www.upi.com By Jason Tockman A UPI Outside view commentary From the Washington Politics & Policy Desk Published 1/21/2003 6:24 PM

ATHENS, Ohio, Jan. 20 (UPI) -- Most people in the United States took little or no notice of this past November's presidential elections in Ecuador. Little ink or airtime was dedicated to the selection of the former army colonel that participated in a coup in 2000 to oust the unpopular President Jamil Mahuad. But it may be time to pull out the world atlas for a little geography refresher, because there's a trend afoot to our south that has implications for us here at home.

The army colonel is Lucio Gutiérrez, a populist reformer who bested Ecuador's richest man. Gutiérrez rode into the presidency on a wave of public discontent with the status quo. From the perspective of many Ecuadorians, the status quo equals corruption equals free market fundamentalism equals poverty.

What's most relevant to the United States is the part about markets, and the growing opposition to the economic reforms imposed from Washington: the "Washington Consensus" policies of privatization, deregulation, trade liberalization and lowering public expenditures (on services like education and subsidies of food or oil).

Much of Latin America is thick with resentment toward what is generally perceived as neo-colonial dominance by the United States. Traveling in these largely developing countries, one gets the sense that the International Monetary Fund is akin to a natural disaster that happened to the region, etched in their collective memory.

Luiz Inácio Lula da Silva of the Brazilian Workers' Party is now president of Brazil, home to the world's eighth-largest economy. Lula's solid victory is widely seen as a public rejection of the free market policies that contributed to the economic downfall of Brazil's neighbor and close trading partner, Argentina. Similar political developments are also occurring in Bolivia, Paraguay, Peru and Argentina.

"There is a reason the left is having a resurgence in Brazil and elsewhere in the region: We promised them a rose garden, but even before this latest crisis too many people got nothing but thorns," Princeton economics Professor Paul Krugman wrote in August.

"A decade ago Washington confidently assured Latin American nations that if they opened themselves to foreign goods and capital and privatized their state enterprises, they would experience a great surge of economic growth. But it hasn't happened. And because inequality has increased sharply, most people are probably worse off than they were 20 years ago."

The political changes in South America are largely a repudiation of U.S. influence in the region, and have definite implications for U.S. foreign policy. This was apparent at a recent meeting of the hemisphere's trade ministers, who gathered in Quito, Ecuador, to negotiate the proposed Free Trade Area of the Americas, a trade pact for the 34 nations of the Western Hemisphere, excluding Cuba.

It quickly became apparent in Quito that plans for the FTAA faced serious challenges.

In the streets, 10,000 protesters assailed the trade deal as a threat to farmers, indigenous people, forests and those in poverty. Chants of "Yes to life, no to the FTAA!" and "We don't want to be a North American colony!" rang for hours as the colorful protest march -- led by Ecuador's indigenous and farmer confederations -- snaked through the city.

Behind the police barricades, Latin American governments united around a tough demand that the United States must first commit to the elimination of subsidies on agriculture before talks could advance. Venezuela reiterated their objection to a 2005 deadline for the FTAA's creation, a date that few still take seriously; Brazil indicated that participation in the negotiations did not necessarily mean they would sign any final product.

The FTAA may become a fatality of the failures of the very free trade fundamentalism it seeks to advance, and in fact that may be the best thing for Latin Americans right now.

"I, too, bought into much though not all of the Washington consensus," Krugman confesses, "And my confidence that we've been giving good advice is way down. One has to sympathize with Latin political leaders who want to temper enthusiasm for free markets with more efforts to protect workers and the poor."

Despite our comfort of a stronger economic position in North America, we would be wise to take heed of the political transformation that is underway to our south, as there is a growing likelihood that these nations will soon be charting an economic course of their own. The elections in Brazil and Ecuador serve as a wake-up call for the United States to reconsider its economic intervention in the countries of Latin America.

Further, many of the spectacular failures of Washington-promoted policies in Latin America -- such as the disastrous privatization of social security in Argentina or water in Bolivia -- have their counterparts in recent U.S. experience: the electricity crisis in California and the Enron scandal, both borne of deregulation. A backlash could happen here as well.

-0- -- Jason Tockman is the director of international trade for American Lands Alliance. He is based in Athens, Ohio.

-- "Outside View" commentaries are written for UPI by outside writers who specialize in a variety of important global issues.

www.forbes.com Reuters, 01.21.03, 6:10 PM ET

NEW YORK, Jan 21 (Reuters) - Citgo Petroleum Corp. said on Tuesday it expects to receive crude oil deliveries this month from Venezuela's state oil firm PDVSA that will equal about 83 percent of the volume Citgo received in January 2002.

A general strike that started Dec. 2 has substantially curbed oil exports from Venezuela. Citgo Petroleum Co. is an indirect, wholly-owned subsidiary of Petroleos de Venezuela SA (PDVSA), the state oil company of Venezuela.

Citgo, making its comments in an 8K filing to the U.S. Securities and Exchange Commission, said in December the company received from PDVSA about 59 percent of the year-ago volume.

"To date...our refineries have continued to operate at normal levels and our deliveries to customers have not been disrupted," Citgo said in the filing.

The firm has refineries in Corpus Christi, Texas, Lake Charles, Louisiana, and Lemont, Illinois.

Citgo acknowledged that the reduction of crude oil supply from PDVSA has required buying alternate sources of crude oil that "may differ from the PDVSA-sourced crude oil in terms of cost, logistics and physical characteristics."

Lyondell Chemical Co. (nyse: LYO - news - people) said on Tuesday that production at its refinery in Houston, a joint venture with Citgo, is at 85 percent of its capacity of 270,000 barrels per day (bpd). Lyondell said

Lyondell also said availability of spot and Venezuelan contract crude has improved the refinery's ability to operate.

www.alertnet.org 21 Jan 2003 22:47

CARACAS, Venezuela, Jan 21 (Reuters) - Venezuelan opposition leaders on Tuesday extended for a 52nd day a protest strike aimed at forcing leftist President Hugo Chavez to quit and stage elections in the world's No. 5 oil exporter.

The opposition stoppage, which began Dec. 2, has cut deeply into Venezuela's vital petroleum production, slashed the government's economic lifeline and pushed world oil prices to two-year highs of more than $34 a barrel.

"It has been 51 days since this national protest began ... Not one step backwards," opposition leaders said in a statement.

Strikers, including rebel managers at state oil firm PDVSA, have vowed to keep up the shutdown until Chavez resigns. But in a signal the oil stoppage could be weakening, some tanker pilots in the key export hub of Lake Maracaibo have returned to work, officials and shipping agents said.

Chavez, who was elected in 1998 and survived a coup in April, has refused calls for immediate elections. He rejects charges from foes his government has been marred by corruption, economic mismanagement and authoritarian rule.

www.csmonitor.com By Francisco José Moreno

AGOURA, CALIF. – Those trying to end the rule of Hugo Chávez as president of Venezuela are having a very difficult - and protracted - time of it.

Coup and strike notwithstanding, the opposition has had no success because it has been unable to convince the world that the unwillingness to abide by Venezuela's laws and Constitution represent a defense of, not an attack on, democracy.

The opposition claims that Mr. Chávez is a dictator aiming for totalitarian control. But this jars with the complete political and journalistic freedom enjoyed in the country. The Chávez regime does not take political prisoners (unless they break the law, such as those who tried to oust him in April) and the local press is openly and militantly antigovernment.

The opposition also asserts that the struggle against Chávez is purely political, devoid of social or racial overtones. This is difficult to reconcile because the president's strongest support is among poor and mixed-race Venezuelans and the opposition is largely white and middle-to-upper class.

The arguments put forward by the anti-Chávez militants and their professed commitment to freedom and democracy don't tally with their willingness to disregard their Constitution and forgo traditional elections. They claim that if Chávez remains in power until the elections, in 2006, he'll either irreparably damage the economy or somehow make his rule permanent.

But this professed inability to defend their interests and forward their views in the regular give-and-take of politics rings hollow. Chávez's popularity has indeed diminished substantially since his election; the most reliable Venezuelan pollster Alfredo Keller puts it now at 36 percent. As the president's popularity decreases, and as long as he keeps operating within the legal and democratic framework, an equally legal and democratic opposition representing the majority of the population should have no difficulty making its preferences felt through the existing electoral system.

The Venezuelan opposition is no political orphan. Businesses, the privately owned-media, organized labor, and the traditional political parties are all solidly in its ranks. Even without waiting for 2006, the opposition has a multitude of legal and political means to make its power felt. No government can effectively function without the active collaboration of all the interests and institutions it represents.

The opposition's unwillingness to abide by the electoral timetable seems less than true concern for freedom and democracy. Given the global influence of US interests and the strategic importance of Venezuelan oil, there is little chance that Venezuela would be allowed to go the way of Cuba. So what's really at stake, what the opposition is trying to impede, isn't the "radicalization" of the country, or the emergence of a totalitarian dictatorship, but the threat that Venezuela will no longer be in the hands of those who controlled it during the past 30 years of corrupt politics and inept economic policies. And Chávez's electoral victories - winning the presidency, calling for a new Constitution, winning a congressional majority - came as direct reactions to that previous state of affairs. But many of those now leading the opposition were active participants in the misgoverning and ineptness that made Chávez possible, and they fear losing the sway they've long held.

The opposition has been totally silent about what it advocates for the future, how it plans to avoid repeating the past. It's silent because it can't speak with one voice. Its ranks range from the ultraconservative association of industrialists to Bandera Roja, a radical leftist group that opposes Chávez not because he is undemocratic, but because he is democratic.

If both government and opposition were truly committed to the rule of law, a compromise between their more moderate elements should not be hard to achieve. Chávez claims he wants to work within the legal structure; the opposition is doing itself, and Venezuela, no favor by refusing to follow suit.

• Francisco José Moreno, a political economist who has advised Latin American leaders - including two Venezuelan presidents prior to President Chavez - is president of the Strategic Assessments Institute, a think tank specializing in politics and economics.

www.alertnet.org NEWSDESK   21 Jan 2003 22:23

By Tom Doggett

WASHINGTON, Jan 21 (Reuters) - The cost for a gallon of motor fuel in the United States reached its highest level in 16 months, as drivers suffered a sixth week of rising gasoline prices, the Energy Department said on Tuesday.

The average price for regular unleaded gasoline jumped half a penny over the last week to $1.459 a gallon -- up 35 cents from a year ago -- based on a survey of more than 800 service stations by the department's Energy Information Administration.

That is the highest since late Sept. 2001, when the Sept. 11 terror attacks caused a panic surge in energy prices.

The national price for cleaner-burning reformulated gasoline, which is sold at about one-third of the gas stations in more polluted metropolitan areas, increased 1.8 cents in the last week to $1.534 a gallon, EIA said.

Gasoline prices are rising in response to traders' fear of a U.S. war with Iraq and the disruption in oil exports from Venezuela -- a major oil producer -- caused by a workers' strike now in its eighth week.

The price of crude accounts for about 40 percent of the cost of a gallon of gasoline. In Tuesday trading in New York, oil soared above $35 a barrel, the highest level in 26 months.

Venezuela is the fourth-biggest foreign oil supplier to the U.S. market and the lost oil exports have depleted American crude inventories to their lowest level since the mid-1970s.

The West Coast had the most expensive regular unleaded gasoline over the last week, with the average weekly price in the region up 3 cents to $1.548 a gallon, EIA said.

The Gulf Coast states had the cheapest fuel, as the average price was up 0.8 cents to $1.407 a gallon.

Among cities, San Francisco maintained its top spot in fuel costs, with the price up 4.3 cents to $1.762 a gallon. Houston had the best deal at the pump, with the price up a penny to $1.389 a gallon.

The report also showed gasoline prices were up 4.4 cents in Los Angeles at $1.577, up half a penny in New York City at $1.554, up 1.7 cents in Chicago at $1.521 and down 0.9 cents in Denver at $1.44.

The biggest year-on-year change in city pump prices was in San Francisco, where gasoline costs were up 49 cents a gallon from a year earlier.

Separately, the nationwide price for diesel fuel rose 0.2 cents to $1.48 a gallon, up 34 cents from last year.

Truckers in New England paid the most for diesel fuel at $1.594 a gallon, up 0.1 cents from the prior week. The Rocky Mountain states had the cheapest diesel at $1.445 a gallon, unchanged from the previous week.