Thursday, May 22, 2003
Andean Development Bank Plans $300 Million Loan for Colombia
Bogota, May 13 (<a href=quote.bloomberg.com>Bloomberg) -- The Andean Development Corp., a regional multilateral lender, plans to disburse a $300 million loan for Colombia by July to help fund state cutbacks and social spending, President Alvaro Uribe's office said.
Enrique Garcia, president of the development bank, said the bank planned to disburse as much as $800 million to Colombia this year to spur economic growth, generate jobs and boost export competitiveness, according to the presidential Web site.
The CAF, as the bank is known, has agreed to provide Colombia with $3.5 billion in loans and loan guarantees over the next four years to close the budget deficit and boost growth. Garcia said the funds would also help finance state cutbacks, spending on the poor and plans to boost exports.
``We want to motivate companies so they take advantage of the new Andean Trade Preferences Act that will be in effect until 2006,'' Garcia was quoted as saying.
The U.S. last year renewed and broadened trade benefits for a range of Colombian exports, including canned tuna and shoes, to help generate legal alternatives to drug crop production.
The CAF last year approved $748 million in loans for Colombia, of which $83 million served as a partial guarantee of a $250 million syndicated loan, the agency said in December.
The corporation approved $705 million for Venezuela, $500 million in lending for Bolivia, $497 million for Peru, $400 million for Ecuador, $110 million for Brazil and $25 million for Uruguay last year.
The development corporation, set up in 1970, serves as a lending agency for Bolivia, Ecuador, Colombia, Venezuela and Peru. Members now also include Argentina, Brazil, Chile, Costa Rica, Jamaica, Mexico, Paraguay, Spain, Trinidad and Tobago and Uruguay.
Brazil's Development Bank wants greater Latam ties
Posted by click at 8:31 AM
in
brazil
Reuters, 05.13.03, 12:33 PM ET
By Denise Luna
RIO DE JANEIRO, Brazil (Reuters) - After decades of bankrolling growth at home, Brazil's National Development Bank is turning into an instrument of Latin American integration in the hands of the country's new center-left government.
President Luiz Inacio Lula da Silva has said exports and trade ties are key priorities as Brazil, Latin America's largest economy, aims to assert itself as leader of a region most of whose economies are much worse off than Brazil's.
"Apart from fulfilling its traditional role, the bank will be an instrument of South American integration," BNDES Vice-President Darc Costa told Reuters before going to Argentina to discuss a new credit line to boost trade.
Jose Augusto de Castro, director of the Brazilian Foreign Trade Association, was only cautiously optimistic about planned financing of neighboring countries' exports.
"From the economic point of view this only strengthens our competitors," he said, although politically, he added, there were more advantages to the BNDES' new role.
The government has promised $2.6 billion of BNDES credit lines to Venezuela, Bolivia, Argentina and Uruguay. The loans are designed to support mutual trade or to fund infrastructure expansion, as in gas-rich Bolivia.
The BNDES, whose credit portfolio is 119 billion reais ($42 billion) and whose planned financing for this year is 34 billion reais, will also take part in a regional joint effort to increase exports to other countries.
Set up in 1952 by President Getulio Vargas to promote Brazilian industry, the bank financed industrial and agricultural development. In the 1990's, the BNDES spearheaded Brazil's privatization drive, a process that is unlikely to continue under Lula, analysts say.
LARGER LATAM BLOC FOR FTAA TALKS
De Castro said the new government was apparently not only trying to boost trade in the region, weakened by years of economic crises, but also create a wider Latin American bloc to defend its position better in talks on a U.S.-proposed Free Trade Area for the Americas.
"That way, the financing makes sense," de Castro said. Developing Latin American countries fear a trade pact with the U.S. and Canada may expose their weaker economies to what they see as unfair competition and cause an industrial slump.
Brazil is a key member of the Mercosur trade bloc which also includes Argentina, Paraguay and Uruguay, with Bolivia and Chile as associate members.
BNDES' announcement last month of its entry into the Andean Development Corporation, replacing Brazil's Treasury, shows the country's interest in expanding its role beyond Mercosur.
Its stake in the organization, which borrows funds abroad for infrastructure projects, will rise from 2.5 to 20 percent, making the BNDES its biggest single shareholder.
Brazil is only an associate member of the corporation which has up to 200 planned regional projects worth about $24 billion to be financed. The Andean Community includes Colombia, Ecuador, Peru, Bolivia and Venezuela.
One of the biggest projects is a $1 billion credit line for bilateral trade between Brazil and indebted, recession-hit Argentina. Bilateral trade peaked at $20 billion a year in the 1990's but now is less than half of that.
BNDES' Costa also plans to study infrastructure projects in Argentina and possible joint work in textiles, automaking, petrochemicals and food for export to other countries.
The percentage of Brazil's exports which go to other South American countries has fallen to 16 percent so far this year, from 17 percent in 2002 and 26 percent in 1998.
Support for Venezuela's Chavez Down but Alive
Tue May 13, 2003 12:10 PM ET
By Patrick Markey
CARACAS, Venezuela (<a href=reuters.com>Reuters) - Dictator, thieving despot or madman in a red beret. Opponents of Venezuelan President Hugo Chavez are never short of insults for the retired paratrooper turned populist South American leader.
But in the slums that ring the Venezuelan capital, people like Alicia Gil are more than willing to give him the benefit of the doubt.
"Before, I wouldn't bother with any political leader; they wouldn't do anything for you. But I'd defend this one tooth and nail," said the mother of six outside her government-financed home in the arid hillsides near Caracas.
Most recent opinion polls show support for Chavez has slipped to around 30 percent from a peak of nearly 80 percent soon after his first election victory four years ago. But even with diminished backing, he commands more support than any one leader from within the splintered opposition movement.
The question of how much support Chavez can muster could be key this year as opposition negotiators try to get the government to accept a referendum on his rule in an effort to end political strife in the world's No. 5 oil exporter.
Venezuela's economy is crippled by recession, unemployment has matched inflation's steady climb and political rancor over Chavez' rule remains as bitter as ever a year after the leftist leader survived a short-lived coup in April 2002.
But from residents of Gil's hardscrabble El Winche neighborhood to middle-class business owners, Chavez supporters say his greatest merit has been to recognize the needs of the impoverished majority. That sense of involvement keeps firm their belief in his promises for a better Venezuela.
Many are suffering in the economic downturn; some struggle even to define concrete gains from his policies. But they say they are still eager to back him at the ballot box.
A slight woman with long mousy hair, Gil said thanks to a government program she exchanged a shack for a three-bedroom house with white tiles and a state-financed mortgage.
"This is not about Chavez. It's about the process, the change," Gil said. "You have to give it a chance."
HARD CHANGES, FALLING SUPPORT
A retired army lieutenant colonel who once led a botched coup bid himself, Chavez came to power in a landslide election victory in 1998 on promises he would ease poverty and reverse the neglect and corruption of past governments.
He won that election by 57 percent, one of the highest majorities in Venezuela's recent history.
He pushed through reforms such as cheap credits, housing and land redistribution that he promised would help most of Venezuela's 24 million people who live in poverty despite the country's oil wealth. Chavez won re-election in 2000 with 59 percent of the vote.
Despite his loss of popularity, his core followers maintain their faith in him. In one pocket of middle-class Chavez support, about 300 residents gather weekly in an east Caracas theater to hear speeches that echo the president's rhetoric.
Political skits on a wooden stage draw howls of laughter and jeers at the mention of opposition leaders dismissed as inept remnants of past corrupt governments.
"This government tried to do something that had not been done before and that was take care of the biggest population here, the poor people," said Dimas Sanchez, a U.S.-educated businessman. "That implies a huge change, and change is hard to understand and hard to accept."
CONTESTED REVOLUTION, ECONOMIC CRISIS
Foes of Chavez say he has failed miserably to live up to his promises and instead has driven Venezuela to financial ruin and authoritarian rule.
They point to the sharp economic downturn and growing ranks of unemployed. They say the poor are poorer for Chavez' reforms, which they dismiss as cheap vote-buying tactics.
To be sure, most Venezuelans are worse off than they were four years ago. The economy shrank nearly 9 percent in 2002. A two-month opposition strike in December and January battered the economy further but failed to oust the president.
But Chavez has stepped up his populist rhetoric with relentlessly upbeat speeches about imminent recovery and defeat of the "elites" he blames for trying to scuttle his reforms.
His message is not lost in places like Los Mallaganes, a sprawling maze of poor homes west of the capital, where his supporters say Chavez remains the only politician to have connected with them.
"This government has paid attention to us," said Agustin Barrios, a 41-year-old unemployed contractor. "Before, a person from the 'barrio' wasn't worth the same as an oil worker."
Trade Deficit Swelled in March
The StreetBy TSC Staff
05/13/2003 10:49 AM EDT
The U.S. trade deficit reached $43.5 billion in March, jumping from February's $40.4 billion, the Commerce Department reported Tuesday.
The deficit was the second-highest ever, beating Wall Street expectations and trailing only the $44.9 billion reported in December. The swelling trade gap is one reason the Bush administration has recently indicated that a strong dollar might not be its first priority.
Some of the dollar's recent weakness might be showing up in the trade ledger, but not enough to offset rising imports. According to the report, exports grew for the third month in a row in March, but imports rose almost five times as fast, increasing by 2.9% from February to $126.3 billion. Notably, imports of industrial supplies, such as crude oil and plastics, rose to a record $28.3 billion.
Meanwhile, comments made Monday by Treasury Secretary John Snow led traders to believe that the administration was privately welcoming some depreciation of the dollar in order to try and boost exports. But publicly, the administration has supported a strong dollar policy.
The U.S. trade deficit with Mexico and Canada reached record levels of $3.9 billion and $5.2 billion, respectively, in March. With oil producing nations, including Saudi Arabia and Venezuela, the U.S. trade deficit reached an all-time high of $5 billion.
Venezuelan Flour Mills Without Grain Close Down, Universal Says
Caracas, May 13 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela's flour mills have begun to shut down because they can't get dollars from the country's foreign exchange commission to import grain, El Universal reported.
Three of the country's 16 mills have already closed, Alirio Perez, who heads the country's wheat association.
``We can't continue importing (wheat) because we have no guarantee that they will give us dollars,'' Perez said, the newspaper reported. Perez earlier warned that mills would run out of flour by the end of the month.
Venezuela banned dollar sales in January to stem a decline in international reserves after a two-month strike cut oil output, which accounts for 43 percent of government revenue. Limited dollar sales began last month. The country imports about 60 percent of the products it consumes.
(EU, 5/13, 1-12)
To see El Universal's Web site, click on {EUDC }
Last Updated: May 13, 2003 09:02 EDT