www.voanews.com VOA News 23 Jan 2003, 08:32 UTC

Business and political leaders from across the globe have gathered in Davos, Switzerland for the opening Thursday of the World Economic Forum.

The six-day forum is expected to focus on corporate ethics, terrorism, and Iraq. The meeting is being held amid tight security to protect high profile guests. Jordan's King Abdullah, Microsoft founder Bill Gates, and U.S. Secretary of State Colin Powell are all scheduled to attend.

Participants are expected to discuss the global effects of the corporate scandals that plagued the business world last year. They will also examine the effects of the international war on terrorism and the possibility of a U.S.-led war in Iraq.

The forum in Davos coincides with the World Social Forum in Porto Alegre, Brazil. There, as many as 100,000 anti-globalization advocates are expected to discuss the financial problems of the developing world, threats to the environment, and human rights issues.

Brazil's new president, Luis Inacio Lula da Silva, is expected to attend both events to deliver speeches on hunger and poverty.

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Corporate scandals and the possibility of war with Iraq will be the two issues dominating this year's World Economic Forum.

The political and business elite have already begun gathering in the exclusive Swiss ski resort of Davos for the annual meeting that starts on Thursday.

On the other side of the Atlantic, in Brazil, anti-globalisation protestors meanwhile are gathering for a rival summit, the World Social Forum.

Meeting in Porto Alegre they will focus on issues like poverty and participative democracy. Organisers expect more than 100,000 people from 157 countries to attend.

Powell's podium

Top billing goes to the US Secretary of State, Colin Powell, who will deliver a "major speech" on US foreign policy at the weekend.

He will be speaking on the eve of a critical report on Iraqi disarmament by weapons inspectors to the UN Security Council.

Other political figures likely to make the headlines include Presidents Luiz Inacio Lula da Silva of Brazil, Vicente Fox of Mexico and Johannes Rau of Germany.

King Abdullah II of Jordan and Malaysian Prime Minister Mahathir Mohamad will also be there.

Heavily guarded

Among the 1,300 business leaders at the forum will be Microsoft founder Bill Gates, Douglas Daft of Coca Cola, Nobuyuki Idei of Sony and Carly Fiorina of Hewlett-Packard.

The theme of this year's meeting is "building trust".

The organisers says this is about the need to restore confidence in companies and in government.

"The string of corporate scandals revealed in 2002 has contributed to the serious undermining of trust," says the guidebook to this year's meeting.

The forum has been held in Davos for three decades although last year it moved to New York as a show of solidarity after the 11 September attacks.

It has increasingly drawn demonstrations from anti-globalisation protestors.

This year the meeting will be more heavily guarded that usual, with the Swiss air force patrolling the skies, because of the fear of terrorist attacks.

But the authorities have decided to allow a demonstration in Davos itself although it will be kept away from the meeting site.

economictimes.indiatimes.com INDRANI BAGCHI TIMES NEWS NETWORK[ THURSDAY, JANUARY 23, 2003 01:45:47 AM ]

When the Petroleos de Venezuela SA recruited Indian workers last month to break the strike in the South American country, the move was seen as a compliment to India's skills in a sector where it hardly has any locus standi.

However, the presence of these very same workers sparked off even bigger riots and threatened the safety of the Indian community in Venezuela, compelling the government here to ask the Mumbai-based company to recall the workers.

Hugo Chavez of Venezuela, ranged in a political stalemate with the opposition for the past eight weeks, has been on a single-point mission: to break the strike that has paralysed his country and played havoc with global oil prices.

Petroleos de Venezuela SA (PDVSA) is the state oil company that provides the government with nearly half of its $20bn budget. Chavez has used the strike to fire 2,000 dissident employees at the company. But, to break the impasse, PDVSA imported Indian workers to run the oil tankers.

In December, a Mumbai-based company that provides workers for oil rigs, sent six technicians to work on the Pilin Leon tanker near Maracaibo city, 600 km west of Caracas.

An enraged Venezuelan opposition threatened India with dire consequences, extending the threats to the Indians living in Venezuela. The situation snowballed into a crisis and it was not long before the Indian embassy in Caracas became the venue for riots and further demonstrations. 

On one occasion, opposition strikers hit an embassy car. On being told that it belonged to the Indian embassy, one of them smiled and said, "India deserved it."

A rattled ambassador, R Vishwanathan, like his other counterparts, dispatched his non-essential staff to Aruba. He also issued a press release in Spanish to assure the opposition that India did not intend to meddle in Venzuela's internal affairs. But this failed to placate the rioters.

Finally, a worried Indian government asked the Mumbai company to recall the workers. It also told the firm to refrain from sending any more workers to that politically-fractured nation. It's a lesson neither the Indian government nor Indian business will forget in a hurry. 

Of late, Indian corporates are seeing the flip side of doing business in a globalised world. Recently, the manging director of Polaris was caught in the maelstrom of Indonesian politics and extortionists.

The Venezuelan incident brought home another issue: that while operating across borders, Indian business houses need to be more aware of the political implications of their actions.

The ministry of external affairs says that it should be kept in the loop when it comes to these sensitive decisions. However, business representatives sing a different tune — South Block's inaccessibility.

India companies, notably Reliance Petroleum, have been buying crude from Venezuela since '00. Hugo Chavez, who is bent on establishing left-wing rule in Venezuela, was on the verge of visiting India last year.

news.ft.com By Christopher Swann Published: January 22 2003 20:40 | Last Updated: January 22 2003 20:40

The euro continued to edge higher against the dollar on Wednesday amid mounting tensions between the US and Iraq.

The recent bout of more aggressive rhetoric from the US administration has kept the dollar under pressure in recent days. On Wednesday, the dollar hit a fresh three-year low against the euro at $1.0744.

Traders said that $1.10 now appeared in sight.

Risk reversals - an indication of the bias of the options market - provided an interesting hint into the psychology of the marketon Wednesday. Although euro calls continue to trade at a premium to euro puts - suggesting the market still expects a rising euro - this premium is at its lowest level so far this year.

Marc Chandler, chief currency strategist at HSBC in New York, said this could be explained by traders long of euros trying to hedge against a fall in the currency. "This hints that many of those who hold a long euro postion do want some protection, but are not willing to sell their spot position," he said. "This is an encouraging sign for the euro," he added.

Rising risk aversion in financial markets continued to support the Swiss franc - still the world's favoured safe-haven currency. The Swiss franc continued to hover close to the four-year highs hit against the dollar earlier in the week.

There was a grim inevitability to Venezuela's decision on Wednesday to shut down trading in the bolivar. So far this year the currency has fallen 24 per cent, following a 44 per cent slide last year. This is as close as a currency gets to sky diving.

Since the country's debilitating strike began six weeks ago foreign exchange reserves have fallen $1.9bn. An estimated $900m of reserves have been lost in the past week alone.

Given the poor historical record of capital controls, it is not surprising that some are questioning the sustainability of the Venezuelan move. "Capital controls tend to be quite leaky," said David Ross, emerging market economist at 4Cast, the economic consultancy. But most are viewing the measures as a mere expedient.

Hopes remain high that US mediation will bring about an acceptable solution. Marc Chandler, chief currency strategist at HSBC in New York, said that Venezuela's financial position gave cause for optimism.

Foreign debt servicing should total around $4bn this year. Foreign exchange reserves are still thought to stand at around $11bn.

When the strike does end, a sharp rise in the bolivar seems inevitable. But it will take a brave trader to try to pick the turning point.

"There is no sense standing in front of a freight train," said Mr Chandler.

The towering interest rates that have supported the Norwegian krone are gradually being chipped away. Wednesday's 50 basis point cut takes rates down to 6 per cent - the lowest level since June 2000.

Given how widely anticipated the cut was, it is little surprise that Norwegian krone failed to weaken. Indeed it strengthened against the euro. But this was a typical "sell the rumour, buy the fact" reaction from the market.

Opinion is now sharply divided about where the market goes next. Marc Chandler said that after a period of consolidation the Norwegian krone should regain some strength - supported by high interest rates and buoyant oil prices. "There is also little indication that the Norwegian authorities will intervene to combat the market," said Mr Chandler.

Others worry that the market's enthusiasm for the krone had gone way too far and a sustained period of profit taking is now in order.

Although policy makers have showed no enthusiasm for intervention, they have indicated their displeasure with the strength of the krone and have cut rates swiftly in order to diminish the currency's appeal.

The weak industrial production figures since the summer of last year in Norway, suggests that the strength of the exchange rate is now inflicting serious damage on the economy.

In addition, the krone's thin liquidity will make it hard for traders to exit their position in a hurry.

www.miami.com Posted on Wed, Jan. 22, 2003 Associated Press

WASHINGTON - Saudi Arabia's ambassador to the United States said Wednesday that his country was prepared to increase its oil output if world prices do not drop below $28 a barrel in the next few weeks.

The ambassador, Prince Bandar, made the statement in a question-and-answer session at the U.S. Conference of Mayors meeting. He did not say how much additional oil his government was ready to export.

Saudi Arabia provides the United States with 1.6 million barrels of oil a day, ranking first in imported oil. The price of crude for February delivery climbed above $35 per barrel Tuesday before settling at $34.61, the highest closing price since Nov. 30, 2000.

For weeks, oil prices have been above $30 a barrel because of the cutoff of supplies from Venezuela and fear of an impending war in Iraq.

Saudi Arabia and other OPEC members have said they would like to gear production levels to keep world prices in the $22 to $28 a barrel range. Higher prices, if sustained, could hurt the world economy and producers in the long run.

Last week, the Organization of Petroleum Exporting Countries, a cartel that controls oil prices, decided to boost crude output by 1.5 million barrels a day.

The action, taken by Saudi Arabia and other oil-rich countries, was viewed as an attempt to reassure markets roiled by the situations in Venezuela and Iraq.

Saudi Arabia is among the few OPEC nations with the capacity to make large boosts in oil production.