www.sfgate.com Friday, January 24, 2003

(01-24) 15:07 PST MEXICO CITY (AP) --

Mexican stocks closed lower Friday in line with U.S. declines as investors pulled out of the market ahead of expectations of an American attack on Iraq.

Mexico's key IPC index closed down 41.88 points or 0.7 percent to 6,012.56. Volume totaled a thin 45.6 million shares worth 585.2 million pesos.

The peso tapped a new historical closing low Friday on the war jitters. Mexico depends on U.S. consumers to purchase almost 90 percent of its exports. Attacks in the Middle East would likely further bruise the U.S. economy and consumer spending.

Equity decliners included brewer Grupo Modelo's C shares, which lost 2.5 percent to 23.78 pesos, and financial group BBVA-Bancomer's B shares, which dropped 1.6 percent to 8.11 pesos.

SAO PAULO, Brazil (AP) -- Brazil's main stocks index slumped to its lowest level since mid-December, as investors fled local equities on fears an American-led invasion of Iraq is drawing ever closer.

The Sao Paulo stock Exchange's leading Ibovespa index tumbled 3.3 percent to end at 10,783, its lowest close since Dec. 16.

The submission of a report on the state of Iraq's weaponry -- to be submitted by U.N. inspectors Monday -- could be a watershed moment in the standoff between Iraq and the United States.

Markets, worried that a war in Iraq could further feed risk aversion among equities investors, were anxious ahead of the report's release, traders said.

War in Iraq could also endanger Brazil's economy. The local currency has already depreciated significantly, falling Friday to its weakest level in more than a month. And an extended spike in crude prices could feed into inflation for net oil importers like Brazil.

Oil giant Petrobras, which could be hurt by the cost of importing more expensive crude, fell 4.9 percent to 45.11 reals.

Utilities Eletrobras and Eletropaulo also declined, shedding 5.9 percent and 3.4 percent to finish at 20.13 reals and 28.10 reals, respectively.

BUENOS AIRES, Argentina (AP) -- Argentine stocks closed down Friday, despite the decision by the International Monetary Fund's executive board to approve a debt rollover accord for the South American nation.

Thee IMF approved a deal that will roll over of some US$6.8 billion in debt payments the South American nation owes the international lender between January and August.

The deal could open the way to similar rollover accords for Argentina with the World Bank and the Inter-American Development Bank.

Analysts said the negative reaction of blue chips came because traders had already discounted the IMF accord at the turn of the year and were now looking to other themes.

In particular traders were concerned by the battle within the Peronist party over whether to hold a primary vote.

On Friday, a Peronist Congress organized by President Eduardo Duhalde decided to scrap the ballot, as the head of state wants.

But on Thursday, a federal judge ordered the Peronists to hold the primary, responding to a legal claim demanding primaries go ahead by Duhalde's party rival, former President Carlos Menem, who is seeking a third term in office.

The blue chip Merval Index closed down 10.34 points, or 1.81 percent, to 557.82 points. The broader General Index was down 355.95 points, or 1.31 percent, to 26,685.00 points. Volume was a modest ARS44.94 million.

Dragging the Merval down once again was energy giant Perez Companc. The share, which accounts for around one quarter of the market, was 4.16 percent lower at 2.30 pesos. The company continues to be negatively affected by the crisis in Venezuela, where the company produces much of its oil.

Carmaker Renault was one of the few blue chips heading higher. It closed up 1.61 percent to 1.26 pesos.

SANTIAGO, Chile (AP) -- Chilean share prices fell across the board Friday in response to the steep decline in U.S. share prices.

The blue-chip IPSA index ended down 1 percent at 993.97 points, from 1,003.95 points, and erasing all gains made in the three weeks of trading since the beginning of the year.

The narrower Inter-10 index of more liquid, internationally traded Chilean shares fell more steeply, dropping 1.4 percent to 100.26, setting the index back almost to where it stood Jan. 2. The broader-based IGPA index slipped to 4,985.22 from 5,000.97, backtracking 0.3 percent. Volume was low at 5.47 billion pesos.

Telecommunications company CTC lost 1.8 percent.

www.sfgate.com Friday, January 24, 2003

(01-24) 15:07 PST MEXICO CITY (AP) --

Mexican stocks closed lower Friday in line with U.S. declines as investors pulled out of the market ahead of expectations of an American attack on Iraq.

Mexico's key IPC index closed down 41.88 points or 0.7 percent to 6,012.56. Volume totaled a thin 45.6 million shares worth 585.2 million pesos.

The peso tapped a new historical closing low Friday on the war jitters. Mexico depends on U.S. consumers to purchase almost 90 percent of its exports. Attacks in the Middle East would likely further bruise the U.S. economy and consumer spending.

Equity decliners included brewer Grupo Modelo's C shares, which lost 2.5 percent to 23.78 pesos, and financial group BBVA-Bancomer's B shares, which dropped 1.6 percent to 8.11 pesos.

SAO PAULO, Brazil (AP) -- Brazil's main stocks index slumped to its lowest level since mid-December, as investors fled local equities on fears an American-led invasion of Iraq is drawing ever closer.

The Sao Paulo stock Exchange's leading Ibovespa index tumbled 3.3 percent to end at 10,783, its lowest close since Dec. 16.

The submission of a report on the state of Iraq's weaponry -- to be submitted by U.N. inspectors Monday -- could be a watershed moment in the standoff between Iraq and the United States.

Markets, worried that a war in Iraq could further feed risk aversion among equities investors, were anxious ahead of the report's release, traders said.

War in Iraq could also endanger Brazil's economy. The local currency has already depreciated significantly, falling Friday to its weakest level in more than a month. And an extended spike in crude prices could feed into inflation for net oil importers like Brazil.

Oil giant Petrobras, which could be hurt by the cost of importing more expensive crude, fell 4.9 percent to 45.11 reals.

Utilities Eletrobras and Eletropaulo also declined, shedding 5.9 percent and 3.4 percent to finish at 20.13 reals and 28.10 reals, respectively.

BUENOS AIRES, Argentina (AP) -- Argentine stocks closed down Friday, despite the decision by the International Monetary Fund's executive board to approve a debt rollover accord for the South American nation.

Thee IMF approved a deal that will roll over of some US$6.8 billion in debt payments the South American nation owes the international lender between January and August.

The deal could open the way to similar rollover accords for Argentina with the World Bank and the Inter-American Development Bank.

Analysts said the negative reaction of blue chips came because traders had already discounted the IMF accord at the turn of the year and were now looking to other themes.

In particular traders were concerned by the battle within the Peronist party over whether to hold a primary vote.

On Friday, a Peronist Congress organized by President Eduardo Duhalde decided to scrap the ballot, as the head of state wants.

But on Thursday, a federal judge ordered the Peronists to hold the primary, responding to a legal claim demanding primaries go ahead by Duhalde's party rival, former President Carlos Menem, who is seeking a third term in office.

The blue chip Merval Index closed down 10.34 points, or 1.81 percent, to 557.82 points. The broader General Index was down 355.95 points, or 1.31 percent, to 26,685.00 points. Volume was a modest ARS44.94 million.

Dragging the Merval down once again was energy giant Perez Companc. The share, which accounts for around one quarter of the market, was 4.16 percent lower at 2.30 pesos. The company continues to be negatively affected by the crisis in Venezuela, where the company produces much of its oil.

Carmaker Renault was one of the few blue chips heading higher. It closed up 1.61 percent to 1.26 pesos.

SANTIAGO, Chile (AP) -- Chilean share prices fell across the board Friday in response to the steep decline in U.S. share prices.

The blue-chip IPSA index ended down 1 percent at 993.97 points, from 1,003.95 points, and erasing all gains made in the three weeks of trading since the beginning of the year.

The narrower Inter-10 index of more liquid, internationally traded Chilean shares fell more steeply, dropping 1.4 percent to 100.26, setting the index back almost to where it stood Jan. 2. The broader-based IGPA index slipped to 4,985.22 from 5,000.97, backtracking 0.3 percent. Volume was low at 5.47 billion pesos.

Telecommunications company CTC lost 1.8 percent.

news.pacificnews.org El Norte Digest Compiled and Edited by Marcelo Ballve, New California Media, Jan 23, 2003

“El Norte” is a weekly report on news and views from the Latino press and communities.

• Latino Media Interpret South America’s ‘Left-Turn’ Differently
• Deportees from U.S. Flooding into Border Area
• Bush’s Affirmative Action Position Attacked by California Latinos
• U.S. Colombians Coalescing Politically, Economically

Latino Media Interpret South America’s ‘Left-Turn’ Differently

With populist presidents inaugurated in both Ecuador and Brazil, major mainstream U.S. newspapers speculated about a continent-wide shift to the left in South America. But Latino editors and analysts said the leaders showed no clear signs yet of breaking with market-friendly policies.

On Jan. 1, Brazil inaugurated Workers’ Party leader Luiz Inacio “Lula” da Silva, who is a former union leader. Since Brazil is Latin America’s largest nation and economy, the country’s elections were watched as a barometer of political thought in the region.

But Brazzil, a Los Angeles-based monthly published for overseas Brazilians, cautions in its January 2003 issue of making too much of the election results. In the cover article, “So this is Lula?” Ted Goertzel of Rutgers University points out that Lula selected a multi-millionaire connected to evangelical Christians as vice president and that Henrique Mereilles, former head of BankBoston, was picked as Central Bank president. “Lula’s government will be one of continuity. … He will easily manage the disappointment of the ideological leftists.”

In Spain’s widely read El País daily, former Uruguayan president José María Sanguinetti writes, “In reality, Latin America is not being pushed by an ideological wave in either direction.”

Guillermo Martinez, writing Jan. 18 in the New York Spanish-language daily El Diario/ La Prensa, says Ecuador’s new president, Lucio Gutierrez was relying principally on the support of indigenous members of his coalition, rather than actively courting any Marxist-inspired faction.

President Gutierrez, a former coup leader and military officer, backtracked already on his opposition to having the U.S. dollar as Ecuador’s currency. Martinez says the new president was also unlikely to adopt the same incendiary class rhetoric used by President Hugo Chavez in Venezuela.

Deportees from U.S. Flooding into Border Area

U.S. homeland security efforts to increase border surveillance and speed up deportation of illegal immigrants are beginning to impact fragile Mexican border cities, which are often the first stop for returned migrants. In one city deportees are overwhelming social service agencies.

Nuevo Laredo and Tijuana have seen sharp increases recently in the number of deportees turning up on city streets, according to Frontera NorteSur, a daily New Mexico-based news service.

Nuevo Laredo’s daily El Mañana newspaper cites figures documenting a dramatic rise in deportees: in January 2001, 296 Mexicans were returned; in 2002, the number was 718; in the first two weeks of January 2003, over 2,000 Mexicans were returned over the bridge linking the city to Texas.

In Tijuana, the daily Frontera newspaper said in mid-2002 that the number of deportees returned to Mexico through the city climbed sharply from low 2001 levels to a flow of 100 deportees per day arriving from San Diego.

In Nuevo Laredo, the Casa del Migrante, an immigrant aid organization, has been overwhelmed by the influx and can no longer house and feed deportees. The city’s Civil Protection Unit was activated to provide emergency housing and help transport migrants home.

The U.S. Immigration and Naturalization Service has made speedy deportation a hallmark of its ongoing overhaul under the planned Department of Homeland Security. One new measure—called “mandatory surrender”—was approved last year and says that from that date forward, immigrants with “removal” orders handed down against them must turn themselves within 30 days or be prohibited from contesting their deportation. Before, illegal immigrants or visa violators could stave off deportation by appealing to immigration judges.

Bush’s Affirmative Action Position Attacked by California Latinos

In California, where the state’s university system has already abolished using racial criteria in its admissions, the Latino media has blasted the White House for opposing affirmative action at the University of Michigan in a U.S. Supreme Court case.

On the popular LatinoLA web portal, two commentators made the case for affirmative action. Karen Salazar, an undergraduate at UCLA, writes that California is an example of how abolishing affirmative action would lead to the “resegregation” of higher education. She says that while the Black and Latino population in California boomed in high schools, minority students’ representation in the university system declined precipitously since affirmative action was abolished in 1996.

Attorney Sylvia Trujillo, a Harvard and University of California graduate, says she was “outraged” that President Bush implied that universities had somehow “overvalued” the importance of including the perspectives of minorities in the student body.

“Bush is looking for a fight that he didn’t need,” says the La Opinión daily in Los Angeles, with over 600,000 daily readers. In the Jan. 19 editorial, the newspaper said “diversity is a hugely important goal for a teaching institution that operates in a society of inequalities, with a background of racism and discrimination and abysmal economic disparities.”

Raul Caballero, a Texas journalist writing in the same newspaper, highlighted U.S. Secretary of State Colin Powell’s public statements dissenting with the president’s position the day before the Martin Luther King holiday. “(Powell’s dissent) made me feel pain and pride.”

Latino community organizations such as the National Council of La Raza and the Mexican American Legal Defense and Education Fund have urged the White House to support affirmative action.

U.S. Colombians Coalescing Politically, Economically

After a decade of heavy immigration, U.S.-based Colombians are beginning to make economic and political ripples in the Northeast and Florida. Colombian businessmen are investing heavily in U.S. real estate, while some are forging ties with other Latinos to launch political careers.

Many Colombians arriving are professionals fleeing the instability and conflict of the 1990s, and their political impact is being felt quickly, both in Colombia and in the United States. In a Jan. 21 report, Miami’s Spanish-language daily El Nuevo Herald says some $5 billion in Colombian capital had been invested in the United States, notably in Miami real estate, during the past five years. The article estimates that there could be over 2 million Colombians in the United States, with 250,000 in South Florida.

The movement in money has been accompanied by some political clout. Juan Carlos Zapata, a Colombian representing a district in the Miami area, was voted into the Florida legislature according to the Nuevo Herald. Zapata has attributed his victory to close ties with the state’s 1 million-strong Cuban community. In Rhode Island there are Colombians on city councils, as well as one representative in the state legislature.

The U.S. Association of Colombian-American Organizations, or NACAO for its syllables in Spanish, plans to meet in September in New York. According to New York Spanish-language daily El Diario/La Prensa, the organization will push for a higher profile for Colombians within U.S. Latino organizations. They also want overseas Colombians to be able to vote for their own representative in their home country’s legislature.

www.washingtonpost.com Special to washingtonpost.com Thursday, January 23, 2003; 5:09 PM

Like the brilliance of fireworks, U.S.-Mexican relations at the start of the Bush-Fox era flared with promise and hopeful rhetoric. Two years later, all that is left is a mere fizzle.

Jorge Castañeda, the Mexican foreign minister and soul of that brief Pyrotechnic Age, has stepped down. His replacement, economist Luis Ernesto Derbez, made his first visit to the United States this week. By the time he left, it was clear that, certainly in terms of style, things have changed. More substantive revisions seem to be on the horizon, too.

Mexican President Vicente Fox has put in place a new team with the potential to fundamentally change the way Mexico works with Washington. With a host of issues to discuss and enormous potential for mutual assistance, the shuffle seems to open the way for a more down-to-earth relationship. But the stakes are high.

It is understood that internal forces, not external ones, spawned the most recent changes in Fox's Cabinet. Derbez and Fernando Canales, who replaced Derbez as economy secretary, belong to Fox's own National Action Party, the PAN. Castañeda was a leftist loner, a member of no party.

By giving the posts to a pair of the faithful, Fox moved to reconcile his presidency with his party, which had been feeling ignored. That gesture is particularly important in light of legislative elections scheduled for July in which PAN hopes to win more seats in Congress and break the legislative logjam on Fox's reforms.

Their future rides on these elections. Washington has a critical role to play, albeit a delicate and potentially harmful one. With the right moves, President Bush could help revitalize the momentum for democratic reform ignited by Fox's election more than three years ago. But a miscalculation could be el golpe de gracia-the kiss of death-that would condemn Fox to a historical footnote, little more than a six-year interruption in the decades-long reign of the Institutional Revolutionary Party (PRI).

Fox and the PAN need results somewhere soon.

Immigration is still at the top of Fox's priorities. But expectations have reached a point where his opponents will portray anything short of full amnesty for millions of Mexicans illegally in the United States as a failure.

Some U.S. Republican sources say a plan that would offer temporary work visas is more achievable than amnesty. Democrats here would oppose this as too limited. Fox would need to decide if something is better than nothing, and fight the good fight at home to make it a political gain.

Trade is also at play. Under provisions of the North American Free Trade Agreement, nearly all tariffs on agricultural products were eliminated at the beginning of this year, throwing Mexican farmers into direct competition with their heavily subsidized U.S. counterparts. It is an unfair competition, the campesinos contend, without more help from their government.

In the meantime, the two sides are negotiating an exemption for the Mexican poultry industry, most hard-hit by the changes. That would be a win for Fox, but the talks have been stalled by Washington's apparent reluctance to risk setting a worrisome precedent.

Fox needs real progress on the economic front to silence some of his most outspoken critics. With unemployment rising and foreign direct investment falling, Fox's choice of a former World Bank economist to succeed a leftist intellectual as foreign minister was no accident.

U.S. and Mexican officials have been working on a little-known initiative to bring investment to regions in Mexico least benefited by NAFTA and that fuel migration to the United States. The so-called "Partnership for Prosperity" could use the undivided attention of a high-powered Bush official to get the kind of private interest it would require and to demonstrate Fox's sway in Washington.

There is no doubt that Bush also stands to win from helping his friend. Fox's government is becoming an ever more enthusiastic partner in Washington's efforts to strengthen security in the region. Fox's popularity among Hispanics in the United States also adds to Bush's appeal for his reelection bid next year. And perhaps more critically, Fox's attempts to reform the corrupt and inefficient Mexican oil industry, the third-largest U.S. supplier, have gained new urgency here as war in the Persian Gulf looms and Venezuela, the No. 5 U.S. supplier, wrestles with a profound political crisis.

The flash and boom may have gone out of the bilateral relationship. But this time, Mexico needs the steady burn of real progress with Washington.

www.heraldtribune.com The Associated Press

A growing consensus has emerged among Latin American nations on the need to coordinate their efforts to combat drugs and terrorism, the head of the U.S. Southern Command said Thursday.

Gen. James Hill said a two-day meeting of U.S. ambassadors to seven Latin American countries at SouthCom underscored the importance of increased communication and coordination to battle the drug networks that help fund terrorist groups.

"The problem in Colombia is Brazil's problem. The problem in Colombia is Chile's problem. The problem in Colombia is Argentina's problem. And they're all going to have to work together," Hill said.

U.S. ambassadors to Bolivia, Brazil, Colombia, Ecuador, Panama, Peru and Venezuela took part in the Andean Ridge Chiefs of Mission Conference that concluded Thursday.

The U.S. military has taken an expanded role in recent months in Colombia, where rebels have waged war for 38 years against a succession of elected governments.

Anne Patterson, U.S. ambassador to Colombia, told reporters this month that 70 U.S. Army trainers had arrived to train 6,500 Colombian soldiers for three months to protect a key oil pipeline from attacks by rebels.

The deployment of the members of the 7th Special Forces Group, based at Fort Bragg, N.C., followed a Congress-approved decision by the Bush administration that U.S. military assistance should be expanded into helping Colombia combat the rebels.

Previously, U.S. military aid and training was restricted largely to battling cocaine production, which rebels and rival paramilitary gunmen profit from, fueling the war.

Hill said the region's most pressing problem includes the "growing influence of drug money and drug corruption on democracies.

"It is pervasive and it is destabilizing and that's something that we all have to take a hard look at," Hill said.

Hill said officials had a "free-ranging" discussion about the recent political turmoil in Venezuela with U.S. Ambassador Charles Shapiro but declined to elaborate. He said SouthCom continues to monitor the situation like any other country in the region.

"That is a situation that's up to the people of Venezuela acting in construct within their own democracy to work out, not for SouthCom," Hill said.

Southern Command oversees U.S. military activities in 32 nations and 12 dependencies, from Guantanamo Bay Naval Base in Cuba to Plan Colombia, the $1.7 billion aid project to strengthen Colombia's military and counter-drug operations.