www.pacifica.org Fri., Feb. 28, 2003

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Today's lead stories:

Blix Report #3 (3:28)

The Iraqi government has agreed to destroy its Al-Samoud-surface-to-air missiles, meeting a key demand of United Nations weapons inspectors. The move comes as the Security Council prepares to discuss chief inspector Hans Blix’s latest report on Iraqi disarmament, and could influence attempts by the US and its allies to push through a new resolution authorizing war. At stake are the votes of six undecided developing nations vulnerable to US military, economic and political pressure. Susan wood has more from the UN.

Living Wage in Santa Fe (4:26)

The city of Santa Fe, New Mexico has passed the nations most far-ranging minimum wage law, requiring many parts of the private sector to raise wages to 8.50 an hour. This makes Santa Fe the third U.S. city to attempt such a wage hike, following failed attempts in New Orleans, Louisiana and Santa Monica, California. But as Joe Gardner Wessely reports from New Mexico, Santa Fe may have a better chance of implementing its minimum wage than those cities who tried before.

Venezuela's Oil Recovery (4:44)

Today the Chavez appointed leader of Venezuela’s oil company PDVSA addressed a crowd at NY’s Columbia University where he attempted to reassure people that Venezuela was back on track after the crippling two month long shut down of Venezuela’s oil industry by striking oil executives. Venezuela is the world's fifth largest oil producer and a major source of oil for the United States. And in our continuing special series looking at Oil around the world, Caracas reporters Johnny Moreno and Yajaira Hernandez explore the recovery process of Venezuela’s oil industry in the aftermath of the 2 month strike. Reading the English transcript is Josh Chaffin.

Mexicans Rise Up Against NAFTA (4:40)

Campesinos rise up in Mexico After Border Patrol Agents shot and killed a Mexican teenager this past Saturday, lawyers representing witnesses say the Border Patrol is trying to interfere with the investigation. Meanwhile, in other Mexico news, from the south to the north, Mexican farm groups are mobilizing throughout the country to challenge the free trade policies of the government of Vicente Fox. As Kent Paterson reports from Mexico, this is the largest manifestation of rural discontent in years.  

Reflecting on Black History (3:06)

From the painful passage of slavery to the civil rights movement to the present, African Americans have struggled to survive, and continue to strive to overcome the mental, physical and political attacks by reflecting on history. Simba Russeau files this report.

www.ticker.com March  2003 Cover Story TICKER Staff

High Yield Funds

If there were years when high-yield bond buyers were afraid to listen to the news, 2002 was definitely one of them. While there have been other years when high-yield funds posted negative returns, posting a negative 3-year annualized average is a rare occurrence. For 2002, the Lipper high yield category reported a 3-year return of - 2.9%, which was the third consecutive year that category had negative 3-year returns. For 2001, the return was -1% and for 2002, it was - 1.6%.

“The prices of high yield bonds can still go down significantly,” said Mark Vaselkiv, a manager with 15-year tenure in T.Rowe Price and Affiliates, running the T.Rowe Price High Yield fund. “The positive spin here is they’ve been going down for four years. We are just starting the fifth year of a bear market in high yield debt - it started in 1998 and continued through most of 2002. Fundamentally, this market is pretty undervalued.”

The depressed state of the high-yield category - the largest in terms of number of funds - widened the performance gap between the consistent performers and the average fund. During 1999, the consistent top performers returned 2.2% more than the category average, while in 2002, the top performers exceeded the average by 5.2%.

Columbia Management’s Company’s (CMC) institutional and retail high-yield portfolios take the take the top two spots for consistent top performers. Managed by Jeffrey Rippey and Kurt Havnaer, CMC High Yield and Columbia High Yield outperformed its peer group for the 3-year period ending 2002 by margins of 8% and 6.9%, respectively. The managers’ approach is to screen companies using a combination of qualitative, financial-statement and relative-value analyses and come up with a batch of 150 issuers, generally companies with market capitalizations above $100 million. The list is then submitted to the portfolio managers, who reduce it to between 50 and 70 names that are included in the portfolio.

CMC maintains its credit quality well above its benchmark Merrill Lynch High Yield Master index. While the index listed no BBB rated bonds as of Sept. 30, 2002, Columbia had 11.7% of its assets invested in BBB. Subsequently, Columbia had no bonds in the C, CC, and CCC categories, while the index was 12.3% exposed to these deep junk issues.

Janus High Yield weathered the high-yield storms in mint condition. By December 2002, it was the third-best consistent performer with a 7.66% average annual return. By the end of 2002, manager Sandy Rufenacht kept the fund 80.6% invested in high-yield bonds, 6.3% in investment-grade, and 9.6% cash, with 90% of the fund’s bond holdings rated BB or B. His top three preferred industries were Casino Hotels, Residential and Commercial Buildings, and Oil Companies.

T.Rowe Price High Yield is the highest-ranking fund in the consistent group with net assets above $1 billion. Mark Vaselkiv’s portfolio reports an 8.45% average annual total return measured since its inception in December 1984. At the end of 2002, its quality weighing was 18.3% BB and 68.1% B, with the balance being lower-rated issues.

“The way to excel in the high yield area is to avoid defaults, bad companies, and credit problems,” said Vaselkiv. “As I look historically, the basic metric to gauge success in this business is the aggregate default rate. The reason we have consistently outperformed the market is that we seem to make fewer mistakes than many of our competitors.”

“We focus on the higher quality companies in the marketplace. On average, we have much lower weightings in the most speculative, highest risk bonds,” Vaselkiv explained. “We tend to be a little bit more conservative than our rivals. Our funds will not report the highest yield in the category, but on a total return basis, we give up less in principal because of our good security selection.”

“The average annual return for BBs has been 9.5% over the 1990 to 2002 period, while Bs have returned 8% and CCCs have returned about 4%. There are times when investing in CCCs is highly rewarding, particularly when they’ve been beaten up like they have over the last three years. But to make that a long-term strategy has never worked,” said Vaselkiv.

Moderate strategies are better suited for larger portfolios, where it is harder to constantly keep one’s finger on the trigger - an absolute must for the high-yield manager. “High-yield companies blow up. That’s the reality of the market and the basic risk that you face. You need to quickly move out of a position when you anticipate trouble, when you see the fundamentals of a company deteriorate, when management is taking a risk in a new strategy, when the competitive dynamics of an industry change, or when there is a concern about the integrity of the management team,” Vaselkiv added.

For many retail investors, Pimco and William Gross are synonymous with bond fund safety in uncertain times. For institutional money, however, the Pimco High Yield I, managed by Raymond Kennedy, has provided consistent top performance in the risky times. Since its inception in December 1992, the fund has reported a 7.72% average annual return, with only two negative years - 2000 and 2002. Mr. Kennedy’s preferred sectors as of November 2002 were telecommunications, domestic banks and healthcare services. He also spiced up his portfolio by allocating 14% of the portfolio to investments in rated A and AAA debt.

The smallest portfolio among the consistent top performers is Nicholas-Applegate High Yield Bond, which is also the only fund in the group that ranked number one in any of the past four years. The institutional portfolio has a $250,000 minimum initial investment and has returned 8.5% from its inception in 1994. Managers Douglas Forsyth, William Stickney, and Michael Yee keep the average credit quality of the portfolio at BB, or a notch above its benchmark, which is the Salomon Smith Barney High Yield.

The largest two funds occupy the bottom two spots in the high-yield group. Lord Abbett Bond Debenture A invests 57% of its $3 billion assets in corporate bonds and notes, 48% in BB and B rated. The portfolio is diversified with 13% common stocks and 13% convertibles. American Funds High Income Trust A invests 71.7% in corporate issues and 12.2% in foreign currency denominated paper. Portfolio counselors David Barclay, Abner Goldstine, and Susan Tolson lean towards the more-speculative end with 31% invested in bonds rated B, 21.2% in BB, 16.8% in BBB and 12.2% in issues with credit ratings below B.

Global Income Funds

For many investors, the international credit markets are becoming more attractive due to globalization and the broad decline in interest rates. The declining dollar and the sluggish equity markets has also fueled the interest in world debt. During 2002, the weaker dollar increased the dollar value of many investments. The J.P. Morgan Global Government Bond, Non-U.S. Index rose 22.1% for the year.

According to Merrill Lynch, bonds issued in the U.S. currently account for only 52% of the global bond market primarily because of the rise of euro-zone corporate bonds and the increase of Japan’s government debt.

Global income funds are probably the least risky category among world bond funds because they keep their investments close to home. Funds in this category must invest in at least three countries, one of them being the U.S. These funds are suitable for investors who want to have some international exposure but do not want to invest entirely overseas.

The fund with the highest rank among the consistent top performers is ISI North American Government Bond (NOAMX). Despite being in the global income category, NOAMX is not different from a long-term government bond fund.

It invests in government obligations of three countries (US, Mexico, and Canada), with the majority of its bond holdings kept in U.S. government bonds. NOAMX has an unusually big position in cash - about 41% of its portfolio. U.S. Treasury notes and bonds account for about 45% of its net assets, Mexican Bonos 9%, and Canadian government obligations 5%. The performance of the fund is mainly due to the strong performance of the treasury market.

Alliance Americas Government Inc (ANAGX) also ranked high on the list. The fund changed its name last year from Alliance North American Government Income Trust. With large positions in Argentine and other Central and South American bonds, ANAGX was not complying with a SEC’s requirement that mutual funds must hold at least 80% of their holdings in securities suggested by their name. So, instead of selling the South American bonds, the fund decided to drop the “North” part of its name.

Despite its stellar performance in the past six years, investors should be warned that the fund crashed in 1994 when it lost more than 30% of its value. Shareholders sued the fund’s manager, Alliance Capital Management, partially because it had invested 25% of its assets in Argentine securities. However, the court dismissed the accusations because at that time funds were required to invest only 65% of their assets in the securities suggested by their names.

Like NOAMX, this fund invests primarily in long-term government bonds issued by the United States, Mexico, or Canada, but it is more diversified and therefore more risky. Currently, the fund invests about 53% of its assets in the U.S., 22% in Mexico, 11% in Canada, but it also has investments in Brazil, Panama, and nine other countries.

The majority of its portfolio, or 58%, is invested in high quality AAA bonds, while 33% of the holdings are invested in bonds with BBB rating or lower.

The manager of the fund, Paul J. DeNoon, has been in the position only 6 months. ANAGX is more expensive than its peers with an expense ratio of 1.96% and a front-end load of 4.24%. International Income Funds

International income funds are more diversified than global income funds. They invest in debt securities of issuers located in at least three countries, excluding the U.S.

PIMCO Foreign Bond I (PFORX) has consistently ranked second or third in this category since 1997. Its holdings include government and corporate debt, mortgage-backed and asset-backed securities. The fund invests in investment grade foreign bonds with an average duration of 3 to 7 years.

European debt, which has relatively high yield due to central banker policy, is the investment of choice for the Pimco’s Foreign Bond Portfolio. German bonds occupy an unusually large 76% of the fund’s holdings. Sudi Mariappa, manager of the fund since November 2000, believes that European interest rates have a long way to fall and that this will boost the value of its bonds.

A major strength of Pimco’s Foreign Bond fund strategy is in hedging its dollar exposure. Because currencies are so volatile, the fund either provides currency exposure or attempts to hedge that exposure. Pimco was wise enough to favor the euro last year and expects the strength of the currency to continue well into 2003.

“We’ve already seen a fairly substantial move in the euro and expect to see the trend continue,” said manager Sudi Mariappa in a recent interview. “In our view, the dollar is going to be more prone to sell off on a secular basis while the yen is going to be range-bound. So we like the European currency.”

In addition to Europe, Pimco Foreign Bond favors Japan, where the fund invests about 20% of its assets. With regard to a potential rise in Japanese interest rates, the management acknowledges that there is some risk, but it expects that rates will stay unchanged.

“We think Japanese interest rates, as a whole, will probably stay where they are because their monetary authority has been fairly accommodative,” Mariappa said. “The Japanese are not dependent on foreign purchasers of their bonds. So they’re self-funding, in essence, they should just muddle along.”

This is one of the cheapest international funds available, with an expense ratio of 0.50% and no loads. The minimum investment in the institutional class is $5 million.

Emerging Markets Bond Funds

Investing primarily in debt securities issued by the developing nations, the emerging market bond category is the most risky segment of the bond universe. Emerging markets may be highly volatile, less liquid, and subject to currency fluctuations and political disruptions. But they can also provide investors a very handsome return.

Emerging market bonds have had a very strong performance recently. The gains have been broad-based with the majority of country components registering positive returns.

Of course, there were also a number of countries with problems. Argentina, for example, was in a state of total economic collapse and political turmoil. Venezuela still faces political unrest and debilitating strikes. Brazil has elected a former left-wing union leader as president, while Turkey has elected a leader from a traditional Islamic party.

Nevertheless, emerging markets debt has avoided the crisis common during the last decade and much of it has registered strong demand. Some analysts also believe that the emerging debt markets are gradually maturing in terms of market infrastructure and availability of information.

After the Russian debt crisis of 1998, the International Monetary Fund began publishing detailed credit reports on each market. At the same time, many countries realized the importance of providing more information to investors. While problem do still arise, the impact is usually confined to that specific country.

The only fund in this category, which has consistently been among the top performers, is Salomon Brothers Institutional Emerging Market Debt Fund (SEMDX). The fund is fully invested in fixed income securities and holds less than 2% of its assets in cash. Manager Peter Wilby has been managing the fund since 1996. The minimum investment in the fund is $1 million and the fund charges 0.75% for expenses.

Intermediate Investment Grade Debt Funds

The intermediate investment grade category has had a good run during the last three years. Funds with healthy investments in TIPS, or Treasury Inflation Protected Securities and higher quality corporate debt have performed better than their peers. On the other hand, funds invested heavily into mid- and low-quality corporate debt have suffered as the corporate scandals took their toll. Similarly, funds that held positions in telecom have had a rough time with the WorldCom bankruptcy and problems at Qwest.

One of the category’s most consistent top performers has been the PIMCO Total Return Inst. (PTTRX). With net assets in excess of $39 billion, it has reported returns of 10.7%, 8 %, and 8.3% over the 3-year, 5-year, and 10-year reporting periods. While this fund does own some government debt, the bulk of its assets are invested in top quality corporate debt.

Managed by Bill Gross, this fund has consistently invested in the right sector. While it pursues only a moderately aggressive strategy, it has one of the best track records in its category.

Short Investment Grade Debt Funds

Lower interest rates have been a real boon for the short-term debt funds, and this category continues to represent one of the safer investment bets in fixed income segments. A few of the funds had exposure to the problem sectors, such as telecom and airlines, and suffered as a result. But as a category, they performed relatively well vis-‡-vis there longer-term cousins.

Vanguard Short-Term Bond Index fund (VBISX) has generally outperformed its category peers over the last few years. Tracking the Lehman Brothers 1-5 Year Government/Corporate Index, the fund has maintained a diversified investment mix, with exposures to both government and corporate debt. However, the fund does not invest in mortgage-backed securities. While it faced some problems in 2002 when some of its swapping strategies went awry, it did manage to earn a return of 6.1%. Over the most recent 3-year period, the funds return of nearly 8 % gave it the second rank in the category.

Multi-sector Income Funds

The very name of this category suggests diversification, lower volatility, and stable returns. But, during the last six years, the category has been less than outstanding. The poor performance can be traced to funds in the category that have had exposure to either junk bonds or emerging market debt. Industry estimates suggest that the multi-sector funds category had a huge 29% exposure to junk bonds in August of 2002.

Even so, there are a few balanced multi-sector funds that have had good, consistent performance over the years. The Fidelity Advisor Strategic Income T (FSIAX) is one such fund. It has reported returns of 6.1% between 2000 and 2002, and gains of 5.9% between 1997 and 1999.

Strategically, the fund focuses on high-income debt and looks for capital appreciation as a secondary objective. Generally, its assets are spread among a number of debt classes, such as high yield securities, U.S. government and investment-grade securities, emerging market securities, and foreign developed market securities.

GNMA and other U.S. Mortgage Funds

GNMA funds, or funds which invest primarily in mortgage bonds by the Government National Mortgage Association, have the advantages of relatively high yields combined with a capital guarantee from the government. Vanguard GNMA (VFIIX) has been one the top performers in this category, posting solid returns of 8.3%, 9.8% and 7.1% over 1-year, 3-year, and 5-year periods. A strategy of limiting prepayment risk combined with a low expense ratio has helped the fund to maintain steady gains. However, not only does this fund focus largely on GNMA securities, generally investing 80% or more of its assets in these bonds, but it also invests only in plain vanilla GNMAs, bypassing the potential higher returns available from non-conventional GNMAs.

TCW Galileo Total Return Bond Inst. (TGLMX) has also been one of the top performers in the mortgage fund category, delivering a return of 11.3% over the last three years, as well as an 11% return in 2002. While this fund invests at least 65% of its assets in long-term mortgage securities backed by the government, it also invests in a number of riskier securities such as inverse floaters. Nonetheless, the fund’s experienced and well-reputed management has performed consistently over the years.

www.wsws.org By Bill Vann 1 March 2003

Over the past month, the Pentagon has nearly doubled the number of US military forces it acknowledges are deployed in Colombia, while special operations units are joining directly in a massive search-and-rescue operation that has been mounted to locate three US military contract personnel captured after their plane was downed over guerrilla-held territory February 13.

Another Pentagon contractor and a Colombian military intelligence agent were killed in the incident after they apparently resisted capture by elements of the Revolutionary Armed Forces of Colombia (FARC).

According to figures supplied by the Bush administration, the number of US military personnel on the ground in Colombia has climbed from 208 in January to 411 last week. A State Department spokesman disputed published reports that 150 special operations troops had been sent to join the manhunt in the dense jungles of Caqueta province in southern Colombia, where the contractors were captured.

State Department spokesman Philip Reeker claimed on February 25 that only 49 new troops had been brought in to hunt for the captured Americans and that the other 101 new arrivals represented “pre-planned deployments of military planners.” Whatever the case, the incident in Caqueta and the buildup that has followed signals a significant shift in both the size and focus of Washington’s military intervention in the war-torn South American nation.

The Bush administration has continued to withhold any details on the identity or the mission of the Americans captured in Caqueta. The one who was killed, however, was identified as Thomas Janis, 56, a retired career soldier and Vietnam veteran thought to have been the pilot of the downed Cessna aircraft.

Janis and the other three Americans worked for California Microwave Systems, a subsidiary of Northrop Grumman, one of the Pentagon’s largest contractors. The company specializes in aerial surveillance equipment. US and Colombian sources have indicated that the plane was involved in an attempt to target leaders of the FARC for an attack by the Colombian armed forces.

The FARC has declared the three Americans “prisoners of war,” offering to release them in exchange for the guerrilla group’s own imprisoned members. At the same time, it has warned that the massive military operation that has been mounted in search for the captured Americans could put their lives in danger. An estimated 3,000 Colombian troops, backed by helicopter gunships and US military and FBI “advisors,” are involved in the manhunt. Both the US and Colombian governments have ruled out any prisoner exchange.

The province where the search is taking place was once a huge demilitarized zone established in 1999 as part of a truce between the Colombian government and the FARC. But the truce, which was opposed by the Bush administration, ended a year ago and Colombian troops and right-wing paramilitary squads rushed back into the area, unleashing a wave of killings of suspected guerrilla sympathizers. The FARC, however, continues to control much of the jungle and the outlying villages.

The incident in Caqueta has had the effect of sharply accelerating what is already a qualitative expansion of US involvement in Colombia’s civil war. The US has sent some $2 billion in military aid to Colombia, making it the third-largest recipient of such assistance, trailing only Israel and Egypt.

The country’s right-wing president, Alvaro Uribe Velez, has sought an expanded US involvement in the country ever since he was elected last May, suggesting recently that Washington should mount a military operation in Colombia on a similar scale as the one being prepared against Iraq.

Colombia’s Vice President Francisco Santos felt compelled last week to deny that the steady increase in the number of US military “advisers” on Colombian soil represented a “Vietnamization of the Colombian conflict.” Suggestions to the contrary, he affirmed, were the work of “enemies of the US aid to Colombia.”

Meanwhile, the Bush administration has shifted the axis of US involvement in Colombia from the so-called “war on drugs,” which was the pretext for the “Plan Colombia” military aid program begun under the Clinton administration, to the “global war on terrorism.” The effect has been to free up military resources that had previously been provided for coca-eradication efforts to be used in counterinsurgency campaigns against the FARC and another guerrilla movement, the National Liberation Army, or ELN.

The downing of the US spy plane over Caqueta is only one in a series of setbacks for this counterinsurgency campaign that together could pressure Washington to increase its direct military involvement. On Wednesday, 23 Colombian troops died when a US-supplied Black Hawk helicopter crashed in the mountainous northeast of the country in the midst of an anti-guerrilla operation. While military sources initially blamed the crash on weather conditions, peasants in the area reported that they heard gunfire before the helicopter went down. The US has supplied Colombia with nearly 50 Black Hawks for use as gunships and to transport troops.

Meanwhile, the campaign has increasingly focused on protecting US oil interests in Colombia, with the deployment of some 70 US Special Forces troops and the allocation of $98 million for the training of a new Colombian brigade to guard the oil pipeline that is jointly operated by Los Angeles-based Occidental Petroleum and Ecopetrol (Empresa Colombiana de Petroleo), Colombia’s state-run oil company. With a war against Iraq imminent and continuing disruption of supplies from Venezuela, a steady flow of oil from Colombia has become an increasingly important US interest.

Part of this battle to secure US domination of the country’s oil wealth is being waged against Colombia’s oil workers, one of the most combative sectors of the country’s workforce.

Colombian army troops and police are continuing to occupy the country’s two main oil refineries in Cartagena and Barrancabermeja after they were brought in February 21 to suppress a protest march by workers inside the Barrancabermeja facility. Nine workers were wounded and 15 arrested in the confrontation, which saw security forces use tear gas and rubber bullets against the workers.

The union representing some 6,000 employees at state-run Ecopetrol is currently negotiating a contract and has denounced attempts by the government to roll back gains won over decades by the oil workers. In particular, it has opposed provisions allowing the contracting out of work, which is says is part of the Uribe government’s preparations to privatize the country’s oil resources.

Workers have charged that the government is conducting a lockout by militarizing the refineries, while management insists that it is guarding against “sabotage” and “subversion,” implicitly threatening the union with the same treatment meted out to the guerrillas.

The union has also denounced a deal between the government and Texaco-Chevron that cedes control of one of the country’s main natural gas fields in La Guajira to the multinational for another 12 years after the current contract expires next year. Under the existing deal, Ecopetrol was to take over both the gas reserves and the infrastructure in December 2004.

The union, the USO, has also pointed to deals ceding control of pipelines to the foreign oil companies, the elimination of subsidies on gas prices, the slashing of maintenance budgets for the refineries and a halt to independent exploration for new oil reserves as warnings that the Uribe government is planning to sell off the country’s petroleum resources to the multinationals.

The oil workers union issued a statement denouncing the repressive measures of the Uribe government and linking them to the Bush administration’s war drive: “behind the policy of smashing the USO there is hidden a perverse proposal for paving the way to the liquidation of Ecopetrol as the public property of the Colombians and to deprive the nation of the exploration, exploitation, refining, transportation, distribution and technological investigation of petroleum and other strategic fuels for national development.

“The attack is not separate from Bush’s crusade to trade ‘blood for oil’, which was justly denounced last week by formidable demonstrations of millions of people throughout the world against the unjust war against Iraq that is promoted by North American imperialism.”

The oil workers union has suffered persistent repression at the hands of both the military and the right-wing death squads. Since 1988, more than 80 oil workers, including a number of union leaders, have been murdered, without any action taken by the government against their killers.

See Also: After capture of Pentagon contractors: Wider US war threatened in Colombia [21 February 2003] As Green Berets deploy in war zone Colombian president seeks massive US intervention [1 February 2003]

www.stltoday.com By Dan O'Neill Of the Post-Dispatch 02/28/2003 09:23 PM

"Venezuela is still very close to my heart all the time," says Cardinals utility player Miguel Cairo. He lives with his wife and son in Bakersfield, Calif., but has family in Venezuela. (Chris Lee/P-D)

JUPITER, Fla. - Spring training camp can be an intoxicating place. Baseball increments that mature into a major-league season take place every day. One is easily lost in the surreal, sun-soaked surroundings.

But the troubled world from which some players come, the world in which their families and friends reside, is never entirely out of focus.

"I don't think about it when I'm playing baseball; you get away from it here," said nonroster catcher Alex Delgado, who is from Palmarejo, Venezuela. "But it is always on my mind when I'm not playing. I feel sorry for my family."

The Cardinals have four players in camp from Venezuela, including Delgado, nonroster catcher Luis Rodriguez, catcher Steve Torrealba and utility player Miguel Cairo.

Venezuela, a South American country of 24 million people, is in economic ruin after a two-month oil strike aimed at ousting President Hugo Chavez failed. Venezuela is the world's fifth-largest oil exporter and a major supplier for the United States. A coalition of labor and business leaders has been unable to unseat Chavez, who has the support of the armed forces.

Trying to lend support

Cairo went back to Venezuela to play winter ball but had to leave prematurely. Baseball players participated in a general strike on Dec. 2, and the league shut down altogether. Cairo returned to his residence in Bakersfield, Calif., on Dec. 15.

"There were a lot of robberies and everything taking place, a lot of bad stuff going on," Cairo said. "It's kind of bad for Venezuelan people. My family is doing fine right now, but it could be any moment that everything could get worse."

Delgado arrived at spring training a day late because he had problems getting a visa - but he was one of the lucky ones. Some players remain stuck in Venezuela, where immigration offices and consulates have intermittently closed.

"They were open for two days, so if you were a ballplayer, you could get a visa then, but they just closed again," Delgado said.

The families of Rodriguez and Delgado are dependent on the oil business for their livelihood. In response to the strikes and shutdowns that have crippled the Venezuelan economy, Chavez has fired about 16,000 of the 33,000 employees in the oil industry.

Rodriguez's family lives in Maracaibo, the oil capitol of the country. His father is a longtime employee of an oil company and had risen through the ranks to the position of supervisor. His salary is about $400,000 bolivar a month, slightly more than $250 dollars.

"He has worked his tail off his whole life to get that job," Rodriguez said. "A lot of people would like to have that job."

But with companies shutting down, with hostility rising between Chavez and his opposition, with commerce in a stranglehold, good jobs are relative. The oil company that Rodriguez's father works for has been closed since November.

Rodriguez, 31, never has drawn a big-league paycheck. He spent the last nine years playing for American League organizations, including the last four with the Red Sox. He lives in Tampa, Fla., year-round, and he supports his wife and two children on a minor-league salary that ranges from $30,000 to $40,000 a year.

Along with his parents, he has two brothers and two sisters in Maracaibo, including a younger brother trying to attend college. "I have to send money to them as much as I can," Rodriguez said. "If you send $200, it's almost what my dad makes in a month, so I do what I can. But I have to take care of things here, too. We have to eat, too, but I don't want to see my family in Venezuela suffer.

"My brother is going to college, but it's not like here, where you stay in (the dormitories) and just go to schools. He is at home with my parents and there is no work. So when I got my refund in taxes, I sent them a little bit to keep him in school."

"You can't get around"

Delgado also has two brothers and two sisters. His family also works in the oil industry, and they have been without work for more than two months. Not only are there no jobs, there is little oil available for purchase. At some gas stations, hundreds of drivers are in lines stretching for several miles. And some of those fortunate enough to get gas turn around and sell it at inflated prices.

"You can't get around," Delgado said. "You have to get in line for gas for two days. You see people sleeping in their cars to be in line to get gas. It's very hard. It's one of the richest oil companies in the world, and still we have to get in line to get gas. I feel sad when I see what is happening. For the players it's a little easier. Everyone knows you and lets you in to get gas. But for other people, it's really hard."

Delgado, 32, has played the bulk of his career in the minor leagues. He has a wife and a 5-year old daughter to support, but he sends money to his family back home whenever possible. The strikes have affected all businesses. Delgado and his brother own a sports bar in Palmarejo, but the tappers ran dry.

"At one point all the beer companies and everything were closed, we couldn't get any beer or liquor," he said. "It's everything. Groceries were out for a month. There are long lines to get any rice or sugar. It's really bad."

With the sound of mitts popping and bats cracking, with palm trees swaying in a warm coastal breeze, the Venezuelans can get lost in the business of baseball. But they fear the worst is yet to come in their home country. Earlier this week, the diplomatic embassies for Columbia and Spain were bombed. There have been clashes, robberies and shootings. While the economy continues to deteriorate, the danger appears to be escalating.

"People are afraid to go out on the streets, especially in Caracas," Delgado said. "I don't like to go to Caracas. It's dangerous to go there."

Cairo, 28, and his wife, Nicole, who is from California, have a 20-month old son. Cairo plans to return next winter to see his family and to raise spirits the best way he knows how - by playing ball.

"Venezuela is still very close to my heart all the time," said Cairo, who was second in the National League in pinch-hits (19) last season. "That's where I was born, that's where I grew up and that's where I became a baseball player.

"People know who I am when I go home to Venezuela. ... People see you play, especially the kids, and it makes them happy. You want to try to be a role model and give the younger kids something to follow."

www.chinapost.com.tw 2003/3/1 TAIEPI, Taiwan, The China Post staff

Although worldwide attention is presently focused on a possible U.S.-led war in Iraq, Taiwan is listed as one of the "smoldering volcanoes" on the globe that could pose problems in the future, according to the Forbes magazine.

In a special report in its March 17 issue, the American magazine comes up with a list of 15 trouble spots which could become "the next Iraq."

Taiwan was listed eighth place in terms of potential conflict. The report says Taiwan's perennial conflicts with mainland China could lead to nuclear arms and U.S. involvement.

But the article does not specify whether the possible dangers come from nuclear threats from the mainland or whether Taiwan may develop its own nuclear weapons.

Japan was sixth place on the list, followed by South Korea. Waning U.S. influence in the event of a prolonged war against Iraq could make Japan feel increasing pressure to develop its own nuclear arsenal to defend against possible attack from North Korea.

Due to reduced confidence in the U.S., South Korea could also take the nuclear option to cope with threats from Pyongyang, according to the Forbes analysis.

The "smoldering volcanoes" put ahead of these three countries are: 1) Belarus and Ukraine, the two unstable states bordering new members of the North Atlantic Treaty Organization; 2) the Balkans (Bosnia and Kosovo); 3) Chechnya and the Caucasus; 4) Pakistan (threats from Islamic fundamentalism, skirmishes with India, and al-Qaida organization); and Indonesia, Malaysia, and the Philippines (threats from Islamic fundamentalists, al-Qaida, ethnic and religious bloodshed).

Nations and regions listed after Taiwan include 9) Iran, 10) Libya, 11) Central Asia, 12) Brazil, 13) Colombia, 14) Mexico, and 15) Venezuela, the Forbes analysis said.