Latin America round-up

13/03/2006 | Emerging Markets Reporters

Bachelet's first 100 days, car production in Mexico

Wanting to kick off her presidency with a powerful message, Michelle Bachelet has promised to implement 36 urgent reforms in her first 100 days in office, relating to, among others, education, health, social security, subsidies and equality.

Beginning Monday, all of Bachelet's newly appointed economic ministers, including Finance Minister Andres Velasco, will go to work to make that promise possible. The price tag for the projects is expected to be at least $350 million: the amount of discretionary funds the outgoing Lagos administration made available for Bachelet. The available funds could increase if some of the $22 billion budget for 2006 is reassigned.

Bachelet's number one priority is adjusting the system of welfare pensions, and reconfiguring minimum pensions. This project that, according to Labor Minister Osvaldo Andrade, is all but complete: "The project is ready, we just need to fine-tune the numbers", he said. Bachelet plans to provide guaranteed pensions not only to the elderly, but to housewives as well.

Pension reform is just one area where Bachelet is looking to make immediate changes. She also hopes to fast track one of the plan's health care issues, possibly free hospital attention for citizens over 60 years of age.

Bachelet's proposed measures include providing free child care for both working parents with children under four, and low income working parents with older children.

The measures also include the creation of two new ministries, Public Security and Environment, and electoral reform.

One of the greatest challenges for Bachelet is to encourage more equitable income distribution in a country where 8 percent of Chileans earn less than US$560 per month, unemployment has only recently dropped under 10 percent, and poverty is still a major issue.

Eighty percent of Bachelet's measures will require new laws. However, her ability to push through these reforms will be greatly bolstered by her party having a majority in both houses of government for the first time since Chile's transition to democracy began in 1990.

 

Motor vehicles manufacturer DaimlerChrysler Mexico, the third largest player in that country announced that it will invest $ 1 billion to modernize its facility in Toluca and to construct an industrial complex for its suppliers. The facility of Toluca started operations in 1964 and is the most important of the company in Mexico. From 1998 to 2002 the company invested $ 2 billion in Mexico to develop the model PT Cruiser in Toluca, and to produce Dodge Ram in its facility of Saltillo, Coahuila. In Toluca, DaimlerChrysler Mexico employs 2,700 people.

 

 

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