washingtontimes.com

   The New York Times      The mixed report on Iraqi weapons compliance presented yesterday by the United Nations' two chief weapons inspectors begins an intense week of diplomacy and decision-making on the next steps in the international campaign to disarm Saddam Hussein. Their findings argue strongly for giving the inspectors more time to pursue their efforts and satisfy international opinion that every reasonable step has been taken to solve this problem peacefully. As President Bush has repeatedly said, war, if it comes to that, must be a last resort. ...      Without Baghdad's full cooperation, inspectors cannot disarm Iraq. They can, however, keep enough pressure on Baghdad to contain its unconventional weapons development and perhaps produce evidence that would mobilize an international consensus for additional steps.      Secretary of State Colin Powell warned Baghdad yesterday that not much time remains to begin disarming, but he said a peaceful solution was still possible if Iraq changed course. The White House should not be impatient to invade Iraq. War there could be a messy, bloody business. The world must be reassured that every possibility of a peaceful solution has been fully explored. To that end, the inspectors should be granted additional time.      -0-      Washington Times      In his report to the United Nations yesterday, chief weapons inspector Hans Blix presented a compelling case that Iraq is in material breach of U.N. disarmament resolutions, in particular, Security Council Resolution 1441, approved last November. While the Swedish diplomat expressed his opinion that more time should be allowed inspectors from his organization, UNMOVIC, to continue their work, the facts reported suggest that this would do little more than give Saddam Hussein more time to evade disarmament and conceal his chemical and biological weapons arsenal. Indeed, Mr. Blix stated that "Iraq appears not to have come to genuine acceptance, not even today, of the disarmament that was demanded" of it. ...      Now that they've documented Saddam's continued cheating, the members of the Security Council are obliged to apply the factual findings to Resolution 1441, particularly paragraphs 4 and 13. Applying paragraph 4 of Mr. Blix's factual report requires a finding of a material breach. Paragraph 13 triggers "serious consequences," understood by all parties to be military action. (Q.E.D.: quod erat demonstrandum.)      -0-      Washington Post      The vital point of the presentations by Iraq arms inspectors to the United Nations Security Council yesterday came at the beginning. "The fundamental aim of inspections in Iraq has always been to verify disarmament," said chief weapons inspector Hans Blix. But Iraq, he said, "appears not to have come to a genuine acceptance, not even today, of the disarmament which was demanded of it." Mr. Blix went on to present, in a deliberately understated way, a devastating catalogue of lies, omissions and obfuscations by Iraq in the 21/2 months since the council passed Resolution 1441, which was meant to give Saddam Hussein "a final opportunity" to give up weapons of mass destruction. Mr. Blix and Mohamed ElBaradei, the chief of nuclear inspections, made it clear that Iraq did not embrace that chance. Yet the two men dodged the obvious question their reports raised: If Saddam Hussein did not accept voluntary disarmament, what purpose could be served by the continued inspections they both advocate? ...      Rather than yield to the inspectors and offer Iraq yet another last chance, the council would do better to simply obey the resolution it approved unanimously just 11 weeks ago. The terms of 1441 said that if Iraq submitted a false declaration of its weapons -- as all agree it did on Dec. 8 -- and failed "at any time" to "cooperate fully" -- Mr. Blix detailed a number of instances -- Baghdad would be in "material breach" of the resolution and the council would be bound to meet to consider consequences. Only if the council sticks to its own decisions will there be any chance that Saddam Hussein will change his.      -0-      Baltimore Sun      Iraq - surprise, surprise -- is not cooperating. The chief U.N. weapons inspector delivered his long-awaited report yesterday, and said that Saddam Hussein's regime was not coming clean on questions of disarmament and in fact does not appear to have accepted the idea that the country should disarm.      Does this mean war? ...      So far, the Bush administration's diplomacy on Iraq has been a spectacular failure, as one ally after another jumps ship. That doesn't hold out much promise for the war to come.      Mr. Hussein's thumbing of his nose at the U.N. inspectors means it's all the more important for the United States to step up its diplomatic efforts, to make a persuasive case for action to the rest of the world and to win back its allies. Instead, President Bush's aides spent the weekend threatening a nuclear attack. That's pure insanity.      -0-      Chicago Tribune      In an indictment laden with particulars and devoid of spin, United Nations chief weapons inspector Hans Blix told the UN Security Council what it knew but perhaps didn't want to hear: Saddam Hussein has failed to comply with much of the council's direction.      The council, you'll recall, voted 15-0 last November to back Resolution 1441, demanding yet again that Hussein disclose his most dangerous weaponry and disarm. If he did not, the resolution said, he would face "serious consequences."      On Wednesday the Security Council will debate how Blix's report influences that threat. ...      So as the Security Council reacts to Blix's report, its members face two urgent questions. Will those who embraced a multilateral approach toward Iraq now honor their word? Or was 1441 a stalling tactic worthy of Saddam?      -0-      Boston Globe      In his report yesterday to the UN Security Council on the work of weapons inspectors in Iraq, Hans Blix, head of the United Nations inspection commission, was not supposed to deliver the kind of a war-or-peace judgment that only the council can make. What he did say, differentiating between the process and the substance of Saddam Hussein's dealings with the UN inspectors, left no doubt that the Iraqi dictator continues to refuse to comply with the December UN resolution calling on him to disarm and with all preceding UN disarmament resolutions going back to 1991. ...      Although Blix found that Saddam has not been disarming, he cannot answer the central question facing President Bush and other Security Council members: How long should the inspection process go on, and under what circumstances should force be used to disarm the dictator. ...      Now it is up to the United States and its allies to balance Blix's ''sense of urgency'' and their need for a reasonable period of inspections.      -0-      Dallas Morning News      Weapons inspectors reported yesterday. The news was neither good nor surprising. Sixty days of inspections revealed Iraq uncooperative and duplicitous. ...      Secretary of State Colin Powell spoke this weekend of the need for America to go it alone against Iraq if need be. But that's likely not necessary. Britain stands besides us. Italy, Spain, Portugal, Denmark, the Netherlands and others are believed to be supporters of acting sooner rather than later to confront Saddam Hussein.      The U.N. Security Council must live up to its name when it meets again tomorrow. Members should understand what a dangerous place the world will become if Mr. Hussein's flouting of the law continues to be routinely ignored.      -0-      Los Angeles Times      In a hateful message driven by anger, Venezuela's President Hugo Chavez on Sunday called on the ideologically faithful (detractors call them the globalifobicos) to bury capitalism.      As Chavez spoke at the World Social Forum in Brazil, on the other side of the Atlantic -- at the World Economic Forum in Switzerland -- hundreds of the world's most powerful and, no doubt, well-fed business leaders and politicians heard another leftist's plea for the poor. "Hunger," Brazilian President Luiz Inacio Lula da Silva said, "cannot wait." And he called on the Group of 7 industrialized nations and international investors to create a new agenda of shared global development and an international anti-poverty fund.      It was more than altruism that made people cheer so heartily at the gatherings. Lula and Chavez are two in the latest wave of Latin American leftists voted into office by those willing to take desperate measures to solve the seemingly intractable problems of hunger, poverty, inequality and injustice. ...      Lula has been in power for less than a month and has vowed to control inflation by limiting deficits; to pay Brazil's debt; to streamline the country's pension system; to reform the nation's labor laws, and to fight hard against corruption. So far, it looks as if Lula is the kind of man with whom the Western world can and should do business.      -0-      Miami Herald      When a Mack truck is speeding toward a brick wall, something has to intervene to avert a crash. Thus, proposals and pressure from outside Venezuela raise hope of a break in the hostile impasse between President Hugo Chávez and his tenacious opposition.      Former U.S. President Jimmy Carter offered two electoral proposals last week. That alone is an accomplishment. The six nation-friends -- including the United States -- seeking to help end Venezuela's stalemate, add another critical ingredient: international guarantees that both sides will comply with agreed-upon conditions. That is key considering the mutual distrust of Mr. Chávez and the opposition, which for good reason wants him out of office.      Each proposal would require the opposition immediately to end the crippling strike that now is in its ninth week. ...      Mr. Carter's electoral proposals pave new paths from what had become a painful dead end. Now it's up to Mr. Chávez and the opposition to show that each can be reasonable.      -0-      Minneapolis Star Tribune      Chief U.N. weapons inspector Hans Blix was blunt Monday in his assessment of Iraq: It "appears not to have come to a genuine acceptance -- not even today -- of the disarmament, which was demanded of it and which it needs to carry out to win the confidence of the world and to live in peace."      The world knew this, of course, but it was oddly reassuring to hear Blix say it. He's making no excuses for Saddam Hussein, and that is good to know. It suggests the world can have faith in the inspections regime if not in Iraq, and that giving the inspectors the time they need to complete their task would be a wise investment. ...      The ongoing consultations at the United Nations most likely will involve some sort of horse trading, with Washington agreeing to extended inspections in return for a commitment from France, Germany, China and Russia to support military action if Iraqi cooperation does not improve greatly over the next few months.      That's not a bad outcome. Blix and ElBaradei demonstrated in their briefings that to a significant degree they don't depend on Iraqi compliance. There is a great deal they can do on their own. They should get a full chance to do all they can.      -0-      Pittsburgh Post-Gazette      Chief U.N. Iraq arms inspector Hans Blix presented his required 60-day-in report to the U.N. Security Council in New York yesterday. It contained no surprises. Its clear message was to pursue the inspections, with even more intensity and perseverance. The message to those in the Bush administration eager to conclude that the inspections are already a failure was: Hold your horses a bit. ...      The United States cannot allow the U.N. inspections process to fail for want of information it could provide and then cite this failure as justification for an attack. That is a level of bad faith in dealing with the United Nations and our allies that is not consistent with American principles. ...the United States must never get to the point where momentum toward war overcomes the dictates of good judgment.      -0-      Portland Oregonian      Hopes dimmed Monday that more weapons inspections could lead to disarmament in Iraq. Secretary of State Colin Powell, sometimes described as the Bush administration's "dove" and definitely its strongest advocate for diplomacy, made it clear that Iraq had failed to take a succession of "diplomatic exit ramps" that could have steered the world away from war. ...      At the moment, it seems far more likely that Saddam would share his weapons with al-Qaida than disclose them to U.N. inspectors. And if he does share them, we can be pretty sure who'll be at the top of the target list.      -0-      (Compiled by United Press International)

www.nzherald.co.nz 29.01.2003

First, there was the ticking clock: the countdown to the war by the United States.

Then there was the second ticking clock: the diary of the week - the Blix statement, the State of the Union Address, the Blair-Bush war cabinet.

No one in the press talked about the third ticking clock: the dollar, the collapsing US economy, Venezuela and North Korea.

How easily do we slip into war?

The people don't support us? Why, let them be reminded of the asphyxiated Kurds of Halabja (whom we didn't care about at the time), the "weapons of mass destruction" which have never been used against us (but which we helped to create), the flagrant breach of United Nations resolutions of which Iraq has stood guilty (along with Israel, though we mustn't say so).

Ah yes, it's a hard life trying to convince a free people to go to war.

Especially when some of them - the British perhaps - take note of some unhappy facts along the way.

Let's take, for example, the Israeli-Palestinian conflict: 14 dead Palestinians in Gaza in just 12 hours - killed by an army led by a general whom President George W. Bush has called a "man of peace".

Few newspapers in Europe reported two weeks ago that Belgium Prime Minister Guy Verhofstadt said he supports a change in the country's legislation, which would, after all, allow Sharon to be tried for war crimes during the Sabra and Chatila Beirut camps massacre in 1982.

When Sharon stood for election in 2001, he expressed his regret about the "terrible tragedy" of Sabra and Chatila - at 1700 civilian dead, this was more than half the total fatalities of the World Trade Centre on September 11 that year. The most important prosecution witness against Sharon was the Lebanese Phalangist militia leader Elie Hobeika, who agreed to testify in Brussels last year, but was murdered just over 12 hours later. Israel denied any part in the murder.

The critical aspect of the forthcoming war in Iraq - alas, I suppose we must use such words as "forthcoming" - is that journalists are already using the language of inevitability.

The Americans are the good guys, the British the same - if their tank units perform as efficiently as the Americans' - just so long as no one brings up the subject of Israel.

Just take a look at Israel's man in space, Ilan Roman, a hero of the interstellar world who is now a crew member of the space shuttle Colombia, "a crew fighter pilot who bombed the Iraqi nuclear reactor in 1981," according to Associated Press.

But then AP says that, "He fought ... in the 1982 war in Lebanon". Really? But 17,500 civilians were slaughtered in this war, mostly by the Israeli Air Force.

Does Roman really fit into the new US space world? There is a serious case for some Israeli pilots in 1982 being brought before a war crimes tribunal.

I have met some of Roman's colleagues, who are haunted by the killing of the innocents they were called upon to commit. Maybe Roman is a nice guy. He certainly looks it. But when the New York Times suggests that the pilots may become "targets for terrorists" it doesn't say why.

Strange, you may think, to include all this in the third ticking clock. But in the Middle East, it is part of the story.

In other words: When the Americans invade Iraq, let's watch the Israel-Palestine war and ask ourselves the old question "why?".

Let's ask why we don't invade North Korea. Let's remember the dollar.

abcnews.go.com Jan. 28

— LONDON (Reuters) - World oil prices bounced back on Tuesday after Iraq said it could retaliate against crude producing neighbor Kuwait if the United States launches an attack from Kuwaiti territory.

U.S. light crude by 10:40 a.m. EST was up 31 cents at $32.62 a barrel after losing 99 cents on Monday. London Brent blend added 31 cents to $30.12 a barrel.

Iraqi Deputy Prime Minister Tareq Aziz told Canada's CBC television in an interview in Baghdad that Iraq might strike at Kuwait to defend itself against a U.S. invasion.

"Kuwait is a battlefield and American troops are in Kuwait and preparing themselves to attack Iraq," he said.

"If there will be an attack from Kuwait I cannot say that we will not retaliate. We will of course retaliate against the American troops wherever they start their aggression on Iraq. This is legitimate."

Dealers are waiting for President Bush's State of the Union address at 9 p.m. EST on Wednesday, 2100 local time, for further clues on the timing of any war effort.

"Some traders are looking at whether the threat of war has really subsided, and are taking positions in case the State of the Union address is really more aggressive than the previous rhetoric from Bush," said John Hirjee, senior energy analyst at Deutsche Bank in Melbourne.

DRUMBEAT

Many military analysts expect hostilities to start by the end of February or early March, once the combined forces of the United States, Britain and Australia are in place in the Gulf.

"We'll hear a deafening drumbeat from the United States in the run-up to February 14," said Iraq expert Toby Dodge of Warwick University. "I would be surprised if the air war had not started within seven days of that."

Britain joined the United States in declaring Iraq in "material breach" of U.N. disarmament demands on Tuesday, a day after chief U.N. arms inspector Hans Blix told the council that Saddam had not come clean about stocks of lethal weapons.

British Foreign Secretary Jack Straw said a further report by U.N. weapons inspectors on February 14 was not an ultimatum, but warned Iraq that its "unbelievable" refusal to comply with U.N. demands had diminished chances of a peaceful outcome.

"The U.S.-British deployment will be in place toward the end of February. They could start the air campaign a bit ahead of that, but probably won't," said Sir Timothy Garden, a defense expert at London's Royal Institute of International Affairs.

Sir John Moberly, a former British ambassador to Baghdad, said attempts by the United States and Britain to secure a second resolution might delay war, but not indefinitely.

"When they judge the moment favorable in terms of international support and when they are militarily ready, they will not wait. The machine is lumbering forward," he said.

In Venezuela, opposition oil workers admitted that strike-hit crude production topped a million barrels a day on Tuesday, a third of normal levels, for the first time during the eight-week shutdown.

The government has used troops and replacement crews to break the strike, which aims to force President Hugo Chavez to resign and call an election.

www.austin360.com By FABIOLA SANCHEZ Associated Press Writer

CARACAS, Venezuela (AP)--Schools, restaurants and malls may reopen amid fears that a 57-day-old strike called to force President Hugo Chavez from office could backfire, business leaders said, as the government extended a freeze on foreign currency sales for another week to protect its battered currency.

Business representatives expressed concern Monday that discontent with food and fuel shortages caused by the strike could undermine its objective of removing Chavez from office.

Julio Brazon, president of the Consecomercio business chamber, which represents about 450,000 stores and retailers, said businesses need ``to recover earnings and avoid labor problems.'' He said shopping malls and franchises may be permitted to open part-time next week.

Carlos Avila, executive president of Subway de Venezuela, said fast food franchises were considering opening four days a week. Each of Subway's 76 branches in Venezuela have lost an average of $30,000 during the strike.

The National Association of Private Education, which represents 911 private schools, convoked assemblies this week to decide whether schools should open Feb. 3.

Strike organizers, who accuse Chavez of dragging this South American country into political and economic chaos, warned that easing the work stoppage would be counterproductive.

``If some sectors of the opposition, business sectors or political sectors, think they can save themselves from this regime by easing the strike, they are totally mistaken,'' labor boss Carlos Ortega said.

Strike leaders said the work stoppage in the oil industry, which provides half of government revenue, would continue.

``The protest by oil workers will continue because this is the path we are taking to find a solution to the crisis,'' dissident oil executive Juan Fernandez said at a press conference.

Crude output reached 966,000 barrels a day on Monday, according to striking executives at state oil monopoly Petroleos de Venezuela S.A., or PDVSA. Chavez claimed Sunday that daily production had surpassed 1 million barrels.

Oil production dropped as low as 150,000 barrels per day in December compared to pre-strike levels of 3.2 million barrels per day.

A waning strike could give Chavez the upper hand in negotiations with the opposition. Negotiations, mediated by the Organization of American States, have focused on whether to hold early presidential elections.

Meanwhile Tuesday, the Finance Ministry extended a freeze on foreign currency sales, first imposed last Wednesday, until Feb. 5. The suspension is designed to give the government more time to implement a new policy of foreign exchange controls, which will limit the amount of dollars and other foreign currencies Venezuelan can buy.

Exchange controls would stem the slide of Venezuela's bolivar currency, which has lost a quarter of its value this year. But they could hurt businesses that depend on dollars to buy imported goods.

The strike has cost Venezuela at least $4 billion so far. The economy could shrink by as much as 40 percent in the first quarter of 2003, the Santander Central Hispano investment bank has warned.

Chavez, a firebrand former paratrooper, was elected in 1998 and re-elected two years later. His term in office ends in 2007.

Government adversaries are now pinning hopes on amending the constitution to allow early elections. They must gather signatures from at least 15 percent of Venezuela's 12 million registered voters to call a referendum to cut the presidential term to four years.

Another option is waiting until August, when the constitution allows for a legally binding referendum on the president's rule.

Opposition parties are organizing a massive signature collection campaign on Feb. 2, the same day a nonbinding referendum on Chavez's presidency was supposed to be held. Citing a technicality, Venezuela's Supreme Court ruled last week balloting must be postponed indefinitely.

asia.reuters.com Tue January 28, 2003 10:20 AM ET

WILMINGTON, Del. (Reuters) - DuPont Co. DD.N , the No. 2 U.S. chemical company, on Tuesday said fourth-quarter profit, excluding a huge one-time gain a year earlier for selling its drug business, nearly tripled with stronger sales of everything from nylon and spandex to automotive paint.

Including the gain, its net earnings fell sharply.

DuPont, whose chemicals are used to make products ranging from Stainmaster carpets to Teflon coatings, has been cutting jobs and closing plants for the past two years to cope with soaring energy prices and lower spending by manufacturers. It has already announced plans to eliminate at least 5,500 jobs.

Now the company -- a component of the Dow Jones industrial average -- says it is starting to see "modest growth" in many of its businesses and its revenue for the quarter rose about 8.6 percent to $5.68 billion.

DuPont is not entirely in the clear, however. Chemical prices are still relatively depressed, pension expenses are up and energy costs have been climbing steadily higher as the United States has made preparations for a possible war with Iraq.

Unless business or world events change dramatically, the company said its earnings in the first-quarter would be similar to what they were a year ago, which would be below most current analysts' estimates.

But after a recent warning that its fourth-quarter earnings would fall short of expectations, the company actually reported profit that surpassed many forecasts.

Net income fell to $350 million, or 35 cents a share from $3.92 billion, or $3.82 per share a year ago, when its results were heavily influenced by a huge gain from the sale of its pharmaceuticals business.

Stripping out one-time items, profit rose to $345 million, or 34 cents a share, from $124 million, or 12 cents a share, a year ago. Its fourth-quarter earnings were 2 cents a share above the Thomson First Call consensus forecast.

Shares of DuPont were up 31 cents at $38.77. During the fourth quarter, they rose more than 17 percent, outperforming the Dow Jones, which increased nearly 10 percent during the same period.

EQUITY WRITEDOWN

DuPont, whose total sales are slightly below Dow Chemical Co.'s DOW.N , is not the only chemical company trying to dig out of a long downturn in the chemical market. Smaller rivals PPG Industries PPG.N and Rohm and Haas Co. ROH.N lowered fourth-quarter profit expectations before this month's earnings season, blaming continued weak demand.

Although DuPont showed signs that sales were rising from the depressed levels of a year ago, the entire industry still must deal with high energy costs. Crude oil and natural gas are key components of raw materials used in the industry, and energy prices over recent weeks have been bolstered by concerns about the possibility of U.S. military action in Iraq and a workers strike in Venezuela.

The other threat to DuPont's earnings is increased pension and other postretirement benefit costs. Largely to reflect a decline in the market value of its pension assets, DuPont said it will reduce stockholders' equity by about $2.5 billion after-tax. It also said the combined impact of pension and other postretirement expenses will lower 2003 earnings by 34 cents to 39 cents a share, compared to the prior year.

At the moment, the company expects 2003 first-quarter earnings per share to be roughly similar to prior-year earnings, before special items, when it earned 55 cents a share. Current estimates range from 53 cents to 70 cents a share, with an average of 64 cents.