PANORAMA.

REGIONAL

WESTDEUTSCHE LANDESBANK GIROZENTRALE (WestLB), a German bank teamed with Bermuda-based fund manager Tricon Trade Management to launch a US$100 million trade finance fund for emerging markets.

STARMEDIA NETWORK, a Latin American Internet portal, received US$36 million in funding from Atlanta-based telecommunications company BellSouth (US$25 million), New York-based media conglomerate Primedia ($5 million) and New York investment firm J.P. Morgan Partners along with other private investors ($6 million).

FOX SPORTS INTERNATIONAL, a unit of New York-based television network Fox Entertainment, and Argentina's TeleRed Imagen which is partly owned by Argentine media conglomerate Grupo Clarin, are joining to create a regional Spanishlanguage sports network.

TERRA LYCOS, the Internet arm of Spanish telecommunications company Telefonica, laid off 480 employees, an estimated 15% of its workforce.

AMBEV, Brazil's largest beverage company, bought a minority stake in Paraguayan brewer Cerveceria Interacional for US$12 million.

SUBMARINO.COM, a Brazilian Web site retailer of books, CDs and other goods, ceased operation in Argentina and Portugal as part of a cost-cutting measure. The company will focus its energies on Brazil and Mexico.

DANONE, a French food conglomerate, and Latin American Internet portal StarMedia will jointly promote the "En Forma" (In Shape) channel on StarMedia, geared toward Latin American teenagers.

ARGENTINA

THE GOVERNMENT OF ARGENTINA cancelled an estimated US$1 billion contract with German engineering company Siemens to make identification cards for the country's citizens. The government called off the project because of cost, It now faces multi-million dollar fines for breach of contract.

THE GOVERNMENT OF ARGENTINA implemented an agreement among federal and provincial governments and the steel industry, called the "competition accord," which provides tax breaks and other subsidies to steel companies that agree not to lay off employees. Most affected will be steel companies Siderca, Siderar and Acindar Industria Argentina.

PETROLERA SAN JORGE, an Argentine subsidiary of U.S.based Chevron, signed a US$16 million deal with the province of Neuquen to exploit natural gas and oil reserves.

SILVER STANDARD RESOURCES, a Canadian mining company, paid an undis closed sum for a 20% stake in Manantial Espejo, a gold and silver mining plant in southern Argentina, from Canada's Barrick Gold.

SIDERCA, an Argentine steel maker owned by local conglomerate Techint, began trading on the New York stock exchange as American Depositary Shares.

SKYONLINE, a U.S.-based telecommunications company, bought Argentine Internet service provider Netizen for an undisclosed sum.

MICROSOFT, the world's largest software company, will build a software plant in the province of Neuquen.

BRAZIL

THE WORLD BANK loaned US$404 million to Brazil to support financial sector reform, economic growth and poverty reduction.

ANTONIO CARLOS MAGALHAES resigned from Brazil's Senate after an ethics committee recommended that he be removed. Magalhaes and Senator Jose Roberto Arruda, who also resigned, are alleged to have tampered with the Senate's voting system.

PETROBRAS, Brazil's state-run oil company, bought a 25% stake in natural gas distributor Companhia Distribuidora de Gas do Rio dejaneiro (CEG) from U.S.-based Enron for around US$240 million.

CLOROX,a U.S.-based consumer products manufacturer, will proceed with a joint venture with local cleaning products company Bombril, forming Detergentes Bombril. Clorox had cancelled the deal with Bombril but will now renew it with an investment of US$175 million instead of the original amount of $200 million.

AMERICA MOVIL, the wireless spin-off of Mexico's leading telecommunications company Telmex, bought all the shares owned by its partner Williams Communications in local wireless company Algar Telecom Leste. Financial details for the deal, which is subject to regulatory approval, were not disclosed.

KAWASAKI HEAVY INDUSTRIES, based in Japan, is teaming with Brazilian aircraft manufacturer Embraer to develop and manufacture wings for Embraer's ERJ-190 regional jets.

PERDIGAO, a Brazilian processed food company, will invest around US$16 million to build a distribution center in Sao Paulo state.

GENERAL MOTORS, the world's largest automaker, will spend US$10 million to buy and protect 30,000 acres of Brazilian rain forest as part of a carbon dioxide reduction program.

AOL LATIN AMERICA, a joint venture of AOL Time Warner and the Cisneros Group, appointed Carlos Dan Trostli, former president of Quaker Oats in Brazil, to head AOL's operations in Brazil. Trostli is AOL Latin America's third president for Brazil in 18 months.

ERICSSON, a Swedish telecommunications equipment maker, won a contract from Brazilian telecommunications company CTBC Telecom to upgrade the company's infrastructure. No financial details were disclosed.

METLIFE, a New York-based insurance company, bought Brazil's Seguradora America do Sul for an undisclosed sum.

THE GOVERNMENT OF BRAZIL cancelled the sale of state-run power company Companhia Energetica de Sao Paulo (Cesp). A looming domestic energy crisis has forced the government to reevaluate the terms of the sale.

CARIBBEAN

THE GOVERNMENT OF JAMAICA issued US$275 million in 10-year fixed-rate notes. The issue, underwritten by New York-based Bear, Stearns & Co., was Jamaica's largest ever.

THE WORLD BANK earmarked US$150 million to fight AIDS in the Caribbean.

CENTRAL AMERICA

THE WORLD BANK loaned the government of Guatemala US$62 million to improve basic education.

THE INTER-AMERICAN DEVELOPMENT BANK loaned the government of Honduras US$25 million to promote sustainable development.

CHILE

THE GOVERNMENT OF CHILE launched a US$200 million public works program to combat unemployment. The government aims to create 100,000 jobs.

QUINENCO, a holding company owned by the Luksic family, sold 4% of Chilean telecommunications company Entel for US$71 million on the stock market. The company plans to use the proceeds to pay down debt.

TELEFONICA CTC, the Chilean subsidiary of Spanish telecommunications company Telefonica, laid off 1,600 employees.

COLOMBIA

GRUPO BAVARIA, a local beverage conglomerate, bought back shares in circulation on the Bogota stock market for about US$99 million.

THE GOVERNMENT OF COLOMBIA will inject around US$170 minion into its state-run industrial development institution, Instituto de Fomento Industrial. The institution, which provides financing for the private sector, will reduce its workforce to 70 from 244 employees as part of an overall restructuring.

MEXICO

VOLKSWAGEN, a German automaker, will spend US$1 billion over the next five years to upgrade its auto manufacturing plant in Puebla.

SAVIA, an industrial conglomerate, sold three production units of its packaging subsidiary Empaques Ponderosa to local private newspaper group Organizacion Editorial Mexicana for US$285 million. The money will go to pay down debt.

QUEBECOR WORLD, one of the world's largest printing companies, won a five-year, US$250 million contract to produce telephone directories for Telefonos de Mexico, the country's leading telecommunications company.

ICA FLUOR DANIEL, a joint venture between Mexico's largest construction company, ICA, and U.S.-based Fluor Corp., won a US$195 million contract from Spain's Iberdrola to build a power plant in northeastern Mexico.

TELEFONOS DE MEXICO, the country's leading telecommunications company, reached an agreement with U.S.-based WorldCom to reduce cross-border rates for completing calls between Mexico and the United States to 15.5 cents per minute from 19 cents per minute.

A DALLAS JUDGE reduced to US$122 million a $455 million judgment against Mexican mogul Carlos Slim and his companies for conspiring to keep Texas-based COC Services from opening computer stores in Mexico. The judge determined that CompUSA, which Slim purchased in 2000, was not liable for the breach of contract with COC Services. Meanwhile, CompUSA announced it will layoff 700 employees, about 4% of its staff.

THE HOME DEPOT, the largest home improvement retailer in the United States, bought local building materials company Total Home from Mexican industrial conglomerate Alfa for an undisclosed sum. The move marks The Home Depot's entrance into the Mexican market. The company also operates in Argentina and Chile.

TOYOTA, Japan's largest automaker, plans to sell cars in Mexico before 2004.

MOTOROLA, a U.S. telecommunications company, laid off 600 workers at its cellular phone factory in the border state of Chihuahua. The move is part of the company's worldwide cost-cutting plans.

PERU 

MILPO, a Peruvian mining company, will spend US$150 million over the next five years to upgrade its Ivan and El Porvenir mines, located in Chile and Peru respectively.

URUGUAY

DIRECT a satellite television provider, received authorization to provide its services in Uruguay.

VENEZUELA

PRESIDENT HUGO CHAVEZ named Diosdado Cabello as his new chief of staff, replacing Elias Jaua. Jesse Chacon was promoted to take over Cabello's old job as head of the state telecommunications regulatory council, Conatel.

SIVENSA, a Venezuelan steel maker, sold its stakes in three joint ventures to its partner, U.S. auto parts manufacturer Dana Corp., for US$21 million. The joint ventures include Danaven, Danaven Rubber Products and Transejes de Colombia.

CSX WORLD TERMINALS, the freight terminal unit of U.S.-based CSX Corp., bought a 50% stake in Terminal Port Services de Puerto Cabello from Venezuelan family-owned corporation H.L. Boulton & Co for an undisclosed sum.

PACHACUTEC WINS

After almost two years of campaigning, Alejandro Toledo is finally president of Peru. The 55-year-old Stanford-educated economist defeated rival Alan Garda, president of Peru from 1985 to 1990, in what proved to be a fair election for this fraud-fatigued South American country.

In 2000, Toledo withdrew his candidacy before a runoff with former President Alberto Fujimori that involved electoral fraud. He then led street demonstrations against Fujimori's "fraudulent" third term, which soon ended with the latter's self-imposed exile in his parents' native Japan.

Toledo is the first Peruvian president of Indian ancestry, earning him the nickname "Pachacutec," after a 15th century Inca emperor.

NORTHERN EXPOSURE

Brazil's Votorantim Group is heading north after initiating the purchase of cement plants and other related assets in the United States and Canada from Lafarge, a French manufacturer of building materials, for US$712 million.

Brazil's largest private conglomerate, whose principal activities are in cement, mining and metals, pulp and paper and energy, is buying assets that Lafarge acquired earlier this year as part of a $5.9 billion purchase of U.K-based Blue Circle Industries. That deal made Lafarge the world's largest cement producer. Lafarge needs to shed assets in order to assure regulatory approval for its Blue Circle purchase; expansion-hungry Votorantim jumped at the opportunity.

BIG DEAL

Citigroup Chairman and CEO Sandy Weil and Banamex-Accival Director General Roberto Hernandez Ramirez certainly have something to smile about. Citigroup's US$1 2.5 billion takeover of Mexican banking giant Banamex is the biggest acquisition by a foreign company in Mexican history. The transaction, which should be completed by the fourth quarter of this year, pays Banamex shareholders $6.25 billion in cash and $6.25 billion in Citigroup shares.

It seemed that the Spanish had all but taken over Mexico's banking system after Banamex lost a bid last year to control the country's third largest bank, Bancomer, to Spain's Banco Bilbao Vizcaya Argentaria (BBVA). BBVA's merger with Bancomer unseated formerly No. 1 Banamex, while Spain's Banco Santander Central Hispano moved in with a successful bid for state-owned Grupo Financiero Serfin.

RX FOR IVAX 

Miami-based pharmaceutical company Ivax is racing to capture a chunk of Latin America's emerging generic drugs market. The company, which also produces some of its own patented drugs, bought Chile's top pharmaceutical company, Laboratorio Chile (LabChile), for US$395 million.

The deal will increase Ivax's distribution network throughout South America, since LabChile has subsidiaries in Argentina, Brazil, Colombia and Peru. The Chilean company is also an important producer of veterinary products, including livestock vaccines and antibiotics.

Ivax recently purchased Mexico City-based Laboratorios Fustery for an undisclosed amount.

DOLLAR VALUE

As of June 2001 most Latin American currencies had maintained their value against the U.S. dollar from the previous year, according to exchange rate Web site www.oanda.com. Mexico's strengthening peso was the exception.

DEBT SWAP 

Argentina's Economy Minister Domingo Cavallo boldly attempted to pull the country out of almost three years of recession with a multi-billion dollar swap in short-term debt for longer-term notes. Cavallo hopes the move will stimulate economic growth by assuring investors that Argentina will not default on its debt. Cavallo also pledges that Argentina's fiscal deficit will improve with better tax collection methods.

Investors swapped US$30 billion in existing Argentine debt, most of which matures before 2006, for new bonds with maturities between five and 30 years