www.nytimes.com By LARRY ROHTER

RASÍLIA, March 14 — If crime is getting out of hand and the police cannot control the situation, send in the army. If extra help is needed to build and repair highways, distribute food to the poor or run sports training programs, call on the military.

After nearly two decades on the margins of Brazilian life, the armed forces have been thrust back into the center of things. Since taking office on Jan. 1, the left-wing government here has increasingly been looking to the 185,000 members of the military to perform tasks to advance President Luiz Inácio Lula da Silva's ambitious social development agenda. Advertisement

When violence ordered by drug gangs in Rio de Janeiro threatened to interfere with this month's Carnival festivities, 3,000 soldiers were sent to maintain order. But that action has set off a growing national debate as to whether restoring or expanding the role of the armed forces is appropriate in a country that lived under a military dictatorship from 1964 to 1985.

"When military rule ended, there was a hiatus in which everything associated with the military and every initiative the dictatorship had taken had to be defenestrated," said Geraldo Cavagnari, a former army colonel and a professor at the Strategic Studies Center at the University of Campinas. "But time has passed, democratic rule is firmly implanted, and we have now entered a period of reflection about the military and the tasks it should undertake."

The new government's penchant for relying on the armed forces is noteworthy given the background of its leaders. During the dictatorship, both the president of Mr. da Silva's Workers' Party, José Genoino, and the man who is now presidential chief of staff, José Dirceu de Oliveira e Silva — to cite just two of many — were members of guerrilla groups that fought the army, and both were eventually jailed.

But as Mr. da Silva's press spokesman, André Singer, said in January, "The president has emphasized that the country needs the involvement of all of society in the tasks of government." Recent pledges made to the International Monetary Fund to reduce spending have left him with little money for the new social programs, like "zero hunger," that he championed as a candidate last year.

Mr. da Silva "made lots of promises, and the military are one of the few resources he has available," said Richard Millett, an American expert on the Latin American military. "They're already on the payroll, they're already in the places they need to be, and they've got discipline. They may not be the first choice, but there is no second choice."

For the most part, military leaders have indicated that they welcome a higher profile, especially if it means that more money from the tight government budget will come their way. Their financial situation has been so difficult recently that the army had to send 44,000 soldiers home last year because it could no longer afford to house and feed them. Flying time for air force pilots has had to be curtailed because of lack of reliable aircraft and spare parts, and even ammunition is scarce.

But others have begun warning of the dangers of an expanded role for the military, some of them already made manifest. During Carnival, an army unit shot and killed a 51-year-old teacher when his car ran a late night roadblock in a dangerous neighborhood. His family is considering legal action, contending that the soldiers should have shot out the tires of his car instead.

"Our generals, who are inundated with material problems in keeping the spirit of their troops high, know that soldiers are not prepared for this kind of combat and that the institutional risk is high," Denise Frossard, a former judge who is now a member of Congress, wrote in an essay published this week in the daily Jornal do Brasil. In addition, she wrote, "the manner in which the armed forces are being employed tramples the Constitution."

The army is withdrawing the troops from Rio, mostly because of a dispute between the federal government and the state governor over broader public security policy questions. But the Rio state security secretary, Josias Quintal, has said he favors stationing troops in the city permanently and expanding their role to include combatting drug trafficking.

Similarly, the transportation minister, Anderson Adauto, has said he envisions army engineering battalions building up to 600 miles of road a year, a throwback to the era of military-built projects like the trans-Amazon highway. He also said he would like to put military officers in charge of procurement at his ministry because he thinks they are honest and the agency currently responsible for that task is not.

Perhaps the most unusual plan involving the military, though, would allow poor children to use the sports facilities at military bases. The program also calls for army drill instructors to train Brazilian athletes for competitions.

"Sports are a powerful instrument of social inclusion," Sports Minister Agnelo Queiroz, a member of the Communist Party of Brazil, said in a recent speech. "The armed forces are in agreement and also enthusiastic about this project."

José Viegas, in his first speech as defense minister in January, said he had no objection to the armed forces taking part "in the noble task of supporting the social development of our country," but only so long as it "does not hamper their principal task, which is the safeguarding of our sovereignty." He declined a request for an interview.

Similar experiments have been tried, with largely unfavorable results, in other Latin American countries where the military is also searching for new, nonpolitical roles. In Venezuela, where the last military dictator was deposed 45 years ago, President Hugo Chávez set up Plan Bolivar 2000, which calls for the military to build schools and roads, operate medical clinics and sell food at subsidized prices in poor areas.

Many senior military officers there opposed involvement, saying it would lead to corruption and the politicization of the armed forces, and indeed both occurred as the program was carried out. In Colombia, using the army alongside the police in counternarcotics efforts has also fomented corruption while undermining discipline and morale.

"The Brazilian military doesn't have the operational capacity to do all of this," Dr. Cavagnari said. "People forget the armed forces were neglected and abandoned for years. If their capacity to perform their main mission is low, then imagine their ability to carry out these complementary missions."

www.dailytelegraph.co.uk (Filed: 16/03/2003)

A war could have ruinous consequences for Western economies, but there are also rich pickings to be had for the oil majors and the construction industry. Mary Fagan and Edward Simpkins report

If Sheikh Yamani, the feted former Saudi oil minister, is to be believed, the imminent war with Iraq is all about oil.

Many people, including the American and British governments, fiercely disagree with Yamani's assessment, but what no one can deny is that the conflict could have enormous consequences for the price of oil and the world economy. 

Oil prices have already soared by almost 60 per cent since the middle of last year when fears that there might be war with Iraq began to crystallise. Last month crude oil prices in the US nudged $40 a barrel, a level not seen since 1991 in the aftermath of the Gulf War.

In America, the situation has been hugely exacerbated by a severe winter and a shortage of gas. But prices of crude in the UK have also soared above $30 and increased the cost to consumers at the petrol pump, with prices up by 4p a litre within the past few weeks.

The optimists in the market say that, assuming a quick and "clean" war, the oil price will go up further but then fall back rapidly when hostilities end, as happened after Iraq invaded Kuwait.

The doomsayers fear wider instability in the Middle East (and in particular in Saudi Arabia, the world's largest producer with an output of 8m barrels per day) could see prices clinging to $50 or more.

The experience of previous oil shocks in 1973/74, 1979/8 and 1990/91 shows the damage that can be caused to global economies. In this case, the big question is whether the aftermath of war will release Iraq's potentially huge reserves for world consumption. Or will Saddam Hussein wreak havoc on his (and neighbouring) oilfields to terrible effect?

Yamani, speaking to The Telegraph, warns that the consequences for the world economy could be "disastrous".

"Is it going to be a quick war? Is Saddam going to resign? Will America go in and restore and manage the oil fields. If so the price will drop," he says.

"But if Saddam sets fire to the oil fields or damages those fields in any way then the price will jump. All these ifs. If he has chemical and biological weapons [and manages to mobilise them] there could be an absence of crude from the market. Its a disaster. We do not know the outcome and anyone who says they do is just taking a guess."

The short-term problem is that when war breaks out the world will lose Iraq's oil exports of between 1.5m and 2m barrels per day. The Organisation of Petroleum Exporting Countries, led by Saudi Arabia, has been quick to reassure markets that it will increase production to plug any gap in world supplies.

Opec, however, has already been increasing output to offset the shortage caused by a crippling general strike in Venezuela. There is growing concern as to whether, in the short time available, the cartel can do much more.

On Wednesday the International Energy Agency warned that world oil production capacity would fall short of demand this month by 1.68mbpd in the event of war. The IEA also said that Opec's spare capacity is just 900,000bpd, which is well below the amount estimated earlier by the US government.

One oil price expert with a major Western oil producer says people are panicking unnecessarily and that, assuming any damage is limited to Iraq, there is no shortage.

"The reason Opec's capacity is down is that Opec has been increasing production in anticipation of war. There is oil loaded on tankers out there. The world has more than enough oil to get through war. We are talking about 2mbpd [at risk] out of a daily consumption of 77mbpd," he says.

That said, the tenaciously high oil price even before the start of war is putting pressure on Western governments to release precious emergency reserves.

The US has been steadily building its strategic petroleum reserves to a record level of about 600m barrels and could, say analysts, release up to 4mbpd when war breaks out. That would be more than enough to account for the Iraqi shortfall, but it may not be enough to make up for potential disruption in production from neighbouring Kuwait.

According to Vincent Cable, the Liberal Democrat spokesman on trade and industry and former chief economist at Shell, the severity of the pre-war "oil shock" means that Western governments should be acting before it is too late.

"There is genuine scarcity. Why on earth are the Western governments not releasing strategic stocks? This is the time to do it," he says.

"The oil price is doing a lot of damage which may not be percolating through yet. It is almost certainly having a severe effect on oil importing developing countries such as India and China.

If this goes on for a few weeks, let alone months, we would have the kind of adverse effect on the world economy we had in 1991. We are back to 1991 with the potential for worse if the war does not go smoothly."

It is the prospect of the war "not going smoothly" which strikes fear in the heart of many industry experts. The main worry is that Saddam will attack oil reserves and infrastructure beyond his own - notably in Kuwait or Saudi Arabia.

Cable says that the most serious risk is if the new Gulf war were to hasten the collapse of the Saudi regime. That could happen, he believes, either because of an intensification of anti-Western feeling or because of a sharp post-war rise in Iraqi production. That could, in turn, cause prices of oil to slump to the detriment of the Saudi economy and its ability to provide cheap public services.

"The potential for revolution is all too plain. And regime change could bring to power people with little interest in worldly problems such as oil, much like the mullahs did in Iran in 1979," Cable says.

Philip Lambert of Lambert Energy Advisory is also deeply concerned about the effect of potential instability in the Middle East on the oil price. And he argues that the markets appear to be forgetting about the wider political difficulties in the oil world.

"What worries me is that Iraq is not the only place that is politically difficult. Our view is that political instability could create an almost permanent risk premium in the oil price," he says.

"A solution in Venezuela is not yet certain. Nigeria (which produces 2mbpd) is unstable and the Middle East will almost certainly be unstable after war. We have to ask whether there will be a fundamentalist backlash. All that has to be priced in by the market. What this crisis has proved is that there is not a lot of spare capacity in the world."

www.forbes.com Reuters, 03.13.03, 5:40 PM ET

BRASILIA, Brazil, March 13 (Reuters) - Brazil's Senate on Thursday approved three new Central Bank directors who had been nominated to the bank's board by the new government of President Luiz Inacio Lula da Silva, lawmakers said. Luiz Augusto Candiota, who is replacing Luiz Fernando Figueiredo as monetary policy director, won 60 votes versus six against. Paulo Sergio Cavalheiro, who will become the bank's new oversight director, and Joao Antonio Fleury Teixeira, who will head the bank's administration department, won similar-sized votes, lawmakers said. The three new directors were nominated by the government last month.

www.forbes.com Reuters, 03.14.03, 7:30 PM ET

BRASILIA, Brazil, March 14 (Reuters) - Brazil's Defense Minister Jose Viegas said on Friday the country's tender to purchase up to 12 supersonic fighter jets for $700 million will restart next year. One of the first decisions by the new centre-left government of President Luiz Inacio Lula da Silva when it was inaugurated in January was to suspend the purchase of the fighters in order to devote more funds to fighting poverty. But Viegas told Reuters in an interview on Friday that "next year the process will start again," to buy the fighters. There had been some speculation that the purchase could be shelved for a longer time than next year because of Brazil's tight public finances. Viegas said that the offers already made by heavyweight bidders such as Lockheed Martin Corp.(nyse: LMT - news - people), Sweden's Saab <SAABb.ST> and BAE Systems Plc <BA.L>, are still valid. "The things which were already presented are valid, the work already done is valid," Viegas said. "We will invite the participants to represent their offers. After a year there may be technological developments, there could be developments on off-sets." Viegas said just the companies that had passed through to the second stage of the bidding would be invited to make their offers again. They are Lockheed with its F-16 fighter, Sweden's Saab and BAE with Saab's Gripen jet and a joint offer by Brazil's Embraer <EMBR4.SA> (nyse: ERJ - news - people) and France's Dassault Aviation SA <AVMD.PA> with a special version of the Mirage strike plane. Russia's Sukhoi is bidding with its Su-35 "Super Flanker" fighter.

www.arabnews.com Othman Tezghart, Al-Majalla

PARIS, 16 March 2003 — International terrorist Ilyich Ramirez Sanchez is better known as Carlos the Jackal. He has been in a French prison since 1994, and spoke to Al-Majalla magazine, a sister publication of Arab News, in an exclusive interview.

In the wide-ranging interview spanning two weeks, the world’s most wanted terrorist of the turbulent 70s — who executed many a PLO operation — spoke of his childhood, love won and lost, his family, his Moscow education, his support for the Palestinian cause and his conviction that he will be killed on his release from incarceration.

Carlos grew up in a socialist environment. His family had moved from the suburb to Caracas, Venezuela after the country became rich in oil.

“My mother was a very loving, intelligent housewife,” he said. “My father was an educated political activist who specialized in international law. He was a supporter of revolutions.”

His most memorable childhood moments were his first trip on an airplane, the birth of his sister and her death after just three months, the nationalization of the Suez Canal and the subsequent attack on Egypt.

His childhood dream was revolution, and his role models included Stalin, Che Guevara, Gamal Abdul Nasser, Fidel Castro, Mao Tse-tung and “my father” — all men who struggled for their countries and had visions that traversed beyond their national frontiers.

Carlos’ most important memory of his life in Moscow was “my love story with the mother of my son, my expulsion from the Venezuelan Communist Youth Movement, my expulsion with my brother and 15 other Venezuelan students from the university in Moscow and the attempt to recruit me by the Russian KGB.”

He was ousted from the Venezuelan Communist movement because he supported the idea of military struggle against Commander Douglas Bravo.

When in Moscow, he knew students from all over the world. “I also knew some Soviet citizens from different backgrounds.”

Carlos said he knew Refat Aboown, who was his classmate in Moscow. He was a secret fighter and he always wanted to remain that way.

“But most Palestinian students were from the Fatah movement.”

When and how did he become a Muslim?

“In October 1975 I was training and supervising a group of commandos who were all Muslims. We were launching an operation against the Zionists in South Africa. It was a difficult operation and we all expected to die. They told me to become a Muslim so I would join them in paradise if I died. I was very touched, and later I did convert.”

Carlos first visited France in August 1967.

“It was empty of local people because of summer holidays. Most stores were closed but it was beautiful and I loved it.

“I have a great ability to adapt and it is my nature to love people. That’s why I feel comfortable wherever I go. Cities I liked the most, other than my hometown Caracas, are London, Moscow, Budapest, Amman, Damascus, Paris and Beirut.”

Carlos said he had “only four major” love affairs.

“Whenever I remember those women, I fall in love with them again.”

If Carlos has a life after his imprisonment, he will spend it in Caracas. But he says his chances of release are slim. “Barring a direct intervention by my government to release me and respect for my civil rights, I do not see any possibility of freedom — except through military action. Since the enemy does not respect his own rules, then there is no way that I will be released by a court of law. I’m fighting a legal battle just because I like to defend my principles.”

In any case, Carlos is certain that he will be freed only to be killed by his enemies.

According to him, the French authorities made repeated attempts to encourage him to jump jail after they arrested him but he was too smart not to fall into their trap.

Given another chance, would he try to escape from prison? “I will never participate in any such attempt even if political prisoners planned it. I’m not going to put my life in danger with an attempt that could lead to my capture by my enemies. I’m sure that I’ll leave this prison one day after I get compensation for my suffering. This will not happen until there is a military operation planned from outside the prison, not inside.”

How was he drawn to the Palestinian issue? Was he influenced by the Palestinians who studied with him in Moscow?

“I first knew about the Palestinian issue in 1965. I was in Caracas at the time. My father worked as a legal consultant to a Palestinian businessman named Bashar. He told us lots of stories about events in Jerusalem in 1948 when the United Nations divided Palestine. I was 15 years old at the time and very sympathetic to the Palestinian cause because I hated the fate that befell them. My first contact with the PLO was in November 1966 in London. I had limited contacts with Palestinians when I was in Moscow. I was only interested in the Palestinian cause because of the unjust treatment they received under the occupation army. The revolutionary movement of the Palestinians also impressed me.”

The Palestinian personalities who impressed him most were Haj Abdulkader Al-Hussaini, who was the leader of Palestinian resistance inside Palestine; Lebanese leader Antwan Saadah, founder of the Syrian nationalist party, who initiated the idea of fighting against Zionism; Ezaldeen Al-Kassam and Faisal Al-Hussaini, most popular resistance fighters; Gamal Abdul Nasser, the Egyptian leader who gave confidence to the Arab world to fight against Zionism; Wadee Haddad Abo Hani, who had the strategic vision of suicide attacks; Yasser Arafat, world leader of Palestinian resistance; and Sheikh Ahmad Yassin, founder of Hamas.

He said he wrote his autobiography and put it in a secret place before he was arrested.

It will, he says, be his legacy for his children. (Part II on Sunday) Features 16 March 2003