www.taipeitimes.com NY TIMES NEWS SERVICE Monday, Mar 10, 2003,Page 12

For months, the OPEC has scrambled, with little success, to keep a lid on oil prices. With war threatening as the cartel's ministers meet in Vienna, Austria, this week, prospects for the global economy are so cloudy, analysts say, there is not much left for OPEC to do.

The oil producers are not alone in their plight. Around the world, and especially in the US, the problem of planning for the unknowable is upsetting the decisions of consumers, businesses and investors. That is hampering an economy struggling to better last year's meager growth, weighing on stock prices and subduing consumer spending.

Oil is a significant component of all those calculations. Crude oil prices have hit their highest levels since the Persian Gulf War of 1991, and S&P's estimates that high energy prices have cost the economy US$50 billion in consumer purchasing power, or 0.5 percentage point of growth, just since last fall. The Energy Department predicts that by April, consumers will be paying record-high prices for gasoline in much of the US.

In any effort to assess how prices will move -- and how the economy will react -- the echoes of history are inescapable. Just like in the fall of 1990, the massing of American troops near Iraq and fears that oil supplies from the Persian Gulf will be disrupted have pushed the price of oil well above US$30 a barrel for weeks.

But moste similarities end there, according to industry analysts. While few experts expect a war to lead to shortages of oil, most doubt there will be a replay of the events of the Gulf War.

Most analysts say that key indicators of the oil industry's health -- notably low inventories of oil and petroleum products at American refineries -- suggest that prices will remain steep regardless of military action.

A year-long series of production cuts by OPEC last year gradually reduced global oil supplies as world economies were growing stronger. Then a strike in Venezuela stripped 4 percent of the world's oil supply from the market. So the balance between supply and demand is much tighter than it was on the eve of the Gulf War.

Today, a war in Iraq would remove about 2 million barrels of oil a day from the market, analysts estimate. Some believe that OPEC, which does not disclose its production, has the spare capacity -- concentrated in Saudi Arabia -- to replace that oil. Others say they think the cartel's members are already pumping at full capacity, both in an effort to keep prices from spiraling even higher, at the risk of stifling demand, and to take advantage of the unusually high prices.

Ultimately, the price of oil will likely swing with the progress of a war, analysts say.

allafrica.com Visit The Publisher's Site The East African Standard (Nairobi) OPINION March 10, 2003 Posted to the web March 10, 2003 Otieno Otieno Nairobi

If the predictions of one ancient scholar by the name Malthus were right, the human species would have disappeared from the face of the earth today. Malthus contended that since the human population growth was exponential, it would soon reach a threshold and come down crashing.

But long after he passed on, humanity is not any closer to extinction. Instead, we are watching a population explosion in our time. And many of the latter day scholars have dismissed Malthus as an alarmist-which is not entirely true. Malthus' concern was somehow valid, but he had simply ignored the potential of technology, better healthcare and other factors to reverse the trend for the better.

Nigeria Competition Bill

More recently, some scientists have argued that because crude oil is a non-renewable resource, the world's oil wells would run dry soon. Yet the OPEC members are striking new wells bubbling with the product every other day. The only times there is limited supply are in the events of a pending war in the Gulf or violent demonstrations in Venezuela.

In the same breath, wanton destruction of forests in the past has sent similar panic among Kenyans. It is understandable. The country's forest cover is shrinking so fast, only about 2.5 per cent of our land area is currently under forest-a far cry from the international standard of 10 per cent required of countries. It has thus become rather unfashionable to imagine any development activity taking place in any of our forests. That is why a lot of heat has been generated by the recent revelation that an American investor had bought a section of Karura forest to build a tourist hotel.

Whether or not he acquired it on the strength of a legal notice may not matter much now. But the transaction has not failed to raise some serious issues about environmental conservation in Kenya. Do forests have any other benefits to Kenyans apart from the crucial natural values of attracting rain and acting as water catchment areas? Should we preserve our forests just as part of our national heritage and for their aesthetic value?

At face value, it seems difficult to appreciate that economic benefits can accrue from our forests without undermining conservation efforts. How do we put in check the common economic greed that comes with investments?

The whole world was once locked in a similar dilemma. With high population growth and the zeal to attain economic development, the world's natural resources came under a lot of pressure. It suddenly emerged that the resources were getting depleted at a faster rate than they could recover.

But it was not until 1972 that the problem gained significant international attention. Governments and environmentalists who converged for a conference in Stockholm, Sweden, left with a loose agreement to improve the status of natural resources.

When a similar meeting was held in Rio de Janeiro, Brazil, in 1992, the resolve was much stronger. They even came up with a plan of action, which was compressed in the now popular document with environmentalists, Agenda 21.

One remarkable lesson in the document is the recognition that the environment and economic development are two sides of the same coin. It correctly emphasises the need to strike a balance between ecology and economics using a tool called Environmental Impact Assessment (EIA). The environmental expert's version of a cost/benefit analysis, any EIA's twin objectives are to identify and mitigate the dangers posed by the development project on the environment. Where a serious conflict arises, an independent EIA can be relied upon to establish the truth.

Kenya set in earnest to domesticate Agenda 21 in her environmental policy in the National Environmental Action Plan (NEAP) of 1994. The content of NEAP later fed heavily into the authoritative legislation-the Environmental Management and Co-ordination Act, 1999.

Notably, the Act also prescribes an independent EIA for major development activities in the country.

Public opinion may tie the government's hands on such matters.

But in future, the Ministry of Environment, Natural Resources and Environment should find it valuable to subject all development projects to independent EIAs before approving or dismissing them.

One more thing. The government should demand of investors a high degree of corporate responsibility to help conserve the natural resources. But a balance must be struck between ecology and economics-however delicate.

www.planetark.org BRAZIL: March 10, 2003

RIO DE JANEIRO, Brazil - While Brazil's new left-leaning government is sticking to market-friendly economic policies, one minister with a wild revolutionary past seems less inclined to please investors in her ailing sector - energy.

As prospects strengthened this week for the nationalization of cash-strapped U.S. energy firm AES Corp's (AES.N) Brazilian affiliate Eletropaulo (ELPL4.SA), Mining and Energy Minister Dilma Rousseff has done little to soothe foreign investor nerves.

Analysts say tough remarks by the 55-year old former urban guerrilla suggest stricter government control over the market and pricing policies, which have become vitally important since the government is fighting a surge in inflation.

"So far, the (government's) economic team have been much more orthodox in what they say or do than the energy minister," said Jed Bailey, Latin American director with Cambridge Energy Research Association. "She sounded more radical than others."

Rousseff, a member of President Luiz Inacio Lula da Silva's Workers' Party, is known among leftists who came to power in January for taking part in a daredevil "expropriation" of $2.5 million from a former governor in 1969.

Rousseff fought the 1964-85 military regime, spent three years in jail and was tortured. Later, she got a doctorate in economics from Campinas University and was the finance secretary and twice the energy secretary of southern Rio Grande do Sul state. Rousseff is divorced and has one daughter.

NO DECISIONS YET

So far Rousseff, who inherited a power sector in crisis and mired in uncertainty whether it should be private or state-run, is yet to come up with key decisions on energy and fuel pricing, as well as a model for the electricity sector.

A critic of privatizations, she had denied any plans to nationalize the private part of the power sector.

But the problems at AES, which this week acknowledged a second default on its debt to the government's BNDES National Development Bank in a month, means a nationalization might become the first major event in the sector under her rule.

Rousseff told the Istoe Dinheiro Magazine recently the bank had every right to claim AES assets and did not rule out a provisional federal administration for Eletropaulo.

Analysts said such an act on behalf of a government-run bank would be bad for an already difficult investment climate. The sides have decided to continue talks until next week.

As for the sector's model, Rousseff has promised to come up with a plan by July.

"The government will have to regulate the market, improve the revenues of utilities and guarantee investment. It's a tough task but it has to be done, or we'll have power rationing again in two years," said Osvaldo Telles of BBV Securities. Nine months of rationing ended a year ago.

Her plan may involve a wider use of wind power in Brazil, which Rousseff has advocated in the past using a quotation from Bob Dylan: "The answer, my friend, is blowing in the wind."

OIL SECTOR SEEKING GUIDELINES

Rousseff is also responsible for the oil and gas sector, which analysts say needs urgent attention as well.

So far, Rousseff has been focused mainly on fuel pricing, which is key for inflation. Giant state oil firm Petrobras (PETR4.SA) (PBR.N) accounts for nearly all refining in Brazil, but it has not raised prices of gasoline and diesel since December despite a sharp rise in world oil prices.

Petrobras had obtained formal independence in price-setting, seen as key to its profitability, under the previous administration, and analysts attribute the lack of price hikes recently to Rousseff's influence.

Rousseff has said local fuel prices should continue to depend on world oil prices, but the government has to work out a mechanism to protect the population from sharp fluctuations.

"But the energy policy is also much wider than the question of pricing. Natural gas consumption and production, free access to gas pipelines, taxation of providers and producers all have to be tackled," said Jean Paul Prates of Expetro consultancy.

Story by Andrei Khalip

www.sltrib.com Compiled by ROGER MORTON THE SALT LAKE TRIBUNE

    * Brazil: A wave of invasions of farms and government offices in recent days has abruptly ended a truce between landless farmworkers and President Luiz Inacio Lula da Silva. Since March 1, farmworkers have occupied public and private property in five Brazilian states, loudly resuming their favored tactic to pressure the government to speed up agrarian reform.         * Ecuador: Ecuador and other nations neighboring Colombia should brand the rebels from the largest guerrilla group there as terrorists, the U.S. ambassador to Ecuador said Thursday. Last month's kidnapping of three Americans by the Revolutionary Armed Forces of Colombia, or FARC, "demonstrates that they are terrorists," Kristie Kenney told the newspaper El Universo.         * Peru: Nearly a century after a Yale professor became the first foreigner to reach the Inca citadel of Machu Picchu, Peru is asking the university to give back artifacts he took with him. Hundreds of the ceramics and human bones dug up by expeditions led by Hiram Bingham between 1911 and 1915 went on display at the university's Peabody Museum in late January. The Peabody Museum's Web site says the artifacts became part of its collection "by agreement with the Peruvian government."         * Argentina: The Supreme Court declared unconstitutional on Wednesday a government decree that converted dollar bank accounts to devalued pesos -- a ruling that could ease the way for thousands of Argentines seeking to restore the value of their savings. Hundreds of people danced and hugged on the steps of the courthouse amid shouts of "Give us our money back!" Despite the celebrations, it remained unclear how far-reaching the impact of the court's decision would be on about $9 billion in bank deposits.         * Chile: Former dictator Gen. Augusto Pinochet underwent tests Tuesday to determine whether doctors should replace the pacemaker he has had for seven years, an aide said. No decision was immediately announced on whether the 87-year-old will need a new device to control his heart beat. Nearly 3,200 people were killed during Pinochet's 1973-90 reign.         * Mexico: President Vicente Fox defended his wife's political appearances and social work Thursday, saying he and the first lady are a "presidential couple." Martha Sahagun, the president's former spokeswoman, married him in July 2001. Sahagun resigned after their wedding and took an unpaid post as head of the charitable fund for Mexico's family welfare agency.

reuters.com Sun March 9, 2003 04:23 PM ET By Marc Frank

HAVANA (Reuters) - Cuba charged on Sunday that the United States was holding five Cubans convicted of spying incommunicado to thwart an April 7 appeal of their sentences, and demanded they be allowed to see lawyers.

Cuban lawmakers said the agents, who are being held in five different federal prisons, were all placed in solitary confinement Feb. 28, and had since been denied contact with lawyers, family and Cuban officials.

"This measure was adopted by Washington with the deliberate purpose of obstructing a just appeals process," the statement by Cuba's National Assembly said, pointing out the lawyers for the five prisoners had planned to consult and visit with them this week to prepare the appeal.

"We demand the five patriotic Cubans be immediately permitted to communicate and meet with their lawyers," the statement said.

The agents were convicted by a Miami court in June 2001 of conspiracy and espionage. Three were sentenced to life in prison, one received a 15-year term and the other 19 years.

The five spies were part of a ring that infiltrated U.S. military bases and Cuban exile groups and fed information to Havana. They said at the trial that they caused no harm to the United States and gathered information solely to defend their homeland from terrorist attacks by Cuban exiles.

Western diplomats said tensions between the two countries, bitter enemies for more than 40 years, had increased in recent weeks due to the Bush administration's more aggressive support for President Fidel Castro's domestic opponents, and perhaps due to the five agent's upcoming appeal.

Cuba and the United States have not had diplomatic relations for four decades and the American mission operates as the U.S. Interests Section of the Swiss embassy in Havana.

Sunday's protest came just three days after Castro threatened to close the U.S. diplomatic mission in Havana for supporting dissidents, whom Havana charges are paid by the United States to subvert the one party socialist state.

The five are seeking a new trial outside of Miami and insist that their conviction was influenced by the hundreds of thousands of Cuban exiles who live there and are hostile to the Castro government.

The spies also claim new information obtained after their conviction will prove their innocence

Havana insists the five were sent to the United States only to spy on Cuban exile groups that have launched repeated attacks against the Communist-run Caribbean island.

Since their arrest in 1998, Cuba has heaped its highest honors on the agents and launched an international campaign to free them.