www.riyadhdaily.com.sa Monday - 10 March 2003 The Philippines could be the arena of a bloody international conflict after Iraq, according to foreign security experts who have tagged the country as a major security hot spot in the world today. In an article in the United States-based "Forbes" international business magazine, the Philippines is near the top of a list of 15 countries and regions around the world - along with Indonesia and Malaysia - "that could pose problems in the future." The article titled "The Next Iraq," appearing in Forbes’ March 17 issue, draws up an "Atlas of Evil and Discord" in a global security assessment that sums up the threat in the Philippines and its two Southeast Asian neighbors. "Al-Qaeda has bases here, as do Islamic fundamentalist and separatist groups. (There has also been) ethnic and religious bloodshed," it said of the three countries. The magazine’s list of "smoldering" security volcanoes came on the heels of last Tuesday’s bomb explosion at the Davao City international airport in which was found among the 21 fatalities a religious fundamentalist with a bomb still strapped to his body. Deteriorating peace and order conditions in the country’s south are said to have been scaring off investors and tourists. Topping the list of the world’s security hot spots are Belarus and Ukraine, which Forbes described as "two unstable states" on the verge of civil strife. Next came four regions of the world where the Al-Qaeda terrorist network is allegedly strong or gaining influence. These are the Balkans, Chechnya and the Caucasus in the former Soviet bloc; Pakistan in South Asia, and the three Southeast Asian countries-the Philippines, Malaysia and Indonesia, collectively ranked 5th-where Al-Qaeda has reportedly already established a foothold. Surpassed by the Philippines in the degree of "threat risk" are three Asian countries with nuclear potential, listed as 6th to 8th in the Atlas: Japan, South Korea and Taiwan. All three are at odds with North Korea and China and may resort to nuclear arms "if Iraq goes badly and the US loses influence," the article said. Next ranked are two other countries slated to join the small, elite group of nuclear-equipped nations this year, Iran and Libya. Rounding up the list is Venezuela, where civil war looms, and four more places wherein Al-Qaeda followers have supposedly started setting up bases: the whole of Central Asia "where religious fundamentalism is exacerbating political instability" and Brazil, Colombia and Mexico in the Americas.

www.riyadhdaily.com.sa Economy   Monday - 10 March 2003 The Organisation of Petroleum Exporting Countries (OPEC) meets in Vienna on Tuesday to weigh its options amid the looming threat of war in Iraq, high oil prices and slumping oil inventories. The cartel will also "see what measures are needed to offset a shortage if there is a military strike in Iraq", an OPEC source said on Friday. Although production quotas are expected to be in the focus, however, analysts said OPEC will have little room for maneuver at its latest quarterly conference on output policy, given that spare production capacity is relatively small. "With oil storage levels still sitting well under normal, crude prices well over 30 dollars ... and the cartel’s spare capacity limited almost entirely to just Saudi Arabia, production quotas have effectively been suspended," said a research note by Merrill Lynch director of energy research Michael Rothman. Analyst George Beranek at PFC Energy, a Washington-based consulting group, also noted the divergence between quotas and actual production. "Production is what the market looks for, so at the moment any change in quotas would have little effect," he said. "The question is, do they just agree to disregard the quotas, or formally suspend them?" The price of benchmark Brent crude has soared more than 10 dollars since mid-November-a rise of over 40 percent-as a crippling 63-day strike choked off Venezuela’s output and traders speculated on the prospects of rising prices resulting from any war with Iraq. OPEC raised its collective output quota from 21.7 million barrels per day to 23.0 milloin bpd in January, and again to 24.5 milloin bpd in February, in a bid to rein in prices. But the quota hikes had little impact, partly because actual output by the group’s members already exceeded the quotas, analysts said. OPEC’s stated aim is to keep oil prices-based on a basket of seven crudes-within in a range of 22 to 28 dollars per barrel. But the price of OPEC’s basket has stayed well above the cartel’s upper target of 28 dollars a barrel since mid-December 2002, while US reference light sweet crude recently hit a 12-year high of almost 40 dollars in New York. With a possible war threatening to cut off Iraq’s output of 2-2.5 million bpd, attentions have turned to the ability of other producers to make up any shortfall. But most member countries are already pumping at or near capacity, leaving only OPEC giant Saudi Arabia in a position to boost production significantly, having already increased output from just over eight million bpd in December to 8.95 million bpd last month, according to industry estimates. Lawrence Eagles, an analyst at brokerage GNI-Man Financial said the latest survey of OPEC production pegged output including Iraq at 27.21 million bpd, up 1.56 million bpd since January. The US Department of Energy estimates that OPEC countries excluding Iraq and Venezuela hold between 2.1 and 2.5 mln bpd of excess oil production capacity that could be brought online. "This is the second lowest spare capacity level in the past three decades, trailing only the low reached in 1991 after the loss of Iraqi and Kuwaiti production," it said in a study published last Thursday. But analysts said the group is likely to continue ascribing current high oil prices to speculation about war with Iraq, rather than to extremely low global oil inventories. "We suspect that there will be some commentary that current crude prices are largely a function of factors ‘beyond OPEC’s control’, such as speculation about supply security because of a war against Iraq," Merrill Lynch’s Rothman said.

www.wilmingtonstar.com Last changed: March 09. 2003 4:11PM By BRUCE STANLEY AP Business Writer

Whatever OPEC decides to do this week, its representatives won't have their usual influence on oil prices when they meet to review the group's output quotas for crude, analysts say. Members of the Organization of Petroleum Exporting Countries are already pumping at or near their full production capacity, as worsening fears of a U.S.-led war on Iraq have pushed prices to 12-year highs. A conflict would almost certainly cut off Iraq's crude exports, currently totaling about 2 million barrels a day. With Venezuela's oil exports still recovering from a strike, OPEC would be hard-pressed also to cover a shortfall in Iraqi shipments. "That's one of the reasons now why the market is so incredibly nervous," said Orrin Middleton, an energy analyst at Barclays Capital. "The real problem is how much can OPEC really do?" OPEC supplies about a third of the world's oil, but some analysts estimate it has only 1.4 million barrels a day in readily available spare capacity. The United States and other large importing countries are now coordinating plans to tap into their strategic petroleum reserves as the ultimate cushion against a major supply disruption, should fighting erupt in Iraq. OPEC, whose delegates meet on Tuesday in Vienna, Austria, can help by suspending its formal production quotas and producing flat out. But at the moment, analysts say international politics has robbed the cartel of much of its influence. "For once OPEC is in the back seat, looking out the window. The U.S. is in the front seat, driving the war wagon," said Leo Drollas, chief economist at the Center for Global Energy Studies. When OPEC oil ministers last met two months ago, they decided to increase the group's production target by 6.5 percent to 24.5 million barrels a day, in the hope of keeping prices at or below $28 a barrel. Prices have climbed steadily since then. On Feb. 27, futures contracts of U.S. light, sweet crude spiked to a post-Gulf War high of $39.99 a barrel in New York. April contracts of U.S. crude were trading Friday at $37.30 a barrel, while Brent futures for April delivery were at $33.75 in London. OPEC's members are cashing in on these high prices by pumping well above their official quotas. In February, the group's 10 members excluding Iraq produced 24.7 million barrels a day, according to a Dow Jones Newswires survey. Iraq doesn't participate in OPEC's production agreements because the United Nations oversees its exports. Energy Secretary Spencer Abraham and Claude Mandil, executive director of the International Energy Agency, expressed gratitude Friday for OPEC's willingness to bust its own quotas. The agency is the energy watchdog for the Organization for Economic Cooperation and Development, a club of rich oil-importing nations. "The U.S. government and IEA appreciate the actions of producer nations, which have already increased production to mitigate the effects of the Venezuelan disruption," Abraham and Mandil said in a joint communique issued at the agency's headquarters in Paris. "In light of tight markets, we also appreciate producers' willingness to increase production if necessary to address any further supply disruption." Mandil has consulted recently with officials at OPEC's headquarters in Vienna, in a sign of closer cooperation between importing countries and the cartel. Abraham planned to visit the city Tuesday on separate business and indicated that he might seek talks with key oil ministers. Some analysts suggested that major importers and OPEC - two often adversarial camps - might be hatching a deal aimed at heading off a war-induced disruption in supply. "This is not a time for volume control. This is a moment for OPEC to be a good global citizen," said Peter Gignoux, managing director of the petroleum desk at Salomon Smith Barney. OPEC, led by Saudi Arabia, dreads a release of crude from importers' strategic reserves because such a step would reduce the cartel's control over supplies. After meeting with Mandil on Thursday, Saudi Arabian Oil Minister Ali Naimi said that the IEA agreed producers should exhaust their spare capacity before importing countries resort to tapping into their reserves, OPEC's news service reported. Mandil and Abraham appeared to confirm this joint strategy. Washington and its IEA partners "reaffirmed their commitment to make additional volumes of oil available to the market to reinforce producers' efforts if needed," they said. IEA countries have 4 billion barrels of strategic crude reserves. The United States accounts for 600 million barrels of that total, enough to cover 39 days of imports in case of a complete halt in foreign supplies. Some analysts urged importing countries to release oil from their reserves even before a war, to forestall a supply shortage or another spike in prices. "In fact they should do it now," Drollas said, "before anything happens, because it takes time for the stuff to come through the system."

www.vheadline.com Posted: Sunday, March 09, 2003 By: Patrick J. O'Donoghue

Indigenous National deputy Noehli Pocaterra has announced that the government’s special food supply program will target Warao indians that migrate from eastern Venezuela to Caracas to beg for food.

“The idea is to help the Indians set up allotments where families can grow vegetables, beans and roots … we hope the program will help them improve their standard of living and stop them from migrating to the cities.”

The Agriculture & Lands Ministry (MAT) and Banco de Desarrollo (Bandes) have confirmed that they are drawing up economic projects for indigenous communities.

www.brazzil.com

Colombia wants Brazil to classify the FARC as a terrorist group, freeze its bank accounts in Brazil and detain any of its members or supporters in Brazilian territory. In a recent meeting between the two governments, though, this topic was not even raised.

John Fitzpatrick

None of Brazil's neighbours has suffered as much as Colombia, which has experienced a savage guerrilla war for more than 30 years. This war has cost thousands of lives and has involved a variety of left-wing guerrillas groups, right-wing paramilitaries and the security forces of the Colombian state. Countless peace talks have been held, but the main guerrilla group, called the FARC, has never abided by agreements and continued with its campaigns, killing civilian and soldiers, Colombians and foreigners alike. The FARC is estimated to have around 30,000 armed men and occupies a huge part of the country ceded to it by the previous government. It routinely kidnaps people and has recently extended its operations into the cities with deadly effect.

Most of its operations are funded by the drugs trade, which inflicts misery on the lives of millions, including Brazilians. It should be recalled that Brazil's most infamous criminal, known as Beira Mar, was extradited from Colombia, where he spent much time, to Brazil. Drug gang lords in Brazil are becoming as daring as the Colombian guerrillas and their writ is law in their fiefs. Not only do they terrorize the favela shanty towns, where they are based, but they have also shown they can bring business in large parts of Rio de Janeiro to a halt.

The conflict in Colombia is relevant to Brazil but, so far, the government of President Luiz Inácio Lula da Silva (like that of his predecessor, Fernando Henrique Cardoso) has done little to try and end it. Lula's attitude has been that of a driver who stops at the scene of a terrible road accident, shakes his head ruefully and drives on.

This week, the recently elected president of Colombia, Alvaro Uribe, held a meeting in Brasília with Lula and some of his ministers. Afterwards they announced an agreement on combating drug trafficking and the arms trade in their border area. Talks will also be held on allowing Colombia access to information from the Brazilian government's SIVAM high-tech security system covering the Amazon region.

This sounds good on paper, but the Colombians left for home frustrated at the Brazilian government's refusal to take measure, which the Colombians believe would bring more concrete results. The Colombians want Brazil to classify the FARC as a terrorist group, freeze its bank accounts in Brazil and detain any of its members or supporters in Brazilian territory. In fact, according to the local press, this topic was not even raised at the meeting.

One assumes the Colombians knew they were fighting a lost cause and wished to be diplomatic. Of course, the fact that it was not on the official agenda did not mean that the Brazilian, as hosts, could not have raised it. There was little chance of this since the Brazilian foreign minister, Celso Amorim, in one of the most absurd explanations imaginable, had said a few days earlier that Brazil did not have a list of prescribed terrorist groups and, therefore, could not add the FARC to it. Using weasel words while people's lives are at risk has always been the diplomatic way and Amorim was following in the long tradition of the Brazilian diplomatic corps.

Another ludicrous statement from one of Lula's advisers was that if Brazil were to call the FARC a terrorist group this could compromise any future role for the country as an intermediary. Instead of stating such nonsense, why does Brazil not offer to host talks, if it believes in peace, or start cracking down on guerrilla activities in its territory to show that it will not just stand by and watch this threat to regional security and democracy continue? The lack of action over Colombia compares with the flurry of activity at the start of the year when Brazil announced its support for Venezuela's besieged President Hugo Chavez and even sent technicians to break a strike in the oil industry.

There is a faction within the PT which regards the FARC as a progressive force fighting for social justice. The fact that the Americans have been helping the Colombians with arms, equipment and advisers makes these PT radicals mistrust any Colombian government and allows them to turn a blind eye to guerrilla atrocities. The U.S. has a list of proscribed terrorist groups and, in the views of these leftists, this is another reason for Brazil not to have such a list. Paradoxically, it is this very ideological aspect which could bring about a solution. If the FARC is an organization fighting for social justice why, then, does it not ask Brazil, under the impeccably left-wing Lula, to try and broker a solution? And why, instead of complaining, do the PT radicals not also try and use their influence with the FARC to get peace talks started? The answer is simple: the FARC is not interested in peace talks or social justice but only in maintaining its own power. Trying to broker any deal would be a nightmare, just as cleaning up the mess after a car crash, but it would be to Brazil's credit if it tried.

John Fitzpatrick is a Scottish journalist who first visited Brazil in 1987 and has lived in São Paulo since 1995. He writes on politics and finance and runs his own company, Celtic Comunicações—  www.celt.com.br, which specializes in editorial and translation services for Brazilian and foreign clients. You can reach him at jf@celt.com.br

© John Fitzpatrick 2003

You can also read John Fitzpatrick's articles in Infobrazil, at www.infobrazil.com