December 24, 2002 By Herb Weisbaum www.komotv.com SEATTLE - The Commerce Department has just released a new report on the economy, and it is worse than expected.

Orders to U.S. factories for big-ticket goods fell 1.4 percent in November, dealing a setback to the nation's manufacturers, which have been struggling to get back on their feet after being knocked down by last year's recession. The unexpected drop in new orders for costly manufactured goods marked the weakest showing since September.

Sun Microsystems wins a round in its court case against Microsoft.

A federal judge says Microsoft must include rival Sun Microsystems' Java programming language in its Windows operating system. The injunction will be enforced while Sun pursues its antitrust case against Microsoft.

Sun had argued during a hearing earlier this month that Microsoft has gained an unfair advantage by shipping Windows with an outdated version of Java that's inconsistent for its users. U.S. District Judge Frederick Motz said in his ruling that the public wants to be assured that free enterprise remains genuinely free. Microsoft says it will appeal.

McDonald's will soon be serving up a new burger. A memo sent to franchisees says the fast-food giant will change its seasoning mix to improve flavor and stimulate sales. The memo also states that McDonald's will maintain its Dollar Menu.

FAO Incorporated will close 70 "under-performing" stores by March as it attempts to return to profitability. The company says of those closings, 55 will be Zany Brainy stores. FAO also owns FAO Schwarz and The Right Stuff.

Crude oil futures have rallied to two-year highs as worries about supplies from Venezuela and Iraq intensify. The rally in crude helped lift heating oil and gasoline futures to their highest levels since December 2000 and June 2001 respectively.

The theme park business has had a rough year. An industry survey finds that attendance at North American theme parks fell by almost two percent from last year -- that's more than 3-million fewer visitors. The decline is blamed on the sluggish world economy that kept international visitors at home.

Expect to fewer business lunch meetings next year. USA Today reports that cost cutting employers are telling their workers to cut back on taking clients out to lunch. Add to that the fact that over-worked employees at down-sized companies have less time "do lunch." The paper says "half of full-time employees spend less time on lunch than they used to" with about a third of all workers doing something other than eating during their lunch break.

Reuters, 12.24.02, 12:15 PM ET By Hugh Bronstein NEW YORK, Dec 24 (Reuters) - Emerging market sovereign bonds meandered in stagnant holiday trade on Tuesday while the few analysts who showed up kept their eyes on Venezuela, where President Hugo Chavez was trying to break a national strike that has throttled oil exports. "We're not seeing any transactions and there has been no news," one emerging debt trader said. "But desks are a little bit better staffed than they usually are at Christmas because people are on their toes, keeping their eyes on Venezuela." The strike, which has slashed Venezuela's petroleum output, moved into its fourth week without any signs of easing. Heading into the holiday, Wall Street had worried that domestic shortages of gasoline and, to a lesser extent, food might set the stage for street violence. "According to the latest reports, Venezuela has increased its gasoline stock enough to get them through the Christmas season," said Rafael de la Fuente, an emerging markets analyst at BNP Paribas. "And, at least according to government sources, there's enough food to go around. So over the next two to three days we should not see a big issue," he added. "But it's a touch and go situation." Strike leaders, who are seeking Chavez's resignation, rejected the government's appeal on Monday for a Christmas truce. Negotiators from the two sides remained far apart on the key issue of early elections demanded by Chavez's foes. Chavez was elected in 1998 after a campaign in which he vowed to wrest control from the country's corrupt elite and enact reforms to help the poor. But opposition has grown amid chargesthe president wants to establish a Cuban-style authoritarian state. Many investors say Chavez is probably on the way out and that Venezuelan bonds are poised to rally on that development. This optimism helped account for the stunning rise seen this year in Venezuelan bond prices. Other market players say Chavez, whose struggle for control of the country began with an unsuccessful coup he led in 1992, is not likely to leave without a long, economically debilitating fight. Venezuelan debt has rewarded holders with total returns of 18.6 percent in 2002, compared to the 14 percent rise in the overall market, according to JP Morgan's Emerging Markets Bond Index Plus. But as the strike eats into the country's Christmas season tax revenues, Venezuelan total returns have dropped 3.4 percent so far in December. Copyright 2002, Reuters News Service

Reuters, 12.24.02, 12:50 PM ET  By Marc Frank

HAVANA, Dec 24 (Reuters) - Communist Cuba's recovery from a 1990s economic crisis slowed in 2002 and domestic finances deteriorated, as Havana printed pesos to lessen the impact of a foreign exchange shortage on the import-dependent island. A 5 percent decline in tourism, low sugar prices, hurricanes, shrinking foreign investment and credit and the U.S. trade embargo left the country short of cash to import oil and other products, Economy Minister Jose Luis Rodriguez said in a customary year-end report to the National Assembly. The government pumped more than 2 billion pesos into the economy, keeping the gross national product barely in the black while widening the budget deficit, according to the report, read by Rodriguez to a legislative session Saturday devoted to the economy. He said the gross domestic product grew 1.1 percent in 2002 and forecast a 1.5 percent GDP increase in 2003, though the country's highest ranking economic officials warned at the session of rising oil prices could dash those plans. President Fidel Castro, in a message relayed to the assembly by Central Bank chief Francisco Soberon, warned that the strike in Venezuela and possible war in Iraq threatened to plunge the Caribbean island into a grave energy crisis. "One can no longer speak of high oil prices. Now you can start talking about exorbitant and unreachable prices," Soberon told the assembly, adding Cuba last week failed to purchase oil on the spot market as it was outbid by other buyers. Cuba currently imports around 65 percent of its minimum fuel needs, and more than half of that comes from Venezuela with soft financing. Vice President Carlos Lage, Castro's point-man for economic development, told legislators: "Oil prices could go up more ... forcing emergency, though temporary measures," Lage added the measures would guarantee the minimal functioning of the country and essentials such as food and health care. WIDENING BUDGET DEFICIT, PRESSURE ON CURRENCY The National Assembly adopted a 2003 budget with a deficit of 3.4 percent of GDP, breaching its own limit on deficits of more than 3 percent. The deficit was just over 3 percent in 2002, according to reports delivered at Saturday's meeting, compared with 2.5 percent in 2001. Increased currency in circulation combined with little growth to put pressure on the peso. The local currency held steady at 26 to the dollar because of a freeze on the exchange rate, government sources said, after a 22 percent devaluation in 2001. The government maintains a one peso to one dollar rate for its economic accounts. In 2002, there were 13.550 billion pesos in circulation -- 45.2 percent of GDP, compared with 11.356 billion in 2001, or 42 percent of GDP, Rodriguez said. The GDP increased by around 300 million pesos in 2002. At the National Assembly, Rodriguez and other officials focused on peso-funded efforts to upgrade free social services and recover from storm damage. "The year 2002 has been one of little growth and high development," Osvaldo Martinez, president of the Cuban parliament's economic commission, boasted. Martinez said social services had improved and unemployment declined from 4.1 percent to 3.3 percent despite the halving of the huge sugar industry, as more than 200,000 workers and unemployed youth were paid to go to school. LONG RECOVERY FROM SOVIET COLLAPSE Western diplomats said Cuba defaulted on hundreds of million of dollars in short-term and medium-term credits this year, leaving the country few options to find foreign financing. The collapse of former-benefactor the Soviet Union plunged the Caribbean's largest island into a crisis from which it has yet to fully recover. The GDP declined 35 percent during the 1989 through 1994 period, recovering since then at a 4 percent annual rate. Growth slowed from more than 6 percent in 2000 to 3 percent in 2001 and 1.1 percent this year. Budget deficits soared to 35 percent of GDP, and the peso fell from 5 to 150 to the dollar during the depths of the 1990s crisis. The peso and dollar circulate freely in Cuba. Havana adopted a series of austerity measures in 1994. The budget deficit declined to 2.4 percent of GDP by 2000, pesos in circulation fell from 15 billion to less than 10 billion, and the local currency strengthened to 22 pesos to the dollar, while most wages were frozen. Copyright 2002, Reuters News Service

AI Index: AMR 53/023/2002 (Public) News Service No: 242 24 December 2002

Venezuela: step back from the brink: an urgent appeal to Venezuelan society and the international community

The next few days will be decisive for the rule of law in Venezuela, Amnesty International warned today. Amnesty insisted that the support of the international community is fundamental for the resolution of the crisis in the country in these critical hours.

" More than two weeks after a general civic strike began, the country once more runs the risk of political breakdown and a rupture in the constitutional order on which the full observance of human rights depends," the organization added.

"The seriousness of the situation faced today by Venezuelan society requires a concerted response from all sectors of society. The dilemma they face is whether to continue along the path of confrontation, perpetuating the cycle of violence, harassment and polarization, or whether to commit themselves to seeking peaceful negotiated solutions within the constitutional framework and in accordance with international human rights standards," it continued.

Amnesty International therefore urges all sectors of society and institutions to immediately take basic steps to defend the rule of law and restore governability. In particular:

Amnesty International urges the security forces to act with scrupulous attention to the standards that regulate the use of force when dealing with present and planned demonstrations and mobilizations. Since the tragic events of April 2002, Amnesty International has on many occasions denounced the excessive use of force by the police and the National Guard, that has resulted in death and injury. Any action ignoring these standards should be rigorously investigated and punished.

Attacks on journalists and other press workers should cease immediately. At moments of crisis, it is even more crucial to guarantee freedom of expression, the cornerstone of the rule of the law. Likewise, the indispensable work carried out by human rights defenders should not be unduly restricted and they should be able to count on the impartial protection of the law. By exercising their legitimate right to the freedom of assembly, association and expression, opposition sectors should take responsibility for choosing protest methods and tactics that do not undermine constitutional guarantees. Without these guarantees, the rights of all are prejudiced. In addition, considering the role played by the communications media in the development of the crisis, Amnesty International urges Venezuelan journalists and communicators to take responsibility for reporting the situation in a serious and impartial way, to avoid further polarizing the situation.

Both sides should commit themselves to the search for negotiated and peaceful solutions, through a dialogue focused on the need to strengthen the rule of law and full observance of human rights. The fundamental objectives of this process should be to end impunity, depoliticize the armed and security forces, and recover the credibility of the administration of justice. At the same time, the international community and especially the regional and international human rights organizations, must redouble their efforts to facilitate a peaceful resolution of the crisis, and to provide adequate mechanisms and resources to monitor the human rights situation in the country and stop the situation from deteriorating.

"To this end, we support the request made by the International Human Rights Commission for permission to make a monitoring visit to the country and we urge the government to extend an invitation to other inter-governmental human rights monitoring mechanisms," declared Amnesty International.

Background Throughout this year, political polarization in Venezuela has been threatening to lead to large-scale violence. Currently, tension is especially intense due to an indefinite national strike, which is already in its twelfth day, convened by the opposition to overthrow President Chávez. In this context, there have been many acts of violence, including the killing of three people during an opposition demonstration held on 6 December in Francia Square in Caracas. The strike has paralysed many sectors of the economy.

On 11 April 2002, a similar national strike led to acts of violence which left 20 dead. This violence in turn led to a failed coup and the temporary detention of President Chávez. On 13 April, the President returned to power after major national and international protests at the breaking of the constitutional order. Since then, there have been attempts to negotiate a solution. César Gaviria, President of the Organization of American States is currently acting as a mediator in talks between the government and the opposition.

For more information, contact the Amnesty International press office in London, United Kingdom, on +44 20 7413 5562 Amnesty International, 1 Easton St., London WC1X 0DW. web: www.amnesty.org

For latest human rights news view news.amnesty.org

Posted Dec. 24, 2002 By Scott Wheeler www.insightmag.com

Al-Qaeda and two other Middle East terrorist groups have established operations and are leading a holy war against U.S. and British interests from the tiny Caribbean nation of Trinidad and Tobago, Insight has learned from U.S. government sources and officials inside the government of Trinidad and Tobago. A U.S. official involved in tracking these activities says Umar Abdullah is "leading a group called the Islamic Front," believed to be "smuggling AK-47s, Tech-9s and Glocks" into the island country. According to the U.S. source, Abdullah may have fought in Afghanistan against the Soviet Union during the 1980s, operates "in solidarity with al-Qaeda and the Taliban" and is "maintaining relations with Hamas and Islamic Jihad."

According to the State Department, Hamas is a Palestinian-based branch of the Muslim Brotherhood, and the Egyptian-based Islamic Jihad is a "close partner of [Osama] bin Laden's al-Qaeda organization." Both are terrorist groups.

Emergence of the Islamic Front in Trinidad has raised such concern in the United States, say sources on the island, that FBI and CIA counterterrorism experts have been dispatched to assist the government there in investigating groups with terrorist ties.

Trinidad and Tobago is a stable country, but has suffered some Muslim terrorism. In 1990 the Trinidad-based Muslim group Jamaat al-Muslimeen bombed police headquarters, attacked the parliament, shot and wounded the prime minister and held hostage members of his Cabinet in an effort to overthrow the government. According to press accounts, 24 people were killed and hundreds wounded during the attempted coup that lasted six days.

Jamaat al-Muslimeen leader Yasin Abu Bakr, who led the failed coup, was convicted and jailed along with other group members, but in 1992 they were released from prison on a legal technicality. According to U.S. government sources, Jamaat al-Muslimeen primarily is affiliated with Libya. A high-level source in the Trinidad prime minister's office tells Insight that Bakr is known to have traveled to Libya many times. But now, according to a U.S. counterterrorist specialist, the Islamic Front is "taking over the Libyan operations," leaving a complicated web for counterterrorism investigators to untangle.

Prime Minister Patrick Manning and Minister for National Security and Rehabilitation Howard Chin Lee have attempted to downplay terrorist-threat conditions in Trinidad in response to other press inquiries. Though Manning and Lee were not available to answer questions from Insight, senior staff members of the administration spoke to this magazine on condition of anonymity. One official says Manning is concerned that if reports of the Islamic Front are widely circulated, "it would adversely affect the economy," but insists that, internally, preventing "terrorism is the main concern" of the prime minister.

Some within the Manning administration openly admit there is a sense of great urgency about this. During the last year there has been "a wave of crime" in urban areas where "Islamic fundamentalists have been aggressively recruiting among the poor" and, according to a Trinidadian government source, some of the jihadist recruits "are traveling to Pakistan and Afghanistan" and back.

There is concern that the omnipresence of U.S. and British petroleum companies in the oil-rich nation provide easy pickings for terrorists. Local populists say this is the reason U.S. and British counterterrorism experts are on the island. "They came in to ensure the security of the multinational corporations," a source assured. If so, it is being handled secretively, as such an operation would be; neither the FBI nor CIA would confirm presence in Trinidad and Tobago.

One official who spoke with Insight on the record is Sen. Sadiq Baksh, a Muslim who says he is concerned about the threat posed by radical Islam to the safety of the citizens of Trinidad. Baksh says there is reason for "profound alarm over the escalating crime rate in our republic over the past 11 months."

A member of the United National Congress party, which opposes the administration of the prime minister's People's National Movement (PNM), Baksh tells Insight: "Recent studies have revealed that two out of every three persons in this country live in fear for their own personal safety and the safety of their loved ones."

Baksh and other officials agree that the surge in crime is characteristic of areas in which terrorist operations are mounted. For instance, there have been repeated "kidnappings of businessmen ... more than 40 in an eight-month period," a member of the prime minister's staff tells this magazine.

Baksh cites growing concern about the Manning administration, claiming that "two out of every three persons admit that they have no confidence in the government's ability to protect them." He tells Insight: "In the past 12 months, over 155 citizens of this country have had their lives snuffed out, surpassing the murder figures of 2001. ... And the minister of national security calls on the people to thank their lucky stars because it could have been worse." But Baksh also says the Manning administration is more than just indifferent to terrorism. He points to Jamaat al-Muslimeen's support for the Manning team in the October elections.

Baksh warns, "The ruling PNM ... has been compromised by its unholy alliance with known terrorists and insurrectionists." He and other critics insist that Manning courted Jamaat al-Muslimeen in hopes of securing support from the nation's growing Muslim minority, now 15 percent of the total population. Baksh asks, "How can the PNM government solve crime when it is in bed with the extremist and known criminal elements?"

Insight obtained a Trinidad telephone number for Jamaat al-Muslimeen and attempted to speak with Bakr. After this magazine placed repeated calls and spoke with three different people, a male leader of the group who refused to identify himself answered several questions, then began shouting and abruptly slammed down the receiver. Asked about Jamaat al-Muslimeen terrorist activities in Trinidad he denied that there were any. When asked about the 1990 coup attempt staged by the group, he responded, "I don't know anything about that. I was in the U.S. at the time." Asked about the Islamic Front and Umar Abdullah, he responded: "I know very little about him; he's a little upstart."

While Insight was unable to track down Abdullah or anyone from the Islamic Front for comment, the voice speaking for Jamaat al-Muslimeen confirmed vigorous proselytizing in Trinidad, explaining, "One of the tenets of Islam is to propagate the faith." When asked if jihadists and other Muslim extremists were responsible for the spike in murder and kidnapping in Trinidad, he responded, "That crime belongs to poverty."

Baksh, the Muslim senator, says "During the holy month of Ramadan we had a significant reduction in murder and kidnapping, and it is not insignificant that after the holy month we once again saw a spike" in criminal activity.  

Meanwhile, U.S. sources claim to be unclear about whether the suspected terrorist cells in Trinidad will mobilize and pose a direct threat to citizens inside the United States. In October, Trinidad immigrant Shueyb Mossa Jokhan was sentenced to "nearly five years in federal prison for a terrorist bombing plot," according to the Milwaukee Journal Sentinel.

The report said that Jokhan pleaded guilty to "conspiring to bomb electrical transformers and the Israeli Consulate in Miami." The plan reportedly was "hatched in a Florida mosque" and involved a Pakistani immigrant who recruited Jokhan for the attack, but law-enforcement sources tell Insight they have been unable to connect the foiled Florida attack to the Islamic Front in Trinidad.

Trinidad and Tobago is in the southern Caribbean just a few miles off the coast of troubled Venezuela [see "Chavez Plans for Terrorist Regime," in this issue]. The island nation has been independent of the British Commonwealth since 1962.

Scott L. Wheeler is a reporter for Insight. swheeler@insightmag.com