South American Countries Weather Argentine Foot-and-Mouth Threat.

Publication: The Miami Herald (Miami, Florida) (via Knight-Ridder/Tribune Business News)

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COPYRIGHT 2001 The Miami Herald

Byline: Jane Bussey

Mar. 25--SANTIAGO, Chile--After enduring the havoc wreaked on emerging markets by Mexico's tequila crisis, the Asian tsunami and the Russian ruble rout, Latin Americans are suffering from crisis exhaustion and austerity fatigue.

Now comes the newest threat to the region's faltering economic stability -- the possibility that Argentina could unwillingly unleash the financial equivalent of hoof and mouth disease on the region.

From Santiago, Chile, where bankers and economists from the Western Hemisphere gathered the past week to assess the state of the region, to Buenos Aires, where workers poured into the streets to protest new austerity measures, the possibility of an Argentine default or devaluation has roiled financial markets and populations.

Either upset in Argentina's finances could quickly infect countries beyond its borders. Capital flows could fall; borrowing could become more expensive; cross-border trading, particularly in key trading partners such as Brazil and Chile, could slide; and interest rates could rise, returning to the sharp hikes that devastated small and medium-size businesses and credit-card...

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