www.voanews.com VOA News 02 Feb 2003, 18:11 UTC

Opponents of Venezuelan President Hugo Chavez are turning out in large numbers Sunday to sign a petition demanding early elections.

President ChavezLong lines formed at sign-up tables across the country, as citizens added their names to the petition.

Under the constitution, organizers need signatures from 15 percent, or about 1.8 million people, of the country's registered voters.

The petition calls for a constitutional amendment to shorten President Chavez's rule and for elections later this year. Mr. Chavez has made it clear he will not support the constitutional amendment.

The opposition campaign follows an appeal by a six-nation "Friends of Venezuela" group for a democratic, electoral solution to end the crisis. Envoys from the United States, Brazil, Mexico, Chile, Spain and Portugal are urging Mr. Chavez and his opponents to settle their differences in negotiations brokered by the Organization of American States.

Meanwhile, opposition leaders who called the national strike December second to pressure Mr. Chavez to step down, say they will ease the work stoppage because of the damage to businesses and jobs. However, the protest will continue in the vital oil industry.

www.hinduonnet.com

THE PREVALENCE of low interest rates in the developed countries, a continuing decline in the external parity of the U.S. dollar vis-à-vis the major currencies and improvement in India's creditworthiness in world markets have been responsible for an unprecedented upsurge in forex reserves. It would not have been expected in 1991, when forex reserves were only $5.83 billion, with foreign exchange assets accounting for $2.24 billion, that there would be an upsurge in these reserves from the middle of the Nineties.

In a little over nine and half months in 2002-03, forex assets have risen by $18.70 billion to $69.75 billion during the week ended January 24, 2003 as compared to only $11.50 billion in the whole of 2001-02.

The revaluation of foreign exchange assets held in euro and other currencies, after taking into account the depreciation in the greenback in recent months, has had an exaggerating effect to the extent of 17 per cent. Even allowing for this adjustment, net additions to foreign exchange assets have been embarrassing to the Reserve Bank. This is because difficulties will be experienced in redeployment of these reserves, if the debt content proves to be sizable.

However, with a smart rise in invisible receipts and a current account surplus of $2.5 billion up to November on current account and other non-debt inflows on capital account, the monetary authorities have indicated that the handling of forex reserves has not presented any serious difficulty.

It is now being discussed in forex market circles to what extent the uptrend in forex reserves will be sustained and whether the $100-billion-mark will be reached even by March 2004 from around $76 billion at the end of March this year after allowing for revaluation including gold reserves.

Higher value of gold holdings

As there has also been a spurt in gold prices in World markets, the reserves held by the Reserve Bank in the Issue Department are being revalued at the end of every month and the value of these reserves has risen to $3.44 billion during the week ended January 17, 2003 from $3.05 billion at the end of March 2002. It is likely that the value of these holdings will rise in a pronounced manner, as World price for the yellow metal has risen by 30 per cent in recent weeks. However, it is necessary to remember in this context that the same quantum held by the Reserve Bank get appreciated in value with monthly adjustments.

With the highly comfortable Balance of Payments (BoP) position and the prospect of a current account surplus emerging again in 2002-03, notwithstanding a heavier oil import bill, the restrictions on the use of foreign exchange by individuals and institutions have been relaxed. NRIs also have been provided incentives for increasing their investments in India. This process of liberalisation towards capital account convertibility of the rupee may not, of course, get reflected in any noticeable utilisation of foreign currencies for various purposes.

External debt reduction

The Union Finance Ministry has, therefore, decided to effect repayment of foreign loan of $1.54 billion due to the International Bank for Reconstruction and Development (IBRD), the developmental financing wing of the World Bank, and another loan of $1.25 billion to the Asian Development Bank (ADB) prematurely. These repayments will be helpful in minimising the interest payments in respect of outstanding foreign debt and there may also be a net decline in the external debt.

The real decline in the outstanding external debt may not get revealed, as foreign bonds are being lodged with the Reserve Bank.

What is heartening to note is the continuing rise in software exports and larger inflows due to remittances from expatriates, a higher level of foreign tourist traffic and other favourable developments. It will be necessary, therefore, for the Reserve Bank to devise measures for effective use of the portion of free reserves for augmenting investment in vital sectors of the Indian economy.

The oil import bill had not, of course, got reflected in an enlargement of the trade gap in April-December 2002, as the increase in the oil import bill by $2.10 billion and non-oil imports by $3.47 billion could be financed more than fully with export earnings of $6.45 billion. As a consequence, the trade deficit for the nine-month period has even declined by $875.80 million.

Even taking into account the impact of higher prices for crude and petro products, due to special factors, the trade deficit may not get enlarged by more than $1.5 billion in a whole year. The Organisation of Petroleum Exporting Countries (OPEC) members are also inclined to raise output for offsetting the reduction in supplies with a drop in output of Venezuela.

Rupee appreciation

The surging forex reserves have resulted in an appreciation of the rupee against the U.S. dollar and less pronounced depreciation against other major currencies. The Indian currency has, thus, improved by 2.55 per cent against the U.S. dollar and also against other ASEAN currencies in varying degrees since June 4, 2002. But it is still at a discount in other major currencies and it is believed that the export effort will not be adversely affected by the rising rupee, as the inflation rate also has remained low at around 3.5 per cent.

Sizable accretion to bank deposits

The accretions to the deposits of the Scheduled Commercial Banks (SCBs) have enabled bank executives to lend liberally for worthwhile purposes and invest at the same time large amounts in new loans issued by the Central and State governments. The Central Exchequer has not, thus, had any difficulty in increasing the net borrowing through new loans on a cheaper basis. Though aggregate borrowing will be higher than the Budget estimate, the fiscal deficit may not get unduly enlarged even with a sharp rise in non-plan revenue expenditure due to liberal assistance extended to the States for overcoming the impact of the drought.

Fiscal deficit may constitute an all time record

The fiscal deficit has, of course, declined to Rs.86,269 crores in April-December 2002 from Rs.89,014 crores even with an increase in total revenue expenditure to Rs.2,18,506 crores from Rs.1,99,249 crores. The revenue deficit has got enlarged modestly to Rs.68,018 crores from Rs.66,559 crores. In spite of the serious bid made by the Union Finance Ministry to prune an undue enlargement of the fiscal deficit, it will constitute an all time record at over Rs.1,45,000 crores. This situation is in strong contrast with the comfortable BoP.

Will fiscal deficit be reduced in stages?

It remains to be seen how the Finance Minister Jaswant Singh will adopt measures for contracting the fiscal deficit gradually with a pruning of subsidies, downsizing Government employees and the like. There should also be a streamlining of the structure of indirect and direct taxes for boosting revenues even while providing the necessary fillip to saving and investment and creating conditions, which would be helpful to the Planning Commission to achieve the postulated average gross domestic product (GDP) growth of 8 per cent in the Tenth Plan Period.

P. A. Seshan

www.riyadhdaily.com.sa Monday - 03 February 2003

OPEC will deal with any unforeseen development such as war on Iraq, and increase supply to meet demand, the oil cartel’s president, Abdullah bin Hamad al-Attiyah, said Sunday. "If there is a shortage of supply, OPEC will balance demand and supply," Attiyah told reporters on the sidelines of an energy and environment conference in the Emirati capital. "We have learnt from history how to deal with these situations," he said, adding that the Organisation of Petroleum Exporting Countries (OPEC) had "learnt a lot of lessons" from the 199O Iraqi invasion of Kuwait and 1991 Gulf war. Attiyah said no OPEC meeting had been scheduled during the Abu Dhabi conference attended by at least 11 oil ministers. "Only bilateral talks are taking place but not any OPEC meetings because not all the oil ministers are present. "The next OPEC meeting is on March 11 and we will discuss all options taking into account the market situation. For sure we will take into account any surprise development in the market also." In the event of a US-led attack on Iraq, the cartel could convene a snap meeting, said Attiyah, who is Qatar’s energy and industry minister. "OPEC always has a tradition, can meet any time to discuss the markets, but I hope not to see a war," he said. Saudi Oil Minister Ali Al-Nuaimi had renewed Saturday the kingdom’s pledge to activate spare oil production capacity and make up for any loss in world petroleum supply if war breaks out. The world’s top oil exporter "does not hope that a strike on Iraq happens but, if it does, it is committed to cover the needs of the market in line with its capacity," Nuaimi said. Meanwhile, Libyan Oil Minister Abdulhafidh Zlitni said on Sunday that OPEC could reduce its oil output ceiling in March if prices were declining rapidly and demand for petrol was stable. "If there are signs in March that demand is stable and prices are falling sharply then OPEC will act to reduce production," Zlitni told reporters at an energy and environment conference in Abu Dhabi. Zlitni said the oil market was well supplied and global inventories were building up, setting the stage for a sharp decline in prices. "Supplies are sufficient...and the build up of stocks will have a negative impact on prices, certainly," he said. The Libyan oil minister said most cartel members were pumping at high rates in a bid to cool-off scorching oil prices which had blasted beyond $30 a barrel. "It seems everybody now is producing above the market requirements to make the market cool," he said. OPEC last month agreed to raise its supply limits by 1.5 million barrels per day (bpd) to 24.5 million bpd to cover the supply gap left by strike-bound member Venezuela. Influential Saudi oil minister Ali al-Naimi said on Saturday the kingdom would ensure that the producers group was pumping at 24.5 million bpd.

www.thevistaonline.com

Editor's Note: These stories would not have been possible without the guidance and help of Lizette Galindez Silva.

Stories by Mark Schlachtenhaufen February 02, 2003

If the two-month-old general strike in Venezuela continues and U.S. troops invade Iraq, UCO commuters could soon be paying significantly higher prices at the pump. Resulting lingering uncertainties are pushing prices even higher.

"That's enough to make the market fairly jittery," said Chuck Mai, AAA Oklahoma public relations director.

Other factors influencing the oil market include OPEC's increase in production by 1.5 million barrels a day, winter weather, which is driving heating oil prices higher, and the low level of crude oil stocks, said Lowell Feld, Energy Information Administration (EIA) world oil market analyst.

An AAA Oklahoma survey of local regular self-serve prices shows metro prices are higher than they were one year ago, but lower than the record high of $1.73 per gallon of regular unleaded gasoline recorded on June 20, 2000.

The metro average price for a gallon of gas on Jan. 22 was $1.36 per gallon, compared to 99.9 cents per gallon one year ago, a difference of 36.9 cents. If there were no war with Iraq and the situation in Venezuela improved, prices over the coming months would remain comparable, Mai said.

If U.S. troops do invade Iraq and the situation in Venezuela worsens, prices could go as high as $1.55-$1.60 a gallon, Mai said. How long they would remain at that level, or just how high they could climb would depend on the duration and extent of the two crises.

"Anything is possible," Mai said.

The national average for a gallon of gasoline was $1.45, the highest amount since Sept. 24, 2001, said Doug MacIntyre, EIA senior oil analyst. Fears about Venezuela and Iraq briefly drove oil prices above $35 per barrel Jan. 21. They ended the day at $34.61 per barrel.

The higher the price per barrel, the higher the price of gas at the pump, MacIntyre said.

Before the national strike, Venezuela was exporting 1.5 million barrels of oil per day to the United States, Feld said. The current estimate ranges from 600,000 to 800,000, the lower figure being offered by strike leaders, the higher figure by the government.

The United States receives about one-fifth, or 20 percent, of its total oil imports from the Persian Gulf region, McIntyre said. A U.S.-led war against Iraq would have negative consequences throughout the oil-producing region.

Recently, President Bush has been pressing the case for taking action against Iraq sooner rather than later.

Numerous UCO students commute to school from various sections of Oklahoma City, already driving up their monthly gas bills. Some said they are very concerned about the prospects of paying increased prices at the pump.

Ayyappan R. Muthuvel lives in north Oklahoma City. He said he currently spends about $100 each month on gas. If prices increase too much, he will have to shuffle his budget and search for ways to come up with the extra money.

"Gas is one of the most important things. It is the driving force of the common man. It's going to affect everyday life in a very big way," Muthuvel said.

He said he hoped former President Jimmy Carter could resolve the Venezuelan crisis.

"It's better if things are solved diplomatically rather than militarily," Muthuvel said.

Shawn McCleary lives in Oklahoma City, near Millwood High School. He said he spends about $30 per week on gas and he would be happy if prices remained the same.

Instead of worrying about the world situation, he said he concentrates on school, sports and his one-year-old daughter.

Laura Oden spends a lot of her time on the road driving to UCO from northwest Oklahoma City. She said she probably doesn't follow current world events as closely she should. Her parents pay for her gas.

"I already think it's kind of high compared to what I remember a couple of years ago," Oden said.

Mai encouraged consumers to shop around for the best prices. He said Oklahoma, with its numerous retail outlets, has a competitive market compared to other areas.

www.thevistaonline.com

Editor's Note: These stories would not have been possible without the guidance and help of Lizette Galindez Silva.

by Mark Schlachtenhaufen February 02, 2003

For most students, the biggest worries are finding the time to study for a test or deciding what to do over the weekend.

Carlos Espinel, who graduated from UCO in December, is weighing the biggest decision of his life: whether or not he will return to his homeland of Venezuela and join the opposition coalition working to have President Hugo Chavez removed from power.

Espinel's original plan to go home by February or March has been postponed. Espinel said if he hasn't found a job by June -- he earned a master's degree in business administration -- he will return to Venezuela, against the advice of friends.

"At this moment, I don't want to march," Espinel said.

"If I do not have a job by June, I will go back. The situation is very hard for all of us because we don't have a clear future."

If he returns, Espinel said he would participate in special events organized by the opposition by helping provide food for example. He could provide financial support, or assist with the production of newsletters.

Espinel said he is aware of the consequences of his future actions. Since unrest in Venezuela erupted in April 2002, dozens of people have been killed.

"Anytime you participate in an event, you take a risk to receive a gunshot or something like that," Espinel said.

Espinel said the future of Venezuela is worth the risk.

Since Chavez entered office in 1998, Venezuela has been transitioning from a social democracy into a communist state, Espinel said. If Chavez had his choice, Venezuela would have a communist-type regime and would face political and economic isolation, he said.

"We receive a lot of [advice] from Cuba," Espinel said. "If we take out Chavez, what would be our relationship with Cuba in the future?"

Espinel's mother and father live in Caracas. His mother is a homemaker. His father is a retired retailer. The general strike, while adversely affecting the economy, has not disrupted their day-to-day lives too much, Espinel said.

Others tell different stories. One of Espinel's two brothers lives in Caracas and was recently told not to come to work for a month; there is nothing for him to do as a result of the strike. When Caracas residents fill their cars with gasoline, they wait in line up to 10 hours. A two-liter bottle of Coke costs $3 on the black market, where gas may also be found.

Some canned foods, beer and even Big Macs are now hard to find, since McDonald's franchises recently joined the strike.

"Most of them are closed," Espinel said.

Mail delivery has also been slowed greatly. The last week of November, Espinel mailed some Christmas gifts, destined for family members in Venezuela. As of Jan. 23, the gifts had still not been received, Espinel said.

Espinel said his brothers are "very upset" about the situation in Venezuela. He communicates weekly with his family members by telephone and on the Internet. He gets current news about the crisis from Internet newspapers.

Former U.S. President Jimmy Carter is trying to broker a peaceful resolution to the crisis. One solution would be through a Constitutional amendment to shorten President Chavez's term to four years. The other would lead to a recall referendum in August.

Espinel said due to Constitutional provisions, the outcome of the referendum would be that Chavez would step down and the vice president would become the president, a prospect that concerns Espinel.

The vice president is Chavez's right-hand man, Espinel said.

What does the future hold for Venezuela?

"At this moment, we do not know," Espinel said.