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Peru and Panama are the countries in better position to confront crisis

Date: 2008-23-10
By Elizabeth Cavero , www.elcomercio.com.pe/ediciononline/

bolsa valores The World Bank , evaluated the impact of the overall situation in emerging countries. The agency can provide more funding if states require it.

Financial support from the World Bank (WB) in all countries today comes to about U.S. $ 13.5 billion, but this could grow to U.S. $ 27 billion if they require a source that will help maintain liquidity in their lending.

This was announced by the president of the WB, Robert Zoellick, during the last meeting of the bank and the International Monetary Fund (IMF) with finance ministers from around the world, and reiterated yesterday by the director for Peru, Ecuador, Venezuela and Bolivia, Carlos Felipe Jaramillo.

"We come from a very good period, especially in Latin America and the World Bank today has a very liquid capital. I do not have the figures on hand to say how much can be offered specifically to Peru, but it is a preferential client of the bank and surely would be a high figure. In part, because in the past two or three years Peru has not needed to borrow, "he explained.

According to the Reserve Bank of Peru, local commercial banks now have an adequate level of liquidity. According to Jaramillo, this is one of the strengths of Peru’s economy.

The official recalled, however, that the recommendation of the WB is that countries have various funding sources. He felt that Peru has a good chance of placing their bonds in international markets (the issue for which the Ministry of Economy has prepared himself would be between U.S. $ 400 million and U.S. $ 600 million) because it maintains a low risk.

THE GOOD NEWS

Jaramillo gave these statements at a conference that was intended to share the conclusions reached by the WB in recent sessions. "The context is dramatic and this crisis is unprecedented. Every, absolutely every country of the world will be affected in some way," he said.

"Now they are asking that the countries of Latin America, at least the largest (Mexico, Brazil), participate in forums which we could re-define the global financial architecture," he stated.

The only good news - he said - is that Latin America is much better prepared than before to the consequences of these crises. "In that context, Peru is one of two Latin American economies that are better prepared to deal with the crisis. Those are good news that we cannot say for the rest of the countries," he said.

The other economy, he said, is Panama, that in recent years has saved a lot of money to invest in the works to widen the Panama Canal.

The three indicators that the WB takes to make this comparison is GDP growth, productivity growth, and position in the country-risk index (EMBI). In these factors, Peru shows strengths.

"This minimizes the possibility of a recession and it (the effect of the international crisis) will just cause a slowing in the economic growth” he stated, in the case of Peru.

CLUES

Bonds and assessments

1. Carlos Felipe Jaramillo, of the World Bank, announced that this entity has approved a fund of U.S. $ 6 billion to recognize countries that are striving to reduce carbon emissions. Peru - he said - already has a couple of projects that can apply to the use of the fund.

2. Rossana Polastri, economist of the World Bank in Peru, said that agreements to avoid double taxation are not a priority today for Peru, in order to attract investments.

3. It was announced that two evaluations are under way, one from the program “Together” and one for all other social programs. "We hope to have the first between December of this year and January of next year," said Polastri.

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Peru and Panama are the countries in better position to confront crisis