European Stars And Stripes (Newspaper) - February 9, 1986, Darmstadt, Hesse                                Sunday february 9, 1986 the stars and stripes Page 19 business hews latin America debt woes surface again Rio de Janeiro Brazil not barely three months after a . Initiative raised Hopes of casing latin America s Finan Cial problems there is a renewed urgency about the Region s debt crisis. The immediate catalyst of concern is the drop in world Oil prices which has shaken Mexico and Venezuela two major debtors that depend overwhelmingly on Oil revenues to maintain interest payments on their debts. This has coincided with mounting opposition to Argentina s austerity program the target of a general strike called by a group of unions and a wave of nationalism in Brazil that has prompted the regime to take a firmer stand in its dealing with creditors and the International monetary fund. Foreign Bankers and officials in the re Gion said that these four debtor nations which among them owe about $285 billion abroad were under greater political pres sure than Ever before to reduce their foreign payments and give priority to Domestic expansion moves that would inevitably Lead them into conflict with their creditors mostly commercial Banks. They also said that while the drop in Oil prices would bring savings of perhaps $1 billion this year for Brazil which imports 450,000 barrels a Day the damage to mexi co and Venezuela was expected to have a much greater destabilizing effect on the Broad regional debt situation. In Argentina which is self sufficient in Oil the Price drop has barely been noticed in the context of rising criticism of govern ment policy. One immediate result of this darkening of the debt picture has been to overshadow the much publicized debt initiative made by Treasury Secretary James a. Baker Iii last october. That plan called for an infusion of $9 billion from International lending organizations and $20 billion from Commer Cial Banks Over a three year period to 15 governments 10 of them in latin Ameri Ca if they work out economic adjustment programs with the if. So far no Concrete actions have been taken As the result of the initiative which latin american officials and Many foreign Bankers say involves resources far smaller than needed to confront the crisis. We still have no direct . Government involvement in providing funds one Amer ican banker said. There is no Way that the government can stay in the Buck seat. There s no Way that Banks can continue to shoulder the entire  although Only a handful of countries arc still making principal payments the Region nonetheless paid Oul Mure than $30 billion in interest on its $370 billion debt in 1985. Moves by the so culled Cartagena group of nations to coordinate debt strategy How Ever have in recent weeks been overtaken by the problems of individual countries with most attention focused on Mexico. Having sparked the regional debt crisis in after to glue 1982, Mexico adopted a Tough if approved austerity program and seemed Well on the Way to recovery until world Oil prices began Tum bling last year. Mexico exports 1.5 million barrels a Day which accounts for 75 percent of its exports. As a result uncertainty returned to the country bringing a new Light of capital Sharp devaluations of the peso More inflation and a new slump. President Miguel do la Madrid was willing to assume the political risks of culling govern ment spending and holding Down wages even before the latest Oil Price reductions. But mex Ico said it required some $4 billion in fresh Loans to keep up interest payments on its $96 billion foreign debt. Now according to some estimates Mexico May need As much As $8 billion in new Money this year. There s no Way that Mexico can find that Money at Home and there s no Way it can raise it with commercial Banks one foreign banker said. In contrast Argentina won accolades in the International Community after it imposed a Tough austerity program last june which dramatically reduced inflation stabilized the Exchange rate and enabled the if and foreign Banks to resume loan disbursements there. But the plan also pushed the Argentine Economy into a deep slump. President Raul Alfonsin faces an additional problem with the if temporarily suspending disbursements of a $1.4 billion standby credit because the government s deficit exceeded agreed limits in the last Quarter of 1985. In Brazil the Region s largest debtor with a debt of $104 billion the anti if Flag is being carried by the government itself with a 7.4 percent surge of economic growth last year apparently serving to vindicate presi Dent Jose Varncy s decision to ignore Calls for austerity. Even in Venezuela a country with s31 billion in debt but a healthy $13.5 billion in reserves the debt question has become highly politicized in recent months. Presi Dent Jaime Lusinchi is being urged to renegotiate a draft agreement to restructure $21.2 billion in debt in order to compensate for revenues losses resulting from lower Oil prices. Investor s guide by William a. Doyle o. I have $41,000 from recently matured certificate of Deposit and he been approached about putting that Money into an annuity. The insurance company would pay $530 a month on the annuity for 10 years certain even if i die. After 0 years i would receive $370 a month until i die. I am 61 and have about $60,000 in other investments such As my inT"18 retirement account and other cd. The annuity proposal looks Good to me. But could i do better someplace else a you can do better lots of other places. You should be aware of that if you understand How the annuity works. The payments you would receive from that annuity would not be All income. At $530 a month you would receive $6,360 a year. On $41,000, that s 15.5 percent. After 10 years the $370 monthly checks would give you $4,400 annually 10.8 percent on your $41,000. The 15.5 percent Over a decade would be a mighty nigh return and the 10.8 per cent after that would be a Good return if those payments were All income. But Only part of each Check would be interest Stock pulse United press International Stock at to Meyer Panama Phil Perl Cooder in Mobil Mol Rola Ami Houslin Clit a invt of Voi Clow earn. Be yld2,908,800 2i /. 5.0 5.6 Al Sulom m Al my 18.0 i m 10i943wo 33 28 1,612.300 44 1 586 000 20 z 1.44 7.0 10.0 3j7 10.0 4.8 10.67 110 2.8 2.55 11.0 7.8 0.61 72.0 1.5 i5l l ski Stock Elvam into   Wansle dome Pedro Robert him Home or Lionel vol Clou earns be old 660.100 6h i 0.52 13.0swllsoo 37w 1.93 19.0 u 458,800 ih441,400 16h 3si.500 13vi 139.800285.000 0.� 17.0 1.2 263,200 3h246,100 27i 234.200 7k 0.07 s3 0 1.91 18.0 6.54 24.0 Texas in  nah Kiln Getty Pelcak Iii a a Viil Una Irp a r0 or to sep str Bah jag has Fisli & kiss inst latest 12 monks unaudited earned on your Money. The rest of each Check would be a portion of your own Money being returned to you. By buying that annuity and taking monthly payments you would gradually dissipate your principal. You can put your Money into invest ments with lower returns in straight interest and keep your principal intact. For safety s Sake you should consider Long term cd or . Treasury Bonds. You la get less Money from them each year than that annuity pays but it will be All interest. When a cd or Treasury Bond matures you get All your principal Back. An annuity such As you arc considering is really suitable Only for someone who needs a High and steady source of Money and who does t mind using up All of his or her principal leaving nothing behind when the grim reaper comes calling. Q. The life insurance company from which i am considering obtaining a policy does not have a rating in Best s manual. Should i be cautious about this a. Definitely. Alfred m. Best co. Is the Best known and most authoritative insurance rating service. It s always Wise to Check that company s annual publication. Best s life insurance reports which can be found in Many Public libraries. Best rates insurance companies Accord ing to their financial strength from a plus for excellent Down to c for fair. The Lack of a rating in Best s certainly is a cautionary sign. Even Best in t perfect. It still has egg on its face for giving National investors life insurance co. An a rating in 1982. That outfit and other insurance subsidiaries of Baldwin United corp. Went belly up the very next year. Q. I plan to follow the theory buy term and invest the  rather than pay the High premiums on whole life or univer Sal life insurance i la buy term insurance on which the premiums Are Lover and invest the Money i save in an individual retirement account. However checking both Load and no Load Mutual funds i find they do not provide insurance against loss on their iras. As a cautious investor would you advise me to open my Ira at a Bank or savings and loan association a. As Long As Freedom from risk is your prime consideration you la get no urge mint from me about having your Ira at a federally insured Bank or so. More peo ple have iras there than anywhere else. You would take on risk in Hopes of greater financial rewards by putting your Ira Money into most Mutual funds the exceptions being Money Market Mutual funds in which there is virtually no risk. However Over the Long run Mutual funds have produced belter investment re sults than Bank or so iras. By follow ing your cautious dictates you la avoid risk and potentially greater Ira profits. If you change your mind and go the Mutual route pick a no Load fund on which there is no commission charge. Kino features columnist Hoovle welcomes written questions but he can provide answers Only through the column. You can write to him in care of the stars and stripes Apo 09211, . Forces