Venezuela problems a "special case"-Peru's Baca
Reuters, Friday, September 04, 1998 at 19:28
By Roger Atwood
WASHINGTON, Sept 4 (Reuters) - Venezuela has become a
"special case" in Latin America because of its shaky political
outlook and investors should not lump it together with more
stable countries like Peru and Chile, Peru's Finance Minister
Jorge Baca said Friday.
Baca, speaking after a meeting of top Latin American
finance officials with the International Monetary Fund, said
Venezuela's fiscal situation was sound but that, with elections
in December, its political future was much less certain.
"Venezuela is a special case because it's going to have
elections shortly and the candidates are not the most
appropriate, I would say. This is a personal view of course,"
Baca told reporters.
The leading candidate in the election is a former army coup
leader, Hugo Chavez, who has vowed to halt Venezuela's foreign
debt payments.
"Certainly Venezuela's case is not the common ground in
Latin America. Particularly countries like Peru and Chile are
in a strong position, and I don't think this should be
generalized in terms of other countries," he said.
Baca's comments gave the clearest sign yet that other Latin
American governments were growing impatient with Venezuela's
steady financial turmoil and felt it was hurting the region's
standing as a whole.
Many officials at the meeting, including IMF Managing
Director Michel Camdessus, have rapped investors for not
distinguishing between healthy and weak emerging market
nations.
But they have usually been reluctant to say clearly which
markets they think are weakest.
Baca said Brazil did not deserve a downgrade Thursday on
the country's speculative credit rating by Moody's Investors
Service Inc "because it does not reflect the efforts Brazil has
made to reduce its fiscal deficit and fix its economy."
But he offered no criticism on a similar downgrade for
Venezuela, and nor would he say if Venezuela had ruled out a
devaluation of its bolivar currency in the IMF meeting.
Baca said Venezuela's fiscal position was strong but that
its political future was very cloudy.
"If you look at Venezuela's international reserves, you
will see that there are plenty of reserves to service the debt.
So there is no worry about that. I would say (it's) more a
political situation in view of the coming election," said Baca.
"There are other countries in the region, and as an example
I can cite Peru, which have not only been doing things well in
recent years but are also in a very solid situation on both the
monetary and fiscal side," he said.
He also said it was important for investors to
differentiate strong Latin American economies from
crisis-stricken emerging economies in Russia and Asia.
"We definitely want to differentiate ourselves with respect
to the situation in Russia, which is almost in a moratorium,
and the Asian situation, which is completely different. Latin
America has the right fundamentals."
898-8383, washington.economic.newsroom@reuters.com))
Copyright 1998, Reuters News Service |
