Business in Italy - Special service by AGI on behalf of the Italian Prime Minister's office

(AGI) - Agrigento, Italy, Jan 25 - War prevents the economy from growing. For the economy to develop and recover, it needs peace instead. This message of peace comes from the Bank of Italy governor, Antonio Fazio, who was at the Agrigento Forex convention, giving an outline of the international economic scene which is still full of uncertainty and which could be very badly affected by an armed conflict.

"An armed conflict," Fazio went on to say, "brings with it consequences that are difficult to gauge in that it has an effect on raw materials and energy, upsetting normal financial and commercial business on a global level, the business on which the considerable performance of the global economy has been based over the past ten years, increasing the chance of new terrorist attacks. The benefits of a pacific co-existence," added Fazio, "and of the continuous research into the international common good are advantageous to everyone: people, families and nations".

The governor's analysis of the international economic scenario is full of pessimism. He said, "Interpreting the economic picture has become difficult and complicated over the past few weeks. "The most recent data from industrialised countries is proving to be full of gaps and question marks which have a telling influence over investment activity. Fears of military and political conflict seem to be having an enormous effect". Only a lessening of these tensions, the governor added, "can set off an increase in production on a global level before the end of the first half of this year". And this hypothesis is supported, in Fazio's view, by recent performance on the stock markets.

"At the end of December," he explained, "statements by the American government on the possibility of avoiding an armed conflict gave an immediate boost to share prices in all the principal stock markets". Then, he added, "the way the situation evolved and the positions that were taken once again had a negative impact on shares prices and the cost of crude oil".

All this in a context that, outlined by the governor, is proceeding very uncertainly. "This uncertainty," he said, "is of interest to all the industrialised economies and any economic recovery immediately suffered a slow-down over the past few months".

In the USA, where trends "during 2002 affected performance in Europe and Japan", the indicators "produced contrasting signals on progress over a short period". There were positive signals coming from manufacturing but "industrial output is still slightly down but share investments are continuing to expand". Fazio gave the thumbs-up to the measures that Bush approved for tax cuts worth 670 million dollars over ten years and to the Fed's monetary decisions. Whilst he continued to be very concerned, on the other hand, about Europe where "in the first nine months of 2002 the GDP increased by little more than half a percentage point compared with the same period during 2001". Fazio explained that we felt the weight of "the weak economic performance in Italy and Germany" where consumption was stagnant, investments were down and the GDP over an entire year was 0.7 per cent, down from the 1.4 per cent of 2001.

Speaking of the global situation from the podium of the ninth AIAF, Assiom and ATIC Forex Convention, Fazio said, "In Europe, the start of the considerable structural reforms to public finances and labour market are crucial in order to make the economy more flexible so as to use the new technologies to become more competitive and increase the level of development". One state of affairs, i.e. the lack of structural reforms, is also of concern in Japan where "the trend of aging demographics is hanging over the country (as is the case in the Old Continent)" and where production remains "characterised by rigidity and inefficiency". (AGI)

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www.upi.com By Bradley Brooks UPI Business Correspondent From the Business & Economics Desk Published 1/23/2003 2:43 PM

RIO DE JANEIRO, Brazil, Jan. 23 (UPI) -- Brazil's new leftist leader will bridge the globalization gap this week, speaking first at the World Social Forum then at the summit which that gathering is meant to protest: the elite World Economic Forum in Davos, Switzerland.

On Friday, President Luiz Inacio Lula da Silva will become the first-ever leader of the Brazilian government to speak at the World Social Forum, which opened Thursday in Porto Alegre, Brazil.

For many of the 100,000 activists in attendance, Lula, as he is known, and his October election in Latin America's largest country represents the best hope in lessening economic inequalities between the First and Third Worlds.

"After participating for the third time at the World Social Forum (previously as an activist), I'm going to Davos to demonstrate that another world is possible," Lula said in a Thursday statement. "Davos needs to listen to Porto Alegre."

He said there was an need for a new pact that would bridge economic disparity.

"I will take to Davos the message that the rich countries need to distribute the wealth of the planet," he said.

Great words of hope, no question, that most people wouldn't disagree with: who doesn't want to see a more efficient global economy that would make us all more prosperous? The great difficulty, of course, is backing those words with the grueling work that goes into tackling global economic issues: drug patent fights, agricultural subsidies, stalled talks on the proposed Free Trade Area of the Americas.

It is the bare-knuckled arena of international trade negotiations and Brazil's role of representing the Third World where Lula's appetite for either pragmatically making headway or falling back on ideological differences will be tested.

"One of things that will be important is not only his bridging the globalization gap, but his keeping the discussion of the gap alive," said Margaret Keck, a political science professor at John's Hopkins University, of Lula's role in representing poor countries.

Keck, whose book "The Workers' Party and Democratization in Brazil" was the first major study of Lula and the political party he helped found, says Lula has the potential to be a Third World leader who can act as both a catalyst and a salve as rich and poor countries try to reach mutual understandings.

Yet for others, Lula embodies a Latin America that is veering to the ideological left, where voters have recently elected leaders whose apparent opposition to American-style capitalism gives fright to some Bush administration officials and leaders on Capitol Hill.

It was just at last year's World Social Forum that then presidential-candidate Lula told reporters, "I'll fight with all my power to stop the FTAA in Brazil."

Others point to his friendliness with Venezuelan President Hugo Chavez and Cuban leader Fidel Castro as evidence that Lula is going to lead Latin America in the wrong direction.

That worried a few Republican congressmen enough that they sent a letter to President Bush before Lula's October election, expressing concerns about the threat of having a wild-eyed leftist running Latin America's largest economy.

Keck rejects these arguments, saying that it is simply too soon to tell if Latin America really has aggressively gone to the left, or if the left in Latin America has simply wised up and come more to the center, where it can win elections.

"Despite all the connections that get made between Lula and Castro and Chavez, the fact is he is very different from them, his history is extremely different from theirs," Keck said.

"It is important to have somebody out there as an international spokesman for bridging the globalization gap, someone who has legitimacy and who doesn't raise the same kinds of knee-jerk ..'well, he was a revolutionary and radical populist' .. response."

Lumping Lula in with Chavez or Castro is inaccurate at best, and, truth be told, a wholly simplistic vision of a region comprised of extremely different countries, but that for short-hand purposes becomes "Latin America" in the United States.

Lula himself has disavowed any connection with the political beliefs of Chavez or Castro, repeatedly saying he has no intention of leading Brazil to economic self-destruction, like Chavez.

The fact that Lula received more votes than any other democratically elected leader in the history of the world -- with the exception of Ronald Reagan's 1984 election -- should be evidence enough that he is no Castro.

But the proof, clearly, will be in the pudding, and whether Lula is truly intent on taking his country out of its miserable economic state will be seen in how he addresses his dualistic concern: uplifting the poor by bringing more economic justice to the world.

Marta Lagos, the director of Latinobarometro, a Santiago, Chile-based group that tracks public opinion in Latin America, told United Press International in November that the notion that the region is swinging to the left can't be viewed through the same prism as it was during the Cold War years.

"There is no leftist revolution before us, nor is there a military regression," Lagos said. "The left and right as they were in the past is gone. The alternatives are not a socialist state versus capitalism. Today, the market economy has no competitor."

Just how Lula intends to make Brazil competitive in the global economy -- and what sort of example he will provide for the rest of the developing world -- is yet to be seen.

But for Keck, Lula's past experience of leading union negotiations against Brazil's military regime makes him a savvy spokesman ready to take to the world stage.

"Lula and the Workers' Party have a lot more experience in governing than it used to," Keck said. "That has made most people in the party aware of the costs of radicalizing expectations too much, too quickly."

"It has given people more realistic notions of what is possible."

www.sun-sentinel.com By Juan Forero The New York Times Posted January 21 2003

BOGOTA, Colombia · Latin America's four most visible left-leaning heads of state came together for the first time last week at the inauguration of one of them as president of Ecuador.

The new leader, Lucio Gutíerrez, is a former army colonel and coup plotter who has promised to fight the "corrupt oligarchy" in his country.

The others are Luiz Inácio Lula da Silva, a former union leader elected to the Brazilian presidency in October; Fidel Castro of Cuba, the grand old man of the Latin American left; and Venezuela's embattled president, Hugo Chávez.

The four basked in applause at Ecuador's cavernous Congress on Jan. 15 and held meetings to discuss the future of a troubled region.

To some in Washington, particularly conservatives on Capitol Hill, the convergence of leftist leaders, all of whom, at some point, have used antagonistic words in criticizing U.S. policy, has raised concerns about a new pan-Latin American movement with socialist overtones.

Rep. Henry J. Hyde, R-Ill., the chairman of the House International Relations Committee, warned late last year that Brazil's new president might join Chávez and Castro in a new "axis of evil." Hyde also characterized da Silva as a dangerous "pro-Castro radical who for electoral purposes had posed as a moderate."

It is true that all four leaders share similarities: opposition to the unfettered market reforms that have failed so far to bring prosperity to Latin America, concern about the burdensome foreign debts that stagger many nations in the region and wariness about the United States meddling in their affairs.

Invigorated by da Silva's victory in Brazil, the first election of a left-wing president in the largest Latin American country, the four leaders also see an opportunity to shape events in the region, rather than leave it to the United States to set the agenda.

Brazil already has exerted its influence, with da Silva becoming the driving force behind a "group of friendly nations," including the United States, that is offering to help Venezuela negotiate an end to a 7-week-old national strike aimed at forcing Chávez from power. Chávez has welcomed the initiative, flying on Friday to meet in Brazil with da Silva to discuss ways to resolve the crisis.

"There's no question that these four nations are going to form an axis of populism, or an axis of popular rhetoric," said Larry Birns, director of the Council on Hemispheric Affairs, a Washington-based policy analysis group.

Birns and other analysts who track political trends in Latin America said that while the four leaders might, on the surface, show a united front, they were four very different men who would pursue different agendas with markedly different approaches.

Da Silva, 57, who grew up in poverty, became a factory worker and helped found the Workers Party, won a loyal following as a firebrand who railed against everything from international lending policies to the incompetence and corruption of Brazil's elite class.

After losing three presidential elections, he moderated his tone, promising that Brazil would pay its foreign debt while still trying to enact social policies to alleviate poverty and hunger.

Gutíerrez, 45, a former colonel and son of a riverboat captain, shares many of da Silva's qualities, say international analysts who have met him.

Though his background is dissimilar -- he helped lead a coup that toppled President Jamil Mahuad three years ago -- he is seen as a pragmatist who already has shifted on earlier positions such as scrapping the country's dollar currency and not paying the foreign debt.

Chávez, 48, and Castro, 76 leader of the hemisphere's only communist country for 44 years, have taken more defiant stances.

www.sofiaecho.com Jose Augusto Lindgren Alves

OF all the European media that covered the first events of 2003, French newspapers, not to mention the Portuguese, seem to have best grasped the meaning of a seemingly routine fact on the other side of the world: the inauguration of Luis Inacio Lula da Silva as President of Brazil.

I do not refer only to the leftist Liberation with its tender-sounding frontpage headline: "Au boulot, Lula!" Nor do I particularise the stimulating "Viva Brasil!" by I. Ramonet in Le Monde Diplomatique. I do bear in mind the coverage of the Brazilian situation by different journalists in the French media - to which I gladly add the moving hour-long programme on the Italian TG2, that I saw here in Bulgaria.

Important for their content, those articles detract from the daily published flood of "non-news" the world over, about the sale of football players among competing teams, marriages of pretty, powerless princesses, or unnecessary shows of military might for a war nobody seems to want. While enticing the consumers, insistence on such non-events (to speak of Jean Baudrillard) distracts public attention from the much closer, widespread problems of poverty, disease and hunger that can breed the crime, racism, genocide and terrorism we all abhor.

Lula was chosen by more than 60 per cent of an "electoral college" of 115 million - all the citizens of voting age (voluntary at 16, compulsory at 18) - in a computerised balloting system (voters simply pressed buttons with the colour of their candidates) that brought out the results in a few hours. Its fairness and technical perfection were praised by all. They proved that a peripheral state, of mid-level development, does not need to belong to a privileged group of rich and powerful to display exemplary behaviour.

In his capacity as Head of State of the largest Latin democracy, the new President of Brazil is a case in point, for many reasons.

Born in a poor family of eight children, in one of the poorest regions of the northeastern backlands, Lula and his family migrated to Sao Paulo, where they first lived together in only one room, at the back of a bar. At an age when other kids play with toys, he was a street peddler of peanuts and a shoe-shiner. Having made elementary studies at school, at 12 he got work in a laundry. After performing several odd jobs, he obtained a place on a course to become a metal worker. It was during his employment as a lathe operator that he projected himself as a union leader, who co-ordinated strikes in the seventies, and became an outstanding opponent of the military regime. In that period Lula was arrested and first labeled a "leftist" (a label that then applied to most of his present opponents), more inspired by Lech Walesa than "Che" Guevara. His charisma and intelligence led him to found, with different social forces, the Workers' Party, soon to become, under his guidance, one of the most formidable political forces in the country.

Since 1989, when he ran as a candidate in the first direct presidential suffrage after the military take-over of 1964, the label of "leftist" has been branded on Lula with the aim of turning ordinary people against him. It is true that the Workers' Party has always been on the Left, gathering Trotskyites to mild social democrats. Nevertheless, however radical his discourse might have been in the past, Lula is a man who evolves, for he learns from the lessons of time and his own political defeats. He knows that the period of Revolutions has passed, that capitalist globalisation is now an unavoidable trend. But he also knows that globalisation cannot go on as it is, disrupting lives and countries in the name of competitiveness, disguised under the fallacy of short term economic efficiency.

As far as I could follow from translations, few newspapers in Bulgaria tried to analyse Lula's victory. One of the exceptions - and a very positive one - was the article by K. Kadrinova, in Sega, on January 13. Her analysis is good, except for the confrontational tone she lends to the new President. He does not intend to be a nail inside anybody's shoe.

An authentic leader with very humble origins, Lula represents for Brazil an encouraging sign of social mobility. He is the first non-elite personality ever to attain the highest political position in a country that is rich, but full of social contrasts. Having suffered in his own skin - and his own stomach - the distresses of poverty, malnutrition and hunger, the first programme he has launched, dubbed "Zero Hunger", sets the aim of ensuring that all inhabitants of Brazil may sometime enjoy the luxury of three meals a day. If he succeeds in this simple goal, difficult to achieve in the circumstances we all live, rather than a nail in somebody's foot, the Brazilian experience might become a lighthouse to help steer our times out of today's global gloom.

www.fredericksburg.com By STEPHEN IXER Associated Press Writer CARACAS, Venezuela

At least a hundred thousand Venezuelans _ many equipped with tents, inflatable mattresses and foldout chairs _ parked themselves on a Caracas highway Saturday in what they said would be their longest protest yet against President Hugo Chavez.

Shouting "until he goes!", the protesters blanketed a stretch of nearly three miles, prepared to spend the night. On the advice of organizers, many also brought water, sun hats, portable TVs and radios to help while away the hours.

Police at the scene estimated the crowd at between 200,000 and 300,000 people. At least a hundred thousand were present, Caracas fire chief Rodolfo Briceno said.

"Prepare yourself for the longest protest in history!" screamed TV commercials and newspaper ads in the opposition-run media.

The opposition is trying to recover from a Supreme Court ruling on Wednesday that postponed indefinitely a Feb. 2 referendum that would have asked citizens whether Chavez should resign. Although the referendum wouldn't have been binding, opponents had hoped a negative outcome would persuade Chavez to quit.

"Although they stole the referendum from us, spirits are higher than ever," said Alexandra Suarez, a 19-year-old student carrying a sleeping bag on her shoulder.

Opponents had gathered 2 million signatures to petition for the vote. They backed up their demand by launching a devastating national strike Dec. 2 and staging daily street protests. Six people have been killed during protests since the strike began.

The 55-day strike has badly hurt the oil industry, which provides half of the government's income and a third of Venezuela's gross domestic product. But production in the world's fifth largest oil exporter is slowly reviving.

The government claims most of the 40,000 employees at the state oil monopoly, Petroleos de Venezuela S.A., have abandoned the strike and that output has reached 1 million barrels per day. Striking executives put the figure at 855,000 and deny most employees are back to work. Output was 3 million barrels a day before the strike. It reached a low of less than 200,000 last month.

Justices ruled that no national vote _ a referendum or election _ can be held until it decides whether elections council member Leonardo Pizani is eligible to serve on the panel.

Members of Chavez's ruling party filed a suit arguing that Pizani couldn't serve because he resigned from the council in 2000, only to rejoin last November. Pizani insisted he could rejoin because Congress, by law, had failed to formally accept his resignation.

Searching for a new strategy, the opposition Democratic Coordinator movement is gathering signatures to demand a constitutional amendment that would pave the way for early elections. The amendment would involve cutting Chavez's six-year term to four.

Former President Carter proposed a similar plan while attending negotiations between the government and opposition in Caracas last week. His Atlanta, Georgia-based Carter Center, the Organization of American States and the United Nations are co-sponsoring the talks.

Under Carter's plan, the opposition would call off the strike in exchange for a government pledge to quickly push through a similar amendment. Such a deal would save the opposition the effort of collecting signatures because either the president or Congress _ where the government has a majority of seats _ can call a referendum to approve the amendment.

Carter proposed a second plan that would have both sides prepare for a binding referendum on Chavez's rule in August, midway point in his term. The constitution allows such a vote. The Democratic Coordinator said it was also collecting signatures to petition for that vote.

Chavez has indicated he would be open to both the amendment and the August referendum, and he welcomed Carter's proposals on Saturday. "The general focus, the strategy, appears spot on," Chavez told reporters. He had argued the February referendum would have been unconstitutional.