www.forbes.com Reuters, 01.09.03, 9:42 AM ET By Karen Iley and Peter Nielsen

GENEVA/LONDON, Jan 9 (Reuters) - Wanted: Well-connected, market-savvy financier with superb diplomatic and social skills who can command the respect of the world's top central bankers.

That was the challenge facing the Bank of International Settlements (BIS) as it secretly scoured the globe over the last four months for a successor to general manager Andrew Crockett.

Poised to name its new boss on Monday, the typically low-key BIS is tight-lipped on who has even made it to the short-list.

But finding a successor to Crockett, who will step down at the end of March, will be no easy task, given the Briton's good record, the daunting job description and the "musical chairs" going on elsewhere in the central banking and supervision arena.

Crockett, who moved to the BIS in 1994 from the Bank of England, is widely credited with transforming the BIS from a European-dominated body to a global institution.

The BIS, which now has offices in Hong Kong and, since November, Mexico, may want to continue his work by looking to a non-European for the first time in its 70-year history.

For sure, the search committee, headed by BIS Chairman and Dutch Central bank Governor Nout Wellink, wants a high-calibre candidate -- someone with a track record of "proven independence and personal integrity...outstanding management skills and have high stature in the international financial community."

"We are simply looking for the best candidate in a broad field," Wellink said in September.

NON-EUROPEAN? Set up in 1930 to deal with German war reparations, the BIS has only had Europeans at its helm: Five Frenchmen, one German, one Belgian and a Briton.

The BIS serves a variety of roles, including fostering international monetary and financial cooperation, serving as a bank for central banks, a research centre, a prime counterparty for central banks' financial transactions, and an agent or trustee with regard to international financial operations.

However, the BIS has taken on a much more global role in recent years and if it were to pick an "outsider" it would certainly hammer home the message that its role has expanded to one of a truly international body.

Two Latin American names have cropped up.

Arminio Fraga, the former President of the Central Bank of Brazil and ex-hedge fund manager for billionaire George Soros, was applauded for keeping Brazil's economy on track during the Latin American crisis of the late 1990.

Fraga, replaced at the central bank at the start of 2003 by Henrique Meirelles under new president Luiz Inacxio Lula da Silva, is seen as competent and investor-friendly.

Guillermo Ortiz, Mexican central bank chief, ends his term in December, and has presided over a booming recovery in the domestic economy.

Both have superb track records and perhaps more importantly, both are members of the prestigious Group of Thirty so would certainly qualify as well-connected to the elite of the international financial establishment.

The BIS, however, is more likely to play it safe.

Global financial stability, one its main concerns, mainly involves the major developed economies, not emerging markets. It may thus be too soon for the BIS to pick someone outside the realm of the Group of 10 leading economies.

Among such candidates are former Swedish central bank governor Urban Backstrom, out of work after resigning at the end of 2002. He is still young, has solid contacts, is well-respected and a former BIS president.

Other possibilities among the Group of Thirty members include Jacob Frenkel, former governor of the Israeli central bank and current chairman of Merrill Lynch International (nyse: MER - news - people), and Gerd Hausler, counsellor and director of the IMF's international capital markets department.

The search committee includes Bank of France chief Jean-Claude Trichet, who is hoping to switch to the European Central Bank to take over from Wim Duisenberg, provided he emerges unscathed from a banking scandal trial.

It also includes Bank of Japan deputy governor Yutaka Yamaguchi, who is set to lose his boss Masura Hayami, at the end of March, as well as the Bank of Italy's Antonio Fazio, the Federal Reserve's Roger Ferguson and Jean-Pierre Roth of the Swiss National Bank. The inclusion of Yamaguchi and Ferguson suggests that the BIS is not restricting its search to Europe, but it does not shed light on whether it would consider a non-G10 candidate.

As for Crockett, he is continuing to play a role in the high-finance job swap.

His departure nine months ahead of schedule sparked talk he may take over from Sir Edward George as Governor of the Bank of England. But Deputy Governor Mervyn King got that job and Crockett is now tipped to replace Howard Davies as chairman of Britain's Financial Services Authority (FSA).

Crockett's resignation also means the Financial Stability Forum, a body set up in 1997 to promote international financial stability, is likely to be looking for a new chairman.

www.forbes.com Reuters, 01.09.03, 9:44 AM ET  By Andrei Khalip

RIO DE JANEIRO, Brazil9 (Reuters) - Latin America is treacherous territory for oil and gas investors, awash with fears about Venezuela's general strike and public unrest, economic crisis in Argentina and Brazil's new leftist government.

Sector analysts suggest investors "sit it out" until calm returns to the region, which partly opened to foreign investment in the past decade and is still considered less risky than the former Soviet Union and some Middle East countries.

"It was a time of big shocks last year in Latin America, but it is a big question whether we see any recovery now," said Matthew Shaw of Wood Mackenzie oil consultancy in Edinburgh. "It's time to wait and see, really."

The problems in the region, which in total produces more oil than world leader Saudi Arabia, add to the pressure most foreign companies are facing at home to cut unnecessary risks in a sluggish global economy.

Although some assets have become seemingly cheap, it is difficult for companies to evaluate actual opportunities because of uncertainties over the region's economic prospects and politics, he added.

"The lower ability to tolerate higher risks, less support for new ventures, resulted in many trying to sell down positions, especially in natural gas," said Jed Bailey, Cambridge Energy Research Association's director for Latin America, who also expected "a very tough" 2003.

With Venezuela's strike still crippling crude output in the world's fifth-largest oil exporter whose political future is murky at best, investors have plenty to worry about, even though higher world oil prices due to the strike will still bring a net benefit to those with diversified portfolios.

"There is concern about restarting production of heavy oil in Venezuela," said Myles McDougall of ABN Amro in London. It may take months to reestablish wellhead pressure and some wells may have to be redrilled in costly operations, experts said.

Heavy oil accounts for more than half of the Andean nation's output that slumped from 3.1 million barrels per day (bpd) in November to 600,000 bpd now. Some refineries in the U.S. Gulf Coast depend on this type of crude.

The strike, organized by the opposition seeking to oust Populist President Hugo Chavez, affected state oil giant Petroleos de Venezuela's credibility and raised concerns about its debt, threatening Venezuela's efforts to lure fresh foreign investment into its energy sector.

PROBLEMS DOWN SOUTH Despite a modest economic recovery in the past few months in Argentina, hit by its worst economic crisis ever, drilling activity is low and investors are bracing for a new bout of uncertainty ahead of early presidential polls in May.

A freeze on fuel prices and a 30 percent retention of export revenues in dollars are also hampering investment.

Brazil, the region's No. 3 oil producer after Mexico and Venezuela, has lived through a general crisis of investor confidence ahead of presidential elections last October that brought leftist Luiz Inacio Lula da Silva to power.

Analysts say the statements by his new energy officials have been moderate so far, suggesting that a free-market fuel pricing system and sales of exploration licenses to foreign firms would be preserved. But they said they needed time to evaluate whether that commitment would last.

Also, foreign firms have lost some of their enthusiasm about new oil concessions offered by the government since 1999, and are trying to reshuffle their portfolios after only a few small finds of heavy oil in deep-water offshore areas.

Analysts and company officials alike say the government must come up with tax breaks to maintain Brazil's oil appeal.

As for natural gas-rich but land-locked Bolivia, most analysts are skeptical that companies working there would be able to ship liquefied natural gas to the U.S. markets any time soon, due to Bolivia's political problems with sea access.

Meanwhile, slow growth of natgas consumption in neighboring Brazil has thwarted Bolivia's plans for bigger exports there.

Latin America's No. 1 oil producer Mexico offers a calmer picture, but there is also room for uncertainty, as the start of multi-service contracts that state oil monopoly Pemex is expected to award to foreign firms has been delayed.

Most experts singled out tiny Ecuador as the country with the steadiest oil development. Ecuador will be selling concessions for one of its big oil fields this year and should finish a 450,000 bpd pipeline to coastal ports for export.

Copyright 2003, Reuters News Service

www.insidevc.com By New York Times News Service January 9, 2003

RIO DE JANEIRO, Brazil -- A senior official in the left-wing government that took power last week has set off a furor here and alarmed neighboring countries by arguing that Brazil, Latin America's largest nation, should acquire the capacity to produce a nuclear weapon.

"Brazil is a country at peace, that has always preserved peace and is a defender of peace, but we need to be prepared, including technologically," Roberto Amaral, the newly appointed Minister of Science and Technology, said in an interview with the Brazilian service of the BBC that was broadcast Sunday night. "We can't renounce any form of scientific knowledge, whether the genome, DNA or nuclear fission," he added.

Amaral's remarks, coming as the United States faces a nuclear crisis with North Korea and is preparing for war with Iraq over its weapons programs, has reawakened debate over Brazil's own nuclear energy and research program, the most advanced in Latin America.

On Tuesday, a spokesman for President Luiz Inacio Lula da Silva was quick to distance the new president from Amaral's pronouncement that "mastery of the atomic cycle is important" to Brazil, saying that the minister's remarks were not an expression of official policy. "The government favors research in this area solely and exclusively for peaceful purposes," the spokesman, Andre Singer, told reporters at a news briefing in Brasilia.

Luiz Pinguelli Rosa, Brazil's most prominent nuclear physicist and the newly appointed head of the state electrical power utility Eletrobras, said Wednesday: "Brazil does not have, does not need and should not obtain the knowledge of this technology. The bomb is a plague of mankind."

Nevertheless, Amaral's declarations echoed a certain discontent expressed by da Silva as a candidate last year. In a speech here in September, da Silva criticized the Nuclear Nonproliferation Treaty as unjustly favoring the United States and other nations that already had nuclear weapons, asking, "If someone asks me to disarm and keep a slingshot while he comes at me with a cannon, what good does that do?"

Da Silva later issued a "clarification" saying Brazil did not intend to develop nuclear weapons. But a dozen members of the U.S. Congress, complaining of his "longstanding relation with and admiration for the Communist dictator and sponsor of terrorism Fidel Castro," sent a letter to President Bush saying da Silva's remarks "raise grave questions concerning the international policies a government of Brazil might pursue under his presidency."

In his inaugural address last week, da Silva, a former factory worker and union leader, said he favored "the democratization of international relations, without any form of hegemony." Brazil already has a joint rocket program with China, and da Silva said his government would also strengthen ties in all areas with regional powers like India, Russia and South Africa.

The Brazilian Constitution, promulgated in 1988, forbids the development of nuclear weapons or their presence here.

That action was taken a year after the government here announced it had developed the technology to enrich uranium, but it was not until Fernando Henrique Cardoso took office in 1995 that Brazil agreed to sign the Nuclear Nonproliferation Treaty.

Until the mid-1980s, Brazil and its neighbor and traditional rival, Argentina, had programs aimed at developing the ability to produce atomic bombs. But after military dictatorships in both countries gave way to democratic rule, civilian presidents negotiated an end to those programs and began a policy of technical cooperation and exchange of information.

That effort has been so successful that during a visit to India and Pakistan in 2000, Bill Clinton, president at the time, cited Brazil and Argentina as examples for the rest of the developing world to follow. For that reason, Amaral's declarations immediately generated front-page headlines and raised eyebrows in Argentina.

Argentina's president, Eduardo Duhalde, who is scheduled to visit Brazil on Jan. 14, told reporters on Tuesday: "Before making any comment, we need to have a good look at what the Brazilian minister said. Let's say we're in a holding pattern, waiting for further explanation."

english.pravda.ru

The Russian defense establishment offers Arabs the newest weapons for special operations

The Arab state of Qatar is currently especially popular for its particular connection with the Iraqi problem and indirectly, with the international terrorism. Qatar’s television al-Jazeera almost regularly broadcasts Osama bin Laden’s threats and revelations.

Moreover, Qatar Foreign Minister Hamad Bin Jassim Al Thani is categorical against the war against Iraq. He thinks the idea of Saddam Hussein overthrowing is a complete mistake; he is sure that actions of this kind require sanctions of the world community.

International exhibitions of specific armament MILIPOL are regularly held in the country. Today, the fourth exhibition, MILIPOL QATAR 2002 opened there. It is quite natural that Russia’s state arms exporter Rosoboronexport brought the newest samples of the Russian special purpose weapons to Qatar More details... Pravda.RU:World:More in detail 20:14 2002-10-28 Does Money Smell? The Russian defense establishment offers Arabs the newest weapons for special operations

The Arab state of Qatar is currently especially popular for its particular connection with the Iraqi problem and indirectly, with the international terrorism. Qatar’s television al-Jazeera almost regularly broadcasts Osama bin Laden’s threats and revelations. Moreover, Qatar Foreign Minister Hamad Bin Jassim Al Thani is categorical against the war against Iraq. He thinks the idea of Saddam Hussein overthrowing is a complete mistake; he is sure that actions of this kind require sanctions of the world community. International exhibitions of specific armament MILIPOL are regularly held in the country. Today, the fourth exhibition, MILIPOL QATAR 2002 opened there. It is quite natural that Russia’s state arms exporter Rosoboronexport brought the newest samples of the Russian special purpose weapons to Qatar.

According to the Russian online source, REGIONS.Ru, the Russian federal state unitary enterprise Rosoboronexport presented several Russian achievements designed for protection of objects and territories, and also arms for special operations. A Rosoboronexport spokesperson informs, special shooting and silent arms designed for special operations and for public order protection, and also hunting rifles are presented on the Russian exposition at MILIPOL QATAR 2002. Majority of the exhibits were developed at the arms concern Izhmash and in the design bureau of fine machinery in Russia.

The Moscow State Research and Production Enterprise Bazalt has brought an anti-diversion hand grenade cup discharge DP-64, small-size anti-diversion grenade cup discharge complex DP-65 and multi-barreled missile emplacement MRG-1 to the exhibition. The equipment is designed for protection of vessels, hydraulic structures, offshore platforms and other offshore and coastal objects from any kind of underwater attacks. According to a spokesperson of the enterprise, “the equipment can strike any kind of existing armored targets and those one which may appear in the future.” Bazalt also exhibits hand antitank grenade weapons of the RPG-26 and RPG-27 type, attack grenades and new ammunition for the RPG-7 hand grenade cup discharge, which are adopted by the armies of over 40 countries of the world.

Federal enterprise Strela exhibits the Fara-1 portable radar station. Rosoboronexport representatives say that the radar station “is the world’s only which can be mounted as a heavy gun.” Fara-1 weighs 16,5 kg, it can be joined with automatic shooting arms (machine-guns or grenade cup discharges); it can be completed with night vision equipment. The station’s detection range is up to 5 kilometers. REGIONS.Ru informs, the Fara-1 radar station suits for fighting under conditions when targets cannot be seen, in the mountains for instance.

Enterprise Fraktal-SB from the Russian city of Serpukhov represents security system Gyurza designed for detection of violators. Lenta.Ru informs, Russian enterprise Eleron from Moscow exhibits a wide range of fast deployment facilities for protection of especially important objects.

It is obvious that almost all exhibits that Rosoboronexport has brought to Qatar this year are special equipment designed for the struggle against diversion groups, however, everything can be successfully used for organization of diversions. In other words, the Russian exhibits are also good weapons for small mobile terrorist groups. All arms presented at the exhibition may serve for realization of the terrorist objectives and for their retreat as well.

That is why it’s no wonder that the Arab world is very much interested in the Russia-produced weapons. It is very likely that Rosoboronexport will be a success in Qatar and conclude contracts for supply of Russian weapons to some Arab countries. Unfortunately, nobody can guarantee that these very weapons won’t be tested on the Russian territory some day, no Arab clients can guarantee this.

Dmitry Slobodanuk PRAVDA.Ru

Translated by Maria Gousseva

Read the original in Russian: pravda.ru

english.pravda.ru

The new Brazilian Minister of Science and Technology, Roberto Amaral, shook the South American and international media after announcing his Government was interested on developing a nuclear program to "handle such technology". In confusing declarations, Amaral said: "We are against the atomic bomb, wherever it comes from: Brazil, Argentina, USA or Israel". However, he added: "there cannot be limits to the knowledge" and puzzled local and foreign authorities."

Jan, 09 2003

10:30 2003-01-09

The Brazilian Minister of Science said that his country should "handle the atomic technology" and know how to produce atomic bombs.

The new Brazilian Minister of Science and Technology, Roberto Amaral, shook the South American and international media after announcing his Government was interested on developing a nuclear program to "handle such technology". In confusing declarations, Amaral said: "We are against the atomic bomb, wherever it comes from: Brazil, Argentina, USA or Israel". However, he added: "there cannot be limits to the knowledge" and puzzled local and foreign authorities.

As the polemic declarations may provoke a reaction from Brazil's neighbors and the international community, the Foreign Minister Celso Amorim consulted his colleague and said Amaral did not mean Brazil was interested on developing an atomic bomb. "We will keep on fighting for the world nuclear disarming", said Amorim to the press.

The problem with Amaral declarations is that he actually said what he says he didn't said. On Monday, the BBC correspondent to Brasilia asked him if he was of the idea that his country should eventually has the know-how to produce atomic bombs. His answer was very clear: "I agree, I agree", he said.

If Brazil plans to have the bomb, then would alter the military equilibrium in the region and may face a diplomatic reaction from its Mercosur partners. Argentina, as well as Brazil, already handles atomic energy, but with pacific purposes. If its neighbor plans to develop massive destruction weapons, then the Argentine militaries would push their civil authorities to follow Brazil's path.

Sources in the Argentine Army confirmed to PRAVDA.Ru that even in peacetime, Brazil and Chile are always targets for military actions and the Armed Forces have defensive plans to neutralize hypothetical neighbor attacks. This is mere speculation as an armed conflict in the region is unthinkable with democratic governments.

Notwithstanding, Foreign Officers in Buenos Aires became puzzled by Amaral declarations. "Argentina and Brazil have several mutual agreements, which forbid nuclear development for military purposes and allow mutual controls on this subject", said a source at the Foreign Ministry to the Argentine newspaper Clarin.

Analysts are also concerned on Brazil's rocket launching programs. Brazil has initiated negotiations to develop a new space program with Ukraine and has a base in country's NorthEast to launch satellites. The combination of both capabilities: atomic power and rocket launching is what Argentina is scared of.

This situation will be surely discussed on the next summit between Brazil's Lula and Argentina's Duhalde in Brasilia, next June 14. There is also scheduled a meeting between Foreign and Defense Ministers for January, as Carlos Ruckauf, Argentine FM's head confirmed to this correspondent last week.

Hernan Etchaleco PRAVDA.Ru Argentina

Photo (AP): Presidents of Brazil (left) and Argentina (right)

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