Former Peruvian President Alberto Fujimori, who has been living in exile in Japan since 2000, said he is working to return to Peru and wants to run in the country’s presidential election next year. Fujimori is wanted in Peru for alleged crimes committed during his presidency, including involvement in the military’s killing of civilians and misappropriation of public funds. In February, Peru’s constitutional court upheld the Peruvian parliament’s 2001 resolution to ban Fujimori from public office for 10 years.
Category: Daily Brief
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Ipiranga Closes Refinery
Ipiranga, Brazil’s second-largest oil company, shut down an unprofitable refinery, saying it was unable to compete with state-owned Petrobras. Ipiranga has been hurt by the government’s efforts to control inflation by slowing fuel price increases charged by Petrobras, which controls 98% of the market in Brazil, even as crude oil prices have climbed to record highs. Petrobras has raised fuel prices 18% since January 2004, while crude oil prices have climbed more than 50%.
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Uruguay-IMF Discuss Loans
The International Monetary Fund announced that it is in discussions with Uruguay over a new loan accord, and the two sides may announce an agreement this week. Uruguay needs new loans to keep up payments on $13.2 billion of international debt. President Tabare Vazquez, inaugurated in March, said the country would maintain budget and monetary goals under the current $3 billion IMF agreement in order to obtain new loans from the lender.
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Villarzu Extols Privatization
Juan Villarzu, president of Chile’s state-owned copper company Codelco, said the company would benefit from privatization. Villarzu said Codelco needs to make larger investments to meet growing global demand for copper, and it would be better able to make those investments as a private company. CODELCO is considering raising its production from 2.5 million tons of copper per year to 3 million in 2020 to meet increasing demand, especially from China.
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Peasants Invade Finance Ministry
Landless peasants invaded the Brazil’s Finance Ministry headquarters Friday, occupying it for six hours to press the government to free up more money for land reform, investment and jobs. The protesters left after negotiating with the police. The peasant groups, which are usually allied with President Luiz Inacio Lula da Silva, say Palocci is holding up funds that should be used for land reform and settlement of rural families.
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Seixas-Correa Out of WTO Race
The World Trade Organization eliminated Brazil’s Luiz Felipe de Seixas Correa from the running to be its next director-general, saying that European Union candidate Pascal Lamy leads the race for the position. The other candidates are Uruguay’s Carlos Perez del Castillo and Mauritian Foreign Minister Jaya Cuttaree. The decision on who will succeed Supachai Panitchpakdi for the four-year post must be made by consensus before June.
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Snow Pressures Argentina
US Treasury Secretary John Snow said the US would “engage” Argentina to push for a settlement with holdout creditors that own about $20 billion in defaulted Argentine bonds. In February Argentina persuaded holders of $62 billion of a total $82 billion of defaulted bonds to exchange for new securities worth about 30 cents on the dollar.
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Brazil: Retail Sales Growth Slows
Brazil’s retail sales rose 1.3 percent in February, the slowest pace in 15 months, adding to evidence that South America’s biggest economy is starting to weaken after seven interest-rate increases by the central bank. Retail sales rose 1.3 percent year-on year in February after increasing 6.2 percent in January and 11.4 percent in December. Brazil’s central bank will meet next week to decide if it will leave the benchmark rate unchanged at 19.25 percent.
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Chile: Growth Forecast Raised
The International Monetary Fund is predicting Chile’s GDP will growth 6.1 percent this year, up from its previous estimate of 4.7 percent. The Fund predicted growth of 5.4 percent in 2006 and said Chile’s economy will be boosted by increased exports and foreign investments.
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Emerging Market Bonds Tumble
Emerging market bonds declined in anticipation that General Motors and Ford Motor will be cut to junk, overwhelming the market for high-yield, high-risk securities. Should both companies lose their investment-grade credit ratings, they would add $80 billion to high-yield markets. The increase may force yields higher on other junk bonds as investors seek compensation for increased risk. Brazil’s benchmark bond due in 2040 was down $2.25 Thursday to $112.1, pushing its yield up to 9.77 percent.