JP/6/OT9

U.S. support to South American economies

Banks in Montevideo will have returned to normal work when U.S. Treasury Secretary Paul O'Neill visits Uruguay this week. Besides supporting an agreement between the International Monetary Fund (IMF) and Uruguay, the United States advanced a US$1.5 billion emergency loan to allow banks to restart operations. Is Washington policy regarding Latin America changing?

If there was a change, it was prompted by the perception of two facts: First, the economic crisis in Argentina was not confined to that country; second, the price of a financial disaster in Brazil would be too high, with repercussions probably all over Latin America.

The U.S. might have found that Latin America's southern-most region is more important than Washington had thought... (But) the help to Uruguay came only when that country was on the verge of a deep financial crisis.

O'Neill's main test will be in Argentina, where the U.S. government has contributed to restrict the crisis affecting South America's second largest economy. It is not clear yet if Washington will continue dealing with Argentina as an exceptional case deserving an exceptional punishment. Unluckily for the Argentines, their neighbors and perhaps the U.S., that attitude produces not only a cruel sacrifice but also a useless one.

(But) It is with its policy regarding Argentina that Washington will demonstrate up to what point it has changed the way it deals with South America.

-- Estado de Sao Paulo, Brazil