www.alertnet.org 13 Feb 2003 22:09

(Recasts with Gaviria comments, oil figures) By Phil Stewart

CARACAS, Venezuela, Feb 13 (Reuters) - After three months of tortured talks, the chief mediator in Venezuela warned on Thursday of a long, deadly road ahead if friends and foes of President Hugo Chavez fail to strike a deal quickly.

Organization of American States chief Cesar Gaviria said he would push for a nonviolence pact aimed at defusing the explosive divide in the world's fifth largest oil exporter.

At least seven people have been killed and scores injured in street clashes since December, as negotiations drag on.

"We are working with the wording to see if we can put out a declaration against violence, and the confrontational rhetoric, the hateful (rhetoric) that has prevailed in the country," said Gaviria, at a forum on the country's deep political crisis.

"Venezuela's recovery will be very long, very traumatic and also very difficult to bring to a good ending" without a deal soon, Gaviria said, warning "many more lives" could be lost.

Opponents of Chavez, who charge that his so-called peaceful revolution is a mask for Cuba-style communism, have demanded that he step down and agree to elections.

Chavez has refused and has accused his opponents of supporting a coup that briefly ousted him last year. He has hardened his stance in talks and has slowly eroded a 10-week-old oil strike aimed at forcing him from power by bankrupting the state.

The populist president, whose term ends in 2007, has fired more than 11,000 employees of the state oil firm PDVSA.

Negotiations to end the crisis began in November and are being brokered by Gaviria and backed by the United States, Brazil and four other nations.

OIL FLOW CUT

The flow of oil from Venezuela to the United States, which had been about 13 percent of all U.S. oil imports, has slowed dramatically during the strike. The stoppage has further jolted world oil prices, already reeling from war worries in Iraq.

Chavez said this week production was at about 2 million barrels per day (bpd) compared with pre-strike levels of 3.1 million bpd. The government on Thursday pegged exports at about half normal levels, or 1.3 to 1.5 million bpd.

Rebel oil workers put the output lower, at a modest 1.4 million bpd, and say exports are at about 1 million bpd.

Still, with oil exports limping along, and more than $11 billion in foreign currency reserves, analysts say Chavez can hold on for months even if the standoff deepens.

Chavez introduced sweeping price controls on Wednesday on everything from tomatoes to funeral services to shield the poor majority from spiraling inflation.

Opposition leaders warned that the new controls would further damage shopkeepers, many of whom shuttered their businesses for nearly two months as part of a general strike abandoned earlier in February. Capping wholesale prices will also hurt industry and farmers, already mired in recession.

"Is the desire to make everyone self-destruct? What this could do is shut down the country's productive sector," said Rafael Alfonzo, an opposition negotiator and business leader.

Chavez suspended foreign exchange trading on Jan. 22 before announcing controls to shore up international reserves and the bolivar currency. Trading was still closed on Thursday, leaving businesses starved of the much-needed U.S. currency in a nation that imports more than 60 percent of its goods.

www.forbes.com Reuters, 02.13.03, 5:43 PM ET CARACAS, Venezuela, Feb 13 (Reuters) - Venezuela's government, struggling with a drastic slide in oil revenues, pushed back maturities on about 30 percent of local bonds due Feb 17 with a debt swap on Thursday worth about $32 million, the Central Bank said. The bank said it exchanged 51.8 billion bolivares in bonds for four other debt issues, maturing between five and just over eleven months away. Supply far outstripped demand for the 200 billion bolivares ($125 million) in bonds on offer. Dollar conversions on the bolivar-denominated notes are based on the government's new fixed exchange rate of 1,600 bolivars to the dollar. Venezuela's debt swap is part of emergency measures adopted by the government to cope with the economic crisis after a two-month opposition strike slashed the vital oil exports that account for half of state revenues. Opponents of leftist President Hugo Chavez started a general strike Dec. 2 to press him into elections to end their bitter feud. While the strike has fizzled, it has disrupted oil output and shipments from the world's No. 5 petroleum exporter. The debt auction follows six previous exchanges by the Finance Ministry to ease a crunch in domestic payments during 2003 and the next two years when most of the nation's $8.75 billion in total internal debt matures. The government has said that it has sufficient resources to complete its obligations and said it will take the necessary measures to guarantee payments as oil production starts to recover. Officials have also guaranteed payments on the government's $20 billion in foreign debt. As part of its economic counter measures the government has cut its spending by 10 percent and introduced an austerity program, which includes tight currency controls and pricing curbs on basic products. From the end of last year the government has conducted a reorganization program in its internal debt, including a swap of more than $2 billion in its National Public Debt that came due between December last year and June 2005. Those notes were swapped for debt due between one and five years later.

www.thisiscornwall.co.uk 23:59 - 13 February 2003

A man is being questioned by anti-terrorist police after a live grenade was found in a passenger's luggage at Gatwick airport.

The 37-year-old Venezuelan arrived on British Airways flight 2048 from Bogota in Columbia. He was held by Sussex Police and was being taken to a central London police station to be quizzed by detectives from Scotland Yard's Anti-Terrorist Branch.

Police said the flight stopped at Caracas in Venezuela and BA said it also stopped in Barbados. It was not clear where the man boarded the flight. The grenade was found as he went through Customs so explosives officers were called in and it was found to be live. It was not detonated.

Part of the airport's North Terminal was evacuated during the alert and outbound flights were suspended.

The grenade was believed to have been in the man's hold luggage, not his hand luggage, although that had yet to be officially confirmed.

A BA spokesman said an investigation had begun as to how his baggage had got on to the plane undetected. Seventeen BA flights due to leave from the north terminal were cancelled. They were mostly short-haul departures. Incoming flights were unaffected.

The BA 2048 plane, a Boeing 777 with 125 passengers onboard, landed at Gatwick at 1.23pm.

"The problem did not become apparent until the man went through Customs," a BA spokesman said.

BA screens 100% of baggage before it is allowed on planes, and was tonight checking if the checks were performed by its own staff at Bogota or by local airport staff.

Home Secretary David Blunkett said the arrest at Gatwick, and the unrelated arrest of two men near Heathrow, showed that the terrorist threat did exist and wasn't being made up.

www.timesonline.co.uk February 14, 2003 By Stewart Tendler, Laura Peek and Ian Cobain

BRITAIN’S airport terror alert spread to Gatwick yesterday when a Venezuelan passenger was arrested with a live hand grenade in his luggage.

Police sealed the North Terminal for five hours, almost 100 flights were delayed, and many incoming passengers were kept aboard their aircraft as the 37-year-old passenger, who was carrying a copy of the Koran, was taken to Paddington Green police station.

In a separate incident, two men were arrested near Heathrow under the Terrorism Act 2000 after a routine police check.

There were signs last night that the terror alert, and the police and military response, were making travellers increasingly nervous. There was also evidence that the alert and fears of war against Iraq were beginning to hurt the tourism industry, with travel agents, airlines and hotels all reporting a fall in bookings.

Police said that the Venezuelan man was detained after his bags were searched by Customs officers when he arrived on British Airways flight 2048 from Caracas, which had stopped in Bogotá and Barbados. It was not known where he had boarded the plane.

Scotland Yard, whose bomb disposal team was called in to examine the weapon, said that the man had no known connections with al-Qaeda, it is not known whether he is a Muslim, and it was unclear whether his arrival was linked to the terrorist threat that has led to increased security at airports.

More than 1,400 police and soldiers were patrolling Heathrow yesterday and police carried out spot-checks at other airports. An RAF Nimrod communications aircraft was also flying over London, providing unprecedented links between the Government, police, the military and security services.

The Gatwick alarm was raised shortly after 2pm when armed police and airport officials began ushering more than 2,000 passengers and staff out of the North Terminal. All incoming passengers were diverted to the South Terminal, where departing passengers were also sent to wait.

Kim Fowle, who works in the North Terminal, said: “A manager told me police had found a live hand grenade. There was no Tannoy announcement. The police just started moving people out of the terminal and there was a bit of a panic.” Her friend Fiona Ritchie said: “We saw women with pushchairs and their husbands pushing trolleys, running as fast as they could.”

David Blunkett said last night that the arrests proved that there was a real threat. “It reinforces that we really do have a problem, as people have been saying that it doesn’t exist. Second, it means that our security services are on the ball. Third, over the next few days we need to follow these leads through.”

Fears about a terror strike were beginning to bite as hotels and travel companies reported a sharp drop in American business. Virgin Atlantic reported that more people than usual failed to arrive for flights yesterday.

The Association of British Travel Agents said that most agents had lost bookings. “The same thing happened during the Gulf War in 1991, when bookings went down by 16 per cent.” During that war visitors to Britain from America dropped by 30 per cent, and the tourism industry lost £400 million. BA has put aside £2 billion to cope with the expected dip this year.

The Dorchester Hotel in London said: “There have been more cancellations than normal this week and they have all been from America. They all said that it is because of the situation with Iraq. Customers are talking as if we are already at war.”

story.news.yahoo.com World - AP Europe By JANE WARDELL, Associated Press Writer

LONDON - Authorities arrested a man with a grenade in his luggage Thursday at London's Gatwick airport and detained two men outside Heathrow airport as the capital remained on a high alert against terrorism.

Reuters Slideshow: Man With Grenade Nabbed at London Airport London On High Alert

AP - Thu Feb 13, 1:59 PM ET Special Coverage   The two airports are the focus of a huge security operation in London, set in motion earlier this week in response to a threat that Prime Minister Tony Blair (news - web sites) has refused to detail.

The Guardian newspaper reported that the alert was sparked by "high-quality" intelligence that Islamic extremists had smuggled SAM-7 anti-aircraft missiles into Britain from Europe. Police refused to comment on the report, which said the intelligence was the most specific information about an imminent threat since the Sept. 11 attacks.

Gatwick's North Terminal was closed for hours and the terminal's flights were suspended after police found the grenade in the baggage of a 37-year-old Venezuelan after he arrived on a British Airways flight from Caracas, Venezuela.

At Heathrow, police said two men were arrested in nearby Hounslow as a precautionary measure and were not believed to be linked to the threat to the airport. They were being held at a police station in west London but police did not say why they were detained.

Britain has deployed hundreds of soldiers at Heathrow, Europe's busiest airport, over the last three days after police warned that the al-Qaida network might try attacking London during this week's Muslim festival of Eid al-Adha.

Some critics have suggested the government has overstated the terrorist danger to bolster support for a war with Iraq.

Home Secretary David Blunkett said the arrests showed officials were not exaggerating the risk to the British public.

"First, it reinforces that we really do have a problem, as people have been saying that it doesn't exist," Blunkett said. "Second, it means that our security services are on the ball. Third, over the next few days we need to follow these leads through."

In Parliament before the arrests, lawmakers pressed the government to say more about the threat that led to the increased security, but Blair refused.

"We cannot start disclosing details of everything we know or may know," he told a news conference. "But it's important we take every precaution we can in order to keep people safe."

Police said the Venezuelan man, arrested under the Terrorism Act, arrived at Gatwick on British Airways flight 2048, which originated in Caracas and stopped in Bogota, Colombia, and the Caribbean island of Barbados en route to London.

It is believed the suspect boarded in Caracas. British Airways has canceled Friday's scheduled flight to Caracas while an investigation is carried out into security checks there.

The man was taken to a central London police station for questioning by anti-terrorism officers.

A Home Office spokesman said police did not yet know what the man's intentions were and urged the public not to jump to conclusions.

The Ministry of Defense said a Nimrod surveillance plane was flying over the London area, but added that fighter jets had not been deployed. Police have boosted security in the center of the capital and at several other airports including Stansted, London's third airport, and Manchester international airport in northern England.