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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: RR who wrote (45310)	12/18/2001 3:14:38 PM
From: Sully-	Respond to of 65232

Argentina guards against food riots Du Du?? By Alistair Scrutton BUENOS AIRES, Argentina, Dec 18 (Reuters) - Police in Argentina tightened security at supermarkets on Tuesday after an outbreak of looting, while provinces appealed for emergency food aid from a government promising only more austerity . Several provincial governments have appealed to embattled President Fernando de la Rua for help after food stores, stocked for the Christmas holidays. were attacked in some parts of the country at the weekend. The looting coincides with a resurgence of social protests in a country wrestling with a four-year recession and 20 percent unemployment, Protesters outside supermarkets were a mix of unemployed, from single mothers with child Go???statistical line into poverty. ``We are negotiating some extra help. The federal government responded immediately and has guaranteed aid,'' said Ruben Villaverde, social development minister of Entre Rios province, which suffered some raids on supermar???in, who is from the same center-left party as De la Rua. The central government, desperate for international aid to escape the recession, has proposed cutting spending by 18 percent in its 2002 budget but must still do battle with ???f the budget could unlock Ji Du Dur IN1/2? DE?ecord sovereign debt default, which would make Argentina a pariah in foreign debt markets for years. Echoing investor sentiment that Argentina was on a slow train to default if it does not reform, IMF chief economist Kenneth Rogoff said on Tuesday that its "mix of fis???mestic debts. Local pharmacies said they would stop selling subsidized medicines to state pensioners until they Da??? 2 retailer, which operates in Argentina. This kind of protest is just what the government wants to avoid as it tries to persuade a reluctant opposition that it must approve the budget. Economy Minister Domingo Cavallo, so unpopular for his spending cuts that he is portrayed as the devil in red horns in children's puppet shows, said he wants the Peronists to approve the budget before year-end. But there were signs of foot-dragging. ``The executive delayed presenting the budget for 100 days and they cannot ask Congress to approve it in four days,'' said Jorge Matzkin, a Peronist who will likely head the lower house budget committee, told local television But Cavallo, who last week saw protesters organizing a soup kitchen outside his posh Buenos Aires home, says the lion's share of the proposed spending cuts will come from reduced debt-servicing costs. The proposed budget cuts overall spending by $9 billion, to $39.5 billion. Cavallo said cuts of about $5 billion would come from swapping most of the $132 billion public debt for new debt paying lower interest rates. Cuts totaling $4 billion are to come from reduced government services or wages, he said. Yet economists say it is unclear how these cuts will help Argentina. The more the government reins in spending, the more the economy contracts and the more tax revenues plummet, thereby worsening state finances. The IMF expects the economy to contract 2.7 percent this year and 1.1 percent in 2002, much gloomier than its previous assessments in September, when it expected a 2.6 percent rebound in the economy next year. Compounding the situation, the government this month slapped restrictions on cash withdrawals to end a run on the banks, severely eroding confidence in the financial system. Most economists see Argentina heading for a catastrophic debt default and the eventual end of a one-to-one currency peg between the peso and the U.S. dollar. Markets have priced in debt default to such an extent that worries have diminished that a collapse of Argentina -- the darling of foreign investors in the 1990s for its widespread privatizations -- could weaken the global economy. In Buenos Aires, the leading MerVal (^MERV - news) stock index fell 0.14 percent on Tuesday, while the benchmark global bond due 2008 rose 6.2 percent to 32.125 percent of face value. (Additional reporting by Karina Grazina) biz.yahoo.com