USA : WORLD BANK REACTION TO MEXICO'S ECONOMIC CRISIS

SPANISH / NAT World Bank Latin American experts say the Mexican economic crisis was a wake-up call to the Mexicans and most major economies in the region. Despite recent apprehension over the Mexican economic crisis and it's effect on neighboring economies, World Bank officials say the region's situation is improving. World Bank Vice President for the Latin American and Caribbean Region, Shahid Javed Burki, says the Mexican crisis did have some good effects. It has directly contributed to producing a more robust economy in the region. Mexico's economic recovery should reach the residents of the country soon says the World Bank's Chief Economist for the Latin American region. SOUNDBITE: SPANISH "Hemos visto en Mexico una importante mejora en el sector de exportacion. Esta mejora se traduce necesariamente en un aumento de los ingresos de aquellos que trabajan en estos sectores, y ello va a significar, en un tiempo relativamente corto, que estas personas van a empezar a aumentar sus gastos y sus compras en otros sectores de la economia. De esta manera se va a producir un efecto en cadena, y un efecto multiplicador que esperamos se traduzca en una mejora en las situaciones economica mexicanas como en todo ya asi al final de este ano, y francamente una mejoria importante durante 1996. TRANSLATION: We've seen in Mexico an important improvement in exports. This improvement translates into increased income and this will mean that these people will increase their spending in other sectors of the economy. In this way a chain reaction and multiplier effect will be produced that we hope will translate into improvement in the Mexican people's economic situations toward the end of this year, and frankly, significant improvement for 1996. SUPER CAPTION: Sebastian Edwards, Chief Economist of the Latin American and Caribbean Region of the World Bank ] Edwards noted that the time is right for a change in Venezuela's economic policies. SOUNDBITE: SPANISH "Es claramente contraproducente mantener una tasa de cambio fija a la luz de un deficit fiscal elevado y de una inflacion que podriamos caracterizar como galopante. En esa situation lo que sucede es que el nivel de competitividad de la economia interna empieza a erosionarse fuertemente contribuyendo ello a que se produzcan situaciones de balanza de pago y de balanza comercial que terminan en crisis. En ese sentido creo yo que la politica cambiaria de Venezuela esta en estos momentos esta en una situacion propicia para ser revisada. TRANSLATION: It's clearly counterproductive to maintain a fixed exchange rate in light of an elevated fiscal deficit and inflation that can be characterized as galloping. What happens in this situation is that the level of competitiveness of the internal economy begins to strongly erode contributing to situations of balance of payments that end up in crisis. In this sense I think Venezuela's exchange rate policy is at this time is inclined to be revised. SUPER CAPTION: Sebastian Edwards, Chief Economist of the Latin American and Caribbean Region of the World Bank ] Venezuelan President Rafael Caldera has doubled the country's money supply over the past two years while placing price controls on consumer goods and freezing currency exchange rates. These measures resulted in filling the nation with cash while making it cheap for Venezuelans to buy dollars. You can license this story through AP Archive: http://www.aparchive.com/metadata/youtube/e8d4db19dc440363e2a848c300750d7d Find out more about AP Archive: http://www.aparchive.com/HowWeWork