www.upi.com By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 3/6/2003 8:08 AM

RIO DE JANEIRO, Brazil, March 6 (UPI) -- Markets were mixed across Latin America this week as bargain hunters moved in to buy up cheap shares but external worries of war in the Mideast weighed on investors.

In Mexico, the Latin American country most integrated with the U.S. economy, the peso hit a record low on Wednesday.

Analysts say that fear over potential military action in Iraq is punishing Mexico's market the most in the region.

Mexico's peso lost nearly 1 percent Wednesday to end at 11.23 to the dollar. The currency has shed more than 7 percent this year, and one-fifth of its value since last April.

Markets across the region were spooked Wednesday by diplomatic fireworks as France, Russia and Germany vowed to block a United Nations resolution authorizing use of force in Iraq, and the United States responded that it was determined to disarm Saddam Hussein.

The main concerns, as they are around the globe, are how far a war in Iraq would pump up oil prices, and whether the risk aversion of investors in a time of war will drain foreign cash out of Latin America's emerging markets.

A domestic storm hit Argentina on Wednesday as the supreme court there ruled against the government in its conversion of dollar-denominated banking accounts into pesos.

The San Luis province brought a lawsuit against state-run Banco de la Nacion after the province's accounts -- like every other account in Argentina -- were converted from dollars to pesos.

Depositors have been seeking reversal of the decree, as accounts were converted at 1.4 pesos per dollar. The market price of the peso is hovering around 3.2 to the dollar.

Analysts expect the banking sector to suffer mightily if Wednesday's ruling sparks more such lawsuits. Most analysts estimate lawsuits seeking a combined total of $10 billion or more from banks.

It's not clear how the bank ruling may affect Argentina's hard-fought debt-rollover agreement with the International Monetary Fund.

Fund officials are known to be in opposition to a ruling that would force banks to reconvert accounts.

The IMF didn't return inquiries from United Press International on Wednesday, and a fund spokesman refused comment on the matter at a news conference in Washington on Tuesday.

However, an IMF delegation visiting Argentina this week released a statement saying that Argentina's economic plans were "on track" and that it is likely to push ahead completion of the first review of the country's $6.78 billion debt-rollover agreement.

"The financial program supported by the fund is on track, and all end-January quantitative performance criteria were observed with comfortable margins," the IMF statement said.

In Brazil, where markets were shuttered for most of the trading week because of the raucous Carnival holiday, some modestly good news came in the form of a debt upgrade on Wednesday.

J.P. Morgan Chase & Co. said it was upping Brazilian debt to neutral from underweight. The investment bank said it was impressed with the commitment of President Luiz Inacio Lula da Silva to economic austerity.

As for the markets, Brazil's Bovespa stock index rose 1.3 percent last Thursday to 10,126, as investors took cues from Wall Street. Long-distance carrier Embratel rose 4.4 percent. Private bank Unibanco climbed 4.7 percent.

Investors sent the Bovespa up 1.3 percent to 10,280 ahead of the Carnival holiday. Optimism ruled the day, as Morgan Stanley upgraded the country's debt and the government announced a large primary budget surplus for January. Phone giant Telemar rose 2.1 percent.

Brazil's markets were closed Monday and Tuesday for Carnival.

The Bovespa, in a half-day of trading Wednesday, rose 0.24 percent to 10,305.5. The Bradesco bank gained nearly 2 percent, power company Eletrobras added 3.6 percent, while oil giant Petrobras fell 2.5 percent.

In Mexico, the IPC index ended last Thursday up 0.5 percent at 5,900 in light trade. Fixed-line phone company Telmex rose nearly 1 percent, while cement maker Cemex jumped more than 3 percent. On Friday, the index rose to 5,927, as mobile phone operator America Movil lifted the market by gaining 3.5 percent.

The IPC closed flat Monday at 5,926.7. Broadcaster Televisa gained 1.1 percent, while retailer Wal-Mart de Mexico lost 1.7 percent.

Heavy losses in New York on Tuesday drove the IPC down 0.3 percent to 5,911. America Movil lost 0.8 percent, while brewer Modelo lost nearly 1 percent.

Wednesday brought a slight gain to 5,914 for the IPC as investors were sidelined by Iraq woes. Modelo gained 1.26 percent, while the country's No. 2 mobile phone company Iusacell added 2.7 percent.

Argentina's Merval index dropped 1.2 percent to 578.9 on Thursday. Banking shares were hit, as a row grew between the sector and the government over reimbursement for last year's banking freeze. Grupo Financiero Galicia, which controls the nation's largest bank, shed 3.7 percent.

On Friday the index rose 2.57 percent to 593.8. Chemical company Indupa gained 12.5 percent after posting a healthy profit for 2002, sending the market up.

The Merval was flat Monday, ending at 593.9 in thin and rocky trade. Banco Frances lost 2.7 percent. Tuesday saw a gain of 0.44 percent to 596.6. Banco Galicia gained 2.8 percent as investors gained some confidence in the sector.

On Wednesday, the index fell 0.23 percent to 595.1. Galicia fell 3.35 percent, hit hard with the supreme court ruling on banking account conversions. Food group Molinos lost 2.85 percent.

Chile's IPSA index rose 0.9 percent to 1,007 Thursday. Brewer CCU gained 2 percent. On Friday, the index gained 0.8 percent to 1,015. Power generator Endesa gained 2 percent.

Monday brought a slight loss to 1,014 for the IPSA. CCU gained 1.4 percent, while telecom CTC Chile shed nearly 1 percent. On Tuesday, the index ended flat at 1,013. Electricity company Enersis -- which controls Endesa -- shed 2.5 percent.

Wednesday brought a flat close of 1,013 in uneventful trade.

The IBC index in Venezuela ticked up 0.1 percent to 8,157 Thursday. Friday brought a gain of 4.3 percent to 8,509 in light trading.

The market was closed Monday and Tuesday for the holiday, then lost 4.16 percent to 8,156 on Wednesday as Nacional Telefonos de Venezuela -- which represents 40 percent of the index -- lost 2.7 percent.

english.pravda.ru 10:00 2003-03-03

Malaria cases dramatically rose since the beginning of the new millenium in Latin America. According to last reports from the Pan American Health Organization (PAHO), Colombia registers the highest increases with a 91.6%. In what looks like an Andean epidemic, Venezuela, Ecuador and Peru follow Colombia at the top of the ranking.

Specialists warn on the potential spread of cases in those countries if not immediate policies are implemented. For instance, Colombia had 193,542 cases in 2002, but 5,027,427 are at serious risk of becoming infected at country's rural areas.

An almost eradicated disease in the 1990's, malaria has come back as major worrying for health authorities of the Andean countries. The aggravation of the social situation after the collapse of the neo-liberal programs, the continuos migration of farmers looking for jobs at the illegal plantations, environmental changes are some of the reasons for this reality.

In some Colombian States over one third of the population are at risk of catching malaria. An official internal report of the Ministry of Social Care estimates in 24 million, the number of people that could die of malaria in Colombia.

In Peru, malaria cases went up 14% between 2001 and 2002; Ecuador's figures are slightly better: 10.5% during the same period of time. Venezuela is an special case: one of the largest economies of the region thanks to the exports of oil faces an increasing in malaria rate of 32.7% according to PAHO.

Brazil is an exception to the rule. Traditionally the most affected country, made an extraordinary progress on this field turning back its figures. Between 2001 and 2002, malaria cases decreased in a 36%.

Malaria can be cured, nowadays. However, mistreatment and lack of controls can make this ancestral disease mortal among the impoverished rural population. Actually, national Governments count with eradication programs financed by international institutions, but the money does not reach its destiny for several well-known reasons.

Hernan Etchaleco PRAVDA.Ru Argentina

www.chron.com Feb. 22, 2003, 6:43PM By TONY SMITH New York Times

SÃO PAULO, Brazil -- With crude prices edging toward $40 a barrel and a shortfall looming in world production, South America's two main oil producers, Petrobras of Brazil and the Spanish-owned Repsol YPF of Argentina, might be forgiven for spotting a silver lining among the clouds of war gathering over Iraq.

Remote from the potential combat zone and convenient to the United States, both companies could find ready buyers for stepped-up oil exports and give the economies of their home countries a welcome injection of fresh petrodollars.

But in fact, analysts say, neither company can expect to reap a windfall because of economic volatility, changing government regulations and growing political pressure to keep a lid on fuel prices at home.

Energy analysts say a war in Iraq and the continuing instability in Venezuela could combine to depress world daily oil production by 3.5 million barrels, to about 73 million barrels. Most OPEC nations are already running close to full capacity, so the shortfall would have to be made up by non-OPEC suppliers.

Increased output in Russia and Norway would probably fill part of the gap; the remainder is where the opportunity lies for Latin producers like Mexico, Brazil and Argentina.

"Anyone who is producing will benefit from higher prices," said George Beranek, an analyst at PFC Energy in Washington. "Petrobras and YPF will also benefit, provided they can get the world price."

That last proviso is crucial.

With the advent on Jan. 1 of a new left-leaning government in Brazil, Petrobras appears likely to lose some of the autonomy it has won over the last decade, especially regarding prices. The Brazilian state owns 56 percent of the voting shares in Petrobras and names its top management.

President Luiz Inacio Lula da Silva made two political appointments that will effectively tame Petrobras: A little-known senator, Jose Eduardo Dutra, will take over the company's presidency from the market-friendly Francisco Gros, and Sergio Gabrielli, an academic economist with little commercial experience, will become chief financial officer.

Petrobras' refinery prices for fuel are now 23 percent lower than those in the United States, a situation that the company cannot maintain indefinitely. To run its refineries efficiently, it must import some lighter oil to mix with its own heavy crude and pay the going world rate for the imports.

Gabrielli said Thursday that Petrobras would "alter prices as soon as possible," but that a recent surge in inflation might prevent the government from allowing any price increases for a while.

Despite its dependence on imports of light crude, Petrobras, Brazil's largest industrial company, has grown rapidly to become an aggressive player in global markets. Last year it was Brazil's top exporter, with much of its success coming in refined products rather than crude.

In January, it was able to double its exports of gasoline, mainly to the United States, after supplies from Venezuela all but ceased because of a nationwide strike against President Hugo Chavez.

Petrobras is producing more oil than ever -- 1.62 million barrels a day early this month. According to Fabiana Fantoni, oil analyst at Tendencias, a São Paulo-based consultancy, and it has room to expand its exports of 235,000 barrels a day by about 8 percent.

Doing so might bring in $500,000 a day in extra profits, Fantoni estimated -- "not an extraordinary increase, but it would certainly be good for Brazil's trade balance."

Still, she said, "Petrobras could increase its profits greatly if it kept its pricing at international levels." Though it stepped up production last year, Petrobras posted an 18 percent drop in net profits, to $2.25 billion for 2002.

After years of trade deficits, Brazil recorded a $13.2 billion surplus last year, offsetting a slide in foreign direct investment, which had financed past deficits.

At the moment, though, tackling inflation seems to be the government's prime concern. The central bank has raised interest rates twice this year, despite da Silva's campaign pledges for easier credit.

Unlike Brazil, Argentina is a net oil exporter. But it is still gingerly recovering from a four-year economic slump that broke the Argentine peso loose from its dollar-pegged moorings and upended the country's politics. And like his Brazilian counterpart, President Eduardo Duhalde has pressed his country's oil companies to limit their exports and hold the line on domestic prices to nurture the fragile domestic market.

So Repsol YPF "can only export a certain part of its production," said Ian Reid, oil analyst at UBS Warburg in London, "and there's a question mark over whether it can pass on price hikes to consumers."

What oil it can ship abroad does not earn the company what it might: There is a 20 percent tax on exports and regulations saying that at least 30 percent of export revenues must be brought back to Argentina to be spent or invested.

At one point, the central bank thought the figure should be 100 percent. According to an official at another oil company in Buenos Aires, there is widespread concern in the industry that the economy minister, Roberto Lavagna, wants to increase the export tax rate now that world crude prices are above $35 a barrel.

In January, Argentine oil companies reached an agreement with the government to freeze prices for three months and to supply crude to Argentine refineries at $28.50 a barrel, well below the current world price. Repsol YPF has been leading the oil sector's negotiations with the government.

washingtontimes.com EDITORIAL • February 18, 2003

     Country by country, Latin America is boiling over. From the fatal police-military clash last week in Bolivia, to the ongoing social upheaval in Venezuela and economic calamity in Argentina, the region is showing signs of distress. Paraguay, Ecuador and Uruguay are tottering financially.      While the Bush administration has wisely made its pursuit of terrorists its first priority, the problems in Latin America have grown severe enough to merit the attention of the White House.      Last Wednesday and Thursday, 23 persons were killed and scores were injured in Bolivia after the military opened fire on a peaceful protest by striking police officers. President Gonzalo Sanchez Lozada, who won in a tightly contested election, has been severely weakened politically by the violence. In Venezuela, more than 200 people have killed or injured since spring, when a coup briefly ousted President Hugo Chavez. The country has become so polarized, that groups against and supportive of Mr. Chavez are arming themselves. That situation remains highly volatile. Argentina, meanwhile, has succumbed to full-blown economic crisis after suffering several years of recession. And on Friday, Paraguay defaulted on some of its $20 million in dollar-denominated debt, as bond holders exercised their right to cash in their bonds before they mature in 2005. Ecuador and Uruguay will have considerable trouble paying their public debt of about $11 billion each.      On Wednesday, President Bush spent 40 minutes with Ecuadorean President Lucio Gutierrez. The head of state of Ecuador, with a population of 13 million and a gross domestic product of $21 billion, ordinarily wouldn't get so much time with the leader of the world's only superpower. But Mr. Bush clearly is interested in supporting stability wherever he can in the Western hemisphere.      A week ago, the White House offered to eliminate tariffs on all imports of textiles and clothing from 34 nations in the Americas by 2010, as part of negotiations for creating a free-trade zone in the Western hemisphere by 2005. The administration also has proposed cutting tariffs on about 65 percent of U.S. imports of consumer and industrial goods from the Americas when the free-trade zone becomes a reality, and to eliminate all tariffs on these goods by 2015. Also, 56 percent of agricultural imports would enter tariff-free once the zone is established.      The Bush administration is certainly on the right track in adopting measures that will allow Latin America to develop economically in the long-term. But it also should consider granting the region more immediate tariff relief, given the scale of current economic.      While Latin America's current economic crises are certainly troublesome, the Bush administration must steer clear of such quick fixes as bailouts, which certainly could cause more problems in the long term. Those troubled nations would best be served with foreign aid that focuses on micro and small businesses — rather than large-scale public works projects, for example. The United States clearly has a stake in Latin America's present and future, as Mr. Bush seemingly is aware.