<a href=www.oneworld.net>See Source Emad Mekay

WASHINGTON, Mar 24 (IPS) - Joining others that have predicted Latin American economies will fare better in 2003, the Inter-American Development Bank (IDB) said Monday the region will rebound this year after two years of recession and slow growth, but also warned of possible dangers ahead.

"The immediate prospect for the world economy and for our region is one of uncertainties ... exacerbated by the complex situation of the Middle East," Bank President Enrique V. Iglesias said in a statement released simultaneously in Washington and Milan, where the Bank is having its annual meeting of the board of governors.

"Nevertheless, the economies of several countries in the region have begun to improve compared to the beginning of 2002," added Iglesias.

For that improvement to continue and for Latin America to shed its poverty and under-development, the region should adopt more free-market policies, said the Bank, the region's largest public lender, echoing recent reports from the Institute of International Finance (IIF) and the International Monetary Fund (IMF).

In its economic forecast last week, the IIF went so far as to warn governments not to follow the advice of their own people. Recovery could be derailed if governments ''succumb to populist political pressure" and fail to fully implement recommended policies, it added.

The Bank said that if international conflicts do not worsen - in reference to the possibility of a prolonged U.S. war on Iraq - the economy of the region could grow between 1.5 and two percent this year.

If the upward trend continues, growth could reach as high as four percent in 2004, added Iglesias. In 2002, the region's gross national product (GNP) fell 0.5 percent.

The IDB says it approved about 4.6 billion U.S. dollars worth of projects in the region in 2002.

Earlier this month, IMF Director Hoerst Koehler said there were signs of recovery in Latin America but added that recovery would ''need to be nurtured, with the right policies and decisive leadership''.

Last week the IIF, a global association of financial firms and banks, forecast the region's economies are likely to grow modestly next year, buoyed by anticipated improvement in the world economy.

Excluding Venezuela, whose gross domestic product (GDP) would fall by 10 percent, real GDP growth in the region overall will increase 2.4 percent this year and 3.2 percent in 2004, said the IIF, which groups over 310 financial institutions from more than 60 countries.

But the IDB estimates that in order to make inroads on the poverty that affects close to one-half of the population of Latin America and the Caribbean, the region's growth must climb higher and become more consistent - an average of 2.7 percent annually over the next 15 years.

In his statement, Iglesias said some of the past reforms in the region - inspired by the IMF and the World Bank - ''contained weaknesses'', but he was quick to say that they were applied inconsistently, without the necessary legal and regulatory frameworks.

''Corruption and errors in handling privatisation in some cases resulted in a loss of public support that is a prerequisite of a reform's success,'' he said.

One observer said that such remarks give the impression that economic crises are the result of a trend in Latin America to vote for leftist governments, as in Brazil and Venezuela, rather than on policies invented in Washington and other Western capitals.

''It's trying to scapegoat the problems on left-leaning or populist governments or place problems in their hands versus the fact that policies don't work,'' said Vicki Gass of the Washington Office on Latin America. ''Trade is fine but you need it hand in hand with protectionist policies or support for incubator policies.''

The IDB's annual report, also released Monday, warned that Latin America was going through one of ''its most critical periods in several decades beset by serious downtrend indicators''.

The report said that per capita income in the area in now less than it was five years ago while consumption remained stagnant and investment has slid back to its lowest point in the past decade.

Among the factors causing the poor economic performance is the fragile recovery of growth in the United States, the main destination for exports from the region, according to the Bank.

It also said that Argentina, Latin America's second largest economy, has yet to find a way out of its lingering economic crisis, while in Brazil, fears of macroeconomic instability still loomed because of the country's heavy debt burden.

The Bank also said that in several countries, including Venezuela and El Salvador, the economic clouds are compounded by social unrest.

To boost business in the region, the IDB said it would develop new programmes, including: financing exports; providing loans for social emergencies, as in the case of Argentina; and making loans more accessible, with lower interest rates. It will also build trade capacity to prepare the region to join controversial trade agreements.

Even with the changes, the IDB continues to recommend higher doses of its usual recipes for development, including expanding foreign trade, attracting investment, promoting growth of the private sector and increasing business productivity, especially for small and medium-sized enterprises.

That business-as-usual approach has elicited frustration from development and anti-poverty campaigners.

''They are continuing with a one-policy-fits-all sort of policy in the region instead of looking at each country and figuring out what each country needs for development,'' said Gass. ''It's pretty discouraging.'' (END/2003)

AJC wire reports

MONTERREY, Mexcio -- Mexican brewer and bottler Femsa, soon to become the largest Coca-Cola bottler in Latin America, is looking at combining its beer and soft drink operations in various Latin American markets.

Femsa is in the midst of a previously announced $2.7 billion purchase of Panamerican Beverages of Miami.

Femsa's purchase of Panamco via subsidiary Coca-Cola Femsa, which operates in Mexico and Argentina, will give the Monterrey-based company a growth platform for Femsa's beer division in the markets of Panamco.

"Integration is a real possibility in some of the markets where we operate currently and where we hope to operate in the future once ther acquisition of Panamco is completed," Femsa's chairman Jose Antonio Fernandez said in a recent annual report.

Femsa said it clinched a deal with Coca-Cola to analyze "market by market" the degree of integration of its beer and soft-drinks businesses, which could include sharing administration and marketing expertise and joint distribution.

The strategy would allow Femsa to compete on a level playing field with Brazil's Ambev, the world's fifth-largest brewer and also a major regional bottler, which combines beer and soft drinks in its units in Brazil, Argentina, Uruguay and Venezuela.

Inside Mexico, joint distribution of beer and soft drinks is seen more tricky because of the fragementation of the retailers -- mom and pop stores are the main vendors.

But combining operations in Mexico would help Femsa face up to stiff competition from the No. 1 brewer Grupo Modelo.

AOL unit sees silver lining in Argentina Posted on Mon, Mar. 24, 2003 BEA GARCIA bgarcia@herald.com

AOL EXEC: Charles Herington is president and chief executive of America Online Latin America. AOL is consolidating most of its call center operations from Mexico and Puerto Rico in Argentina. CHUCK KENNEDY/KRT FILE

Argentina's recent economic turmoil may have frightened away some investors, but others see opportunity there.

One is AOL Latin America, which will announce this morning that it's consolidating most of its call center operations from Mexico and Puerto Rico in a regional center in Argentina. The move takes advantage of lower labor and operating costs as well as a highly educated, technically savvy and Spanish-speaking workforce. The company will be adding about 200 employees in the next few weeks.

In a concurrent move, AOL Latin America, which is a joint venture between America Online and Venezuela's Cisneros Group of Companies, will concentrate its content operations in Mexico where it already has a strong team working in that area. The group will be producing generic Spanish-language content that can be used in the company's Argentine, Mexican and Puerto Rican portals.

AOL Latin America moved Martin Moreyra, who has been the director of content development in Argentina, to Mexico to work with the consolidated group.

AOL Latin America also operates in Brazil. Banco Itau, one of Brazil's largest banks, holds a minority stake in the Internet service provider and portal.

AOL Latin America is the front end of an emerging trend to use Argentina as a central location for regional operations.

A major U.S. multinational computer company already has established a regional call center in Argentina and several other companies have similar plans, sources said.

Charles Herington, AOL Latin America's president and CEO, says these two consolidating actions take advantage of the region's economic situation and meet objectives that have been driving the company in the past year: Cost reduction and more efficient operations.

After four years in business, the Fort Lauderdale-based company is still striving to reach profitability.

Losses from mid-1999 through year-end 2002 totaled $791.4 million. To the company's credit, however, it has been narrowing its losses significantly in the past 10 consecutive quarters.

AOL Latin America ended 2002 with $75.5 million in cash and said that money should carry it through the first quarter of 2004.

David Joyce, a stock analyst who follows the company for Guzman & Co. in Miami, estimates that AOL Latin America will have to borrow only $30 million in the second quarter of 2004 if it can manage to keep its costs ``more or less flat.''

That's why these latest initiatives are key, says Herington.

In 2002, the company saw its revenue grow 8.5 percent to $72.1 million. Its net losses shrank considerably, but red ink remains on the bottom line.

AOL Latin America's net loss fell to $180.6 million, or $2.69 a share, from $307.3 million or $4.66 per share.

The other major objective for the company is targeting high-value members, which means getting subscribers who are willing to stay with the service after the initial free trial period is over.

The company's shares closed Friday at 45 cents, up 5 cents for the day and 8 cents for the week.

MORE HISPANICS GOING ONLINE

Often, the beauty of statistics is that you can slice 'em and dice 'em any way you want -- and make them suit your point of view.

Last week, comScore Networks, the New York-based firm that tracks Internet usage, released highly anticipated data on Spanish-language Internet portals.

It provided a good view of where the top portals stand after nearly two years of transition.

Many of these companies made headlines in 1999 and 2000; all of them have been through significant downsizing and management, ownership and operational changes since then.

But the report does show the Internet has a growing number of Spanish-language users, and U.S. Hispanic are the fastest growing group. That was good news for Yahoo en Español, StarMedia, Terra.com, Univision.com, and MSN Group, which includes YupiMSN.

comScore released general data on Internet usage by Hispanics, but several of the portals put out some of the comScore numbers to best reflect their position in a market that is beginning to take off once again.

For instance, Terra.com, which is the Spanish-language portal of the Terra-Lycos network, put out a release saying it was a leader among portals for U.S. Hispanics who are bilingual and those for whom English is their preferred language.

Yahoo! was quick to point out that its entire network was the No. 1 choice for U.S. Hispanics in general and No. 1 for Hispanics here with a preference for Spanish.

Looking at the data in a less-partisan manner -- total pages viewed and total unique users -- here is how the portals shake out for the month of January:

• All Yahoo! Spanish sites: 155 million page views and 1.25 million unique users. • Univision.com: 148 million page views and 1.04 million unique users. • StarMedia: 121 million page views and 903,000 unique users. • Terra Lycos: 88 million page views and 1.02 million unique users. • Yahoo! en Español: 80 million page views and 845,000 unique users. • MSN Group: 61 million page views and 1.23 million unique users.

BELLSOUTH HELPS WITH AMBER ALERTS

BellSouth has joined Florida's Amber Alert network, providing alerts in cases of child abductions to more than 15,000 field technicians, 62,000 employees and 1.5 million Internet users in its entire nine-state region.

BellSouth will send electronic messages with alerts from the Florida Department of Law Enforcement to staffers in the field via pagers and laptops. The alerts will be posted on BellSouth's home page of its ISP users and on the company Intranet for employees.

The Amber Alert system is designed to put out notification of missing children as widely and quickly as possibly. The system and pending legislation to make it a requirement in every state got renewed attention two weeks ago after the return of Elizabeth Smart, the kidnapped Salt Lake City girl, because her family are big supporters.

While other companies and organizations such as electric and gas companies, TV and radio broadcasters, are supporting the Amber Alert network, BellSouth is making one of the biggest commitments since its operations and workers are spread over several states.

Amber alerts are named after Amber Hagerman, a 9-year-old girl abducted in Arlington, Texas, and later found murdered. Bulletins are distributed quickly through radio and television broadcasts and electronic highway signs about kidnapped children and their abductors.

<a href=www.nytimes.com>But the path is proving treacherous. March 22, 2003 By JUAN FORERO with LARRY ROHTER

A PAZ, Bolivia, March 21 — Isabel Ortega, a full-blooded Aymara-Quechua Indian who dresses in the black bowler and heavily layered 19th-century dress common to her people, is one of Bolivia's newest members of Congress.

But that has not kept guards from trying to bar her from the ornate building where the halls of power have long been the exclusive domain of buttoned-down descendants of Europeans.

"The guards would say, How can you come in?' And then they pushed me out," said Ms. Ortega, 49. "They would say, An Indian is coming into the palace.' "

Such racism and resistance have not stopped Ms. Ortega, who is part of a new Congress with three times as many indigenous lawmakers as the last one. Nor have they deterred a growing number of other leaders from forgotten classes across Latin America who are promising a political and economic upheaval.

They and their supporters are organizing as never before and using new, more open democracies to take on the traditional, light-skinned ruling classes they blame for keeping their countries mired in poverty and their people on the sidelines of power for 500 years.

Whether filled with Indians in the Andes, blacks and mixed-race "caboclos" and "mulatos" in Brazil or the poor of Argentina's outlying provinces, the ranks of these new political movements are united by the dark color of their skin and their low economic station.

With popular protests and new political parties, they are challenging the orthodoxy of market reforms as the region faces its worst economic crisis in decades. In the process, Latin America's political landscape is being redrawn. Parties that have been the pillars of governments from Caracas to Quito to Buenos Aires are collapsing or fast losing influence.

"Latin America is undergoing a fundamental redefinition of identity," said Elisa Carrio, the leading antiestablishment candidate in the presidential election scheduled in Argentina in April.

"That identity is being tinkered with in different ways in each country," she said, "because we are all different and not a single package, but there is one thing in common: we are finally electing leaders who look like the people they represent."

In Bolivia and Peru, this change has been accompanied by violent protests. Elsewhere, it has meant the rise of new leaders like President Luiz Inácio Lula da Silva in Brazil, a former labor leader born a peasant, and Lucio Gutiérrez in Ecuador, a former army colonel who led the coup that overthrew President Jamil Mahuad, a Harvard-educated favorite of the International Monetary Fund, in January 2000.

Mr. Gutiérrez was elected president in November after railing against traditional politicians and promising to cut poverty and scale back market reforms. He was supported by a powerful indigenous movement, Pachakutik, and inspired in part by another former army colonel and coup plotter, President Hugo Chávez of Venezuela.

In Mr. Chávez, the many dark-skinned people of Caracas's poor barrios believe they have found a powerful spokesman — and the nation's traditional political and business class, a reviled antagonist. In the last year, Chávez supporters have defended his four-year-old presidency against weeks of strikes by an opposition whose leaders are mostly of European descent.

These new Latin American leaders do not offer a uniform solution to region's problems. But their political base is decidedly anchored on the left, and all have toyed with the populism that has been a staple of Latin American politics since the 1930's.

What they have in common is the promise to replace the policies pushed by the International Monetary Fund with a return to a system of state-owned companies and protected markets.

"It is not very well thought out, but it is the opposite of the status quo," said Amy Chua, author of a new book, "The World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability." "The problem with these policies is they are more anti- than affirmative anything."

Mr. Chávez, who introduced a new Constitution in Venezuela and is redirecting oil profits toward social programs, has taken the most aggressive tack. Others, like Evo Morales, the head of Bolivia's main opposition movement, emphasize the traditions of indigenous people who have organized their communities collectively for generations.

More moderate leaders have begun groping for a middle ground between appeasing the powerful financial and capital markets of a global economy and addressing the complaints of those who feel excluded from the benefits of more than a decade of market-driven economic reforms.

But the path is proving treacherous.

In Peru, a host of independent movements, several with strong indigenous representation, swept recent regional elections and are eroding the standing of the market-friendly government of President Alejandro Toledo.

In Brazil and Ecuador, the new governments have leaned toward fiscal prudence rather than following through immediately on promises to redistribute wealth. Disappointed followers are already criticizing both Mr. Gutiérrez and Mr. da Silva, who assumed Brazil's presidency on Jan. 1.

But even absent clear answers, these new leaders have been helped by the disintegration of traditional political parties, whose ranks have been thinned by the defection of those who feel past reforms have not helped them.

Venezuela's two main established parties are in disarray. Peru's long-dominant parties have lost ground to an amalgam of independent parties. The two parties that have ruled Colombia for more than a century suddenly face new challengers, as is also the case in Uruguay.

In Argentina, the Peronists, long the country's dominant party, have split into three warring factions, and their rivals in the Radical Party have been equally discredited by the worst economic crisis in the country's history.

None of the five leading candidates in the presidential election on April 27 have been able to win the support of more than 19 percent of voters. But a recent poll showed that if Brazil's president, Mr. da Silva, were allowed to run, more than 50 percent of Argentines would vote for him.

In no other country is the gap between the traditional ruling classes and the majority of the population as wide as in Bolivia. One Western diplomat described the country as Latin America's South Africa — a land of virtual apartheid — dominated for centuries by the descendants of Spanish colonists, while most of its eight million people, indigenous and desperately poor, remained disenfranchised.

Here, the experiment with market reforms has come full circle. President Gonzalo Sánchez de Lozada was the architect of the government's free-market reforms in the 1980's. For a while they tamed inflation and restored growth. But today Bolivia — much like the rest of the region — is mired in recession, unable to create enough jobs for the 100,000 people who join the work force each year.

In February Mr. Sánchez de Lozada was forced to escape from a bullet-riddled presidential palace in a heavily armed motorcade. At the time, nearly 30 people died during a protest against his plans for a payroll tax to close government deficits and meet I.M.F. demands.

His government, just seven months old, is now badly hobbled and its indigenous opponents are energized, foreshadowing what some political analysts say will be the eventual rise to power of an Indian government, Latin America's first in centuries. "After 500 years, the Quechua and Aymara are preparing to recover political power," said Mr. Morales, the leader of the opposition Movement Toward Socialism.

Many of Bolivia's indigenous people see hope in the populist message of Mr. Morales and that of Felipe Quispe, a former rebel who is known here as El Mallku, or the condor.

Mr. Morales, who finished second in presidential elections last year, leads a congressional delegation with 22 Indians among its 35 members. Those allied with him do not control Congress, but they are nearly half of its 157 members and have demonstrated that they can organize potent, economically disastrous street protests.

In their view, Bolivia must take back state companies sold into private hands, end food imports, and reject Washington's efforts for a hemisphere-wide free-trade treaty.

In essence, the idea is to end the vestiges of a modern, free-market-oriented state and return to an agricultural society, with a smattering of mining, that would "regain the philosophy of the Andean soul," as Hernán Vargas, a member of Mr. Morales's congressional delegation, put it.

"The indigenous are looking to take political power, to govern ourselves, not to be governed by whites who have robbed and stolen our natural resources," said Mr. Quispe, who leads a confederation of rural workers.

The idea that Latin America must make a sharp break from American-inspired market orthodoxy percolates among several indigenous movements in the Andes. Mr. Chávez in Venezuela has used similar appeals recently, as have all but one of the five main presidential aspirants in Argentina.

The message is poison to the region's elites, and to the United States, since the indigenous movements oppose Washington's policies to try to end coca growing in Bolivia. Mr. Morales, in fact, began his political career as head of the coca growers' union.

Critics say the nontraditional leaders fail to take note of Bolivia's dependence on foreign loans and trade, as well as the importance of foreign investment in developing the country's most important industry, mining.

"Taking power is fine," Bolivia's president, Mr. Sánchez de Lozada, said in an interview. "But what do you do when you are in power? I do not know how long the economic engine will last exporting just dried potatoes."

<a href=news.pacificnews.org>Commentary, Andrew Reding, Pacific News Center, Mar 21, 2003

Though France took the heat for its promised veto of the U.S. war resolution on Iraq, in fact Latin America was the resolution's defeater. As the rift between Washington and Latin America widens, America's isolation from its neighbors and NAFTA partners is taking its toll.

Much has been made of the split that has developed within the European Union over whether to join Washington in its war with Iraq. Almost unnoticed, though, is the rift that has developed in the Americas, leaving the United States virtually isolated in its own hemisphere.

To put it bluntly, France never got a chance to cast its Security Council veto because opposition from the United States' closest economic partners in Latin America ensured that the resolution could not pass. France may be the scapegoat, but Latin America was the resolution's undertaker.

Both of America's NAFTA partners -- Canada and Mexico -- have broken with Washington over Iraq. Elsewhere in Latin America, the only sizable nation whose leadership backs Washington is Colombia -- a war-torn nation that is the third-highest recipient of U.S. foreign aid after Israel and Egypt.

Canadian Prime Minister Jean Chrétien, whose proposed compromise resolution was labeled a "non-starter" in Washington, says he will not back the military effort in any way. His natural resources minister openly criticized President George W. Bush, saying, "I think he's let not only Americans, but the world, down by not being a statesman."

As recently as last November, President Bush said that "the United States has no more important relationship in the world than the one we have with Mexico." Bush's first presidential visit abroad was to Mexico, and Mexican president Vicente Fox was the first foreign leader to be feted with a state dinner at the Bush White House.

That relationship has now soured. President Fox was disappointed with the White House's unwillingness to pursue immigration reform following the Sept. 11 terrorist attacks. By May 2002, Fox was telling the Council of the Americas in New York, "There can be no privileged U.S.-Mexico relationship without actual progress on substantive issues...and there will be no substantive progress without comprehensively addressing the issue of migration."

In January, Mexican foreign minister Jorge G. Castañeda quit in frustration after failing to secure concessions on migration by aligning Mexico more closely with Washington on foreign policy issues, such as human rights in Cuba.

In the past month, however, Bush unexpectedly found himself needing to ask a special favor of Fox. Mexico had won a two-year seat on the United Nations Security Council in October 2001. Its support was now crucial to passage of the Bush-Blair resolution authorizing use of force against Iraq.

But Fox declined to provide that support, ultimately forcing abandonment of the resolution. It is not hard to see why. Public opinion in Mexico is overwhelmingly opposed to war with Iraq, and Fox's conservative National Action Party faces difficult parliamentary elections in July. Absent a major concession from Washington such as a deal on immigration, a yes vote would have been political suicide at home.

The other Latin American country with a seat on the Security Council -- Chile -- likewise said no. It did so even though it is the only other Latin American country to have concluded negotiations for a free trade agreement with the United States.

With the exception of Colombia, all the other major countries of the region -- Argentina, Peru, Venezuela and giant Brazil -- opposed the resolution. Besides Colombia, only the Central American nations of Nicaragua and El Salvador lined up with Washington.

This is not the first time the Bush administration has found itself isolated in Latin America. When the White House briefly gave its blessing to the abortive military coup against Venezuelan president Hugo Chávez last April, Mexico led 19 Latin American nations in condemning the coup. Only tiny El Salvador lined up with the United States.

Frustrated in its attempt to develop a new relationship with the "colossus of the north," Mexico is again turning southward, reassuming its traditional leadership role in Latin America, and cultivating ties with the European Union. Short of a major change of attitude in Washington, Latin America will pursue its own path toward economic integration, with rising hostility to the United States.

"Anti-Americanism" has been signaled as a primary source of concern in the post-Sept. 11 environment. With anti-Americanism on the rise throughout the Americas, one thing is certain: Washington's indifference to the concerns of its continental neighbors is beginning to compromise its own interests.

PNS Associate Editor Andrew Reding (areding@earthlink.net) is a senior fellow of the World Policy Institute in New York.