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Costa
Rica also to issue debt in dollars!
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major Latin American bond markets
looking volatile in 2003 and markets
hungry for higher yields, debt from the
small nations of Central America could
catch the eye of investors.
Costa
Rica, Panama, El Salvador and Guatemala,
whose small economies are dominated by
coffee, bananas, sugar and tourism, plan
to issue dollar-denominated sovereign
debt on international markets this year,
with Costa Rica and Guatemala leading
off this month.
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Costa
Rica's Finance Ministry said it will
launch a $450 million bond offer in
January, led by Deutsche Bank, but
declined to give an issue date.
Guatemala,
the biggest economy in Central America
with gross domestic product of $45
billion in 2001, said it aims to sell
$500 million in new paper on Jan. 20,
although it has yet to set to the terms
of the offer.
Panama hopes to
issue around $250 million later this year,
according to Deputy Finance Ministry Domingo
Latorraca, while El Salvador's Finance
Ministry has set either June or July as the
date for its bond sale.
Analysts put
the El Salvador offer at some $300 million.
There will be takers for debt, analysts say,
despite rising fiscal deficits in the four
countries, as investors look for higher yields
and assume more risk. Yields are around 7
percent to 9 percent on Central American
bonds, seen as medium risk, compared with 3
percent to 4 percent on dependable U.S
Treasuries.
A five-week-old
general strike has brought Venezuela's economy
to a halt, while Argentina appears hard
pressed to prepare for elections in April amid
economic malaise.
Uncertainty in
Brazil over the direction of the new
government makes the relative stability of
Central America look attractive. This for a
region that in the 1980s was known more for
its civil wars and death squads than its
credit ratings.
Mexico debt,
however, remains in high demand. On Thursday
Mexico milked market optimism, doubling a
planned sovereign bond sale to $2 billion.
According to
Rafael Barraza, former president of El
Salvador's Central Bank, Central America
should benefit from the pick-up of the U.S
economy in 2003.
"Negotiations
for a free trade pact between Central America
and the U.S. will also give investors
confidence," Barraza said. The United
States and five Central American nations,
Costa Rica, El Salvador, Guatemala, Honduras
and Nicaragua, launched free trade talks on
Wednesday.
In April, El
Salvador sold $500 million in 30-year
international bonds, the first Central
American country to issue a 30-year bond. El
Salvador again went to market in July, issuing
$300 million in nine-year bonds. El Salvador
is one of Latin America's few investment grade
issuers. Fitch and Moody's both rate it
investment grade, but not Standard &
Poor's, which rates it BB, giving the same
rating to Costa Rica, Guatemala and Panama.
The popularity
of Central American debt may not last beyond
2003, however. Still seen as an exotic credit
popular for its scarcity value, continued
issues of the region's debt could damage that
image and snap off demand, analysts say.
Panama recently
disappointed investors with a weak tax reform,
bringing in only half of the $120 million
initially projected. Guatemala is struggling
with the three-year-old collapse in world
coffee prices, dealing a severe blow to its
export base.
Costa Rica is
currently running a budget deficit of 4.4
percent of gross domestic product, while El
Salvador has a fiscal gap of 3.3 percent.
A
Bridge too far...?
From
our local correspondent.
| Many
bridges that are part of the Pan
-American Highway are becoming more
dangerous as they age and much needed
maintenance is often not performed.
More
damage is being caused by natural
erosion, a result of the torrential
rains and other seasonal shifts.
Especially in the southern zone, bridge
structures have deteriorated to a point
were safe crossing is almost impossible.
Some work
was started last December but for some
crossings it may be too late. With high
levels of the rivers during the rainy
months and the continued use of these
structures by heavy vehicles, the
damaging effects are outpacing the
repair work. |

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Even new bridge
construction is far from ideal. It is the
major hold-up regarding the highway
construction between San Jose and Jaco. And on
existing roads, like the one leading from Jaco,
through Parrita to Quepos, new bridges are
being built but at a snail's pace.
All over Costa
Rica, bridges are becoming unstable and at
times even collapse. About eighteen months
ago, the bridge outside of Santa Eulalia, near
Atenas collapsed and a crossing truck fell 14
meters into the river below. Fortunately, the
driver escaped with minor injuries. But like
many other bridges here, this one was built by
the US Army Corps of Engineers and had served
far beyond the intended period for which it
was constructed.
Free
Trade Agreement warrants conditions
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President
Abel Pacheco, in his weekly radio
address yesterday, said that he
will not allow his country to be put at
a disadvantage as a result of
negotiations concerning the Free Trade
Agreement. the Minister of Foreign
Trade, Alberto Trejos, was present at
the official kick-off for these
talks in Washington, DC last Wednesday.
Trejos said that he made it very clear
that the rules of the talks should be
explained fully and that they should be
fair to all parties involved. No country
should be placed at a disadvantage
because its level of trade activity
is less than that of a competing nation. |
Other countries
involved and affected by this pact have
voiced similar concerns.
An other item
of discussion is the eradication of
corruption, as to where this would not have an
effect on the outcome of the Trade Agreement.
Many nations are demanding that countries with
such a reputation, or having known official
and political persons that have been accused
of corruption, must eradicate this problem
sufficiently or risk being banned from the
Treaty.
The outcome of
these talks and the resulting agreement will
impact Costa Rica and all of Latin America.
Proponents of the Free Trade Agreement predict
an increase in imports and exports, and a
resulting boost in the economy of
participating nations.
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INTERNATIONAL
NEWS
Bee
Gee dead in Miami

The
Bee Gees: Barry, Robin and Maurice
Gibb
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On
Sunday morning, at Mount
Sinai Hospital in Miami,
Maurice Gibb, member of
the popular British
Group "The Bee
Gees" passed
away during surgery.
A
hospital spokesperson
said that Maurice Gibb
was undergoing surgery
to correct a serious
intestinal obstruction,
but suffered a heart
infarct from which he
did not recover.
Mr.
Gibb was born on the
island of Man, Great
Britain. Together with
his brothers Barry and
Robin, they formed the
band that has made a
lasting impression on
the music world.
The
"Brother's Gibb",
later abbreviated to
"Bee Gees",
rivaled bands like The
Beatles and The Rolling
Stones in popularity.
With its distinct
"Surfer
Sound", it had its
own huge following as
well.
Maurice
was preceded in death by
a younger brother; Andy,
who succumbed more than
two decades as a
result of alcohol and
drug abuse.
Maurice
himself suffered many
health problems because
of a lifetime of
heavy alcohol use.
He
leaves behind a wife and
two children. He was 53
years old.
NO Solution near in Venezuelan Oil Crisis
Street clashes intensified as a result of tensions due to a six week old strike against Venezuela's President Hugo Chavez, and a solution to the political deadlock over his rule seemed no closer on Monday.Police fired tear gas and a water cannon to disperse hundreds of Chavez supporters protesting against the strike in western state of Zulia. National Guard troops also repelled government sympathizers who attacked an opposition delegation with stones in
Caracas
.
The clashes were the latest outbreak of violence in an escalating opposition strike aimed at forcing populist Chavez to resign. The shutdown has slashed Venezuela's vital oil exports, causing widespread domestic fuel and food shortages and jolting world energy markets.
Oil prices rose 58 cents to $32.26 a barrel on Monday despite a pledge from the OPEC oil exporters cartel to increase output to compensate for the Venezuelan crisis. But 43 days into the stoppage the government and opposition appeared no nearer to making a deal on elections that might restore stability to South America's largest oil producer.
International pressure is increasing for a solution to the conflict in Venezuela, which usually provides about 13 percent of U.S. oil imports. The crunch in Venezuela's petroleum supply comes as Washington prepares for a possible attack on Iraq.
Opposition leaders on Monday gave a lukewarm response to a fledgling initiative, first broached by Brazil, for a "group of friends" from regional nations to help broker an accord. Talks chaired by the Organization of American States have so far failed to reach an agreement on elections.
Chavez administration officials have welcomed the idea.
"We might agree to a group of friends, not of Chavez, not of the government, but of Venezuela, which are two different things. This initiative must be in tune with OAS negotiations," anti-Chavez union boss Manuel Cova told Reuters.
But other opposition leaders in Caracas questioned the initiative and said it could confuse
negotiations.
Joe Lieberman says he is going to
run to win!
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Democratic
Sen. Joseph Lieberman declared on
Monday he will run for the U.S.
presidency, which could make him the
first Jewish president in the
nation's history.
Lieberman, 60, who already made
history in 2000 as the first Jew
drafted as a vice presidential
candidate when he shared the losing
Democratic ticket with Vice
President Al Gore, told a small
audience at his alma mater, Stamford
High School, that he was running to
"make the American Dream real
again."
Freed by Gore's decision not to make
another bid for the White House,
Lieberman told the crowd of
well-wishers, "I am ready to
announce today I am running for
president in 2004."
"In the coming months, I want
to convince Americans that I have
the strength, the vision and the
values to lead our nation to higher
and safer ground," he added.
"The American Dream is in
jeopardy," he said,
"threatened by hateful
terrorists and tyrants from abroad
and a weak economy that makes it
harder for Americans to live a
better life."
A devout Orthodox Jew, Lieberman
routinely did not campaign on the
Sabbath during the 2000 race. A
spokesman in his Washington campaign
office said Lieberman intended to
continue to observe the laws of his
religion during this campaign.
Asked in Stamford how he thought the
American people would respond to his
religion, Lieberman said he would
not hesitate to talk about faith,
and he cited the Declaration of
Independence and its protection of
rights and liberties endowed by
"the Creator."
Comparing the coming campaign with
the race he ran with Gore, Lieberman
said similar issues such as economic
reform, the environment and
educational reform would arise but
added, "This gives me an
opportunity to do it my way."
The two Democrats won the popular
vote but lost the electoral vote in
their race against Republicans
George Bush and Dick Cheney.
Lieberman said he had asked for
Gore's support, but did not expect
the former vice president to endorse
anyone this early in the campaign.
"I would be honored by his
support, but I've got to earn
it," he said.
Wasting no time taking aim at the
Bush administration, he said:
"This president, I'm afraid,
made a promise to come to Washington
to change the tone, and the reality
is the place is more partisan and
polarized than ever.
"The country doesn't benefit
from the poor economic record, from
the failure to fund education
reform, the inability to improve our
health care system and from the
slowness with which the president
has responded to the threat to
Americans here at home from
terrorism."
A centrist Democrat, Lieberman has
previously clashed with Bush over
probes into the bankrupt Enron Corp.
and Bush's designs for the
Department of Homeland Security.
He first came to national prominence
in September 1998 when he was the
first Democratic senator to denounce
President Bill Clinton's affair with
White House intern Monica Lewinsky
as morally wrong.
Pope John Paul II led a growing
chorus of voices raised against war
or opposed to any hasty decision to
pull the trigger, saying a conflict
in the Gulf would be a "defeat
for humanity." Saudi Arabia,
Turkey and others talked of peace
initiatives.
The big question was whether the
U.N. experts and nervous governments
in Europe and the Middle East had
made Washington more cautious about
carrying out a threat of war against
Iraq if it failed to come clean over
any weapons of mass destruction.
U.S. officials and defense experts
said political and logistical
pressure could delay any invasion of
Iraq for months, despite the
Pentagon's huge build-up of
warplanes, ships and tens of
thousands of troops in the oil-rich
Gulf region.
"Those soldiers can't just hit
the sand shooting on arrival. I
wouldn't expect anything in
February, or even early March. And
who knows what the political
landscape will be then?" one
U.S. official told Reuters.
But the United States and close ally
Britain face a dilemma in war
planning as April heralds the start
of Iraq's fierce summer heat and
sandstorms.
The pope became the most prominent
new voice against conflict in the
Gulf, declaring in an address:
"No to war!"
The U.S. military said Western
warplanes bombed an anti-ship
missile launcher in south Iraq
Monday, deeming it a threat to its
vessels in the Gulf, and dropped
hundreds of thousands of leaflets
urging Iraqis to listen to U.S.
radio broadcasts.
As U.N. inspectors took their hunt
to Iraq's science and technology
colleges, the ruling Baath Party
newspaper al-Thawra said Baghdad was
ready for war.
"Iraqis ... know how to fight
the aggressors," the paper
said.
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