news.ft.com By Richard Lapper and Raymond Colitt in Brasília Published: March 14 2003 23:01 | Last Updated: March 14 2003 23:01

War in the Middle East could increase economic isolationism and set back free trade negotiations, Brazil's foreign minister has warned.

Celso Amorim told the Financial Times: "Once you have entered into a period of instability it becomes more difficult. People tend to become more defensive and more nationalistic. It doesn't augur well."

He suggested that the rift over Iraq between the US and some European countries would "inevitably affect trade negotiations", in reference to the current Doha round of World Trade Organisation talks.

Such a setback would be particularly damaging because President Luiz Inácio Lula da Silva has begun to abandon his longstanding opposition to the US-led Free Trade Area of the Americas.

The success of Brazil's trade negotiations with the US and Europe depends largely on progress at the WTO.

"In a politically unstable world it is more difficult to make political and economic concessions," said Mr Amorim. "There is no feeling of rejoicing about this. We need US leadership for many things we need to do in this world."

Brazil has offered to help Colombia's US-supported government to combat growing drug-fuelled violence. Mr Amorim said Brazil had proposed an arms embargo to be monitored by the United Nations Security Council, denying weapons to leftwing guerrillas and rightwing paramilitaries.

But Brazil would not accept Colombian requests to classify clandestine leftwing groups as "terrorists", suggesting this would end all possibilities for negotiation. Mr Amorim said it was important to keep communicating.

He welcomed US acceptance of a multilateral approach to the political crisis in Venezuela, where Brazil is leading a group of six "friends", along with the US, Spain, Chile, Mexico and Portugal. He said prospects for a negotiated settlement to the political crisis in Venezuela had improved since the end of the general strike.

www.voanews.com Greg Flakus Caracas 14 Mar 2003, 20:42 UTC

Opponents of Venezuelan President Hugo Chavez are struggling to maintain their unity and momentum, more than a month after ending a general strike that halted much of the nation's commercial activity.

A coup attempt that briefly removed President Chavez from power last April failed. The two-month strike that opposition leaders started in early December also failed to oust the populist leader. Since that time, authorities have placed one prominent opposition leader under arrest, and forced others into hiding. Chavez supporters say they now have the momentum, and that the opposition has been weakened.

Political analyst Anibal Romero, who has long opposed Mr. Chavez, says the opposition has made errors, and that there is now a need to regroup.

"The leadership of the Venezuelan Democratic Opposition is not as good as we would want it to be," he said. "We do not have one leader who can fight Chavez on his own terms and on the same fields of political struggle. We have deficiencies in that sense."

But Mr. Romero says it is vital that the diverse elements that have come together against Mr. Chavez keep working together. He says divisions in the movement would only favor the president. He says the focus now is on holding a binding referendum on Chavez rule, in August.

"I hope they all come to the same conclusion, and work together to make sure that the referendum does take place, as mandated by the constitution," added Mr. Romero.

Two months ago, the opposition was demanding an earlier referendum, but President Chavez insisted that no vote could be held before August, under terms set by the constitution. Whether a referendum will be held then or not remains unclear, as the two sides wrangle in court and in meetings held under the auspices of the Organization of American States.

Anibal Romero says the political solution is only one part of the challenge facing his country. International banks are predicting a more than 40 percent decline in economic growth in the first quarter of this year. Mr. Romero says it is important to end the political crisis and get the country moving again.

"There is no investment. People are losing their jobs," he said. "Lots of firms are closing their doors every day. Poverty is on the increase. We have the worst numbers in Latin America with regard to inflation, to unemployment, to rate of increase in poverty, and so on and so forth."

Deep economic and social divisions have been at the heart of this crisis, and may continue to vex the country, even if Mr. Chavez were to leave power. Mr. Chavez finds his core of support in poor communities, where the opposition leaders are viewed as wealthy oligarchs who crave power for themselves.

Mr. Chavez has shown little inclination to compromise with the opposition leaders, whom he continues to refer to as "golpistas," which, loosely translated from Spanish, means "coup-mongers." Government representatives failed to show up for a meeting with opposition counterparts this week. Another meeting is scheduled for next week, but there is little hope that advances will result from it.

reuters.com Fri March 14, 2003 05:43 PM ET (The following statement was released by the rating agency)

NEW YORK, March 14 - Moody's Investors Service lowered the rating on the $72 million Series 1997A and 1999 revenue bond debt of Aruba Airport Authority to Ba1 from Baa3. This concludes the review for downgrade. The rating outlook is negative.

Approximately $43 million of the Series 1997 bonds are insured by MBIA and are rated Aaa based on the claims paying ability of the company. This rating action reflects continued weakeness in the airport's tourist based air service market, as reflected in the 13% decline in its passenger facility charge eligible enplaned passengers since 2000. Also considered was the potential for further near term stress on the airport's financial operations given the tourist based economy and the dependence on the U.S. market. While financial performance appears to have stabilized in 2002 with only a projected small decline in net revenues from 2001, this incorporates a number of non-recurring revenue increases and expenditure reductions. The 2003 budget is based on a 1% passenger growth forecast that Moody's believes may be too optimistic.Moody's also has concerns over the lack of organizational consensus on near term strategy, as has been reflected in the delayed approval of the 2003 budget.

The airport's 13% decline in passengers since 2000 has brought passenger levels to below that of 1999. Airport officials have based the 2003 budget on a forecast of 1% passenger growth in 2003. This appears to be somewhat optimistic given the potential negative impact that a war with Iraq could have on international U.S. tourism. North American tourists accounted for 70% of the tourist visits in 2002, followed by Latin Americans at 18%. The Latin American market, dominated by Venezuelans, declined 3% during 2002 reflecting the economic situation in Venezuela.

Also considered is the precarious financial state of the US airline industry. American Airlines is the dominant carrier at 27%, followed by US Airways at 10%, and the local Dutch Caribbean Airlines at 8%. Continued retrenchment by the airlines could affect lift to Caribbean destinations. KLM has added back a number of routes that it was going to cancel from Aruba which should help traffic to Europe and South America, though they won't offer the same level of service as in 2002. The 2003 adopted budget indicates preliminary financial results for 2002 showing revenues declining slightly from 2001. However, this is in part due to a number of non-recurring revenues including receipt of proceeds from a litigation settlement. Of particular interest will be whether these revenues will be considered towards calculating the 1.35 times rate covenant test for 2002. The 2003 budget, which was adopted two months into the fiscal year at the end of February 2003, projects a 1.65 times debt service coverage.

In Moody's opinion this appears to be optimistic given the projected growth in passengers and revenues and the roughly 14% in assumed additional cost reductions. Management's assessment and strategic response to any significant changes in traffic and revenues during the course of the year will be an important factor in assessing the airport's creditworthiness. To its credit the Authority has taken a number of steps to increase fees and charges to offset the decline in finances since September 11th. Thishas helped stabilize the airport's financial picture. Proactive measures include implementing a $2.50 per passenger security charge in March 2003. The airport authority's board has the power to increase the passenger facility charge if needed.

In addition, a $20.5 million court judgement against the government of Aruba, after a deal to create a motor sports complex ended in a dispute with the developers, increasingly seems unlikely to affect the Airport Authority. Bondholders also benefit from a number of reserve accounts held in the United States, including a cash funded debt service reserve totaling almost $10 million.

eastbay.bizjournals.com 2:14 PM PST Friday  Alan Doyle  

Three of the five oil companies with East Bay plants are the top importers of crude from Iraq, according to U.S. Department of Energy statistics for January, the most recent month for which figures are available.

A fourth refiner, San Ramon-based ChevronTexaco Corp. – which operates the East Bay's largest refinery in Richmond – said it is suspending purchases of Iraqi crude for its U.S. refineries. The nation's second-largest oil company said the decision was based on market conditions and uncertain continuing supplies, not because of political fallout as President Bush prepares to wage war on Iraq. ExxonMobil Corp., the nation's largest refiner, also said it had stopped loading Iraqi crude for U.S. refineries.

The three refiners still buying Iraqi crude through middlemen under terms of the embargo imposed by the United Nations in 1991 after the last war with Iraq are Valero Energy Corp., ConocoPhillips and Motiva Enterprises LLC, a joint venture between the Royal Dutch/Shell Group and Saudi Aramco. Valero and ConocoPhillips previously said none of the Iraqi crude was bought for their refineries in Benicia and Rodeo. Motiva doesn't do business in the West.

The Department of Energy reported Valero, the nation's largest independent, was the biggest U.S. purchaser of crude in January, importing 140,000 barrels per day, up from 48,000 in the fourth quarter of 2002. ConocoPhillips imported 101,000 bpd and Motiva was the fifth-largest importer at 65,000 bpd, according to the federal agency.

Total U.S. imports of Iraqi crude rose to 600,000 bpd from 366,000 bpd in December, according to the DOE. Much of that increase was thought to be attempts to offset shortages caused by the oil strike in Venezuela, normally the fifth-largest exporter of crude to the United States.

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Venezuela said has boosted production to 2.1 million bpd since the strike ended last month. Production had dropped as low as 390,000 bpd, forcing refiners to scramble for other sources of crude and persuading other OPEC nations, including Saudi Arabia and Nigeria, to increase production.

Overall, Saudi Arabia remained the top source of U.S. imports in January, with 1.82 million bpd, or 21 percent of the total 8.55 million bpd total, according to the DOE. Production rose from 1.15 million bpd in December.

Canada remained second at 1.62 million bpd, up from 1.49 million bpd in December; Mexico dropped to 1.57 million bpd from 1.73 million bpd. Nigeria remained fourth, at 798,000 bpd, up from 625,000 bpd in December.

Reach Doyle at adoyle@bizjournals.com.

www.voanews.com VOA News 14 Mar 2003, 21:18 UTC

Costa Rica has granted political asylum to Venezuelan opposition leader Carlos Ortega, who faces treason charges for organizing Venezuela's recent two-month general strike.

Costa Rica's Foreign Ministry said in a statement Friday that Mr. Ortega received asylum for humanitarian reasons. The statement also said Mr. Ortega entered the Costa Rican Embassy in Caracas earlier in the day because he feared for his safety.

Mr. Ortega had been in hiding since last month, when Venezuelan authorities issued a warrant for his arrest.

The Venezuelan government says he responsible for the lengthy strike, which had its greatest effect on the country's key oil industry. The labor action was aimed at forcing President Hugo Chavez to resign and call early elections.

Another strike leader, Carlos Fernandez, is under house arrest on charges of treason and other crimes related to the protests.

Mr. Ortega is the head of the country's largest labor union. He now becomes the third major opponent of President Chavez to seek asylum outside the country.

Last year, Colombia granted asylum to business leader Pedro Carmona. He briefly replaced Mr. Chavez as president during last April's coup that briefly ousted the populist leader.

El Salvador granted asylum to retired naval officer Carlos Molina, who faced an investigation for his role in the coup.