Law enforcement officials have outlined their findings associated with the takeover of the Embassy of Chile Tuesday in the face of a growing number of rumors.

The rumors that have been circulated on television shows and on the Internet speculate on the presence of another person, the real gunman. Another contribution from the radical fringe claimed that policeman José Orlando Jiménez Jiménez was a secret agent for the United States who was sent to assassinate Chilean officials because of the country’s monetary policies.

Luis del Valle Carazo, the head of the Morgue Judicial, explained at a press conference Thursday how Jiménez was able to live for some four hours after being shot. That was a fact that played into the theory of another gunman.

Jiménez shot three persons inside the Embassy of Chile about 3:45 p.m. Tuesday. But some commentators claimed he could not have shot himself in the head and survived for hours.

Del Valle said that the bullet that eventually killed Jiménez entered below the jaw and moved upwards through the skull. But the bullet did not enter the brain, Instead it caused sufficient damage nearby that the policeman eventually bled to death.

The three victims in the embassy all died immediately from bullet wounds in the chest, said the doctor. Each were found in different rooms of the embassy. 

Also dead were Cristhian Juseff, the consul at the embassy, Roberto Nieto, the first secretary, and Rocío Sariego, a cultural official.

Police did not enter the embassy in barrio Dent to liberate seven other persons until after 10 p.m. because Jiménez was believed to holding hostages.

Jiménez, 54, was buried Thursday in his hometown of Puriscal west of San José. Officials speculate that he went into a rage and did the killings because embassy officials had asked that he be transferred. He had been assigned to guard the embassy.

Half of country marches
to Cartago basilica

That pitter-patter you hear will soon become thunderous as nearly half the county embarks on a pilgrimage to Cartago and the Basilica of the Virgen de Los Angeles, the patroness of Costa Rica.

The Virgin’s feast day is a holiday in Costa Rica and the U.S. Embassy reports that it will be closed that day.

Hundreds of thousands of pilgrims are timing their departures so they will arrive at Cartago Monday morning in time for services. Police agency are on alert and traffic will be rerouted in the Cartago area.

Help needed on burned body

Investigators in Alajuela say they could use a little help in identifying the man found burned in Siquiares de Alajuela about 9 p.m. Wednesday. the man is between 20 and 35 years and weighed about 140 pounds when alive.

The Judicial Investigating Organization can be reached at 437-0340 or 437-0342

A.M. Costa Rica
Consultantes Río Colorado S.A.

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Saray Ramírez Vindas.... associate editor

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Police raided two sex operations late Wednesday, and the man in charge said this is the beginning of a crackdown on such businesses.

The man, Paul Chavez, credited Internet Web pages for helping provide evidence in the case. He is director of the Centro de Información of the Fuerza Pública. Despite its non-threatening name, this is the unit that handles certain complex cases.

Raided was New Fantasy on Avenida 9, Barrio Amon, and La Bella Mansión on Avenida 11 between calles 1 and 3.

Some 65 officers participated in the twin raids. Although a report from the Ministerio de Gobernación, Policía y Seguridad Pública said the 15 female prostitutes were liberated, Chavez said his men were met with considerable hostility from the women.

Two persons were arrested, one at each location. At New Fantasy, the administrator, a woman identified by the last name of Suazo, was detained for six months preventative detention. At La Bella Mansión, a man with the last name of Carballo was detained, officials said.

The report by officials said that the operations were under the same ownership and that three more persons are being sought. Police said that both operations catered to foreigners. That certainly is the case with New Fantasy, a popular spot for 

Chavez said that a million colons were confiscated in the raids. That’s about $2,270. He estimated that the businesses collected 14,000 colons ($32) from customers and handled about 70 customers a day.

Chavez said that the raids were a result of citizen complaints and followed a six-month investigation. He said he realized that there were similar operations in downtown San José but no complaints had been filed on these.

Chavez said all the women in the establishments were adults. Prostitution is not prosecuted in Costa Rica, but pimping is punishable by prison. 

New Fantasy, which has been open about a year, was closed down by the Municipalidad de San José Jan. 16 but it reopened a short time later. The problem then was described as one of paperwork.

Chavez said that the Policía Municipal and his unit soon will meet to plot a course of action. They are concerned about the sex tourism generated by international advertising of these establishments.

New Fantasy was bold in promoting its operation. In addition to Web pages, an agent circulated through the downtown handing out business cards to likely looking prospects. He even did so on the pedestrian boulevard in the heart of the capital.

The oxygen-starved zone off the coast of Louisiana and Texas this summer is predicted to remain between 10,619 and 16,835 square kilometers, about the same size as it has been since 1990, according to a team of U.S. government scientists, the Louisiana Universities Marine Consortium and Louisiana State University.

The dead zone is an area in the Gulf of Mexico where oxygen levels are too low to support most life. It is caused by a seasonal change in the growth of algae that is stimulated by input of nutrients like nitrogen and phosphorus from the Mississippi and Atchafalaya rivers. The algae settle and decay in the bottom waters, where they consume oxygen faster than it can be replenished from the surface. This leads to hypoxia, or decreased levels of dissolved oxygen.

The Mississippi River system drains all or parts of 31 states and 6,086 square kilometers before reaching the Gulf of Mexico; the Atchafalaya River, 

National Oceanic and Atmospheric Administration pays for research cruises to track the development of hypoxia. These have been conducted monthly since January and will be completed by the end of July. The forecast about the size of this summer's dead zone is based on nutrient loads from the Mississippi and Atchafalaya rivers in May and June provided by the U.S. Geological Survey.

Research from the team indicates that nearly tripling the nitrogen load into the gulf over the past 50 years has increased hypoxia there. The latest research could help improve assessments of hypoxic effects under various gulf coast oceanographic conditions.

The northern Gulf of Mexico's bottom-water summer hypoxic zone in recent years has extended roughly 604 kilometers westward from the mouth of the Mississippi River.

LIMA, Peru — Archeologists working on a 2,400-meter-high mountaintop in southern Peru have unearthed an ancient brewery. 

Expedition leader Patrick Williams of the Field Museum in Chicago, Ill., this week called the 1,000-year-old find at Cerro Baul the oldest large-scale brewery ever discovered in the Andes.  Williams says it was apparently built by members 

Researchers from the Field Museum and the University of Florida have unearthed the remains of more than 20 preparation vats and open-hearth fire pits used to prepare the fermented beverage known as chicha. That drink was similar to beer, but was made of local grains, fruit and pepper seeds rather than barley and hops.  Project botanists are attempting to recreate the ancient brew. 

An International Monetary Fund ombudsman's report is sharply critical of the fund's long-term support for Argentine economic policies in the 1990s. 

The report released Thursday says the IMF provided billions of dollars to Argentina for almost a decade despite the country's unsustainable exchange rate system and its repeated failure to meet fund targets for reducing debt. It says the IMF maintained support long after it should have been apparent that Argentina "lacked fiscal discipline." 

The IMF's eventual withdrawal of support for Argentine economic policies in December 2001 led to a currency devaluation and a sharp economic downturn.  The report recommends that the Fund draw up so-called stop-loss contingency plans for countries facing a fiscal crisis and that it refrain from backing countries with serious political obstacles to reform. 

The Independent Evaluation Office of the fund did the report. It covers fund involvement from 1991 to 2001.

The Argentine crisis of 2000-02 was among the most severe of recent currency crises. In December 2001, Argentina defaulted on its sovereign debt and soon afterwards abandoned the convertibility regime, under which the peso had been pegged at parity with the U.S. dollar since 1991. The crisis had a devastating economic and social impact, causing many observers to question the role played by the IMF over the preceding decade when it was almost continuously engaged in the country through five successive financing arrangements.

The report examines the role of the IMF in Argentina during 1991-2001, taking advantage of the Evalation Office’s unique access to internal documents, in order to draw lessons for the IMF in improving both its surveillance and crisis management capabilities in future. 

In accordance with the office’s rules, it does not assess issues that have a direct bearing on current operations. Consequently, the report does not discuss developments beyond the first few days of 2002. As with all such reports, the version being made public is identical to the one submitted to management and the executive board. 

Here are the report’s major findings:

The crisis resulted from the failure of Argentine policymakers to take necessary corrective measures sufficiently early. IMF surveillance failed to highlight the growing vulnerabilities in the authorities' choice of policies and the IMF erred by supporting inadequate policies too long. By 2000, there were concerns about exchange rate and debt sustainability, but there was no easy solution. 

Recognizing the large costs of a pullout, the IMF supported Argentina's efforts to preserve the exchange rate regime. This support was justifiable up to January 2001 because large financial support, combined with strong policy corrections, had some chance of success. However, subsequent disbursements, made despite repeated policy inadequacies, only postponed the fundamental resolution of the crisis. In retrospect, the resources used in an attempt to preserve the peg could have been better used to mitigate some of the inevitable costs of a pullout.

• During the precrisis period, the IMF correctly recognized fiscal discipline and structural reform, labor market reform in particular, as essential to the viability of the convertibility regime. However, surveillance underestimated the vulnerability that could arise from the steady increase in public debt, when much of it was dollar-denominated and externally held, and did not consider exit strategies when it became evident that meaningful progress in structural reform was not forthcoming. 

Long-standing political obstacles proved formidable, but neither did the IMF use the available tools effectively. Argentina's failure to comply with requested conditions and the country was repeatedly accommodated. The result was that the IMF remained engaged in a program relationship with Argentina too long, when the policies being supported were inadequate.

• From late 2000, the IMF increased its commitment of resources to as much as $22 billion. The strategy viewed any exchange rate or debt sustainability problem as manageable with strong action on the fiscal and structural fronts, and may well have worked if the underlying assumptions had materialized and the program had been impeccably executed. 

The authorities, however, proved unable to implement the policies as agreed, and the successive resignations of two ministers of economy in March 2001 shattered market confidence. Then, the new minister of economy began to take a series of controversial and market-shaking measures. Yet, the IMF, having no effective contingency plan, continued to disburse and augment funds in support of the existing policy framework.

• By mid-2001, it should have been clear that the initial strategy had failed and that Argentina's exchange rate and public debt could not be considered sustainable. However, the IMF did not press the authorities for a fundamental change in the policy regime and, in December 2001, effectively cut off its financial support to Argentina. 

The decision to call the program off-track was fully justified under the circumstances, but the way in which it was done meant that the IMF was unable to provide much help as the crisis unraveled. 

Devaluing the currency would have been very costly regardless of when it was made, but an earlier shift in the IMF's strategy could have mitigated some of the costs because Argentina's economic health would have deteriorated that much less and more resources would have been available to moderate the inevitably painful transition process.

• The Argentine experience reveals weaknesses in the IMF's decision-making process. First, contingency planning was insufficient. Second, from March 2001 on, the IMF accepted a less cooperative relationship with the authorities, who often took multiple policy initiatives without prior consultation. 

Third, little attention was paid to the risks of giving the authorities the benefit of the doubt beyond the point where sustainability was clearly in question. Fourth, the executive board did not fully perform its oversight responsibility, exploring the potential tradeoffs between alternative options.

Here are the report’s recommendations:

A great deal of learning has already taken place within the IMF since the Argentine crisis. New guidelines have been issued, or are being discussed, to incorporate that learning into policies and operational procedures. The report draws 10 lessons, from which it presents six sets of recommendations in order to strengthen the initiatives already being taken. The main points are as follows:

• IMF surveillance needs to be strengthened further, by making medium-term exchange rate and debt sustainability the core focus. To fulfill these objectives, the IMF needs to improve tools for assessing the equilibrium real exchange rate, examine debt profiles from the perspective of "debt intolerance," and take a longer-term perspective on vulnerabilities that could surface over the medium term. Systematic discussion of exchange rate policy must become a routine exercise on the basis of candid staff analysis.

• The IMF should have a contingency strategy from the outset of a crisis, including stop-loss rules — a set of criteria to determine if the initial strategy is working and to guide the decision on when a change in approach is needed. Where the sustainability of debt or the exchange rate is in question, the IMF should indicate that its support is conditional upon a meaningful shift in the country's policy. High priority should be given to defining the role of the IMF when a country has a solvency problem. 

• The IMF should refrain from entering a program relationship with a country when there is no immediate balance of payments need and there are serious political obstacles to needed policy adjustment or reform. 

• In order to strengthen the role of the executive board, procedures should be adopted to encourage: (i) effective board oversight of decisions under management's purview; (ii) provision of candid and full information to the board on all relevant issues; and (iii) open exchanges of views between management and the board on all topics, including the most sensitive ones. 

These initiatives will be successful only insofar as IMF member countries uphold the role of the board as the prime locus of decision-making.

The report was discussed by the IMF's Executive Board Monday. The report, along with IMF management and staff responses and the summing up of the Board discussion are available on the IEO's Web site.