www.vheadline.com Posted: Monday, March 03, 2003 By: Patrick J. O'Donoghue

An umbrella group calling itself the Democratic Block has called on the Armed Force (FAN) to do its constitutional duty and re-establish law and order in Venezuela.  The group consists of 40 associations, the most prominent of which are rebel merchant navy officers union, the opposition Gente de Mar and Fuerza Solidaria (FS), an off shoot of the La Rouche Labor Party.

FS president, Alejandro Pena Esclusa says the group is drawing up a document and the FAN plays an important role … “the FAN has to defend citizens because the government is killing them … the FAN must intervene or we will have a dictatorship.”

Crimes against humanity, human rights abuses, threats against freedom of expression, attack on the autonomy of public powers and the government links with terrorist groups will also feature in the document. Personalities supporting the group include Alfredo Garcia, Alvaro Mora, Maruja Beracasa,  Altamira rebel, Silvino Bustillos and former self-proclaimed exile, Nedo Paniz.

www.scoop.co.nz Tuesday, 4 March 2003, 7:56 am Press Release: Council on Hemispheric Affairs

Council on Hemispheric Affairs

Memorandum to the Press 03.07 For Immediate Release Monday, March 3rd, 2003

The Slippery Slope Approaches in Colombia

Buildup of U.S. Troops Begins:

• Washington seeks a "strong response" to the current abduction crisis in Colombia, setting the basis for an accelerated posting of U.S. military personnel to the country

• 150 U.S. Special Forces arrive, surpassing the legislative "non-emergency" limit on U.S. personnel allowed in Colombia

• After 40 years, the ongoing civil war continues unabated, with all signs pointing to further escalation and rising fatalities

• Oil concerns are a prime factor pushing the Bush Administration to wade further into an increasingly spongy South American quagmire

• Washington risks vertigo as it proceeds pell-mell in militarizing its regional diplomacy

• If the U.S. could not subdue Communist insurgency in Vietnam and is unable to liquidate al Qaeda forces in Afghanistan, how will it cope with FARC in densely canopied forest and urban settings?

• With war in the Middle East approaching, and U.S. troops headed to the Philippines, can Washington's already stretched resources be over-committed to yet another long-term conflict without a sufficiently coherent exit strategy?

America is nearing the point of no return in Colombia. After years of providing an average of over half a billion dollars annually in economic and military assistance to the troubled nation, Washington is rapidly ridding itself of any restraints and is assuming a hawkish stance regarding the depth of its intervention in Colombia's internal affairs. The slippery slope of another Vietnam has never been closer in that country. By sending more troops to search for its kidnapped contract workers, Washington is providing a revealing clue as to how it will respond when its armed forces begin to experience casualties as a result of stepped-up combat there. Already, Colombian troops tracking the guerrilla column thought to have captured the missing Americans, have benefited from the intelligence and logistical leadership provided by U.S. advisors, which helped them to kill four of the rebels who may have been involved. These first few steps, involving relatively small allotments of U.S. personnel, could lead to substantially larger deployments in the future.

Faced with powerful insurgent forces, a deficient battlefield response by the Colombian military, and a growing stake in the country's crude oil, the White House may be coming around to the idea that the seemingly endless, drug-fueled civil war will need a substantial infusion of U.S. military might to push it towards a favorable outcome. But in reality this conflict and the underground narcotic economy that fuels it, most likely cannot be resolved through a blunt military adventure unless the U.S. is willing to shoulder the substantial expense, inflict massive human suffering and commit itself to further years of involvement in Colombian democratic reforms.

Also, the Bush administration would be deceiving itself if it confuses the world-class military cadres formed into the FARC and the other leftist body, the ELN, with the inept troops of Manuel Noriega's Panamanian Defense Force and Maurice Bishop's Grenadian police constabulary, which provided U.S.

armed forces with a cakewalk.

A New, Aggressive Approach

Recent events mark a new development in U.S. involvement in Colombia.

The death of one American and the capture of three contract workers represent the first employees of the U.S. government to be killed or captured in Colombia in twenty years of fighting. Three United States' congressman have voiced their desire to see a "dramatic response" to the kidnappings of American civilians by leftist rebels after a U.S. government plane crashed in the southern province of Caqueta on February 13th. As Washington commits more personnel to the region, it is increasing the certainty that such bloody encounters will not be the last in which Americans lose their lives.

Engine failure caused the single engine Cessna carrying the four American civilians contracted out by the U.S. Southern Command for anti-narcotics intelligence activity, along with one Colombian military intelligence officer, to crash in FARC-controlled territory while on route to the provincial capital of Florencia. Shortly after the crash, the bodies of one American ex-military officer and one Colombian were found with bullet wounds to the head and chest. Although President Bush at first described their deaths as "clearly an execution," U.S. officials later determined, based on an initial autopsy, that at least one of the deceased was in fact killed while attempting to escape their captors. It is believed that the three remaining survivors were taken to mountain strongholds by the FARC, a leftist guerrilla movement primarily financed through narco-trafficking, "war taxes," kidnappings and extortion. It has been battling Colombian authorities for decades in a protracted civil war. Scores of Colombian military and police abductees as well as politicians and civic figures are currently being held captive by the FARC, including one-time presidential candidate Ingrid Betancourt.

Carrying a Big Stick

Congressmen Thomas M. Davis III (R-Va.), James P. Morgan (D-Va.) and Mark Edward Souder (R-Ind.) met with Colombian and U.S. Embassy officials during a two-day visit to the country to discuss possible responses to the abductions. While the Colombian military, with support from approximately 100 U.S. Special Forces trainers, is already conducting a search and rescue operation, administration officials are indicating that they are seriously considering a response of greater magnitude, possibly using an augmented number of U.S. Special Forces in a more aggressive and combat-oriented approach.

Congressman Davis, Chairman of the Government Reform Committee, was quoted on February 20th in the Washington Post, as saying, "There is no doubt that this act by the FARC is going to meet with a very strong response." He went on to note "they [the FARC] have made a very grave error." But the U.S. could as well be making a grave error by exposing U.S. military and civilian personnel to a war which no U.S. fatalities have occurred through armed combat until a few days ago.

Turning Up the Heat

In November, President Bush signed the secret National Security Presidential Directive 18, which officially widened the scope of U.S. military assistance to Colombia. U.S. aid being sent there already had been expanded late last year to include combating the leftist rebels and right wing paramilitary groups -dubbed "terrorist" organizations by the State Department - instead of focusing solely on counter-narcotics as was previously mandated by Washington. In response to the crisis produced by the recent air crash and kidnappings, President Bush, using his presidential authority to "carry out emergency search-and-rescue operations for U.S. military personnel or U.S. citizens," authorized sending an additional 150 Special Forces soldiers to Colombia to support the ongoing search and rescue operation. According to the Washington Post, this put the U.S. military contingent in Colombia at 411 personnel - just over the legislated limit of 400 set by Congress.

For many, this has raised concerns that a cycle of rapidly increasing U.S.

military involvement in that country, as well as growing danger, has begun.

The Oil Connection

As concerns over the reliability of Persian Gulf oil supplies have increased, interest in exploiting alternative petroleum resources in the Western Hemisphere have grown. Four of the ten major sources of oil for the U.S. bound market are located in the Western Hemisphere - Mexico, Canada, Venezuela and Colombia, now the 10th largest supplier of petroleum to this country. In the northeast Colombian town of Aruaca, U.S. Special Forces are training Colombian soldiers in counterinsurgency warfare to combat leftist rebels who repeatedly attack the oil pipeline at Caño-Limon, which is crucial to Colombia's fragile economy.

The Occidental Petroleum Company, based in Los Angeles, half-owns and operates this facility, which transports some 100,000 barrels of crude a day. According to the Center for Public Integrity, Occidental has spent nearly $8.7 million lobbying American policymakers on Latin American affairs, focusing on Colombian aid packages. The funds have been well spent: whereas Occidental budgeted little more than $3.00 per barrel for security costs, the amount that U.S. tax payers are now bearing is over $8.00 per barrel. U.S. policy-makers increasingly realize the importance of preserving stability in important petroleum producing regions and are actively pursuing proactive initiatives to do so. On February 26, the State Department once again referred to its Latin American oil supply, calling for a negotiated settlement of the current political stalemate in Venezuela.

Approaching the Slippery Slope

There are striking similarities between the existing conflicts in Colombia and the Philippines, with that of Vietnam in the late1950s and early1960s.

Special Forces at first trained and advised Vietnamese troops in combat against the Viet Cong. As casualties increased and conflict spread throughout the region, American ground forces were incrementally sent into the country to directly assist Vietnamese personnel as well as the U.S.

trainers, culminating in an ever-growing commitment. As in Vietnam, at a certain point the quantitative growth in U.S. troop strength will become qualitative.

The recent commitment of 3,000 U.S. marines to the southern Philippines to fight the Abu Sayyaf bears a remarkable resemblance to the Vietnam scenario.

It is such unilateral diplomatic and military initiatives by the White House, which are causing serious concerns over the runaway role being assumed by Washington policy-makers around the world. The fatal flaws in past interventions have been the lack of a clearly thought-out exit strategy for controversial U.S. initiatives. The same could be true regarding Colombia, particularly because the guerrilla forces are first-class fighters, superbly trained and armed, as a result of years of fighting in a stalemated war and their ability to purchase sophisticated arms on the international black market.

The Colombian conflict has carried on for nearly 40 years. The FARC, by some estimates, exacts hundreds of millions of dollars yearly from narcotic trafficking, "war taxes," extortion and kidnapping. Access to such substantial funding has allowed the FARC and the ELN to more than adequately arm themselves with a full range of modern weaponry, including shoulder-mounted Stinger missiles designed to knock out low flying aircraft, such as the Black Hawk helicopters the Pentagon recently has given to the Colombian Army. After 40 years of low-intensity guerrilla warfare, the insurgents are battle hardened and remain highly motivated. Any major new commitment on the part of the Pentagon must not be considered lightly, but with a realistic analysis of risks versus benefits.

Colombian President Uribe finds himself in an extremely untenable position.

He is under pressure from the United States and right-wing paramilitary groups in Colombia to continue his aggressive campaign against the FARC.

He now must face, as the result of the FARC's recent adoption of an urban strategy, the kind of war that neither the Colombian, or for that matter, U.S. army are trained to wage. Without clear evidence of an enhanced capacity to effectively deal with the insurgents, paramilitary groups, created several years ago by wealthy landowners to defend their own interests, may once again lose confidence in the state, renege on the AUC's cease-fire arrangements with the authorities and also join in an all-out urban war. Regardless, as the conflict escalates, urban combat and attacks on civilians, such as the bloody Bogotá social club bombing on February 7th, may become commonplace.

An increasing U.S. military presence may complicate matters further. U.S. troops will have to enhance coordination with their Colombian counterparts.

Yet, despite years of effort and government orders to the contrary, the latter has consistently failed to completely sever its conspiratorial ties with paramilitary forces. As a result, U.S. forces could get caught up in the chronic massacres staged by the AUC against civilian populations.

Carrying on combat against the leftists while, de facto, excluding the rightists could have potentially destabilizing ramifications. The FARC has warned the United States that American involvement in Colombia is tantamount to a declaration of war and therefore it can be expected to target U.S. personnel and interests. Such strife would occur on a battlefield in which U.S. forces have had minimal training and experience. Deepening U.S. involvement could potentially further radicalize the rebel groups into a patriotic, anti-imperialist framework that may serve to widen the scope of the conflict, while further threatening the stability of Colombia and its neighbors and alienating a population already desperately searching for the answers and solutions which unfortunately are not readily available.

This analysis was prepared by Thomas Gorman and Neil T. Duren, Research Associates at the Council on Hemispheric Affairs, Washington, D.C.

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization.

It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 216-9261, fax (202) 223-6035, or email coha@coha.org.

www.forbes.com Reuters, 03.03.03, 11:55 AM ET By Susan Schneider

NEW YORK, March 3 (Reuters) - Brazilian sovereign bonds edged higher on Monday in thin Carnival holiday trading, as investors remained sanguine about the financial health of Latin America's economic powerhouse and the reform agenda of its new president. Turkey, however, kept a lid on the broader market's gains as its bonds tumbled more than 3 percent, battered by concerns about the economic fallout of parliament's rejection of a U.S. request to station its troops in Turkish territory for a possible U.S-led military strike on Iraq. Brazil's share of the J.P. Morgan Emerging Market Bond Index Plus added 0.53 percent, building on a string of positive days that helped the bonds rack up 7.5 percent in returns last month. The nation's benchmark C bond <BRAZILC=RR> gained 0.125 points to 74.875 bid. While Brazil's markets are closed for much of the week because of the Carnival holiday, leaving the bonds without key cues on the domestic front, the bonds continued to gain ground as investors line up medium-term positions in what is likely to be a top performer for emerging markets this year, said one analyst. "If you look at the high-yielders, where's the competition? Uruguay and Venezuela are plagued by problems; their spreads (over comparable U.S. Treasuries) are very high," said Siobhan Manning, Latin American debt strategist at Italian investment bank Caboto. "Brazil is one of the best with regard to fundamentals," she said. Manning added that cash has recently flowed into Brazil as investors take profits on the sizzling performance of Russian bonds. Brazilian President Luiz Inacio Lula da Silva, in office since Jan. 1, has wooed investors with promises to keep a tight rein on the government's finances and to pursue reforms of the social security and tax regimes. Investors say the reforms are critical for Brazil to shore up its financial health. Still, a number of analysts have questioned how high Brazil's C bond can go. "This week is going to be important because 75-1/2 is a strong resistance level. But pricing will be difficult to interpret because Brazil is basically closed until Thursday," said Manning. Turkey's bonds, meanwhile, careened lower as the Saturday vote unleashed concerns that the nation's economy, still recovering from a fierce recession, would take a severe hit from an Iraqi war without any promise of U.S. aid. The approval of the U.S. troop request would have facilitated up to $30 billion in grants and loan guarantees Turkey has said it needs to compensate for the economic fallout of an Iraqi conflict. Analysts said the vote was negative on several fronts. "The vote puts the country's good relationship with the U.S. at risk and makes the fate of the $6 billion aid package uncertain, (and) the vote reduces the chances that the U.S. will force the (International Monetary Fund) to be lenient in the ongoing IMF negotiations with Turkey," said CSFB in a report. In addition, CSFB said the ruling Justice and Development Party's (AKP) divisions on the issue sent the market the signal that the party may find it difficult to govern in the future. Turkey's share of the EMBI-Plus lost 3.3 percent in terms of daily returns, underpinned by a 4.0 point slump in the nation's benchmark dollar bond <TRGLB30=RR> to 101.75 bid. Peru's bonds also slipped in Monday's session as the nation prepares to reopen its previous 12-year issue bond for up to $250 million, said traders. The nation's portion of the EMBI-Plus shed 0.42 percent on the day. On Monday, Peru's government authorized the reopening of last month's $500 million, 12-year global bond, which sold at 5.77 percentage points over the comparable 12-year U.S. Treasury with a yield of 10.10 percent and a coupon of 9-7/8. "This has hit the market a little bit," said an emerging debt trader of Peru's planned issue. The broader EMBI-Plus move a bare 0.12 percent higher on the day.

www.abqtrib.com

In a bid to strengthen economic, governmental and cultural ties, a Venezuelan delegation is visiting New Mexico this week.

Bernardo Alvarez Herrera, Venezuelan ambassador to the United States, is scheduled to speak to the Senate this morning.

Venezuelan petroleum representatives also will meet with New Mexico oil and gas business leaders to discuss future trade and equipment development opportunities.

Other Venezuelan visitors will focus on tourism, finance and banking systems, economic development and environmental issues.

The delegation's visit comes on the heels of a two-month strike against Venezuela president Hugo Chavez that has crippled the country's oil exports.

reuters.com Mon March 3, 2003 01:02 PM ET (Adds U.S. manufacturing data, updates prices, comments)

By Andrea Ricci

NEW YORK, March 3 (Reuters) - The dollar eased on Monday as listless U.S. manufacturing data encouraged selling of the U.S. currency, but dealers said they expected it to remain in well-established ranges absent major developments in Iraq.

"Manufacturing is still growing, but it's a real wait-and-see situation. There's a lot of geopolitical risk, not just in Iraq, but with oil prices up from the strike in Venezuela and North Korea not helping," said Kurt Karl, chief economist at Swiss Re America in New York.

By midday in New York, the dollar was down about a third of a percent against the euro at $1.0828 per euro and off four tenths of a percent against the Swiss franc at 1.3467 francs .

Joe Francomano, vice president of foreign exchange at Erste Bank in New York, said the uncertainty over what will happen in Iraq, and how that will affect the U.S. economy, was keeping pressure on the dollar.

"People seem to be writing off the first half of the year, whether it's because of the mixed U.S. economic data, high oil prices or worry over Iraq. Other than the housing market, we're not seeing much sign of growth," he said.

"It's tough to make gains in market conditions like that, and obviously we are seeing confidence in the dollar erode," Francomano added.

A key survey on manufacturing in the United States showed the manufacturing sector expanded for a fourth straight month but at a slower-than-expected pace.

The Institute for Supply Management said its February index slipped to 50.5 in February from 53.9 a month earlier, below expectations of a dip to 52.4. It said concerns about a possible war with Iraq were a "major deterrent" for many industries.

Against the Japanese currency, the dollar eased 0.23 percent to 117.85 yen .

Dealers said they were reluctant to sell the dollar aggressively against the yen after Japan disclosed last week that it had intervened in February for a second straight month to weaken its currency.

IRAQ THE KEY

The weak U.S. factory data also put pressure on U.S. stocks, which had opened higher on speculation that recent events may have pushed back a possible war on Iraq.

Baghdad agreed over the weekend to destroy banned missiles and on Monday said it would submit a report on its stocks of biological weapons.

Turkey's parliament over the weekend blocked a U.S. plan to use the country as a base for a possible attack on Iraq, though on Monday the two parties said they were reviewing other options.

Equity investors also were cheered by news that a key member of the al Qaeda network had been captured in Pakistan, an arrest U.S. officials said was significant in the war on terror.

Oil and gold prices also were lower on easing war worries.

But currency dealers were more cautious, with some reading Turkey's surprise rejection of U.S. troops as a further blow to White House efforts at coalition building, and therefore a negative for the dollar.

The worst-case scenario for the dollar would be for the United States to wage war on Iraq with limited international backing.

"The dollar has been range trading, and will continue to do, probably with a weaker bias, until we some resolution on the Iraq issue," said John McCarthy, director of foreign exchange at ING Capital Markets in New York.

CENTRAL BANK MEETINGS AWAITED

The dollar showed little reaction to an unexpected 0.1 percent fall in U.S. consumer spending, long a mainstay of the economic recovery. Economists had expected a 0.1 percent rise.

It also shrugged off a bigger-than-expected 1.7 percent rise in construction spending in January.

Data from Europe were mixed.

Switzerland's industrial sector contracted further, with a key purchasing management index falling to 48 in February from 48.3 in January, the eighth time in nine months that the index has been below the boom-or-bust line of 50.

But manufacturing in the euro zone stabilized in February. The Reuters Eurozone Purchasing Managers' Index rose to 50.1 last month from 49.3 in January, beating consensus forecasts.

Nevertheless, analysts said the survey was unlikely to stop the European Central Bank cutting interest rates this week to shore up business and consumer confidence.

A Reuters poll taken last week found that 38 of 53 economists expect the ECB to cut rates this week.

Erste Bank's Francomano, echoing a sentiment expressed by other traders, said an ECB rate cut would erode the euro's yield advantage, "which may favor the dollar."

Central banks of Japan, Britain, Australia, New Zealand, Canada and Norway also hold policy meetings this week.

Norway is widely expected to cut rates and economists believe there is some chance that Canada will raise rates. But the other banks are expected to keep interest rates on hold.