Alfonsin accuses them of ""wanton [/INST] influence peddling"" while center-left opposition Congressman Juan Pablo Cafiero says he considers their activities ""shameful"". "
1172,"[INST] The U.S. embassy, which has been without [/INST] an ambassador since Mr. Cheek's departure, has kept a polite distance. "
1173,"[INST] , Native Mr. Cheek says the recent emphasis placed by [/INST] Washington on expanding global trade and investment ties means such work is natural for a retired diplomat. "
1174,"[INST] ""Ambassadors who have a reputation for forceful advocacy of [/INST] U.S. business interests are sought after when they retire,"" says the 61-year-old Little Rock, Ark. "
1175,"[INST] ""Ten years ago, a U.S. ambassador [/INST] who retired probably didn't know many corporate executives,"" he adds. "
1176,"[INST] That's true for countries such as Argentina, [/INST] which, a decade ago, had state-dominated economies unattractive to foreigners and anti-U.S. policies. "
1177,"[INST] Since Mr. Menem took office in 1989, [/INST] the year Mr. Todman arrived as ambassador, U.S.-Argentine ties have blossomed. "
1178,"[INST] The affair between Washington and Buenos Aires, which Argentine Foreign Minister [/INST] Guido diTella has half-jokingly described as ""carnal relations,"" has been accompanied by an upsurge in U.S. corporate investment here. "
1179,"[INST] American investment, attracted by Argentina's high growth rates [/INST] and conservative economic policies, grew to $8.1 billion last year from $2.8 billion in 1991. "
1180,"[INST] While the Argentine economy is more open nowadays, [/INST] political contacts remain key, particularly in privatizations and in highly regulated sectors such as aviation. "
1181,"[INST] ""The private sector views having Todman and Cheek [as representatives] as [/INST] carrying the implicit backing of the U.S. and of having open access to President Menem,"" says Mr. Cavallo, now a congressman. "
1182,"[INST] Exxel Chairman Juan Navarro says Mr. Todman can get [/INST] in to see Mr. Menem without formalities and ""lends an appropriate American tone"" to Exxel's board. "
1183,"[INST] ""He has given us access, know-how and tactical skill,"" says Mr. [/INST] Navarro, who most recently put Mr. Todman to work winning U.S. government backing for Exxel's bid in the airports privatization. "
1184,[INST] The Exxel group includes Sideco [/INST] Americana SA and Flughafen Frankfurt Main AG.
1185,"[INST] Meanwhile, Mr. Cheek is lobbying [/INST] Argentine officials on behalf of New York-based Ogden Corp. "
1186,"[INST] , which is bidding in partnership [/INST] with two Argentine companies and Italy's SpA Esercizi Aeroportuali. "
1187,"[INST] Mr. Todman, a 71-year-old Virgin Islands native known for his regal bearing [/INST] and demanding management style, says that although he no longer works for the U.S. government, his work helps promote U.S. interests. "
1188,"[INST] ""When I was a diplomat, I played a [/INST] major role in helping investors and bankers understand what Argentina could become,"" he says. "
1189,"[INST] ""In the private sector, I am [/INST] helping to make sure the changes that have taken place work"". "
1190,"[INST] ___ Document 270 of 500 Review of Global Equity Markets -- AMERICAS: Americas Finish Year Battered, Not Broken Author: By Wall [/INST] Street Journal staff reporters Pamela Druckerman in New York, Thomas T. Vogel Jr. in Caracas, Craig Torres in Mexico City And Solange DeSantis in Toronto Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 02 Jan 1998: R10. "
1191,"[INST] accountid=28034 Abstract: Latin American stock markets had seemed invincible through the first half of [/INST] 1997, exaggerating the gains of U.S. markets and benefiting from the region's strong export growth, low inflation, massive foreign capital inflows and burgeoning capital markets. "
1192,[INST] Even an opposition victory in the Mexican congress [/INST] and delays in Brazilian privatizations didn't stop investors from pouring money into Latin stocks.
1193,"[INST] But when the Thai baht [/INST] fell to speculators, all emerging markets suddenly seemed suspect. "
1194,"[INST] Although Latin markets still moved in a rocky path upward for several months, investors seeking [/INST] to protect their record profits and nervous about soaring stock valuations had moved into a defensive trading mode and were braced to see whether the volatility would persist. "
1195,[INST] Speculative attacks on the Hong Kong dollar in late October prompted [/INST] a massive sell-off of Latin stocks that led to the largest price declines since the 1994 Mexican peso crisis.
1196,"[INST] Attention focused on overlooked problems in [/INST] Latin economies, in particular Brazil's big trade deficits and overvalued currency. "
1197,[INST] Latin America appears to have [/INST] emerged from 1997 battered but not broken.
1198,"[INST] Latin governments moved resolutely to defend [/INST] their currencies against speculators, securing investor confidence in regional economic programs. "
1199,"[INST] In late November, Latin markets rallied as investors [/INST] acknowledged that most economic fundamentals that powered the region's ascent earlier last year haven't changed. "
1200,"[INST] Though most gross-domestic-product forecasts for the region have been trimmed, [/INST] it appears that Latin economies have already undertaken many of the painful market reforms now required of Asia. "
1201,"[INST] Latin American stock markets had seemed invincible through the first half of 1997, [/INST] exaggerating the gains of U.S. markets and benefiting from the region's strong export growth, low inflation, massive foreign capital inflows and burgeoning local capital markets. "
1202,[INST] Even an opposition victory in the Mexican congress [/INST] and delays in Brazilian privatizations didn't stop investors from pouring money into Latin stocks.
1203,"[INST] But when the Thai baht [/INST] fell to speculators, all emerging markets suddenly seemed suspect. "
1204,"[INST] Although Latin markets still moved in a rocky path upward for several months, investors seeking [/INST] to protect their record profits and nervous about soaring stock valuations had moved into a defensive trading mode and were braced to see whether the volatility would persist. "
1205,[INST] Speculative attacks on the Hong Kong dollar in late October prompted [/INST] a massive sell-off of Latin stocks that led to the largest price declines since the 1994 Mexican peso crisis.
1206,"[INST] Attention focused on overlooked problems in [/INST] Latin economies, in particular Brazil's big trade deficits and overvalued currency. "
1207,"[INST] In Canada, the stock market failed to [/INST] meet expectations, in large part because of bad news affecting important natural-resource stocks. "
1208,[INST] Latin America appears to have [/INST] emerged from 1997 battered but not broken.
1209,"[INST] Latin governments moved resolutely to defend [/INST] their currencies against speculators, securing investor confidence in regional economic programs. "
1210,"[INST] In late November, Latin markets rallied as investors [/INST] acknowledged that most economic fundamentals that powered the region's ascent earlier last year haven't changed. "
1211,"[INST] Though most gross-domestic-product forecasts for the region have been trimmed, [/INST] it appears that Latin economies have already undertaken many of the painful market reforms now required of Asia. "
1212,"[INST] Although more bad news from Asia could upset Latin markets again, [/INST] analysts say it is unlikely to provoke another massive sell-off on the scale seen in October and November of last year. "
1213,"[INST] Analysts say those sell-offs made many Latin [/INST] stocks look inexpensive, which should attract investors back to the region. "
1214,[INST] Here is a look at some individual markets: [/INST] MEXICO Mexico surprised investors with its resiliency in the face of worrisome vulnerabilities.
1215,[INST] The rally continued apace as Mexico astounded [/INST] analysts with quarterly GDP-growth rates above even the most bullish estimates.
1216,"[INST] Strong flows of money into Mexico's financial markets [/INST] pushed the peso up in inflation-adjusted terms against the dollar, and domestic consumption revived. "
1217,"[INST] Around midyear, hand-wringing over [/INST] midterm elections dimmed enthusiasm for Mexican shares. "
1218,[INST] The ruling party lost its majority [/INST] in the lower house for the first time in modern memory.
1219,[INST] But the defeat produced a positive [/INST] surprise: Mexicans celebrated the elections as a necessary step toward democracy.
1220,"[INST] In about one week in [/INST] October, Mexico's stock market slid around 20%. "
1221,"[INST] Interest rates shot higher, and [/INST] the peso fell sharply against the dollar. "
1222,[INST] The IPC finished 1997 [/INST] with a 51.2% gain in dollar terms.
1223,[INST] CANADA Canadian stock markets stubbornly [/INST] refused to perform as predicted in 1997.
1224,"[INST] In 1996, the TSE 300-stock index outperformed the U.S. [/INST] Standard & Poor's 500-stock average, and everyone was set for more of the same in 1997. "
1225,"[INST] Instead, the TSE 300 rose just [/INST] 13%, compared with a 31% gain in the S&P 500. "
1226,"[INST] ""The predictions were built on a traditional economic cycle, with a pickup in the world [/INST] economic cycle leading to higher commodity prices,"" says Ian Joseph, a fund manager at Altamira Investment Services Inc. A slew of bad news hit Canada's resource stocks. "
1227,"[INST] The price of gold fell below [/INST] US$300 an ounce, laying waste to Canadian gold share prices. "
1228,"[INST] Fears that OPEC would raise production quotas [/INST] squeezed the price of oil, and that hit Canadian energy stocks. "
1229,"[INST] But it was a banner year for [/INST] financial-services companies, pipelines and utilities, interest-sensitive sectors that were expected to pull back. "
1230,"[INST] The economic turmoil in Asia, along with sinking commodity [/INST] prices, slammed the Canadian dollar, and economists are cutting their GDP growth estimates for Canada for 1998. "
1231,"[INST] BRAZIL Last year was turbulent in Brazil, [/INST] and this year is likely to bring more of the same, say analysts. "
1232,"[INST] On the contrary, the country is likely to continue its torrid [/INST] pace of selling off state-owned companies, says Tim Love, head of Latin America research and strategy at ING Baring in London. "
1233,"[INST] At one point last year, Brazil's stock [/INST] market, as measured by the Bovespa index, was up more than 70%. "
1234,"[INST] Worries about the real, which many believe is overvalued, sparked massive selling [/INST] of Brazilian stocks and bonds in the fourth quarter and forced the government to sharply raise interest rates and cut official spending. "
1235,"[INST] The result: a much lower but still healthy [/INST] year-end return of about 35% in dollar terms for the Bovespa, and slower economic growth. "
1236,[INST] ARGENTINA Argentina's Merval index ended [/INST] up a dismal 5.8% in dollar terms in 1997.
1237,"[INST] Despite strong domestic growth numbers and a stable economy, Argentina was [/INST] ensnared in the market turmoil largely because of its close economic ties with Brazil, which buys 30% of Argentine exports. "
1238,"[INST] Any further sell-off of Brazilian stocks, or [/INST] attacks on the real, would likely spill over into the Argentine stock market. "
1239,"[INST] Despite the volatility, Argentina was the first [/INST] emerging-market country to issue Eurobonds following the height of the Asian crisis. "
1240,"[INST] The bond issue was a testament to investors' confidence [/INST] in the country's one-to-one currency convertibility program with the U.S. dollar, the linchpin of its economic-stabilization program. "
1241,"[INST] CHILE In 1997, Chile lost [/INST] its status as a haven for investors. "
1242,"[INST] Chile is more directly exposed to Asia than any [/INST] other Latin country, with 33% of its exports headed to Asia, according to Goldman Sachs. "
1243,"[INST] Half of those exports are commodities, [/INST] primarily copper, which have already come under global price pressure. "
1244,"[INST] Thus after stretching to more than 30% gains [/INST] at midyear, Chile's IPSA index closed the year up 9.3% in dollar terms. "
1245,"[INST] COLOMBIA Despite a sharp increase in guerrilla attacks on oil pipelines [/INST] and political figures, Colombia's stock market rose about 32% in dollar terms last year, as measured by the Ibomed index. "
1246,"[INST] The current president's protege, Horacio Serpa, [/INST] is the front-runner for presidential elections scheduled for May. "
1247,[INST] He isn't expected to do much about a [/INST] growing budget deficit problem that has kept interest rates high and hurt the economy.
1248,"[INST] PERU Peru is, once again, the darling of stock investors in Latin America, thanks to [/INST] a tough austerity program mounted in 1995 to put a brake on inflationary pressures, government spending and consumption of imported products and to shrink a growing fiscal deficit. "
1249,"[INST] Peru's stocks, as measured by the [/INST] IBVL index, rose 19% in dollar terms last year. "
1250,"[INST] The big risk on the horizon is [/INST] El Nino, a periodic warming of waters off the coast of Peru. "
1251,[INST] El Nino caused great damage [/INST] to Peru's fish exports in the early 1980s.
1252,"[INST] VENEZUELA Venezuela is yet another Latin nation facing [/INST] presidential elections this year (in December), but analysts don't expect major changes in economic policy. "
1253,[INST] Venezuela's economy has long depended on [/INST] the success or failure of its huge oil industry.
1254,"[INST] 1 foreign supplier of oil to the U.S. With the oil industry [/INST] booming with billions of dollars of new foreign investment, the nonoil portion of the economy is starting to benefit, says Lawrence. "
1255,"[INST] Krohn, head of Latin America [/INST] economic research for UBS Securities LLC in New York. "
1256,"[INST] But continued appreciation in the value of Venezuela's currency, the [/INST] bolivar, over the next year, is likely to hurt the nonoil sector by year's end, Mr. Krohn says. "
1257,"[INST] ""The question is when the markets will sense [/INST] that a devaluation in the currency"" is inevitable for 1999, Mr. Krohn warns. "
1258,"[INST] ""So we're counseling caution towards [/INST] the end of the year,"" he says. "
1259,"[INST] ___ Document 163 of 500 In Argentina, Acquisition Talks Could Lead to [/INST] Supermarket Giant Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 21 Dec 1998: A14. "
1260,"[INST] accountid=28034 Abstract: In a deal that would create Argentina's largest supermarket group, [/INST] Promodes SA of France and Argentine buyout fund Exxel Group are in negotiations to buy local retailer Tia SA for about $630 million. "
1261,"[INST] The Tia acquisition, which is still in the works, follows [/INST] the French retailer's purchase of a 49% stake in Exxel Group's Supermercados Norte SA in September for $420 million. "
1262,"[INST] That deal showed how valuable supermarket properties had become to strategic [/INST] buyers and proved to be a home run for Exxel, which purchased Norte only two years earlier for $380 million. "
1263,"[INST] Full text: BUENOS AIRES -- In a deal that would create Argentina's largest [/INST] supermarket group, Promodes SA of France and Argentine buyout fund Exxel Group are in negotiations to buy local retailer Tia SA for about $630 million. "
1264,"[INST] The Tia acquisition, which is still in the works, follows [/INST] the French retailer's purchase of a 49% stake in Exxel Group's Supermercados Norte SA in September for $420 million. "
1265,"[INST] That deal showed how valuable supermarket properties had become to strategic [/INST] buyers and proved to be a home run for Exxel, which purchased Norte only two years earlier for $380 million. "
1266,"[INST] Rising incomes, easing inflation and economic stability in South [/INST] America's largest economies has set off a battle for market share among supermarkets in the region. "
1267,"[INST] Privately held, family-run chains such as Tia are [/INST] selling to larger buyers, who are trying to capture new brands, formats and location. "
1268,"[INST] Analysts at Robert Fleming Inc. in New York said the combined Argentina market share [/INST] of Tia and Norte would reach 16.7%, putting the group ahead of another French chain, Carrefour, which would rank second with market share of 13.7%. "
1269,"[INST] Combined sales of Tia and [/INST] Norte would total more than $2 billion, analysts say. "
1270,"[INST] Last month, the majority shareholders of Argentine [/INST] grocer Disco SA announced a tender offer for the publicly held shares. "
1271,"[INST] Though the tender offer was made at a 35% premium to the [/INST] stock price, analysts were critical, saying Disco's controlling shareholders were getting the company at a cheap valuation of 0.42 times estimated 1998 sales. "
1272,"[INST] Exxel and Promodes are laying out 0.75 to one [/INST] times estimated sales for Tia, assuming the deal includes the assumption of debt, analysts say. "
1273,"[INST] While the lofty price for Tia would lend support to criticisms about [/INST] the Disco tender offer price, analysts said Exxel and Promodes might also be overpaying, especially because Argentina's economic growth will slow next year. "
1274,"[INST] ""Of the 12 transactions in the Latin American supermarket sector in [/INST] the last year, this is by far the most expensive,"" said Thomas Mobille, global retail coordinator for Robert Fleming. "
1275,"[INST] A spokesman for the Exxel Group confirmed the general [/INST] terms of the deal as reported in Argentine newspapers, but declined further comment until the transaction concludes. "
1276,[INST] A spokesman declined to comment on [/INST] the deal's valuation relative to other acquisitions earlier this year.
1277,"[INST] ___ Document 191 of 500 Economic Moderate Wins Key Argentine Primary --- Buenos [/INST] Aires Mayor Faces Ruling Party Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 01 Dec 1998: A16. "
1278,[INST] accountid=28034 Abstract: Argentina kicked off its presidential election year with a vote for [/INST] economic continuity as Buenos Aires Mayor Fernando de la Rua emerged as the candidate who will challenge President Carlos Menem's Peronist Party in 1999.
1279,"[INST] Mr. de la Rua, a 61-year-old lawyer and member of Argentina's centrist Radical [/INST] Party, handily defeated his leftist opponent, Graciela Fernandez Meijide, in the weekend primary staged by a coalition of opposition parties known as the Alliance. "
1280,[INST] Analysts said the results show that Argentines don't want drastic [/INST] changes with the free-market model endorsed by Mr. Menem; they just want it administered with greater transparency and honesty.
1281,[INST] Mr. de la Rua's Radical Party took a bad economy and made it [/INST] worse in the 1980s by sustaining a bloated state with monetary expansion; that led to an inflation spiral that nearly destroyed Argentine industry.
1282,"[INST] But the party has presented itself as highly [/INST] ethical, and that has attracted voters exhausted by the murky scandals surrounding the Menem administration. "
1283,[INST] Full text: BUENOS AIRES -- Argentina kicked off its presidential election year with a [/INST] vote for economic continuity as Buenos Aires Mayor Fernando de la Rua emerged as the candidate who will challenge President Carlos Menem's Peronist Party in 1999.
1284,"[INST] Mr. de la Rua, a 61-year-old lawyer and member of Argentina's centrist Radical [/INST] Party, handily defeated his leftist opponent, Graciela Fernandez Meijide, in the weekend primary staged by a coalition of opposition parties known as the Alliance. "
1285,[INST] Analysts said the results show that Argentines don't want drastic [/INST] changes with the free-market model endorsed by Mr. Menem; they just want it administered with greater transparency and honesty.
1286,"[INST] ""This is a vote that shows Argentines want to basically [/INST] maintain what they have achieved,"" said Martin Redrado, president of Fundacion Capital, an economic think tank here. "
1287,"[INST] ""There is no way back [/INST] to the years of fiscal and monetary irresponsibility"". "
1288,[INST] Mr. de la Rua's Radical Party took a bad economy and made it [/INST] worse in the 1980s by sustaining a bloated state with monetary expansion; that led to an inflation spiral that nearly destroyed Argentine industry.
1289,"[INST] But the party has presented itself as highly [/INST] ethical, and that has attracted voters exhausted by the murky scandals surrounding the Menem administration. "
1290,[INST] Analysts add that the opposition [/INST] has learned several lessons from Mr. Menem.
1291,"[INST] The Alliance said last August that the anchor of the Menem [/INST] model, a currency board system where all pesos in circulation are backed by dollars, must be maintained to ""consolidate stability"". "
1292,"[INST] While it is too early to say who Mr. de la Rua will [/INST] choose as his economy minister, many analysts point to the business establishment's support for Ricardo Lopez Murphy, an orthodox economist from the Radical Party. "
1293,"[INST] ""He is very tough in everything related to fiscal [/INST] issues,"" says Pedro Lacoste, head of the Buenos Aires economics firm that bears his name. "
1294,"[INST] ""He would [look] for [/INST] ways to make public expenditures more efficient"". "
1295,[INST] But just how much latitude Mr. Lopez Murphy or [/INST] any other economist would have within Mr. de la Rua's cabinet is a big question.
1296,"[INST] Part of the strength of Mr. de la Rua's candidacy [/INST] rests in the Alliance, an uneasy coalition formed by the Radical Party with various left and center-left parties. "
1297,[INST] Argentina has shown remarkable resilience in the [/INST] face of one of the most turbulent years ever for emerging economies.
1298,"[INST] Even with its gigantic neighbor Brazil on the rocks [/INST] Argentina experienced little capital flight, a sign that the public believes the currency scheme here is bullet-proof. "
1299,"[INST] That said, the next government faces urgent [/INST] tasks, including fixing chronic unemployment and making Argentine industry more competitive. "
1300,"[INST] Mr. Redrado says breaking monopolies with an eye toward [/INST] allowing fast-growing services such as the Internet to flourish is ""the most important strategic issue"". "
1301,[INST] The Peronists have yet to choose their own [/INST] candidate for the elections which are likely to be held in October next year.
1302,"[INST] But analysts add that Mr. Menem's [/INST] party doesn't have much room to debate the economic model, either. "
1303,"[INST] The governor of Buenos Aires province and Peronist presidential contender, Eduardo Duhalde, has criticized the [/INST] exclusion produced by freemarket policies, but nobody has taken his remarks seriously, especially since he was recently seen courting Mr. Menem's former economy minister, Domingo Cavallo, in a cafe. "
1304,"[INST] ""None of the candidates has a lot of [/INST] room to discuss the economic model without hurting themselves,"" says Carlos Acuna, a political scientist. "
1305,"[INST] ___ Document 205 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 23 Nov 1998: A14. "
1306,"[INST] accountid=28034 Abstract: Argentina's flagship airline Aerolineas Argentinas, a company in which AMR's [/INST] American Airlines has bought an indirect stake, said it will spend $1.3 billion to expand and revamp its fleet of jets. "
1307,"[INST] And it's buying those dozen airliners from the increasingly [/INST] aggressive European aircraft consortium Airbus Industrie, which is in a battle for new orders with Boeing. "
1308,"[INST] The move is significant, too, because it comes at a time when [/INST] many airlines, concerned about the global economic crisis, have been tightening their belts rather than expanding -- particularly carriers in emerging markets. "
1309,"[INST] The recently privatized Argentine airline says the acquisition of the Airbus A-340 jets, [/INST] which can fly 8,600 miles without refueling, will allow it to offer nonstop service from Buenos Aires to such faraway destinations as Rome and Paris. "
1310,"[INST] When Brazil gets the first $5.3 billion tranche of its $41.5 [/INST] billion international aid package, it says it plans to run right down and put the money into its international reserves. "
1311,"[INST] The reserves of South America's biggest economy have plunged nearly in half to about [/INST] $40 billion since the end of July, as all the goings-on in Russia prompted nervous investors to beat a retreat from other emerging markets as well. "
1312,"[INST] But before the government can get its hands on that [/INST] money, the aid package will still need to get the final go-ahead from the International Monetary Fund. "
1313,"[INST] Brazil is hoping that will happen [/INST] when the board meets next, on the Wednesday after Thanksgiving. "
1314,"[INST] With Rupert Murdoch's British Sky Broadcasting Group cooling its [/INST] heels in the bid to buy Manchester United, another similar deal reportedly has hit the skids. "
1315,"[INST] The London media company Carlton Communications is said to have abandoned its attempt to [/INST] take over Arsenal, another soccer club with a rich history in the sport, and the root of the problem appears to be the price tag. "
1316,"[INST] Though the group's failure to net the London club, with which it was [/INST] officially in discussions since September, is seen a big blow to Carlton's ambitions to diversify, the market wasn't as troubled as some analysts. "
1317,"[INST] In fact, shares in the company, which is [/INST] remaining mum about all this, actually rose after losing ground initially in London trading. "
1318,"[INST] Full text: THE AMERICAS Argentine Carrier Picks Airbus Argentina's flagship airline Aerolineas Argentinas, a [/INST] company in which AMR's American Airlines has bought an indirect stake, said it will spend $1.3 billion to expand and revamp its fleet of jets. "
1319,"[INST] And it's buying those dozen airliners from the increasingly [/INST] aggressive European aircraft consortium Airbus Industrie, which is in a battle for new orders with Boeing. "
1320,"[INST] The move is significant, too, because it comes at a time when [/INST] many airlines, concerned about the global economic crisis, have been tightening their belts rather than expanding -- particularly carriers in emerging markets. "
1321,"[INST] The recently privatized Argentine airline says the acquisition of the Airbus A-340 jets, [/INST] which can fly 8,600 miles without refueling, will allow it to offer nonstop service from Buenos Aires to such faraway destinations as Rome and Paris. "
1322,"[INST] Brazil to Use Aid Check for Reserves When Brazil gets the first $5.3 [/INST] billion tranche of its $41.5 billion international aid package, it says it plans to run right down and put the money into its international reserves. "
1323,"[INST] The reserves of South America's biggest economy have plunged nearly in half to about [/INST] $40 billion since the end of July, as all the goings-on in Russia prompted nervous investors to beat a retreat from other emerging markets as well. "
1324,"[INST] But before the government can get its hands on that [/INST] money, the aid package will still need to get the final go-ahead from the International Monetary Fund. "
1325,"[INST] Brazil is hoping that will happen [/INST] when the board meets next, on the Wednesday after Thanksgiving. "
1326,[INST] of Canada formed a joint venture with Chinese partner Sifang [/INST] Locomotive & Rolling Stock Works to make mass-transit rail cars in China for the domestic and export markets.
1327,"[INST] The two Canadian firms will each [/INST] own 25% of the venture, with Sifang holding the remainder. "
1328,"[INST] de Telecomunicaciones de Chile, the former state phone monopoly, will [/INST] pay $126 million for 60% of Chilean computer services firm Sonda, including the 40% stake held by Compaq Computer. "
1329,"[INST] -- Motor Coach Industries International, the U.S. unit of Mexican [/INST] bus and truck maker Consorcio Grupo Dina, said it deferred a $25 million principal payment due to Prudential Insurance. "
1330,"[INST] --- EUROPE Carlton Said to Quit U.K. Soccer Deal With Rupert Murdoch's [/INST] British Sky Broadcasting Group cooling its heels in the bid to buy Manchester United, another similar deal reportedly has hit the skids. "
1331,"[INST] The London media company Carlton Communications is said to have abandoned its attempt to [/INST] take over Arsenal, another soccer club with a rich history in the sport, and the root of the problem appears to be the price tag. "
1332,"[INST] Though the group's failure to net the London club, with which it was [/INST] officially in discussions since September, is seen a big blow to Carlton's ambitions to diversify, the market wasn't as troubled as some analysts. "
1333,"[INST] In fact, shares in the company, which is [/INST] remaining mum about all this, actually rose after losing ground initially in London trading. "
1334,"[INST] EMI Held Talks With Bertelsmann The company that owns the recording rights for the [/INST] Beatles, British music group EMI, says it held informal talks with the German media giant Bertelsmann to discuss ""possible opportunities for cooperation"" between the two. "
1335,[INST] But EMI isn't saying whether the talks are [/INST] still going on or whether there was any discussion of an out-and-out merger.
1336,"[INST] It seems about all that EMI, which has been the subject [/INST] of feverish takeover speculation, is conceding is that talks did occur a month ago and covered a wide range of topics. "
1337,[INST] The group has been finding itself journeying down [/INST] a long and winding road lately as Asia's economic crisis has cut into music sales.
1338,"[INST] Deutsche Bank Eyes Cable Operation Germany's mighty Deutsche Bank added its name to [/INST] the list of companies interested in buying all or part of Deutsche Telekom's cable television operations, according to people close to the phone carrier. "
1339,"[INST] The big question is whether the vast cable operations, which are strung [/INST] along the former monopoly's phone lines, will be sold off as one big business or divided into a half a dozen smaller companies. "
1340,"[INST] Regardless, whoever does wind up with the operations in the end [/INST] will be hindered by Deutsche Telekom's older cable technology, which will need to be upgraded for Internet and pay-per-view service. "
1341,[INST] The company estimates that upgrade could [/INST] run as high as five billion marks ($2.89 billion).
1342,[INST] BRIEFLY: -- The European Commission says it will support a U.S. proposal designed to [/INST] speedily resolve a banana trade dispute through the World Trade Organization if the U.S. lifts a related threat to impose sanctions against the European Union.
1343,[INST] -- Europe's Socialist and Social Democratic finance ministers presented [/INST] a widely anticipated manifesto for growth-oriented economic policies to accompany the launch of the euro next year.
1344,[INST] -- France Telecom is selling [/INST] a 13% stake in Greek mobile phone operator Panafon.
1345,[INST] It expects the sale to [/INST] raise between $600 million and $695 million.
1346,"[INST] -- French industrial production fell 0.9% in [/INST] September from July/August levels, and was up 3.2% from September 1997. "
1347,[INST] --- ASIA/PACIFIC Big Shipping Lines In Japan Unveil [/INST] Plan to Merge Japan's Mitsui O.S.K. Lines and Navix Line plan to merge next spring.
1348,[INST] The marriage will give birth to what [/INST] will be the world's biggest shipping concern in terms of loading capacity.
1349,"[INST] Mitsui O.S.K. is already a formidable player, with its vessels plying [/INST] the seas to ports in more than a hundred countries, and Navix is among the world's largest oil-tank operators. "
1350,"[INST] But despite their prominent roles within the highly competitive industry, the two will be navigating into the deal [/INST] with a lot of baggage; both groups have for some time been carrying huge interest-bearing debts, and as one analyst points out, simply creating a bigger company doesn't mean the company will become stronger. "
1351,"[INST] Moody's Investors Service apparently has its concerns as well; upon hearing [/INST] of the plan, it placed on review for possible downgrade the debt rating of Mitsui O.S.K. and its subsidiaries. "
1352,"[INST] Meanwhile, there's yet another troubling aspect to all this; [/INST] the companies didn't announce any plans for a major restructuring of the newly created entity. "
1353,"[INST] That's got analysts scratching their heads, considering that freight charges have been badly [/INST] hit by sagging demand as fewer autos and other exports have been loaded onto ships in Japan and elsewhere in the troubled region. "
1354,"[INST] Hong Kong Property Sale Swamped In a sign of growing confidence in Hong [/INST] Kong's residential real-estate market, thousands of hungry buyers swamped a sale of apartments at a new development in the territory over the weekend. "
1355,"[INST] The response to the offer by blue-chip property company Sino Land was viewed as the latest [/INST] indication that life may be returning to the city's moribund residential market, where prices have plunged by as much as 60% since hitting their high back in October 1997. "
1356,[INST] A steady drop in interest [/INST] rates is no doubt helping to fuel the rebound.
1357,"[INST] And in this case, the old adage location, location, location also applies; the site [/INST] is only a stone's throw from a new rail station -- a big selling point for harried commuters in one of the world's most densely populated cities. "
1358,"[INST] Moody's Downgrades Taiwan Banks Moody's Investors Service lowered the ratings of several Taiwanese [/INST] banks, reflecting growing concerns over the structural weaknesses in the island's banking sector -- a weakness that is being magnified by the regional economic crisis. "
1359,"[INST] The banks affected by the downgrade are: Chang Hwa Bank, Chinatrust Commercial Bank, Hua Nan [/INST] Commercial Bank, First Commercial Bank, Bank of Taiwan, Chiao Tung Bank, Bank Sinopac, United World Chinese Commercial Bank, International Commercial Bank of China and E. Sun Bank. "
1360,"[INST] Meanwhile, Moody's said that although Taiwan has weathered the regional [/INST] turmoil better than many other economies in the region, strains may be emerging in the corporate sector as well. "
1361,[INST] BRIEFLY: -- Japan will sell up to one million shares of [/INST] Nippon Telegraph & Telephone in its fourth round of sales since NTT was first privatized more than a decade ago.
1362,[INST] The decision on the offering price and [/INST] the number of shares to be sold will be made next month.
1363,"[INST] -- Just after announcing some of its largest-ever price cuts, Taiwan's biggest steelmaker, China Steel, said [/INST] it expects a gloomy outlook of slack prices and weak regional and local demand to plague the island's steel industry until at least the second quarter of next year. "
1364,[INST] -- Japan's Nikko Securities announced an extensive [/INST] restructuring in its domestic and overseas operations to make itself more competitive.
1365,"[INST] Its work force will be reduced by about [/INST] 2,000 through a cut back in hiring, attrition and the consolidation of overseas operations. "
1366,"[INST] -- The re-emergence of good properties in Japan may spark [/INST] the return of international investors trolling for distressed properties in that real-estate market, according to Pricewaterhouse Coopers executives. "
1367,"[INST] ___ Document 223 of 500 Brazil and Argentina, Long Rivals, Move Closer --- Economic Crisis [/INST] Could Spark An Eventual Monetary Union Author: By Matt Moffett and Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 12 Nov 1998: A25. "
1368,"[INST] accountid=28034 Abstract: SAO PAULO, Brazil -- The world is [/INST] watching Brazil's back-to-the-wall struggle to rescue its economy, but no country more fretfully than neighboring Argentina. "
1369,"[INST] Long the fiercest of rivals, Argentina and Brazil cast aside their antagonisms to form [/INST] an economic union, Mercosur, that in just seven years has become the world's third-largest economic bloc after the North American Free Trade Agreement and the European Union. "
1370,[INST] Most economists on both sides [/INST] of the border initially scoffed at the notion.
1371,"[INST] But given Brazil's current difficulties, the debate over whether Brazil should [/INST] try piggybacking on its neighbor's monetary policy has picked up steam, becoming the topic of countless seminars and editorial-page articles. "
1372,"[INST] That's especially true since Argentina has emerged, in the wake [/INST] of the Asian economic crisis, as the most stable economy in Latin America, eclipsing the continent's traditional star, Chile. "
1373,"[INST] One reason: In 1991, Argentina made its peso [/INST] interchangeable with the dollar through the creation of what economists call a currency board. "
1374,"[INST] By eliminating the government's leeway to [/INST] print money, that policy effectively halted inflationary government overspending. "
1375,"[INST] Analysts such as Sebastian Edwards, a University of California at Los Angeles [/INST] economist, said a regional currency board might serve as the prod Brazil needs to impose fiscal and monetary discipline on its own economy. "
1376,"[INST] ""Give Brazil all the rest of the posts [/INST] for Mercosur: chief trade negotiator, tax collector and even head soccer coach,"" he said. "
1377,"[INST] ""But create a common currency [/INST] board and let the Argentines run it"". "
1378,"[INST] Full text: SAO PAULO, Brazil -- The world is [/INST] watching Brazil's back-to-the-wall struggle to rescue its economy, but no country more fretfully than neighboring Argentina. "
1379,"[INST] Long the fiercest of rivals, Argentina and Brazil cast aside their antagonisms to form [/INST] an economic union, Mercosur, that in just seven years has become the world's third-largest economic bloc after the North American Free Trade Agreement and the European Union. "
1380,"[INST] And while past economic emergencies have provoked frictions between the two countries, the [/INST] Brazilian crisis seems to be propelling them toward what could turn out to be the most ambitious integration policy yet: an eventual monetary union. "
1381,[INST] Argentine President Carlos Saul Menem first [/INST] floated the idea nearly a year and a half ago.
1382,"[INST] ""Commerce between Argentina and Brazil has grown [/INST] from around $2.5 billion a year to nearly $18 billion,"" he said. "
1383,"[INST] ""Now we have to rapidly [/INST] begin the creation of a common currency"". "
1384,[INST] Most economists on both sides [/INST] of the border initially scoffed at the notion.
1385,"[INST] But given Brazil's current difficulties, the debate over whether Brazil should [/INST] try piggybacking on its neighbor's monetary policy has picked up steam, becoming the topic of countless seminars and editorial-page articles. "
1386,"[INST] That's especially true since Argentina has emerged, in the wake [/INST] of the Asian economic crisis, as the most stable economy in Latin America, eclipsing the continent's traditional star, Chile. "
1387,"[INST] One reason: In 1991, Argentina made its peso [/INST] interchangeable with the dollar through the creation of what economists call a currency board. "
1388,"[INST] By eliminating the government's leeway to [/INST] print money, that policy effectively halted inflationary government overspending. "
1389,"[INST] Analysts such as Sebastian Edwards, a University of California at Los Angeles [/INST] economist, said a regional currency board might serve as the prod Brazil needs to impose fiscal and monetary discipline on its own economy. "
1390,"[INST] ""Give Brazil all the rest of the posts [/INST] for Mercosur: chief trade negotiator, tax collector and even head soccer coach,"" he said. "
1391,"[INST] ""But create a common currency [/INST] board and let the Argentines run it"". "
1392,"[INST] As a first step down that path, Juan Llach, Argentina's former vice minister of [/INST] economy who now runs an influential think tank, is pushing a proposal for Mercosur to negotiate an agreement similar to the European Community's Maastricht Treaty. "
1393,"[INST] That accord laid out specific targets for public [/INST] debt and deficits, in order to nudge inflation and interest rates toward convergence. "
1394,"[INST] ""This is a fundamental first [/INST] step to start thinking about monetary union,"" he said. "
1395,"[INST] Mr. Llach said that even though it [/INST] is a midterm project, some of the benefits would be immediate. "
1396,"[INST] By merely stating its commitment to macroeconomic convergence, Mr. [/INST] Llach said, Brazilian policy makers could take an important step toward restoring confidence in their embattled economy. "
1397,[INST] Many Brazilians said such talk is [/INST] premature given the gravity of their country's immediate problems.
1398,"[INST] ""It's impossible to talk about a common currency when Brazil has [/INST] so many domestic distortions, including a deficit of 8% of GDP,"" said Igor Cornelsen, a Sao Paulo investment banker. "
1399,"[INST] Mr. Cornelsen, like many Brazilians, has another problem with the [/INST] idea: He tends to be more supportive of a flexible exchange rate rather than Argentina's fixed currency. "
1400,"[INST] Nevertheless, Mr. Cornelsen acknowledged that ""some [/INST] kind of South American monetary union is ultimately inevitable"". "
1401,"[INST] Even without a common currency, Mercosur already stands [/INST] as the most ambitious experiment in economic and social integration in South American history. "
1402,"[INST] It is all the more notable because historically, [/INST] there has been no love lost between the haughty Argentines and the freewheeling Brazilians. "
1403,"[INST] Argentina and Brazil fought a war against each other, and as recently [/INST] as the 1980s Brazilians were still building their railroads with wider tracks than Argentina's, to make it that much harder on potential invaders. "
1404,"[INST] But faced with intractable problems of stagnation and inflation at the start [/INST] of this decade, the two neighbors laid aside age-old grudges to develop an economic union that also encompassed Uruguay and Paraguay. "
1405,"[INST] ""Germany and France constituted the pivot of the construction of the [/INST] European Union, and Brazil and Argentina are doing the same for Mercosur,"" Brazilian President Fernando Henrique Cardoso said not long ago. "
1406,"[INST] Since the start of the [/INST] decade, trade within the Latin colossus has grown fivefold. "
1407,[INST] Auto makers alone are investing [/INST] $20 billion in heavily integrated plants throughout the region.
1408,[INST] Argentine naval pilots now train on Brazilian aircraft carriers; [/INST] Brazilian translators are preparing special Portuguese-language versions of the works of Argentine novelist Jose Luis Borges.
1409,"[INST] When India and Pakistan recently went mano a mano in a [/INST] nuclear arms race, President Clinton lectured the Asians to learn from Argentina and Brazil about cross-border cooperation on peaceful nuclear-power projects. "
1410,[INST] The aftermath of Mexico's 1994 peso [/INST] crisis proved the biggest threat yet to comity in Mercosur.
1411,"[INST] With speculators attacking its economy, Brazil enraged Argentina [/INST] by unilaterally imposing restrictions on auto imports to defend its own commercial interests. "
1412,[INST] The dispute grew so bitter that one Argentine newspaper [/INST] provoked a formal diplomatic protest from Brazil's government by publishing a racist editorial cartoon about Brazilians.
1413,"[INST] Notably, there have been no [/INST] such flare-ups during the current Brazilian crisis. "
1414,"[INST] That may reflect the fact that cross-border ties have gotten so [/INST] close, and touched so many different areas of society, that there seems to be no turning back for either country. "
1415,[INST] Argentina has made massive investments in Brazil [/INST] and counts on its neighbor as the market for one-third of its exports.
1416,"[INST] YPF SA, Argentina's largest oil company, has several joint ventures with Petroleo Brasileiro SA, the state-controlled [/INST] Brazilian oil company, that range from mutual exploration of oil fields to a quirky program where YPF will open gas stations in Brazil and Petrobras will open stations in Argentina. "
1417,[INST] The idea is to expand both brands [/INST] in what both companies believe will some day be a common market.
1418,[INST] A novel by Brazilian New [/INST] Age writer Paulo Coelho is now ranked No.
1419,"[INST] At Brooklyn Bridge SA, a Buenos Aires language school [/INST] used by many Argentine businesses, enrollments in Portuguese classes are up 60% over the past four years. "
1420,"[INST] Of course, what's driving the [/INST] ties is business and that depends on stability. "
1421,"[INST] ""I receive calls nearly every day from Argentine businessmen asking me [/INST] if Brazil has devalued yet,"" said Alberto Alzueta, vice president of the Argentine Chamber of Commerce office in Sao Paulo. "
1422,[INST] Many Argentines see such a plan [/INST] as a form of protecting their own interests in Brazil.
1423,"[INST] Said Domingo Cavallo, the former economy minister who was architect of Argentina's stabilization: ""One [/INST] of the causes of the crisis we are living in is that there are too many monetary policies in the world pretending to be independent,"" he said. "
1424,"[INST] ""Regional monies or convertibility regimens are [/INST] advances in the right direction for a better international monetary system"". "
1425,"[INST] Jose Alexandre Sheinkman, a Brazilian who is an [/INST] economist at the University of Chicago, said he sees many virtues in Argentina's currency model. "
1426,[INST] But he added that discussions of monetary [/INST] reform are largely a distraction until Brazil puts its fiscal house in order.
1427,"[INST] ""The major problem Brazil has is the deficit, and [/INST] once we solve this problem, there are many ways we can organize our monetary system,"" he said. "
1428,"[INST] ___ Document 225 of 500 World Bank Approves* Loans Of [/INST] $3 Billion for Argentina Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 11 Nov 1998: B7A. "
1429,[INST] accountid=28034 Abstract: The World Bank approved $3 billion [/INST] in loans to help Argentina strengthen its financial system and implement further economic reforms.
1430,[INST] Full text: WASHINGTON -- The World Bank approved $3 [/INST] billion in loans to help Argentina strengthen its financial system and implement further economic reforms.
1431,"[INST] The two loans will ""support continued efforts of the government of [/INST] Argentina to transform its economy and to protect the gains achieved so far,"" the Bank said in a statement. "
1432,"[INST] Calling Argentina ""one of Latin America's most successful reformers,"" the Bank said the country [/INST] has achieved price stability, opened its markets to more global trade, privatized public enterprises, restructured public administration, reformed the pension system and has started restoring social services. "
1433,"[INST] One loan, worth $2.5 billion, will help meet the [/INST] Argentine government's foreign-exchange needs and help shield the country from global financial instability, while its reforms continue. "
1434,"[INST] The second loan, worth $505 [/INST] million, is intended to strengthen the banking system. "
1435,"[INST] ___ Document 231 of 500 Huge Rollover Of Debt Faces Global Lenders --- Over $34 Billion [/INST] in Bonds Of Emerging Markets Due for '99 Redemption Author: By Yasmin Hassany and Cecile Gutscher Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 09 Nov 1998: B13D. "
1436,[INST] accountid=28034 Abstract: Bankers and investors in emerging [/INST] markets can't afford to spend too much time crying into their espressos.
1437,"[INST] After being savaged by global economic woes, the question of how [/INST] they will roll over tens of billions of dollars in emerging-market bonds coming due next year still hangs over their heads. "
1438,"[INST] There are about $34.37 billion of international [/INST] bond redemptions due in 1999 from emerging-market issuers, according to Capital DATA Bondware. "
1439,"[INST] Of that amount, $7 billion is by sovereign borrowers, [/INST] $7 billion from quasisovereign entities, including authorities and public-sector companies, and $20.09 billion from private entities. "
1440,[INST] Full text: LONDON -- Bankers and investors in [/INST] emerging markets can't afford to spend too much time crying into their espressos.
1441,"[INST] After being savaged by global economic woes, the question of how [/INST] they will roll over tens of billions of dollars in emerging-market bonds coming due next year still hangs over their heads. "
1442,"[INST] There are about $34.37 billion of international [/INST] bond redemptions due in 1999 from emerging-market issuers, according to Capital DATA Bondware. "
1443,"[INST] Of that amount, $7 billion is by sovereign borrowers, [/INST] $7 billion from quasisovereign entities, including authorities and public-sector companies, and $20.09 billion from private entities. "
1444,[INST] Aversion to risk is ebbing slowly and efforts by [/INST] the Group of Seven major industrialized nations to stem the global crisis have calmed fears.
1445,"[INST] ""With the G-7 governments attempting to head off a credit crunch, [/INST] eventually at least part of the redemptions will be rolled over,"" said Peter West, chief economist at BBV Latinvest. "
1446,"[INST] The hopeful mood has allowed Argentina, Venezuela, Hungary and [/INST] the Czech Republic's Aero Vodochody to return to the market in the past two weeks. "
1447,"[INST] All these signs, however, may not [/INST] be enough to fill next year's huge financing needs. "
1448,[INST] Emerging-market borrowers will be asking bond investors for [/INST] money against the shadow of further defaults from Russia -- and possibly others.
1449,"[INST] Analysts anticipate some, if not [/INST] many, defaults next year, mostly from the private sector. "
1450,"[INST] ""The problem is that if there is [/INST] a sovereign default, then history suggests there will be more than one. "
1451,"[INST] That's why Brazil is so important,"" [/INST] said Nick Douch, emerging-markets currency strategist at Barclays Capital in London. "
1452,[INST] The numbers alone aren't startling: The [/INST] emerging markets have faced heavier refinancing schedules in the past.
1453,"[INST] ""But next year won't be like past [/INST] years,"" said Chris Palmer, head of Latin American investments at Gartmore Investment Management. "
1454,"[INST] ""We're coming off a particularly bad phase in [/INST] emerging-market credits and the appetite is no doubt going to be lower than it was"". "
1455,"[INST] Argentina, which has first-quarter financing needs of $3.7 billion and [/INST] the highest international bond-redemption schedule of $2.28 billion, has shown that it is still possible to access the markets. "
1456,[INST] It was able to borrow 500 million German marks ($301 million) on the [/INST] Eurobond market last week in the first new bond offering out of Latin America since the Russian financial crisis erupted in late August.
1457,"[INST] ""Argentina is a country with [/INST] very strong fundamentals,"" BBV Latinvest's Mr. West said. "
1458,"[INST] ""The country has continued to manage things in a professional, [/INST] proactive way, which has allayed market fears and in turn makes it easier to access private sectors"". "
1459,"[INST] Brazil, by contrast, is seen as the problem child with huge external financing needs: Some [/INST] estimates put Brazil's government-funding requirement at $8 billion next year, with private-sector borrowings much higher -- at a staggering $27 billion between now and the end of 1999. "
1460,"[INST] ""Brazil is going to have [/INST] a tougher time convincing the markets"" than Argentina. "
1461,"[INST] Hungary and Turkey have the next-largest [/INST] international bond redemptions at $1.262 billion and $1.163 billion, respectively. "
1462,"[INST] The Russian government still has to persuade Western governments, multilateral lenders and bond investors to reschedule $17.5 [/INST] billion of sovereign debt it can't pay off next year, while the country's banks are expected to have to reschedule tens of billions of dollars more of commercial loans they can't meet. "
1463,"[INST] If the capital markets remain shut for borrowers, [/INST] they will need to turn to the banking market with short-term syndicated loans. "
1464,"[INST] A number of Asian governments this fall [/INST] took that route, despite the stricter covenants and shorter terms commercial lenders impose. "
1465,"[INST] ""I expect that the loan market will prove far more competitive than bonds [/INST] in 1999 because the volatility and mark-to-market aspects of tradable bonds is precisely what is frightening most risk management officers,"" Mr. Palmer said. "
1466,"[INST] This week, Argentine oil company YPF SA sold $125 [/INST] million of three-year floating-rate notes that in structure seemed more akin to a loan than a bond. "
1467,[INST] The deal was still welcomed as [/INST] the first signs of life from the emerging-markets private sector.
1468,"[INST] Mr. West believes that given the low yields in the European Union, the [/INST] currencies of the 11 countries that will join in the euro, Europe's common currency, in January will play an increasingly important role in emerging markets. "
1469,"[INST] The mark, seen as the [/INST] proxy euro, so far is leading the way. "
1470,"[INST] Mr. Douch of Barclays Capital adds that there is [/INST] still resistance, however, from a number of European funds to extend down the non-investment-grade curve. "
1471,"[INST] ___ Document 237 of 500 Argentina Likely to Brave Storm From Brazil [/INST] and Grow in 1999 Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 02 Nov 1998: A30. "
1472,"[INST] accountid=28034 Abstract: Argentina is expected to surprise the skeptics [/INST] again by growing in 1999 despite a deeper-than-anticipated recession in Brazil, its largest trading partner. "
1473,[INST] Brazil announced spending cuts and tax increases [/INST] last week that are likely to result in an even deeper economic contraction.
1474,"[INST] Ordinarily, that would be bad news [/INST] for Argentina because Brazil absorbs a third of all Argentine exports. "
1475,[INST] But economists think that Argentina can sidestep [/INST] Brazil's economic troubles and grow anywhere from 1.8% to 3.5% next year.
1476,[INST] The country's resilience is in part a [/INST] lesson about how officials in Argentina have skillfully managed their risks.
1477,"[INST] While Brazil struggles with billions of dollars in short-term debt, Argentine [/INST] officials have secured a diversified financial backstop of more than $5 billion to help it roll over its maturing bonds. "
1478,"[INST] Full text: BUENOS AIRES -- Argentina is expected to surprise [/INST] the skeptics again by growing in 1999 despite a deeper-than-anticipated recession in Brazil, its largest trading partner. "
1479,[INST] Brazil announced spending cuts and tax increases [/INST] last week that are likely to result in an even deeper economic contraction.
1480,"[INST] Ordinarily, that would be bad news [/INST] for Argentina because Brazil absorbs a third of all Argentine exports. "
1481,[INST] But economists think that Argentina can sidestep [/INST] Brazil's economic troubles and grow anywhere from 1.8% to 3.5% next year.
1482,"[INST] ""There is a tremendous amount of momentum [/INST] in the Argentine economy,"" says Lawrence Goodman, chief economist at Santander Investment. "
1483,[INST] The country's resilience is in part a [/INST] lesson about how officials in Argentina have skillfully managed their risks.
1484,"[INST] While Brazil struggles with billions of dollars in short-term debt, Argentine [/INST] officials have secured a diversified financial backstop of more than $5 billion to help it roll over its maturing bonds. "
1485,"[INST] As Brazil loses billions of dollars in foreign reserves, Argentine bank deposits have [/INST] shown little evidence of capital flight, a sign of maturing confidence in the exchange-rate regime where all pesos in circulation are backed by dollars. "
1486,[INST] Argentina has also bucked the credit crunch for emerging [/INST] economies and pried open international bond markets with two issues valued at a total of $553 million.
1487,[INST] Discussions are also under way [/INST] with commercial banks for a $500 million bridge loan.
1488,[INST] Another source of cautious optimism is [/INST] that commodity prices will probably firm slightly next year.
1489,"[INST] Even the slightest turn in wheat, soy or mineral prices [/INST] would prove a boon to Argentina, where agriculture and mining products make up 56% of all exports. "
1490,[INST] The risk of effects from a Brazilian [/INST] devaluation pushed Argentina's prime lending rates to a peak of 19% on Sept.
1491,"[INST] 24, from 8% in early [/INST] August; the rates stand at around 12% today. "
1492,"[INST] Business sentiment has hit a three-year [/INST] low and manufacturing is slowing, especially in the auto sector. "
1493,"[INST] Some 90% of all Argentine auto exports [/INST] are absorbed by Brazil, and local plants in Argentina have experienced temporary shutdowns. "
1494,"[INST] ""It is the most sensitive sector to Brazilian [/INST] consumer spending and interest rates,"" says Gloria Sorensen, an economist at Banco Frances SA. "
1495,"[INST] She says sales to Brazil [/INST] could remain flat in 1999, or fall by 10%. "
1496,[INST] Economic forecasts vary widely now because no one [/INST] is convinced that a Brazilian fiscal-austerity program will diminish speculation against the local currency.
1497,"[INST] Right now, ""there is a clear perception [in the world] that we shouldn't [/INST] let Brazil go under,"" says Martin Redrado, president of Fundacion Capital, an Argentine economics firm that forecasts economic growth of 3.5% next year. "
1498,"[INST] ___ Document 238 of 500 World Watch Author: Compiled by [/INST] Paul J. Deveney Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 02 Nov 1998: A27. "
1499,"[INST] accountid=28034 Abstract: Just as the acceptances were rolling in, [/INST] London put the brakes on Rupert Murdoch's plan to own one of the nation's wealthiest soccer clubs. "
1500,"[INST] The Labor government, citing competitive concerns related to the broadcast of soccer games in England, [/INST] asked the Monopolies and Mergers Commission to take a closer look at British Sky Broadcasting Group's planned GBP 628 million ($1.05 billion) takeover of the Manchester United team. "
1501,"[INST] owns a 40% stake in BSkyB and whose dream of owning a European soccer club could hinge [/INST] on what that panel ultimately decides, indicated that the target of his wrath is less the Labor Party, which he opposed in the last election, than a ""few paranoid hacks in Fleet Street"". "
1502,"[INST] Mr. Murdoch is also publisher of the tabloid [/INST] Sun, known for its page three pinup girls, and the venerable Times of London. "
1503,"[INST] Germany's Deutsche Bank is pondering a bid to acquire all of the shares [/INST] of BFG Bank, a smaller German retail institution, in a deal that would be valued at up to five billion marks ($3.02 billion). "
1504,"[INST] BFG's majority owner, the troubled French banking group Credit [/INST] Lyonnais, is being forced by regulators to divest itself of the shares as part of its reorganization. "
1505,"[INST] The mighty Deutsche Bank's interest in BFG, which has assets of about 80 billion marks, surprised even the [/INST] most astute analysts since Germany's leading financial institution has shown little desire in the past to expand its domestic retail business, preferring instead to beef up its corporate and investment banking operations in other markets. "
1506,"[INST] Unlike big banks in other European countries, large German [/INST] banks have a tiny share of the domestic retail market, which is dominated by savings banks. "
1507,[INST] Little Ireland has been one of [/INST] the fastest expanding economies in Europe in recent times.
1508,[INST] So news that the French home-appliance maker Moulinex is [/INST] shutting down its plant in Limerick no doubt dealt a blow to trade officials in Dublin.
1509,[INST] But the loss of the 650 jobs at [/INST] the site is less a reflection on Ireland and its booming economy than Russia.
1510,"[INST] The French group, which makes everything from microwave ovens [/INST] to Krups coffee makers, issued a profit warning along with the details of the plant closure. "
1511,"[INST] It seems that Moulinex has been hard hit by the collapse of the ruble and [/INST] Russia's economic crisis; its sales in the former Soviet republic, which once amounted to about 10% of the group's total revenue, have been in a free fall for weeks. "
1512,"[INST] Nevertheless, the company did have a reassuring message for [/INST] its fellow countrymen; it said there will be no jobs losses at its factories in France. "
1513,"[INST] Full text: EUROPE Murdoch Criticizes U.K. Plan to Study Soccer Club Deal Just [/INST] as the acceptances were rolling in, London put the brakes on Rupert Murdoch's plan to own one of the nation's wealthiest soccer clubs. "
1514,"[INST] The Labor government, citing competitive concerns related to the broadcast of soccer games in England, [/INST] asked the Monopolies and Mergers Commission to take a closer look at British Sky Broadcasting Group's planned GBP 628 million ($1.05 billion) takeover of the Manchester United team. "
1515,"[INST] owns a 40% stake in BSkyB and whose dream of owning a European soccer club could hinge [/INST] on what that panel ultimately decides, indicated that the target of his wrath is less the Labor Party, which he opposed in the last election, than a ""few paranoid hacks in Fleet Street"". "
1516,"[INST] Mr. Murdoch is also publisher of the tabloid [/INST] Sun, known for its page three pinup girls, and the venerable Times of London. "
1517,"[INST] Meanwhile, BSkyB reported that its quarterly earnings [/INST] tumbled by nearly a fifth to GBP 52 million, though sales climbed 8.7%. "
1518,[INST] The company said the retrenchment in earnings was [/INST] because of costs related to the launching of its digital TV venture on Oct.
1519,[INST] 1 -- something the markets were [/INST] sympathetic to as BSkyB's shares rose slightly in London trading.
1520,"[INST] Deutsche Bank Eyes Germany's BFG Germany's Deutsche Bank is pondering a bid to acquire [/INST] all of the shares of BFG Bank, a smaller German retail institution, in a deal that would be valued at up to five billion marks ($3.02 billion). "
1521,"[INST] BFG's majority owner, the troubled French banking group Credit [/INST] Lyonnais, is being forced by regulators to divest itself of the shares as part of its reorganization. "
1522,"[INST] The mighty Deutsche Bank's interest in BFG, which has assets of about 80 billion marks, surprised even the [/INST] most astute analysts since Germany's leading financial institution has shown little desire in the past to expand its domestic retail business, preferring instead to beef up its corporate and investment banking operations in other markets. "
1523,"[INST] Unlike big banks in other European countries, large German [/INST] banks have a tiny share of the domestic retail market, which is dominated by savings banks. "
1524,[INST] French Jobless Rate Fell in September The [/INST] job creation efforts of the Socialist leadership in France are apparently paying off.
1525,"[INST] After keeping the unemployment problem in [/INST] check since last spring, the nation's jobless rate dropped in September. "
1526,[INST] The unemployment rate was down a better-than-expected one-tenth of a percentage point to [/INST] 11.7% as more people showered and shaved and made their way through the morning commute in Paris and cities and towns all across France.
1527,[INST] But analysts fear that an increase in pessimism [/INST] among the nation's business leaders may stunt the government's job-creation efforts in the end.
1528,[INST] A recent survey of industry leaders revealed that they plan to curb production [/INST] in the coming months in what analysts see as a further indication that the global economic crisis is taking its toll on European manufacturers.
1529,[INST] Moulinex to Shut Factory in Ireland Little Ireland [/INST] has been one of the fastest expanding economies in Europe in recent times.
1530,[INST] So news that the French home-appliance maker Moulinex is [/INST] shutting down its plant in Limerick no doubt dealt a blow to trade officials in Dublin.
1531,[INST] But the loss of the 650 jobs at [/INST] the site is less a reflection on Ireland and its booming economy than Russia.
1532,"[INST] The French group, which makes everything from microwave ovens [/INST] to Krups coffee makers, issued a profit warning along with the details of the plant closure. "
1533,"[INST] It seems that Moulinex has been hard hit by the collapse of the ruble and [/INST] Russia's economic crisis; its sales in the former Soviet republic, which once amounted to about 10% of the group's total revenue, have been in a free fall for weeks. "
1534,"[INST] Nevertheless, the company did have a reassuring message for [/INST] its fellow countrymen; it said there will be no jobs losses at its factories in France. "
1535,[INST] BRIEFLY: -- Swedish banking group Svenska [/INST] Handelsbanken made a surprise cash bid for Norway's Fokus Bank.
1536,"[INST] The offer values the bank at 5.09 billion kroner ($689.9 [/INST] million) and could scuttle the planned three-way merger of Fokus, Christiania Bank and Norwegian state-owned Postbanken announced last month. "
1537,"[INST] -- Russia's Siberian Oil posted a loss of $60.4 [/INST] million in the first half, citing the nation's economic problems and the slump in oil prices. "
1538,"[INST] -- Italian tire maker Pirelli saw profit fall 7.5% in the first nine months of [/INST] the year to 505 billion lire ($308.7 million), but said it expects results for all of 1998 to be in line with those reported a year earlier. "
1539,"[INST] --- ASIA/PACIFIC Cathay to Soon Bid for Airline Stake Hong Kong's flag carrier, Cathay Pacific Airways, has been [/INST] burning the midnight oil going over the books of the beleaguered Philippine Airlines and is expected to make an offer to buy a stake in the carrier within the next couple of weeks. "
1540,"[INST] But Cathay Pacific, which also has had its share [/INST] of troubles because of the Asian financial crisis, has no intention of throwing good money after bad. "
1541,"[INST] The deal being worked out will apparently give Cathay Pacific a say in [/INST] all major decisions made by the Philippine carrier, which just recently restarted limited service after telling the world it had closed its doors for good. "
1542,"[INST] Japanese Bank to Cut 3,000 Workers With Japan embroiled in its worst [/INST] economic troubles in years, yet another big bank unveiled plans to shake up its operations to cope with the crisis at hand. "
1543,"[INST] Sakura Bank, the core bank of the Mitsui industrial [/INST] group, will slash 3,000 jobs, or 20% of its work force, over the next three years. "
1544,"[INST] A huge number of job losses for any company, but particularly [/INST] noteworthy for a concern in Japan, where layoffs are still seen as something to avoid at just about any cost. "
1545,[INST] The announcement comes as Sakura and other major Japanese banks are [/INST] doing everything they can to raise the money they need to write off bad loans amid the economic downturn.
1546,"[INST] Earlier this year, Sakura asked Toyota Motor and other Mitsui [/INST] group members to shore up its eroded capital base with an emergency infusion of more than $2.1 billion. "
1547,"[INST] India Decides to Keep Rates Steady The governor of India's central bank says he really would [/INST] have liked to have lowered interest rates on Friday, but that it will be better for everyone concerned if the nation holds off on any such moves awhile longer. "
1548,"[INST] In the wake of the central bank's decision to leave rates unchanged, Bimal Jalan conceded there's a likelihood of [/INST] reducing rates when a seasonal decline in food prices is reported in a few weeks, but that ""the other joker in the pack is liquidity,"" which he says is still too high in the banking system. "
1549,"[INST] Earlier, State Bank of India, one of India's biggest commercial lenders, [/INST] said the decision not to raise rates, despite the higher-than-targeted money supply, will help the South Asian nation's industrial recovery. "
1550,[INST] BRIEFLY: -- China plans to mitigate risks by [/INST] setting up financial asset management institutions that will take over the assets of bankrupt banks.
1551,"[INST] --- THE AMERICAS Citibank to Take Over Latin Bank In a strong signal of [/INST] confidence in Argentina's banking industry, Citigroup's Citibank unit will take over Banco Mayo Cooperativo, one of the nation's top 20 banks in terms of deposits. "
1552,"[INST] The deal will allow Citibank Argentina to expand into middle market [/INST] banking in the South American nation, a potentially lucrative arena despite the current credit crunch resulting from high interest rates. "
1553,[INST] Citibank Argentina will pay $90 [/INST] million for Banco Mayo's credit card operations.
1554,"[INST] It will also absorb $728 million [/INST] in deposits, and a similar amount of loans and other assets. "
1555,"[INST] Citibank said it will keep 54 of Banco [/INST] Mayo's 104 branches, expanding its total branch network in Argentina to a total of 105. "
1556,[INST] Brazil Agency Backs Cargill Proposal Brazil's National Monetary Council recommended [/INST] that Minnesota-based Cargill be allowed to set up commercial and investment-banking operations at several sites in the country.
1557,"[INST] According to the central bank, Cargill requested that it be allowed to establish [/INST] a bank to ensure continued support for its operations in the Latin American region's biggest economy, where it has been active since 1965. "
1558,[INST] The decision still needs to [/INST] be signed off by President Fernando Henrique Cardoso.
1559,"[INST] BRIEFLY: -- Third-quarter earnings released last week by Mexico's top financial groups show the [/INST] sector still has big challenges in its asset quality outlook and will face a bumpy road in the final quarter of the year, analysts say. "
1560,[INST] -- Sevel Argentina plans to suspend production on its assembly [/INST] lines through the second week of November because of the unsteady market conditions facing the local auto industry.
1561,"[INST] -- Lawyers for Raul Salinas appealed a Swiss decision [/INST] to order the confiscation of $114.4 million as probable laundered drug money, his wife's Swiss attorney said. "
1562,"[INST] The appeal will send the case of [/INST] Mr. Salinas, brother of former Mexican president, to Switzerland's supreme court. "
1563,"[INST] -- Peruvian authorities suspended two stockbrokerage firms, [/INST] Argos and Ares, for failing to meet liquidity and net worth requirements. "
1564,"[INST] While Brazil Agonizes, The U.S. Makes a Move --- Fed Action Thrills Markets; Cardosa Must Decide Between [/INST] Dueling Experts --- `Money Has to Be a Measure' Author: By David Wessel and Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 16 Oct 1998: A1. "
1565,"[INST] It's exactly the kind of gut-wrenching decision that economic policy-makers are facing all over the world [/INST] -- including in the U.S. Only 17 days ago, the Federal Reserve decided to lower interest rates a quarter percentage point, disappointing markets, which had hoped for a greater cut. "
1566,"[INST] Yesterday, concerned about ""unsettled conditions in [/INST] financial markets,"" the Fed unexpectedly cut another quarter-point, sending markets soaring. "
1567,"[INST] The Dow Jones Industrial Average [/INST] closed up 330.58 points, or 4.15%, at 8299.36. "
1568,"[INST] But an equally strong case can be [/INST] made against devaluation: Look what happened to Thailand, Korea, Indonesia and Russia. "
1569,"[INST] Devaluation was followed by recession, [/INST] high interest rates, widespread bankruptcies and panic. "
1570,[INST] Mr. (Fernando) Cardoso knows that pushing down the real could [/INST] lead to higher import prices and risk rekindling the devastating inflation he worked so hard to conquer.
1571,"[INST] With money flowing across international borders [/INST] more easily than it did a decade ago, devaluation is trickier. "
1572,"[INST] Rich-country investors and banks lend and invest billions in [/INST] faraway markets; companies, banks and wealthy families in those faraway countries borrow heavily from abroad. "
1573,"[INST] When their governments reduced the value of their currencies, Thais or Koreans [/INST] or Indonesians who had borrowed from abroad (in dollars) to invest or lend at home (in baht, won or rupiah) got smashed. "
1574,"[INST] A Thai borrower that owed $1 million to foreigners on June 30, 1997, [/INST] just before the government devalued, owed the equivalent of 24.7 million baht; a month later, it owed the equivalent of 31.5 million baht. "
1575,"[INST] Full text: Some day soon, Brazilian President Fernando Cardoso and his economic [/INST] advisers will have to decide whether to let the value of the Brazilian currency, the real, fall sharply against the U.S. dollar. "
1576,[INST] Brazil is seen as a firebreak [/INST] in the financial conflagration that has swept through Asia and Russia.
1577,"[INST] If Brazil gets it right, [/INST] the worst of the crisis may be past. "
1578,"[INST] If it gets it wrong, [/INST] the odds of world-wide financial calamity increase. "
1579,"[INST] It's exactly the kind of gut-wrenching decision that economic policy-makers are facing all over the world [/INST] -- including in the U.S. Only 17 days ago, the Federal Reserve decided to lower interest rates a quarter percentage point, disappointing markets, which had hoped for a greater cut. "
1580,"[INST] Yesterday, concerned about ""unsettled conditions in [/INST] financial markets,"" the Fed unexpectedly cut another quarter-point, sending markets soaring. "
1581,"[INST] The Dow Jones Industrial Average [/INST] closed up 330.58 points, or 4.15%, at 8299.36. "
1582,"[INST] Unfortunately for Mr. Cardoso, who vows he won't devalue his nation's currency, the [/INST] issue of devaluation has been the focus of an almost theological debate for decades among the economic experts who have thought the hardest about it. "
1583,"[INST] But when it comes to [/INST] facts, neither side has a preponderance of the evidence. "
1584,"[INST] The case for devaluation is clear-cut: When something bad happens to demand [/INST] for a country's products or assets, the smart thing is to do what companies do when demand falls -- cut the price. "
1585,"[INST] The easiest way for a country to do [/INST] that is to reduce the value of its currency against other currencies, to ""devalue"". "
1586,"[INST] Exports are instantly cheaper to [/INST] foreign consumers, sales increase, the economy perks up. "
1587,"[INST] Today, Brazil's imports exceed its exports by a sum greater than 4% of its economy, and its inflation [/INST] rate, though down from the early 1990s, still exceeds that of the U.S. Those measures suggest to Harvard University economists Jeffrey Sachs and Steven Radelet, among others, that the real is overpriced by about 25%. "
1588,"[INST] But an equally strong case can be [/INST] made against devaluation: Look what happened to Thailand, Korea, Indonesia and Russia. "
1589,"[INST] Devaluation was followed by recession, [/INST] high interest rates, widespread bankruptcies and panic. "
1590,[INST] Mr. Cardoso knows that pushing down the real could [/INST] lead to higher import prices and risk rekindling the devastating inflation he worked so hard to conquer.
1591,"[INST] With money flowing across international borders [/INST] more easily than it did a decade ago, devaluation is trickier. "
1592,"[INST] Rich-country investors and banks lend and invest billions in [/INST] faraway markets; companies, banks and wealthy families in those faraway countries borrow heavily from abroad. "
1593,"[INST] When their governments reduced the value of their currencies, Thais or Koreans [/INST] or Indonesians who had borrowed from abroad (in dollars) to invest or lend at home (in baht, won or rupiah) got smashed. "
1594,"[INST] A Thai borrower that owed $1 million to foreigners on June 30, 1997, [/INST] just before the government devalued, owed the equivalent of 24.7 million baht; a month later, it owed the equivalent of 31.5 million baht. "
1595,"[INST] And when the borrowers are banks, as [/INST] many have been, the heavier debt burden can push them into insolvency. "
1596,"[INST] That, in turn, makes it almost impossible for local [/INST] exporters to get the credit they need to take advantage of devaluation to increase their sales abroad. "
1597,"[INST] In short, the pain of devaluation is worse [/INST] than it was in the old days, and the benefits to exporters are elusive. "
1598,"[INST] Franklin Roosevelt devalued the dollar in 1933, [/INST] and the U.S. economy bounced back from the Depression -- temporarily. "
1599,[INST] Richard Nixon devalued the dollar in [/INST] 1971; critics say that helped produce a decade of inflation.
1600,[INST] Treasury Secretary James Baker encouraged a [/INST] steep decline in the dollar's value in 1985; U.S. manufacturers cheered.
1601,"[INST] Britain's Prime Minister John Major [/INST] devalued the pound in 1992, and his economy soared. "
1602,"[INST] Mexico, Korea and Thailand devalued only after spending all their [/INST] foreign-currency reserves trying to support the price of their currencies, U.S. Deputy Treasury Secretary Lawrence Summers regularly reminds critics. "
1603,"[INST] Those countries didn't have the means to stop their [/INST] currencies from falling; indeed, they might have been better off letting their currencies go sooner, he says. "
1604,"[INST] To avoid devaluation altogether, most economists believe, Mexico, Thailand and Korea would have [/INST] been forced to raise interest rates to excruciatingly high levels, maybe even higher than their fragile financial systems and politically shaky governments could have handled. "
1605,"[INST] In some conservative circles, however, devaluation long has been a dirty word; the idea [/INST] that exchange rates ought to move like other prices is as much an abomination as the notion that the length of an inch should vary. "
1606,"[INST] It has to be stable,"" says Robert Mundell, [/INST] a Columbia University economist and advocate of a return to the gold standard. "
1607,"[INST] Mr. Mundell, known among colleagues not only for his intellect but for a spectacular 65-room [/INST] Renaissance palazzo near Siena, Italy, that he bought in 1969, inspired the original supply-siders -- including economist Arthur Laffer and former Wall Street Journal editorial writer Jude Wanniski. "
1608,"[INST] Adherents to the Mundell school include The Wall Street Journal's editorial page and [/INST] influential congressional Republicans, which explains some of the antipathy to those they deride as ""devaluationists"" at the U.S. Treasury and International Monetary Fund. "
1609,"[INST] Cut the value of your currency, [/INST] and the resulting inflation will undo the apparent benefits. "
1610,"[INST] Better to persuade markets that you [/INST] are serious about not devaluing, and they will back off. "
1611,[INST] What has the last [/INST] year of currency-market turmoil taught Mr. Mundell?
1612,"[INST] On that point, Milton Friedman, [/INST] the Nobel laureate economist now at Stanford University, concurs. "
1613,"[INST] ""I don't think we've learned [/INST] anything that we didn't already know,"" he says. "
1614,"[INST] But on nearly everything else involving exchange rates, Mr. Friedman -- who has spent the past 45 [/INST] years preaching the virtues of allowing exchange rates to move freely -- disagrees with Mr. Mundell, just as he did when the two were teaching at the University of Chicago in the 1960s. "
1615,"[INST] Bradford DeLong, an economic historian at the University of California at Berkeley, explains the [/INST] debate to his students this way: To Mr. Friedman, an exchange rate is a price; therefore, it is an infringement on human freedom to peg it. "
1616,"[INST] To Mr. Mundell, an exchange rate is [/INST] a promise; to change it is to default on a commitment. "
1617,"[INST] For better or worse, since the system of fixed exchange rates among rich countries [/INST] broke down in the early 1970s, the world's major currencies have been floating freely against each other, with occasional efforts by governments to influence their movements. "
1618,"[INST] In 1975, according to the International Monetary Fund, three-quarters of the [/INST] output from developing countries came from nations with fixed exchange rates; at last tally, in 1996, only 13% did. "
1619,"[INST] Mexico, for instance, decided after a botched devaluation [/INST] in late 1994 to let the markets set the value of the peso. "
1620,[INST] It didn't want to give speculators a fixed target at which to [/INST] shoot or to repeat the tense internal government confrontation between those who wanted to devalue the peso and those who didn't.
1621,"[INST] President Ernesto Zedillo recently called Mexico's floating [/INST] exchange rate a ""suitable"" weapon to avoid abrupt devaluations and discourage speculation. "
1622,"[INST] Since the end of June, the [/INST] peso has fallen more than 10% against the dollar. "
1623,[INST] Deteriorating expectations about Mexican [/INST] inflation have pushed interest rates above 30%.
1624,"[INST] The banking system is taking another [/INST] beating, and the cost of borrowing for Mexican companies is prohibitive. "
1625,[INST] Advocates of freely floating exchange rates have hoped that more-flexible (even [/INST] if not completely flexible) rates would spare the world the big jolts that occur when fixed exchange-rate systems crack.
1626,"[INST] ""Contrary to conventional wisdom,"" IMF economists Francesco Caramazza and Jahangir Aziz [/INST] concluded in a study published last year, ""misalignments and currency crashes are equally likely under pegged and flexible exchange rate regimes"". "
1627,"[INST] In the 116 instances between 1975 and 1996 [/INST] when currencies plunged 25% or more, half were operating with flexible exchange-rate systems. "
1628,"[INST] Recently, the huge amounts of money flowing across borders [/INST] have further undermined the case for freely floating exchange rates, or at least greatly complicated matters. "
1629,"[INST] These days, exchange rates affect, and are affected by, not [/INST] only trade in corn and cars, but also trade in stocks, bonds, bank deposits, loans, derivatives and so on. "
1630,"[INST] The ability of emerging-market families and firms [/INST] to borrow from abroad, it turns out, changes the dynamics of devaluation. "
1631,"[INST] ""Normally, depreciation is a neat, clean, nice safety valve to allow you to [/INST] maintain full employment when the world economy deals you a bad hand,"" says Mr. DeLong, the Berkeley economist and former Clinton Treasury official. "
1632,"[INST] ""But if you have a lot of foreign debt, you have a choice between [/INST] raising interest rates to avoid depreciation or getting the exchange rate down and putting your entire banking system and most of your corporations in bankruptcy"". "
1633,"[INST] To some wise old men of economics, the [/INST] tension between rigid exchange rates and freely flowing capital comes as no surprise. "
1634,"[INST] ""This is something that John Maynard Keynes pointed out in 1923 when he said you [/INST] can have two, and only two, of the following three things: free movement of capital, fixed exchange rates and independent monetary policy,"" Mr. Friedman -- no Keynesian he-says approvingly. "
1635,"[INST] To Mr. Friedman, the answer is [/INST] obvious: Let the currencies go and the capital flow freely. "
1636,"[INST] However, to Harvard's Mr. Sachs, an advocate of devaluation for Brazil and similarly situated [/INST] economies, there is another solution: Let the currencies go and stop the capital from fleeing, by prodding Brazil's creditors to turn short-term loans into long-term ones. "
1637,"[INST] A few economies, Argentina and [/INST] Hong Kong most prominently, have chosen a different combination. "
1638,"[INST] They allow capital to move freely and [/INST] fix their exchange rates to the U.S. dollar, but emasculate their central banks. "
1639,"[INST] Unlike the Federal Reserve, the Argentine [/INST] central bank can't cut interest rates to resist recession. "
1640,"[INST] So when Mexico's woes in 1994 sent shock waves through [/INST] Latin America, Argentina couldn't cushion the blow: It lost several banks and allowed unemployment to reach 18%. "
1641,"[INST] With similar logic, Germany, France and nine other European nations are [/INST] surrendering their national currencies to the euro, and their freedom to set interest rates to the new European Central Bank. "
1642,[INST] Italy will no longer be able to devalue [/INST] the lira (at least against its European competitors) or cut interest rates to fight recession.
1643,"[INST] Yet to one degree or another, the rest of the world still [/INST] embraces currencies that can change value when economic conditions change, sometimes by overt government actions, other times by allowing markets to move them. "
1644,[INST] It still isn't clear to those [/INST] who ponder such issues if that is a good idea.
1645,"[INST] As Carnegie-Mellon University economist Allan Meltzer, a Friedmanite, puts it: ""The best you can [/INST] say of what economic research has produced is: You can make a case for freely floating exchange rates if you're willing to live with the consequences. "
1646,[INST] You can make a case for [/INST] fixed exchange rates if you're willing to live with the consequences.
1647,"[INST] You can't make much [/INST] of a case for anything in between"". "
1648,"[INST] Brazil, for example, adopted the real [/INST] in 1994 as part of a successful attack on inflation. "
1649,[INST] The Brazilian central bank buys and sells the [/INST] real to keep its value within a publicly announced range against the U.S. dollar.
1650,"[INST] It has been moving the top and bottom limits of this band downward [/INST] by about 7% a year, hoping this will compensate for differences between the U.S. and Brazilian economies and avoid the need for bigger, disruptive devaluations. "
1651,"[INST] In the jargon of [/INST] finance, this is called a ""crawling peg"". "
1652,"[INST] Brazilian officials repeatedly assert, as they did recently in [/INST] a statement issued jointly with the IMF, ""their firm commitment to their current exchange-rate regime"". "
1653,[INST] But Brazil has been losing more than $10 [/INST] billion a month as nervous foreign and domestic investors move money out of the country.
1654,"[INST] Mr. Cardoso, newly re-elected, hopes that government belt-tightening, changes to its costly [/INST] pension system and several billion dollars from the IMF, World Bank and rich-country governments will calm global investors so Brazil can avoid devaluation. "
1655,[INST] But the markets know that this [/INST] will be a tough sell to Brazilian voters and politicians.
1656,"[INST] ""A pegged exchange rate system"" -- like Brazil's [/INST] -- ""with an independent central bank is a ticking bomb and a remedy for disaster"". "
1657,"[INST] His ally Mr. Meltzer says, ""If [/INST] I were in Brazil, I'd think strongly about devaluation. "
1658,"[INST] Even Mr. Mundell, the defender of [/INST] the gold standard, isn't sure that Brazil should avoid devaluation altogether. "
1659,"[INST] ""They should now decide if they're [/INST] going to have devaluation of any kind,"" he advises. "
1660,"[INST] ""If they think they need one, for whatever reason, they should [/INST] only do it in conjunction with setting a new rate"" that they promise never to change again, an Argentine-style approach. "
1661,"[INST] For Brazil to devalue its currency by 10% [/INST] or 20%, and then try to resume the old approach, he adds, ""would be disastrous"". "
1662,[INST] Brazilian officials said yesterday that they [/INST] anticipate announcing their new economic plan sometime after next Tuesday.
1663,[INST] The Fed's surprise interest-rate [/INST] cut gave them a welcome respite yesterday.
1664,"[INST] In response, the country's biggest stock [/INST] market, Sao Paulo's Bovespa, soared, closing up 6.7% percent. "
1665,"[INST] ___ Document 318 of 500 Latin America's Top Companies, Battle Tested, Have a [/INST] Fighting Chance in the Latest Turmoil Author: By Pamela Druckerman Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 22 Sep 1998: A17. "
1666,"[INST] accountid=28034 Abstract: ""Even if someone drops a bomb on the macroeconomic fundamentals of Latin America, at the end of the [/INST] day, the top companies are going to survive,"" said Walter Stoeppelwerth, director of Latin research at Robert Fleming Inc., who led a study of the region's 60 largest public companies and banks, measured by market capitalization and stock liquidity. "
1667,[INST] The companies account for about [/INST] 70% of Latin America's total market capitalization.
1668,"[INST] Though the companies in the study have about two-thirds of their debt in foreign currency, [/INST] which can become more expensive to repay after a devaluation, Mr. Stoeppelwerth says even currency drops wouldn't be fatal for most companies since their overall debt level is manageable. "
1669,"[INST] But it's not going to risk [/INST] the fundamental business franchise that these companies have built,"" he said. "
1670,"[INST] The chief fortification is that only onethird of the total debt held by [/INST] Latin companies matures in the next 12 months, and most have enough cash on hand or coming in to cover it, the Fleming study concluded. "
1671,"[INST] That contrasts sharply with Southeast Asian companies, many of which were pulled into [/INST] bankruptcy when they couldn't meet an onslaught of maturing bonds and loans, according to Tim Love, global emerging-market strategist at SG Cowen Securities. "
1672,"[INST] And whereas Latin companies have an average of 33 cents of debt for [/INST] every dollar of equity, according to Fleming, companies in South Korea, Thailand and Malaysia generally have about equal parts of each, Mr. Love said. "
1673,"[INST] Full text: Although the economic outlook for [/INST] Latin America is deteriorating, the region's largest companies can probably weather the storm. "
1674,"[INST] Most are expected to be able to pay their bills through next year by [/INST] borrowing locally, tapping cash reserves and cutting costs, despite the fallout from higher interest rates, slowing growth and restricted access to foreign funding, analysts say. "
1675,"[INST] ""Even if someone drops a bomb on the macroeconomic fundamentals of Latin America, at the end of the day, the [/INST] top companies are going to survive,"" said Walter Stoeppelwerth, director of Latin research at Robert Fleming Inc., who led a study of the region's 60 largest public companies and banks, measured by market capitalization and stock liquidity. "
1676,[INST] The companies account for about [/INST] 70% of Latin America's total market capitalization.
1677,"[INST] Though the companies in the study have about two-thirds of their debt in foreign currency, [/INST] which can become more expensive to repay after a devaluation, Mr. Stoeppelwerth says even currency drops wouldn't be fatal for most companies since their overall debt level is manageable. "
1678,"[INST] But it's not going to risk [/INST] the fundamental business franchise that these companies have built,"" he said. "
1679,"[INST] The chief fortification is that only onethird of the total debt held by [/INST] Latin companies matures in the next 12 months, and most have enough cash on hand or coming in to cover it, the Fleming study concluded. "
1680,"[INST] That contrasts sharply with Southeast Asian companies, many of which were pulled into [/INST] bankruptcy when they couldn't meet an onslaught of maturing bonds and loans, according to Tim Love, global emerging-market strategist at SG Cowen Securities. "
1681,"[INST] And whereas Latin companies have an average of 33 cents of debt for [/INST] every dollar of equity, according to Fleming, companies in South Korea, Thailand and Malaysia generally have about equal parts of each, Mr. Love said. "
1682,"[INST] Of course, all bets could be off [/INST] if the outlook is still as bleak a year from now. "
1683,"[INST] And the companies do face [/INST] formidable economic challenges, even in the short term. "
1684,"[INST] Notably, Mexico and Brazil recently [/INST] have raised key interest rates to about 40%. "
1685,"[INST] That helped shore up their ailing currencies, [/INST] at least for now, but is slowing consumption and eating into corporate earnings. "
1686,"[INST] Regional growth of gross domestic product is expected [/INST] to fall to about 3% this year and next, down from about 5% in 1997. "
1687,[INST] And the foreign funding that Latin [/INST] blue-chip companies had come to expect has largely dried up.
1688,"[INST] But even heavily leveraged companies insist [/INST] they can pull through, albeit with some financial juggling. "
1689,"[INST] Argentine conglomerate Sociedad Comercial de la Plata SA, whose Eurobonds were named by Santander Investment analyst Jim Garvey [/INST] as among the region's riskiest, says it is prepared to meet a $100 million bond payment in December by selling its stake in a subsidiary to a European company, said investor-relations head Hernan Gestoso. "
1690,"[INST] To cover an additional $212 million in short-term debt held by its oil-and-gas subsidiary, it is [/INST] negotiating to sell a stake in that company and has a bridge loan from international and Argentine banks that it hopes eventually to refinance in the now-unapproachable bond market, he said. "
1691,"[INST] Last week, Mexican broadcaster TV Azteca SA said it [/INST] would slow expansion, cut executive pay and slash costs in preparation for an economic slowdown. "
1692,[INST] Argentine oil giant YPF SA announced it [/INST] had reduced its 1998 capital expenditures in response to lower crude-oil prices.
1693,"[INST] With nearly all its $1 billion debt in dollars, Mexican [/INST] conglomerate Desc SA has beefed up its export business and doubled export revenue to $400 million since 1995. "
1694,"[INST] The company also has stillunused credit lines [/INST] of about $150 million from U.S. commercial banks, said Treasury Director Arturo D'Acosta. "
1695,"[INST] Facing a slowdown in Mexico, the [/INST] company also has postponed acquisition plans and slashed expenses. "
1696,"[INST] ""We know that these crises [/INST] come-we have learned the lesson,"" Mr. D'Acosta said. "
1697,"[INST] After Mexico abruptly devalued the peso in late [/INST] 1994, the foreign capital that had poured into the region quickly dried up. "
1698,[INST] Many companies have taken advantage of the market opening since then [/INST] to space out the maturities on their debt and arrange guaranteed credit lines that they can tap in a pinch.
1699,"[INST] ""The '94 crisis was an excellent eye-opening catalyst for a [/INST] region that had grown quite euphoric,"" said Violy McCausland, president of advisory firm Violy, Byorum & Partners Holdings LLC. "
1700,"[INST] Another advantage is that foreign firms have invested heavily [/INST] in local banks, particularly in Argentina and Brazil, helping to shore up loan portfolios and improve efficiency. "
1701,"[INST] Analysts say these large foreign partners, notably Spain's Banco [/INST] Santander SA and Banco Bilbao Vizcaya SA, could provide an extra capital cushion in a funding squeeze. "
1702,"[INST] That contrasts sharply with local banks in [/INST] Southeast Asia, many of which simply stopped lending when markets and currencies plunged. "
1703,"[INST] ""In Asia, credit lines were simply cut,"" [/INST] said David Sampol, director of international equity at Van Eck Global. "
1704,"[INST] Of course, the degree of debt-cover in [/INST] Latin America varies, with Brazilian companies facing the heaviest short-term debt load. "
1705,"[INST] In addition to $2.6 billion in Eurobonds that mature through December [/INST] 1999, they face $3.9 billion in bonds carrying ""put"" features that compel companies to buy them back at fixed rates. "
1706,"[INST] Since bond prices have plunged recently, at current levels [/INST] most companies would have to buy the bonds at above-market rates, says Anne Milne at ING Barings. "
1707,"[INST] And across the region, earnings for commodity [/INST] sellers have fallen sharply, making it tougher to meet debt payments. "
1708,[INST] Best off are companies with monopolies or duopolies [/INST] in their sectors that can raise prices to compensate for higher borrowing costs.
1709,"[INST] This includes Brazilian cellular companies, which can adjust their rates beginning next [/INST] year, and cement companies like Mexico's Cemex SA and Peru's Cementos Lima, which can set prices for their markets, Mr. Stoeppelwerth says. "
1710,"[INST] Brazil's fixed-line phone companies and electric utilities are [/INST] less flexible, since the government typically only adjusts tariff rates once a year. "
1711,"[INST] And retailers, steel companies and electric utilities, which extend a [/INST] lot of credit to customers, are particularly vulnerable to a breakdown in the chain of payments, he notes. "
1712,"[INST] --- The Least Leveraged Latin American public companies with the lowest ratios of total liabilities to shareholders' equity, with negative numbers indicating companies with more cash than liabilities Company Country Sector Net [/INST] debt/equity ratio Grupo Modelo Mexico brewing -24.5% Cifra Mexico retail -24.1 Telesp Fixed Brazil telecom -14.9 Siderca Argentina steel - 3.6 Eletrobras Brazil electricity - 2.5 Buenaventura Peru mining 0.0 Quilmes Argentina brewing + 0.1 CCU Chile brewing + 1.2 Kimberly-Clark Mexico paper products + 2.7 CANTV Venezuela telecom + 9.5 Source: Robert Fleming Inc. Credit: Staff Reporter of The Wall Street Journal "
1713,"[INST] ___ Document 328 of 500 Rates Slow Auto Sector In Argentina [/INST] And Brazil Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 17 Sep 1998: A17. "
1714,"[INST] , a division of Ford Motor Co., announced its [/INST] third work stoppage for the year, saying it plans to idle 6,000 workers for 12 days. "
1715,"[INST] unit, also plans to idle [/INST] 7,000 workers for 12 days in October. "
1716,"[INST] Italian auto maker Fiat SpA will suspend production at one of [/INST] its Argentine plants for three days later this month because of sluggish market conditions in Brazil, company officials said this week. "
1717,"[INST] Separately, the Argentine unit of French car maker Renault SA said [/INST] yesterday it plans to halt production at one of its plants for three days because of weak demand from Brazil. "
1718,"[INST] Full text: BUENOS AIRES -- High interest rates are starting [/INST] to slow Argentina and Brazil's auto sectors, one of the region's most important motors of job creation and growth. "
1719,"[INST] , a division of Ford Motor Co., announced its [/INST] third work stoppage for the year, saying it plans to idle 6,000 workers for 12 days. "
1720,"[INST] unit, also plans to idle [/INST] 7,000 workers for 12 days in October. "
1721,"[INST] Italian auto maker Fiat SpA will suspend production at one of [/INST] its Argentine plants for three days later this month because of sluggish market conditions in Brazil, company officials said this week. "
1722,"[INST] Separately, the Argentine unit of French car maker Renault SA said [/INST] yesterday it plans to halt production at one of its plants for three days because of weak demand from Brazil. "
1723,"[INST] ""This all began with the storm in financial markets [/INST] during the month of August,"" Vincenzo Barello, president of Fiat Argentina SA, said in an interview yesterday. "
1724,[INST] Interest rates in both [/INST] countries are rising because of distinct reasons.
1725,"[INST] In Argentina's dual-money banking system, where clients can [/INST] use dollars or local pesos, deposits remain stable, indicating there is almost no capital flight. "
1726,"[INST] But there is a slow, orderly increase [/INST] in dollar deposits compared with pesos, which is increasing peso lending rates. "
1727,"[INST] In Brazil, outflows of foreign [/INST] capital have raised domestic interest rates sharply. "
1728,"[INST] Average lending rates for a two-year auto loan in Argentina are [/INST] around 18% today; in Brazil, one large auto financing company has raised rates to 3.3% a month, or around 48% annually. "
1729,[INST] Auto production and related industries [/INST] make up about a quarter of Argentina's industrial output.
1730,"[INST] Pedro LaCoste, an independent economist here, says the [/INST] auto industry's slowdown is an early indicator of the slowdown in Argentina's economy. "
1731,"[INST] Nevertheless, Argentina's economy ministry is estimating [/INST] gross domestic product growth of more than 4% next year. "
1732,"[INST] ""We are convinced that the hypotheses [/INST] we used are reasonable,"" Economy Minister Roque Fernandez said this week. "
1733,[INST] Mr. Fernandez also said he [/INST] didn't think unemployment will rise next year.
1734,"[INST] --- Peter Fritsch in [/INST] Sao Paulo, Brazil, contributed to this article. "
1735,"[INST] ___ Document 337 of 500 Argentina Confident Despite Ills In Brazil [/INST] Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 14 Sep 1998: A24. "
1736,"[INST] accountid=28034 Abstract: This year's rout in the local stock market [/INST] aside, an eerie calm prevails in Argentina as its giant neighbor, Brazil, wrestles with a worsening threat of devaluation. "
1737,"[INST] Developed by former Economy Minister Domingo [/INST] Cavallo in 1991, the convertibility plan essentially acknowledged the obvious. "
1738,[INST] A vicious cycle of devaluation [/INST] and hyperinflation had completely discredited Argentina's money.
1739,[INST] So Mr. Cavallo simply said [/INST] Argentina has no other currency but dollars.
1740,"[INST] In effect, pesos are merely dollar substitutes used for commercial and nationalistic purposes; Argentines [/INST] can use dollars to pay for taxi rides, meals, candy bars or just about anything because pesos and dollars are completely interchangeable at a one-to-one rate. "
1741,[INST] The central bank must back every [/INST] peso in circulation today with a dollar of reserves.
1742,"[INST] 2 show that Argentina's overall level of [/INST] bank deposits is stable, a sign that capital flight hasn't plagued Argentina. "
1743,"[INST] Skittishness over the Argentine peso is also negligible with total dollar [/INST] deposits rising in the most recent period by less than $1 billion, though further increases may be seen in coming days. "
1744,"[INST] ""The financial system has behaved better"" with each test, [/INST] Pablo Guidotti, Argentina's vice minister of economy, said Friday in an interview with Wall Street Journal editors. "
1745,"[INST] Full text: BUENOS AIRES -- This year's rout in the local [/INST] stock market aside, an eerie calm prevails in Argentina as its giant neighbor, Brazil, wrestles with a worsening threat of devaluation. "
1746,"[INST] For now, Argentines are confident that their seven-year-old [/INST] monetary system, known as the convertibility plan, can withstand the shock of Brazil's currency turmoil. "
1747,"[INST] ""I don't see any risk that convertibility is modified,"" [/INST] says Carlos Leone, chief executive officer of Acindar SA, a large specialty steel company here. "
1748,"[INST] Developed by former Economy Minister Domingo [/INST] Cavallo in 1991, the convertibility plan essentially acknowledged the obvious. "
1749,[INST] A vicious cycle of devaluation [/INST] and hyperinflation had completely discredited Argentina's money.
1750,[INST] So Mr. Cavallo simply said [/INST] Argentina has no other currency but dollars.
1751,"[INST] In effect, pesos are merely dollar substitutes used for commercial and nationalistic purposes; Argentines [/INST] can use dollars to pay for taxi rides, meals, candy bars or just about anything because pesos and dollars are completely interchangeable at a one-to-one rate. "
1752,[INST] The central bank must back every [/INST] peso in circulation today with a dollar of reserves.
1753,[INST] The plan tamed inflation to nearly zero [/INST] and helped turn Argentina into a magnet of foreign direct investment.
1754,[INST] The result has been booming economic [/INST] growth averaging more than 6% annually over the past nine years.
1755,"[INST] ""Convertibility has withstood the test of [/INST] time,"" says Lawrence Goodman, chief economist at Santander Investment, New York. "
1756,"[INST] 2 show that Argentina's overall level of [/INST] bank deposits is stable, a sign that capital flight hasn't plagued Argentina. "
1757,"[INST] Skittishness over the Argentine peso is also negligible with total dollar [/INST] deposits rising in the most recent period by less than $1 billion, though further increases may be seen in coming days. "
1758,"[INST] ""The financial system has behaved better"" with each test, [/INST] Pablo Guidotti, Argentina's vice minister of economy, said Friday in an interview with Wall Street Journal editors. "
1759,"[INST] ""Dollars are not leaving [/INST] the country,"" confirmed one private banker here. "
1760,[INST] Perhaps the larger risk [/INST] to Argentina today is a Brazilian recession.
1761,"[INST] Through strategic planning and proximity, both local companies and [/INST] foreign multinationals located here have made an enormous bet on Brazil, Latin America's largest economy. "
1762,"[INST] Brazil is also pivotal to regional growth [/INST] within Mercosur, a trading block that also includes Argentina, Uruguay and Paraguay. "
1763,"[INST] ""The disruption a devaluation [in Brazil] would have on [/INST] the way day-to-day business is done is unmeasurable,"" says Paul Dougall, director at Deutsche Bank Securities SA. "
1764,"[INST] ""Today, Argentine companies either trade, [/INST] invest or do joint ventures with Brazil. "
1765,"[INST] [A devaluation] would have [/INST] a devastating effect on the Argentine"" economy. "
1766,"[INST] The lightning rod of pessimism so far has [/INST] been the Argentine stock market, which fell last week to lows unseen in three years. "
1767,[INST] But Mr. Dougall thinks Argentine companies have [/INST] yet to adjust to the effects of a possible Brazilian slowdown.
1768,"[INST] Brazil absorbs a third of [/INST] Argentina's exports, including the majority of its auto exports. "
1769,"[INST] Some of the goods, such [/INST] as oil, could be redirected to other markets. "
1770,[INST] But other industries will [/INST] have a difficult time replacing Brazilian consumption.
1771,"[INST] ""If Brazil stops buying our autos, we won't be [/INST] able to sell them to anybody,"" says Hernan Lacunza, economist at Fundacion Capital, an Argentine think tank. "
1772,"[INST] An executive at a shoemaker here, which exports about a fourth of its [/INST] annual sales to Brazil, says many of its products would be priced out of the market in the event of a Brazilian devaluation. "
1773,[INST] Argentine officials are cautious about predicting how Mercosur [/INST] will negotiate trade issues in the event of a drastically cheaper Brazilian currency.
1774,"[INST] ""Competitive devaluations aren't good for anybody"" because of [/INST] the economic chaos they create, says Jorge Campbell, Argentina's secretary for international economic relations. "
1775,"[INST] He says the two countries haven't discussed compensatory mechanisms; however, [/INST] the secretary of industry said last week that consultations with Brazil on trade issues are under way. "
1776,"[INST] Mr. Leone, the chief executive at steel maker Acindar, [/INST] says the company's specialized products don't have many competitors, so sales to Brazil shouldn't suffer too much. "
1777,[INST] The bigger worry is that a Brazilian [/INST] recession will slow growth in Argentina and other important regional markets.
1778,"[INST] ""We were estimating growth for next [/INST] year of about 3% to 4% for Argentina,"" Mr. Leone says. "
1779,"[INST] Given the likelihood of continued volatility in [/INST] Brazil, ""we think that now we will have growth of zero"". "
1780,[INST] ___ Document 373 of 500 [/INST] The Americas: How About a Single Currency for Mercosur?
1781,"[INST] Author: By Sebastian Edwards Publication info: Wall [/INST] Street Journal , Eastern edition [New York, N.Y] 28 Aug 1998: A11. "
1782,"[INST] accountid=28034 Abstract: Earlier this year, Argentina's President Carlos Menem suggested [/INST] that Mercosur -- the trade pact formed by Argentina, Brazil, Uruguay and Paraguay -- should have a common currency. "
1783,"[INST] In fact, Brazil's salvation, and future, [/INST] may well be intricately linked to the implementation of this plan. "
1784,"[INST] After the collapse of the Russian ruble, Brazil, with its [/INST] huge fiscal deficit, obscenely high interest rates, slow growth, quasi-fixed currency, and burgeoning short-term debt, looks particularly vulnerable. "
1785,"[INST] Under attack by global speculators, Brazil's international reserves are declining, and in an [/INST] effort to attract fresh foreign financing, the authorities have reversed restrictions on short-term capital inflows that were put in place only last March. "
1786,"[INST] As Brazilian risk increases, [/INST] so does the country's cost of borrowing. "
1787,"[INST] The resulting high interest rates are contributing [/INST] to an ever growing fiscal deficit, and continue to choke the economy. "
1788,"[INST] In evaluating Brazil's options it is [/INST] useful to look at its neighbor to the south, Argentina. "
1789,"[INST] In 1991, after two rounds of hyperinflation, Argentina implemented a new monetary [/INST] system based on a fixed, one-to-one, exchange rate to the U.S. dollar, free capital mobility and strict constraints on central bank behavior. "
1790,"[INST] Under this ""convertibility"" system, 100% of Argentina's monetary base [/INST] is backed with foreign exchange, and the central bank is forbidden from granting credit to the government. "
1791,"[INST] This system has been supplemented with high liquidity requirements on local [/INST] banks, giving stability to the financial system, and an international credit line that can provide liquidity in a crisis. "
1792,"[INST] Full text: Earlier this year, Argentina's President Carlos Menem suggested [/INST] that Mercosur -- the trade pact formed by Argentina, Brazil, Uruguay and Paraguay -- should have a common currency. "
1793,"[INST] In fact, Brazil's salvation, and future, [/INST] may well be intricately linked to the implementation of this plan. "
1794,"[INST] After the collapse of the Russian ruble, Brazil, with its [/INST] huge fiscal deficit, obscenely high interest rates, slow growth, quasi-fixed currency, and burgeoning short-term debt, looks particularly vulnerable. "
1795,"[INST] Under attack by global speculators, Brazil's international reserves are declining, and in an [/INST] effort to attract fresh foreign financing, the authorities have reversed restrictions on short-term capital inflows that were put in place only last March. "
1796,"[INST] As Brazilian risk increases, [/INST] so does the country's cost of borrowing. "
1797,"[INST] The resulting high interest rates are contributing [/INST] to an ever growing fiscal deficit, and continue to choke the economy. "
1798,"[INST] Since last week's Russian meltdown, there have been rumors that the administration of [/INST] Brazilian President Fernando Henrique Cardoso is only playing for time, and that the real might be devalued immediately after the October presidential election. "
1799,"[INST] As the experiences of Mexico, East Asia and Russia have [/INST] decisively shown, in this era of global capital mobility there is no such thing as an orderly devaluation. "
1800,"[INST] A country that devalues it's currency invariably suffers the wrath of [/INST] international investors, and is forced to engineer massive adjustment programs that result in increased unemployment, rapid inflation and social unrest. "
1801,"[INST] Not even the International Monetary Fund, once considered [/INST] to be the world's financial doctor, has been able to help devaluing countries. "
1802,[INST] With its huge international reserves -- about [/INST] $70 billion -- Brazil still has time to avoid a major crisis.
1803,"[INST] The problem is that, in light of [/INST] the Russian debacle, market participants are becoming increasingly impatient and jittery. "
1804,"[INST] In evaluating Brazil's options it is [/INST] useful to look at its neighbor to the south, Argentina. "
1805,"[INST] In 1991, after two rounds of hyperinflation, Argentina implemented a new monetary [/INST] system based on a fixed, one-to-one, exchange rate to the U.S. dollar, free capital mobility and strict constraints on central bank behavior. "
1806,"[INST] Under this ""convertibility"" system, 100% of Argentina's monetary base [/INST] is backed with foreign exchange, and the central bank is forbidden from granting credit to the government. "
1807,"[INST] This system has been supplemented with high liquidity requirements on local [/INST] banks, giving stability to the financial system, and an international credit line that can provide liquidity in a crisis. "
1808,"[INST] In spite of initial international [/INST] skepticism, the convertibility law has served Argentina very well. "
1809,"[INST] Inflation has disappeared, growth has resumed, [/INST] and unemployment -- although still high -- is declining. "
1810,"[INST] More impressively, perhaps, interest rates have remained very low; [/INST] indeed at 8% per year the government's cost of borrowing is less than half that of Brazil's. "
1811,"[INST] In the aftermath of the Mexican crisis [/INST] of December 1994, Argentina's international reserves dipped, generating a liquidity squeeze. "
1812,"[INST] By staying the course, however, the country [/INST] was able rapidly to regain credibility, attracting, once again, foreign investors. "
1813,"[INST] The adoption of a common currency for Mercosur, [/INST] based on the Argentine convertibility system, would provide much needed stability to Brazil. "
1814,"[INST] The most important short-run effect would be a rapid decline [/INST] in Brazilian interest rates from their current 20% per annum, to levels similar to prevailing Argentine rates. "
1815,"[INST] By reducing the cost of servicing the [/INST] domestic debt, lower interest rates would immediately help lower Brazil's fiscal deficit. "
1816,"[INST] According to my own computations, these lower interest rate costs would help [/INST] reduce Brazil's public sector imbalance from its current 7% of gross domestic product, to a still high but more manageable 3.2% of GDP. "
1817,"[INST] For this program to be successful, Brazil would [/INST] have to implement a number of measures rapidly to further reduce the fiscal deficit. "
1818,"[INST] Some of the required fiscal policies -- such as the administrative reform that would [/INST] allow the government to reduce the size of the bureaucracy -- are already in the pipeline, but have not been implemented due to political reasons. "
1819,[INST] It would also be necessary to [/INST] adopt Argentine policies aimed at maintaining a strong banking sector.
1820,"[INST] Moreover, it would be necessary to enact deep [/INST] labor market reforms that would reduce labor costs, encourage employment and increase labor market flexibility. "
1821,[INST] This would ease the (potential) costs [/INST] of this fixed exchange rate system under certain conditions.
1822,"[INST] These reforms are politically difficult to implement -- in spite of valiant efforts by the [/INST] economic team, Argentina still has not done it -- but their approval would help reduce the trade-off between stability and the country's capacity to absorb external shocks. "
1823,"[INST] Brazil's $70 billion in international reserves are higher than both its [/INST] monetary base, currently at $33 billion, and M1 ($36 billion), making the adoption of a Argentine-style monetary system technically feasible. "
1824,"[INST] Deciding who would run this new monetary institution would not be easy, and [/INST] one could imagine that, just as in the case of the European Monetary Union, petty politics and nationalistic interest would affect the process. "
1825,"[INST] In the end, however, a technical criteria should prevail, and [/INST] Pedro Pou, the current governor of Argentina's Central Bank, should get the job for the first term. "
1826,"[INST] So much so, that according to a recent study by A.T. Kearney's [/INST] Global Business Policy Council, Brazil is second only to the U.S. among countries considered as attractive markets for global corporate investors. "
1827,[INST] It would be a tragedy if this [/INST] potential is derailed by a currency crisis and the ensuing macroeconomic chaos.
1828,[INST] It is time for the Brazilian leadership [/INST] to take truly creative and lasting measures to ensure economic stability.
1829,"[INST] Although by no means a panacea, adopting President Menem's [/INST] idea of a common currency for Mercosur would go a long way towards achieving that goal. "
1830,[INST] --- Mr. Edwards is professor of [/INST] international economics at UCLA's Anderson Graduate School of Management.
1831,"[INST] (See related letter: ""Letters to the Editor: [/INST] Brazil Should Avoid Rigid Exchange Rate"" -- WSJ September 4, 1998) "
1832,"[INST] ___ Document 389 of 500 Investors Brace After Shudders in Global Stocks --- Financial Virus Spreads Beyond Russia, Others [/INST] Author: By Wall Street Journal staff reporters Michael R. Sesit and Silvia Ascarelli in London, and Sara Webb in New York Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 24 Aug 1998: C1. "
1833,[INST] accountid=28034 Abstract: Analysts believe the cabinet [/INST] reshuffle could rattle Western markets further when they open today.
1834,"[INST] ""It exacerbates the underlying (bad) situation"" in Russia, [/INST] says J. Paul Horne, European stock-market economist at Salomon Smith Barney Holdings Inc. in London. "
1835,"[INST] ""Clearly, it shows that (Boris) Yeltsin is [/INST] unreliable, and that, of course, isn't what investors wanted to hear"". "
1836,"[INST] On Friday, the German stock market plunged 5.4%, capping a week [/INST] in which Russia effectively devalued its currency, effectively defaulted on its debt and saw its stock market crash 29%. "
1837,"[INST] Meanwhile, Spanish stocks plummeted 5.8% on growing fears [/INST] about Latin American currencies and markets, specifically rumors that Venezuela might devalue its bolivar. "
1838,"[INST] Michael Howell, head global strategist at CrossBorder [/INST] Capital, a London financialconsulting firm, sees the world heading toward recession. "
1839,"[INST] About 40% of it is already in recession, [/INST] and Friday's carnage wiped about $400 billion of value from world stock markets. "
1840,"[INST] ""With these sort of crises, stock markets can [/INST] keep falling; panics bring them down in 5% to 10% lurches,"" Mr. Howell says. "
1841,"[INST] Full text: The financial virus from [/INST] emerging markets is spreading, threatening the health of Western financial markets. "
1842,"[INST] Yesterday, Russian President Boris Yeltsin dismissed Sergei [/INST] Kiriyenko, his 36-year-old prime minister, and his entire team of reformers. "
1843,"[INST] In Mr. Kiriyenko's place stepped Viktor [/INST] Chernomyrdin, the Soviet-era apparatchik whom Mr. Yeltsin ousted in March. "
1844,[INST] Analysts believe the cabinet reshuffle [/INST] could rattle Western markets further when they open today.
1845,"[INST] ""It exacerbates the underlying [bad] situation"" in Russia, [/INST] says J. Paul Horne, European stock-market economist at Salomon Smith Barney Holdings Inc. in London. "
1846,"[INST] ""Clearly, it shows that Yeltsin is [/INST] unreliable, and that, of course, isn't what investors wanted to hear"". "
1847,"[INST] At midday, the Nikkei 225 stock average was [/INST] down 408.69 points to 14889.51, after falling 93.21 points on Friday to 15298.20. "
1848,"[INST] The Taiwan market also started the day [/INST] lower, with its blue-chip stock index falling 226.20 to 6987.17 at about midday. "
1849,"[INST] On Friday, the German stock market plunged 5.4%, capping a week [/INST] in which Russia effectively devalued its currency, effectively defaulted on its debt and saw its stock market crash 29%. "
1850,"[INST] Meanwhile, Spanish stocks plummeted 5.8% on growing fears [/INST] about Latin American currencies and markets, specifically rumors that Venezuela might devalue its bolivar. "
1851,"[INST] For months, the contagion was mainly restricted to the world's [/INST] emerging markets, as Asian currencies and stock markets kept falling, one after another, in a vicious downward spiral. "
1852,"[INST] But now it is beginning to reach into the heart of Europe and the U.S. ""We [/INST] are seeing the implications of what people call the Asian flu on major developed markets,"" says Wolfhard Graetz, chief investment officer at Bank J. Vontobel & Co. in Zurich. "
1853,"[INST] De facto, the Russians [/INST] declared bankruptcy, at least for short-term debt"". "
1854,"[INST] The degree to which German and Spanish stocks, two of Europe's [/INST] better-performing markets, are suffering from their association with two of the world's basket cases reflects global contagion at its most extreme. "
1855,"[INST] Its hallmarks include competitive devaluations, collapsing commodity prices, shrinking global liquidity, [/INST] investors' reduced tolerance for risk, and fund managers dumping shares in one market because they fear disaster in another. "
1856,"[INST] For one thing, the debacles in Russia and Asia are forcing hedge-fund managers [/INST] to sell stocks and low-grade bonds in other markets to make up for loans they took out to invest in Russian and Asian markets. "
1857,"[INST] Investors also are beginning to heed the [/INST] warnings of economists, who say the world is heading for a global slowdown. "
1858,"[INST] Taken together, those factors [/INST] spell trouble for major Western stock markets. "
1859,"[INST] ""If more bad news accumulates, you could see stock markets [/INST] fall another 5% to 15%,"" says Paul Burik, chief investment officer at Commerz International Capital Management in Frankfurt. "
1860,"[INST] Major markets are vulnerable because the current turmoil [/INST] is occurring ""against a backdrop of valuations which, by most people's measures, was stretched"". "
1861,"[INST] Michael Howell, head global strategist at CrossBorder [/INST] Capital, a London financialconsulting firm, sees the world heading toward recession. "
1862,"[INST] About 40% of it is already in recession, [/INST] and Friday's carnage wiped about $400 billion of value from world stock markets. "
1863,"[INST] ""With these sort of crises, stock markets can [/INST] keep falling; panics bring them down in 5% to 10% lurches,"" Mr. Howell says. "
1864,"[INST] Still, it may take a while for [/INST] investors to fully grasp the impact of the disruptions rattling world markets. "
1865,[INST] Many money managers also [/INST] believe stock markets may have a floor.
1866,"[INST] ""As long as we have very, very low bond yields, [/INST] the fallout will be limited, because there are no alternative investment possibilities than stocks,"" Vontobel's Mr. Graetz says. "
1867,"[INST] ""So I expect a major correction of maybe [/INST] 20% from markets' peaks, but I don't expect an extended bear market, not yet"". "
1868,"[INST] Although he concedes it will be some time until emerging [/INST] markets bounce back, Mr. Graetz says ""for long-term value investors, value is popping up in these markets"". "
1869,"[INST] Stock markets in Britain, France, Italy, Sweden and Switzerland [/INST] all tumbled between 3.1% and 3.8%, while Holland and Belgium sank 2.8% and 2.4%, respectively. "
1870,"[INST] In Latin America, Argentina [/INST] plunged 7.8%, Mexico 2.4% and Brazil 2.9%. "
1871,"[INST] But before Wall Street recovered much of its [/INST] intraday losses, Brazil had been down as much as 10%, Argentina 9.5% and Mexico 7.4%. "
1872,"[INST] Meanwhile, Russia's woes swept through Turkey, Poland and [/INST] the Czech Republic, where currencies wobbled and stock markets fell between 2.4% and 4.6%. "
1873,"[INST] ""We are in complete and utter meltdown; this is every bit as bad as the Mexican [/INST] crisis"" of late 1994 and 1995, said Geoffrey Dennis, global emerging-market strategist at Deutsche Bank in London, in the midst of Friday's stock-market turmoil before Wall Street clawed its way back. "
1874,"[INST] ""What's frightening is it's [/INST] not clear what's going to stop it"". "
1875,"[INST] Across the board, companies and banks with actual, or [/INST] perceived, links to Russia and Latin America -- or emerging markets in general -- were hammered. "
1876,"[INST] Spain's Telefonica de Espana, which has stakes [/INST] in telephone companies in Venezuela, Argentina and Chile, plunged 6.7%, to 6,700 pesetas. "
1877,"[INST] French retailer Carrefour, which derives 34% of [/INST] its earnings from Brazil and Argentina, fell 5.4% to 3,500 francs. "
1878,"[INST] ""Latin America is a much more real problem as far as the earnings of [/INST] European companies are concerned, compared to Russia or the four main Asian casualties,"" says Joe Hall, head of marketing for European stocks at Deutsche Bank in London. "
1879,"[INST] Ignacio Montero, head strategist for Merrill Lynch & Co. [/INST] in Madrid, reckons the region accounts for roughly 8% to 10% of Spanish blue-chip company profits. "
1880,"[INST] Among the Spanish banks, Banco Bilbao Vizcaya, which has controlling stakes [/INST] in three Venezuelan banks, fell 8.5%, to 2,360 pesetas; at one stage, it was off as much as 12%. "
1881,"[INST] Banco de Santander, which also has large operations [/INST] in Latin America, lost 9.9% of its value, to close at 3,375 pesetas. "
1882,"[INST] France's Banque Nationale de Paris fell 5.6%, [/INST] to 439 francs, and Credit Lyonnais tumbled 6.6%, to 570 francs. "
1883,"[INST] Investors chose to ignore the fact that German banks are among the world's [/INST] best capitalized and that they have put aside large reserves against their Russian loans, which stood at $30.5 billion at the end of 1997. "
1884,[INST] Investors also have ignored the fact [/INST] that a large chunk of that lending is government guaranteed.
1885,"[INST] Dresdner Bank dropped 6.7%, to 83 marks, Deutsche [/INST] Bank fell 5.3%, to 123.50 marks, and Commerzbank lost 4.9%, to 54 marks. "
1886,"[INST] Friday's selling panic sent investors scurrying for the perceived [/INST] havens of the dollar, Treasury bonds, German government bonds, the pound sterling and Swiss franc. "
1887,"[INST] Yields on 30-year Treasurys [/INST] and German ""Bunds"" fell to record lows. "
1888,"[INST] Today, Russia is expected to reveal its plan for [/INST] rescheduling about $40 billion of ruble-denominated debt, of which $10 billion to $15 billion is foreign held. "
1889,"[INST] ""If Russia doesn't give the markets what they want, they won't be [/INST] able to sell a single security for two or three years,"" warns David Hale, chief economist of Zurich Insurance Group in Chicago. "
1890,"[INST] What is more, he says, what [/INST] Russia does or doesn't achieve today ""will have global implications"". "
1891,"[INST] If Russia is blacklisted by overseas investors, it will be [/INST] another blow to Mr. Yeltsin, whose resignation has been demanded by the Communist-dominated lower house of Russia's parliament. "
1892,"[INST] ""The fate of Venezuela, Brazil, Argentina, Mexico [/INST] and South Africa hangs very much on what Russia does,"" Mr. Hale says. "
1893,"[INST] If Venezuela eventually devalues, as many analysts predict, it would represent a [/INST] continuation of the competitive devaluation cycle that has been cascading through emerging markets since early July 1997, when Thailand floated its baht. "
1894,"[INST] But ""rather than adding to competitiveness, each devaluation is simply crunching the devaluer, [/INST] because world confidence in [the country] goes down with the devaluation,"" says David Malpass, chief international economist at Bear, Stearns & Co. in New York. "
1895,"[INST] ""Witness Indonesia, Thailand, South Korea, Malaysia [/INST] and Russia; rather than growing, their exports have gone down"". "
1896,"[INST] Even though they have devalued, many emerging-market countries [/INST] still are forced to keep interest rates high to keep their currencies from falling further. "
1897,"[INST] ""The devaluations are causing a [/INST] giant human catastrophe outside the U.S.,"" Mr. Malpass says. "
1898,"[INST] ""Eventually, Americans will find themselves part [/INST] of a world that is moving sideways rather than up. "
1899,"[INST] Farmers already feel it deeply in [/INST] lower commodity prices, because people in Asia are eating less"". "
1900,"[INST] Skittishness among investors and traders has risen to the point that ""it's fair to say that [/INST] currency markets are now trading beyond the realm of [economic] fundamentals, and are, instead, trading on sentiment,"" says Michael Scarlatos, an international economist at Bankers Trust Co. in New York. "
1901,"[INST] He adds that the future will ""be [/INST] more of the same"" until Russia and Japan legislate needed reforms. "
1902,"[INST] ""Only then can we see some [/INST] of the pressure on emerging-country currency and securities markets being lifted"". "
1903,"[INST] As CrossBorder's Mr. Howell sees it, the roots of the current contagion [/INST] lie in Japan's prolonged recession, which prompted the world's second largest economy to buy less oil, gas, metals and other commodities. "
1904,"[INST] Then as the financial crisis spread [/INST] to other parts of Asia, commodity prices fell with them. "
1905,"[INST] That hurt the economies of commodity producers such as South Africa, Russia, [/INST] Canada, Australia, Venezuela and Norway, prompting investors to become more risk-averse and to retreat from the financial markets of countries with ballooning deficits. "
1906,"[INST] Thus, at the same time ""deficits are swelling because [/INST] of falling commodity prices, there isn't the liquidity to finance those current account deficits,"" Mr. Howell says. "
1907,"[INST] Take hedge funds and big banks' proprietary-trading desks, [/INST] many of which have placed huge bets on emerging-market stocks, and especially bonds. "
1908,"[INST] ""Say they own Russian treasury bills or Russian bonds,"" [/INST] says Desmond Lachman, head of emerging-markets economic research at Salomon Smith Barney in New York. "
1909,"[INST] ""They probably borrowed money to finance their purchases; so [when [/INST] Russian markets fell], they either have to put up more cash or sell out at a loss. "
1910,"[INST] If they put up more cash, they [/INST] need to sell Brazilian securities"" or those of other liquid markets. "
1911,"[INST] ""This is going to have very large [/INST] implications for Latin American growth, and thereby the U.S.,"" Mr. Lachman says. "
1912,"[INST] That is because American exporters will become less [/INST] competitive in world markets, while demand from some of their biggest markets shrinks. "
1913,"[INST] 1306.6 1312.1 +9.9 As calculated [/INST] by Morgan Stanley Capital International Perspective, Geneva. "
1914,"[INST] Each index, calculated in local currencies, [/INST] is based on the close of 1969 equaling 100. "
1915,"[INST] (See related article: ""Abreast of the [/INST] Market: Seesaw Ride Leaves Analysts In U.S. Divided"" -- WSJ Aug. "
1916,"[INST] ___ Document 406 of 500 Argentine Opposition Wants State To Recover Bigger [/INST] Economic Role Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 12 Aug 1998: A12. "
1917,"[INST] accountid=28034 Abstract: Argentina's opposition-party coalition unveiled its economic platform for the [/INST] 1999 presidential elections, promising to keep the peso pegged to the dollar while seeking a larger state role in economic affairs. "
1918,"[INST] The document, released late Monday, is likely to become a leading example of how center-left parties [/INST] in Latin America plan to recover a role for state institutions after they were discredited in the 1980s and all but dismantled in the 1990s through privatization and deregulation. "
1919,"[INST] The proposals, called ""A Letter to the Argentines,"" gives the coalition, [/INST] known as the Alliance, important influence over the economic debate as the ruling Peronist party remains distracted by infighting. "
1920,"[INST] In a national poll conducted in May by the Buenos Aires firm Mora [/INST] y Araujo & Associados, the Alliance's most likely candidates for the presidency led the Peronist candidates by as much as eight percentage points. "
1921,"[INST] Full text: BUENOS AIRES -- Argentina's opposition-party coalition unveiled its economic platform [/INST] for the 1999 presidential elections, promising to keep the peso pegged to the dollar while seeking a larger state role in economic affairs. "
1922,"[INST] The document, released late Monday, is likely to become a leading example of how center-left parties [/INST] in Latin America plan to recover a role for state institutions after they were discredited in the 1980s and all but dismantled in the 1990s through privatization and deregulation. "
1923,"[INST] The proposals, called ""A Letter to the Argentines,"" gives the coalition, [/INST] known as the Alliance, important influence over the economic debate as the ruling Peronist party remains distracted by infighting. "
1924,"[INST] In a national poll conducted in May by the Buenos Aires firm Mora [/INST] y Araujo & Associados, the Alliance's most likely candidates for the presidency led the Peronist candidates by as much as eight percentage points. "
1925,"[INST] The Alliance envisions an Argentine economy where at the end of four years [/INST] exports double to $50 billion annually, unemployment is halved to 6% of the work force and investment spending rises to 30% of gross domestic product. "
1926,"[INST] Annual economic growth is expected to average 6%, about [/INST] equal to the rate of average growth over the past nine years under President Carlos Saul Menem. "
1927,"[INST] The model doesn't propose aggressive state intervention, but suggests that efficient, honest institutions [/INST] can promote economic growth by simplifying bureaucratic codes, or kick-starting marginalized sectors through various forms of partnering, such as financing small export cooperatives. "
1928,"[INST] Pedro Lacoste, an independent economist, said the unemployment goal would be impossible to [/INST] achieve, given the expected increase in Argentina's job pool and the economy's limited ability to absorb these workers at a 6% growth rate. "
1929,"[INST] ""They have too many goals and [/INST] they are not specific about the tools,"" he said. "
1930,"[INST] ""If they want to build [/INST] credibility, they will have to give more details"". "
1931,"[INST] Nevertheless, Mr. Lacoste and other [/INST] economists praised the general framework as sound economic policy. "
1932,"[INST] ""The Alliance said: `We want convertibility [economic shorthand for Argentina's currency system, where the peso [/INST] is fixed one-to-one with the dollar] to continue, and we want to maintain the rules of the game,'"" said Raul Buonuome, chief economist at Deutsche Morgan Grenfell, Argentina. "
1933,"[INST] As in many emerging markets, Argentine stocks [/INST] were pounded yesterday; the benchmark Merval stock index fell 4.4% to 489.66. "
1934,"[INST] ""Convertibility"" has reduced inflation to near zero, but it [/INST] has also created high unemployment as exporters resorted to technology and other labor-saving investments to lower costs. "
1935,"[INST] Because exchange-rate policy is fixed, the Alliance focuses [/INST] on other tools such as fiscal policy, regulation and use of state resources. "
1936,"[INST] The Alliance said it wouldn't privatize Argentina's largest [/INST] bank, Banco de la Nacion, preferring to keep it as a state development bank. "
1937,"[INST] ___ Document 438 of 500 Argentina's Menem Changes His Mind And Decides Not [/INST] to Seek Third Term Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 22 July 1998: A11. "
1938,"[INST] accountid=28034 Abstract: ""This president will leave office unfailingly on December 10, 1999, and aspires [/INST] to place the sash on another Peronist president who will continue the revolution we started,"" Mr. (Carlos Saul) Menem said in an unexpected news conference yesterday. "
1939,"[INST] Crediting himself with Argentina's ""peaceful and democratic revolution,"" the 68-year-old president said [/INST] ""the fruits of this effort is wealth for all, and nothing and no one has the right to put that in danger"". "
1940,"[INST] Argentina has managed to grow at a remarkable 6.2% a [/INST] year on average during Mr. Menem's two terms, and inflation has fallen to below 2% from 4,924% in 1989. "
1941,"[INST] Mr. Menem's re-election bid had become a contentious issue within his own Peronist party [/INST] as well as Argentina, and was starting to have an impact on crucial legislation, such as a tax bill now working its way through Congress. "
1942,"[INST] Mr. Menem was elected to a single six-year term in [/INST] 1989, and was elected to a second, four-year term after a constitutional amendment allowed him to run. "
1943,[INST] Full text: BUENOS AIRES -- Argentine President Carlos Saul Menem said he [/INST] won't seek a third consecutive term because political disunity over the issue was putting the country's decade of progress at risk.
1944,"[INST] ""This president will leave office unfailingly on December 10, 1999, and aspires to [/INST] place the sash on another Peronist president who will continue the revolution we started,"" Mr. Menem said in an unexpected news conference yesterday. "
1945,"[INST] Crediting himself with Argentina's ""peaceful and democratic revolution,"" the 68-year-old president said [/INST] ""the fruits of this effort is wealth for all, and nothing and no one has the right to put that in danger"". "
1946,"[INST] Argentina has managed to grow at a remarkable 6.2% a [/INST] year on average during Mr. Menem's two terms, and inflation has fallen to below 2% from 4,924% in 1989. "
1947,"[INST] Mr. Menem's re-election bid had become a contentious issue within his own Peronist party [/INST] as well as Argentina, and was starting to have an impact on crucial legislation, such as a tax bill now working its way through Congress. "
1948,"[INST] Mr. Menem was elected to a single six-year term in [/INST] 1989, and was elected to a second, four-year term after a constitutional amendment allowed him to run. "
1949,"[INST] Mr. Menem's supporters had said they would pursue all legal avenues [/INST] to clear the president for a third term, including a Supreme Court ruling excluding his first term, which began in 1989. "
1950,"[INST] Opposition parties argued that such a ruling would clearly violate the [/INST] constitution, and that view was gaining support among certain Roman Catholic bishops and other powerful sectors of Argentine society. "
1951,"[INST] Argentine politics are likely to be a lot more orderly [/INST] over the next several weeks, and that is healthy for both the economy and the political debate here. "
1952,"[INST] ""This eliminates a big pressure on the economic [/INST] and political environment,"" said Raul Buonuome, chief economist at Deutsche Bank's Argentine investment-banking unit. "
1953,"[INST] The alliance of opposition parties, previously preoccupied with opposing [/INST] Mr. Menem, will now have to define clear and credible economic proposals that they have sorely lacked. "
1954,"[INST] The Peronists also have more room to redefine their platform and rebuild [/INST] their popularity, which has been damaged by the public fight between Mr. Menem and Eduardo Duhalde, the Buenos Aires provincial governor. "
1955,[INST] Mr. Duhalde opposes Mr. Menem's re-election and [/INST] threatened to hold a September plebiscite in his province on the issue.
1956,"[INST] Theoretically, they could choose Mr. Menem as [/INST] the candidate and again seek to win a favorable reading of the constitution. "
1957,"[INST] But analysts are taking Mr. Menem's renunciation at [/INST] face value, and say he wants to head the Peronist party after finishing his term. "
1958,"[INST] Mr. Buonuome, the Deutsche Bank economist, says Ramon Ortega, a former [/INST] pop singer and close Menem ally who currently heads social development, is likely to be tapped for the candidacy. "
1959,"[INST] Carlos Reutemann, a former governor and race-car driver, is also [/INST] said to be favored by some Peronist factions, while some analysts hold up Mr. Duhalde as a longshot possibility. "
1960,[INST] Mr. Menem formally announced his [/INST] desire for a third term only last week.
1961,"[INST] But by the weekend, his chances were already severely damaged after the Peronist party congress [/INST] on the issue last Friday produced a surprisingly tepid endorsement, while a consensus against re-election began to form rapidly among leading thinkers and powerful sectors of society. "
1962,"[INST] ___ Document 444 of 500 Argentina's Menem Seeks Way to Run For [/INST] a Third Term Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 17 July 1998: A12. "
1963,"[INST] accountid=28034 Abstract: Speculation that Mr. (Carlos Saul) Menem would seek re-election [/INST] had already triggered a power struggle within his Peronist party that is disrupting economic policy here, according to analysts. "
1964,"[INST] He cited personal reasons, but news reports attributed the resignation [/INST] to differences with Congress on a tax-reform bill, which some analysts said has been altered by Peronist infighting. "
1965,"[INST] Full text: BUENOS AIRES -- President Carlos Saul Menem formally announced his desire [/INST] to run for a third term, saying he would seek a legal solution to a constitutional provision that limits presidents to two consecutive terms. "
1966,"[INST] Speculation that Mr. Menem would seek re-election had already [/INST] triggered a power struggle within his Peronist party that is disrupting economic policy here, according to analysts. "
1967,"[INST] He cited personal reasons, but news reports attributed the resignation [/INST] to differences with Congress on a tax-reform bill, which some analysts said has been altered by Peronist infighting. "
1968,"[INST] Mr. Menem said that he will ask his fellow Peronists in a party [/INST] congress today ""what needs to be done to be a candidate, to not be prohibited and to be able to compete in the 1999 elections"". "
1969,[INST] Menem supporters are likely to ask the Supreme Court [/INST] to exempt his first term from the two-term limit because it occurred before the 1994 constitution.
1970,"[INST] Eduardo Duhalde, presidential aspirant and Buenos Aires Province's Peronist governor, [/INST] opposes Mr. Menem's re-election and said he will hold a plebiscite on the question in November in his province. "
1971,[INST] Analysts credited Mr. Menem with responsible fiscal management in [/INST] a political year and with leading the economy to 6.2% average annual growth during his two terms.
1972,"[INST] But there is concern the polarization [/INST] of Peronist congressional blocs, or shifting alliances, will dilute reforms. "
1973,"[INST] ""Now in Argentina, political considerations are constraining the reining in [/INST] of demand and the adoption of structural reforms,"" said Nina Ramondelli, senior credit analyst at Moody's Investors Service. "
1974,"[INST] News reports said Carlos Rodriguez, the vice minister of economy, became [/INST] furious this week when he discovered Congress removed an extension of valueadded taxes to cable television and other media. "
1975,[INST] Those tax extensions were designed to cover payroll-tax cuts [/INST] that the ministry hopes will boost export competitiveness in the face of Asian currency devaluations.
1976,"[INST] Argentina's peso is fixed to the dollar, [/INST] so it can't adjust its exchange rate to fix trade imbalances. "
1977,"[INST] ""From the beginning, the economic team thought [/INST] the extension of the valueadded tax was nonnegotiable,"" said Pedro Lacoste, an economist. "
1978,"[INST] But raising taxes on the media is a [/INST] challenge for the Peronists, who are trying to fortify loyalties as the Duhalde-Menem camps divide. "
1979,"[INST] ""We didn't have an accord to push [/INST] it,"" said Congressman Oscar Lamberto in a meeting with reporters yesterday. "
1980,"[INST] ___ Document 452 of 500 Menem Re-election Bid Rattles Peronists Infighting in Argentine [/INST] Ruling Party Could Impede Reforms Author: By Craig Torres Publication info: Wall Street Journal , Eastern edition [New York, N.Y] 15 July 1998: A11. "
1981,"[INST] accountid=28034 Abstract: President Carlos Menem's re-election bid has created severe infighting within [/INST] the ruling Peronist party, and analysts fear that Congress will be unable to complete several important reforms before presidential elections in September 1999. "
1982,"[INST] Peronist infighting has yet to rattle financial markets [/INST] here, which are getting a lift from the recovery of Japanese and Russian markets. "
1983,"[INST] Nevertheless, members of Mr. Menem's economic cabinet [/INST] are starting to worry that the re-election battle is getting out of hand. "
1984,"[INST] ""An investor looking at Argentina doesn't know what the Constitution will contain, nor who is going [/INST] to be the candidate of each party, nor what will be the tax or labor system,"" complained Mr. Menem's economic adviser, Carlos Rodriguez, in an interview with the daily Clarin. "
1985,"[INST] ""We are making too much [/INST] noise and these errors have high costs"". "
1986,"[INST] Presidential transitions are delicate in [/INST] Latin America, and Argentina is proving no exception. "
1987,"[INST] The issue is especially important for investors, because [/INST] Mr. Menem is credited with dramatically reforming Argentina's economy during his decade in power. "
1988,"[INST] Gross domestic product has grown at an average rate of [/INST] 6.2% during Mr. Menem's term so far, and inflation has fallen to below 2% from 4,924% in 1989. "
1989,"[INST] Full text: BUENOS AIRES -- President Carlos Menem's re-election bid has created severe [/INST] infighting within the ruling Peronist party, and analysts fear that Congress will be unable to complete several important reforms before presidential elections in September 1999. "
1990,"[INST] ""We are in a very, very complicated political [/INST] game that is not doing the country any good right now,"" says economist Pedro Lacoste. "
1991,[INST] Among the central issues Argentina needs to tackle [/INST] before Mr. Menem's term ends in December 1999 are the tax and labor codes.
1992,"[INST] Peronist infighting has yet to rattle financial markets [/INST] here, which are getting a lift from the recovery of Japanese and Russian markets. "
1993,"[INST] Nevertheless, members of Mr. Menem's economic cabinet [/INST] are starting to worry that the re-election battle is getting out of hand. "
1994,"[INST] ""An investor looking at Argentina doesn't know what the Constitution will contain, nor who is going [/INST] to be the candidate of each party, nor what will be the tax or labor system,"" complained Mr. Menem's economic adviser, Carlos Rodriguez, in an interview with the daily Clarin. "
1995,"[INST] ""We are making too much [/INST] noise and these errors have high costs"". "
1996,"[INST] Presidential transitions are delicate in [/INST] Latin America, and Argentina is proving no exception. "
1997,"[INST] The issue is especially important for investors, because [/INST] Mr. Menem is credited with dramatically reforming Argentina's economy during his decade in power. "
1998,"[INST] Gross domestic product has grown at an average rate of [/INST] 6.2% during Mr. Menem's term so far, and inflation has fallen to below 2% from 4,924% in 1989. "
1999,[INST] Many believe that economic reforms need further consolidation under [/INST] Mr. Menem before the presidency can be turned over to an opposition party or even another Peronist.
2000,"[INST] ""A country that took 50 years to destroy itself can't [/INST] rebuild in 10,"" says Vicente Mastrocola, head of the plastic workers' union and an ardent Menem supporter. "
2001,[INST] Such sentiments have given a boost to an [/INST] informal re-election effort that only a few months ago seemed likely to fail.
2002,"[INST] After all, the 1994 constitution [/INST] prohibits presidents from holding more than two consecutive terms. "
2003,"[INST] But constitutions aren't typically written in stone [/INST] in the region, and there now appears to be some wiggle room. "
2004,"[INST] For much of this year, President Menem's operators have been testing the waters, [/INST] affixing ""Menem 1999"" slogans to poster boards, bumpers and even a birthday cake for the president when he turned 68 on July 2. "
2005,"[INST] Most dismissed the campaign as a tool to strengthen the [/INST] president in his final, lameduck year, and President Menem himself has avoided specific comment on the subject. "
2006,"[INST] Over the past week, however, Argentina's political prospects changed sharply [/INST] as Mr. Menem's operators have now launched a serious effort to legitimize his candidacy for Peronist primaries next April. "
2007,"[INST] In an effort to show popular support, the Menemistas suggested [/INST] that a plebiscite on the re-election issue be held in Mr. Menem's home province of La Rioja. "
2008,"[INST] Mr. Menem's chief political enemy in the Peronist party, Buenos [/INST] Aires provincial governor Eduardo Duhalde, then countered with a proposal to hold a plebiscite in his province. "
2009,[INST] Now the battle is likely to [/INST] spill over into a national Peronist convention scheduled for this week.
2010,"[INST] If the Menemistas can isolate Mr. Duhalde's allies, they will [/INST] suggest that the high court exempt Mr. Menem's first term, which began in 1989, from the two-term constitutional limit. "
2011,"[INST] Failing that, they may push in [/INST] November for a national nonbinding referendum on Mr. Menem's re-election. "
2012,[INST] There is concern among U.S. investors and policy makers [/INST] that Argentina proceed with a legal and fair electoral process that enhances the country's democracy.
2013,"[INST] The U.S.'s ""predisposition is to be neutral,"" but [/INST] the re-election effort ""must be completely legal and constitutional,"" said one U.S. official this week. "
2014,"[INST] Any democratic backsliding in the region is problematic to the Clinton administration because [/INST] new economic alliances, such as the Free Trade Agreement of the Americas, are being sold to the American public as policies that also foment democracy. "
2015,"[INST] Argentina's political battles have a remarkable way of [/INST] surging and disappearing, and the latest rupture between the Peronists also may subside. "
2016,"[INST] Meeting with reporters recently, Argentina's ambassador [/INST] to the U.S., Diego Guelar, said, ""Peronism is like tango. "
2017,"[INST] ___ Document 295 of 400 Specialists: Latin America and the [/INST] market: The free society on trial Author: Anonymous Publication info: The Economist 349.8095 (Nov 21, 1998): 23-25. "
2018,"[INST] accountid=28034 Abstract: Tough times lie ahead [/INST] throughout Latin America, albeit the much-feared meltdown has not happened. "
2019,"[INST] For the eight biggest economies, combined, [/INST] J. P. Morgan, an American bank, foresees nil growth next year. "
2020,[INST] In Latin America little or no [/INST] growth does not mean standing still; it means sliding backwards.
2021,[INST] The setback is all the [/INST] more bitter because things had been going well.
2022,[INST] It is not hard [/INST] to detect political resistance to market reform.
2023,[INST] Some voters and legislators alike [/INST] plainly think there has been too much already.
2024,[INST] Latin America's recent financial scare will prompt a rethink about economic policy - [/INST] and should give governments an incentive to far more boldness both in structural reform and in tackling the many defects of Latin American democracy.
2025,[INST] Full text: Headnote Will Latin America's coming economic slowdown [/INST] undermine the region's broad but quite recent rediscovery of free markets and democracy Probably not.
2026,"[INST] But it ought to make reformers less complacent THE 14,ooo [/INST] production workers at Fiat's giant car factory near the Brazilian city of Belo Horizonte took a holiday last week. "
2027,"[INST] But it is one they would rather not [/INST] have had: for the third time in two months, the factory was temporarily closed. "
2028,"[INST] Brazil's car industry, bursting with new plants, and, [/INST] until a year ago, full of expansionary optimism, is now grappling with lay-offs and short-time. "
2029,"[INST] Output is running at 25% below [/INST] last year's levels, and a record zoo,ooo unsold cars are stockpiled. "
2030,"[INST] As $30 billion fled in August and September, the [/INST] central bank first raised interest rates ferociously (to 43% and up, while inflation is 3%). "
2031,"[INST] Then-with President Fernando Henrique Cardoso safely re-elected-the government announced [/INST] tax rises and spending cuts, to slash a fiscal deficit heading for 8% of GDP. "
2032,"[INST] Congress is yet to back [/INST] the new measures, foreigners to resume investment. "
2033,[INST] Brazil will probably pull through-but at [/INST] a cost: some economists see unemployment reaching 13% next year.
2034,"[INST] And though Brazil is worst hit, tough [/INST] times lie ahead throughout Latin America, albeit the much-feared meltdown has not happened. "
2035,[INST] Mexico's peso recently slid by some 20% (before a [/INST] modest recovery) and a resultant blip in inflation may wipe out a slight recovery in real wages.
2036,[INST] Many businesses in Mexico [/INST] are scaling down investment as profits fall.
2037,[INST] Argentina's industrial production in September [/INST] was 2% less than a year earlier.
2038,"[INST] This month its car plants [/INST] cut hours, after a slump in sales to Brazil. "
2039,"[INST] Even Chile, after a decade of [/INST] 7% annual average growth, will barely expand in 1999. "
2040,[INST] All on top of the blows [/INST] inflicted farther north by El Nino and now Hurricane Mitch.
2041,"[INST] For the eight biggest economies combined,J.P. [/INST] Morgan, an American bank, foresees nil growth next year. "
2042,[INST] But in Latin America little or [/INST] no growth does not mean standing still: it means sliding backwards.
2043,[INST] Prosperity postponed The setback is all [/INST] the more bitter because things had been going well.
2044,"[INST] The region's early-198os debt crisis plunged it into [/INST] several years of stagflation and rising poverty, but also hastened the end of military regimes. "
2045,"[INST] Since then, democratic governments in many countries have [/INST] brought in free-market reforms, taming inflation, opening to foreign trade and investment, and privatising extensively. "
2046,"[INST] These reforms were controversial, some fiercely resisted, because, at first, they often seemed to [/INST] favour the rich, while hurting some middle-class people, and unionised workers who had previously done well out of the state; many now found themselves jobless. "
2047,"[INST] Yet, despite a scare in 1995, after Mexico's peso collapse [/INST] brought recession there and in Argentina, and stress elsewhere, reform at last seemed to be paying off. "
2048,"[INST] Both those countries recovered swiftly, and in 1997 Latin [/INST] America overall recorded its best economic performance since 1982, growing at 5.5%, with inflation below to%. "
2049,"[INST] Those who opposed freemarket reform (neoliberalismo to Latin Americans, [/INST] though this is more a term of political abuse than of economic analysis) feel vindicated. "
2050,"[INST] Look, they say, tearing down the barriers to trade and [/INST] investment has left our economies even more vulnerable, innocent victims of the volatile humours offoreign fund managers. "
2051,"[INST] These critics, who include the traditional left, nationalists, and some businessmen, argue [/INST] that governments should instead favour ""national"" investment and products, impose exchange controls, and (say some) intervene more actively to redistribute wealth. "
2052,"[INST] In many countries, the [/INST] pay-off from reform has indeed been disappointing. "
2053,"[INST] True, Latin America's widespread poverty, inequality and [/INST] discontent pre-dated the reforms; but that does not make them any less real. "
2054,[INST] It would be naive to [/INST] assume that democracies can forever thrive against such frustrations.
2055,[INST] And there is a precedent: the collapse of international credit and of world demand for [/INST] commodities at the start of the 193os ended half a century or so of civilian regimes and a liberal economic order in many countries of the region.
2056,"[INST] Those who foresee an authoritarian or populist reaction against reform point to Venezuela, and the avenging [/INST] figure of Hugo Chavez, the then paratroop colonel who in i992 came close to toppling democracy with a would-be coup, and who now is the front-runner in next month's presidential election. "
2057,"[INST] True, part of his appeal [/INST] lies in his promise to clean up politics. "
2058,"[INST] True too, he has backed away from earlier threats to [/INST] take dictatorial powers and impose a siege economy (and debt default And of course he may not win. "
2059,[INST] But his commitment to [/INST] democracy or to the market remains untested.
2060,"[INST] He might halt Venezuela's opening of its [/INST] oil reserves to foreign companies, and raise tariffs to protect agriculture and manufacturing. "
2061,"[INST] He has talked of a constituent [/INST] assembly, which might close Congress and grant him sweeping powers. "
2062,"[INST] That route is one already travelled, in 1992, by Peru's Alberto Fujimori, today a reelected [/INST] autocrat who-whatever his neoliberal economics-has defied public opinion in pushing first legislators, then judges, to pull down all constitutional bars to his running for a third term in 2000. "
2063,"[INST] There are authoritarian threats elsewhere: Colombia's extreme left and right; General Pinochet's friends [/INST] in Chile's business, security services and the Independent Democratic Union, its unmodemised right-wing opposition party; Lino Oviedo, Paraguay's former army commander and would-be political messiah. "
2064,"[INST] It is not hard, either, [/INST] to detect political resistance to market reform. "
2065,[INST] Some voters and legislators alike [/INST] plainly think there has been too much already.
2066,"[INST] In Mexico, structural reform such as [/INST] privatisation has made little progress under President Ernesto Zedillo. "
2067,"[INST] The opposition, which since last year has controlled Congress, wants to oust Guillermo Ortiz, the central-bank president, a free-marketeer because of his earlier role in an ill-conceived bail-out of the country's private-sector banks (and bankers) In Brazil, senior figures in [/INST] Mr Cardoso's own party have not concealed their dislike of the new austerity package, nor their support for higher tariffs and controls on capital outflows-in other words, a selective debt default Argentina's Congress this year thwarted a government proposal to free the rigid labour market; instead, it passed a law that keeps tradeunion power largely intact And presidential elections next year could bring centreleft leaders to power in Argentina, Chile and two small countries, El Salvador and Uruguay. "
2068,"[INST] Is Latin America about to turn [/INST] its back on the market, or even on democracy? "
2069,"[INST] Look closer and Mr Chavez emerges [/INST] as an exception, not the leader of a trend. "
2070,"[INST] Much of Venezuela's discontent [/INST] stems not from reform, but its absence. "
2071,"[INST] Oil financed a bloated state, and a patronage system operated by the two traditional parties, which alternated [/INST] in central power from 1958 until 1994 (and that years new president, Rafael Caldera, founder of one of them and president from 1969 to 1974, was hardly a break with the past. "
2072,[INST] Neither Venezuela's economy nor its [/INST] political system has adapted to a low oil price.
2073,"[INST] No longer able to hand out largesse, [/INST] the old politicians have earned mounting public anger at corruption, inflation and poverty. "
2074,"[INST] A generation ago, this was Latin America's [/INST] richest country; today, two in three of its people are poor. "
2075,"[INST] In differing ways, both Mexico and Colombia also share the turmoil associated [/INST] with moving from a political system in which power was confined to a relatively restricted elite to a more inclusive democracy. "
2076,[INST] Yet many of Venezuela's ills are [/INST] more typical of Latin America's recent past than of its future.
2077,"[INST] Where stability, both political and economic, [/INST] has been achieved, voters have shown they value it. "
2078,"[INST] Brazilians in 1994 elected Mr Cardoso, who as finance [/INST] minister that year had launched the real and the anti-inflationary plan of which it was the centre. "
2079,"[INST] His opponent then was Luiz Ignacio [/INST] Lula da Silva, standing on a populist, ""old-left"" platform. "
2080,"[INST] This October, despite, or because of, its [/INST] economic difficulties, Brazil chose Mr Cardoso again, over the same rival. "
2081,[INST] Mexico's left-wing Party of the Democratic Revolution clings [/INST] to old-left ideas; polls suggest defeat for it in the presidential election of 2000.
2082,"[INST] In contrast, why do leftish candidates [/INST] in Argentina, Chile and El Salvador look well placed? "
2083,"[INST] In large part, because they have moved to the centre, accepting the market [/INST] and the importance of macroeconomic stability, though (or, indeed, and) wanting to complement it with political reforms, or, for example, tighter regulation of privatised monopolies. "
2084,"[INST] Perhaps not coincidentally, these are the countries [/INST] where structural reform has gone furthest, and growth has been strong. "
2085,"[INST] An unfinished agenda That said, Latin America's recent financial scare will prompt a rethink [/INST] about economic policy-and should give governments an incentive to far more boldness both in structural reform and in tackling the many defects of Latin American democracy. "
2086,"[INST] Brazil's trouble arose partly from unlucky timing-its victory over inflation was still unconsolidated when the Asian crisis struck-but mainly because its politicians [/INST] had seen no urgency in tackling the fiscal deficit (whose size was in part due to the end of inflation) as long as foreigners were ready to finance it When the world took fright, Brazil's response was complicated by this October's elections. "
2087,"[INST] The government shirked some of the deficit-cutting promised [/INST] last year, and held off announcing some of this year's steps till voting was over. "
2088,"[INST] Elsewhere, most governments reacted to the market [/INST] shock with similar orthodoxy, tightening monetary and fiscal policy, and faster. "
2089,"[INST] In several countries, financial stress [/INST] is in fact likely to stimulate swifter market reform. "
2090,[INST] Brazil's government at last this month [/INST] won congressional approval for its much resisted pension reform.
2091,[INST] It plans new laws [/INST] to make the labour market more flexible.
2092,"[INST] Ecuador, like Venezuela an oil exporter, this [/INST] year embarked on a long-postponed stabilisation programme, involving privatisation and an iMF agreement. "
2093,[INST] Chile has approved a law [/INST] to cut its already low import duties.
2094,"[INST] Several countries, including Guatemala [/INST] and Argentina, are pushing on with privatisation. "
2095,"[INST] Confounding past stereotypes, Latin America is thus eschewing both a [/INST] return to populism and a general retreat to protectionism (though Brazil has fiddled with anti-dumping rules and tariffs). "
2096,"[INST] And while Mr Cardoso and others have talked of a [/INST] 0.5% tax on short-term capital inflows, until there are again flows to tax that is little more than talk. "
2097,[INST] Both Brazil and Chile have had such [/INST] taxes-and have eased them in the past year as capital has grown scarcer.
2098,"[INST] As to control on capital outflows, [/INST] such as Malaysia imposed recently, Latin America has resisted this. "
2099,"[INST] It had controls in the early 198os, yet plenty of [/INST] local money managed to flee the debt crisis then, not to return for a decade or more. "
2100,"[INST] Taught by experience, governments [/INST] now seem determined not to try again. "
2101,"[INST] ""The biggest capital we have in the region now is the [/INST] stock of our past mistakes, which protects us from repeating them,"" says Enrique Iglesias, chairman of the Inter-American Development Bank (Is). "
2102,"[INST] ""I've never seen such commitment to defend [/INST] what's been achieved with so many years of pain and adjustment"". "
2103,"[INST] Provided Brazil's new rescue works, and the world economy [/INST] avoids catastrophe, this orthodox policy-tightening may yet prove enough to ensure a fairly speedy recovery. "
2104,[INST] But it leaves open the question of [/INST] how Latin America can make itself less vulnerable to volatile capital flows.
2105,[INST] The region was hit partly [/INST] because higher growth had brought large current-account deficits.
2106,"[INST] These have been much improved, notably in [/INST] Argentina, which suffered bank failures and a run on deposits in 1995. "
2107,"[INST] Since then, more than 50 weak banks have closed [/INST] or been bought, and strong foreign banks now account for over 40% of the system. "
2108,"[INST] Moreover, the government has not only imposed [/INST] a deposit-insurance scheme, but recently tightened banks' liquidity requirements, especially on foreign borrowing. "
2109,"[INST] This year, despite the collapse of two middle-sized [/INST] banks, and fears of a Brazilian devaluation, deposits in Argentina's banks have risen. "
2110,"[INST] Most economists think Brazil needs a modest devaluation, if it [/INST] is to generate enough export growth, and so a better trade balance, to reduce its dependence on shortterm capital. "
2111,"[INST] Once calm is restored, it may-though its economic team says [/INST] notadjust its exchange-rate system (a managed crawl, which lets the real slide against the dollar by 7.5% a year). "
2112,"[INST] The trouble is that when emerging [/INST] countries try such modest adjustments, markets tend to panic. "
2113,"[INST] Opinions are now polarised around two extremes: Mexico's free float; and Argentina's rigid [/INST] currency-board system, which limits its local money supply to the level of its foreign-exchange reserves, and ties its peso, one-for-one, to the dollar. "
2114,"[INST] An external shock under Mexico's system is likely to mean, [/INST] as it has recently, inflation and falling real wages; under Argentina's, less liquidity and higher unemployment, as in 1995-96. "
2115,"[INST] Both are unwelcome, politically as economically, but they are not the [/INST] same, and other Latin Americans will be watching closely how the two economies compare in the next year or so. "
2116,"[INST] Educating for equality In Latin America's [/INST] shanty towns, however, other issues are on people's minds. "
2117,"[INST] If opinion polls show only grudging support for democracy in the region, it may [/INST] be because the politicians have done disappointingly little to improve the quality of life for ordinary people, in two main areas: personal security and social fairness. "
2118,"[INST] Some blame Latin America's high and rising levels of [/INST] crime, especially violent crime, on the end of dictatorial and paternalist regimes, and on higher unemployment. "
2119,"[INST] These may among the reasons, [/INST] but they are not the whole story. "
2120,"[INST] Its causes include rapid urbanisation, the illegal trade in drugs [/INST] and arms, and mere demography-Latin America now has a bulge of teenagers, which in time will slim. "
2121,[INST] Where democratic governments can be blamed [/INST] is the low priority many have given to police reform.
2122,"[INST] Or to corruption, which is made more [/INST] noticeable by democracy-and in its turn makes austerity harder to bear. "
2123,[INST] But perhaps the most politically damaging failure of [/INST] democracy and market reform alike has been their failure to reduce deep-rooted inequalities.
2124,[INST] Latin America's income distribution [/INST] is the most unequal in the world.
2125,"[INST] According to a new IDB study, in the region as [/INST] a whole, the richest io% of the population gets 4o% of overall income, the poorest 3o% only 7.5%. "
2126,"[INST] It is partly a function of Latin America's stage of development: labour is more plentiful, [/INST] therefore worse-rewarded, than capital; rapid urbanisation at first increases inequality, because city dwellers earn more; past neglect of schooling means that an educated minority earn unduly well. "
2127,"[INST] Mining and large-scale tropical agriculture [/INST] suck up scarce capital, while offering relatively few jobs. "
2128,"[INST] And wildly fluctuating commodity prices contribute to the boom-bust [/INST] cycles characteristic of Latin America and damaging to its prosperity, investment and creation of jobs. "
2129,"[INST] To make inequality worse, as companies have modernised to compete in open markets, [/INST] the immediate effect has been to raise the demand for and pay of skilled workers, especially graduates, while many unskilled ones have lost their jobs. "
2130,"[INST] Reform has produced higher growth, [/INST] and cut poverty rates, but has not reduced inequality. "
2131,[INST] The case for Latin America to make a much bigger [/INST] effort in education-and not only at primary levels-has rarely been put more clearly than in the IDB study.
2132,"[INST] In fact, there is an unusually wide consensus in the region [/INST] that the way to a fairer society is more, and more efficient, spending on education and health for the poor. "
2133,[INST] There is also far more agreement than in the [/INST] past that the way to make this possible is to create a competitive market economy.
2134,"[INST] Far from undermining such a consensus, Latin [/INST] America's current woes underline the urgency of putting these policies into practice. "
2135,[INST] ___ Document 296 of 400 [/INST] The Americas: Which candidate for Argentina's alliance?
2136,"[INST] Author: Anonymous Publication info: [/INST] The Economist 349.8095 (Nov 21, 1998): 37. "
2137,"[INST] accountid=28034 Abstract: In Argentina, the Radical Union and [/INST] the much younger Frepaso joined forces in August 1997 to form the Alliance. "
2138,[INST] Now a vote by Alliance members on November 29 is [/INST] to decide between the rival standard-bearers - Frepaso's Graciela Fernandez Meijide and Radical Union's Fernando de la Rua.
2139,[INST] Some Argentines fear an Alliance victory in [/INST] the next presidential election could mean a resurgence of populist politics.
2140,[INST] Full text: Headnote One or other [/INST] of them may well be Argentina's president a year from now.
2141,"[INST] Voters find it hard to tell A [/INST] PRIMARY, as voters in the United States would understand it, it is not. "
2142,[INST] Argentina's opposition two-party Alliance hopes next year to [/INST] seize the national presidency from the ruling Justicialist Party of President Carlos Menem.
2143,"[INST] So the rival would-be challengers [/INST] are going at each other hammer-and-tongs, are they? "
2144,"[INST] When Fernando de la Rua, Radical mayor of Buenos Aires, [/INST] and Frepaso's hopeful, Graciela Fernandez Meijide, squared off before a television audience last July, they agreed on nearly everything. "
2145,[INST] The Radical Union and the [/INST] much younger Frepaso joined forces in August 1997.
2146,"[INST] The resultant Alliance, riding a wave of [/INST] resentment against Mr Menem and his government, won congressional elections that October. "
2147,[INST] It promises to clean up corruption [/INST] and blames Mr Menem's policies for high unemployment and stagnant salaries.
2148,"[INST] But, after some initial Radical hesitation, it also promises business and [/INST] foreign investors that privatisation will not be reversed, and that the currency board that smashed Argentina's inflation will not be touched. "
2149,[INST] Now a vote by Alliance members [/INST] on November 29th is to decide between the rival standard-bearers.
2150,"[INST] Whatever its faults, Mr Menem's administration since 1989 has [/INST] radically altered Argentina's economy, achieving stability and growth, and winning the confidence of investors, domestic and foreign. "
2151,[INST] Some Argentines fear that an [/INST] Alliance victory could mean a resurgence of populist politics.
2152,"[INST] That fear was for a time increased, in some minds, [/INST] by the lead-modest though it is-that most polls show for Mr de la Rua over Mrs Fernandez Meijide. "
2153,"[INST] The Radicals might better, [/INST] in Argentine economic terms, be called conservatives. "
2154,"[INST] Pollsters attribute a recent swing towards Mr de [/INST] la Rua not to that, however, but to a leaning among voters towards proven experience. "
2155,"[INST] Now 61, Mr de la Rua, a lawyer from the central [/INST] city of Cordoba, was a Radical congressman for 23 years before being elected mayor of Buenos Aires in 1996. "
2156,"[INST] He has run it well, striving to return the [/INST] city, in its day sometimes known as the Paris of South America, to its former state. "
2157,"[INST] He has invested in infrastructure, and [/INST] in cultural events, as well as starting a much-publicised waste-recycling programme. "
2158,"[INST] His city(unlike the central government) ended 1997 with a [/INST] budget surplus, and it has been able to sell bonds internationally-""tango"" bonds to their friends. "
2159,"[INST] Many believe he would be a [/INST] stronger candidate, and later a more effective president, than his rival. "
2160,"[INST] But Mrs Fernandez Meijide, 67 and [/INST] with dark bags under her eyes, is a strong figure too. "
2161,"[INST] Her personal history and outspoken style have won her [/INST] widespread trust, and project a sense of mission that could bring a large turnout in her favour. "
2162,"[INST] Long a professor of French, she became a full-time human-rights activist after [/INST] her son was taken off in 1976 by the security forces of the then military regime, never to be seen again. "
2163,"[INST] After the last military junta collapsed in 1983, [/INST] she helped to lead President Raul Alfonsin's commission to probe the thousands of civilian ""disappearances"". "
2164,"[INST] Then she moved into a political [/INST] career, and was eventually elected to Congress in 1993. "
2165,"[INST] While Mr de la Rua finds most of his support in the [/INST] metropolitan areas of Buenos Aires and Cordoba, Mrs Fernandez Meijide has tirelessly campaigned from one end of the country to the other. "
2166,"[INST] Mr de la Rua has shown political skill recently, saying he [/INST] would support an anticorruption investigation of an out-ofpower Mr Menem, thus stealing one of Mrs Fernandez Meijide's main themes. "
2167,"[INST] Argentina's economy has survived the global turmoil better [/INST] than have some others in the region, and voters do not seem eager for change. "
2168,"[INST] Last month Mr de la Rua suggested he [/INST] would pick as his economy minister Ricardo Lopez Murphy, a laisserfaire economist and keen budget-balancer. "
2169,"[INST] Mrs Fernandez Meijide quickly retorted, saying Mr [/INST] Lopez Murphy would be even worse than the current economy minister, Roque Fernandez. "
2170,"[INST] She prefers Jose Luis Machinea, a former central-bank president and now head of the [/INST] Alliance's economic team, who places less emphasis on fiscal balance and thinks trade barriers can justifiably be raised in times of crisis to protect the economy. "
2171,"[INST] And it raises the chances that, if Mr de la Rua wins the [/INST] candidacy, the freemarket Mr Menem-himself barred by the constitution from running again next year-may see his economic policies prevail, even if his party loses. "
2172,"[INST] ___ Document 309 of 400 The Americas: Goodwill--and [/INST] a group of islands Author: Anonymous Publication info: The Economist 349.8091 (Oct 24, 1998): 35. "
2173,"[INST] accountid=28034 Abstract: When he arrives in Britain on [/INST] October 27, Carlos Menem will be the first Argentine president officially there since the 1960s. "
2174,[INST] Goodwill has grown vastly since the [/INST] two countries went to war over the Falkland Islands in 1982.
2175,"[INST] Menem meets with Queen Elizabeth and her prime minister, [/INST] Tony Blair, and many of his ministers - notably those of defense, economy, foreign affairs and education. "
2176,[INST] The themes will be [/INST] reconciliation and the strengthening of economic links.
2177,"[INST] Britain refuses to negotiate, against [/INST] the urging of the UN's decolinisation committee. "
2178,"[INST] Full text: Headnote Argentina and Britain WHEN he arrives in [/INST] Britain on October 27th, Carlos Menem will be the first Argentine president officially there since the 1960s. "
2179,"[INST] Goodwill has grown vastly since the two countries [/INST] went to war over the Falklands Islands (to Argentines, the Malvinas) in 1982. "
2180,[INST] But all kiss-and-make-up it is not-and [/INST] Argentina's Congress has not recently been helping that way.
2181,"[INST] Few Britons take much note of [/INST] Argentina, except on the football field and at ""Evita"". "
2182,[INST] But there has long [/INST] been a love-hate relationship the other way.
2183,"[INST] For Britons, the Falklands war was [/INST] a nasty incident, successfully concluded, that happened 16 years ago. "
2184,"[INST] For Argentines, British rule in the islands [/INST] is a long-standing, unhealed injury, a theft of their national territory. "
2185,"[INST] And the war, which claimed [/INST] over 1,000 lives, remains a vivid and bitter memory. "
2186,[INST] Yet the long relationship between the [/INST] two countries ensures that resentment in Argentina is mixed with fascination.
2187,"[INST] Argentina owes much to British capital and British settlers, not least its 19th-century railways [/INST] and the port of Buenos Aires (and warships, from those of that day to the-now mothballed-aircraft carrier that the British chose not to go after in 1982). "
2188,"[INST] It owes football too, and today's [/INST] regular victories over the one-time masters arouse immense pride. "
2189,"[INST] British-taught rugby football, British culture in [/INST] general and (more widely) British pop-groups, all have their fans. "
2190,"[INST] It is against this background-barely perceived in [/INST] Britain, alive in Argentinathat Mr Menem sets off for an actionpacked five-day visit. "
2191,"[INST] While he meets Queen Elizabeth and her prime minister, Tony [/INST] Blair, many of his ministers-notably those of defence, economy, foreign affairs and education-will meet their British counterparts. "
2192,"[INST] A service at St Paul's cathedral in London, attended [/INST] by the heads of Argentina's armed forces and veterans from both sides, will emphasise reconciliation. "
2193,"[INST] Some 70 leading Argentine business people will [/INST] be strengthening economic links, the other main theme of the visit. "
2194,"[INST] Britain is the third largest foreign [/INST] investor in Argentina, after the United States and Spain. "
2195,"[INST] The two countries are close in [/INST] international affairs, both good allies of the United States. "
2196,"[INST] Yet Britain still has an arms embargo [/INST] against Argentina-a ""comic"" one, says the foreign minister, Guido Di Tella. "
2197,"[INST] Argentines hope it will be ended during the [/INST] visit, giving way to the export licences that Britain uses for other countries. "
2198,[INST] The two countries agreed in 1989 to [/INST] sort out practical issues without prejudice to either's claim to sovereignty.
2199,[INST] That brought a deal on licensing for oil exploration [/INST] in a sea area between the islands and the mainland; another is yet to come on fisheries.
2200,"[INST] But both have been challenged-put [/INST] at risk, in British eyes-this year by Argentine legislators. "
2201,"[INST] First came a bill-passed by both houses of Congress, [/INST] though not yet in lawrequiring companies finding oil anywhere round the islands to pay Argentine royalties. "
2202,"[INST] Recently the Senate passed a similar bill, [/INST] to fine boats fishing-wherever-in the islands' waters without an Argentine licence. "
2203,"[INST] The islanders, self-governing in internal affairs, still refuse entry [/INST] to visitors using Argentine passports (except relatives visiting war graves, and, recently, a television journalist). "
2204,"[INST] As for negotiations on sovereignty (or shared sovereignty, sale and leaseback, or [/INST] other imaginable halfway houses), their answer is a flat no: for all Mr Di Tella's ""charm offensive"", their distrust is deep. "
2205,"[INST] Britain equally refuses to negotiate, [/INST] against the urging of the UN's decolonisation committee. "
2206,[INST] The Malvinas are not [/INST] the Argentine public's first concern these days.
2207,"[INST] Mr Menem has sworn to raise it [/INST] whenever he can in his visit, not least with Mr Blair. "
2208,"[INST] But that exchange has been tightly choreographed: Mr [/INST] Blair will listen politely, note the Argentine position and move on to other business. "
2209,"[INST] ""At the level of political discussion [/INST] and negotiation there is absolutely no activity,"" laments Mr Di Tella. "
2210,"[INST] Its garrison of some 2,000 men may cost $125m [/INST] a year, but otherwise the islands pay for themselves, thanks largely to the sale of fishing licences. "
2211,"[INST] They may be surrounded by oil too, though that dream has been [/INST] dashed by the results of the first exploratory drilling, this year: one company calls a well it sank ""our driest ever"". "
2212,"[INST] If change is to come, Mr [/INST] Di Tella knows, it must start with the 2,200 islanders. "
2213,"[INST] His charm offensive-last Christmas, presents of [/INST] books and videos on Argentina's natural beauty-has been frostily received. "
2214,"[INST] ""It is not an attempt to make them change [/INST] their minds, but to create an environment where it might be possible to negotiate one day"". "
2215,"[INST] That day, if ever [/INST] it comes, is unlikely to be his. "
2216,"[INST] With elections due next year, [/INST] Argentina's opposition Alliance is far ahead in the polls. "
2217,"[INST] Its senior figures refused to join Mr [/INST] Menem on his trip, saying it was a bit of his propaganda. "
2218,"[INST] So-among other thingsit is: his dream of winning a third [/INST] term in has been blasted, but he still hopes for a place in history as a statesman. "
2219,[INST] But the Alliance's attitude springs [/INST] also from a tougher line on the Falklands.
2220,"[INST] Of course, that might well be watered down by an Alliance government [/INST] (and the constitution, in its latest form, though it enshrines Argentina's claim, also implicitly disavows the use of force to achieve it). "
2221,"[INST] But, however smoothly Mr Menem's visit may go, [/INST] Britain cannot suppose that the Falklands irritant to good relations can then be pigeonholed. "
2222,"[INST] ___ Document 313 of 400 Letters [/INST] Author: Anonymous Publication info: The Economist 349.8089 (Oct 10, 1998): 6. "
2223,"[INST] Full text: Taking the year out SIR-Your otherwise thorough survey on the millennium [/INST] bug (September 19th) propagates the myth that the computer age brought in the practice of leaving the ""19"" off the year of calendar dates. "
2224,"[INST] In fact, this practice was universal [/INST] in the punched-card industry in the 1950s and for decades earlier. "
2225,[INST] It would have been absurd not to have dropped those [/INST] digits when designing unit records to be fitted into the 80 or 90 columns of a card.
2226,"[INST] Programs coded for the first electronic computers brought [/INST] into commercial use merely copied the less automatic procedures used with older, simpler punched-card machinery. "
2227,[INST] Those early computers processed cards formated to [/INST] old designs and still produced and partly processed on the older machinery.
2228,"[INST] The millennium bug is only a minor example of a general, historical tolerance [/INST] of second-rate computation, and gets major attention only because most of its effect is going to be felt on a single day by many people. "
2229,"[INST] Dilston, Australia NEVILLE HOLMES SIR-You say, regarding [/INST] the millennium bug, that ""all sorts of functions that depend on dates will... "
2230,"[INST] In truth, only a small [/INST] fraction of computer functions depends on dates. "
2231,[INST] These functions are quite identifiable and the [/INST] ways in which they will go wrong are extremely easy to forecast.
2232,"[INST] Certain methods of calculating age and [/INST] duration, and before-and-after decisions involving the year, will be affected. "
2233,"[INST] The wrong results they will [/INST] report, if comparing 99 to zero, are completely predictable. "
2234,"[INST] There is no believable scenario whereby one ofthese [/INST] incorrect results could crash even a single program, let alone an entire system. "
2235,"[INST] The truth is that many or most [/INST] of the computer functions involving yearly date checks have already""failed""with no discernible consequences. "
2236,"[INST] For instance, almost every program that calculates credit-card expiration dates [/INST] has already passed through one day (or one hour) when it rejected cards expiring in the 21st century. "
2237,"[INST] It was quickly and [/INST] easily fixed, and the rejected cards reprocessed. "
2238,"[INST] A momentary embarrassment, perhaps, [/INST] but hardly the end of the world. "
2239,"[INST] Berkeley, California JEFF CARLOCK SIR-My own awakening to the potential millennium bug problem [/INST] occurred in the late 1970s when I was a junior programmer put on to a project to convert applications from one mainframe to another. "
2240,"[INST] As the programs were mostly written in the early [/INST] 1960s, I realised the long lifecycle of these systems could cause problems around the year 2000. "
2241,[INST] The problem was discussed and resolved-not only internally in [/INST] the software house where I was employed but also in several industry forums in Britain and America.
2242,"[INST] Since then, four-digit years in all [/INST] new or reworked applications has been a strict rule. "
2243,"[INST] When I read that some organisation in Japan ""proposed"" [/INST] this solution as late as 1992, I did not know whether to laugh or cry. "
2244,"[INST] Zaventem, Belgium IAN MCLOUGHLIN SIR-I notice that [/INST] The Economist is working to preclude the problem of the millennium bug. "
2245,[INST] In June 19981 renewed my subscription and was [/INST] thrilled to receive your acknowledgment informing me that my new expiration date is May 2999.
2246,"[INST] Wayne, Pennsylvania CHARLES WENZEL Flood warning SIR-You certainly deserve our thanks for highlighting the terrible nature of the floods which this year have laid waste to [/INST] huge parts of Bangladesh (""Drowning"", September 12thy But there was no reluctance on the part of the authorities where calling for outside help was concerned, as you suggest Initially, it remained the endeavour of the government to deal with the emerging flood problem through its own measures and machinery. "
2247,"[INST] However, as the waters rose and the intensity of the disaster [/INST] became all too obvious, the government lost hardly a moment to acquaint the outside world with the news of the crisis. "
2248,"[INST] Finally, to suggest that foreign pressure was brought [/INST] to bear on the government in the matter of distribution of aid is unkind. "
2249,"[INST] SYED BADRUL AHSAN Bangladesh High Commission Lott Spinning the Web SIR-You say that [/INST] ""CERN was widely criticised for inventing the World Wide Web and then failing to cash in on it,"" (""Vacuum science: a stronger suck"", September 12th). "
2250,[INST] We are often asked why [/INST] CERN did not take out patents for the Web.
2251,[INST] What we did was to produce a [/INST] standard; we wanted to leave the production of software to industry.
2252,[INST] The real question is: why did European industry fail to [/INST] pick up the Web when we were pushing them and giving away prototype software for exactly that purpose?
2253,"[INST] ROBERT CAILLIAU CERN Geneva Neutral observation SIR-I am forced to respond to claims made by J.M.Amir, the Malaysian [/INST] high commissioner in London (Letters, September l9th), who states that the presence of Amnesty International at the trial of an opposition parliamentarian, Lim Guan Eng, demonstrates that the Malaysian justice system is fair and open. "
2254,"[INST] The presence of a neutral observer, a minimum requirement of international [/INST] human-rights standards, indicates only that the trial is open and in no way ensures that a fair trial is administered. "
2255,[INST] The truth of the matter is that Amnesty International [/INST] believes that the government of Malaysia continues to apply restrictive legislation in an arbitrary and selective manner.
2256,[INST] This belief is reinforced by the recent [/INST] arrest of former deputy prime minister Anwar Ibrahim and his political associates.
2257,"[INST] Amnesty International believes that the imprisonment of Mr Lim, who is deputy secretarygeneral of the Democratic [/INST] Action Party, is politically motivated and that the aim of the prosecution was to remove a prominent government critic from public life (the sentence automatically disqualifies him from Parliament). "
2258,"[INST] We believe Mr Lim, Mr Anwar and his detained associates are [/INST] prisoners of conscience, imprisoned solely for the peaceful expression of their opinions, and call for their immediate and unconditional release. "
2259,"[INST] DAVID BULL Director London Amnesty International UK Moral authority SIR-Lexington [/INST] (September 12th) writes of Senator Joe Lieberman that ""his political persona exudes integrity and strict moral values"". "
2260,"[INST] Before Mr Lieberman is anointed the moral [/INST] custodian of the Senate, a broader, secular definition of morality is needed. "
2261,"[INST] Year after year, Mr Lieberman has pressed for product liability [/INST] legislation that restricts the recovery rights of wrongfully injured people in courts of law against the perpetrators. "
2262,[INST] He has also voted for legislation that makes it [/INST] much more difficult for defrauded investors to hold corporate chisellers accountable in state and federal courts.
2263,"[INST] While taking away rights held for decades [/INST] by Americans when suing corporations, Mr Lieberman protects the corporations' right to sue. "
2264,"[INST] Companies are exempted from the restrictions imposed on injured human beings and [/INST] are left with unfettered rights to obtain full compensation for their commercial losses from defective products, including punitive damages without statutory limits. "
2265,"[INST] Also, in the past, Mr Lieberman has proposed more [/INST] Draconian tort-law restrictions than were contained in the bill which the Senate defeated in July. "
2266,"[INST] Will commentators ever get round to evaluating this kind of legislative immorality [/INST] against defenceless children and adults who become victims of reckless or criminal behaviour by car, drug, chemical, securities and insurance companies? "
2267,"[INST] And by the way, much of Mr [/INST] Lieberman's campaign contributions comes from the very special interests that he champions. "
2268,"[INST] Washington, DC RALPH NADER Don't cry for Argentina SIR-The view [/INST] from Argentina of the links with Brazil is quite different from the one that you portray (September 12th). "
2269,"[INST] First, there is confidence that Brazil will not radically change monetary [/INST] or exchange-rate policy, given its hard-won fight against inflation and the political capital the government has invested in stability. "
2270,"[INST] Second, the growing insider view is that even if it did, this would not unduly affect Argentina as: [/INST] Though almost 30% of Argentine exports go to Brazil, total exports are less than 8% of GDP, and some so% of exports to Brazil are commodities that would find other markets at going international prices. "
2271,"[INST] Even an unthinkable disaster in Brazil [/INST] would cost Argentina no more than, say, 1% Of GDP. "
2272,"[INST] Argentina grewby7.2% in the first quarter of 1998, [/INST] Brazil by 1.1%; second-quarter figures for Argentina showed continued strong growth of 6.9%. "
2273,"[INST] This makes perfect sense, given the [/INST] marked difference in real interest rates in the two countries. "
2274,[INST] The Argentine peso appreciated by [/INST] 53% between 1990 and 1992 against the Brazilian currency.
2275,"[INST] Then, with the reduction of inflation in Argentina and [/INST] the start of the real plan it was Brazil's turn to appreciate, by 35% until November 1994. "
2276,"[INST] Yet, notwithstanding these sharp movements in the real exchange-rate, trade between [/INST] the two has been growing steadily in both directions, and Argentine exports to Brazil have grown strongly over the whole period. "
2277,"[INST] Although growing, integration between the two countries remains [/INST] low and very large swings in real exchange rates have not had undue effects. "
2278,"[INST] So, the ""Brazil dependency"" myth is [/INST] contagion at its worst It has no basis in the fundamentals. "
2279,"[INST] But if everyone thinks it is true, it would surely imply [/INST] a reduction in finance available, an increase in the risk premium and lower growth-as this is the way Argentina would adjust. "
2280,[INST] Your normally excellent newspaper has a [/INST] reputation for focusing on the real facts and debunking such myths.
2281,"[INST] What a shame The Economist simply reinforced contagion [/INST] in this case, where it is so clear that the emperor has no clothes. "
2282,"[INST] ANDREW POWELL Chief Economist Central Bank of Argentina Buenos Aires The war in the [/INST] Horn SRI-:Contrary to what you say in your article about Ethiopia and Eritrea (September 19th), it was Ethiopia that launched the first aerial attack against Eritrea. "
2283,"[INST] Also, the borders of Eritrea-the ones that it inherited [/INST] from Italian colonial rule-have already been estaS lished by international treaties concluded between Italy and Ethiopia. "
2284,"[INST] Only Ethiopia is committing violations of human rights, [/INST] both against Eritreans and against Ethiopians of Eritrean origin, amounting to ethnic cleansing. "
2285,[INST] No third party has yet [/INST] accused Eritrea of violations of human rights.
2286,"[INST] Finally, the reports of Eritrean assistance [/INST] to Ethiopian rebel movements are based on Ethiopian allegations. "
2287,"[INST] TSEHAYE WELDMICHEAL Eritrean Consulate General London Cause or correlation SIR-Andrew Oswald is wrong to [/INST] draw attention to the nature of the housing market as a factor in youth unemployment in industrialised countries solely on the basis of correlation (Letters, September 5th). "
2288,[INST] Correlation does not imply causality; plant growth rates [/INST] may be strongly correlated with ice-cream sales but both are caused by good weather.
2289,[INST] Correlation analysis should be used [/INST] to support a model chosen on economic grounds.
2290,"[INST] In this case the most rational model implies a direction of causality opposite to that suggested: younger people are more likely to [/INST] rent, but only if they can afford to do so(for example, when employed) Without proposing a reason to explain why youth unemployment should depend on the nature of the housing market Mr Oswald has done nothing more than point out a mathematical quirk. "
2291,"[INST] JUSTIN SANTA BARBARA Cambridge Clerical error SIR-Your article [/INST] ""Iran's war on fundamentalism"" (September 12th) could well have been titled ""Fundamentalism's war on Iran"". "
2292,[INST] Conservative clergy feel their grip on Iranian [/INST] society is loosening and may resort to war to restore their absolute power.
2293,"[INST] They are no longer martyrs, suffering because of [/INST] the government: they are the government and their words have started to ring hollow. "
2294,"[INST] In the past, the clergy kept their word [/INST] when they promised to fight against the monarchy (often risking their own lives). "
2295,[INST] Today they have failed [/INST] to make things better for ordinary Iranians.
2296,"[INST] To make things worse, they [/INST] have a new generation of students on their hands. "
2297,"[INST] These do not remember the martyrdom of the clergy but have seen the [/INST] vigilantes' sticks, food stamps, and their elder brothers going to war with Iraq with the blessing of the clergynever to return from it. "
2298,"[INST] That is why things are happening in Iran which could never have happened in the first years [/INST] after the revolution: the election of a president who, shortly before the election, lost his post as a minister due to the clergy's pressure and huge demonstrations in support of this president. "
2299,"[INST] In the light of the above, the events described [/INST] in your article look like an act of despair on the part of the fundamentalists. "
2300,"[INST] Were this to occur, we estimate that the [/INST] basic rate of income tax in England could be reduced by 2p in the pound. "
2301,[INST] This estimate is based on Treasury figures for [/INST] 1994-95-the most recent available-and allocates the whole of North Sea oil revenue to Scotland.
2302,[INST] The prospect of tax cuts in England is not sufficient [/INST] reason to let Scotland go; there is more to life than the basic rate of income tax.
2303,"[INST] But English taxpayers might ponder on whether it is appropriate for [/INST] them to help finance public spending in Scotland, which is one-sixth higher per head than it is in England. "
2304,"[INST] FITZPATRICK Chantrey Vellacott London Home truths SIR-As your leader on domestic services suggests (""Jeeves [/INST] strikes it rich"", September 26th), some lost souls may well still believe that lawyers are more productive for society at the bar than do-it-yourselfing at home. "
2305,"[INST] After LTCM, only those firmly fixed in limbo can still believe [/INST] that Nobel-winning economists would not do us all a favour by staying at home reading Galbraith by the fire. "
2306,"[INST] ___ Document 318 of 400 The Americas: The battle [/INST] royal for Brazil's real Author: Anonymous Publication info: The Economist 348.8085 (Sep 12, 1998): 35-36. "
2307,"[INST] accountid=28034 Abstract: In the first [/INST] 3 days of this month, $3.8 billion fled Brazil. "
2308,[INST] The official reserves are now around $58 [/INST] billion - some 20% less than at the start of August.
2309,"[INST] The real was at risk, [/INST] and so was President Fernando Henrique Cardoso's second term. "
2310,"[INST] Both his popular support and his government program [/INST] are centered on the currency that, as finance minister, he invented 4 years ago. "
2311,"[INST] If the real were to fall, few experts [/INST] believe that Argentina's peso, long tied to one-to-one to the dollar, could hold the parity. "
2312,"[INST] Full text: Headnote Brazil's government, facing elections [/INST] on October 4th, has bought more time for its currency-but maybe not much. "
2313,[INST] Anxious Argentina holds its breath [/INST] THE campaign has become a nail-biting affair.
2314,[INST] But the figures that officials and [/INST] pundits pore over are not those of opinion polls.
2315,[INST] These show President Fernando Henrique [/INST] Cardoso well on course for a second term.
2316,[INST] The worry has been over [/INST] the amount of capital flooding out of the country.
2317,"[INST] In the first three days [/INST] of this month, $3.8 billion fled Brazil. "
2318,"[INST] On Friday September 4th, amid mounting panic, exacerbated by a [/INST] devaluation in Colombia and a downgrading of Brazilian debt by the credit-raters of Moody's, $2.9 billion followed. "
2319,[INST] That lowered the official reserves to [/INST] around $58 billion-some 20% less than at the start of August.
2320,"[INST] Both his popular support and his government programme [/INST] are centred on the currency that, as finance minister, he invented four years ago. "
2321,"[INST] A strong real has helped cut roaring inflation to [/INST] an annual rate of 4%, the lowest since the 1950s, and less in recent months. "
2322,[INST] But it has also meant high interest [/INST] rates and large deficits in the current account and the public finances.
2323,[INST] Many economists thought the real [/INST] too high even before other currencies fell.
2324,"[INST] Ten months ago, when Asia's troubles put the real under pressure, Mr Cardoso's team [/INST] doubled interest rates to 43%, and announced an $i8 billion package of tax rises and spending cuts supposed to cut the budget deficit by 2.5% of GDP. "
2325,"[INST] That bought several months of calm, [/INST] but chilled the economy, despite gradual cuts in interest rates. "
2326,"[INST] This time, the government is as determined [/INST] as ever to avoid a devaluation, but it has less room for manoeuvre. "
2327,[INST] It tried to turn the tide of capital [/INST] flows last month by changing rules to allow shortterm foreign investment in government paper.
2328,[INST] So in the evening of [/INST] September 4th it lifted interest rates again.
2329,"[INST] The Central Bank suspended for a month its [/INST] minimum lending rate, in practical effect raising the benchmark shortterm rate from 19% to 29.75%. "
2330,"[INST] In June, to coax sceptical local moneymen into accepting [/INST] a pre-election loosening of monetary policy, the Central Bank began to issue floating-rate real paper. "
2331,"[INST] This now accounts for over half of [/INST] all real-denominated public debt-to be financed at the new, high interest rates. "
2332,[INST] In one month that will cost [/INST] the treasury an extra 3 billion reais ($2.6 billion).
2333,"[INST] So on September 8th Pedro Malan, the finance minister, [/INST] announced emergency cuts of 4 billion reais in this year's budget, with more to come in 1999. "
2334,"[INST] A decree will also oblige the government, by [/INST] law, to post preinterest-costs fiscal surpluses (5 billion reais for 1998, 8.7 billion for 1999). "
2335,"[INST] The Sao Paulo stockmarket stabilised on [/INST] Tuesday, thennot alone in Latin America-fell 2.8% on Wednesday. "
2336,"[INST] For a week or two, it had paid [/INST] investors to borrow reais to convert into dollars and buy high-yielding Brazilian dollar bonds. "
2337,"[INST] The Central Bank is also issuing a new sort of real but dollar-linked debt And [/INST] it has reverted to what Brazilians call norma fone-decree by telephone: in plain Portuguese, browbeating banks not to be too helpful when their customers want to rush into dollars. "
2338,[INST] But in today's climate of [/INST] freedom this may not work as it used to.
2339,"[INST] The crux of Mr [/INST] Cardoso's problem, however, remains the budget deficit. "
2340,"[INST] And here the government faces a credibility deficit too: [/INST] it pushed through last November's tax increases, but not most of the promised spending cuts. "
2341,"[INST] Add higher interest payments, mounting losses from the still unreformed [/INST] pension system, and the public-sector borrowing requirement has climbed to 7% of GDP, from 4.5% a year ago. "
2342,[INST] One view is that the government [/INST] is just delaying harsh spending cuts until after the election.
2343,"[INST] In fact, toughness in defence of the real might win votes: polls show that [/INST] part of Mr Cardoso's appeal is that he is more trusted than his main opponent, Luiz Inacio Lula da Silva, to ward off the world economic turmoil. "
2344,[INST] Mr Cardoso's trouble is that he cannot cut [/INST] deeply even if he wants to: much official spending is still mandated by the constitution.
2345,[INST] He has got Congress to pass the constitutional amendment [/INST] needed to reform the civil service-but not yet the laws to turn principle into practice.
2346,[INST] Mr Malan has talked of bringing [/INST] the deficit down to 3.5% of GDP in three years.
2347,"[INST] If, as polls suggest, Mr Cardoso wins a first-round victory on October 4th, he is [/INST] expected to recall Congress swiftly, and try to push through the civil-service laws (which would allow all tiers of government to trim payrolls) and the pensions amendment. "
2348,[INST] Officials will be watching the daily [/INST] flow of the reserves anxiously for weeks to come.
2349,"[INST] Argentina holds its breath Meanwhile, the people of [/INST] Argentina, not just its ministers or moneymen, have been holding their breath about Brazil. "
2350,"[INST] If its real were to be sucked down, few [/INST] experts believe that Argentina's peso, long tied one-to-one to the dollar, could hold that parity. "
2351,"[INST] And the ordinary Argentine is [/INST] addicted to what he knows as ""convertibility"". "
2352,"[INST] Argentina installed a currency board in 1991, tying [/INST] its austral (soon, minus four zeros, to become the peso) to the dollar. "
2353,"[INST] Suddenly, a society once ravaged by [/INST] hyperinflation discovered price stability; inflation today is barely 1% a year. "
2354,"[INST] ""Scrapping convertibility is unthinkable, it'd be [/INST] disastrous,"" says Eduardo Vitullo, owner of a Buenos Aires gift shop. "
2355,"[INST] He remembers literally running in his past days as a lawyer [/INST] to spend his pay cheques before inflation, galloping at 1% a day or faster, could catch up with them. "
2356,"[INST] The loans and mortgages that later helped [/INST] people like him set up in business were not available then, he recalls. "
2357,"[INST] It was Domingo Cavallo, President Carlos [/INST] Menem's economy minister of 1991-96, who brought in convertibility. "
2358,[INST] He can be blamed too-and was-when its [/INST] rigidities drove unemployment up to 18% after the Mexican currency crisis.
2359,[INST] But his slaying of inflation remains a legend [/INST] (regilded this month when Russia's embattled government flew him to Moscow for advice).
2360,"[INST] Not even the twoparty opposition Alliance, critical as it is [/INST] of unemployment, still around 13%, dares to suggest printing money (the currencyboard system forbids it) as a cure. "
2361,"[INST] The Alliance, formed in 1997, is eager for the [/INST] presidency in 1999; it promises that this bit of Mr Menem's legacy will not be touched. "
2362,[INST] Yet now the peso-for-dollar parity [/INST] that goes with the system is at risk.
2363,"[INST] The peso has stood firm [/INST] as Mexico's, Venezuela's and Colombia's currencies have slumped. "
2364,"[INST] It could withstand the influx of cheap Asian goods [/INST] -cars, electronics and textiles-that are pouring in, despite the barriers of Mercosur, the South American trade grouping. "
2365,"[INST] True, there is pain: when Siderar, its largest [/INST] steel producer, had to stop work for a week in July, it blamed foreign dumping. "
2366,"[INST] Brazil buys one-third of Argentina's [/INST] exports, and could swamp its home market. "
2367,[INST] That alone would imply a [/INST] huge rise in unemployment-or devaluation in Argentina to match.
2368,"[INST] Out of the question, says Miguel Kiguel, under-secretary at the economy ministry, echoing [/INST] Mr Menem, who on September ist promised a ""freeze"" on public spending, and pointed to Argentina's hefty $30 billion (his figure) of reserves. "
2369,"[INST] Officials point too to bank deposits, which, both in pesos [/INST] and dollars, have continued to rise, whereas $8 billion flooded out after the Mexican crisis of 1995. "
2370,"[INST] If the real went, [/INST] the peso would be next under fire. "
2371,"[INST] Thanks to the monetary system, liquidity would [/INST] shrink, and output and jobs with it, again as in 1995. "
2372,"[INST] Because this time Argentina would see not only a [/INST] monetary squeeze, but a currency undercut by that of its main (and Mercosur) trade partner. "
2373,"[INST] Even that would be beyond reach after a real [/INST] devaluation, and 1999 would bring recession-or slump, if Argentina went on trying to hold its parity. "
2374,"[INST] As they hold their breath, [/INST] men like Mr Vitullo should cross their fingers too. "
2375,"[INST] ___ Document 343 of 400 The Americas: Clouds [/INST] over Argentina Author: Anonymous Publication info: The Economist 348.8075 (Jul 4, 1998): 29-30. "
2376,"[INST] accountid=28034 Abstract: Even as Argentine officials insist that the economy can cruise for several [/INST] years with growth of 5% or more, they are looking anxiously over one shoulder at Asia, and over the other at the uncertainties of Brazil. "
2377,[INST] The most tangible sign of [/INST] this mood is last month's tightening of economic policy.
2378,[INST] President Carlos Menem announced a $1 billion cut in this year's [/INST] government spending and backed a fresh effort to get Congress behind a tax package to end distortions that hinder business.
2379,"[INST] The underlying aim is to assuage market fears for the current-account [/INST] deficit, which the IMF reckons was heading for 4.8% of GDP this year, a full point over the agreed target. "
2380,"[INST] Full text: Headnote As the economic [/INST] outlook darkens, can Latin America's fastest-growing economy slow, without crashing? "
2381,"[INST] Maybe-if its politicians do the right things BY RIGHTS, Argentina should be looking forward [/INST] to a period of prosperity and political tranquillity, the reward of almost a decade of radical free-market reforms and a broad consensus about maintaining them. "
2382,"[INST] Even as they insist that the economy can cruise for several years with [/INST] growth of 5% or more, officials are looking anxiously over one shoulder at Asia, and over the other at the uncertainties of Brazil. "
2383,"[INST] And though a presidential election is still 15 months [/INST] away, a premature start to the campaign has killed hopes of much progress on further reforms. "
2384,[INST] The most tangible sign of [/INST] this mood is last month's tightening of economic policy.
2385,"[INST] First, Roque Fernandez, the economy minister, announced the shelving of [/INST] a $10 billion road programme dear to President Carlos Menem, and postponement of a scheme to raise teachers' wages. "
2386,"[INST] Then Mr Menem announced a $1 billion cut in this year's [/INST] government spending, and backed a fresh effort to get Congress behind a tax package to end distortions that hinder business. "
2387,[INST] This new tack follows months in which the [/INST] government publicly pooh-poohed IMF calls to cool an economy that grew by 8.6% last year.
2388,"[INST] Argentina's loan agreement with the IMF (needed to reassure markets rather than for [/INST] the money) calls for a 1998 budget deficit below $3.5 billion; a ""reasonable"" target, says Mr Fernandez, and he is acting to meet it. "
2389,"[INST] Chronic evasion meant that record growth was [/INST] not matched by tax collection, $1 billion below target in JanuaryMay. "
2390,[INST] Yet in January-March alone spending was [/INST] $775m under budget; Mr Menem's promised cuts are already under way.
2391,"[INST] The underlying aim is to assuage market fears for the current-account [/INST] deficit, which the IMF reckons was heading for 4.8% of GDP this year, a full point over the agreed target. "
2392,"[INST] Central to Argentina's recovery from hyperinflation at the start of [/INST] Mr Menem's presidency in 1989 was a scheme which Argentines call ""convertibility"" and economists call a currency board. "
2393,"[INST] The peso is pegged by law to the dollar, [/INST] and freely convertible, while the money supply is tied to the level of foreign-exchange reserves. "
2394,[INST] This rigid arrangement has delivered price stability [/INST] and growth (and is reluctantly endorsed by the two-party centreleft opposition Alliance).
2395,"[INST] But success has come at a price: in 1995, as [/INST] foreign money, and thus domestic liquidity, drained away after Mexico's crisis, the economy slumped and unemployment leapt to 18%. "
2396,[INST] Officials insist that its defences [/INST] against external contagion are far stronger than in 1995.
2397,"[INST] A rickety financial system has been stiffened, [/INST] with weaker banks shut down and many larger ones sold to foreigners. "
2398,[INST] The government has stretched the [/INST] average maturity of its foreign debt to nine years.
2399,"[INST] Though exports recently stopped growing, they have not fallen, despite what Pedro Pou, the central bank's [/INST] governor, calls ""a unique combination of negative circumstances""-lower commodity prices, the rise of the dollar and so the peso, bad weather, floods, and stagnation in Brazil, Argentina's biggest export market. "
2400,"[INST] But independent economists say activity is [/INST] already rapidly slowing, and foresee 1999 growth of 3.5% or less. "
2401,"[INST] To do better, they argue, [/INST] further reform is needed, to cut business costs. "
2402,[INST] And Mr Menem has [/INST] shown little interest in that of late.
2403,"[INST] Notably, he has let his labour minister present a bill [/INST] that would entrench trade-union power and scrap emergency provisions, allowing employers to offer temporary jobs free of red tape. "
2404,"[INST] That helped create 800,000 jobs [/INST] last year and to lower unemployment to 13.7%. "
2405,"[INST] This year was expected to be a pause between [/INST] last October's congressional elections, won by the Alliance, and the presidential election of October 1999. "
2406,"[INST] Within his Justicialist Party, Mr Menem's supporters are manoeuvring [/INST] to obtain a (dubious) interpretation of the constitution to let him run for a third term. "
2407,"[INST] At the least, he aims to keep control of the party at [/INST] a convention this month, and see off a waning challenge for the candidacy from his rival Eduardo Duhalde, governor of Buenos Aires province. "
2408,"[INST] In this he needs the [/INST] aid of Justicialist trade-union leaders, who oppose labour-market reform. "
2409,"[INST] Yet after nine years [/INST] of Menemism, Argentines seem ready for change. "
2410,"[INST] Most expect the Alliance to win in 1999, provided [/INST] it holds together during a potentially bruising contest in November to choose its presidential candidate. "
2411,"[INST] For that job, the Radical Union's Fernando de la Rua, [/INST] mayor of Buenos Aires, looks likely to pip Graciela Fernandez Meijide from Frepaso, the Alliance's younger and smaller component. "
2412,[INST] Frepaso's concern now is to commit the Alliance to [/INST] rules ensuring a fair share of top posts for it if Mr de la Rua becomes president.
2413,"[INST] Tackle corruption, says Mrs Fernandez Meijide, and emphasise [/INST] reforms that Mr Menem has neglected, notably of the judiciary and social policy. "
2414,"[INST] As for the economy, it [/INST] would probably tinker with his reforms, not undo them. "
2415,"[INST] It might even have to promise more to win help, in [/INST] a presidential run-off, from Domingo Cavallo, who as economy minister in 1991-96 brought in convertibility and now leads his own party. "
2416,[INST] The Alliance's blend of liberal politics and Blairite economics might [/INST] prove a balm to the wounds left by Mr Menem's mixture of liberal economics and Sicilian politics.
2417,[INST] Meanwhile Argentina and its fixed peso face [/INST] the risks of a world where other currencies are depreciating by the day.
2418,"[INST] ___ Document 363 of 400 The Americas: The [/INST] season of El Nino Author: Anonymous Publication info: The Economist 347.8067 (May 9, 1998): 35-38. "
2419,"[INST] accountid=28034 Abstract: The El Nino of 1997-1998 is [/INST] returning to its cradle, after scarring Latin America with drought and fire, storm and flood. "
2420,"[INST] But it is not over yet, and the fall-out, economic, social [/INST] and political, will not be cleared up for many months or even, in some places and activities, for years. "
2421,[INST] The economic costs imposed by [/INST] El Nino on the region have been huge.
2422,"[INST] The heaviest cost, though not the [/INST] most noticed, has been to human happiness, health and lives. "
2423,"[INST] Amid all the averages, many people, mostly [/INST] poor ones, have lost everything: crops, jobs, homes and often hope. "
2424,"[INST] The authorities' response to warnings of El Nino, and [/INST] to its arrival, has varied widely - and has been widely, but not always fairly, criticized. "
2425,"[INST] Full text: Headnote At last, the El Nino of [/INST] 1997-98 is returning to its cradle, after scarring Latin America with drought and fire, storm and flood. "
2426,"[INST] But it is not over yet, and the fall-out, economic, social and political, will not [/INST] be cleared up for many months or even, in some places and activities, for years IT SWEPT away roads and bridges, homes and farms, lives and livelihoods. "
2427,"[INST] It created a vast lake in [/INST] a north Peruvian desert, and ruined the fisheries of Chile. "
2428,"[INST] It battered Mexico's Pacific-coast resort of Acapulco, [/INST] and lowered water levels, enforcing draught restrictions on ships in the Panama canal. "
2429,"[INST] Across stretches of northern Brazil, Guyana and Suriname, even [/INST] in the island of Trinidad, it dried up vegetation and-often with human help-burned up forests. "
2430,"[INST] It parched crops too, bringing Brazil's always dry [/INST] north-east food shortages that had the president scurrying there this week to see relief efforts. "
2431,"[INST] Farther south, it swelled the mighty Parana river to eight metres above [/INST] its normal height, flooding millions of hectares and driving hundreds of thousands of people from their homes in Paraguay, Uruguay and Argentina. "
2432,"[INST] Overall, it killed at least 900 [/INST] human beings and livestock by the hundreds of thousands. "
2433,"[INST] It hit economies for perhaps [/INST] $20 billion, much of that still to be paid. "
2434,"[INST] And, in many countries, it [/INST] exposed governments to harsh tests and harsher criticism. "
2435,"[INST] Every year, usually around December-hence the name El [/INST] Nino, the Christchild-a warm Pacific current flows east to the coasts of Ecuador and Peru. "
2436,"[INST] But at random intervals [/INST] of years, this current becomes a flood. "
2437,"[INST] And though satellite observations and new weather buoys now enable a fierce El Nino to be [/INST] foreseen months in advance-as the last big one, in 1982-83, was not-no one can be sure exactly in what form and where the extremes of weather that it brings will strike. "
2438,[INST] Latin America and the Caribbean [/INST] will not swiftly forget the El Nino of 1997-98.
2439,"[INST] Drought, flood and uncertainty Of his two faces, El Nino this time [/INST] broadly (see the map on the next page) showed drought to the north of the equator, floodor at least torrential storms-to the south. "
2440,"[INST] So were Mexico's centre and south-but its Pacific coast was [/INST] struck by hurricanes of wind and rain, rare on that side; the third of these in October smashed Acapulco. "
2441,"[INST] The Caribbean has been short of rain: Cuba recently [/INST] had forest fires, and some east Caribbean islands have had to cut water supplies at night. "
2442,"[INST] Colombia has had half its normal rain, and the [/INST] drought has stretched eastward across Venezuela into northern Brazil, Guyana, Suriname and down into Brazil's north-east. "
2443,"[INST] It was Peru's Sechura desert, on its far-northem coast, that was [/INST] converted into a lake, of several thousand square kilometres at its largest, though it is now degenerating into a stagnant swamp. "
2444,"[INST] Peru's government had done much to [/INST] prepare against the rains, building dykes, cleaning waterways and strengthening bridges. "
2445,"[INST] El Nino from January to March made light of [/INST] its efforts, badly damaging 600 kilometres (370 miles) of Peru's main roads and 30 bridges along them. "
2446,[INST] The authorities had expected the [/INST] normally dry south to grow drier still.
2447,"[INST] Not so: a swollen river three months ago flooded the southern city of [/INST] Ica, near the coast, and it was in the southern mountains that 20 people died when a village was buried by a landslide. "
2448,"[INST] Bolivia for six months has had highland droughts and lowland floods, an unlikely mixture [/INST] due to unusually high temperatures: what would normally fall as snow on the peaks fell as rain, and ran straight off to drown areas below. "
2449,"[INST] Chile had a week [/INST] of fierce floods last June, midwinter there. "
2450,"[INST] But all these pale beside the floods that for four weeks now [/INST] have swamped northern Argentina and parts of Paraguay and Uruguay, as several big rivers, headed by the giant Parana, have burst their banks. "
2451,"[INST] The 250,000 people of Resistencia, capital of Argentina's Chaco province, spent May day [/INST] wondering whether the Parana, already eight metres above normal, would summon up the extra metre to overwhelm the dyke hurriedly built around their city. "
2452,"[INST] It did not; but, in all, some 80,000 square kilometres (31,000 [/INST] square miles) of Argentina were under water this week-and that excludes areas flooded earlier but now starting to dry out. "
2453,"[INST] Costs, short-term and long The economic [/INST] costs imposed by El Nino on the region have been huge. "
2454,"[INST] Most of the figures, of course, [/INST] are heroic estimates, and many are heroic forecasts, at that. "
2455,"[INST] Cattle drowned can be crudely counted (140,000, says one estimate for Argentina's Santa Fe province, [/INST] stretched along 800km of the Parana), and the loss of crops ruined by flood or drought can be reckoned, but the longterm effects may take years to show up. "
2456,"[INST] As now in Argentina and Uruguay, one rancher's drowned beast [/INST] is another's higher beef price, and, more widely helpful, today's disaster can be tomorrow's rebuilding, maybe for the better. "
2457,[INST] Chile's 1997 skiing season [/INST] was prolonged by abundant snow into October.
2458,"[INST] June's flash floods there made [/INST] 80,000 people homeless and hit some farmers, especially vegetable-growers. "
2459,[INST] But both also filled reservoirs for the many [/INST] Chilean farmers who artificially irrigate their land and had suffered three years of low rainfall.
2460,"[INST] So they did for the hydro-power [/INST] companies, which were within days of enforced electricity rationing. "
2461,"[INST] In many countries, road-builders and suppliers [/INST] of concrete can look forward to a profitable year. "
2462,[INST] The first to suffer [/INST] were the fishermen on the Pacific coasts.
2463,[INST] Peru's boats as early as mid-1997 [/INST] started finding the shrimps and lobsters usually caught in Ecuador's waters.
2464,"[INST] The Peruvians' usual prey had swum [/INST] south, looking for food in colder waters off Chile. "
2465,"[INST] Peru normally exports $1 billion [/INST] a year of fishmeal from anchoveta, the Pacific pilchard. "
2466,"[INST] That business has collapsed, and [/INST] jobs at sea and in processing plants with it. "
2467,"[INST] Chile's jack mackerel in turn went farther [/INST] south, cutting its catch by 40% in the first quarter of this year. "
2468,"[INST] In the fishing port of San Antonio, nine of ten [/INST] fishmeal plants have closed, and the tenth is handling 20 tonnes a day instead of its usual 100. "
2469,[INST] Drought in Central America has cost Guatemala [/INST] perhaps 10% of its grain and hard-hit El Salvador 30% of its coffee.
2470,"[INST] Parts of central Panama have been reduced to a dustbowl, and [/INST] thousands of cattle have had to be slaughtered (not wholly a loss: they were already helping to make the dustbowl). "
2471,"[INST] In Colombia drought has parched 5,000 [/INST] square kilometres of pasture and 2,000 of maize, sorghum and soya. "
2472,"[INST] Overall, says the ministry of agriculture, El Nino has cost [/INST] 7% of normal output, with the cotton harvest cut by a quarter and milk currently 30% down. "
2473,"[INST] In Brazil's north-east, SUDENE, the regional [/INST] development agency, talks of drought losses above $4 billion. "
2474,[INST] Cattle have begun to die and [/INST] the many subsistence farmers have seen their crops wither.
2475,"[INST] Even in this area, not famous for [/INST] its grain, 2 1/2m tonnes of that are reckoned to have gone. "
2476,"[INST] Argentina's economy ministry this week estimated the [/INST] total costs of El Nino's floods at $3 billion, almost 1% of GDP. "
2477,"[INST] Farming will bear much of that: cattle apart, perhaps 40% [/INST] of the expected 1 1/2m tonnes of cotton has been lost, 30% of the rice, 50% of the tobacco. "
2478,"[INST] This week the wheat and soya crops [/INST] in the pampa humida, Argentina's breadbasket, west of Buenos Aires, were in danger. "
2479,"[INST] In the Andean region of Mendoza, home [/INST] of the country's-rapidly improving and valuable-wineries, vineyards have been damaged by storms. "
2480,"[INST] Uruguay's cattle have largely escaped, but [/INST] 10% of its main grain crop, rice, has gone. "
2481,"[INST] But even if their fields were untouched, growers of tropical fruit [/INST] and vegetables-key crops in the government's ef forts to wean farmers off coca-growinghave often seen their roads to market washed away. "
2482,"[INST] In the high altiplano, poor peasants depend [/INST] for much of their water on the slow melting of snow. "
2483,"[INST] With snowfall lacking, many have lost [/INST] their crops and will find livestock dying in the coming winter. "
2484,"[INST] They may raise salt levels [/INST] Irrigation, especially during drought, can also have that effect. "
2485,"[INST] And in Guyana and Suriname, coastal farmers irrigating with [/INST] water from river estuaries have had to stop: because of the rivers' weak flow, it was sea-water. "
2486,"[INST] Roads, power and output The [/INST] losses, of course, extend much wider than farming. "
2487,"[INST] In Panama, famous for its tropical downpours, the big river Chagres shrank [/INST] almost to a brook Lack of rain not only meant draught restrictions on ships (and loss of toll revenue) in the canal. "
2488,[INST] It has also brought power cuts: like most [/INST] of Central America (except Nicaragua) Panama gets about 70% of its power from hydro-electricity.
2489,"[INST] Several countries, taught by a sharp drought [/INST] in 1994, have invested in thermal plants, avoiding what they suffered then. "
2490,"[INST] But the price, in [/INST] capital and fuel costs, has been heavy. "
2491,"[INST] Colombia too has seen power suppliers struggling to keep up, and [/INST] river transport, not least of oil, disrupted on its big Magdalena river, which runs north-south deep into the country. "
2492,"[INST] Ecuador has been savaged by this El Nino, recording [/INST] more rain-7,000mm (275 inches)in the past 14 months than in 17 of the El Nino of 1982-83. "
2493,"[INST] It will have to rebuild 19 large [/INST] bridges and repair 2,500km of roads, at a cost put at $800m. "
2494,[INST] But on top come [/INST] the unquantifiable costs of disruption to transport.
2495,[INST] Lorries stand in interminable queues [/INST] where roads and bridges have been washed away.
2496,"[INST] So do pedestrians, waiting [/INST] to pay to cross makeshift plank-and-rope bridges. "
2497,"[INST] As in much of Latin America, especially its many mountain [/INST] areas, a road blocked is movement blocked:without an enormous detour, if at all, traffic simply has no way round. "
2498,"[INST] That has been convenient for Bolivia's weekend travellers to the tropical [/INST] valleys east of La Paz, who have found ""landslide"" a neat excuse for not being at the office on Monday morning. "
2499,[INST] No complaint cameexcept from her father-when a young Ecuadorean [/INST] was forced by a sudden flood to pass the night at the house of her boyfriend.
2500,"[INST] But the economy has suffered, as raw materials or [/INST] components (or workers) did not arrive, and goods (or crops or ores) could not be shipped out. "
2501,"[INST] Service industries too have lost, as [/INST] telephones have gone dead and tourist trips been cancelled. "
2502,"[INST] The storm that smashed Acapulco spared its glossy hotels, [/INST] but-even arriving in low season-menaced its $1 billion a year and 150,000 jobs based on tourism. "
2503,"[INST] The human cost The heaviest cost, though [/INST] not the most noticed, has been to human happiness, health and lives. "
2504,"[INST] Amid all the averages, many people, mostly [/INST] poor ones, have lost everything: crops, jobs, homes and often hope. "
2505,"[INST] In Ecuador, some stand begging at the roadside, crying from [/INST] shame as much as grief Peru has recorded nearly 350,000 people driven from their homes, Argentina 150,000. "
2506,"[INST] Some, though by no means [/INST] all, have had their houses simply swept away. "
2507,"[INST] Many of Ecuador's 50,000 have taken [/INST] ref uge in schools left empty during the holidays. "
2508,"[INST] But many in all these countries have clung on to their homes, come what might, [/INST] surrounded by polluted floodwaters; drinking and cooking with them too, with the predictable results-diarrhoea and other intestinal diseases, leptospirosis (caused by animal urine in the water), even cholera. "
2509,[INST] Just how much is El [/INST] Nino's fault is uncertain: dengue was already alarming Brazil.
2510,"[INST] The death toll too is [/INST] uncertain; a rough count says around 1,000. "
2511,"[INST] Peru blames 300 deaths on [/INST] El Nino, Ecuador 250, with another 150 missing. "
2512,"[INST] Chile lost 20 in the June floods, Argentina [/INST] about as many in the floods now going on, which were well signalled in advance. "
2513,[INST] One landslip in a [/INST] coastal resort killed 17 Ecuadoreans last weekend.
2514,"[INST] The Acapulco hurricane cost Mexico 200-400 lives in a day, and at least 19 [/INST] people died in a single tragedy there this week, when a forest fire-one of thousands that have burned more than 2,000 square kilometres-suddenly overwhelmed those fighting it. "
2515,"[INST] But South America's worst reported disaster happily never occurred: a Bolivian [/INST] goldmine was indeed buried in a mudslide, but earlier flooding had already driven the 7040 supposed victims to leave. "
2516,"[INST] Drought and malnutrition, added to poverty, must [/INST] have killed far greater numbers than any disaster, but leaving no record. "
2517,[INST] Nature will quickly replace the [/INST] starving sea-lions and gulls found on Peru's beaches.
2518,"[INST] She will take longer with the burnt savannahs on the Venezuelan-Brazilian border, and far longer with the [/INST] forests that have burned in so many drought-hit areas, not least the Amazon rainforest destroyed in Roraima state, in northern Brazil, when fires-often lit by farmers clearing land-spread from the savannahs. "
2519,"[INST] It was the Amazon blaze, engulfing some 3,250 square kilometres [/INST] of forest, that aroused the outside world, largely indifferent to human suffering, to the fact of El Nino. "
2520,"[INST] There may be more to come: the southern edge of the forest too [/INST] is dry; and this is the area subject to logging and, from June on, to the yearly burning by migrant would-be farmers desperate for land. "
2521,"[INST] Yet big fires in any hilly region-as [/INST] in southern Mexico, in Colombia, even in Trinidadcan do enduring damage. "
2522,"[INST] Today's treeless hillside is tomorrow's one lashed [/INST] by tropical rains, and tomorrow's landslips, instant run-off of rain and flash floods. "
2523,"[INST] Leaders put to the test The authorities' response to warnings [/INST] of El Nino, and to its arrival, has varied widelyand been widely, but not always fairly, criticised. "
2524,"[INST] Mexicans were quick to denounce the lack of [/INST] precise forewarning of the Acapulco storm, and then the local theft of relief supplies. "
2525,"[INST] Brazil's rulers, local and federal, were accused of slow [/INST] and inept response to the Roraima fires; and, more damningly, of ignoring months of drought warnings. "
2526,"[INST] President Fernando Henrique Cardoso rushed to the north-east this week, having (correctly) blamed [/INST] churchmen and the MSr landless movement for encouraging raids on food stores (and being told, as correctly, that it was not they who invented hunger. "
2527,"[INST] The leading newsweekly, Veja, castigated him-the Veja that in a December story recommended this [/INST] as just the year for a northeastern holiday, with El Nino promising ""an exceptional season, with lots of sun, blue sky, warm water and soft breezes"". "
2528,"[INST] Colombia's government-it has other worries-did little to prepare for El Nino, [/INST] and even let farmers set fires across huge areas of land, supposedly to enrich the soil, before it banned the practice. "
2529,"[INST] Governments in Ecuador, Peru, Bolivia and Chile declared states [/INST] of emergency in parts of their territory; not so Colombia's, which has been much blamed for that. "
2530,[INST] Paraguay's electioneering politicians have largely ignored [/INST] its floods; Ecuador's are vying in plans for reconstruction.
2531,"[INST] Argentine politicians-and the public, truly Latin American in this, whatever [/INST] else-have shown solidarity with victims of the floods, and President Carlos Menem is promising $1 billion to clear up. "
2532,"[INST] But critics like Domingo Cavallo, once [/INST] his economy minister, have damned the lack of advance precautions. "
2533,[INST] The true artist of El [/INST] Nino has been Peru's President Alberto Fujimori.
2534,"[INST] His government spent $300m in advance (not all in the right places, but at least [/INST] the ones that looked right at the time); and since El Nino struck he has rushed about frenetically taking personal charge of relief efforts, even rescue attempts. "
2535,"[INST] Too frenetically, say some critics, who [/INST] claim presidential efforts are muddling those of people on the spot. "
2536,"[INST] Maybe, maybe not; but his [/INST] poll ratings, 30% in mid-1997, now stand at 45%. "
2537,"[INST] ___ Document 372 of 400 The Americas: Carlos Menem, [/INST] labour law and the IMF Author: Anonymous Publication info: The Economist 347.8064 (Apr 18, 1998): 31. "
2538,"[INST] accountid=28034 Abstract: President Menem has [/INST] modernized much in Argentina, but not its labor law. "
2539,"[INST] As a condition of a $2.8 billion stand-by [/INST] agreement, the law must be reformed, and by the middle of this year. "
2540,"[INST] The aim is to ease labor [/INST] negotiations, and give companies more flexibility in hiring and firing. "
2541,"[INST] The problem is to find a reform that the union [/INST] - whose main confederation, the CGT, is usually close to the ruling Justicialist Party - would accept. "
2542,"[INST] Full text: Headnote President Menem has [/INST] modernised much in Argentina, but not its labour law. "
2543,"[INST] The trade unions think not WE ARE not servants [/INST] or slaves to the IMF,"" reads the freshly spraypainted sign on a wall near central Buenos Aires. "
2544,[INST] Next to the words is a caricature [/INST] of President Carlos Menem trying to sell his country for $1.99.
2545,[INST] That about sums up the [/INST] current resentment in Argentina against the ImF.
2546,"[INST] It grew stronger earlier this month when the [/INST] Fund pressed the government to change, among other things, Argentina's ancient, union-leaning labour laws. "
2547,"[INST] The IMF helps to oversee [/INST] the economy, in exchange for financial aid. "
2548,[INST] It had sent a mission [/INST] mainly to check on the alarmingly large current-account deficit.
2549,"[INST] In their report, IMF officials criticised the government's failure to take measures to slow the economy, which [/INST] grew by 8.4% last year, and to reduce the rush of imports; even now, foreseeing growth of only 5.5% this year, the Fund expects a current-account gap of 4.3% of GDP. "
2550,[INST] This criticism on its own was enough to [/INST] upset government officials and send a chill of concern through the ranks of business.
2551,[INST] But it was the demand for an [/INST] updated labour law that irritated the average (and formally employed) Argentine.
2552,"[INST] The present law dates back decades to the days of President Juan [/INST] Peron, who rose to power on the shoulders of organised labour and still remains a national hero for supporting workers' rights. "
2553,"[INST] As a condition of a $2.8 billion stand-by [/INST] agreement, the law must be reformed, and by the middle of this year. "
2554,[INST] The aim is to ease labour [/INST] negotiations and give companies more flexibility in hiring and firing.
2555,"[INST] That in turn is supposed to help foster small and medium-sized [/INST] businesses, reducing an unemployment rate which, though down from its peak, still stood (when last measured, some months ago) at 13.7%. "
2556,[INST] Mr Menem and his previous labour minister have [/INST] spent a good deal of the past two years trying to get it done.
2557,"[INST] The problem was to find a reform that [/INST] the unions-whose main confederation, the CGT, is usually close to the ruling Justicialist Party-would accept. "
2558,"[INST] Last December, Mr Menem replaced his minister, installing an [/INST] old friend, Antonio Erman Gonzalez, from the days when he himself was a provincial governor. "
2559,"[INST] The business lobby known as the Group [/INST] of Eight, linking companies in the country's main industries, flatly said no. "
2560,[INST] It thinks the proposed changes fall [/INST] short of what is required by the stand-by agreement.
2561,"[INST] One is a provision of the current law that [/INST] forces employers to negotiate terms on a nationwide level by industry, rather than company by company. "
2562,[INST] The second is a provision that automatically renews the terms [/INST] of an existing labour contract if a new one is not agreed on within a set period of time.
2563,[INST] A third point in dispute has [/INST] more to do with union finances than those of employers.
2564,[INST] The unions now have [/INST] exclusive rights to manage employee health plans.
2565,[INST] It would also take away [/INST] one of organised labour's main sources of income.
2566,"[INST] But pressure from the IMF [/INST] could stir up nationalist opposition, setting the process back. "
2567,"[INST] Domingo Cavallo, Mr Menem's former economy minister, now [/INST] an opposition member of Congress, has put forward his own proposals for change. "
2568,"[INST] ""What the economy needs by way of [/INST] labour laws"", he argues, ""is not at all what the government is backing"". "
2569,[INST] But even he says Argentina [/INST] needs no guidance in the matter from the IMF.
2570,"[INST] At its annual gathering last September, [/INST] the Fund singled out Argentina as an example to others. "
2571,"[INST] But Mr Menem has also shown that he is not afraid to clash with [/INST] the Fund, as in 1994,when Mr Cavallo chose to forgo the final two tranches of an IMF loan rather than adhere to its economic goals. "
2572,"[INST] He is barred from running for a third [/INST] consecutive term in 1999, but no one expects him to retire from politics. "
2573,"[INST] That may explain why, under pressure [/INST] to resolve the labour-law issue, he sent for Mr Gonzalez. "
2574,"[INST] In 1991, as economy minister, he gave way to union [/INST] and populist pressures and decided not to use austerity measures recommended by the Fund to fight inflation. "
2575,"[INST] Ultimately, that time, faced with 1,300% [/INST] inflation, he had to resign-and was replaced by Mr Cavallo. "
2576,"[INST] ___ Document 375 of 400 Special article: The [/INST] perils of global capital Author: Anonymous Publication info: The Economist 347.8063 (Apr 11, 1998): 52-54. "
2577,"[INST] accountid=28034 Abstract: After East [/INST] Asia's crisis, activism is in the air. "
2578,"[INST] Improving the international financial system will dominate discussion at the IMF spring meeting that begin on April [/INST] 13, 1998; it is the theme of a specially-convened gathering of top financial officials from 22 countries on April 16; and it will be high on the G7 agenda in May. "
2579,"[INST] After East Asia's spectacular crisis, policymakers worry that today's financial architecture, designed at [/INST] Bretton Woods in 1944 for a world of limited capital mobility, may not be capable of dealing with an ever more global capital market. "
2580,"[INST] If Asia's crash was a crisis of Asian capitalism - especially in [/INST] opacity, poor regulation and cronyism - then systemic reforms should be geared towards reinforcing transparency, improving regulation, and limiting moral hazard. "
2581,"[INST] But if the crisis was primarily one of panic, then [/INST] the goal should be to control unstable markets while providing more public money or creating new, reassuring rules. "
2582,[INST] Full text: Headnote Asia's financial [/INST] crash showed the fragilities of global capital markets.
2583,"[INST] ROBERT RUBIN, America's Treasury secretary, wants [/INST] to ""modernise the architecture of the international financial markets"". "
2584,"[INST] Eisuke Sakakibara,Japan's top international finance [/INST] official, is thinking of a ""Bretton Woods II"". "
2585,"[INST] Alan Greenspan, chairman of the Federal [/INST] Reserve, wants to review the ""patchwork of arrangements"" governing international finance. "
2586,"[INST] Improving the international financial system will dominate discussion at the IMF spring meetings that begin on April 13th; it is [/INST] the theme of a specially-convened gathering of top financial officials from 22 countries on April 16th; it will be high on the G7 agenda in May, and will feature at just about every other financial schmoozefest thereafter. "
2587,"[INST] After East Asia's spectacular crisis, policymakers worry that today's financial architecture, designed at [/INST] Bretton Woods in 1944 for a world of limited capital mobility, may not be capable of dealing with an ever more global capital market. "
2588,[INST] Formerly closed economies have [/INST] cast off controls and embraced foreign funds.
2589,[INST] Better technology and financial innovation [/INST] have made it easy to move money instantaneously.
2590,"[INST] The benefits are obvious: the expansion of private flows to developing countries, from [/INST] $34 billion a decade ago to $256 billion in 1997, has brought much needed capital to emerging economies, and healthy returns to rich-country savers. "
2591,"[INST] The five worst-affected Asian economies (South Korea, Indonesia, [/INST] Thailand, Malaysia and the Philippines) received $93 billion of private capital flows in 1996. "
2592,[INST] This shift of $105 billion in [/INST] one year was the equivalent of 11% of their combined GDP.
2593,"[INST] After the demise of the fixed exchangerate system in the early 1970s, [/INST] a group of finance ministers and central bank governors, ""the Committee of 20"", set out to design a wholly new architecture. "
2594,"[INST] As the oil shock hit, Henry [/INST] Kissinger had big ideas for the International Energy Agency. "
2595,"[INST] During the 198os debt crisis, a score [/INST] of new bureaucracies, such as an International Debt Discount Corporation, were mooted. "
2596,"[INST] After the fixed exchange-rate system collapsed, [/INST] today's non-system of floating rates emerged from the wreckage. "
2597,"[INST] After the oil shocks, the IMF created [/INST] new credit lines to help countries cope with sudden shifts in commodity prices. "
2598,[INST] The debt crisis was finally [/INST] resolved with the introduction of Brady bonds.
2599,"[INST] Since Mexico's most recent crash in 1995, the G7 [/INST] has led more tinkering, including a new credit line to lend the IMF money in an emergency. "
2600,[INST] First identify the problem Much [/INST] depends on what caused East Asia's crash.
2601,"[INST] One emphasises that the crisis [/INST] was homegrown, the product of crony ""Asian capitalism"". "
2602,[INST] The other emphasises panic It points out that no one foresaw the crisis; that by conventional indicators [/INST] of economic health (budget deficits and so forth) the Asian economies were in good shape; and that no economic change occurred in 1997 to justify such a massive loss of confidence.
2603,"[INST] There is probably some truth to both [/INST] interpretations, and most observers believe the crisis was a combination of the two. "
2604,[INST] Where analysts differ is [/INST] the relative weight they assign to each.
2605,"[INST] American triumphalists and some academics, [/INST] such as Paul Krugman, emphasise crony capitalism. "
2606,"[INST] Others, notably Jeffrey Sachs of Harvard University and [/INST] Joseph Stiglitz, chief economist at the World Bank, believe panic was more important. "
2607,"[INST] Crucially, these two interpretations imply different [/INST] conclusions about how best to prevent and deal with future crises. "
2608,"[INST] If you regard Asia's crash essentially as a crisis of Asian [/INST] capitalism-especially its opacity, poor regulation and cronyism-then systemic reforms should be geared towards reinforcing transparency, improving supervision and limiting moral hazard. "
2609,"[INST] But if the crisis was primarily one of panic, then [/INST] the goal should be to control unstable markets while providing more public money or creating new, reassuring rules. "
2610,[INST] Thailand's secret sales of foreign-exchange reserves in [/INST] the forward markets made a mockery of its official reserve levels.
2611,[INST] No one had any idea [/INST] how enormous South Korea's short-term debt burden was.
2612,"[INST] This opacity worsened the crisis, suggesting global markets would [/INST] work better if there were more information, of better quality, on a broader range of economic items. "
2613,[INST] Since Mexico's crash in 1994-95 there [/INST] have been efforts to improve the information available to investors.
2614,[INST] Only 39 countries post their [/INST] economic statistics on the IMf's new electronic bulletinboard.
2615,[INST] Few countries (rich or poor) [/INST] publish details of their forward foreign-exchange operations.
2616,"[INST] Worse, much important information is [/INST] simply not collected, or collected too late. "
2617,"[INST] Aggregated information on firms' foreign [/INST] indebtedness, for instance, simply does not exist. "
2618,[INST] Policing the banks A second [/INST] reform to reinforce capital markets is better regulation.
2619,"[INST] Banks are uniquely vulnerable institutions, [/INST] capable of wreaking havoc if inadequately supervised. "
2620,[INST] Countless banking crises-in rich and poor countries alike-have [/INST] shown that the combination of free capital flows and badly regulated banks is disastrous.
2621,"[INST] To improve supervision, the Basle Committee of [/INST] international bank supervisors issued ""25 core principles"" of sound banking last year. "
2622,"[INST] For many observers, however, East [/INST] Asia's crisis shows that more needs to be done. "
2623,[INST] The key internationally-agreed rules for banks are [/INST] the Basle capital-adequacy standards set up by the industrialised countries in 1988.
2624,[INST] The minimal capital necessary for safety in [/INST] a developed banking system may be insufficient in volatile emerging markets.
2625,"[INST] And it seems odd that lending shortterm to banks, [/INST] particularly emerging-market ones, is considered always less risky than making long-term loans to companies such as Microsoft. "
2626,"[INST] Others go much further, arguing that a global [/INST] capital market needs global financial regulation, not a hotch-potch of national supervisors of varying quality. "
2627,"[INST] Henry Kaufman, an American marketswatcher, [/INST] has put forward the most ambitious proposal. "
2628,[INST] He wants to create a new [/INST] international institution that would supervise participants in global capital markets.
2629,"[INST] It would establish uniform trading, reporting and disclosure requirements, [/INST] set minimum capital requirements and eventually rate the credit quality of institutions under its jurisdiction. "
2630,"[INST] Stanley Fischer, deputy managing director of the IMF, is [/INST] wary of creating a new institution but keen on more systematic supervision of existing regulators. "
2631,[INST] Cut moral hazard A third [/INST] market-reinforcing reform is to reduce moral hazard.
2632,"[INST] For many conservatives, particularly in America's [/INST] Congress, the answer is to curb, or even eliminate, the IMF. "
2633,"[INST] It is the prospect of bail-outs, [/INST] they argue, that encourages governments to profligacy and investors to recklessness. "
2634,[INST] They argue that governments can [/INST] protect themselves privately against sudden flights of capital.
2635,"[INST] In 1995, Argentina faced a liquidity [/INST] crisis, as capital fled in the aftermath of Mexico's crash. "
2636,"[INST] To avoid a repeat, the Argentines entered [/INST] into $6.7 billion worth of ""reverse repo"" arrangements with 14 international banks. "
2637,"[INST] For promising to provide liquidity should capital suddenly [/INST] flee, the banks charge Argentina a fee and demand Argentine bonds as collateral. "
2638,[INST] Many reformers think this approach [/INST] is the best way to avoid liquidity crises.
2639,[INST] Some argue that public [/INST] monev can bolster such private liquidity lines.
2640,"[INST] The Argentines, for instance, have suggested that [/INST] international institutions could give guarantees in place of the collateral banks now demand. "
2641,"[INST] Ricardo Hausmann, chief economist at the InterAmerican Development Bank, [/INST] wants international institutions to promote this market by offering countries such liquidity lines jointly with commercial banks. "
2642,"[INST] This way, public money helps boost liquidity [/INST] without worsening moral hazard, and private creditors cannot simply flee when panic hits. "
2643,"[INST] If credit lines could preempt crises [/INST] of illiquidity, that still leaves the problem of insolvency. "
2644,"[INST] Or, put another way, the question [/INST] of how Asia's mess should have been dealt with. "
2645,"[INST] Again, the most orthodox free-market types would say that South [/INST] Korean, Thai and Indonesian banks and firms should simply have defaulted, making foreign bankers and other investors lose money. "
2646,"[INST] International default, however, is [/INST] thought to come at a heavy price. "
2647,[INST] Countries that reneged on their bonds in [/INST] the 1930s did not regain access to capital markets for decades.
2648,[INST] This history has spawned a deepseated fear of formal [/INST] default (though many poor countries have had de facto defaults as their debts have been rescheduled).
2649,"[INST] Formal cross-border default seems frightening, for [/INST] it takes place in a legal and institutional vacuum. "
2650,[INST] Hence a further market-reinforcing reform aims to fill this void: [/INST] to find a way in which creditors can take a hit without the chaos of uncontrolled default.
2651,"[INST] He would like a fully-fledged international [/INST] bankruptcy framework, modelled on chapter it of the American bankruptcy law. "
2652,"[INST] His proposals* would not only ensure that creditors took a [/INST] hit, but would also provide debtors with a framework within which they could gain access to new credit. "
2653,"[INST] He claims that South Korea's ""voluntary"" [/INST] rescheduling of its short-term debts was the right approach. "
2654,"[INST] They argue that a generous international bankruptcy procedure [/INST] would worsen the problems of moral hazard, as default became an easy option. "
2655,"[INST] In official circles the idea of [/INST] such ""orderly work-outs"" was carefully studied after Mexico's 1995 crisis. "
2656,[INST] The conclusion was that the [/INST] legal problems surrounding a world bankrupt court were insurmountable.
2657,"[INST] But more modest reforms were suggested: including ""default clauses"" which stipulated a [/INST] work-out procedure in future bond contracts, and allowing the IMF to lend to countries that had defaulted, thereby implicitly sanctioning a default. "
2658,"[INST] Not only are there two main types of [/INST] creditors (banks and bondholders), but also several kinds of debtors (sovereign governments, banks and firms). "
2659,"[INST] A ""work-out"" system that reinforced, rather than undermined, market [/INST] discipline must be sufficiently systematic to prevent chaos, but tough enough to avoid moral hazard. "
2660,"[INST] Or channel the flows For those who see [/INST] East Asia's crisis primarily as one of panic, these market-reinforcing reforms mostly miss the point. "
2661,[INST] Far more urgent is the [/INST] need to control the capital flows themselves.
2662,"[INST] Ironically, the most ambitious of such proposals is [/INST] touted by George Soros, a man who made his fortune and reputation in financial markets. "
2663,[INST] He now believes the private sector is [/INST] ill-suited to allocating international credit and thinks bureaucrats would do a better job.
2664,"[INST] This bureaucracy would, for a modest fee, guarantee [/INST] all international loans to a country up to a debt level it deemed appropriate. "
2665,[INST] This proposal has so many weaknesses [/INST] it is hard to believe anyone takes it seriously.
2666,[INST] Blanket insurance up to a cut-off point would [/INST] precipitate a rush to lend up to a country's limit (with commensurately bad investment decisions).
2667,[INST] And there is no evidence that bureaucrats [/INST] are any better at determining optimal debt levels than the market.
2668,[INST] Think only of the marvellous [/INST] job they did in the former Soviet Union.
2669,"[INST] While most policymakers consider Mr Soros's ideas [/INST] crazy, a far broader consensus surrounds the usefulness of capital controls. "
2670,"[INST] For those who are uneasy with the speed with which [/INST] funds flow around the globe, the perennial idea of a tax on currency transactions has surfaced again. "
2671,"[INST] Even more popular is the [/INST] idea of ""prudential"" capital controls on short-term inflows. "
2672,"[INST] He likes to compare global capital markets to [/INST] a wild and choppy sea: small economies, like small boats, can easily sink. "
2673,[INST] Chile is often cited as an [/INST] example of a country that has flourished using such controls.
2674,[INST] It discourages hot money by demanding that 30% [/INST] of all inflows be deposited without interest at the central bank for one year.
2675,"[INST] Chile's real interest rates are higher than they need be, [/INST] and its financial markets are segmented: big firms borrow abroad; small ones face high rates at home. "
2676,"[INST] While less hot money might reduce the [/INST] risks of a market panic, it would not eliminate it entirely. "
2677,[INST] Hence a further reform option is [/INST] to create a true global lender of last resort.
2678,"[INST] The IMF partially fulfills the role but compared with a central [/INST] bank (the domestic lender of last resort), it is severely constrained: it cannot print money and so cannot lend freely. "
2679,[INST] It does not lend at penal interest rates [/INST] (though it attaches exacting conditions to its money) and does not demand collateral.
2680,"[INST] In serious crises, the IMF [/INST] has not been the main lender of last resort. "
2681,"[INST] In 1982, when Mexico teetered on the edge of [/INST] default, it was the United States that stepped in, prepaying for $2 billion of Mexican oil. "
2682,"[INST] When Mexico hit trouble in 1995, it [/INST] was again the Americans that provided most of the instant money. "
2683,"[INST] And, for all the talk of ""huge [/INST] IMF bailouts"" in East Asia, only modest sums have been lent. "
2684,[INST] Recent reforms have made the [/INST] IMF more like a lender of last resort.
2685,"[INST] A new credit facility allows countries in trouble [/INST] to borrow more money, quickly, at penal interest rates (but still with economic conditions attached). "
2686,"[INST] But even with a capital increase, [/INST] the IMF will have only another $90 billion in its kitty. "
2687,[INST] To be a credible lender [/INST] of last resort would demand much more.
2688,"[INST] With such an array of possible reforms, [/INST] it is hardly surprising that international officials are confused and uncertain. "
2689,"[INST] Their political masters demand quick [/INST] action, to show they have ""dealt with"" Asia's crisis. "
2690,"[INST] A few reforms are easy, obvious [/INST] and make sense whatever interpretation of Asia's crisis you hold. "
2691,"[INST] A second category of possible [/INST] reforms also make sense, but will be politically difficult. "
2692,[INST] Creating a truly global overseer [/INST] of regulators will be vehemently resisted by national bodies.
2693,"[INST] Imagine America's Securities and Exchange Commission, [/INST] for instance, being dictated to by some supranational body. "
2694,"[INST] Similarly, attempts to change capital-adequacy standards or [/INST] broaden the reach of supervision beyond banks will all take a long time. "
2695,[INST] The Basle capital-adequacy standards took [/INST] the best part of a decade to evolve.
2696,"[INST] But most difficult-conceptually, politically and practically-is the [/INST] question of minimising moral hazard versus creating a better lender of last resort. "
2697,"[INST] Or, put another way, the dilemma of ensuring that private [/INST] investors pay the price of their bad decisions, but that countries are not unfairly punished for investor panics. "
2698,"[INST] Theoretically, the logic of a vast [/INST] international lender of last resort to cope with panics is impeccable. "
2699,"[INST] In practice, it is difficult [/INST] to distinguish between unwarranted panic and real problems. "
2700,[INST] It is virtually impossible to imagine generating political consensus [/INST] for an IMF that was big enough to be a credible lender of last resort.
2701,"[INST] Even those, such as Mr Sachs, who believe that [/INST] East Asia's crisis was mainly a panic, do not conclude that a bigger Fund is the answer. "
2702,"[INST] He believes the only way forward is [/INST] through some form of systematised debt work-outs, where creditors take a hit. "
2703,"[INST] Despite an ever more global [/INST] capital market, legal authorities are still nationally based. "
2704,"[INST] Practicalities aside, a framework that was too clear-cut (and too [/INST] kind to debtors) might invite poor-country recklessness or, more likely, might ensure that foreign capital flows simply dried up. "
2705,[INST] But no single institution or [/INST] innovation will magically make capital markets safe and sound.
2706,"[INST] As they prepare for their meetings, the post-Asia activists would do well [/INST] to take a look at ""Manias, Panics and Crashes"", the definitive analysis of financial crises by Charles Kindleberger, America's foremost economic historian. "
2707,"[INST] The book's first sentence is a salutary reminder: [/INST] ""There is hardly a more conventional subject in economic literature than financial crises"". "
2708,"[INST] Footnote * ""The East [/INST] Asian Financial Crisis: Diagnosis, Remedies and Prospects"". "
2709,"[INST] ___ Document 17 of 600 Argentines' basic instincts say: stick with the dollar: [/INST] Currency link may be 'like being married to Sharon Stone' but it makes it harder to deal with the trade deficit, reports Ken Warn. "
2710,"[INST] Officials say long memories of financial instability justify [/INST] the ties: Author: Warn, Ken Publication info: Financial Times [London (UK)] 05 May 1998: 07. "
2711,"[INST] accountid=28034 Abstract: Foreign investors often ask Argentine officials if they [/INST] have an exit route from convertibility, the currency board system that links the peso at par to the dollar. "
2712,"[INST] ""When you are married to Sharon Stone,"" [/INST] said one senior official recently, ""you do not require an exit route"". "
2713,"[INST] Since the unlikely alliance between the peso and the dollar [/INST] was sealed, GDP growth has averaged 7 per cent a year, hitting 8.4 per cent in 1997. "
2714,"[INST] There is a historical precedent for this harmonious union - Argentina [/INST] operated a currency board system in the early years of this century, when it registered its best-ever period of growth. "
2715,"[INST] But now the IMF is warning Argentina over its [/INST] soaring trade deficit, while the strong dollar - and peso - has set local exporters squealing. "
2716,"[INST] Full text: Foreign investors often ask Argentine officials if they [/INST] have an exit route from convertibility, the currency board system that links the peso at par to the dollar. "
2717,"[INST] ""When you are married to Sharon Stone,"" [/INST] said one senior official recently, ""you do not require an exit route"". "
2718,"[INST] Convertibility was introduced in 1991, despite International Monetary Fund doubts, [/INST] in a last-ditch attempt to halt the repeated bouts of hyperinflation that had laid the economy waste. "
2719,"[INST] Since the unlikely alliance between the peso and the dollar [/INST] was sealed, GDP growth has averaged 7 per cent a year, hitting 8.4 per cent in 1997. "
2720,"[INST] There is a historical precedent for this harmonious union - Argentina [/INST] operated a currency board system in the early years of this century, when it registered its best-ever period of growth. "
2721,"[INST] But now the IMF is warning Argentina over its [/INST] soaring trade deficit, while the strong dollar - and peso - has set local exporters squealing. "
2722,"[INST] Even posing the question demonstrates [/INST] ignorance of Argentina's economic and political realities, officials say. "
2723,"[INST] Argentina is not a healthy, developed economy [/INST] which could readily engineer a modest devaluation to improve its competitiveness, they argue. "
2724,[INST] It is a nation [/INST] seared by its experience of financial instability.
2725,"[INST] Convertibility pulled the country back from [/INST] the abyss, and there are no votes in suggesting an alternative. "
2726,"[INST] ""No politician dares to propose a change that [/INST] risks bringing inflation back to the country,"" said Roberto Alemann, economist and former economy minister. "
2727,"[INST] Under the currency board system, [/INST] only money backed by foreign reserves can be issued. "
2728,[INST] The central bank in effect hands [/INST] over the setting of interest rates to the markets.
2729,"[INST] Most Argentines, with memories of racing [/INST] round the supermarket before prices rose, appear happy with this arrangement. "
2730,[INST] A downside of convertibility is that [/INST] it gives the authorities no policy instruments to fine-tune the economy.
2731,"[INST] During the 1995 ""tequila crisis"" interest rates soared [/INST] as deposits fled the banking system, plunging the economy into a brief but sharp recession. "
2732,"[INST] After the Asian financial crisis broke with full force last October, Argentina's country risk premium (the higher [/INST] interest rates it must pay compared with rates on US Treasury bonds) rose from 361 to more than 800 basis points, before falling back towards pre-crisis levels as fears of contagion eased. "
2733,"[INST] The external account, however, is under increasing stress, with [/INST] the 12-month accumulated trade deficit already outstripping the $5bn limit agreed earlier this year with the IMF. "
2734,[INST] An IMF mission last month urged measures to slow [/INST] domestic demand and stressed the need to press on with structural reform to enhance competitiveness.
2735,"[INST] A change of monetary regime, however, [/INST] was most definitely not on the IMF prescription list. "
2736,"[INST] Even supposing such a change could be engineered, [/INST] it is doubtful decoupling from the dollar would do much to help exporters. "
2737,"[INST] Three factors are driving the worsening trade situation, said Alberto Ades, emerging [/INST] markets currency economist at Goldman Sachs: very strong investment growth, pulling in capital goods imports; lower world commodity prices; and the strong dollar. "
2738,"[INST] ""Of the three, I [/INST] would put least emphasis on the dollar"". "
2739,"[INST] Of its main exports, wheat prices fell 45 per cent between [/INST] May 1996 and December 1997 and soyabean prices 20 per cent between May and December 1997, according to Deutsche Morgan Grenfell. "
2740,[INST] Devaluation would not change this international context [/INST] - but it would send foreign investors fleeing for the exit.
2741,"[INST] The trade deficit will ultimately prove self-correcting [/INST] as foreign investment pays off in terms of increased exports, officials say. "
2742,[INST] The worry would be if trade continued to [/INST] deteriorate in the short term and Argentina was hit by a new external shock.
2743,"[INST] But even then, officials [/INST] argue, convertibility's defence mechanisms would kick in. "
2744,"[INST] Officials also maintain that the banking system is much [/INST] stronger than it was in 1995, partly because of a wave of investment from deep-pocketed foreign banks. "
2745,"[INST] High bank liquidity requirements and a $7bn financial safety net negotiated [/INST] with international banks mean Argentina could cover the outflow of 30 per cent of bank deposits, which now total about $73bn. "
2746,"[INST] Argentina could conceivably find a solution in the creation [/INST] of a single currency for Mercosur, the customs union which also groups Brazil, Paraguay and Uruguay. "
2747,"[INST] Mr Menem has been the single [/INST] currency's main backer, initially to the bemusement of other Mercosur members. "
2748,"[INST] However, Argentine officials say they have [/INST] been pleasantly surprised by increased Brazilian receptiveness to the idea. "
2749,"[INST] Progress could be built on a Maastricht-style [/INST] process of economic convergence which was totally transparent for the markets, advocates argue. "
2750,"[INST] However, work on the project is [/INST] only just beginning, and sustained Brazilian enthusiasm is far from certain. "
2751,"[INST] In the meantime, Argentina's peso [/INST] looks more than ever wedded to the dollar. "
2752,"[INST] Talk of divorce is anathema, and [/INST] only the severest international financial turmoil could put the two asunder. "
2753,"[INST] ___ Document 65 of 600 Argentina given benefit of doubt [/INST] EMERGING MARKET FOCUS: Author: Inman, Colin; Warn, Ken Publication info: Financial Times [London (UK)] 17 Apr 1998: 40. "
2754,"[INST] accountid=28034 Abstract: An IMF mission, which left Buenos Aires last week, [/INST] flagged Argentina's rising trade deficit as an area of serious concern and offered detailed prescriptions to cool the domestic economy. "
2755,"[INST] But economy minister Roque Fernandez politely declined the mission's advice and reiterated [/INST] the government's litany that the trade deficit was healthy, with record foreign investment fuelling capital goods imports which would ultimately benefit the economy. "
2756,"[INST] For the time being, investors appear [/INST] willing to give them the benefit of the doubt. "
2757,"[INST] Although last week saw nervous selling [/INST] in the stock market, it never developed into a rout. "
2758,"[INST] The tone has been firmer recently, helped by some crumbs [/INST] of comfort from Michel Camdessus, IMF managing director, who made clear that Argentina's relationship with the IMF remained intact. "
2759,"[INST] Full text: An IMF mission, which left Buenos Aires last week, [/INST] flagged Argentina's rising trade deficit as an area of serious concern and offered detailed prescriptions to cool the domestic economy. "
2760,"[INST] But economy minister Roque Fernandez politely declined the mission's advice and reiterated [/INST] the government's litany that the trade deficit was healthy, with record foreign investment fuelling capital goods imports which would ultimately benefit the economy. "
2761,"[INST] In the absence of any big corporate [/INST] moves, investors have been left pondering these two very different diagnoses. "
2762,"[INST] The local media have picked up the debate with glee and every commentator in [/INST] town has been wheeled out to opine on whether Argentina is motoring along nicely after last year's 8.4 per cent growth, or careering towards the abyss. "
2763,"[INST] ""All the information is out [/INST] there, so it's up to investors to decide"". "
2764,"[INST] For the time being, investors appear [/INST] willing to give them the benefit of the doubt. "
2765,"[INST] Although last week saw nervous selling [/INST] in the stock market, it never developed into a rout. "
2766,"[INST] The tone has been firmer recently, helped by some crumbs [/INST] of comfort from Michel Camdessus, IMF managing director, who made clear that Argentina's relationship with the IMF remained intact. "
2767,"[INST] ""The consensus among investors is that the IMF [/INST] demand to cool the economy is not justified,"" said Roberto Guevara of Caspian Securities. "
2768,"[INST] ""But they like the fund keeping [/INST] up pressure for structural reform, especially on the labour front"". "
2769,[INST] The Merval leading share index edged [/INST] back early yesterday after advances in the previous four sessions.
2770,"[INST] Little changed from last year's closing levels, the [/INST] Merval has missed out on double-digit percentage rises registered in other markets, including Sao Paulo. "
2771,"[INST] With foreign investors either absent or net [/INST] sellers, the market has struggled to recover its pre-Asian crisis dynamism. "
2772,"[INST] However, Argentina's private pension funds, AFJPs, continue steadily [/INST] to buy up their favourite stocks, at least establishing a floor under the market. "
2773,"[INST] In March, the AFJPs invested $140m [/INST] in stocks, Caspian estimates, sharply up on the recent monthly average. "
2774,"[INST] ""I think we will see some better trade figures [/INST] later this year and the deficit fears will start to ease,"" said Christopher Ecclestone of brokers, Interacciones. "
2775,"[INST] There is a potential $6.1bn of new equity [/INST] issues in the pipeline this year, Caspian estimates, against a total market capitalisation of $57bn. "
2776,"[INST] The offerings comprise the sale of remaining government [/INST] and employee stakes in privatised companies, new privatisations, plus IPOs and rights offerings. "
2777,"[INST] But until the market sparks back [/INST] into life, the big ones will have to wait. "
2778,"[INST] ___ Document 79 of 600 Uruguay determined to set own pace as 'world champion of gradualism': Economy [/INST] is picking up just as Montevideo prepares to position itself as financial hub of Mercosur, reports Ken Warn: Author: Warn, Ken Publication info: Financial Times [London (UK)] 09 Apr 1998: 03. "
2779,"[INST] accountid=28034 Abstract: Yet behind this genteel [/INST] decay, Uruguay's economy is showing increasing signs of vitality. "
2780,"[INST] Montevideo is seeking to position itself as a [/INST] financial and administrative hub for Mercosur, the customs union which includes Brazil, Argentina and Paraguay. "
2781,"[INST] Last year, the economy grew by an [/INST] estimated 6 per cent following 4.9 per cent growth in 1996. "
2782,"[INST] This year the picture is clouded by uncertainty over the economic [/INST] prospects for Brazil and Argentina, the country's biggest trading partners, which take almost 50 per cent of its exports. "
2783,"[INST] Inflation, which began the 1990s at over 100 [/INST] per cent, was down to 15 per cent by the end of last year. "
2784,"[INST] This year, the government hopes to [/INST] secure single digit inflation for the first time in decades. "
2785,"[INST] Despite persistent high inflation, Uruguay never experienced [/INST] the hyper- inflation and economic chaos that plagued neighbouring Argentina and Brazil. "
2786,"[INST] As a result, governments have not had the [/INST] political cover to introduce shock measures to sweep away vestiges of the corporatist, welfare state. "
2787,"[INST] ""We are the world champions [/INST] of gradualism,"" said Elias Bluth, presidential chief of staff. "
2788,"[INST] Full text: In the historic quarter of Montevideo, the Uru [/INST] guayan capital, old men while away their days over coffee, as ornate buildings around them slowly deteriorate. "
2789,[INST] There is a flurry of excitement as a [/INST] street is roped off to protect passers-by from chunks of masonry falling from a hotel.
2790,"[INST] Yet behind this genteel decay, [/INST] Uruguay's economy is showing increasing signs of vitality. "
2791,"[INST] Montevideo is seeking to position itself as a [/INST] financial and administrative hub for Mercosur, the customs union which includes Brazil, Argentina and Paraguay. "
2792,"[INST] Last year, the economy grew by an [/INST] estimated 6 per cent following 4.9 per cent growth in 1996. "
2793,"[INST] This year the picture is clouded by uncertainty over the economic [/INST] prospects for Brazil and Argentina, the country's biggest trading partners, which take almost 50 per cent of its exports. "
2794,"[INST] Since 1996, a coalition government of the Colorado and Blanco parties, [/INST] historic rivals for the centre and centre-right vote, has squeezed down inflation and opened areas of the state dominated economy. "
2795,"[INST] The public sector deficit, 1.6 [/INST] per cent of GDP last year, is improving. "
2796,"[INST] Inflation, which began the 1990s at over 100 [/INST] per cent, was down to 15 per cent by the end of last year. "
2797,"[INST] This year, the government hopes to [/INST] secure single digit inflation for the first time in decades. "
2798,"[INST] Despite persistent high inflation, Uruguay never experienced [/INST] the hyper- inflation and economic chaos that plagued neighbouring Argentina and Brazil. "
2799,"[INST] As a result, governments have not had the [/INST] political cover to introduce shock measures to sweep away vestiges of the corporatist, welfare state. "
2800,"[INST] ""We are the world champions [/INST] of gradualism,"" said Elias Bluth, presidential chief of staff. "
2801,"[INST] After a 1992 referendum rejected privatisation of the Antel telecoms monopoly, [/INST] government has been forced to look at more incremental options for bringing private capital and competition into state dominated sectors. "
2802,[INST] It has offered toll road concessions to [/INST] private operators and ended state monopolies in areas such as insurance.
2803,[INST] Running of Montevideo's port and airport is being [/INST] put out to tender; state organisations have been encouraged to seek private sector partnerships.
2804,"[INST] Montevideo's city government, under the Frente [/INST] Amplio broad-left coalition, has turned to private companies to run services. "
2805,[INST] Government plans to allow the private sector [/INST] into electricity generation alongside the state monopoly UTE have met opposition.
2806,"[INST] A plebiscite in March failed to win the 25 per cent [/INST] of votes required to force a referendum on the changes, voters have a second chance to secure one in June. "
2807,"[INST] If they succeed, a [/INST] binding vote will be held in October. "
2808,"[INST] The Frente Amplio, expected to make a strong showing in [/INST] the November 1999 presidential elections, may be able to play on fears of privatisation to derail the liberalisation. "
2809,"[INST] The ruling coalition's key reform, creation of [/INST] a private pension fund system in 1996, has exceeded its backers' hopes. "
2810,"[INST] The pay-as-you-go state system, combined with an ageing [/INST] population and widespread option of early retirement, was an ever-rising burden on state finances. "
2811,"[INST] Private pension funds, known as AFAPs, were expected to [/INST] win about 100,000 adherents in the early years of operation, running alongside the state system. "
2812,"[INST] Transition costs, with those of administrative and [/INST] education reforms, are being met with World Bank and Inter-American Development Bank loans. "
2813,"[INST] The AFAPs are largely confined to investing in government [/INST] paper, but the rules will be progressively relaxed, giving a boost to Uruguay's financial markets. "
2814,"[INST] Montevideo has secured the Mercosur central administration, sparking [/INST] hopes it will become a mini-Brussels at the heart of the trade grouping. "
2815,[INST] The secretariat is due to [/INST] move into its new headquarters within months.
2816,"[INST] ___ Document 85 of 600 IMF breaks up Argentina's party ECONOMIC POLICY FUND URGES [/INST] BRAKE ON GROWTH TAX MEASURES AND FREEZE ON NEW INFRASTRUCTURE PROJECTS RECOMMENDED: Author: Warn, Ken Publication info: Financial Times [London (UK)] 08 Apr 1998: 05. "
2817,"[INST] accountid=28034 Abstract: Argentina's economy is growing at more [/INST] than 8 per cent a year, after notching up 8.4 per cent growth last year. "
2818,"[INST] The mission criticised proposed labour market reforms, warning that the package [/INST] fell well short of Argentina's commitments in its letter of intent with the IMF for a three-year $2.8bn facility. "
2819,"[INST] It also queried spending plans, backed by President Carlos [/INST] Menem, which appear to be aimed at generating a ""feel-good"" factor before next year's presidential elections. "
2820,"[INST] The visit was triggered by a sharp deterioration in Argentina's [/INST] trade position, which has already taken the 12-month deficit above the $5bn guideline agreed with the IMF. "
2821,"[INST] The trade deficit could rise this year to $8bn, the mission warned, taking [/INST] the current account deficit to the equivalent of 4.75 per cent of gross domestic product, against a 3.8 per cent maximum agreed with the IMF. "
2822,"[INST] ""It is unlikely that more than one third [/INST] of such a deficit could be financed by foreign direct investment,"" the mission said. "
2823,"[INST] Full text: Argentina's economy is growing at more [/INST] than 8 per cent a year, after notching up 8.4 per cent growth last year. "
2824,[INST] An IMF mission this week [/INST] urged changes in economic policies to damp domestic demand.
2825,[INST] Its main worry is that growth is not sustainable [/INST] without a rising trade gap and increased exposure to a turnaround in international investor sentiment.
2826,"[INST] The mission criticised proposed labour market reforms, warning that the package [/INST] fell well short of Argentina's commitments in its letter of intent with the IMF for a three-year $2.8bn facility. "
2827,"[INST] It also queried spending plans, backed by President Carlos [/INST] Menem, which appear to be aimed at generating a ""feel-good"" factor before next year's presidential elections. "
2828,"[INST] The visit was triggered by a sharp deterioration in Argentina's [/INST] trade position, which has already taken the 12-month deficit above the $5bn guideline agreed with the IMF. "
2829,"[INST] The trade deficit could rise this year to $8bn, the mission warned, taking [/INST] the current account deficit to the equivalent of 4.75 per cent of gross domestic product, against a 3.8 per cent maximum agreed with the IMF. "
2830,"[INST] ""It is unlikely that more than one third [/INST] of such a deficit could be financed by foreign direct investment,"" the mission said. "
2831,"[INST] ""The Fund has taken a very extreme view [/INST] on the current account and they are clearly worried,"" said Pablo Guidotti, treasury secretary. "
2832,"[INST] ""We have a fundamental disagreement over [/INST] this, but in the end it is investors who will decide"". "
2833,"[INST] The government argues that the trade imbalance is part of a [/INST] virtuous circle, with strong foreign investment fuelling high imports of capital goods, which will in turn lead to improved export prospects. "
2834,"[INST] However, Argentina's exports have been hit by a triple whammy of falling [/INST] commodity prices, a slowdown in Brazil, its main market, and a strong dollar, to which the Argentine peso is pegged at par. "
2835,"[INST] Last year exports grew 7 [/INST] per cent, but imports rose 27 per cent. "
2836,"[INST] The IMF backed the government's tax reform proposals, [/INST] aimed at extending value-added tax to pay for cuts in taxes on labour. "
2837,[INST] But it urged modifications [/INST] and early implementation to raise more revenue.
2838,[INST] The economy ministry has already signalled its willingness to shelve [/INST] $400m of infrastructure spending due to be financed by the privatisation of the Banco Hipotecario Nacional this year.
2839,[INST] * Increases in bank liquidity requirements [/INST] to help curb the growth of domestic bank credit.
2840,"[INST] * Fundamental revisions to the government's proposed labour reforms, which [/INST] entrench collective bargaining and make no provision for competition among healthcare schemes, which remain in union control. "
2841,"[INST] It also called for a phased, [/INST] rather than immediate withdrawal of flexible, temporary work contracts. "
2842,[INST] Many say these have [/INST] been the main generator of new jobs.
2843,"[INST] Argentina is not constrained to [/INST] implement the IMF's recommendations, Mr Guidotti said. "
2844,"[INST] ""We are meeting our targets [/INST] for the quarter and the programme is on track"". "
2845,[INST] The programme is due for [/INST] formal review by the IMF in June.
2846,"[INST] However, the mission's strictures strengthen the hand of those in government, [/INST] especially the economy ministry, who want to discourage an acceleration in public spending in the run-up to the elections. "
2847,[INST] The central bank may eventually follow the [/INST] Fund's recommendation to raise banks' liquidity requirements from the present 20 per cent.
2848,"[INST] However, central bank officials say they would be happy to raise [/INST] the requirements if they felt it necessary for reasons of prudence, but doubt its efficacy as an instrument of macroeconomic policy. "
2849,"[INST] But the main impact of the IMF's criticisms could be on [/INST] the ruling Peronist party, which has looked to continued strong growth as a key plank in its election appeal. "
2850,"[INST] Mr Menem has backed plans to build 10,000km of motorways, paid [/INST] for by new fuel taxes, and to raise teachers' salaries, paid for by a 1 per cent tax on car sales. "
2851,[INST] But the IMF said such [/INST] projects should be paid for by spending cuts elsewhere.
2852,[INST] Mr Menem's supporters want the [/INST] constitution changed to allow him a third term.
2853,[INST] A dose of unpleasant IMF [/INST] medicine is not in their game plan.
2854,"[INST] ___ Document 108 of 600 Tax reforms anger Argentine business IMF-AGREED [/INST] TERMS ATTEMPT TO INCREASE REVENUE FROM COMPANIES: Author: Warn, Ken Publication info: Financial Times [London (UK)] 31 Mar 1998: 05. "
2855,"[INST] accountid=28034 Abstract: Argentine companies are up in arms about the government's [/INST] tax reform proposals and have taken out newspaper advertisements attacking the package, signed by President Carlos Menem on Friday. "
2856,[INST] The package is a cornerstone of the structural reforms to which Argentina [/INST] is committed under the terms of its three-year $2.8bn (£1.7bn) extended fund facility agreed in February with the International Monetary Fund.
2857,[INST] An IMF team arrived in Buenos [/INST] Aires yesterday to review the economy and progress on structural change.
2858,"[INST] The tax reforms, which are intended to be [/INST] balanced and revenue neutral, had three main aims, said Pablo Guidotti, treasury secretary. "
2859,[INST] They are: * Cutting unemployment [/INST] from its present 13.7 per cent and improving competitiveness.
2860,"[INST] The 22 per cent tax on labour met by companies will be cut by 6.5 points in an [/INST] effort to stimulate job creation; Full text: Argentine companies are up in arms about the government's tax reform proposals and have taken out newspaper advertisements attacking the package, signed by President Carlos Menem on Friday. "
2861,[INST] Now they aim to take [/INST] their battle against the reforms to Congress.
2862,"[INST] No wonder, officials mutter under their breath [/INST] - most companies try their hardest not to pay any taxes at all. "
2863,[INST] The package is a cornerstone of the structural reforms to which Argentina [/INST] is committed under the terms of its three-year $2.8bn (£1.7bn) extended fund facility agreed in February with the International Monetary Fund.
2864,[INST] An IMF team arrived in Buenos [/INST] Aires yesterday to review the economy and progress on structural change.
2865,"[INST] The tax reforms, which are intended to be [/INST] balanced and revenue neutral, had three main aims, said Pablo Guidotti, treasury secretary. "
2866,[INST] They are: * Cutting unemployment [/INST] from its present 13.7 per cent and improving competitiveness.
2867,"[INST] The 22 per cent tax on labour met by companies will be cut by 6.5 points in [/INST] an effort to stimulate job creation; * Eliminating distortions in the tax law which subsidise corporate indebtedness; * Reducing tax evasion, which is estimated at between 40 and 50 per cent. "
2868,"[INST] Higher taxes on tobacco, alcohol [/INST] and soft-drinks have brought the loudest protests from industry. "
2869,"[INST] Value added tax (VAT) will also be imposed for [/INST] the first time on cable television, health insurance, advertising and printed publications, except for newspapers. "
2870,[INST] The prevailing VAT rate of [/INST] 21 per cent will be halved on essential foods.
2871,[INST] Taxes on company and individual [/INST] earnings will rise from 33 to 35 per cent.
2872,"[INST] A tax of 15 per cent is to be imposed on [/INST] interest payments on borrowings through the bond markets, payable by the issuer, and on payments to other foreign lenders. "
2873,"[INST] Under current tax law, interest payments were [/INST] tax exempt and deductible, providing a subsidy to indebtedness, said Mr Guidotti. "
2874,"[INST] ""Some of the problems in [/INST] Asia have to do with tax incentives to debt. "
2875,"[INST] We see this as [/INST] a distortion and want to eliminate it"". "
2876,[INST] There is evidence that many Argentine [/INST] companies generate debt and interest payments to minimise their tax liabilities.
2877,[INST] In the last fiscal year only 39 [/INST] per cent of companies which presented tax declarations incurred any tax liability.
2878,"[INST] Of the 1,600 biggest contributors, [/INST] only 700 registered a positive tax liability. "
2879,"[INST] To pull the other 60 per cent into the tax [/INST] net, the government plans both the tax on borrowings and a1 per cent tax on gross assets. "
2880,[INST] It also aims to adopt OECD norms on [/INST] transfer pricing to stop companies manipulating their internal prices to cut tax liabilities.
2881,[INST] Bond market investors have expressed concern that the tax [/INST] on bond interest payments could trigger tax contingent clauses allowing Argentine bonds to be called at par.
2882,"[INST] ""Our legal advice is that these clauses would not [/INST] be triggered and the tax will not generate changes in outstanding securities,"" said Mr Guidotti. "
2883,"[INST] Despite the opposition from business, Mr [/INST] Guidotti is confident the main proposals will be passed. "
2884,[INST] He also expected the IMF [/INST] team to be happy with economic progress.
2885,"[INST] ___ Document 159 of 600 BANKING Determined drive for [/INST] strength fuels consolidation Author: Crawford, Leslie Publication info: Financial Times [London (UK)] 12 Mar 1998: 02. "
2886,[INST] accountid=28034 Abstract: Latin America's banking industry has entered a phase [/INST] of rapid consolidation following the financial upheavals that wrecked many banks and required costly government bail-outs in the mid-1990s.
2887,"[INST] Seventy banks have gone out of business [/INST] in Argentina since December 1994, leaving 135 mostly small, regional banks in operation. "
2888,"[INST] In Brazil, 50 of the country's 240 banks have either [/INST] disappeared or merged into bigger financial groups since the introduction of the Real anti-inflation plan in mid-1994. "
2889,"[INST] In Mexico, only eight of the [/INST] 18 banks privatised in 1991-92 remain with their original buyers. "
2890,"[INST] Thirteen banks buckled under the weight of loan defaults [/INST] and were placed under central bank intervention, while four were taken over by foreign banks. "
2891,[INST] Full text: by Leslie Crawford in Mexico City Determined drive for strength fuels consolidation The arrival of foreign banks [/INST] has led to revitalising changes in the sector Latin America's banking industry has entered a phase of rapid consolidation following the financial upheavals that wrecked many banks and required costly government bail-outs in the mid-1990s.
2892,"[INST] Seventy banks have gone out of business [/INST] in Argentina since December 1994, leaving 135 mostly small, regional banks in operation. "
2893,"[INST] In Brazil, 50 of the country's 240 banks have either [/INST] disappeared or merged into bigger financial groups since the introduction of the Real anti-inflation plan in mid-1994. "
2894,"[INST] In Mexico, only eight of the [/INST] 18 banks privatised in 1991-92 remain with their original buyers. "
2895,"[INST] Thirteen banks buckled under the weight of loan defaults [/INST] and were placed under central bank intervention, while four were taken over by foreign banks. "
2896,"[INST] The 1994-95 financial crisis in Venezuela forced the government to intervene in [/INST] 56 financial institutions and take control of another 24, representing about 50 per cent of the deposits in the financial system. "
2897,[INST] The consolidation wave is being driven by the determination [/INST] of the region's banking supervisors to build strong banks with healthy capital bases and clean balance sheets.
2898,"[INST] Foreign banks, which have taken Latin [/INST] America by storm since 1995, are accelerating the process. "
2899,"[INST] Where foreign banks have established a beachhead in Latin America, usually through [/INST] the acquisition of local banks, they have shaken up the industry with new products, aggressive marketing, more capital and better technology. "
2900,"[INST] Banco Bilbao Vizcaya's ""El Libreton"", a savings account that takes [/INST] part in a monthly lottery draw, has proved hugely popular with its customers in Mexico, Venezuela, Colombia and Argentina. "
2901,"[INST] Miguel Navas, BBV's director in Mexico, says his bank signed up 800,000 [/INST] new clients in 1997; it also set up 25 offices throughout Mexico to attract the custom of small and medium-sized businesses. "
2902,"[INST] Banco Santander , BBV's rival in Spain, was the [/INST] most active investor in Latin America in 1997, buying, at one stage, a bank every seven weeks. "
2903,"[INST] Santander bought the largest private sector [/INST] bank in Argentina, Rio de la Plata, for $700m. "
2904,"[INST] It also owns smaller banks [/INST] in Mexico, Chile, Peru, Colombia and Venezuela. "
2905,[INST] Both Santander and BBV now have [/INST] more banking employees in Latin America than they do in Spain.
2906,[INST] Analysts reckon that BBV will soon be [/INST] obtaining 30 per cent of its net interest income from Latin America.
2907,[INST] HSBC Holdings is the [/INST] other big foreign player in Latin America.
2908,"[INST] Its $2bn spending spree in 1996 and 1997 netted Banco Bamerindus [/INST] in Brazil, the Roberts financial group in Argentina, as well as smaller stakes in Chilean, Peruvian and Mexican banks. "
2909,[INST] Foreign banks say they are attracted by [/INST] Latin America's underdeveloped banking market in an environment of steady economic growth.
2910,"[INST] In Brazil, the volume of loans is equivalent [/INST] to 30 per cent of GDP, compared with 180 per cent in the US. "
2911,[INST] Deposits in Venezuela are equal [/INST] to less than 10 per cent of GDP.
2912,"[INST] On average, only one in two persons has a [/INST] bank account in Brazil, compared with an average of three accounts per person in Japan. "
2913,[INST] Some estimates put the number of [/INST] potential new Brazilian customers for the banking market at 30m.
2914,"[INST] The financial crisis in Asia has clouded [/INST] the outlook for Latin America's banking industry, particularly in Mexico and Brazil. "
2915,"[INST] Brazil, the country most affected by the Asian [/INST] fallout, has been forced to raise interest rates to defend its currency, the Real. "
2916,"[INST] This, in turn, is expected to subdue demand for [/INST] new credit, increase loan defaults and slow economic growth to below 1 per cent in 1998. "
2917,[INST] The brake on economic growth [/INST] came at a difficult transition period for Brazilian banks.
2918,"[INST] ""Before the Real plan Brazilian banks [/INST] were money traders,"" says Jose Garcia-Cantera, of Salomon Smith Barney. "
2919,"[INST] ""Banks did not focus on asset [/INST] quality because hyperinflation quickly eroded the value of bad loans"". "
2920,"[INST] With inflation tamed, banks have had to relearn [/INST] the traditional business of intermediation and put better credit control systems in place. "
2921,"[INST] Despite a more difficult operating environment, Mr Garcia-Cantera estimates bad [/INST] loans will not exceed 4 per cent of the total loans in the Brazilian banking system in 1998. "
2922,"[INST] In Mexico, by contrast, bad loans stand at a worrying [/INST] 13.2 per cent of the total, a level which has impeded most banks from resuming lending activities. "
2923,"[INST] Credit contracted by more than 50 per cent during 1995 [/INST] and 1996, while there was no new lending in 1997, although the economy grew by 7 per cent. "
2924,"[INST] Most analysts believe it will take another five years of economic growth, [/INST] foreign investment and the merger of weak banks with stronger ones, before the Mexican banking system is awarded a clean bill of health. "
2925,"[INST] Venezuela, like Mexico, is also nursing its banking system back to [/INST] health after the 1994-95 crisis which is estimated to have cost $12bn, or 22 per cent of 1994 GDP. "
2926,"[INST] Like Mexico, foreign banks are expected to play a leading [/INST] role in the recovery, as they already control 38 per cent of the banking system's total assets. "
2927,"[INST] The potential for expansion is also great, because [/INST] the financial system is considered far too small relative to the size of Venezuela's economy. "
2928,[INST] Venezuela's total banking assets are equal to the assets of a [/INST] single bank in Chile - Banco de Santiago - even though the economies of Chile and Venezuela are of similar size.
2929,"[INST] Another similarity with Mexico is that [/INST] banking regulation, which was lax before the crisis, is being improved. "
2930,[INST] Argentina's financial system should be one [/INST] of the most dynamic in the region this year.
2931,"[INST] Mr Garcia-Cantera estimates credit will grow by [/INST] 14 per cent, with consumer loans up between 30 and 35 per cent. "
2932,"[INST] The electronic payment of salaries through banks, which comes [/INST] into force this year, is regarded as a significant development towards increasing banking penetration in the country. "
2933,[INST] Salomon Smith Barney estimates Argentina's banks will [/INST] get 1.5m new clients in the first half of 1998 alone.
2934,"[INST] ___ Document 180 of 600 Hazard of capital outflow [/INST] can be controlled Author: Powell, Andrew Publication info: Financial Times [London (UK)] 10 Mar 1998: 22. "
2935,"[INST] accountid=28034 Abstract: The analysis focused on Asia, but it might also be argued that Argentina suffered [/INST] from the fickle nature of international capital during the tequila period of 1995 when 18 per cent of bank deposits fled the country in little more than three months. "
2936,"[INST] However, there is no strong lobby against the opening [/INST] of the capital account that has taken place, nor in favour of capital controls in this country. "
2937,"[INST] Rather, there is an appreciation of the value of such foreign [/INST] capital, wisely invested, in increasing the efficiency of the economy and the wealth of its citizens and in monitoring policy decisions. "
2938,"[INST] Sir, I read with interest Martin Wolf's comments on capital account [/INST] convertibility and his view that it ""is not whether capital flows should be controlled, but how"" (""Flows and blows"", March 3). "
2939,"[INST] The analysis focused on Asia, but it might also be argued that Argentina suffered from [/INST] the fickle nature of international capital during the tequila period of 1995 when 18 per cent of bank deposits fled the country in little more than three months. "
2940,"[INST] However, there is no strong lobby against the opening [/INST] of the capital account that has taken place, nor in favour of capital controls in this country. "
2941,"[INST] Rather, there is an appreciation of the value of such foreign [/INST] capital, wisely invested, in increasing the efficiency of the economy and the wealth of its citizens and in monitoring policy decisions. "
2942,"[INST] The lesson learnt, however, was [/INST] that capital that enters may at some point leave. "
2943,"[INST] Hence the ""systemic liquidity risks"" associated with the acceptance of such capital [/INST] must be managed - something which most G10 countries are lucky enough not to have to consider in the same way. "
2944,"[INST] This risk is normally to be found concentrated [/INST] in the banking system and for this reason Argentina has developed a ""systemic liquidity policy"". "
2945,[INST] This policy essentially consists of a liquidity requirement system on banks and a contingent [/INST] international credit facility with 14 international banks which together give Argentina access to international funds for some 30 per cent of the total deposit base.
2946,[INST] If capital decides to leave in bulk then there is [/INST] sufficient liquidity to manage such an outflow without placing the other objectives of the central bank in jeopardy.
2947,[INST] The choice is not a closed [/INST] capital account versus total vulnerability to the fickleness of international capital.
2948,"[INST] The optimum may be to accept capital as offered but to [/INST] ensure that the liquidity risks associated with that capital are managed through an effective ""liquidity policy"" at the systemic level. "
2949,"[INST] Andrew Powell, chief economist, Central Bank of Argentina [/INST] , Reconquista 266, Capital 1003, Buenos Aires, Argentina Copyright Financial Times Limited 1998. "
2950,"[INST] ___ Document 244 of 600 Board game winner: Argentina's experience has [/INST] so far proved a success, says Stephen Fidler: Author: Fidler, Stephen Publication info: Financial Times [London (UK)] 12 Feb 1998: 13. "
2951,[INST] accountid=28034 Abstract: Argentina is the country [/INST] whose experience with a currency board is most useful to Indonesia.
2952,"[INST] The government adopted the regime in 1991 [/INST] recognising that its predecessors had, by repeatedly debauching the currency, lost public credibility. "
2953,[INST] Tying the value of the peso to the dollar by [/INST] law and forgoing the right to set monetary policy was a deliberate gesture to break with the past.
2954,[INST] Full text: Argentina is the country [/INST] whose experience with a currency board is most useful to Indonesia.
2955,"[INST] The government adopted the regime in 1991 [/INST] recognising that its predecessors had, by repeatedly debauching the currency, lost public credibility. "
2956,[INST] Tying the value of the peso to the dollar by [/INST] law and forgoing the right to set monetary policy was a deliberate gesture to break with the past.
2957,"[INST] Victor Bulmer-Thomas, an economics professor who heads London University 's [/INST] Institute of Latin American Studies , says a critical aspect of the board's success was its widespread initial popularity. "
2958,"[INST] The system broke the back of [/INST] incipient hyperinflation (prices had risen 1,350 per cent in 1990). "
2959,[INST] Growth then averaged 7{3/4} [/INST] per cent annually from 1991 to 1994.
2960,"[INST] But in 1995, the Mexican [/INST] currency crisis provided the new system's sternest test. "
2961,"[INST] In the wake of the crisis, 18 per cent of [/INST] deposits were withdrawn from Argentina's banking system, and the economy contracted in 1995 by 4.5 per cent. "
2962,"[INST] In dealing with the banking crisis, [/INST] Argentina benefited from the flexibility of its currency-board design. "
2963,[INST] The central bank was able [/INST] to pump some money into the banking system.
2964,"[INST] Sebastian Edwards, economics professor at the University of California , [/INST] Los Angeles, says this underlines a point not often appreciated: that even currency boards require expert management. "
2965,"[INST] Without it, says Mr Bulmer-Thomas, [/INST] the system probably would not have survived. "
2966,[INST] This is because inflation does not drop [/INST] to international levels the moment the currency board goes into operation.
2967,"[INST] Because of inertia, prices [/INST] still rose 25 per cent in 1992. "
2968,"[INST] Inertial inflation also means it is essential to enter [/INST] a currency board at the right exchange rate, perhaps 10 to 20 per cent undervalued. "
2969,"[INST] ""Currency boards are an [/INST] option that should be considered by policymakers. "
2970,"[INST] But they provide no short cut and shouldn't [/INST] be thought of as a trick to allow countries avoid necessary adjustment,"" says Mr Edwards. "
2971,"[INST] ___ Document 248 of 600 Argentina says it has beaten Asian [/INST] crisis ECONOMY EXPECTED TO GROW 6% IN 1998: Author: Warn, Ken Publication info: Financial Times [London (UK)] 11 Feb 1998: 04. "
2972,"[INST] accountid=28034 Abstract: Argentina has already overcome the effects of the [/INST] Asian financial crisis and its economy will grow strongly in 1998, Alieto Guadagni, industry secretary, said yesterday. "
2973,"[INST] Mr Guadagni said industrial production would grow by [/INST] about 6 per cent this year, and the economy would continue to generate fresh jobs. "
2974,"[INST] Full text: Argentina has already overcome the effects of the [/INST] Asian financial crisis and its economy will grow strongly in 1998, Alieto Guadagni, industry secretary, said yesterday. "
2975,"[INST] Mr Guadagni said industrial production would grow by [/INST] about 6 per cent this year, and the economy would continue to generate fresh jobs. "
2976,[INST] One of the main grounds for optimism was [/INST] the fall in interest rates from their peaks immediately after the Asian crisis.
2977,"[INST] The country risk premium, as measured by the spread between Argentina's par bond [/INST] and US treasuries, had fallen from 821 basis points in the immediate aftermath of the crisis to only 485 basis points now, he said. "
2978,"[INST] The fall takes the country risk premium to less [/INST] than it was a year ago, although still above its pre-crisis level of 361 basis points. "
2979,[INST] Local bank's interest rates for their top Argentine corporate clients [/INST] had fallen to 10 per cent this month from a peak of 15.7 per cent last November.
2980,"[INST] The banking system had also shown [/INST] no signs of weakening, Mr Guadagni said, rather the reverse. "
2981,"[INST] In the first 100 days since the [/INST] crisis began, bank deposits had risen 7.5 per cent, or almost $5bn. "
2982,"[INST] This contrasted with the first 100 days after the start [/INST] of the Tequila financial crisis in December 1994, when deposits fell 15.6 per cent, or over $7bn. "
2983,"[INST] Big companies' investment plans were also [/INST] unaffected by the recent international financial turmoil, Mr Guadagni said. "
2984,"[INST] The cereal harvest forecast for the 1997-98 [/INST] season, expected to reach a record 61m tonnes, was another reason for optimism. "
2985,[INST] Mr Guadagni refused to be [/INST] drawn on the prospects for the trade deficit.
2986,"[INST] Last week Argentina reported a 1997 trade [/INST] deficit of almost $4.9bn, compared with a surplus of $49m the previous year. "
2987,"[INST] Some analysts have questioned whether Argentina can keep its 12-month accumulated deficit below $5bn, [/INST] as it pledged to the International Monetary Fund in its letter of intent for a three-year $2.8bn extended fund facility, approved by the IMF board last week. "
2988,"[INST] Argentina is committed to consult the IMF [/INST] if it breaches the trade deficit target and to take ""corrective measures"". "
2989,"[INST] ""The deficit will depend on the final [/INST] result of the harvest and the evolution of commodity prices,"" said Mr Guadagni. "
2990,"[INST] ""But the country has a commercial deficit [/INST] because it is in a very strong process of investment and modernisation"". "
2991,"[INST] ___ Document 276 of 600 City of fakes on Paraguay's wild frontier: Black [/INST] market means big money, but worries about piracy and terrorism are growing: Author: Warn, Ken Publication info: Financial Times [London (UK)] 04 Feb 1998: 03. "
2992,"[INST] accountid=28034 Abstract: In the cramped, rubbish-strewn shopping arcades of Ciudad [/INST] del Este, on Paraguay's frontier with Brazil and Argentina, every kind of consumer desirable is on sale. "
2993,"[INST] Nike sports shoes, Levi's jeans, countless brands of Scotch [/INST] and the latest in Japanese consumer electronics are piled high in thousands of tiny stores. "
2994,"[INST] The city has built a bustling economy exporting contraband, ripping off the [/INST] designs of sportswear and clothing companies, and selling pirated software and cloned electronic goods, both made locally and imported from Asia. "
2995,"[INST] ""Ciudad del Este is the purest [/INST] reflection of corruption in Paraguay,"" said political analyst Carlos Martini. "
2996,"[INST] Brazil has recently cut duty-free allowances and increased the departure tax [/INST] for foreign travel, curbing the numbers of Brazilians entering Ciudad del Este in search of, say, a cheap stereo. "
2997,[INST] But much of the city's [/INST] trade is not affected by changes in the regulations.
2998,"[INST] For those who know where [/INST] to ask, weapons and drugs are readily available. "
2999,"[INST] Clandestine landing strips are plentiful in [/INST] the triple border area, ensuring no interruption in supplies. "
3000,"[INST] Full text: In the cramped, rubbish-strewn shopping arcades of Ciudad [/INST] del Este, on Paraguay's frontier with Brazil and Argentina, every kind of consumer desirable is on sale. "
3001,"[INST] Nike sports shoes, Levi's jeans, countless brands of Scotch [/INST] and the latest in Japanese consumer electronics are piled high in thousands of tiny stores. "
3002,"[INST] Unfortunately for the Argentines and Brazilians who daily swarm across the ""Bridge of Friendship"" into [/INST] the city looking for bargains, most of the authentic consumer goods which flood into the area are re-exported almost immediately, leaving only the look-alikes on the stalls. "
3003,"[INST] The city has built a bustling economy exporting contraband, ripping off the [/INST] designs of sportswear and clothing companies, and selling pirated software and cloned electronic goods, both made locally and imported from Asia. "
3004,"[INST] ""Ciudad del Este is the purest [/INST] reflection of corruption in Paraguay,"" said political analyst Carlos Martini. "
3005,"[INST] The lack of government action to curb the pirates, especially [/INST] over intellectual property rights, is causing concern among US officials, who are considering trade sanctions against the country. "
3006,"[INST] Brazil and Argentina, Paraguay's partners [/INST] in the Mercosur trade group, have also grown alarmed. "
3007,"[INST] ""No one really knows the size [/INST] of the black, frontier economy,"" says an economic analyst, Dionisio Borda. "
3008,[INST] This makes Ciudad del Este a trading [/INST] centre overshadowed only by the likes of Hong Kong and Miami.
3009,[INST] Paraguay's entire gross domestic [/INST] product is officially estimated at about $9bn.
3010,"[INST] Brazil has recently cut duty-free allowances and increased the departure tax [/INST] for foreign travel, curbing the numbers of Brazilians entering Ciudad del Este in search of, say, a cheap stereo. "
3011,[INST] But much of the city's [/INST] trade is not affected by changes in the regulations.
3012,"[INST] For those who know where [/INST] to ask, weapons and drugs are readily available. "
3013,"[INST] Clandestine landing strips are plentiful in [/INST] the triple border area, ensuring no interruption in supplies. "
3014,[INST] The city's teeming commercial economic life has brought [/INST] Shia Lebanese traders - with their own mosque - and Chinese and Taiwanese entrepreneurs.
3015,"[INST] At least some of the newcomers are trying to build [/INST] legitimate export businesses, taking advantage of cheap labour and land, and to ensure the city's economic future. "
3016,"[INST] Last November Carlos Corach, Argentina's interior minister, renewed calls for tighter [/INST] border controls in the triple border area and warned of a growing threat posed by Islamic fundamentalist groups there. "
3017,"[INST] Ciudad del Este was ""a [/INST] unique sanctuary for crime and impunity"", he said. "
3018,"[INST] However, border security has [/INST] been laxly enforced by all three countries. "
3019,"[INST] The area is home to a big tourist attraction, [/INST] the Iguazu waterfalls, and until recently cars and buses travelling between Brazil and Argentina were rarely stopped. "
3020,"[INST] Adding to the constant cross-border flows, many members of the [/INST] Shia community have their businesses in Ciudad del Este but live over the Brazilian border in Foz do Iguacu. "
3021,[INST] Western embassy officials believe Ciudad del Este may have been used as [/INST] a base by Hizbollah guerrillas for the July 1994 bombing of a Jewish community centre in Buenos Aires in which 86 people died.
3022,"[INST] In 1992 another bomb destroyed [/INST] the Israeli embassy in the Argentine capital, killing 29. "
3023,"[INST] The town of Pedro Juan Caballero, further [/INST] north, is the centre for booming marijuana exports to Argentina and Brazil. "
3024,"[INST] US officials estimate that [/INST] about 1,500kg passes through Paraguay every month. "
3025,"[INST] Stolen cars, spirited out of neighbouring countries, [/INST] have also become a nice little earner for Paraguay's ""frontier entrepreneurs"". "
3026,[INST] Last May the national police chief was [/INST] sacked after the force's involvement in the stolen car racket was exposed.
3027,[INST] The country's poor image as a result of these activities is [/INST] worrying some local politicians and has become a recurring theme in the run-up to presidential and general elections in May.
3028,"[INST] The bitterly divided Colorado party, in power for more than 50 [/INST] years, could be unseated by an alliance of the Liberal party and Encuentro Nacional, a new party of young modernisers. "
3029,"[INST] ""We must struggle against corruption and clean up [/INST] the economy,"" said Carlos Filizzola, head of Encuentro Nacional and opposition candidate for vice-president. "
3030,[INST] But it will be hard [/INST] for Paraguay to kick its bad habits.
3031,"[INST] Outside Ciudad del Este's ritzy Monalisa department [/INST] store, hawkers jostle to sell cheap plastic shoes and fake Rolexes. "
3032,"[INST] But inside, amid the air-conditioning and marble floors, [/INST] the Chanel perfume, Cartier watches, Lalique glassware, and Steinway pianos look real enough. "
3033,[INST] Border piracy has given plenty of people in Ciudad del Este [/INST] a taste for the good things in life - and they will not give it up in a hurry.
3034,"[INST] ___ Document 285 of 600 Asia cloud over [/INST] Buenos Aires Author: Warn, Ken Publication info: Financial Times [London (UK)] 02 Feb 1998: 26. "
3035,"[INST] accountid=28034 Abstract: Argentina's Merval share index is down almost 11 per [/INST] cent so far this year at 612.38, far from the heady days of 1997, when 900 looked within reach. "
3036,[INST] It is not that the [/INST] country's traders care too much right now.
3037,"[INST] But as they begin trickling back to work in the next few days, bronzed brokers face a [/INST] horizon clouded by the Asian crisis, and fears of storms blowing in from Brazil, where the exchange rate regime is vulnerable to attack as long as the uncertain international climate persists. "
3038,[INST] Local analysts agree it will take [/INST] a lot to tempt foreigners back into the water.
3039,"[INST] Raul Buonuome and Daniel Tassan-Din, respectively chief economist and head [/INST] of equities at Deutsche Morgan Grenfell , check off a long list of negatives for the market. "
3040,"[INST] Full text: Argentina's Merval share index is down almost 11 per [/INST] cent so far this year at 612.38, far from the heady days of 1997, when 900 looked within reach. "
3041,[INST] It is not that the [/INST] country's traders care too much right now.
3042,"[INST] But as they begin trickling back to work in the next few days, bronzed brokers face a [/INST] horizon clouded by the Asian crisis, and fears of storms blowing in from Brazil, where the exchange rate regime is vulnerable to attack as long as the uncertain international climate persists. "
3043,"[INST] A forced Brazilian devaluation would put Argentina's currency [/INST] board system, which pegs the peso at par to the dollar, under strain. "
3044,"[INST] Foreign investors began fleeing Buenos Aires last year, as the [/INST] Asian crisis impacted on emerging markets generally, and the bolsa has since languished in low trading volumes. "
3045,[INST] Local analysts agree it will take [/INST] a lot to tempt foreigners back into the water.
3046,"[INST] Raul Buonuome and Daniel Tassan-Din, respectively chief economist and head [/INST] of equities at Deutsche Morgan Grenfell , check off a long list of negatives for the market. "
3047,[INST] The economy faces the fall-out from lower world commodity prices; loss of [/INST] competitiveness due to dollar strength; worries over Brazil; increases in international financing costs; and disappointing tax receipts due to slower growth.
3048,"[INST] Shares in YPF , the privatised energy concern with a market [/INST] capitalisation of $10bn, have sunk in line with international oil prices, picking up only recently on rising tensions over Iraq. "
3049,"[INST] The motor vehicle sector has also taken a hit on [/INST] fears of lower exports to Brazil, with Peugeot manufacturer Sevel off more than 22 per cent this year. "
3050,"[INST] Weakening export performance is likely to mean further deterioration in Argentina's balance of [/INST] payments deficit, which last year edged toward 3 per cent of GDP, and growth will inevitably shrink from 1997's storming 8 per cent. "
3051,"[INST] ""Our most optimistic assessment of growth this year is [/INST] 4 per cent, but any fresh negative will mean that is not achievable,"" said Mr Buonuome. "
3052,"[INST] But the dollar peg will be [/INST] maintained, as it was during the Mexican financial crisis in 1995. "
3053,"[INST] ""The machine will work, but [/INST] the level of economic activity will suffer,"" he added. "
3054,"[INST] But eventually the bad news [/INST] may be fully discounted, said Mr Tassan-Din. "
3055,"[INST] ""If the Merval drops to 560 [/INST] or 570, some stocks are going to start looking attractive"". "
3056,"[INST] He believes Argentina's private pension funds, known as [/INST] AFJPs, will continue cherry-picking their favourite stocks at what could prove bargain prices. "
3057,"[INST] ""The pension funds look like [/INST] they are sitting on about $450m in contributions. "
3058,"[INST] When the managers get back from holiday, about [/INST] a quarter of that is likely to be pumped into stocks,"" Mr Ecclestone said. "
3059,"[INST] As of December, the AFJPs had a total [/INST] $8.8bn under management, 21.5 per cent of it invested in the stock market. "
3060,"[INST] The rise of home-grown institutional investors, such as [/INST] the pension and mutual funds, is steadily reducing dependence on foreign investors, said Mr Ecclestone. "
3061,"[INST] I think the market will [/INST] rise because of internal forces,"" he said. "
3062,[INST] Some analysts are also optimistic [/INST] about the next round of company results.
3063,"[INST] While loan-loss provisions and losses on bond portfolios may [/INST] hold back the banking sector, other sectors are not expected to show much Asian fall-out. "
3064,"[INST] Last month the government pushed [/INST] through privatisation of the airports, overcoming fierce political opposition. "
3065,"[INST] Last week it announced plans to sell its remaining holdings in privatised companies, including [/INST] a 20 per cent stake in YPF and 5 per cent of Aerolineas Argentinas , which could raise a total $3bn to plug any financing gaps. "
3066,"[INST] A headline-grabbing battle for supremacy in the ruling Peronist party between President Carlos [/INST] Menem and Eduardo Duhalde, governor of Buenos Aires province, is not affecting economic management, said Freddy Thomsen, chief economist at ING Barings . "
3067,"[INST] Fixed-income investors also continue to look favourably on Argentina, which [/INST] has almost met its first-quarter international borrowing requirements, although at higher spreads than before the Asian crisis. "
3068,[INST] Last week's 10-year D-Mark bond issue [/INST] was doubled in size to DM1.5bn due to heavy demand.
3069,"[INST] However, it is likely to take a [/INST] more settled international environment to tempt foreign investors back into the stock market. "
3070,[INST] Traders' tans may have well [/INST] and truly faded by the time that happens.
3071,"[INST] ___ Document 337 of 600 Argentine banking system [/INST] criticised Author: Fidler, Stephen Publication info: Financial Times [London (UK)] 14 Jan 1998: 03. "
3072,"[INST] accountid=28034 Abstract: Argentina's banking system remains weak despite improvements to bank supervision [/INST] and regulation since a 1995 crisis, according to a report published yesterday by the credit rating agency, Moody's Investors Service . "
3073,"[INST] The report says the system still suffers from poor disclosure standards and [/INST] unreliable reporting of problem loans, one aspect of weaknesses that remain in the surveillance and the prudential supervision of the banking system. "
3074,"[INST] Full text: Argentina's banking system remains weak despite improvements to bank supervision [/INST] and regulation since a 1995 crisis, according to a report published yesterday by the credit rating agency, Moody's Investors Service . "
3075,"[INST] The report says the system still suffers from poor disclosure standards and [/INST] unreliable reporting of problem loans, one aspect of weaknesses that remain in the surveillance and the prudential supervision of the banking system. "
3076,[INST] Banks' asset quality remains poor [/INST] and profitability among the weakest in Latin America.
3077,"[INST] Retail deposits remain mobile, [/INST] with average duration of deposits 70 days. "
3078,"[INST] ""Banks lack a reliable and sustainable [/INST] level of retail deposits,"" said Daniel Sarp, co-author of the report. "
3079,"[INST] Moreover, the government handles bank [/INST] failures on a case by case basis. "
3080,"[INST] ""The Argentine authorities' approach to dealing with nearly [/INST] insolvent banks does not appear to have reduced the systemic risks,"" the report says. "
3081,"[INST] A deposit insurance fund has been [/INST] created but contains only $700m, compared with deposits of about $67bn. "
3082,"[INST] A standby line of credit of $6.1bn has also been [/INST] arranged by the government - but, says Mr Sarp, it is needed because of the short duration of deposits. "
3083,"[INST] The entry of foreign banks into Argentina has been [/INST] positive, but the new entrants have often picked off the best banks, leaving weak domestic competition. "
3084,"[INST] The economy - and the banking system [/INST] - remain vulnerable to volatility in the international capital markets, the report said. "
3085,[INST] An economic crisis in [/INST] Brazil economy would also severely affect Argentina.
3086,"[INST] ___ Document 3 of 600 From Caracas to Tierra del Fuego, the future will be gas-fired: [/INST] SUPPLY by Robert Corzine: Natural gas can be the fuel for the engine of economic development Author: Corzine, Robert Publication info: Financial Times [London (UK)] 06 Nov 1998: 06. "
3087,"[INST] accountid=28034 Abstract: The outlines of such a grid are being put [/INST] in place, with the main element - the Bolivia-Brazil gas pipeline - due to be completed by mid- December. "
3088,[INST] A shortage of generating capacity in the industrial [/INST] heartland of southern Brazil is the engine driving the growth of the gas network.
3089,"[INST] Although the collapse in crude oil prices has caused some existing gas users [/INST] in the region to shift to cheap fuel oil, industry executives say such fuel substitution should not undermine the long-term demand for gas. "
3090,[INST] Brazil recognised the problem of possible fuel substitution in the early stages of building a [/INST] regional gas grid and is subsidising gas prices for three to five years to ensure that end users have the confidence to switch to the more environmentally acceptable fuel.
3091,"[INST] Investors in natural gas projects have also been heartened by the fact that, [/INST] unlike some existing plants in Argentina, most new gas fired-generating plants in Brazil do not have the capability of switching between the fuels. "
3092,[INST] Full text: The development of a natural gas grid across much of South [/INST] America is seen as one of the most important pieces of infrastructure if the region is to ensure steady economic growth in the coming decades.
3093,"[INST] The outlines of such a grid are being put in [/INST] place, with the main element - the Bolivia-Brazil gas pipeline - due to be completed by mid- December. "
3094,"[INST] Although the spreading global economic crisis is casting a shadow over capital-intensive projects, many industry [/INST] figures believe the underlying factors still favour continuing development of a regional gas grid, although it is not clear which pieces will be the next to be developed. "
3095,[INST] A shortage of generating capacity in the industrial [/INST] heartland of southern Brazil is the engine driving the growth of the gas network.
3096,"[INST] Although the collapse in crude oil prices has caused some existing gas users [/INST] in the region to shift to cheap fuel oil, industry executives say such fuel substitution should not undermine the long-term demand for gas. "
3097,[INST] Brazil recognised the problem of possible fuel substitution in the early stages of building a [/INST] regional gas grid and is subsidising gas prices for three to five years to ensure that end users have the confidence to switch to the more environmentally acceptable fuel.
3098,"[INST] Investors in natural gas projects have also been heartened by the fact that, [/INST] unlike some existing plants in Argentina, most new gas fired-generating plants in Brazil do not have the capability of switching between the fuels. "
3099,"[INST] Andrew Barrett, senior executive with BG, the UK pipeline and exploration [/INST] company active in the region, says long-term competition is more between natural gas and hydropower, than between gas and oil. "
3100,"[INST] Although hydropower can be one of the cheapest ways [/INST] to generate large amounts of electricity, large-scale schemes are expensive as well as environmentally sensitive. "
3101,[INST] They are also usually located [/INST] far away from the main electricity markets.
3102,"[INST] Gas fields, too, are often remote but the capital costs of building combined [/INST] cycle gas-fired power plants at main markets along the route of a pipeline are far less than the costs of a big hydropower scheme. "
3103,"[INST] In addition, gas-fired plants are more flexible; [/INST] they can be built quickly and can be sized to match local demand. "
3104,"[INST] Although gas export pipelines link Argentina with Chile, it is Brazil, [/INST] and especially the Sao Paolo area, which is the key to the long-term development of the region's most remote gas reserves. "
3105,"[INST] Officials from Total, the French oil group, [/INST] speak of the ""vacumn cleaner effect"" of the Brazilian gas market. "
3106,"[INST] Total has discovered large reserves off the tip of southern Argentina, but Daniel Valot, [/INST] Total's head of exploration and production, says it is ""unlikely that you can take gas from the southern tip to southern Brazil with an acceptable netback"". "
3107,[INST] But he also believes that the magnet of southern Brazil's [/INST] industrial economy will draw in Argentine gas now being used to satisfy domestic demand in Buenos Aires and elsewhere.
3108,"[INST] ""It would then make sense for [/INST] our remote reserves to replace the gas moving into southern Brazil"". "
3109,"[INST] Even so, Mr Valot does not expect [/INST] an increase in regional gas trading to give a big boost to prices. "
3110,"[INST] Argentine gas prices are among the lowest in [/INST] the world and any rise is likely to be ""very slow and modest"". "
3111,"[INST] The important point, he says, is [/INST] to be able to get large volumes to growing gas markets. "
3112,"[INST] Like Mr Barrett, Mr Vallon believes there is little alternative [/INST] to the long-term expansion of a regional gas grid: ""The growth of hydropower is nearing its end. "
3113,"[INST] The pace at which new pipelines emerge depends in large part on [/INST] how quickly demand develops for gas carried by the big Bolivia-Brazil pipeline, which has a capacity of 30bn cubic metres a year. "
3114,[INST] There are those who believe the Brazilian demand will be so [/INST] strong that little gas may be available at the end of the line at the coastal city of Porto Alegre.
3115,"[INST] Several schemes have emerged over the past year to pump Argentine [/INST] gas to Porto Alegre, in a development which would enhance the security of supply to the whole pipeline system. "
3116,[INST] Some industry executives believe Brazilian demand may [/INST] be such that two separate lines from Argentina could be required.
3117,"[INST] North-east Brazil offers another potential gas market for [/INST] regional producers, although it is increasingly seen as a possible customer for liquefied natural gas. "
3118,"[INST] Trinidad, which is completing its first LNG plant, is especially keen to supply the [/INST] north-east Brazilian market, although it faces stiff competition from Nigeria, which will become the other Atlantic basin LNG producer when its new plant at Bonny is finished. "
3119,"[INST] ___ Document 59 of 600 Havana Author: [/INST] Fletcher, Pascal Publication info: Financial Times [London (UK)] 23 Oct 1998: 07. "
3120,"[INST] accountid=28034 Abstract: Argentina, Cuba's second biggest bilateral creditor, has presented a wide-ranging [/INST] proposal to the Cuban authorities that combines suggested repayment mechanisms for $1.68bn of Cuban debt with initiatives to boost trade and investment ties. "
3121,"[INST] The package was presented yesterday to Francisco Soberon, Cuban central [/INST] bank president, by an Argentine delegation led by Jorge Campbell, secretary of state for international economic relations. "
3122,"[INST] Argentina, whose President Carlos Menem has called for democratic change in [/INST] communist-ruled Cuba, has recently lagged behind other Latin American countries such as Mexico and Venezuela in its trade ties with Havana. "
3123,"[INST] Argentine-Cuban trade in 1997 [/INST] totalled $132m, most of it Argentine exports. "
3124,"[INST] Full text: Argentina, Cuba's second biggest bilateral creditor, has presented a wide-ranging [/INST] proposal to the Cuban authorities that combines suggested repayment mechanisms for $1.68bn of Cuban debt with initiatives to boost trade and investment ties. "
3125,"[INST] The package was presented yesterday to Francisco Soberon, Cuban central [/INST] bank president, by an Argentine delegation led by Jorge Campbell, secretary of state for international economic relations. "
3126,"[INST] ""We are looking for mechanisms that will allow the debt to stop [/INST] being an obstacle to economic relations and will make it instead into a means of promoting such relations,"" Mr Campbell said. "
3127,"[INST] The Argentine proposal contained ""a menu of options"" whose aim would be [/INST] to reschedule the Cuban debt, at the same time linking repayment to possible investment projects in Cuba and increasing two-way trade. "
3128,"[INST] Argentina, whose President Carlos Menem has called for democratic change in [/INST] communist-ruled Cuba, has recently lagged behind other Latin American countries such as Mexico and Venezuela in its trade ties with Havana. "
3129,"[INST] Argentine-Cuban trade in 1997 [/INST] totalled $132m, most of it Argentine exports. "
3130,"[INST] Sergio Plasencia, a vice-president at the Cuban central bank, said Havana was [/INST] willing to talk with creditors about ways of finding ""real solutions"" to the island's hard currency foreign debt of more than $10bn. "
3131,[INST] Mr Campbell was encouraged by [/INST] the reception the Argentine proposal had received so far.
3132,"[INST] The Argentine initiative followed a debt rescheduling accord [/INST] agreed in March between Cuba and 182 companies from Japan, Cuba's single biggest creditor. "
3133,[INST] The March agreement spread repayment [/INST] of about $750m of Cuban debt over 20 years.
3134,"[INST] In total, Cuba owes some [/INST] $2bn in official and private-sector debt to Japan. "
3135,"[INST] Cuba's $1.68bn debt to Argentina consists of [/INST] official bilateral debt, of which $1.2bn is principal and the rest interest. "
3136,"[INST] Mr Campbell said he had also discussed with Cuban officials a Cuban request to join [/INST] the 11-member ALADI (Latin American Integration Association), which, if successful, could open the way for future negotiations on a possible trade agreement between Havana and the Mercosur trade group. "
3137,"[INST] ___ Document 89 of 600 Breathing space won but worries remain [/INST] ARGENTINA $5.7BN DEAL MEETS IMMEDIATE NEEDS FOR FINANCE: Author: Warn, Ken Publication info: Financial Times [London (UK)] 12 Oct 1998: 03. "
3138,"[INST] accountid=28034 Abstract: Argentina has won a valuable breathing space with the $5.7bn [/INST] (£3.3bn) financing package unveiled by Roque Fernandez, the economy minister, during last week's meetings of the World Bank and International Monetary Fund. "
3139,"[INST] The funds are intended to cover Argentina's financing requirements between now [/INST] and the first quarter of next year, in the event of the country remaining shut out of the capital markets. "
3140,"[INST] In the current global financial turmoil new bond issues [/INST] and syndicated bank loans have shuddered to a halt, for Argentina and the rest of Latin America. "
3141,"[INST] It faces debt amortisations totalling $11.5bn next year, while [/INST] the 1999 fiscal deficit was last week forecast at some $2.65bn by Miguel Kiguel, financing undersecretary. "
3142,"[INST] Full text: Argentina has won a valuable breathing space with the $5.7bn [/INST] (£3.3bn) financing package unveiled by Roque Fernandez, the economy minister, during last week's meetings of the World Bank and International Monetary Fund. "
3143,"[INST] The funds are intended to cover Argentina's financing requirements between now [/INST] and the first quarter of next year, in the event of the country remaining shut out of the capital markets. "
3144,"[INST] In the current global financial turmoil new bond issues [/INST] and syndicated bank loans have shuddered to a halt, for Argentina and the rest of Latin America. "
3145,"[INST] It faces debt amortisations totalling $11.5bn next year, while [/INST] the 1999 fiscal deficit was last week forecast at some $2.65bn by Miguel Kiguel, financing undersecretary. "
3146,"[INST] Without a relatively rapid resumption of commercial lending, helped along by [/INST] a convincing adjustment package in neighbouring Brazil, more funding will need to be found to bridge Argentina's financing gap. "
3147,"[INST] The package unveiled by Mr Fernandez consists of: * [/INST] ""Rapid disbursement"" loans totalling $2bn each from the World Bank and Inter-American Development Bank (IADB). "
3148,"[INST] The loans, agreed in principle, are [/INST] expected to be approved soon by the organisations' boards. "
3149,[INST] * The proceeds from a planned [/INST] series of 30-year bond issues aimed at domestic financial institutions.
3150,"[INST] The issues are expected to raise up to $1bn [/INST] by the end of the first quarter, with a further $1bn during the rest of 1999. "
3151,"[INST] * Some $700m in funding agreed with [/INST] local and domestic commercial banks, whose identity officials have declined to specify. "
3152,"[INST] In addition to the package, the World Bank and IADB staffs have recommended [/INST] approval of loans totalling $1bn to back the country's contingent ""repo"" facility, a line of credit which the central bank maintains with international banks. "
3153,"[INST] While Argentine officials insist that the $5.7bn package is precautionary and that they [/INST] hope for an early re-entry into the capital markets, they are working overtime to line up further finance from a variety of sources. "
3154,"[INST] They are believed to be pushing for a further $2.4bn from the multilaterals [/INST] - including the World Bank, IADB, and the US and Japanese Eximbanks - to extend financing cover to the middle of next year. "
3155,"[INST] Conversations are also taking place with European governments, and Japan, [/INST] which could provide funding that would help push the crunch date forward towards the end of 1999. "
3156,"[INST] Further forays could also conceivably be made into the domestic market, [/INST] although the government has always been reluctant to tap the domestic banks for funds and risk crowding out the private sector. "
3157,[INST] Some Argentine companies are already seeking bridging [/INST] finance from local and international banks to fund forthcoming borrowing maturities.
3158,"[INST] Other options include drawing down part of Argentina's $2.8bn extended [/INST] fund facility with the IMF, a move the authorities would be reluctant to make except in extreme circumstances. "
3159,"[INST] ""If Argentina uses up its credit lines with the multilaterals, and access [/INST] to external finance is not forthcoming, they have got to tighten further fiscally,"" said Alberto Ades, emerging markets currency economist at Goldman Sachs. "
3160,"[INST] ""Continuing constraint on access to international finance means sharp economic slowdown, [/INST] but at least as growth slows Argentina is going to see some relief on the current account front,"" he added. "
3161,[INST] There are already signs fresh cuts are being [/INST] planned on top of the $1bn lopped off proposed government expenditure earlier this year.
3162,"[INST] But returning to the capital markets remains crucial for the country, long [/INST] one of the most innovative borrowers in the bond markets, with a strong track record of exploiting niches and stretching out debt maturities. "
3163,"[INST] It can be expected to be among the first [/INST] emerging market borrowers to tap the bond markets, if and when a semblance of stability resumes. "
3164,"[INST] ""If in a few months Argentina still can't access the [/INST] markets, then it's going to look real grim for all emerging market borrowers,"" said one local analyst. "
3165,"[INST] ___ Document 111 of 600 Menem toasts victory but [/INST] markets fall Author: Tricks, Henry; Warn, Ken Publication info: Financial Times [London (UK)] 06 Oct 1998: 06. "
3166,[INST] accountid=28034 Abstract: The Argentine government yesterday reacted with [/INST] unconcealed satisfaction to the election victory of Brazilian President Fernando Henrique Cardoso on Sunday.
3167,"[INST] President Carlos Menem drank a toast in Mr Cardoso's honour on Sunday [/INST] night, according to the official news agency DyN, and regaled his fellow president with both a phone call and a telegram of congratulations. "
3168,"[INST] The government of Latin America's [/INST] other big economy, Mexico, however, was more circumspect. "
3169,[INST] The office of President Ernesto Zedillo restricted its comment [/INST] to congratulations to President Cardoso for his success in winning the confidence of the Brazilian electorate.
3170,[INST] Full text: The Argentine government yesterday reacted with [/INST] unconcealed satisfaction to the election victory of Brazilian President Fernando Henrique Cardoso on Sunday.
3171,"[INST] President Carlos Menem drank a toast in Mr Cardoso's honour on Sunday [/INST] night, according to the official news agency DyN, and regaled his fellow president with both a phone call and a telegram of congratulations. "
3172,"[INST] The government of Latin America's [/INST] other big economy, Mexico, however, was more circumspect. "
3173,[INST] The office of President Ernesto Zedillo restricted its comment [/INST] to congratulations to President Cardoso for his success in winning the confidence of the Brazilian electorate.
3174,"[INST] The win was not enough to [/INST] lift the gloom in the financial markets of either country, however. "
3175,"[INST] In Argentina shares fell in early trading [/INST] yesterday, pulled down by falls on Wall Street and in Sao Paulo. "
3176,[INST] The Merval leading share index was [/INST] off 2.7 per cent just after midday at 363.97.
3177,"[INST] While a victory by Mr Cardoso was widely discounted, [/INST] there was relief among Argentine officials that it looked like a second round would not be necessary. "
3178,[INST] That would have added to [/INST] the intense economic uncertainty in the region.
3179,"[INST] In Mexico, financial analysts said that the victory had been discounted beforehand by investors [/INST] and that they were now awaiting the announcement of a rescue package for Brazil as a step towards ending the turmoil in Latin American markets. "
3180,"[INST] There were also concerns that the continued resilience of the left in [/INST] Sunday's poll could complicate Mr Cardoso's efforts to negotiate fiscal reform with Congress, considered a vital step for the disbursement of international aid. "
3181,"[INST] ""There is still no clear [/INST] view on Brazil,"" said Hector Velez, a Mexican economist. "
3182,"[INST] Brazil's efforts to avoid a distressed devaluation [/INST] have plagued Mexican markets since August, but the concerns have now broadened. "
3183,"[INST] According to Lars Schonander, head of analysis at Santander Investment in Mexico City, [/INST] investors are concerned about the impact of a drop in capital flows on Mexico's growth rate, as well as a slowdown in more industrialised economies. "
3184,"[INST] ""There's so much else going on that whether Brazil [/INST] is enough to turn around the markets I think is open to question,"" he said. "
3185,"[INST] Mexico's stock market was off 3.86 per [/INST] cent at mid-morning, with the IPC index falling below 3,400 points. "
3186,"[INST] The peso, which has slid [/INST] some 14 per cent since mid-August, was also weaker. "
3187,"[INST] Argentina's president had made no secret of his desire that Mr Cardoso should [/INST] emerge victorious from the poll, a stance that produced complaints of interference in Brazil's affairs from Luiz Inacio Lula da Silva's Workers' party. "
3188,"[INST] Mr Menem's telegram said the result ""confirms the commitment [/INST] of the Brazilian people in the path of transformation and growth which you have led"". "
3189,"[INST] The Argentine government's outright hostility to Mr da Silva was based on [/INST] fears that an opposition victory would have produced a radical shift in Brazil's economic policies, with incalculable consequences for the region. "
3190,"[INST] Mr Menem and Mr Cardoso have also built up a reasonable [/INST] working relationship, despite periodic spats over trade between their two countries, the two leading partners in the Mercosur customs union. "
3191,"[INST] Continuity of Mr Cardoso's reforms signalled ""good news for Argentina [/INST] and Mercosur,"" wrote Jorge Campbell, secretary for international economic relations, in a signed article in yesterday's Clarin newspaper. "
3192,"[INST] ___ Document 123 of 600 Argentina looks locally for funds FINANCING GAP SHUT OUT [/INST] OF INTERNATIONAL MARKETS, THE COUNTRY IS EYEING OTHER SOURCES OF CASH: Author: Burns, Tom; Warn, Ken Publication info: Financial Times [London (UK)] 03 Oct 1998: 03. "
3193,[INST] accountid=28034 Abstract: Argentina aims to place 30-year bonds worth up [/INST] to $2bn (£1.18bn) with local financial institutions to help bridge its financing gap for this year and next.
3194,"[INST] Like other emerging emerging market borrowers, Argentina has been shut [/INST] out of international capital markets by the global financial turmoil and has urgently been seeking other sources of finance. "
3195,"[INST] Argentina believes it has been a near model pupil of the IMF, meeting the [/INST] first-half fiscal targets set under the terms of its $2.8bn extended fund facility, and striving, with partial success, to follow IMF prescriptions on structural reform. "
3196,[INST] Full text: Argentina aims to place 30-year bonds worth up [/INST] to $2bn (£1.18bn) with local financial institutions to help bridge its financing gap for this year and next.
3197,"[INST] Like other emerging emerging market borrowers, Argentina has been shut [/INST] out of international capital markets by the global financial turmoil and has urgently been seeking other sources of finance. "
3198,[INST] The financing effort comes as President Carlos Menem prepares to [/INST] fly to Washington to address the annual meeting of the World Bank and International Monetary Fund on Tuesday.
3199,"[INST] Mr Menem is expected to use his address to the meeting, usually [/INST] the preserve of finance and economy minsters and bankers, to continue a government campaign to ""differentiate"" Argentina from other emerging market economies. "
3200,"[INST] Argentina believes it has been a near model pupil of the IMF, meeting the [/INST] first-half fiscal targets set under the terms of its $2.8bn extended fund facility, and striving, with partial success, to follow IMF prescriptions on structural reform. "
3201,"[INST] The Treasury bonds will be aimed [/INST] at local private pension funds, investment funds and insurance companies. "
3202,"[INST] They will be auctioned in monthly tranches of $100m-$200m starting [/INST] on October 20, and are expected to pay an annual interest rate of about 12-13 per cent. "
3203,"[INST] By next March the government expects to have sold about $1bn [/INST] of the bonds, according to Miguel Kiguel, financing undersecretary, with the remainder likely to be sold before the end of 1999. "
3204,"[INST] The planned issue follows long discussions with the pension funds, [/INST] known as AFJPs, which have amassed an investment portfolio of more than $9bn and have monthly inflows totalling $300m. "
3205,"[INST] Argentina is seeking to raise $2bn to complete its 1998 financing programme and a [/INST] further $3.7bn to cover needs up to the end of the first quarter of next year, as insurance against international capital markets remaining shut off. "
3206,"[INST] A package of loans from the World Bank, Inter-American Development [/INST] Bank and other multilateral lenders is expected to be finalised during or shortly after the IMF/ World Bank gathering. "
3207,"[INST] Argentine officials say they have no plans [/INST] to draw down any of the $2.8bn IMF facility, which remains ""precautionary"". "
3208,"[INST] Michel Camdessus, IMF managing director, said on Thursday [/INST] that ""in many respects the experience of Argentina in recent years has been exemplary.. "
3209,"[INST] "" He singled out banking sector [/INST] reform and fiscal discipline as the economy's key strengths. "
3210,"[INST] The forthcoming bond issue echoes the $2bn ""Patriotic Bond"" launched during the [/INST] 1995 ""tequila crisis"" in which Argentina's private sector showed its willingness to support the government, even during a full-blown banking crisis. "
3211,"[INST] ___ Document 158 of 600 Buenos Aires confident of fending off currency shocks: Market turmoil is [/INST] hitting rank-and-file Argentines, but there is little central bank concern over the dollar peg, writes Ken Warn: Author: Warn, Ken Publication info: Financial Times [London (UK)] 22 Sep 1998: 10. "
3212,"[INST] accountid=28034 Abstract: It may be mayhem in [/INST] the markets, but inside Argen tina's central bank an unearthly calm reigns. "
3213,"[INST] Behind the bank's ornate stucco portals, officials believe they have [/INST] built powerful defences for convertibility - the currency board system that pegs the peso to the dollar. "
3214,"[INST] Regardless of the outcome of events in neighbouring Brazil or whatever the [/INST] international crisis may bring Argentina in terms of lost production or rising unemployment, a currency crisis is not on the cards, they argue. "
3215,"[INST] Industrial production in August rose just 0.1 per cent from the previous [/INST] month, according to preliminary figures from FIEL, an economic think-tank, as growth in gross domestic product slides from last year's 8.4 per cent. "
3216,"[INST] Full text: It may be mayhem in [/INST] the markets, but inside Argen tina's central bank an unearthly calm reigns. "
3217,"[INST] Behind the bank's ornate stucco portals, officials believe they have [/INST] built powerful defences for convertibility - the currency board system that pegs the peso to the dollar. "
3218,"[INST] Regardless of the outcome of events in neighbouring Brazil or whatever the [/INST] international crisis may bring Argentina in terms of lost production or rising unemployment, a currency crisis is not on the cards, they argue. "
3219,"[INST] Out in the street, however, Argentines [/INST] are already starting to feel the impact of the international turmoil. "
3220,"[INST] Car plants are scaling back [/INST] production, while mortgage and consumer credit is drying up. "
3221,"[INST] Industrial production in August rose just 0.1 per cent from the previous [/INST] month, according to preliminary figures from FIEL, an economic think-tank, as growth in gross domestic product slides from last year's 8.4 per cent. "
3222,"[INST] A 1999 GDP growth forecast of 4.8 per [/INST] cent released last week by Roque Fernandez, economy minister, was widely viewed as over-optimistic. "
3223,"[INST] Private sector forecasters are busily [/INST] ratcheting next year's growth forecasts downwards, some to zero. "
3224,"[INST] However, these worries have not [/INST] as yet translated into fears over the dollar peg. "
3225,"[INST] ""People are worrying about recession, but not the [/INST] collapse of convertibility,"" said Freddy Thomsen, economist at ING Barings in Buenos Aires. "
3226,"[INST] Central bank reserves have shown no sign of coming [/INST] under pressure, and bank deposits have risen since last October to stand last week at almost $77bn. "
3227,"[INST] At the height of the Tequila crisis in [/INST] 1995, bank deposits fell $8bn, or 18 per cent, in just three months. "
3228,"[INST] Since then the banking system has [/INST] been through a process of consolidation, which is continuing. "
3229,[INST] Deep-pocketed foreign banks now hold [/INST] a 44 per cent share of the market.
3230,"[INST] The 10 biggest banks in the system account for almost [/INST] 70 per cent of deposits, against just 40 per cent at the outbreak of the 1995 crisis. "
3231,"[INST] With total financial system reserves of $31.5bn, plus a contingent liquidity or ""repo"" facility of $6.7bn [/INST] maintained with international commercial banks, Argentina has a level of international reserves in excess of the monetary base, while 30 per cent of the deposit base is covered by foreign liquidity. "
3232,"[INST] A full-blown speculative attack on the peso, while feasible, would [/INST] be hard to mount technically because of the sheer shortage of available currency, according to local analysts. "
3233,"[INST] ""The amount of notes and coins in circulation is a mere $14bn, and [/INST] the level of intermediation is fairly primitive, thus blocking non-physical sale and delivery in a speculative attack,"" noted a report from brokers Interacciones. "
3234,"[INST] So wedded to the dollar has Argentina become that [/INST] full ""dollarisation"" is widely considered a viable option in the event of strong pressure on convertibility. "
3235,"[INST] Dollarisation was studied as a possible alternative to convertibility in 1991 [/INST] and is still viewed by many officials as preferable to devaluation, seen by most Argentines as the prelude to hyperinflation. "
3236,"[INST] Even the most optimistic official, however, acknowledges that dollarisation [/INST] would prove difficult to effect in a combined attack on the currency and run on the banks. "
3237,"[INST] Argentina's real economy also has some defences against a [/INST] Brazilian crisis, a legacy of the country's gradual abandonment of its role in world trade. "
3238,"[INST] President Carlos Menem's efforts to re-open the economy to the outside world [/INST] have had only limited success, and exports account for only some 8 per cent of GDP, of which a third goes to Brazil. "
3239,[INST] Some 60 per cent of exports to [/INST] Brazil are fuel and commodities which could easily find other markets.
3240,"[INST] Thus exports equivalent to only 1 percentage [/INST] point of Argentina's GDP are exposed to price changes in Brazil, officials argue. "
3241,"[INST] The car industry, however, [/INST] is already suffering from events in Brazil. "
3242,[INST] Ford of Argentina last [/INST] week joined other carmakers in slowing production.
3243,[INST] Minimal trade exposure leaves the financial system [/INST] as the most likely transmission belt for a shock from Brazil.
3244,[INST] Already this year share [/INST] prices have plummeted almost 48 per cent.
3245,"[INST] Companies, unable to raise cash through bond issuance, are [/INST] reining in expansion plans while, for consumers, peso and fixed interest mortgage finance has disappeared. "
3246,"[INST] A Brazilian devaluation would almost inevitably [/INST] have some impact on Argentine banking deposits, forcing interest rates higher. "
3247,"[INST] The government itself, denied access to the international bond markets asa result of the global [/INST] turmoil, is seeking to finalise a $6bn loan package, mainly from multinational lenders, to cover financing needs through to the end of the first quarter of next year. "
3248,"[INST] It has yet to raise $2bn to bridge [/INST] this year's funding gap, while next year's needs are put at about $14bn. "
3249,"[INST] It all looks distressingly familiar to Argentines, who saw the economy [/INST] contract 4.6 per cent in 1995 in the wake of the Tequila crisis, before a strong rebound in 1996. "
3250,"[INST] With no quick end to the global turmoil in [/INST] sight, lower growth, rising job-lessness, downward pressure on wages and slowing tax revenues appear to lie ahead. "
3251,[INST] It is not the best of platforms [/INST] for the ruling Peronist party to fight next year's presidential elections.
3252,"[INST] Its only consolation is that this scenario is equally [/INST] problematic for the opposition Alliance, which has backed the main outlines of the Menem economic programme. "
3253,"[INST] ___ Document 180 of 600 Identity crisis for Argentina [/INST] EMERGING MARKET FOCUS: Author: Warn, Ken Publication info: Financial Times [London (UK)] 16 Sep 1998: 56. "
3254,"[INST] accountid=28034 Abstract: Argentina's embattled stock market has rallied strongly with gains [/INST] in the last few days helping to wipe out the 13 per cent decline on ""Black Thursday"" last week. "
3255,"[INST] However, as trading opened yesterday the Merval leading share index [/INST] was still registering a fall of more than 50 per cent from the beginning of the year. "
3256,"[INST] Shares last plumbed such levels in early 1995, when [/INST] crisis was battering Argentina's financial system and straining its currency's one-for-one link with the dollar. "
3257,[INST] Traders are anxiously wondering where [/INST] in the world the next blow will come from.
3258,"[INST] Events in Asia and Russia, the political fall-out [/INST] from the Clinton crisis and last week's devaluation scare in Brazil have all weighed heavily. "
3259,"[INST] Full text: Argentina's embattled stock market has rallied strongly with gains [/INST] in the last few days helping to wipe out the 13 per cent decline on ""Black Thursday"" last week. "
3260,"[INST] However, as trading opened yesterday the Merval leading share index [/INST] was still registering a fall of more than 50 per cent from the beginning of the year. "
3261,"[INST] Shares last plumbed such levels in early 1995, when [/INST] crisis was battering Argentina's financial system and straining its currency's one-for-one link with the dollar. "
3262,[INST] Traders are anxiously wondering where [/INST] in the world the next blow will come from.
3263,"[INST] Events in Asia and Russia, the political fall-out [/INST] from the Clinton crisis and last week's devaluation scare in Brazil have all weighed heavily. "
3264,"[INST] Within this complex international context, the Merval and broader market have [/INST] struggled to define a trajectory of their own, and trading continues to take its cue from Wall St and Sao Paulo. "
3265,"[INST] However, the departure of foreign investors from Argentina [/INST] is steadily changing the dynamics of the stock market, said Christopher Ecclestone of brokers Interacciones. "
3266,"[INST] ""The buyers are locals, while the [/INST] sellers are almost all foreigners, plus some distressed locals"". "
3267,"[INST] Local private pension funds and individual investors [/INST] were being tempted in by low prices and attractive yields, he said. "
3268,"[INST] Trading on Monday also saw [/INST] stock shortages, helping to push up prices. "
3269,[INST] Both domestically and internationally there [/INST] have been some positive developments for investors.
3270,"[INST] Strong words of support for Latin America have come [/INST] from Michel Camdessus, managing director of the International Monetary Fund, and from the US administration. "
3271,"[INST] The tight 1999 budget presented to Congress on Monday by Roque [/INST] Fernandez, the economy minister, was deemed worthy and uncontroversial by markets despite containing economic projections widely considered as highly optimistic. "
3272,"[INST] In addition, the ruling Peronist party has had some success in pushing [/INST] legislation through Congress, easing fears that President Carlos Menem would be a lame duck leader in the run-up to next year's presidential elections. "
3273,[INST] Argentine officials have also been finalising a package of loans up to $6bn from multilateral and commercial [/INST] lenders to stave off liquidity problems to the end of the first quarter of next year in the event of the government being unable to raise fresh cash in the bond markets.
3274,"[INST] Officials insist this financing is intended only for [/INST] use in the worst-case scenario, revolving around a possible devaluation or default in Brazil. "
3275,"[INST] ""International support for Brazil is the [/INST] key to stabilise the situation,"" said one local analyst. "
3276,"[INST] ""Looking beyond that, even assuming an orderly end to international troubles, I [/INST] see problems of competitiveness for Argentine companies and sharp economic slowdown, so people very much need to be looking at defensive stocks"". "
3277,"[INST] ___ Document 183 of 600 Argentina seeks $6bn [/INST] loan deal Author: Warn, Ken Publication info: Financial Times [London (UK)] 15 Sep 1998: 07. "
3278,[INST] accountid=28034 Abstract: Argentina is seeking to finalise a $5.5bn-$6bn (£3.3bn-£3.6bn) loan [/INST] package from multilateral lending institutions and local private sector banks to help shield the country from the global economic turmoil.
3279,"[INST] Details of the package, which is expected to include financing [/INST] from the World Bank and Inter-American Development Bank, will be announced before the end of this month. "
3280,[INST] The loans would be used to tide Argentina over until the end [/INST] of the first quarter of 1999 should it prove unable to borrow in the debt markets because of continuing financial instability.
3281,[INST] Full text: Argentina is seeking to finalise a $5.5bn-$6bn (£3.3bn-£3.6bn) loan [/INST] package from multilateral lending institutions and local private sector banks to help shield the country from the global economic turmoil.
3282,"[INST] Details of the package, which is expected to include financing [/INST] from the World Bank and Inter-American Development Bank, will be announced before the end of this month. "
3283,[INST] The loans would be used to tide Argentina over until the end [/INST] of the first quarter of 1999 should it prove unable to borrow in the debt markets because of continuing financial instability.
3284,"[INST] The funding would be separate from Argentina's existing $2.8bn [/INST] extended fund facility with the International Monetary Fund, which the government has no plans to draw down. "
3285,"[INST] ""This should be a very strong signal to the markets that we [/INST] are well advanced in meeting our financing requirements and help remove any concerns over our liquidity,"" said Pablo Guidotti, deputy economy minister. "
3286,"[INST] Officials stressed Argentina still hoped to meet its financing [/INST] needs through the markets, and the stand-by funding was intended to be ""complementary"" to commercial borrowing. "
3287,"[INST] A government campaign to persuade foreign investors that the country's economic [/INST] fundamentals remain strong has so far failed to lift the stock market, which has tumbled in step with neighbouring Brazil. "
3288,"[INST] However, some relief came yesterday with the [/INST] Merval leading share index up 1.7 per cent in early trading to 327.6. "
3289,"[INST] In Sao Paulo, Brazil's Bovespa index of [/INST] the 57 most traded shares was up 2.3 per cent by mid-day. "
3290,"[INST] Argentina remains dependent on inflows of foreign capital to service its $100bn-plus [/INST] external debt, and bridge its fiscal deficit, which it aims to cut to around 1 per cent of GDP this year. "
3291,"[INST] The country has yet to raise $2bn to [/INST] complete its 1998 borrowing programme, while next year's needs are estimated at $14bn. "
3292,"[INST] News of the negotiations came as Roque Fernandez, the economy minister, [/INST] prepared to present an austere 1999 budget to Congress in a further attempt to ""differentiate"" Argentina from other emerging markets. "
3293,"[INST] Bank deposits have so far shown no signs of slipping, [/INST] signalling continuing confidence in ""convertibility"", the currency board system that pegs Argentina's peso at par to the dollar. "
3294,"[INST] Deposits yesterday edged up to $76.9bn, [/INST] while central bank foreign exchange reserves stood at $24.5bn. "
3295,"[INST] The total reserves of the financial system, [/INST] including a ""repo"" facility maintained with international commercial banks, stood at $31.5bn. "
3296,[INST] ___ Document 191 of 600 [/INST] Continent in crisis: Latin America may need a bail-out.
3297,"[INST] Stephen Fidler, Jonathan Wheatley and Ken Warn report: Author: [/INST] Fidler, Stephen; Warn, Ken; Wheatley, Jonathan Publication info: Financial Times [London (UK)] 12 Sep 1998: 12. "
3298,"[INST] The Asian crisis, having swept [/INST] through Russia, is now engulfing the continent. "
3299,"[INST] Its biggest economy, Brazil, is fighting [/INST] to avoid a currency collapse or a debt moratorium. "
3300,"[INST] If it is forced into either, [/INST] the next biggest economies, Argentina and Mexico, could well follow suit. "
3301,"[INST] This will directly harm US economic wellbeing because Latin America is the most important emerging market [/INST] for US exporters, because US bank exposure to the region is higher than it is to Asia and Russia, and because Mexico is part of the North Atlantic Free Trade Area. "
3302,"[INST] More than that, if Latin America follows Asia into a recessionary spiral, the economic reforms that opened it [/INST] up to the world market after a violent and inflationary decade will be at risk and so could the ""Washington consensus"", the idea that economic modernisation is best performed by liberalising goods and capital markets. "
3303,"[INST] No wonder that economic policymakers in the [/INST] US, Latin America and the International Monetary Fund were in frantic consultation yesterday. "
3304,"[INST] The Asian crisis, having swept [/INST] through Russia, is now engulfing the continent. "
3305,"[INST] Its biggest economy, Brazil, is fighting [/INST] to avoid a currency collapse or a debt moratorium. "
3306,"[INST] If it is forced into either, [/INST] the next biggest economies, Argentina and Mexico, could well follow suit. "
3307,"[INST] This will directly harm US economic wellbeing because Latin America is the most important emerging market [/INST] for US exporters, because US bank exposure to the region is higher than it is to Asia and Russia, and because Mexico is part of the North Atlantic Free Trade Area. "
3308,"[INST] More than that, if Latin America follows Asia into a recessionary spiral, the economic reforms that opened it [/INST] up to the world market after a violent and inflationary decade will be at risk and so could the ""Washington consensus"", the idea that economic modernisation is best performed by liberalising goods and capital markets. "
3309,"[INST] No wonder that economic policymakers in the [/INST] US, Latin America and the International Monetary Fund were in frantic consultation yesterday. "
3310,"[INST] The same message has yet to hit home [/INST] to the US Congress, which is obsessed with President Bill Clinton's moral character. "
3311,"[INST] A Congressional panel on Thursday rejected a request for [/INST] an $18bn (£10.9bn) capital increase to the global financial system's main fire fighter, the IMF. "
3312,"[INST] The proposal is not dead yet, but Republican congressmen still appear more concerned about ""moral hazard"" - [/INST] the idea that helping the fire brigade may encourage people to smoke in bed - than about what some US policymakers think is the worst financial crisis since the Great Depression. "
3313,"[INST] The country most immediately threatened is Brazil, where a [/INST] flight of capital has been draining the country's hard currency reserves at an alarming rate. "
3314,"[INST] Dollar outflows reached almost $11bn in the first [/INST] 10 days of September, nearly as much as in the whole of August. "
3315,[INST] Brazilian as well as foreign [/INST] investors have been dumping Brazil risk at whatever cost.
3316,[INST] The stock market fell 16 [/INST] per cent in one day (Thursday) before recovering yesterday.
3317,"[INST] The country still has, by most guesses, more than $50bn [/INST] in the reserves, but given the level of its short-term debt repayments this is far from excessive. "
3318,"[INST] ""Brazil,"" says one official at a [/INST] Washington international financial institution, ""is the China of Latin America"". "
3319,"[INST] That is worrying because in Brazil economists can point to well recognised policy flaws, in particular a fiscal [/INST] deficit that this year could reach 7 or 8 per cent of gross domestic product at a time of world financial crisis and domestic political uncertainty: a general election is due on October 4. "
3320,"[INST] Last October, as the Asian crisis first began [/INST] to spread, Brazil doubled interest rates and announced spending cuts of about R$22bn. "
3321,"[INST] But most failed to materialise, spending went on rising and this week, [/INST] with bond and stock prices plummeting, the government was forced to double overnight interest rates to about 40 per cent a year. "
3322,[INST] The higher rate adds about R$8bn a year to the [/INST] cost of servicing government debt - and it is not clear where the government can find the money.
3323,"[INST] By law, public workers [/INST] cannot be sacked during an election period. "
3324,"[INST] ""Their only option now is to sharply reduce the public [/INST] sector payroll and immediately tackle social security spending,"" says Arturo Porzecanski, chief economist at ING Barings in New York. "
3325,[INST] Paradoxically the crisis has helped President Fernando [/INST] Henrique Cardoso's standing: he now appears set for a first-round victory.
3326,[INST] That might help him get [/INST] the political approval he needs for spending cuts.
3327,"[INST] ""The time has come to [/INST] start talking about ugly choices,"" says Mr Porzecanski. "
3328,"[INST] ""If what they're trying doesn't work, then [/INST] we come down to the unthinkable: currency controls, devaluation, or a debt moratorium"". "
3329,[INST] Everyone from President Carlos Menem [/INST] downwards has sought to emphasise its strong economic fundamentals.
3330,"[INST] All the same, in their stampede out of emerging markets, foreign investors fear that the [/INST] centrepiece of Argentine economic stability - a currency board system that links the peso at par to the US dollar - would be vulnerable to a Brazilian devaluation. "
3331,"[INST] This system, which in effect hands over the setting of interest [/INST] rates to the markets, is already pushing rates higher: Argentina is seeing the early stages of a credit crunch. "
3332,"[INST] I have no worries whatsoever about convertibility [/INST] [the currency board] being under threat,"" said a senior central bank official yesterday. "
3333,"[INST] ""But I am worried that if this turmoil [/INST] persists for the next three to six months, then we will have a recession"". "
3334,[INST] Such an outcome might well be seen [/INST] as punishment for policies that markets are supposed to approve of.
3335,"[INST] If Argentina goes the way of Russia, [/INST] then what, many will ask, is the advantage of freeing up markets? "
3336,"[INST] Back in Washington, the view is growing [/INST] that protection against abrupt changes in market behaviour will be needed. "
3337,"[INST] One may be discussed as early as next [/INST] Monday, at the meeting of senior officials of the Group of Seven leading industrial nations. "
3338,"[INST] One possibility, in the words of one of their [/INST] officials, is a plan ""to create instruments for emergency financing that do not presently exist"". "
3339,[INST] These would allow for the [/INST] instantaneous disbursement of funds to beat back speculative attacks.
3340,"[INST] The funds would be short-term and relatively expensive, but would allow [/INST] governments to avoid policy responses - such as the Russian debt moratorium - that have spooked investors in the past. "
3341,"[INST] The plan, which it is hoped will [/INST] be unveiled at the IMF-World Bank meetings in October, raises many questions. "
3342,"[INST] One is whether it will be enough, particularly if the IMF is not [/INST] strengthened; more immediately, the question is whether it will be ready in time to help if Latin America does indeed fall over the brink. "
3343,"[INST] ___ Document 211 of 600 View of currency board weaknesses [/INST] is not shared by Argentina Author: Powell, Andrew Publication info: Financial Times [London (UK)] 07 Sep 1998: 20. "
3344,"[INST] accountid=28034 Abstract: Sir, The ""Unpalatable truths of a currency board"" (August [/INST] 31), which discusses whether a currency board is appropriate for Russia, contains some truths but also some often repeated misconceptions. "
3345,"[INST] As pointed out, a currency [/INST] board does indeed reduce monetary and fiscal discretion. "
3346,"[INST] Monetary policy must always be subservient and therefore consistent [/INST] with the fixed exchange rate, and fiscal policy must be consistent with the availability of non-inflationary financing. "
3347,"[INST] However, it is simply incorrect to claim that (1) a currency board implies [/INST] that there is no lender of last resort and that (2) banks need to have greater capital ratios or other regulations need to be stronger. "
3348,"[INST] Sir, The ""Unpalatable truths of a currency board"" (August 31), [/INST] which discusses whether a currency board is appropriate for Russia, contains some truths but also some often repeated misconceptions. "
3349,"[INST] As pointed out, a currency [/INST] board does indeed reduce monetary and fiscal discretion. "
3350,"[INST] Monetary policy must always be subservient and therefore consistent [/INST] with the fixed exchange rate, and fiscal policy must be consistent with the availability of non-inflationary financing. "
3351,"[INST] However, it is simply incorrect to claim that (1) a currency board implies [/INST] that there is no lender of last resort and that (2) banks need to have greater capital ratios or other regulations need to be stronger. "
3352,"[INST] First, it is perfectly possible to have a central bank acting as a liquidity lender of last resort under a [/INST] currency board as shown by the experience of Argentina in 1995, and all a currency board implies is that any ""loser of last resort"" must be transparently fiscal in nature and not financed through the inflation tax. "
3353,"[INST] That this may affect the political feasibility of bailing [/INST] out some financial institutions is another advantage, not a disadvantage, of a currency board system. "
3354,"[INST] Second, given the greater underlying economic volatility, there is a strong [/INST] argument that emerging markets need stricter banking sector regulations than their G10 counterparts whatever monetary policy rule is adopted. "
3355,"[INST] Indeed, a case might be made that given the reduction in economic volatility and lower interest rates that accompanies the adoption of a successful [/INST] currency board, less strict banking regulations might be required relative to a country with similar characteristics but with a different monetary policy - although I hasten to add that this is not practised in Argentina where banking regulations are substantially more exacting than international norms. "
3356,[INST] Whether a currency board is appropriate for [/INST] Russia is a complex and essentially political question that deserves much deeper analysis.
3357,"[INST] The economic desirability of a currency board is in part determined by [/INST] the trade-off between the advantages of a discretionary monetary policy versus the risk, for whatever motive, of the misuse of that discretion. "
3358,"[INST] It seems odd, however, given that Italy, Spain, Portugal and Ireland - to name but four participants [/INST] - are about to give up virtually all monetary and substantial fiscal discretion, that it is considered that this trade-off for an emerging country like Russia may go the other way. "
3359,"[INST] Perhaps the issue is really the feasibility [/INST] of the maintenance of the currency board, rather than its desirability. "
3360,"[INST] Andrew Powell, chief economist, Central Bank of [/INST] Argentina Reconquista 266, Capital 1003, Buenos Aires, Argentina Copyright Financial Times Limited 1998. "
3361,"[INST] ___ Document 212 of 600 Latin America gets dose of reality INTERNATIONAL BONDS [/INST] INVESTORS NO LONGER 'DECOUPLE' REGION FROM CRISES IN ASIA AND RUSSIA: Author: Grant, Jeremy Publication info: Financial Times [London (UK)] 07 Sep 1998: 28. "
3362,"[INST] accountid=28034 Abstract: Only a few months ago, it was fashionable - indeed [/INST] accurate - to speak of Latin American debt markets as having ""decoupled"" from the turmoil in Asia and the gathering gloom in Russia. "
3363,"[INST] Investors were prepared to separate Latin American risk from the [/INST] contagion affecting emerging markets elsewhere, allowing governments to keep their borrowing plans on the international capital markets fairly intact. "
3364,"[INST] In the secondary markets, Latin American bonds were trading at far less [/INST] of a discount to their par value than their equivalent Russian benchmarks, which were bumping along at levels that implied sovereign default. "
3365,"[INST] Full text: Only a few months ago, it was fashionable - indeed [/INST] accurate - to speak of Latin American debt markets as having ""decoupled"" from the turmoil in Asia and the gathering gloom in Russia. "
3366,"[INST] Investors were prepared to separate Latin American risk from the [/INST] contagion affecting emerging markets elsewhere, allowing governments to keep their borrowing plans on the international capital markets fairly intact. "
3367,[INST] Argentina and Venezuela each managed to pull off a [/INST] bond issue with relative ease while appetite for other emerging market paper was at an all-time low.
3368,"[INST] In the secondary markets, Latin American bonds were trading at far less [/INST] of a discount to their par value than their equivalent Russian benchmarks, which were bumping along at levels that implied sovereign default. "
3369,"[INST] But in the space [/INST] of a fortnight, all that has changed. "
3370,"[INST] The waves of contagion sparked by Russia's default [/INST] and ensuing political crisis have hit Latin America, scaring away even the hardiest investors. "
3371,[INST] Talk of decoupling has dissipated as key [/INST] stock markets in the region have plummeted and currencies have slipped.
3372,"[INST] Moody's Investors Service, the rating agency, confirmed the end of decoupling [/INST] last week by downgrading certain foreign debt ratings for Venezuela and Brazil, and reviewing Argentina and Mexico for possible downgrade. "
3373,"[INST] ""This [development] is incontrovertible,"" said Richard [/INST] Fox, director Latin American sovereigns at rating agency Fitch IBCA. "
3374,"[INST] ""The question is how much of it is general [/INST] portfolio adjustment by people trying to cover themselves for losses in Russia or a more long-term thing. "
3375,[INST] The first and most significant is that the [/INST] cost of borrowing has increased dramatically since Russia hit an economic brick wall.
3376,"[INST] The J.P. Morgan emerging markets bond index, which measures the spread on a basket [/INST] of emerging market bond yields over the benchmark US Treasury yield, rose to 1,476 basis points on Friday, compared with 850 basis points almost three weeks ago. "
3377,"[INST] That has potentially serious implications for Argentina, which has been [/INST] a deft borrower and is the most dependent of all the Latin American countries on the international capital markets. "
3378,[INST] SG Emerging Markets estimates that $11.1bn [/INST] in redemptions on Brady bonds and eurobonds fall due next year.
3379,"[INST] This is money that the country will be hard [/INST] pressed to find if, as economists predict, the region faces a contraction in gross domestic product. "
3380,"[INST] Any contraction in the Brazilian economy - exacerbated by the expected maintenance [/INST] of tight monetary policy - will automatically hurt Argentina, as 40 per cent of its exports are bought by its larger neighbour. "
3381,"[INST] That will make it more difficult to meet its [/INST] borrowing requirements one fiscal quarter ahead of time, as it has managed to do so far. "
3382,"[INST] And with investor appetite for all emerging market asset classes gone, it will also force the [/INST] country to turn to other sources of financing, such as the domestic bond market, syndicated loans and funds that have not yet been drawn down from an International Monetary Fund facility. "
3383,"[INST] Tim Love, head of global and Latin American emerging markets strategy at SG Emerging Markets, [/INST] said Argentina has a good reputation as a borrower but it may not be enough to keep investors interested as its external debt of $130bn is worryingly high. "
3384,"[INST] ""They've done everything you can do in textbook [/INST] terms when it comes to spreading risk in debt service and in currency diversity. "
3385,"[INST] But the Achilles Heel is [/INST] the absolute level of debt,"" he said. "
3386,"[INST] Brazil, a less frequent [/INST] visitor to the markets, faces two problems. "
3387,"[INST] It must find a way to service about $50bn in [/INST] redemptions and interest payments in the domestic bond market by end-October, while foreign exchange reserves are falling. "
3388,"[INST] Although it has an $80bn privatisation programme [/INST] in the pipeline, Brazil cannot rely on these revenues in current market conditions. "
3389,"[INST] Mexico, which has also been placed on review, has [/INST] no external borrowing requirements in 1998 and 1999 and is thus much less affected by the move. "
3390,"[INST] ""Because Latin America has been through many crises in the past, [/INST] policy-makers have a better understanding and awareness of what they need to do at times like this,"" said Fitch's Mr Fox. "
3391,"[INST] It forces them to do [/INST] things that they should have done anyway"". "
3392,"[INST] ___ Document 218 of 600 Swift Russian stabilisation programme urged CAVALLO VISIT ARCHITECT OF [/INST] ARGENTINA'S SUCCESSFUL CURRENCY BOARD SUMMONED TO MOSCOW FOR ADVICE ON FINANCIAL CRI: Author: Freeland, Chrystia Publication info: Financial Times [London (UK)] 04 Sep 1998: 02. "
3393,"[INST] accountid=28034 Abstract: Russia must swiftly introduce a radical financial stabilisation programme if it is [/INST] to prevent the economy from plunging into hyperinflation, Domingo Cavallo, Argentina's former economy minister, said yesterday after two days of consultations with the Russian government. "
3394,"[INST] ""The currency has already devalued a [/INST] lot,"" Mr Cavallo said in an interview with the FT. "
3395,"[INST] ""This process will continue unless [/INST] there is appropriate action taken soon by the government... "
3396,"[INST] I hope they will [/INST] do something within the next few weeks"". "
3397,"[INST] On arrival, Mr Cavallo immediately found himself [/INST] at the centre of a crucial debate over the nation's future. "
3398,"[INST] On one side are advocates of radical stabilisation [/INST] measures, led by Boris Fyodorov, deputy prime minister, and advised by Mr Cavallo. "
3399,"[INST] They are opposed by amore conservative lobby, which [/INST] is pushing for a return to command-economy measures such as currency controls and soft credits. "
3400,"[INST] Full text: Russia must swiftly introduce a radical financial stabilisation programme if it is [/INST] to prevent the economy from plunging into hyperinflation, Domingo Cavallo, Argentina's former economy minister, said yesterday after two days of consultations with the Russian government. "
3401,"[INST] ""The currency has already devalued a [/INST] lot,"" Mr Cavallo said in an interview with the FT. "
3402,"[INST] ""This process will continue unless [/INST] there is appropriate action taken soon by the government... "
3403,"[INST] I hope they will [/INST] do something within the next few weeks"". "
3404,"[INST] Mr Cavallo, architect of Argentina's successful currency board system, was summoned [/INST] to Moscow this week to offer the government urgent advice on how to cope with its mounting financial crisis. "
3405,"[INST] A currency board takes control of monetary policy out of the hands [/INST] of government and automatically sets interest rates according to the level of foreign currency reserves it holds, at a fixed exchange rate. "
3406,"[INST] On arrival, Mr Cavallo immediately found himself [/INST] at the centre of a crucial debate over the nation's future. "
3407,"[INST] On one side are advocates of radical stabilisation [/INST] measures, led by Boris Fyodorov, deputy prime minister, and advised by Mr Cavallo. "
3408,"[INST] They are opposed by amore conservative lobby, which [/INST] is pushing for a return to command-economy measures such as currency controls and soft credits. "
3409,"[INST] Mr Fyodorov and his team are currently at [/INST] work on a reformist emergency stabilisation programme, drawing heavily on Mr Cavallo's experience in Argentina. "
3410,[INST] The question now is whether that programme [/INST] will win the wider backing of the politically shaky Russian government.
3411,"[INST] If Mr Fyodorov's approach is triumphant, Russian newspapers [/INST] speculated it could be unveiled by Victor Chernomyrdin, the acting prime minister, in parliament today. "
3412,"[INST] Mr Cavallo, who may be on his way to guru status in the former Soviet bloc - he is [/INST] advising Ukrainian officials in Kiev today - became an instant celebrity in Moscow, with radio stations playing Argentinian tangos to welcome him to the Russian capital and newspapers featuring extensive accounts of Argentina's victory over hyperinflation. "
3413,"[INST] Although some western economists have been sceptical about the applicability of a [/INST] currency board system to Russia, Mr Cavallo said Mr Fyodorov's team had the technical ability to implement a radical stabilisation plan. "
3414,"[INST] ""If they decide to implement a monetary refrom like [/INST] the one we implemented in Argentina, they have the technical capacity to do it,"" he said. "
3415,"[INST] The big question, Mr Cavallo said, was whether Russia's leaders, [/INST] who have been weakened by a political crisis, would summon the political will to pursue difficult reforms. "
3416,"[INST] Perhaps surprisingly, some of the influential Russian financiers who have [/INST] often been viewed as enemies of reform appear to be actively lobbying for Mr Cavallo's advice to prevail. "
3417,"[INST] Mr Cavallo said that in [/INST] Moscow he met leading businessmen, including Boris Berezovsky. "
3418,[INST] This week Mr Berezovsky publicly championed Mr [/INST] Cavallo and called on the government to unite behind a stabilisation plan.
3419,"[INST] If Russia does take a currency board style [/INST] approach, Mr Cavallo said that it would be crucial to reform the tax system simultaneously. "
3420,"[INST] A virtue of the currency board approach, he said, was [/INST] that it drew a line between old and new tax obligations, by, in effect, separating old and new money. "
3421,[INST] The government should use this transition [/INST] as a starting point for a new tax regime.
3422,"[INST] If Russia opts for a tough stabilisation [/INST] plan, Mr Cavallo said that assistance from the west would be particularly important. "
3423,"[INST] ""The only way to produce stabilisation is [/INST] with some support from the International Monetary Fund and the G-7,"" he said. "
3424,"[INST] ___ Document 222 of 600 Crisis talks to [/INST] begin today Author: Mandel-Campbell, Andrea Publication info: Financial Times [London (UK)] 03 Sep 1998: 04. "
3425,[INST] accountid=28034 Abstract: Economy ministers from nine Latin American countries are arriving in Washington [/INST] today for a two-day meeting called by the International Monetary Fund to discuss the impact of the global market crisis on the region.
3426,"[INST] Representatives from the region's leading economies, known as the Group of Nine, will [/INST] review preventive measures which have been taken in each of the countries to strengthen macro-economic conditions and prepare a paper outlining a regional action plan. "
3427,[INST] Full text: Economy ministers from nine Latin American countries are arriving in Washington [/INST] today for a two-day meeting called by the International Monetary Fund to discuss the impact of the global market crisis on the region.
3428,"[INST] Representatives from the region's leading economies, known as the Group of Nine, will [/INST] review preventive measures which have been taken in each of the countries to strengthen macro-economic conditions and prepare a paper outlining a regional action plan. "
3429,"[INST] The group's members are Mexico, [/INST] Brazil, Argentina, Chile, Venezuela, Colombia, Peru, Ecuador and Uruguay. "
3430,"[INST] The two-day conference will also be attended by representatives [/INST] form Canada and the US, including Robert Rubin, US Treasury secretary, and Lawrence Summers, his deputy. "
3431,"[INST] Presentations will be made by James Wolfensohn, the [/INST] head of the World Bank, and Enrique Iglesias, president of the Inter-American Development Bank. "
3432,"[INST] Roque Fernandez, Argentina's economy minister, told a meeting of foreign bankers [/INST] on Tuesday that Argentina would not enter a recession or suffer any social problems as a result of the market crisis. "
3433,"[INST] But with just weeks before presenting the 1999 national budget, he did [/INST] say that the government would be revising down GDP growth estimates to less than 5 per cent from 5.8 per cent for 1998. "
3434,"[INST] ""Argentina will come out of this very solid and without having [/INST] to take extraordinary measures,"" said Mr Fernandez, who is attending the IMF meeting with Pedro Pou, president of Argentina's central bank. "
3435,"[INST] ""Everything we should have done we [/INST] already did, and we will keep on doing it"". "
3436,"[INST] ___ Document 231 of 600 Buenos Aires toughens budget ACTION IN ARGENTINA [/INST] GROWTH IS SLOWING BUT COLLAPSE OF CONFIDENCE DENIED: Author: Warn, Ken Publication info: Financial Times [London (UK)] 31 Aug 1998: 02. "
3437,"[INST] accountid=28034 Abstract: ""We are sticking to the fiscal objectives already set with [/INST] the International Monetary fund, but the budget is tougher than it would have been otherwise,"" said Pablo Guidotti, deputy economy minister. "
3438,"[INST] Primary expenditure, excluding interest payments, would probably be held to this [/INST] year's level, which has already been cut by US$1bn (£630m) to around $45bn in moves aimed at reassuring the markets. "
3439,"[INST] The government would take ""any further necessary [/INST] measures"" to meet its fiscal objectives this year and next, said Mr Guidotti. "
3440,"[INST] On Friday the Senate gave preliminary approval to a government-backed bill limiting future [/INST] budget deficits to no more than 1 per cent of GDP and creating a financial crisis fund, to be part-funded out of future privatisation receipts. "
3441,"[INST] Full text: Argentina is toughening up its 1999 budget, due to [/INST] be presented to Congress next month, as a result of the international financial turmoil and expected domestic economic slowdown. "
3442,"[INST] ""We are sticking to the fiscal objectives already set with the [/INST] International Monetary fund, but the budget is tougher than it would have been otherwise,"" said Pablo Guidotti, deputy economy minister. "
3443,"[INST] Primary expenditure, excluding interest payments, would probably be held to this [/INST] year's level, which has already been cut by US$1bn (£630m) to around $45bn in moves aimed at reassuring the markets. "
3444,"[INST] The government would take ""any further necessary [/INST] measures"" to meet its fiscal objectives this year and next, said Mr Guidotti. "
3445,"[INST] On Friday the Senate gave preliminary approval to a government-backed bill limiting future [/INST] budget deficits to no more than 1 per cent of GDP and creating a financial crisis fund, to be part-funded out of future privatisation receipts. "
3446,"[INST] Argentina is committed to reducing its overall federal government deficit to 1 per [/INST] cent of GDP this year, reaching near balance by 2000, under the terms of a three-year, $2.8bn IMF-extended fund facility agreed in February. "
3447,"[INST] In June the government slashed spending by $1bn [/INST] and froze a series of off-budget spending programmes, including an ambitious motorway-building scheme. "
3448,"[INST] Although first quarter growth is likely to be revised upwards to over 7 [/INST] per cent year on year, Mr Guidotti predicted growth for this year at 5-5.5 per cent, declining to 4.5-5 per cent in 1999. "
3449,"[INST] Mr Guidotti denied that the recent sharp falls in [/INST] Argentine stocks and bonds, with only modest respite on Friday, implied a collapse of investor confidence. "
3450,"[INST] Bonds have been particularly badly hit, with [/INST] the yields on Argentine Bradys rising to around 20 per cent. "
3451,[INST] People are selling almost anything irrespective of [/INST] underlying values to cover margins as a result of Russian and other losses.
3452,"[INST] But the interbank interest rate, reserves and [/INST] bank deposits show the financial system reacting better than in last October's crisis"". "
3453,"[INST] Argentina would have ""no problem"" raising [/INST] the remaining $2bn in its 1998 borrowing programme, said Mr Guidotti. "
3454,"[INST] ___ Document 233 of 600 Cavallo steps in to advise Moscow RUSSIA'S [/INST] ECONOMIC POLICY FORMER ARGENTINE MINISTER ACCEPTS INVITATION FROM KREMLIN: Author: Warn, Ken Publication info: Financial Times [London (UK)] 31 Aug 1998: 02. "
3455,"[INST] accountid=28034 Abstract: Domingo Cavallo, Argentina's former economy minister, is due [/INST] in Moscow tomorrow after accepting an invitation from the Russian authorities to advise on the country's deepening economic crisis. "
3456,"[INST] Mr Cavallo was the architect of Argentina's [/INST] successful currency board system, which pegs the peso at par to the dollar. "
3457,"[INST] ""Let's hope I can help [/INST] improve the situation in Russia,"" he said. "
3458,"[INST] Full text: Domingo Cavallo, Argentina's former economy minister, is due [/INST] in Moscow tomorrow after accepting an invitation from the Russian authorities to advise on the country's deepening economic crisis. "
3459,[INST] He was scheduled to hold discussions [/INST] with senior Brazilian officials yesterday before leaving for Russia.
3460,"[INST] Mr Cavallo was the architect of Argentina's [/INST] successful currency board system, which pegs the peso at par to the dollar. "
3461,"[INST] ""Let's hope I can help [/INST] improve the situation in Russia,"" he said. "
3462,"[INST] The idea of a currency board to stop the collapse of [/INST] the rouble has been backed by a number of economists, but is likely to meet furious political opposition in Moscow. "
3463,[INST] It would mean fixing the rouble rigidly to an [/INST] external currency - probably the dollar - and thus effectively giving up all monetary sovereignty.
3464,"[INST] ""For the [Russian] Duma, that would be [/INST] about 25 bridges too far,"" according to one western diplomat in Moscow. "
3465,[INST] Against that must be put [/INST] the success of the policy in Argentina.
3466,"[INST] There the currency board, introduced in April 1991 in the face [/INST] of International Monetary Fund scepticism, rapidly quashed hyperinflation, reducing annual price rises to one of the lowest levels in the world. "
3467,"[INST] With President Carlos Menem, Mr Cavallo also presided over [/INST] a privatisation programme that largely dismantled the corporatist state set up under General Juan Domingo Peron. "
3468,"[INST] The policy mix ushered in a period [/INST] of high economic growth, interrupted only by the 1995 ""Tequila"" crisis. "
3469,"[INST] However, Mr Cavallo and Mr Menem fell out over issues [/INST] such as corruption and Mr Cavallo was fired in June 1996, subsequently forming his own political party. "
3470,[INST] Mr Menem at the weekend said [/INST] he was happy Mr Cavallo had been called to advise Russia.
3471,"[INST] ""Clearly, our economic policies are [/INST] spectacularly relevant [to Russia],"" Mr Menem said. "
3472,"[INST] ___ Document 234 of 600 Yeltsin pledges to serve a full term as crisis [/INST] deepens: Chernomyrdin hurries to create economic strategy for Russia Author: Freeland, Chrystia; Thornhill, John; Warn, Ken Publication info: Financial Times [London (UK)] 29 Aug 1998: 01. "
3473,"[INST] accountid=28034 Abstract: Russian president Boris Yeltsin last night defiantly declared he [/INST] would serve out the rest of his elected term of office, rebuffing pressure to stand down before June 2000. "
3474,"[INST] Mr Yeltsin's comments came as Victor Chernomyrdin, acting prime minister, scrambled to put [/INST] together a coherent economic programme to tackle Russia's deepening crisis and to win parliamentary backing for his government in a vote on Monday. "
3475,"[INST] Russia's leading businessmen, the so-called ""oligarchs"", are lobbying [/INST] the government to put Boris Fyodorov, a prominent reformer, in charge of economic policy. "
3476,"[INST] They are also behind an invitation to Domingo [/INST] Cavallo, architect of Argentina's financial stabilisation, to come to Moscow as an adviser. "
3477,"[INST] Full text: Russian president Boris Yeltsin last night defiantly declared he [/INST] would serve out the rest of his elected term of office, rebuffing pressure to stand down before June 2000. "
3478,"[INST] ""I am not going to resign, [/INST] I am going to work,"" he said in a television interview. "
3479,"[INST] ""As is laid down according to the constitutional term, in [/INST] 2000 a new president will be elected and I will not take part in that presidential election"". "
3480,"[INST] Mr Yeltsin's comments came as Victor Chernomyrdin, acting prime minister, scrambled to put [/INST] together a coherent economic programme to tackle Russia's deepening crisis and to win parliamentary backing for his government in a vote on Monday. "
3481,"[INST] Russia's leading businessmen, the so-called ""oligarchs"", are lobbying [/INST] the government to put Boris Fyodorov, a prominent reformer, in charge of economic policy. "
3482,"[INST] They are also behind an invitation to Domingo [/INST] Cavallo, architect of Argentina's financial stabilisation, to come to Moscow as an adviser. "
3483,[INST] World stock markets continued to [/INST] head lower in response to the Russian crisis.
3484,"[INST] Tokyo slipped to a 12-year low as the Nikkei 225 [/INST] average fell below the 14,000 level, also weighed down by worries that parliament would delay financial restructuring plans. "
3485,[INST] European markets fell heavily in early trading [/INST] but most cut their losses by the end of the day.
3486,"[INST] The UK's FTSE 100 index was 259 [/INST] points off at one stage but finished 119.1 points down at 5,249.4. "
3487,"[INST] In New York, the Dow Jones Industrial Average traded erratically, [/INST] dropping close to 8,000 before rebounding to be 33.98 lower, at 8,132,01, by 2pm New York time. "
3488,"[INST] Charles Ryan, a Moscow investment banker who was once Mr Fyodorov's business [/INST] partner, said Russia's big businessmen had decided to back Mr Fyodorov out of the fear that the turmoil would destroy their financial empires. "
3489,"[INST] Advisers to Mr Chernomyrdin, such as Alexander Shokhin, parliamentary leader of the [/INST] acting premier's Our Home is Russia party, have been calling for the government to adopt a more interventionist approach and to print money. "
3490,"[INST] Mr Yeltsin, speaking slowly but assuredly on [/INST] TV, admitted the crisis would result in higher prices and hardship. "
3491,[INST] He denied suggestions he had [/INST] in effect handed over power to Victor Chernomyrdin.
3492,[INST] But Mr Yeltsin did dismiss Anatoly [/INST] Chubais as his special representative with the international financial institutions.
3493,"[INST] In Buenos Aires, a spokesman for Mr Cavallo, who leads a [/INST] small opposition party in Congress, said Mr Cavallo had not received any official approach and was fully occupied with domestic politics. "
3494,"[INST] But an official request from [/INST] Russia would of course be considered seriously"". "
3495,"[INST] Mr Cavallo was the architect of ""convertibility"", the currency [/INST] board system introduced in 1991 which pegged the Argentine peso to the dollar at one to one. "
3496,"[INST] Convertibility, along with a sweeping privatisation programme, [/INST] quashed hyperinflation and laid the foundations for renewed economic growth in Argentina. "
3497,"[INST] In circumstances reminiscent of the Russian [/INST] crisis, Argentina also forcibly restructured its domestic debt in 1989. "
3498,"[INST] Reports and analysis, Pages 2 & 3; Editorial Comment, Page 10; All bets [/INST] are off, Page 10; Bonds, Page 12; Currencies, Page 13; Stock markets, Pages 15 & 18; Lex, Page 22; Markets, FT Money Page 2 "
3499,"[INST] ___ Document 235 of 600 Yeltsin pledges to serve his full term as crisis deepens: [/INST] World stocks slip further in response to Russian turmoil Author: Fidler, Stephen; Freeland, Chrystia; Thornhill, John; Warn, Ken Publication info: Financial Times [London (UK)] 29 Aug 1998: 01. "
3500,"[INST] accountid=28034 Abstract: Mr [Boris] Yeltsin's comments came as Victor Chernomyrdin, acting prime minister, scrambled [/INST] to put together a coherent economic programme to tackle Russia's deepening crisis and to win parliamentary backing for his government in a vote on Monday. "
3501,"[INST] Russia's leading businessmen, the ""oligarchs"", are lobbying the [/INST] government to put Boris Fyodorov, a prominent reformer, in charge of economic policy. "
3502,"[INST] They are also behind an invitation [/INST] to Domingo Cavallo, architect of Argentina's financial stabilisation, to advise Moscow. "
3503,[INST] US President Bill Clinton yesterday decided to [/INST] go ahead with his planned visit to Moscow which starts on Tuesday.
3504,"[INST] Samuel Berger, national security adviser, said the US had an enormous strategic [/INST] stake in Russia, and it was important to demonstrate the US would not turn away from Russia in times of difficulty. "
3505,[INST] Meanwhile the International Monetary Fund said it had [/INST] not ruled out providing planned finance for Russia but it depended on government action.
3506,"[INST] Full text: Russian president Boris Yeltsin last night defiantly declared he [/INST] would serve out the rest of his elected term of office, rebuffing pressure to stand down before June 2000. "
3507,"[INST] ""I am not going to resign, [/INST] I am going to work,"" he said on television. "
3508,"[INST] ""As is laid down according to the constitutional term, in [/INST] 2000 a new president will be elected and I will not take part in that presidential election"". "
3509,"[INST] Mr Yeltsin's comments came as Victor Chernomyrdin, acting prime minister, scrambled to put [/INST] together a coherent economic programme to tackle Russia's deepening crisis and to win parliamentary backing for his government in a vote on Monday. "
3510,"[INST] Russia's leading businessmen, the ""oligarchs"", are lobbying the [/INST] government to put Boris Fyodorov, a prominent reformer, in charge of economic policy. "
3511,"[INST] They are also behind an invitation [/INST] to Domingo Cavallo, architect of Argentina's financial stabilisation, to advise Moscow. "
3512,[INST] US President Bill Clinton yesterday decided to [/INST] go ahead with his planned visit to Moscow which starts on Tuesday.
3513,"[INST] Samuel Berger, national security adviser, said the US had an enormous strategic [/INST] stake in Russia, and it was important to demonstrate the US would not turn away from Russia in times of difficulty. "
3514,[INST] Meanwhile the International Monetary Fund said it had [/INST] not ruled out providing planned finance for Russia but it depended on government action.
3515,[INST] World stock markets continued to [/INST] head lower in response to the Russian crisis.
3516,"[INST] Tokyo slipped to a 12-year-low as the Nikkei 225 average [/INST] fell below the 14,000 level, also weighed down by worries that parliament would delay financial restructuring plans. "
3517,[INST] European markets fell heavily in early trading [/INST] but most cut their losses by the end of the day.
3518,"[INST] The UK's FTSE 100 index was 259 [/INST] points off at one stage but finished 119.1 points down at 5,249.4. "
3519,"[INST] In New York, the Dow [/INST] Jones Industrial Average closed 114.31 lower at 8,051.68. "
3520,"[INST] Charles Ryan, a Moscow investment banker who was once Mr Fyodorov's [/INST] business partner, said Russia's big businessmen were backing him out of fear that the mounting turmoil would destroy their financial empires. "
3521,[INST] Advisers to Mr Chernomyrdin have been calling [/INST] for the government to adopt a more interventionist approach and to print money.
3522,"[INST] Mr Yeltsin, who denied he had in effect handed [/INST] over power to Mr Chernomyrdin, dismissed Anatoly Chubais as his special representative with the international financial institutions. "
3523,"[INST] In Buenos Aires, a spokesman for Mr Cavallo, who [/INST] leads a small opposition party in Congress, said Mr Cavallo had not received any official approach. "
3524,"[INST] But an official request from [/INST] Russia would of course be considered seriously"". "
3525,"[INST] Mr Cavallo was the man behind ""convertibility"", the currency [/INST] board system introduced in 1991 that pegged the Argentine peso to the dollar at one to one. "
3526,"[INST] Convertibility, along with a sweeping privatisation programme, [/INST] quashed hyperinflation and laid the foundations for renewed economic growth in Argentina. "
3527,"[INST] In circumstances reminiscent of the Russian [/INST] crisis, Argentina also forcibly restructured its domestic debt in 1989. "
3528,"[INST] Additional reporting by Stephen Fidler in Washington and Ken Warn in Buenos Aires Reports and analysis, Pages [/INST] 2 & 3; Editorial Comment, Page 10; All bets are off, Page 10; Bonds, Page 12; Currencies, Page 13; Stock markets, Pages 15 & 18; Lex, Page 22; Markets, FT Money Page 2 "
3529,"[INST] ___ Document 311 of 600 Private equity investors turn [/INST] to Argentina Author: Mandel-Campbell, Andrea Publication info: Financial Times [London (UK)] 31 July 1998: 07. "
3530,"[INST] accountid=28034 Abstract: Private equity investors are being tempted by [/INST] falling asset values across Latin America, despite the effects of the Asian market crisis on the region. "
3531,"[INST] In the case of Argentina, relatively [/INST] strong economic fundamentals have added further incentives to invest. "
3532,"[INST] ""Valuations have improved across the region and the fundamentals of [/INST] Argentina are very attractive,"" said Andrew de Pass, a managing director at Citicorp Equity Capital Latin America. "
3533,"[INST] The stability of the currency and the economy in [/INST] the face of the Asian crisis was a testament to the success of economic policies, he added. "
3534,"[INST] Private equity funds represented at a conference in Buenos Aires this week - such as [/INST] the US-based Hicks Muse Tate & Furst and Newbridge Latin America - have invested $5bn-$7bn in Argentina in recent years, buying into family-owned conglomerates, small businesses and government privatisations. "
3535,"[INST] Full text: Private equity investors are being tempted by [/INST] falling asset values across Latin America, despite the effects of the Asian market crisis on the region. "
3536,"[INST] In the case of Argentina, relatively [/INST] strong economic fundamentals have added further incentives to invest. "
3537,"[INST] ""Valuations have improved across the region and the fundamentals of [/INST] Argentina are very attractive,"" said Andrew de Pass, a managing director at Citicorp Equity Capital Latin America. "
3538,"[INST] The stability of the currency and the economy in [/INST] the face of the Asian crisis was a testament to the success of economic policies, he added. "
3539,"[INST] Private equity funds represented at a conference in Buenos Aires this week - such as [/INST] the US-based Hicks Muse Tate & Furst and Newbridge Latin America - have invested $5bn-$7bn in Argentina in recent years, buying into family-owned conglomerates, small businesses and government privatisations. "
3540,"[INST] The funds, which are financed by institutional investors and private family trusts, [/INST] buy into fragmented high-growth sectors for a period of three to seven years before selling to a strategic partner or going public. "
3541,"[INST] However, private equity investors may find it difficult to obtain the [/INST] projected returns that they seek - upwards of 30 per cent - because of lower prices and a drop in liquidity. "
3542,"[INST] Bruce Catania, another managing director at Citicorp Equity Capital Latin [/INST] America, said that stock market investors, like mutual funds, had moved away from emerging markets to safer investments. "
3543,"[INST] ""If you are starting up a fund, the [/INST] turbulence in Asia has reduced valuations so you can find assets at more attractive prices. "
3544,"[INST] On the other hand, if you are looking [/INST] to exit now your multiples are not the same as they once were"". "
3545,"[INST] Goldman, Sachs has also begun stepping up its efforts in the region, [/INST] investing $95m in Argentina in the last few months acquiring stakes in Abolio y Rubio dairy company and a string of shopping centres. "
3546,"[INST] ""The bulk of the Argentine economy operates on a private basis, so if [/INST] you want to diversify your portfolio you must tap into private equity,"" said Luis Blaquier, vice-president of the investment banking division of Goldman, Sachs. "
3547,"[INST] At $55bn Argentina's market capitalisation represents 16.7 per cent [/INST] of gross domestic product, with the largest five companies representing more than half that amount. "
3548,"[INST] But while the stock market has dropped 30 per cent since the [/INST] Asian crisis, economic growth has diminished only slightly to an estimated 6 per cent in 1998, from 8.4 per cent in 1997. "
3549,"[INST] Private equity investors are also encouraged by Argentina's [/INST] open economy and per capita income of $9,000, the highest in the region. "
3550,"[INST] ""Foreign investment has caused a complete change in the entrepreneurial culture of [/INST] Argentina by providing new technology, new markets and new management,"" said Alieto Guadagni, secretary of industry, trade and mining, at the conference. "
3551,[INST] ___ Document 326 of 600 Fitting a [/INST] financial shock-absorber Economic quick thinking has helped Argentina out of some tricky times.
3552,"[INST] But there are other pressures still weighing on the [/INST] country, says Richard Lapper: Author: Lapper, Richard Publication info: Financial Times [London (UK)] 27 July 1998: 01. "
3553,"[INST] accountid=28034 Abstract: President Carlos Menem, who this month began his [/INST] tenth year as president of Argentina, confronts a set of issues very different from those he faced in 1989. "
3554,[INST] Hyperinflation - which threatened to plunge the country into chaos - has been eliminated [/INST] and the government's conservative monetary and fiscal policies enjoy wide support within the political and business establishment and have helped the country withstand instability on international markets.
3555,"[INST] However, the economic policy consensus is in [/INST] sharp contrast to the growing controversies surrounding the country's political and judicial institutions. "
3556,[INST] The campaign for next year's presidential elections -a campaign which has begun [/INST] unusually early by Argentine standards - has been dominated by a wave of allegations of political malpractice and corruption among judges and officials.
3557,"[INST] Prices are expected to grow by 1 per cent this year, an increase on the 0.1 and 0.3 per [/INST] cent achieved in 1996 and 1997, but a far cry from the late 1980s, when shopkeepers sometimes adjusted their prices two or three times a day and average annual inflation rates reached more than 1,000 per cent. "
3558,[INST] Tight fiscal management has guaranteed deficits of [/INST] less than 2 per cent of gross domestic product throughout the 1990s.
3559,"[INST] Full text: President Carlos Menem, who this month began his [/INST] tenth year as president of Argentina, confronts a set of issues very different from those he faced in 1989. "
3560,[INST] Hyperinflation - which threatened to plunge the country into chaos - has been eliminated [/INST] and the government's conservative monetary and fiscal policies enjoy wide support within the political and business establishment and have helped the country withstand instability on international markets.
3561,"[INST] However, the economic policy consensus is in [/INST] sharp contrast to the growing controversies surrounding the country's political and judicial institutions. "
3562,[INST] The campaign for next year's presidential elections -a campaign which has begun [/INST] unusually early by Argentine standards - has been dominated by a wave of allegations of political malpractice and corruption among judges and officials.
3563,[INST] Mr Menem's decision last week not to seek a third presidential term - [/INST] which would have been against the terms of the constitution - has been welcomed by the opposition and headed off a potential political crisis.
3564,[INST] But there are still concerns in some quarters that institutional weaknesses [/INST] could make Argentina less attractive to foreign investors than other markets and - in the longer term - inhibit economic growth.
3565,[INST] Two of President Menem's reforms have proved [/INST] essential in allowing Argentina to manage pressures stemming from the Asian crisis.
3566,"[INST] First, the country's exchange rate regime and [/INST] tight fiscal policy have guaranteed monetary stability and continued low levels of inflation. "
3567,"[INST] According to its currency board system, the peso and the [/INST] dollar trade at parity and the central bank holds a dollar in reserves for each peso in circulation. "
3568,"[INST] Prices are expected to grow by 1 per cent this year, an increase on the 0.1 and 0.3 per [/INST] cent achieved in 1996 and 1997, but a far cry from the late 1980s, when shopkeepers sometimes adjusted their prices two or three times a day and average annual inflation rates reached more than 1,000 per cent. "
3569,[INST] Tight fiscal management has guaranteed deficits of [/INST] less than 2 per cent of gross domestic product throughout the 1990s.
3570,[INST] The government's response to international pressures - last month public spending [/INST] was cut by $1bn and a number of public works projects frozen - has won plaudits from the private sector.
3571,"[INST] Incredibly quick,"" says Michael Smith, group chief executive of the [/INST] local subsidiary of HSBC, the UK bank which paid some $600m to acquire Banco Roberts last year. "
3572,"[INST] Second, over the last three years Argentina's financial system has been [/INST] rebuilt and become, in the words of one central bank official, ""an absorber rather than an amplifier of financial shocks"". "
3573,[INST] Financial regulation has been overhauled and the banking [/INST] system has been recapitalised through the entry of many foreign banks into the market.
3574,"[INST] When foreign investors last lost confidence in emerging markets in 1995, the [/INST] Argentine banking system lost nearly $8bn of deposits - or nearly 18 per cent of the total - in a matter of weeks. "
3575,"[INST] Over the past nine months, although the stock market and [/INST] bond prices have fallen sharply in the wake of the crisis in Asia, bank deposits have grown. "
3576,"[INST] ""Fundamentally the banking system has been [/INST] strengthened to prevent a recurrence of what happened [in 1995]. "
3577,[INST] The stability resulting from these policies has allowed [/INST] the government to consolidate on the deregulation and privatisation of the early 1990s.
3578,"[INST] Although the rate of productivity growth has begun to slow from [/INST] the average of 7.7 per cent between 1991 and 1994, the economy has continued to grow at an impressive rate. "
3579,"[INST] Overall it expanded by 8.4 per cent [/INST] in 1997, and by a cumulative 52 per cent between 1991 and 1997. "
3580,"[INST] Growth will slow this year but the economy will [/INST] still expand by more than 5 per cent, according to the most recent independent forecasts. "
3581,"[INST] GDP per capita has more [/INST] than tripled since 1989 to $9,010 in 1997. "
3582,"[INST] This affluence is most evident in middle class areas of [/INST] Buenos Aires, where consumer spending is fuelling the growth of US-style shopping malls and heavy investment in leisure facilities. "
3583,"[INST] Argentina has become a valuable market for cable TV [/INST] companies, with penetration levels the third highest in the world, behind the US and Canada. "
3584,"[INST] Yet in spite of its economic record, President Menem's government [/INST] is unpopular and in the opinion polls his personal approval rating is stuck at below 20 per cent. "
3585,[INST] His party - the Justicialist Party or Peronists [/INST] - is divided and has still to name its candidate for next year's election.
3586,[INST] And the Peronists face a tough challenge from the two main opposition parties - the centrist [/INST] Radicals and the left-wing Frepaso - which united behind the banners of the Alliance last year and scored a convincing victory in mid-term elections for the chamber of deputies.
3587,[INST] The Peronists no longer enjoy [/INST] an absolute majority in the lower house.
3588,"[INST] Two main factors explain the increasing support for the opposition: popular anger [/INST] over corruption, particularly in the judicial system; and mounting concern over the fortunes of those excluded from the benefits of economic growth. "
3589,"[INST] Large-scale corruption has diminished since 1990, as a result of [/INST] the withdrawal of the state from many areas of economic activity, but corruption persists, often at very junior levels. "
3590,[INST] Popular unease - reflected in extensive media [/INST] coverage - reflects broader concerns about the efficiency and independence of the judiciary.
3591,"[INST] ""People in general have the sensation that there is manipulation of [/INST] justice by the government,"" says Domingo Cavallo, the former economy minister, who has been a particularly ardent critic of the judiciary. "
3592,"[INST] ""It is natural that society [/INST] demands solutions to many problems which were hidden before"". "
3593,[INST] Fewer Argentines live in poverty than in 1989 but deprivation and the [/INST] rate of unemployment - at 13.2 per cent - are worse than the levels Argentines were used to in the 1960s and 1970s.
3594,[INST] The government has made some [/INST] progress on both fronts in the past 18 months.
3595,[INST] Plans to reduce political influence in the appointment [/INST] and dismissal of judges - originally agreed in 1994 - are being introduced this year.
3596,"[INST] Judges will in future be selected, and [/INST] where necessary fired, by an independent body comprising lawyers and academics. "
3597,"[INST] The unemployment rate has been sharply reduced from the level of 18.4 per cent [/INST] it reached after the 1995 Tequila crisis, in part at least as a result of labour reforms permitting the use of more flexible employment contracts. "
3598,"[INST] Rosendo Fraga, a political analyst, says that job creation, coupled with the Alliance's [/INST] political successes last year and carefully targeted social assistance programmes, have reduced the level of anti-government mobilisation by the trade unions and the left. "
3599,[INST] But their historical affluence means Argentines have [/INST] both higher material and political expectations than many other Latin Americans.
3600,[INST] So the twin challenges of institutional reform and finding ways [/INST] to extend the benefits of market-based reform to Argentina's underprivileged will dominate the agenda of any future government.
3601,[INST] Critics say that more needs to be done to make the legal system [/INST] user-friendly for smaller business and argue that with a more independent judiciary Argentina would be better able to introduce reforms in other areas.
3602,"[INST] For Mr Fraga, measures [/INST] to tackle social exclusion are the priority. "
3603,"[INST] ""We need to widen [/INST] the market in social terms,"" he says. "
3604,"[INST] ""We need to increase the number of Argentines with credit [/INST] cards and pension funds to 80 per cent and deal with the problems of social exclusion with greater rigour"". "
3605,"[INST] ___ Document 328 of 600 THE ECONOMY Unmoved by [/INST] external problems Author: Lapper, Richard Publication info: Financial Times [London (UK)] 27 July 1998: 02. "
3606,[INST] accountid=28034 Abstract: Argentina's economy has proved less vulnerable to external pressures [/INST] this year than it was in 1995 when international investors last lost confidence in the prospects of emerging markets.
3607,"[INST] But the economy will inevitably be hit by developments in [/INST] Asia and Russia, with weaker commodity prices and higher interest rates adversely affecting prospects for investment and growth. "
3608,[INST] Three years ago Argentine savers withdrew some $8bn - or 18 per cent of deposits - from the banking system [/INST] amid fears that the authorities would abandon their currency board exchange rate regime according to which the peso trades at parity with the dollar and the central bank holds one dollar in reserves for every peso in circulation.
3609,"[INST] This year - in spite of international uncertainty - deposits have [/INST] continued to grow, reaching $75.5bn by June 30, up 15.5 per cent in the first six months of the year. "
3610,"[INST] ""Deposits keep rising as if nothing had [/INST] happened,"" says Miguel Kiguel, sub-secretary for finance at the economy ministry. "
3611,"[INST] ""One of the surprising things [/INST] is the strength of the banking system"". "
3612,[INST] Tougher bank regulation is one [/INST] of the main reasons for the improvement.
3613,[INST] Liquidity ratios have been strengthened from 14 per [/INST] cent of bank deposits in 1994 to the equivalent of roughly 30 per cent today.
3614,[INST] Banks are obliged to hold 20 per cent of their deposits in liquid international [/INST] assets and the central bank is able to call on an additional $7.2bn in funds through the use of an innovative repurchase facility secured with international banks.
3615,[INST] Full text: * by Richard Lapper Unmoved by external problems Waning confidence in emerging markets has not [/INST] sparked panic this time Argentina's economy has proved less vulnerable to external pressures this year than it was in 1995 when international investors last lost confidence in the prospects of emerging markets.
3616,"[INST] But the economy will inevitably be hit by developments in [/INST] Asia and Russia, with weaker commodity prices and higher interest rates adversely affecting prospects for investment and growth. "
3617,[INST] Three years ago Argentine savers withdrew some $8bn - or 18 per cent of deposits - from the banking system [/INST] amid fears that the authorities would abandon their currency board exchange rate regime according to which the peso trades at parity with the dollar and the central bank holds one dollar in reserves for every peso in circulation.
3618,"[INST] This year - in spite of international uncertainty - deposits have [/INST] continued to grow, reaching $75.5bn by June 30, up 15.5 per cent in the first six months of the year. "
3619,"[INST] ""Deposits keep rising as if nothing had [/INST] happened,"" says Miguel Kiguel, sub-secretary for finance at the economy ministry. "
3620,"[INST] ""One of the surprising things [/INST] is the strength of the banking system"". "
3621,[INST] Tougher bank regulation is one [/INST] of the main reasons for the improvement.
3622,[INST] Liquidity ratios have been strengthened from 14 per [/INST] cent of bank deposits in 1994 to the equivalent of roughly 30 per cent today.
3623,[INST] Banks are obliged to hold 20 per cent of their deposits in liquid international [/INST] assets and the central bank is able to call on an additional $7.2bn in funds through the use of an innovative repurchase facility secured with international banks.
3624,"[INST] Additionally, the entry of international banks such as Banco Santander and Banco [/INST] Bilbao Vizcaya of Spain and the UK's HSBC has strengthened the system's capital base and shored up the confidence of customers. "
3625,"[INST] Argentina's exchange rate regime - the peso has been tied at parity to the [/INST] dollar since 1991 - does leave the country potentially very exposed to devaluation by its trading partners, especially Brazil, which buys 30 per cent of Argentine exports. "
3626,"[INST] But central bank officials play down any potential problems, [/INST] arguing that the failure to develop exports more rapidly has proved to be ablessing in disguise. "
3627,[INST] Exports overall account for [/INST] only about 8 per cent of GDP.
3628,"[INST] In addition, more than 60 per cent of exports to Brazil are internationally traded [/INST] commodities which means that the effect of any change in Brazil's currency regime would be largely limited to a few categories of manufactured goods such as motors. "
3629,"[INST] Nonetheless, Argentina has been [/INST] affected by developments on the international markets. "
3630,[INST] Lower commodity prices have undermined the prospects [/INST] of sectors which have contributed to growth in the last two years.
3631,[INST] Reductions in wheat and soya [/INST] prices have offset the benefits of strong harvests.
3632,[INST] Revenues from oil - which have [/INST] risen for seven successive years - will stagnate this year.
3633,[INST] Steep falls in copper and other mineral prices will cut revenues from the [/INST] Bajo de la Alumbrera copper and gold mines which came on stream last year - and delay other investments in the country's renascent mining sector.
3634,[INST] Overall export revenues fell by 14.7 per cent in the first quarter compared [/INST] with the same period last year and economists expect the overall total to be only marginally higher than the $25.2bn achieved in 1997.
3635,"[INST] With imports rising, Argentina will register a trade deficit nearly twice the size [/INST] of the $3.2bn of 1997, while the current account gap will widen to 14.2 per cent of GDP, according to private sector forecasts. "
3636,"[INST] Economists argue that the higher external deficit will choke the [/INST] growth of imports, particularly of capital goods which accounted for 43.7 per cent of the total in 1997. "
3637,"[INST] Debora Giorgi, an economist with Alpha, an independent Buenos Aires consultancy, forecasts [/INST] that new investment will grow at only 11.3 per cent this year, compared with a rate of 27.1 per cent in 1997. "
3638,"[INST] Argentina's greatest exposure to events [/INST] in Asia, however, is through higher interest rates. "
3639,[INST] Already falls in Argentine bond prices in [/INST] the secondary market are increasing the cost of raising new debt.
3640,"[INST] The government has an external financing requirement this year of some [/INST] $17.4bn including the roll-over of short-term debt, says Mr Kiguel, and international investors are demanding higher rates than last year. "
3641,"[INST] The premium charged by investors for holding Argentina's benchmark 30-year bond, compared with [/INST] low-risk instruments such as US Treasury bonds, rose by 1.74 per cent between the end of September last year and the end of last month. "
3642,"[INST] According to Mr Kiguel, the average spread on new [/INST] debt contracted during 1998 has risen to 3.70 percentage points, compared with 2.50 percentage points during 1997. "
3643,"[INST] And with investors less prepared to lend over the longer [/INST] term, maturities of the new obligations have fallen from 8.7 years in 1997 to five years in 1998. "
3644,[INST] In addition Argentina has been forced to go [/INST] to the markets more frequently to raise the funds required as existing loans mature.
3645,"[INST] In the first five months of the year interest payments on public debt [/INST] amounted to $2.92bn (14 per cent of all other spending), compared with $5.8bn (11.7 per cent of spending) for the whole of 1997. "
3646,"[INST] The prospect of further rises in interest rates, following the bout of instability [/INST] in Japan and Russia in May, led the government to cut public spending by $1bn and suspend a number of high-profile public works projects. "
3647,"[INST] The announcements were welcomed by investors but will further hamper growth, which - according to [/INST] private forecasts - is expected to fall to 5.6 per cent this year, although the rate could decline to between 3 and 4 per cent by the final quarter. "
3648,[INST] Critics argue that a bigger problem for [/INST] Argentina is a longer-term decline in the rate of productivity growth.
3649,"[INST] According to Ms Giorgi, during the period between 1991 and 1994, the productivity [/INST] of the Argentine economy grew by an average of 7.7 per cent a year, reflecting in particular sharp falls in financial and energy costs. "
3650,"[INST] The rise was notably strong in manufacturing, with [/INST] productivity increasing by 16.7 per cent each year in the steel industry, for example. "
3651,"[INST] Subsequently, however, the slowdown in structural reform and the strength of the dollar (which weakened by 2.6 per [/INST] cent against the D-Mark in the 1991-1994 period but strengthened by 8.6 per cent in the subsequent three years), has slowed productivity growth to an average of only 1.8 per cent a year. "
3652,"[INST] ___ Document 332 of 600 DIPLOMATIC AND TRADE RELATIONS Old [/INST] maverick steps into line Author: Warn, Ken Publication info: Financial Times [London (UK)] 27 July 1998: 03. "
3653,[INST] accountid=28034 Abstract: President Carlos Menem's planned visit to London at the [/INST] end of October is a powerful illustration of the revolution in Argentine foreign policy that has taken place since 1989.
3654,"[INST] Argentina has ditched its maverick stance and non-aligned [/INST] rhetoric to forge strong ties with the US, neighbouring countries and the European Union. "
3655,"[INST] With 400 troops in Cyprus, 120 in Haiti and [/INST] 900 in Bosnia, Argentina is the most active Latin American country in United Nations peacekeeping operations. "
3656,"[INST] It was the only Latin American nation to participate in [/INST] the 1991 Gulf War, and this February stood ready to participate in a fresh US-led strike against Iraq. "
3657,"[INST] Last year, Argentina won its reward when [/INST] Washington approved its claim to be designated as special non-Nato ally. "
3658,[INST] The move has already boosted co-operation in [/INST] areas such as training and could give Argentina access to surplus Nato hardware.
3659,[INST] It may also help win US congressional [/INST] approval for purchases of US weaponry by Argentina's cash-strapped armed forces.
3660,[INST] Full text: * by Ken Warn Old maverick steps into line Locals say ties with the US and [/INST] Europe are becoming closer than ever President Carlos Menem's planned visit to London at the end of October is a powerful illustration of the revolution in Argentine foreign policy that has taken place since 1989.
3661,"[INST] Argentina has ditched its maverick stance and non-aligned [/INST] rhetoric to forge strong ties with the US, neighbouring countries and the European Union. "
3662,"[INST] It has even put its territorial dispute with Britain [/INST] to one side under a special negotiating ""umbrella"" in the pursuit of normal trade and diplomatic relations. "
3663,[INST] The two countries fought a bloody war [/INST] in 1982 over the disputed Falkland Islands in the South Atlantic.
3664,"[INST] Ties with Washington, once marked by mutual suspicion, [/INST] have since become ""carnal relations"", in the phrase of foreign minister Guido Di Tella. "
3665,"[INST] ""The change in foreign policy came before, and is at least [/INST] as profound as the economic reforms of the Menem government,"" says Carlos Helbling, an economic and foreign affairs analyst. "
3666,"[INST] With 400 troops in Cyprus, 120 in Haiti and [/INST] 900 in Bosnia, Argentina is the most active Latin American country in United Nations peacekeeping operations. "
3667,"[INST] It was the only Latin American nation to participate in [/INST] the 1991 Gulf War, and this February stood ready to participate in a fresh US-led strike against Iraq. "
3668,"[INST] Last year, Argentina won its reward when [/INST] Washington approved its claim to be designated as special non-Nato ally. "
3669,[INST] The move has already boosted co-operation in [/INST] areas such as training and could give Argentina access to surplus Nato hardware.
3670,[INST] It may also help win US congressional [/INST] approval for purchases of US weaponry by Argentina's cash-strapped armed forces.
3671,"[INST] ""Special non-Nato ally status is largely symbolic, but it does [/INST] indicate how well the relationship with Washington is going,"" says Diego Guilar, Argentina's ambassador to the US. "
3672,"[INST] Symbolic or no, the move drew criticism from [/INST] neighbouring Chile and Brazil, who claimed it could upset the regional balance of power. "
3673,[INST] Nowhere is the changed dynamic of [/INST] Argentina's foreign relations more apparent than in international trade negotiations.
3674,[INST] Forthcoming trade talk commitments are so great [/INST] that Argentina is at serious risk of running out of experienced trade negotiators.
3675,"[INST] Argentina is committed to: * Talks aimed at deepening Mercosur, [/INST] the customs union which also includes Brazil, Uruguay and Paraguay, with Chile and Bolivia as associate members. "
3676,"[INST] Argentina's trade with Brazil has soared since [/INST] the formation of Mercosur, and Brazil takes almost a third of its exports. "
3677,"[INST] * Moving towards more co-ordination of regional [/INST] economic policies, This is the main task ahead, according to Argentine negotiators. "
3678,"[INST] Mercosur partners are still prone to act as [/INST] sovereign states first, and members of an emerging economic block a distant second. "
3679,"[INST] However, moves to create a common Mercosur currency, [/INST] heavily promoted by Mr Menem and Argentine officials, have been stifled by Mercosur partners. "
3680,"[INST] * Forging a free trade agreement between Mercosur and the [/INST] Andean Pact - an older trade grouping which comprises Venezuela, Colombia, Ecuador, Peru and Bolivia - by 2000. "
3681,[INST] * Participation in President Bill Clinton's ambitious [/INST] project to create a Free Trade Area of the Americas by 2005.
3682,"[INST] The FTAA would create a market [/INST] of some 800m people and a value of $10,000bn. "
3683,"[INST] Formal trade negotiations between the EU and Mercosur are expected to [/INST] begin next year, possibly kicking off at the Rio Summit which will bring together EU and Latin American heads of state. "
3684,[INST] * Backing the Millennium Round of [/INST] trade negotiations under the auspices of the World Trade Organisation.
3685,"[INST] The round, originally proposed by EU trade commissioner Sir Leon [/INST] Brittan, would follow on from the successful 1986-93 Uruguay Round and tackle remaining industrial tariff, investment and competition issues. "
3686,"[INST] On the bilateral front, some Argentine officials believe they [/INST] can work successfully with Britain to push forward a broad trade liberalisation agenda in international negotiations. "
3687,[INST] Underpinning Buenos Aires' trade agenda are improved [/INST] market access for Argentina's agricultural exports and the dismantling of agricultural subsidies.
3688,[INST] Argentina's commitment to Mercosur has only been enhanced [/INST] by Mr Clinton's failure to secure fast-track negotiating authority from Congress for the FTAA process.
3689,[INST] Detailed talks on creating the FTAA [/INST] got off to a gruelling start in Buenos Aires last month.
3690,"[INST] However, the negotiating committee of vice-ministers of 34 countries of the Americas [/INST] (excluding Cuba) agreed guidelines for the nine working groups which will thrash out the details of the deal, starting in Miami in September. "
3691,[INST] Argentina and Brazil saw off a US-led initiative to allow [/INST] for early implementation of any aspects of the FTAA accord that could be reached before the 2005 deadline.
3692,[INST] Argentina has also warned the US bluntly [/INST] that the absence of fast-track would soon start to impact on the talks.
3693,"[INST] ""If we don't have fast-track by the end of [/INST] this year or early next, the process will begin to stall,"" says Mr Di Tella. "
3694,"[INST] In this context, lingering US hopes of picking off Mercosur [/INST] members one by one, rather than negotiating with a united and confident regional grouping, look difficult to achieve. "
3695,"[INST] But Mercosur will negotiate the FTAA [/INST] as a block,"" says Jorge Campbell, secretary for international economic relations. "
3696,"[INST] ___ Document 333 of 600 MINING Tarnished metals regain [/INST] some of their shine Author: Warn, Ken Publication info: Financial Times [London (UK)] 27 July 1998: 04. "
3697,"[INST] accountid=28034 Abstract: A simmering dispute over royalties, low international metals prices and a [/INST] slowdown in exploration have taken much of the shine off Argentina's mining boom, which began after the government started revamping its mining laws in 1993. "
3698,"[INST] However, the industry is still gaining momentum after decades of neglect, with [/INST] large projects, such as the $1.2bn Bajo de la Alumbrera opencast copper and gold mines in Catamarca province, coming on stream. "
3699,"[INST] Alumbrera, which began production last October, will be the world's ninth-biggest [/INST] copper mine and 14th-biggest gold mine by 2000, according to owners MIM Holdings and North, of Australia, and Canada's Rio Algom. "
3700,[INST] Canada's Cambior has delayed development of the $900m [/INST] El Pachon copper project in San Juan province until international metals prices improve.
3701,"[INST] Exploration has taken a hit [/INST] with the departure of many of the mining ""juniors"",. "
3702,[INST] Investment in some of [/INST] the projects already under way is slowing.
3703,"[INST] Full text: * by Ken Warn Tarnished metals regain some of their shine Dispute over royalties is at the heart of [/INST] difficulties in the sector A simmering dispute over royalties, low international metals prices and a slowdown in exploration have taken much of the shine off Argentina's mining boom, which began after the government started revamping its mining laws in 1993. "
3704,"[INST] However, the industry is still gaining momentum after decades of neglect, with [/INST] large projects, such as the $1.2bn Bajo de la Alumbrera opencast copper and gold mines in Catamarca province, coming on stream. "
3705,"[INST] Alumbrera, which began production last October, will be the world's ninth-biggest [/INST] copper mine and 14th-biggest gold mine by 2000, according to owners MIM Holdings and North, of Australia, and Canada's Rio Algom. "
3706,"[INST] The Salar del Hombre Muerto lithium mine in [/INST] Catamarca province, owned by FMC Lithium of the US, is also in production. "
3707,[INST] The development can supply an [/INST] estimated 30 per cent of world lithium demand.
3708,"[INST] Cerro Vanguardia, a $200m silver and gold [/INST] mine in Santa Cruz province, is due to begin production shortly. "
3709,"[INST] The mine is a joint venture between [/INST] South Africa's Anglo American, Argentine conglomerate Perez Companc, and local interests. "
3710,"[INST] Among other leading projects, development of Agua Rica, a copper-gold-silver-molybdenum deposit [/INST] in Catamarca, is also progressing towards a final feasibility study, according to owners BHP of Australia and Canada's Northern Orion. "
3711,[INST] Canada's Cambior has delayed development of the $900m [/INST] El Pachon copper project in San Juan province until international metals prices improve.
3712,"[INST] Exploration has taken a hit [/INST] with the departure of many of the mining ""juniors"",. "
3713,[INST] Investment in some of [/INST] the projects already under way is slowing.
3714,"[INST] ""The price effect and the decrease in the pace [/INST] of investment will eventually have a big negative impact,"" says Debora Giorgi, of the Alpha economic consultancy. "
3715,[INST] Exploration was losing impetus worldwide [/INST] even before the slide in metals prices.
3716,"[INST] Last year's Bre-X scandal, in which a small Canadian company's claim [/INST] to have found a 200m-ounce gold deposit in Indonesia was unmasked as a hoax, delivered a huge blow to investor confidence. "
3717,[INST] Gold's fall from favour with the [/INST] world's central banks has only quickened the pace of the retreat.
3718,"[INST] The government estimates that mining production will rise from $538m in 1996 [/INST] to more than $1.6bn by 2000, with exports forecast to soar from only $32m to about $1bn in the same period. "
3719,[INST] These ambitious numbers will be [/INST] difficult to achieve in the current economic climate.
3720,"[INST] However, even the development that has taken [/INST] place so far would have been unthinkable only a few years ago. "
3721,"[INST] Before the reform of its [/INST] mining laws, Argentina suffered from strong disincentives to investment. "
3722,"[INST] Royalties were high and unpredictable, [/INST] while hyperinflation made long-term financial planning impossible. "
3723,"[INST] Metals mining was a tiny industry compared with that [/INST] of Chile, even though Argentina has a larger share of the metals-rich Andean Cordillera than it neighbour. "
3724,"[INST] Some 75 to 80 per cent of Argentina's land surface [/INST] with mining potential has not yet been explored, says Mr Martin Dedeu, president of the Argentine Mining Chamber. "
3725,"[INST] The conquering of hyperinflation and reform of [/INST] the mining laws has given Argentina economic, legal and tax stability, officials claim. "
3726,"[INST] However, the Catamarca provincial authorities have challenged the federal [/INST] government by insisting on levying mining royalties higher than the 3 per cent stipulated in national legislation. "
3727,"[INST] By refusing to take into account transport and processing [/INST] costs in assessing the value of mineral production, Catamarca is seeking to double its royalty take. "
3728,"[INST] The dispute, likely to end in an uneasy compromise thrashed out [/INST] by Congress, has angered the industry, which accuses Catamarca, one of the country's poorest provinces, of jeopardising future investment. "
3729,"[INST] ""The dispute sends a very negative message [/INST] - that the rules of the game are not clear,"" says Mr Dedeu. "
3730,"[INST] ""The problem is not so serious that it [/INST] will overthrow the system, but we don't want to see other provinces following suit"". "
3731,"[INST] Despite the problems, multinationals such as Rio Tinto and Billiton are continuing their [/INST] Argentine exploration efforts, as are some of the deeper-pocketed juniors such as Iamgold, which is financing exploration through profits from its African projects. "
3732,[INST] Argentina is also putting a strong effort [/INST] into courting Japanese and Chinese interest in the long-term future of the industry.
3733,[INST] The government is this month stepping up efforts to interest [/INST] foreign investors in building a $400m copper smelter and refinery to add value to Argentina's mining production.
3734,[INST] It is due to present the results [/INST] of a pre-feasibility study of the project by US consultants Fluor Daniel.
3735,[INST] Argentina has also embarked on a $40m project to [/INST] speed up the processing of mining claims and improve inadequate mapping and land registry records.
3736,"[INST] The project, largely financed by the World Bank, also [/INST] aims to improve the expertise of provincial officials, a constant source of complaint by the mining companies. "
3737,"[INST] When metals prices rise again, [/INST] officials say, Argentina should be braced to benefit. "
3738,"[INST] ___ Document 405 of 600 Run on peso ruled out [/INST] by Argentina Author: Lapper, Richard; Warn, Ken Publication info: Financial Times [London (UK)] 10 July 1998: 03. "
3739,"[INST] accountid=28034 Abstract: Argentina's economy minister, Roque Fernandez, has dismissed the possibility [/INST] of a run against the country's currency - the peso - amid signs that the financial system continues to strengthen. "
3740,[INST] Measures to cut this year's spending by about $1bn (£600m) and freeze [/INST] several ambitious public works projects were sufficient to reassure international investors about Argentina's ability to withstand pressures stemming from the crisis in Asia.
3741,"[INST] We don't see that [/INST] there is a necessity,"" said Mr Fernandez. "
3742,"[INST] Argentina was most exposed to the crisis [/INST] in Asia through a possible rise in international interest rates, he said. "
3743,"[INST] Full text: Argentina's economy minister, Roque Fernandez, has dismissed the possibility [/INST] of a run against the country's currency - the peso - amid signs that the financial system continues to strengthen. "
3744,"[INST] A ""speculative attack against the [/INST] peso is impossible,"" he said in an interview. "
3745,[INST] Measures to cut this year's spending by about $1bn (£600m) and freeze [/INST] several ambitious public works projects were sufficient to reassure international investors about Argentina's ability to withstand pressures stemming from the crisis in Asia.
3746,"[INST] We don't see that [/INST] there is a necessity,"" said Mr Fernandez. "
3747,"[INST] Argentina was most exposed to the crisis [/INST] in Asia through a possible rise in international interest rates, he said. "
3748,"[INST] The comments came as bank deposits, which fell by 18 per cent [/INST] during the 1995 ""Tequila"" currency crisis, registered fresh growth, reflecting the confidence of savers in the country's currency and exchange rate regime. "
3749,[INST] The peso has been tied at [/INST] parity to the dollar under a monetary board system since 1991.
3750,"[INST] Bank deposits reached $75.5bn (£45.7bn) by the end of [/INST] June, giving a rise of 15.5 per cent in the first six months of the year. "
3751,"[INST] International reserves also recorded new highs [/INST] at the end of last month, rising to $23bn. "
3752,"[INST] As a result of high levels of liquidity, short-term [/INST] interest rates have fallen from 9 per cent last October to less than 7 per cent. "
3753,[INST] Argentina's stock market - hard hit by the Asian [/INST] crisis and international financial instability - has also risen strongly in the last few days.
3754,"[INST] A rise in international interest rates would [/INST] increase the cost of servicing the public debt, Mr Fernandez said. "
3755,"[INST] At present, however, he expected to meet a fiscal deficit target of [/INST] 1 per cent of gross domestic product, in spite of lower than expected tax receipts during the first half of the year. "
3756,[INST] Declines in commodity prices are depressing export [/INST] growth and higher imports have aggravated pressure on the external accounts.
3757,"[INST] But Mr Fernandez downplayed the significance of the current [/INST] account deficit, which economists expect could exceed $14bn this year, or some 4 per cent of GDP. "
3758,[INST] He said that rises in capital [/INST] goods imports were clearly linked with flows of direct investment.
3759,"[INST] A new labour reform was ""probably not [/INST] as great an advance as some economists expected,"" conceded Mr Fernandez. "
3760,[INST] Changes to traditionally rigid labour laws feature among the list [/INST] of conditions laid down by the IMF as part of a$2.8bn extended fund facility agreed in February.
3761,"[INST] ___ Document 495 of 600 Argentina's IMF pledge [/INST] under fire Author: Warn, Ken Publication info: Financial Times [London (UK)] 17 Dec 1998: 06. "
3762,"[INST] accountid=28034 Abstract: Argentina will commit itself to far-reaching structural reforms in its [/INST] agreement with the International Monetary Fund for next year, but the reforms are causing controversy even before the text has been finalised. "
3763,"[INST] The government will pledge to begin converting the state-owned Banco [/INST] Nacion, the country's biggest bank with 550 branches and $10bn (£5.9bn) in deposits, into a public corporation. "
3764,"[INST] The changes to Banco Nacion will ""eventually allow incorporation [/INST] of private capital and joint operations with the private sector,"" said Pablo Guidotti, deputy economy minister. "
3765,"[INST] Full text: Argentina will commit itself to far-reaching structural reforms in its [/INST] agreement with the International Monetary Fund for next year, but the reforms are causing controversy even before the text has been finalised. "
3766,"[INST] The government will pledge to begin converting the state-owned Banco [/INST] Nacion, the country's biggest bank with 550 branches and $10bn (£5.9bn) in deposits, into a public corporation. "
3767,"[INST] The opposition alliance, members of the ruling Peronist party [/INST] and the powerful farm lobby this week attacked the move as a prelude to privatisation. "
3768,"[INST] The changes to Banco Nacion will ""eventually allow incorporation [/INST] of private capital and joint operations with the private sector,"" said Pablo Guidotti, deputy economy minister. "
3769,"[INST] The government will also in its letter of intent for 1999 with the IMF promise to: * introduce a ""fiscal convertibility"" law which would place [/INST] legal curbs on the country's fiscal deficit; * reform the central bank charter to give it more power to intervene in troubled banks and speed the bank liquidation process; * eliminate or reduce the state pension for retirees receiving high private pensions, to boost coverage for low-income pensioners. "
3770,"[INST] ""If the suspicion of privatisation can be allayed, [/INST] the proposals for Banco Nacion could work,"" said Freddy Thomsen, economist at ING Barings. "
3771,"[INST] ""But 1999 [a presidential election year] [/INST] will be one of much mutual suspicion because of politics"". "
3772,"[INST] An IMF staff mission left Buenos Aires this [/INST] week after a review under the terms of Argentina's three-year, $2.8bn extended fund facility. "
3773,"[INST] The staff will recommend Argentina be granted [/INST] a ""waiver"" after exceeding this year's $3.5bn fiscal deficit target by about $350m. "
3774,"[INST] The mission coincided with government efforts to pass a complementary law to [/INST] its tax reform package approved last week, which aims to limit the provinces' automatic share of extra revenues raised by the changes. "
3775,"[INST] Failure to pass the law, due to [/INST] have been voted on yesterday, would require renegotiation with the IMF, officials warned. "
3776,"[INST] The tax reform brought cable television and private health services into the value [/INST] added tax net, raised corporate income tax from 33 to 35 per cent, and introduced a 15 per cent tax on foreign loans. "
3777,"[INST] * The Inter-American Development Bank yesterday approved two loans for Argentina totalling $2.75bn, [/INST] including its first disbursement under an emergency lona programme to help Latin American countries cope with the effects of the global financial turmoil. "
3778,"[INST] ___ Document 501 of 600 Argentina poised to seek [/INST] IMF waiver Author: Warn, Ken Publication info: Financial Times [London (UK)] 15 Dec 1998: 10. "
3779,[INST] accountid=28034 Abstract: Argentina looks set to seek a waiver from the [/INST] International Monetary Fund after admitting it will overshoot its $3.5bn fiscal deficit target for this year by about $350m.
3780,[INST] Full text: Argentina looks set to seek a waiver from the [/INST] International Monetary Fund after admitting it will overshoot its $3.5bn fiscal deficit target for this year by about $350m.
3781,[INST] Economy ministry officials also said they would be cutting next year's growth forecast [/INST] from the 4.8 per cent contained in the budget to about 2.5-3 per cent - still in excess of most private sector forecasts.
3782,[INST] An IMF mission in Buenos Aires is this week due [/INST] to complete the second revue of Argentina's compliance with the three-year $2.8bn extended fund facility agreed early this year.
3783,"[INST] Argentine officials maintain the deficit overshoot results from the [/INST] international financial crisis and not mismanagement, a view likely to be shared by the IMF board. "
3784,"[INST] Revenues have fallen $600m from budgeted levels since [/INST] the Russian debt crisis in August, while the credit crunch has slowed economic growth sharply. "
3785,[INST] The fiscal deficit target for next [/INST] year looks set to be eased from $2.65bn to $3bn.
3786,"[INST] ""The effect of the crisis on economic activity in [/INST] the second half has been much greater than we anticipated,"" said a senior economy ministry official. "
3787,"[INST] Gross domestic product growth fell to a preliminary 2.9 [/INST] per cent in the third quarter, against a revised 7.4 per cent in the second period. "
3788,"[INST] ___ Document 548 of 600 World crisis hits growth [/INST] forecast in Argentina Author: Warn, Ken Publication info: Financial Times [London (UK)] 24 Nov 1998: 06. "
3789,"[INST] accountid=28034 Abstract: Argentina's growth rate could fall to as low as [/INST] 3 per cent next year, against an official forecast of 4.8 per cent, according to Pablo Guidotti, the deputy economy minister. "
3790,"[INST] In the most cautious analysis to date from a government official, Mr Guidotti acknowledged in [/INST] an interview at the weekend that there was ""some doubt"" that the 4.8 per cent growth could be achieved, due to the impact of the international financial crisis. "
3791,"[INST] If growth fell in the fourth quarter of 1998 [/INST] with no clear signs of recovery, then Argentina might have to cut next year's forecast, he said. "
3792,[INST] Private sector forecasters suggest growth of [/INST] 2 per cent or less is likely next year.
3793,"[INST] Full text: Argentina's growth rate could fall to as low as [/INST] 3 per cent next year, against an official forecast of 4.8 per cent, according to Pablo Guidotti, the deputy economy minister. "
3794,"[INST] In the most cautious analysis to date from a government official, Mr Guidotti acknowledged in [/INST] an interview at the weekend that there was ""some doubt"" that the 4.8 per cent growth could be achieved, due to the impact of the international financial crisis. "
3795,"[INST] If growth fell in the fourth quarter of 1998 [/INST] with no clear signs of recovery, then Argentina might have to cut next year's forecast, he said. "
3796,[INST] Private sector forecasters suggest growth of [/INST] 2 per cent or less is likely next year.
3797,"[INST] The economy grew by over 7 per cent [/INST] year-on-year in the second half, one of the fastest growth rates in the world. "
3798,"[INST] However, growth has since slowed sharply as [/INST] consumers have grown more cautious and companies have battled for credit. "
3799,"[INST] Industrial production fell 9.3 per cent in October from the previous [/INST] year, according to revised figures yesterday from FIEL, the private think-tank, led by sharp falls in the vehicles sector. "
3800,[INST] The government cut its 1998 growth forecast [/INST] from 5.3 per cent to 4.8 per cent earlier this month.
3801,"[INST] ""Credit conditions have been very tight, [/INST] but things started to improve in October,"" said Mr Guidotti. "
3802,"[INST] ""Very shortly we will see credit reappearing for [/INST] companies - the private sector will be issuing bonds by the first quarter"". "
3803,"[INST] To avoid ""crowding out"" private sector borrowers, Argentina had [/INST] no immediate plans to launch a bond offering on the scale of last week's $1bn global issue. "
3804,"[INST] The economic slowdown has led to lower-than-forecast tax revenues, [/INST] leading the government to cut spending and bring forward income and wealth tax payments for some individuals. "
3805,"[INST] Despite the difficulties, Argentina would still meet its [/INST] fiscal deficit target of about 1 per cent of GDP, said Mr Guidotti. "
3806,"[INST] The government, which aims to auction a 14.9 per cent stake in the privatised energy concern [/INST] YPF in January, ""would not oppose"" changes in the company's statutes, which require anyone owning 15 per cent or more of YPF to tender for all the outstanding shares. "
3807,"[INST] ___ Document 588 of 600 $3bn Argentine loans agreed: World Bank [/INST] seeks to safeguard 'social and economic achievements' Author: Warn, Ken Publication info: Financial Times [London (UK)] 12 Nov 1998: 07. "
3808,"[INST] accountid=28034 Abstract: The World Bank has approved $3bn in emergency [/INST] loans ""to safeguard Argentina's social and economic achievements"" in the face of the continuing international financial uncertainty. "
3809,"[INST] A $2.5bn special structural adjustment loan is aimed at boosting confidence in [/INST] the banking system, developing the local capital markets, and expanding access to credit, especially for small and medium-sized businesses, the World Bank said. "
3810,[INST] A separate $500m special repurchase facility is [/INST] intended to back the liquidity of the financial system and bolster its defences.
3811,"[INST] Both loans, unveiled on Tuesday night, were precautionary, the Bank said, and [/INST] part of wider efforts with the International Monetary Fund and Inter-American Development Bank to soften the impact of the market crisis on Argentina. "
3812,"[INST] Full text: The World Bank has approved $3bn in emergency [/INST] loans ""to safeguard Argentina's social and economic achievements"" in the face of the continuing international financial uncertainty. "
3813,"[INST] A $2.5bn special structural adjustment loan is aimed at boosting confidence in [/INST] the banking system, developing the local capital markets, and expanding access to credit, especially for small and medium-sized businesses, the World Bank said. "
3814,[INST] A separate $500m special repurchase facility is [/INST] intended to back the liquidity of the financial system and bolster its defences.
3815,"[INST] Both loans, unveiled on Tuesday night, were precautionary, the Bank said, and [/INST] part of wider efforts with the International Monetary Fund and Inter-American Development Bank to soften the impact of the market crisis on Argentina. "
3816,"[INST] Since the renewed market instability which followed the Russian debt default in July, [/INST] Argentina has been seeking to assemble a multi- billion-dollar ""war chest"" of financing from the multilateral lenders and other sources, such as domestic financial institutions. "
3817,"[INST] It has requested $2.5bn in [/INST] loans from the IADB, which are awaiting board approval. "
3818,"[INST] A $2.8bn IMF extended fund facility, which [/INST] the government does not intend to draw down, was agreed early this year. "
3819,"[INST] The country has also been a pioneer among emerging market [/INST] borrowers in securing renewed access to the international capital markets, issuing five sovereign bonds in the past four weeks. "
3820,"[INST] However, Argentina's access to commercial [/INST] borrowing is likely to remain severely constrained. "
3821,"[INST] ""It's safe to assume that until the beginning of next year at the [/INST] earliest Argentina will be unable to issue bonds on the same scale as before,"" said Alberto Ades, Goldman Sachs emerging markets currency economist. "
3822,"[INST] ""They just can't launch a [/INST] single issue of, say, $1bn right now. "
3823,"[INST] The country already faces a 1999 financing requirement of [/INST] about $14bn, while tax revenues are likely to fall below target because of the economic slowdown. "
3824,"[INST] In its efforts to halt financial ""contagion"" [/INST] in Latin America, the World Bank continued to lavish praise on Argentina. "
3825,"[INST] ""As one of Latin America's most successful reformers, Argentina has achieved price stability, opened [/INST] its borders to trade, privatised public enterprises, restructured public administration, reformed the pension system and has started the process of restoring social services,"" it said. "
3826,"[INST] ""Argentina is now refocusing on investment in human capital, improved [/INST] regulation, modern financial market supervision, and quality public administration and governance,"" said Myrna Alexander, World Bank director for Argentina. "