Friday, February 21, 2003
Three groups battling for control of "new" PDVSA
www.vheadline.com
Posted: Thursday, February 20, 2003
By: Patrick J. O'Donoghue
El Nacional reporter, Mary Mogollon reports that there are three groups fighting for control inside the “new” Petroleos de Venezuela (PDVSA). Company president, Ali Rodriguez, who belongs to Patria Para Todos (PPT), is fighting off takeover attempts from the so-called Garibaldi Group led by former PDVSA president, Hector Ciavaldini and firebrand Adina Bastidas.
- The third group consists of retired army officers belonging to Movimiento Quinta Republica (MVR).
Rodriguez can count on PDVSA-West and PDVSA-East directors, Felix Rodriguez and Luis Marin respectively, Labor Minister Maria Cristina Iglesias, Jose Albornoz in the National Assembly and Mario Isea.
The Garibaldi Group wanted Rodriguez’ head last October. Ciavaldini brought the following into PDVSA and they are still in key positions: Diego Uzcategui, Romulo Gilarte, Alfredo Pineda, Luis Davila, Luis Correa, Favio Gonzalez Ciavaldini, Alejandro Gomez, Jorge Perez, Argenis Rodriguez, Alfredo Riera and Hector Viveros.
MVR counts on Oswaldo Contreras Meza (Citgo) and Gustavo Perez Isea, head of the Security & Losses Department.
Mogollon alleges a conflict between Rodriguez and Ciavaldini over the purchase of gasoline during the national stoppage.
Rodriguez hired Pepex electronic systems to buy 14 million barrels of gasoline for the domestic market at Platts +7 (US) cents a gallon, but PDVSA Commerce & Supply management off its own bat did the same with Golf + 16,5 (US) cents a gallon (almost $1 more per gallon).
Ciavaldini is said to have clinched the deal in Manhattan with Glencore, which has a bad name in Venezuela since it was struck off PDVSA’s client list in 1994 when it was connected to Marc Rich. Ciavaldini reinstated the company when he became president, along with Novarco, whose representative is a relative.
Sorry state of human rights in prisons: starvation and sickness
www.vheadline.com
Posted: Thursday, February 20, 2003
By: Patrick J. O'Donoghue
Venezuela Prisons Observatory coordinator, Humberto Prado has sent a message to the Supreme Tribunal of Justice (TSJ) magistrate, Ivan Rincon, warning that prisoners are experiencing starvation.
The letter complains that prisoners in many instances do not get three square meals a day and unfortunately, sometimes receive just one meal a day.
- Prado adds to the macabre reality highlighting that medical attention is practically non-existent in the country's prisons.
The Observatory group calls on Rincon to open a "thorough and impartial investigation" into the matter, reminding him that Criminal Process Law Article 479 stipulates that judges have the power to order procedures when they observe irregularities in prisons and detention centers.
Shots Fired as Venezuela Police Nab Strike Boss
abcnews.go.com
Feb. 20
— By Patrick Markey
CARACAS, Venezuela (Reuters) - Venezuelan police hauled away a business chief who led a strike against President Hugo Chavez after a judge ordered the arrest of prominent foes of the leftist leader, opposition leaders said on Thursday.
Shots rang out as protesters and private bodyguards faced off with the state security officers who grabbed Carlos Fernandez outside a Caracas steakhouse at midnight and bundled the white-haired strike leader into a waiting car, officials and witnesses said.
A judge ordered Fernandez and union boss Carlos Ortega, who led a crippling two-month shutdown to oust Chavez, detained for rebellion against the state, sabotage and other charges. Ortega told reporters he would go into hiding.
Opposition leaders, who accuse Chavez of wielding power like a dictator, called on supporters to take to the streets as motorists blocked highways in the capital, honking horns and flashing headlights to protest the Fernandez arrest.
"This is not just aggression against these two people. It's aggression against Venezuelan liberty," union leader Manual Cova said at a press conference.
The arrest rattled the opposition, already reeling from the killings of three dissident soldiers and an anti-Chavez protester whose bodies were discovered this week. Police say the deaths likely involved a personal grudge, but grieving relatives blamed political persecution.
Chavez hailed the arrest of Fernandez, a prominent private sector leader, as belated justice for "terrorists" in what his opponents feared was the start of a political witch hunt.
"These people should have been jailed a long time ago," Chavez said grinning widely as he recounted hearing about the arrest. "At one in the morning I sent for the sweet cooked papaya from my mother, to savor it, because it's not about hate, but justice."
"YEAR OF THE OFFENSIVE"
Chavez, who survived a coup in April, has taken a tough stance against opponents since strike leaders called off their nationwide shutdown in early February, when it began to fizzle out. He has declared 2003 as the "year of the offensive."
The president, elected in 1998, has vowed to crack down on foes he says are trying to topple him by sabotaging the oil industry of the world's No. 5 petroleum exporter. Chavez has clamored for judges to jail strikers he calls coup mongers.
The opposition strike briefly crippled the oil exports and production as part of their campaign to push Chavez into resigning and accepting early elections.
But the Venezuelan leader, whose fiery speeches are often laced with threats and name-calling, has so far resisted calls for a vote. He accuses "rich elites" of trying to scuttle his leftist reforms to ease poverty.
As lawyers worked on freeing Fernandez, police investigators scoured for clues on the confusing quadruple homicide of the three rebel soldiers and a female anti-government protester.
About a dozen unidentified gunmen kidnapped the four victims on Saturday night as they left a protest. They were bound, gagged, and some were tortured before they were killed, the police said.
The case has fueled opposition fears that Chavez may be leading Venezuela toward armed struggle by encouraging supporters to silence dissent, more than 10 months after he narrowly survived the coup led by rebel officers.
Using troops and replacement workers, Chavez has battled to overcome the impact of strike and restore oil exports that provide half of state revenues. He has fired more than 12,000 oil workers, accusing them of trying to destroy the refineries of state oil firm PDVSA.
Dissident oil workers rallied on Thursday outside PDVSA facilities across the nation to protest the government's restructuring. They have vowed to protest until Chavez resigns and reinstates fired employees.
"We will be in the streets permanently. This government wants to return us to the Middle Ages," said strike leader Juan Fernandez. "They are not the present or future of Venezuela."
DUE DILIGENCE - Is stagflation in the cards for U.S.? Bad economic data point to slow growth, higher prices
cbs.marketwatch.com Rex Nutting, CBS.MarketWatch.com
Last Update: 3:14 PM ET Feb. 20, 2003
WASHINGTON (CBS.MW) -- Higher prices, slower growth, more layoffs ... a couple more months like this and people will start waxing nostalgic about the days of Jerry Ford and Jimmy Carter.
Have we added inflation to our list of worries about the anemic economy? Is stagflation -- that uniquely dismal marriage of high inflation and stagnant growth -- in our future?
On the surface, the economic data released on Thursday aren't comforting.
"This is the worst economic news day since the 9/11 period," said Ken Mayland, president of ClearView Economics.
Exhibit A: The nation's producer price index jumped 1.6 percent, the most in 13 years, as energy prices rose 4.8 percent on jitters about supplies from the Middle East.
Exhibit B: America's trade deficit surged to a record $435 billion in 2002 with no relief in sight. If the U.S. economy is lame, the rest of the world is crippled. There's no market for U.S. goods. See full story.
Exhibit C: Growth in the manufacturing sector has ground to a halt in the Philadelphia region. Worries about the war are adding to the weak climate for spending and hiring. See full story.
Exhibit D: The labor market is treading water. With new jobless claims totaling 370,000 to 400,000 each week, there's not enough job growth.
The data don't look encouraging. But, on the bright side, things could be worse. A few months ago, the big topics were deflation and double-dip recession. And it was repeat of Herbert Hoover, not Jimmy Carter, that we feared most.
So stagflation is a step up from where we were. But is it really worth worrying about?
The stagnation part is a given, at least for now. Although the recession is over, there's still little growth.
"The U.S. economy could advance soon," Ken Goldstein, a Conference Board economist, said with hope but without much conviction.
Low confidence
Neither consumers nor businesses are confident in the future. Both are burdened with debts and both are putting new cash flow to work repairing balance sheets. Both sectors are waiting. Waiting for the war, but even more waiting for things to get better.
"The fundamental labor market picture does not appear to be changing much, and probably won't -- at least for the better -- until after the war," said Steve Stanley, economist at RSB Greenwich Capital.
Only about a quarter of firms surveyed by the Philadelphia Fed plan to increase hiring or spending in the next six months. About 40 percent of the firms said geopolitical concerns have crimped their capital spending or hiring plans, so you might expect that things would improve once the war is over, or once it's finally begun. Read more.
However, about half of the firms who say the war is holding them back don't have any plans to expand in the first six months after the war.
Clearly, weak demand won't disappear with Saddam Hussein.
The inflation part of the equation is a little trickier.
There are intense deflationary forces at work in the global economy, particularly the competition from low-wage manufacturers like the Chinese.
But at the same time, there are also inflationary pressures stemming from the same war fears that have frozen the American economy in suspended animation.
The global energy system is being squeezed by perfect combination of events. The cold winter in North America pushed up demand just when supply was truly restrained by the general strike in Venezuela.
Add in the uncertainty over Iraqi, Kuwaiti, and possibly other Gulf producers, and you have the recipe for $40 a barrel oil.
At this rate, there may be no cushion left in the system. Any disruption could push energy prices to record-high levels, even when adjusted for inflation. See full story.
Rising oil price
Much of the increase in the January producer price index stemmed from higher oil prices. Gasoline prices rose 13.7 percent and heating oil prices appreciated by 19.7 percent. Tight supplies and rising demand will do that. Read the full release.
But other prices rose in January as well.
Food prices rose 1.6 percent, including big increases in vegetables, meat, fish and even baked goods. The increase in food prices could just be noise in the data. After all, wholesale food prices are up just 0.4 percent in the past 12 months, so there's no trend toward runaway prices.
A 3.5 percent surge in car prices also contributed to the outsized 0.9 percent gain in the core PPI, which excludes food and energy prices. But once again, the January number could be an anomaly: The trend is toward lower car prices, as everyone knows. Wholesale car prices are down 1.4 percent in the past 12 months.
The jump in inflation in January cannot be dismissed by excluding everything that rose. On the other hand, there's little reason to believe that suddenly everything has changed and that businesses all throughout the economy now have the so-called pricing power they crave.
Inflation will hurt the U.S. economy this year. The rise in energy prices has already cut about $50 a month out of household budgets. The business sector is also facing those higher costs and attempts to pass those costs along may not be any more successful than the airlines' failure to impose a fuel surcharge.
Are we in for a repeat of the 1970s? One encouraging sign is that energy matters much less to the economy now than it did then. Each of us uses as much energy now as we did in 1973, but we produce 75 percent more.
Rex Nutting is Washington bureau chief of CBS.MarketWatch.com.
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Malaysian Leader: War May Bring Backlash
www.timesleader.com on Thu, Feb. 20, 2003
SLOBODAN LEKIC
Associated Press
PUTRAJAYA, Malaysia - A U.S.-led assault on Iraq could push the price of oil on international markets to unprecedented levels - perhaps as high as $50 a barrel - and fuel a worldwide wave of terrorism by Muslims, Malaysia's prime minister warned Thursday.
Prime Minister Mahathir Mohamad, in an exclusive interview with The Associated Press, expressed the apparently widespread sentiment among the mostly developing nations of the Non-Aligned Movement that an attack on Iraq was unwarranted.
He emphasized any new U.N. resolution on Iraq should be an impartial, well-reasoned decision and not blindly confirm U.S. and British efforts to justify an attack. "It must be meaningful, not just a change of words with the intention that whatever happens, war must be declared on Iraq," he said.
Mahathir also said U.N. inspectors should be given more time to determine whether Iraq has any weapons left and dismissed U.S. assertions that Iraq already had failed to comply with U.N. resolutions mandating its disarmament.
One of Asia's senior statesmen, Mahathir is to assume the chairmanship of the Non-Aligned Movement of mostly African, Asian and Latin American nations at a summit starting Monday. Senior officials of the 114 non-aligned countries met Thursday to set an agenda for the two-day summit, which is expected to denounce any U.S.-led attack on Iraq.
Wearing a gray Nehru jacket, the 77-year-old Mahathir appeared physically fit as he spoke in his office in Putrajaya, freshly constructed on outskirts of Kuala Lumpur as Malaysia's new capital.
In a wide-ranging interview, Mahathir, who has been in office since 1981, warned that Iraq might destroy its oil fields if attacked and that world prices would rise quickly as a result.
"Looking at what Iraq did in Kuwait, where it burned its oil fields, for a long time its oil will not be available," he said. "And we still have dependence on Saudi oil and oil from Venezuela ... which of course will cause a rise in the price of oil maybe to $50 a barrel."
The Malaysian leader also predicted that an attack on Iraq would set back efforts against international terrorism.
"I don't think overthrowing Saddam and trying to install a new democratic government is a solution that can actually happen," he said. "At the same time, it will cause a great deal of anger among Muslims worldwide and will contribute toward increasing the possibility of terrorism."
Founded in 1955 to steer a middle course between the West and the Soviet bloc, the Non-Aligned Movement has sought since the Cold War to reinvent itself to confront challenges of globalization and U.S. military and economic might.
While Malaysia, a predominantly Muslim nation, has been an active ally in the U.S.-led war on terrorism, Mahathir criticized Washington for shifting its focus to the confrontation with Iraq. He complained that the West ignored a key cause of religious extremism, namely "the expropriation of Palestinian land to create the state of Israel."
"We insist that you should look into the causes. People don't just blow themselves up without reason," Mahathir said.