- The Washington Times - Wednesday, January 8, 2003

Deadline for Argentina

Argentina's new ambassador is anxiously waiting for the International Monetary Fund (IMF) to decide whether to save his financially crippled country from another economic embarrassment, as a Jan. 17 deadline approaches for a $1 billion loan repayment.

Ambassador Eduardo Amadeo told editors and reporters at The Washington Times yesterday that his government cannot make the payment on time. Argentina, in its fifth year of recession, is already in default with the World Bank.

The IMF is considering rolling over the debt as a temporary measure, while it studies Argentina's progress in digging itself out of its financial mess.

"If we cannot make the agreement, it will be hard for us. We would have to use up our reserves," Mr. Amadeo said. "Our point is that it is a win-win situation. Argentina will be better. The economy will reinforce its positive trend."

President Eduardo Duhalde's government this year predicts 3 percent economic growth, after an 11 percent decline last year.

Mr. Amadeo said Mr. Duhalde is turning around the economy through a combination of tight fiscal and monetary policies that include allowing the Argentine peso to float freely and ending an 11-year policy of pegging the currency to the U.S. dollar.

Inflation is running at 41 percent, but some economists say that figure is not as bad as expected, considering the 70 percent fall in the peso last year.

"We need to recover the trust of the world. We need the IMF seal of approval," the ambassador said.

Mr. Amadeo, an economist, called on the industrialized world to help undeveloped countries by opening their markets and finding "reasonable financial tools" to allow them to meet their debt obligations.

"We have to avoid violent economic cycles. It is bad for governments and bad for people, especially the poor who are the first to lose their jobs and the last to benefit from a recovery," he said.

The financial crisis has caused widespread social unrest, manifested in 16,000 demonstrations last year, Mr. Amadeo said.

But, in another sign of economy recovery, those protests are down to only a few, he added.

Mr. Amadeo said his other goals as ambassador are negotiating for the return of Argentina's world-famous beef to the American market, after a year's ban over health issues, and promoting Argentine wine.

"Drink more Argentine wine," he said. "It makes you smile."

Mr. Amadeo came to Washington, after serving as Mr. Duhalde's spokesman. He was secretary of social development from 1994 to 1998 and then served a year as the country's drug czar. He is also a former member of the Argentine Congress and president of the Bank of the Province of Buenos Aires, the country's second-largest bank.

The ambassador, whose hobby is classic-car racing, is married with five children.

Ireland No. 1

Ireland remained the world's most globalized economy in 2002 for the second year in a row, according to an annual index published by Foreign Policy magazine and the A.T. Kearney international management consulting firm.

The United States, meanwhile, finished 11th, one spot higher than in the previous report.

The "Globalization Index" for 2002, released yesterday, measures 62 countries on factors such as trade and investment links to the rest of the world.

Ireland topped the list "in part because it was one of a handful of countries to avoid the slowdown in global trade and capital flows," the report said.

Ireland attracted $91 billion in foreign capital, up $11 billion from 2001 and nearly $30 billion more than neighboring Britain, which ranked ninth.

Switzerland finished second, holding its position from 2001 and "buoyed by a strong reputation as an international financial center and income payments from investments overseas," the report said.

Saudi Arabia suffered the most dramatic decline, falling to 61st from 37th in 2001, mainly because of declining oil prices and the political fallout from the war on terrorism, the report said.

More details are available at www.foreignpolicy.com and www.atkearney.com.

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