www.iol.co.za January 26 2003 at 10:56AM

Paris - Ask French entrepreneur Tawfik Mathlouthi why his Mecca-Cola has become such a phenomenal success, and he is likely to say it's all about politics.

"Not only Arabs and Muslims are buying it, but also non-Muslims who are sick and tired of the crimes committed by America," he said.

If Mecca-Cola is indeed a measure of the level of discontent with Washington's foreign policies, then President George W Bush should probably pay some attention to its bottom line.

In the ten weeks since he brought his new soft drink on the market, Mathlouthi has received orders for 16 million 1,5-litre bottles.

'Every order I get from the US gives me great pleasure'"We originally planned for 160 000 bottles," he said. "They were gone in three days."

The soft drink is now being distributed in 23 countries, nine in Europe, with England providing the most lucrative market by taking 1,8 million bottles a month.

However, the 46-year-old father of four is most proud of the 80 000 bottles he has so far sold to the United States, the drink's political target and home of its mega-rival, Coca-Cola.

"Every order I get from the US gives me great pleasure," he said with a smile you could sense over the phone.

Mathlouthi said another 30 countries - including Indonesia, Pakistan, Venezuela, Cuba and South Africa - were waiting for him.

"They don't want to close the deal with anyone," he said. "They want to talk to the man whose idea it was, me. And I can't be in 20 places at once. It's just a question of time. In June, we will be distributed on five continents."

Not bad for a business that was begun with a shoestring budget of €22 000 (R207 240) and, as he put it, "a little creativity". - Sapa-DPA

www.voanews.com VOA News 26 Jan 2003, 08:21 UTC

Hundreds of thousands of opponents of Venezuelan President Hugo Chavez have jammed a major highway in Caracas to back a 55-day opposition strike that has crippled the nation's economy.

In what is being called "the longest protest in history," demonstators camped overnight along a 24-kilometer stretch of highway Saturday to press their demand that the president step down.

The massive street demonstration follows a recent Supreme Court ruling that suspended a non-binding referendum scheduled for February second on the president's rule.

Opposition leaders are now concentrating on collecting signatures for a petition for a constitutional amendment that could cut short the president's six-year term.

Former U.S. president Jimmy Carter proposed a similar plan while attending negotiations between the government and opposition last week. The former president's Atlanta-based Carter Center, along with the United Nations and the Organization of American States, are co-sponsoring the talks.

President Chavez, in an interview published Saturday in a Canadian newspaper (La Presse of Montreal), called the Carter proposals "interesting" but not necessarily new ideas that should be discussed with the democratic opposition. Opposition leaders blame the country's worsening economic woes on Chavez policies and remain determined to see him leave office. The strike has paralyzed Venezuela's oil production, the mainstay of its economy, and pushed up global oil prices.

www.nytimes.com By JONATHAN FUERBRINGER

NVESTORS dread contagion in emerging markets. But barely four weeks into 2003, Brazil is showing that living close to a big debtor can be good for its neighbors' health.

"The direction Brazil takes will govern to a large extent the way perceptions of Latin America go," said Mohamed El-Erian, who as head of emerging market portfolio management at Pimco has bought millions of dollars in Brazilian bonds.

Although the election of Luiz Inácio Lula da Silva signaled a sharp turn to the left in Brazil, the new president has done everything an investor could want. His key appointees have been "technocrats and orthodox economists," said Mr. El-Erian. "The policy implementation is totally in line," he added, noting decisions to increase social spending by delaying the purchase of jet fighters and canceling highway projects.

The central bank reinforced that conclusion last week, raising its benchmark interest rate half a percentage point to 25.5 percent. Despite the threat to economic growth from higher rates, the government backed up its promise to curb inflation.

That orthodox performance has paid off for some of Brazil's neighbors, as well as for Brazil itself, as the fear of a debt default by Brazil has waned. Three big bond sales, $2 billion from Mexico, $1 billion from Chile and $500 million from Colombia, have gone well in this improved environment, said Jose M. Barrio- nuevo, director of emerging markets strategy at Barclays Capital.

The total return on J. P. Morgan's index of Brazilian bonds is 0.7 percent so far this year and 43.9 percent since just before the October election. Other Latin bonds are faring well, with Peruvian bonds showing a total return of 0.9 percent this year.

Mr. El-Erian said fragile economies like Peru could benefit further from developments in Brazil. Pimco's $436 million Emerging Markets Bond fund bet 5 percent of its assets in Peru at the end of November, a huge bet for such a small country.

But even Brazil's good performance, Mr. Barrionuevo said, will probably not help Ecuador, which defaulted on its debt in 1999.

Ecuador's new president, Lucio Gutiérrez, is a left-leaning retired Army colonel who led a coup that toppled President Jamil Mahuad in 2000. But like Mr. da Silva, Mr. Gutiérrez has been pragmatic, dropping proposals to scrap Ecuador's dollarized currency and to not make payments on foreign debt.

aLTHOUGH Ecuador's bonds have rallied this year on hopes for new aid from the International Monetary Fund, Mr. Barrionuevo does not think Mr. Gutiérrez can win approval of the strong fiscal measures needed to get assistance from the I.M.F.

Mr. El-Erian is avoiding bonds from Venezuela, which is in the midst of a nationwide strike against President Hugo Chávez, and those from Argentina, because of the risk of further declines.

There is, however, a lot of value in Brazilian debt, despite its recent rally, Mr. El-Erian said. He would not disclose how much Pimco has invested overall in Brazilian bonds. .

But Pimco's emerging market bond mutual fund, had 22.8 percent of its assets in Brazil in November. That is up from 20 percent in November and more than the 16.1 percent share in one of the fund's benchmarks, the J. P. Morgan index. Including investments in its non-mutual fund accounts, Pimco holds $9 billion in emerging market debt.

Of course, he warned, Mr. da Silva has not proven he will stay this orthodox course. And investors could flee the risk of Brazil during a war with Iraq. "Then Brazil would suffer just like other countries," he said. Such a fear-of-war selloff sent Brazilan bonds sharply lower Friday.

www.orlandosentinel.com

WASHINGTON -- Venezuela's foreign minister said Saturday that his government welcomes preliminary suggestions made by diplomats from the United States and five other countries to end the political unrest in his country.

"We are convinced that we will reach a solution in a democratic way," Roy Chaderton said in an interview.

Chaderton came to Washington to participate in the meeting Friday of the newly formed "Group of Friends," which also includes officials from Brazil, Chile, Mexico, Spain and Portugal. Also participating was Cesar Gaviria, secretary-general of the Organization of American States, which hosted the meeting.

The diplomats called on the government of President Hugo Chavez and the opposition to tone down their inflammatory rhetoric and end political violence. The countries will send delegations to Caracas, the Venezuelan capital, on Thursday to continue talks to break the political impasse.

"A concern for the risk of violence in Venezuela is valid," Chaderton said. He also said his government would cooperate with the meeting.

A general strike called by the opposition has lasted more than two months, hurting oil production in the world's fifth-largest exporter. The opposition sees the leftist Chavez as authoritarian and hostile to business. Chavez's backers say he has strong support among the country's poor and see the opposition as undemocratic, noting a failed coup attempt in April.

In Caracas on Saturday, tens of thousands of opponents of Chavez gathered on a highway, preparing to stay there overnight to protest a Supreme Court decision suspending a referendum on Chavez's rule.

Protesters covered 2.5 miles of asphalt, chanting "Until he goes!" and waving red, blue and yellow Venezuelan flags. Many brought tents and air mattresses; others carried foldout chairs, portable TVs and radios.

Caracas fire Chief Rodolfo Briceno said at least 100,000 people were present.

The loosely grouped opposition is trying to recover from the blow of a Supreme Court ruling on Wednesday that indefinitely postponed a Feb. 2 referendum that would have asked Venezuelans whether Chavez should resign.

The president's opponents had gathered 2 million signatures to petition for the vote. They backed up their demand by launching a devastating strike Dec. 2 and staging daily street protests.

More than 2,000 soldiers, police and firefighters were on guard. Back in Washington, Chaderton did not respond directly when asked if Chavez feared the protests would force him from office. "We have very good reasons to be optimistic that this will have a democratic outcome, because we are a democracy," he said.

Diplomats are discussing proposals made by former U.S. President Carter to either hold a binding recall referendum or amend the constitution to allow early presidential elections.

Nearly eight weeks into the grueling shutdown, Chavez and his foes appear set on standing their ground even as the strike drives Venezuela's fragile economy deeper into recession. Oil exports account for half of the government's revenues.

The Finance Ministry and the Central Bank on Wednesday shut down foreign-currency exchange markets to stave off capital flight and halt the deep slide in the local bolivar currency as investors seek the safety of the U.S. dollar.

Fighting back against the strikers, Chavez has ordered troops and replacement workers to take over oil installations. Crude production and exports have crept back up, but the industry is still operating far below its usually levels of about 3.1 million barrels per day.

Commercial centers and many large firms remain closed. Support for the strike has frayed, however, as some businesses reopened as the shutdown takes a toll on the private sector.

www.gopbi.com Sunday, January 26 By Susan Ferriss, Palm Beach Post Staff Writer Sunday, January 26, 2003

CARACAS, Venezuela -- Concertina wire spirals across the lawn of the Terraza del Avila apartment complex.

At the gate, neighborhood watch leader Luis Eduardo Manresa clutches a walkie-talkie as part of an emergency plan to deal with mob attacks or looting.

If dialogue or high-pressure water hoses don't work, Manresa says, the complex's residents, mostly professionals, will use whatever they might have, including guns, to defend themselves.

Manresa, a professor of international law, directs an organization called the Latin American Center for Dialogue Between Civilizations and Cultures.

Manresa isn't the only one terrified that Venezuelan society, polarized and volatile in the midst of a political crisis, could explode into chaos if the stalemate is not soon broken.

"Jesus Christ can come here to talk, but if there's no will to really dialogue, then what?" he said with a shrug.

For more than eight weeks, President Hugo Chavez has defied an opposition that declared a "citizens' strike" on Dec. 2 in an effort to oust the bombastic president or force him to agree to an early election the opposition is certain he would lose.

The crisis has already caused so much damage to the national oil industry -- Venezuela is the world's fifth-largest producer -- that it could take years to recover. The world economy, too, is feeling the effects in the form of higher oil prices.

In a country where most complain they have been excluded from the benefits of the oil economy, class divisions have never seemed so sharp.

A sizable number of Venezuelans defend Chavez as an avenging angel who was democratically elected in 1998 by a populace disgusted with the traditional politicians' broken promises.

"From our point of view, the president has given in too much" to the opposition, said Jose Pereira, a policeman and Chavez supporter. "We've waited 40 years to participate in a real democracy."

But to the opposition, Chavez has become an authoritarian and a megalomaniac who violates of the constitution he constantly invokes.

U.S. Secretary of State Colin Powell on Friday urged acceptance of a proposal by former President Jimmy Carter, who suggested two possible scenarios for an early election.

Carter met with Chavez and his opponents early last week and urged them to consider his proposals.

One calls for lifting the strike in exchange for a pledge to let the opposition pursue a constitutional amendment to shorten Chavez's term to four years, something that would trigger a general election.

The other proposal calls for a binding referendum on Chavez in August, midway through his term, a date Chavez himself has argued would be feasible.

On Wednesday, the day after Carter left, Venezuela's Supreme Court sided with a Chavez in his appeal to block a nonbinding referendum on his presidency set for Feb. 2.

And on Thursday, when Chavez's supporters took to streets here to demonstrate their support, he seemed as defiant as always.

"The Venezuelan people don't want violence," he said, gesturing emotionally. "But it's convenient to remind the coup-plotting, fascist oligarchy attempting to overthrow the Bolivarian government that the Venezuelan people are willing to defend their government."

susanf@coxnews.com