Latins expect minor repercussions from slowdown
But meeting of economic experts in Chile faces protests
BY JANE BUSSEY
SANTIAGO, Chile -- The world's major economies are struggling
and social protests in Latin America are gathering strength, but the captains
of banking and finance have
come to Chile's capital to celebrate another year of the free-market revolution that has transformed the region.
The occasion -- amid lavish parties thrown by investment bankers -- is the annual meeting of the Inter-American Development Bank, opening today.
Buoyed by the conviction that the Latin economies, many of them
poster children for the deregulation and trade liberalization preached
by Washington, have strong
structures, finance chiefs predict only minor repercussions from an economic slowdown in the United States, Japan and the financial crisis in Argentina.
``The economic outlook is currently based on a 3.5 percent estimate
for growth for the region,'' said Enrique Iglesias, president of the Inter-American
``But we are dependent on what happens in the rest of the world, the international circumstances, which are complex and problematic.''
The development bank -- supported by contributions from Canada,
the United States and countries in Latin America and the Caribbean -- has
come under attack from
critics, who charge its approach is a recipe for increasing inequality between rich and poor.
Others charge the bank lends too much to the wealthier Latin countries, which end up in tight financial straits, instead of extending more loans to the poorer nations.
Human rights activists have staged several marches protesting
policies handed down by multilateral lending institutions in Washington.
Although Chilean riot police have
blocked marchers from nearing the ornate Mapocho cultural and convention center where the activities are taking place, protesters have scheduled another demonstration
aimed at today's opening meeting.
Iglesias acknowledged the critics, noting that besides assessing
the current economic situation and the bank's performance, representatives
would discuss the role of
multilateral lending institutions in directing economies and development.
Other leaders of global economic policy dismissed the charges of critics.
``Obviously as a representative of the International Monetary
Fund, I don't agree,'' said Eduardo Aninat, deputy managing director of
the Fund, the multilateral agency
overseeing economic policy in the developing world.
``The Fund has often been the scapegoat,'' said Aninat, who formerly headed Chile's Finance Ministry.
``Thanks to the support of the World Bank, the Inter-American
Development Bank and the International Monetary Fund itself, Latin America
could at last grow in the 1990s
at rates that were very different from the very mediocre rates in the 1970s and in the 1980s.''
In the past 10 years, Latin America has become a focus for global business, with billions flowing to support growth in energy, telecommunications and new manufacturing.
In the hallways, the chief discussion is Argentina, which faces
a possible break-up of its ruling coalition after new Finance Minister
Ricardo López Murphy announced a
tough new austerity program Friday night.
Top officials publicly deny the possibility of a devaluation of
the Argentine currency or a default on the government's $125 billion debt,
but both possibilities are on the
minds of bankers and investors in Santiago for the bank meeting.
Early Sunday, former Argentine Economics Minister Domingo Cavallo
abruptly left the gathering in Santiago, where he was supposed to meet
executives, and headed back to Buenos Aires for talks with President Fernando de la Rúa.
The Argentine president is expected to announce that Cavallo will
join his government as chief of the Cabinet in an attempt to shore up domestic
and international support
for the latest belt-tightening.
López Murphy and Cavallo are expected to be in Santiago today to promote the measures.
Santiago has been a frenzy of activity since Wednesday, with more
than 6,000 commercial bankers, financial analysts, bank employees, journalists
and support staff on
hand for the three-day meeting.
The Grupo Santander Central Hispano, a Spanish financial group
that has bank holdings throughout Latin America, hosted a dinner for participants
at the Castillo Hidalgo,
a 19th Century fortress on a hilltop in downtown Santiago.
Serenaded by the Santiago Symphony Orchestra and entertained by
indigenous dancers, hundreds of international bankers and members of Chile's
dined on finger-size shrimp, crab claws, platters of oysters and thick Chilean steaks.
Credit Suisse, the investment bank, tonight brings in the Gypsy Kings for their bash.
Topics at bank seminars have included improving circumstances
for women in the workplace in Latin America to a daylong meeting Sunday
addressing what is hampering
economic growth in the region.