www.cnn.com Friday, March 14, 2003 Posted: 5:10 PM EST (2210 GMT)

CARACAS, Venezuela (Reuters) -- A Venezuelan union boss sought by authorities for leading a crippling strike against President Hugo Chavez was granted political asylum at the Costa Rican embassy, that nation's government said in a written statement on Friday.

Carlos Ortega, a fierce critic of Chavez who spearheaded the two-month opposition strike that tried to oust the leftist leader, went into hiding last month ago after the government arrested another strike leader.

Chavez, a former paratrooper who survived a brief coup in April last year, brands his political enemies "terrorists and coup mongers." He has threatened to arrest strike leaders who he accuses of trying to sabotage the oil industry.

Ortega is the third major foe of Chavez to seek political sanctuary overseas in the last year.

Pedro Carmona, the opposition business chief who briefly replaced Chavez as president during April's coup last year, was allowed to leave for Colombia last year. Retired naval officer Carlos Molina, who faced an investigation for his part in the coup, was later granted refuge in El Salvador.

www.nytimes.com By EDMUND L. ANDREWS

WASHINGTON, March 14 — Alan Greenspan, the Federal Reserve chairman, has said for months that the biggest weakness in the economy is anxiety about "geopolitical risks" — namely the threat of war in Iraq. Once that is "resolved," he has said, confidence should rebound and growth should resume to more normal levels.

But as the Iraq debate has dragged on longer than expected and the economic news has become worse, Mr. Greenspan has come under increased pressure to reduce interest rates when the Fed's monetary policy committee meets on Tuesday.

The drumbeat of bad news — the economy lost 308,000 jobs in February, retail sales slumped more than expected and oil prices surged to nearly $40 a barrel before easing back — has heightened fears that the economy is suffering from more than just war jitters and has increased speculation among investors that the Fed may lower interest rates.

Most analysts say the Fed is much more likely to stand firm on Tuesday. Rather, they say, the central bank is likely to warn that the risks of a slowdown have increased and that it will "closely monitor" events.

That would be a signal of its readiness to pump money into the economy quickly, without waiting until the next scheduled meeting of the Federal Open Market Committee, if a potential war with Iraq went worse than expected or if confidence failed to bounce back afterward.

"I don't think there is much chance of a rate cut next week," said Diane C. Swonk, chief economist at Bank One in Chicago. "Greenspan has been pretty clear that he thinks Iraq is the major disturbance in the economy."

Thus far, neither Mr. Greenspan nor any other top Fed official has hinted at a willingness to cut rates immediately. Indeed, Mr. Greenspan went so far as to say at a Congressional hearing last month that he saw no need for stimulating the economy through special tax cuts like those proposed by President Bush.

But if Mr. Greenspan does not push for lower interest rates on Tuesday, economists say, it will probably not be long before he does, perhaps before the next policy-setting meeting in May.

"If it were not for the background of war uncertainty, the fundamental data would be pointing unambiguously to an aggressive move," said Robert V. DiClemente, chief United States economist at Salomon Smith Barney, who is among economists who have become noticeably more pessimistic in the last few weeks.

"All of us have edged our numbers down," he added.

Richard B. Berner, an economist at Morgan Stanley, said the economy was suffering from more than just the paralysis caused by war anxiety.

"The big story is the energy situation," he said. Higher oil prices stem not only from concerns about the loss of Iraqi crude oil, Mr. Berner said, but also from the dropoff in production from Venezuela after a national strike, low inventories in the United States and limited additional production in the major oil-producing countries.

Mr. Greenspan has long paid close attention to oil prices, and Fed officials are well aware that big surges in oil prices have been followed by recessions in the 1970's, 1980's and after the Persian Gulf war in 1991.

But some Fed officials have suggested that the current jump in oil prices may be less threatening than it seems. Ben S. Bernanke, a Fed governor, contended in a speech last month that previous recessions were driven less by high oil prices than by the Fed's reaction to them.

"My reading of the evidence suggests that the role the conventional wisdom has attributed to oil price increases in the stagflation of the 1970's has been overstated," Mr. Bernanke said. The real problems, he said, stemmed from deeply rooted inflationary expectations at the time and the Fed's decision to tighten monetary policy in response to the surge in oil prices.

Today, analysts say, the Fed has much more latitude — and the markets know it. Inflation expectations are so low right now, sometimes bordering on worries about deflation, that most economists say the Federal Reserve can cut rates without igniting inflationary fears.

"They have a lot of running room," Mr. DiClemente said.

At the same time, analysts say that Mr. Greenspan has good reason to be cautious. The biggest reason is that the federal funds rate on overnight loans between banks is already at 1.25 percent, and monetary policy would move into uncharted territory when the rate dropped to zero.

If the Fed were to lower rates next week, it would have less ammunition to stimulate the economy if a potential war with Iraq turned out to be more costly and protracted than expected. Mr. Greenspan has said the Fed can stimulate the economy even if overnight interest rates drop to zero, by buying Treasury securities. But the Fed has almost no experience with that approach.

www.commondreams.org Published on Friday, March 14, 2003 by the Globe & Mail/Canada by Timothy Appleby

The chief threat to the world today is not Iraq, but the United States, Argentine activist says

The Bush administration's drive to oust Iraqi leader Saddam Hussein is so aggressive that even before a war has started its repercussions are being felt in every corner of the world, says Nobel Peace Prize laureate Adolfo Perez Esquivel.

Nobel Peace Prize recipient Adolfo Perez Esquivel listens to a discussion titled: "A world without wars is possible" during the World Social Forum in Porto Alegre, Brazil, Sunday, Feb. 3, 2002.

The Argentine, who won the 1980 Peace Prize, views President George W. Bush's plans for attacking Iraq with great alarm. "Bush is setting the world on fire," he said.

Mr. Perez Esquivel, a native of Buenos Aires, is an architect, sculptor and teacher. He won the 1980 prize for his resistance to Argentina's Dirty War against leftist rebels. Imprisoned and tortured, he was freed with help from Amnesty International and the Pope.

At 71, he leads the Latin American human-rights group Servicio, Paz y Justicia, and travels widely on behalf of the antiwar movement. He has been in Toronto and Ottawa under the auspices of the church group KAIROS: Canadian Ecumenical Justice Initiatives.

After visiting Iraq last year for a firsthand look at what 12 years of sanctions and U.S. bombing attacks have done to its battered infrastructure, Mr. Perez Esquivel scoffed at the notion that Iraq poses any significant threat.

A U.S. attack, on the other hand, would open "a Pandora's box, threatening to set free the demons of death and destruction," he wrote recently.

"The chief danger in the world today is not Saddam Hussein," Mr. Perez Esquivel said. "It is the United States."

Like other critics of U.S. policy, he perceives in the United States an angry, isolated country inflicting lasting damage on itself. Mr. Perez Esquivel reaches for some words by Abraham Lincoln, quoted by President John F. Kennedy at the United Nations in 1962.

"What Lincoln said more than a century ago is that if the United States doesn't defend life, then it faces the prospect of self-destruction."

Yet unstable as the planet is, Mr. Perez Esquivel fears surging anti-Americanism will make it far more so. Across Latin America, he says, the antiwar sentiment, which has prompted big demonstrations in half a dozen countries, is vigorously feeding long-term resentment over U.S. policies on trade, tariffs, militarization and debt.

"What's happening with Iraq is not isolated, it's part of a global phenomenon. When we see the installation of U.S. military bases throughout Latin America, when we look at [American interference] in countries such as Venezuela and Colombia and Panama, we have to ask ourselves what's going on.

"Lots of people think it and won't say it, but I will say it: The United States is seeking to control the world. That's why we are seeing the reaction in so many countries."

www.gulf-news.com Dubai |By C. L. Jose | 15-03-2003

Hussain SultanEnoc is synonymous with Hussain Sultan, or vice versa. Hussain Sultan is the group chief executive and board member of Enoc and Eppco, and a director of nine subsidiary or associated companies of the Enoc Group.

He is also the executive chairman and CEO of Dragon. He is the man behind the growth story of Enoc — the energy behemoth which has now expanded to more than 26 subsidiaries and a couple of other associate companies. The number doesn't stop here. Hussain Sultan has drawn out plans for the diversification of the group, though confining itself into the energy sector itself.

All look at Hussain Sultan to see what he has got up his sleeves to combat the 'Catch 22 situation', where he is forced to sell fuel at a fixed price, irrespective of the soaring crude price. His answer is diversification. No wonder Enoc is looking at newer countries and newer businesses every other day. The group has already gone into more than 23 countries with its lubricants. It plans to expand in a couple of other countries with its storage business as well.

As everyone knows, the group now holds 70 per cent stake in Dragon — which runs upstream oil business in the CIS. With expanding international activities across East Africa, Central and South Asia, the Levant and the GCC, the Enoc Group is targeting the wider region to tap potential business opportunities. Hussain Sultan is not a person who believes in making noise and doing less — rather, the other way round. Here are excerpts from an interview Gulf News had with him recently.

How was the year 2002 for the Enoc Group? It was a challenging year. However, it was not a bad year for the whole group, although certain divisions of the group had problems, especially the retail business of Eppco. In fact, Eppco is itself a group with retail as its primary arm, but it also has diverse business interests, from storage to aviation, for example.

Can you please compare the year 2002 with 2001? The year 2002 was worse than the previous year. However, I cannot reveal the figures. Since 1983, Eppco has been operating under the 'fixed price policy'. You have to view Eppco differently from the other two national oil companies. They have other resources and businesses that will help them offset problems at the retail end. We are a professional entity and we are not subsidised in any way, unlike other two companies in this field, so we are perhaps suffering more.

The issue of fixed pricing in the fuel retailing sector has always been a problem. Have you made any representation to the government on this long-pending issue? All retail fuel companies are suffering. The government has decreed that the fuel retailers follow a fixed price policy. We are a commercial organisation and, in effect, it is we who are subsidising the market on the fuel. In other GCC countries, virtually all the fuel service stations are selling fuel at fixed price but they in turn get a fixed margin on sales. Here, we sell fuel at a fixed price irrespective of the price of the crude.

At what crude price can you break-even? At a rough estimate, when the crude is at $20 a barrel, this translates into approximately $230 for a metric tonne of gasoline. Today, crude is around $35 a barrel (on the day of the interview). However, this is a very sensitive subject. Fuel is the only commodity that is price controlled in this country as of now.

Is there any indication from the government that this issue can be sorted out? From January 1, 2003, only unleaded fuel was available in the UAE. Now we have two fuel grades — 95 and 98 — sold at Dh4 and Dh5 respectively. We hoped the new pricing structure would give us some relief. But surprisingly, 91 per cent of the petrol sales are currently the cheaper fuel (95), and the '98 unleaded' is used by a very thin customer group — those who own expensive cars.

How do you propose to address this precarious situation? We propose to shore up the bottom-line by moving into other businesses, especially non-fuel businesses. We have opened up Tasjeel, the vehicle testing and registration centres in co-operation with Dubai Police. We continuously look to other areas to diversify the business away from total reliance on retail fuel sales.

Are there any diversification plans? Of course yes, but only in the oil and gas business. We are basically an energy company and whatever projects we visualise, they will be confined to the oil and gas sector.

You have previously hinted at restructuring plans for the group and trimming the size of the company. Can you shed a little more light on this? Restructuring is a continuous process at Enoc. Oil is a commodity and the market is very volatile. A lot of things affect the price of oil, such as the geopolitical situation in the region and the problems in Venezuela, for example. All have affected the price of oil in the past few months. Speculation also affects the price. Energy companies have to remain lean to ride through lean times.

How far has this been possible for you? We have cut down costs in all our group companies. We do have a nationalisation programme, but this does not mean we will go on employing people unnecessarily. We are growing with more and more retail outlets, with an Enoc brand identity.

What about Eppco? Our expansion plan is for Enoc brand service stations. Eppco is a 60:40 joint venture between Enoc and Caltex. We have big investment plans for Enoc this year.

Any plans to buy out or sell off the stake in Eppco? This has to be decided by Caltex. This has been a successful joint venture since the 1980s and I don't see any reason why it should break up. We are happy with the joint venture.

What is the paid-up capital of Enoc? The paid up capital of Enoc is Dh500 million.

How do you propose to finance future investment plans? Any plans for bonds? These are the issues that have to be worked out by our finance and treasury departments after weighing our fund positions. As for bank loans, as in the past, we will look at both Islamic as well as mainstream financial routes in the future.

How do your retail fuel sales grow, and what is your present market share? We grow at an annual rate of 8 to 9 per cent. Our market share in Dubai and the Northern Emirates currently stands at 50 per cent.

Is there any deal that prevents you from opening service stations in Abu Dhabi? There is no agreement or contract that says that we should not open service stations in Abu Dhabi.

Can you explain the current status of Dragon Oil? This is a very good asset that Enoc acquired which is 69.4 per cent share four years ago. Major investments are planned for Dragon during the current year that might help raise the output from the present 15,000 bpd upwards. In terms of performance, the year 2002 had been a much better year.

What happened to the $50 million loan from Enoc to Dragon? That is due in the next two to three months. The board will decide whether it can be re-negotiated, because Dragon is a public listed company.

Which areas will Enoc focus on in future? We have major assets within the group. One is the 120,000 tonnes a day condensate refinery in Jebel Ali.

We also have the subsidiary Dugas, which has two gas processing plants. Dugas is responsible for processing natural gas produced in Dubai's offshore oil fields as well as gas piped from Sharjah.

We have substantial storage facilities for petroleum products. Most historically profitable group companies have gone through hard times during the last year. But things are changing. We are optimistic that this year will be good for us.

We are looking at new businesses overseas. Oil storage will be a strategic business for the group in future. We are planning to substantially increase our oil trading business. Fresh investments in other local and international energy companies are also planned. We are looking at selected downstream projects, refuelling operations overseas, including India. We are marketing lubricants in 23 countries and this is constantly expanding.

www.taipeitimes.com BLOOMBERG Saturday, Mar 15, 2003,Page 12

ECONOMICS: Market forces appear to have trumped politics as shipments of Iraqi crude to the US more than tripled from September to January to 17.1 million barrels

As the George W. Bush administration masses troops in the Persian Gulf in preparation for a war to topple Iraqi President Saddam Hussein, US refineries are the biggest customers for the crude oil Iraq produces.

Shipments to the US more than tripled from September to January, according to the Commerce Department. Iraq supplied 17.1 million barrels in January, 6.4 percent of total US oil imports and up from 5.15 million four months earlier.

The jump in imports came as an illegal surcharge that benefited the Iraqi government was dropped and as refiners sought alternatives for crude from Venezuela, where a strike crippled oil production.

"The US is by far the biggest customer of Iraqi oil," said Eric Kreil, an analyst at the Energy Department's Energy Information Administration. "Iraqi oil is a pretty good substitute for the Venezuelan grades that were cut off."

Iraq pumps about 3 percent of the world's oil and is the third-largest producer in the Middle East. The prospect of a war in Iraq has helped boost the US benchmark oil price by 39 percent since November.

Iraq is allowed to export oil under an exception to UN-imposed sanctions imposed after the country's 1990 invasion of Kuwait. The UN must approve Iraq's oil sales, and proceeds are designated to pay for food, medicine and oil-industry equipment.

The surcharge, which helped the government skirt UN control of oil revenue, stopped toward the end of last year, said George Beranek, an analyst with Petroleum Finance Co in Washington. That made Iraqi crude competitive with oil from other sources.

US imports of Iraqi oil rose by 64 percent in November from October, after falling to a four-year low in September. They continued to climb in December and January, according to Commerce Department figures released yesterday.

The global oil market doesn't discriminate against a country's oil as long as it's priced competitively, said Youseff Ibrahim, editor in chief at Energy Intelligence Group Inc in New York.

"It's not a deliberate decision by the US or anyone" that made the US the largest user of Iraqi oil, he said.

The US doesn't import oil from Iran and Libya, two other states that the government has identified as supporters of terrorism.

In 1986, the Ronald Reagan administration banned US companies from doing business in Libya; UN sanctions against the country were imposed in 1992.

The US has imported little Iranian oil since 1979, according to Lowell Feld, an international oil-markets analyst at the Energy Department.

"US sanctions have waxed and waned since then," he said.

"The last time the US imported Iranian oil was in 1991," when the government allowed limited shipments, he said.

Bush said in April that he would only support lifting US sanctions against Libya and Iran if they acknowledged past acts of state-sponsored terrorism.

About two-thirds of the oil Iraq exported in February went to the Americas, and half of that went to the US, according to an analysis by Energy Intelligence Group. That suggests the pace of imports the Commerce Department reported for January continued last month.

US refiners have been buying Iraqi oil as an alternative to supplies from Venezuela, which were cut off when workers went on strike in early December. Venezuela met 10 percent of US oil needs before the strike began. Iraq's Basrah and Kirkuk grades are reasonable substitutes for the crude produced in Venezuela, which is a high-sulfur or "sour" grade.

"Iraq got an additional boost from Venezuela," Beranek said. "US refiners took any bit of crude they could get, particularly sour crudes."

"There was a certain stigma associated with taking Iraqi crude because it was assumed that you paid a surcharge" that benefited Hussein, Beranek said.