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Argentina: Cold Season for Investors

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Argentina's next president will face several major problems, including growing energy problems and rising inflation.

BY CHRONICLE STAFF

Cristina Fernandez - the frontrunner in Argentina's presidential elections next month - is likely counting the days until she assumes office, but she may not be getting exactly what she wants.

Her husband, Nestor Kirchner, has presided over a fast-growing economy the past four years, but Fernandez will have to face an economy that is increasingly strained as a result of the energy crisis, mounting inflation and reduced foreign investments. She also will face continued demands to pay Argentina's defaulted debt.

SHELL AND EXXONMOBIL OUT?

Fernandez' first crisis may turn out to be the exit of Shell and ExxonMobil (Esso) from Argentina.  "Price controls and the government's approach to fuel supply are likely to force Shell and Esso to leave the country," UK-based risk consultancy Exclusive Analysis said last week.

Shell officials are now under threat with imprisonment and the company faces fines for what the government claims are violations of a little-used 1974 law. Shell denies any wrongdoing.

"Shell Argentina is respectful of the law and we fulfill our obligation with our customers from day one," the company said in a statement. "We will vigorously defend our position at the judiciary."

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Keywords: PDVSA-ENERSA, Juan Jose Aranguren, J. P. Morgan, American Task Force Argentina, World Bank, Inter-American Development Bank, INDEC

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