Reuters, 03.30.03, 5:05 PM ET By Hugh Bronstein NEW YORK, March 30 (Reuters) - Investors are expected to buy high-yielding emerging market bonds this week in a bid to ride out the war in Iraq, which has weakened other markets. "Emerging markets will be bullish while people hunt for yield and while the stock markets realign themselves with the reality that this war is going to be longer than people thought it would be," said Walter Molano, head of research at BCP Securities. U.S. aircraft kept up relentless pressure on Iraqi positions in and around Baghdad on Sunday as U.S. military leaders fended off growing criticism of their war plans and insisted the campaign was still on course. While stock markets have trembled in fear that the war will kick off a global economic downturn, emerging bonds have rewarded holders with total returns of 7 percent since Jan. 1. Brazil, which makes up more than 22 percent of the benchmark JP Morgan Emerging Markets Bond Index Plus, has shot 20.16 percent higher following a weak 2002. At 1,032 basis points over Treasuries, Molano said, Brazil was still "one of the cheapest assets out there." If Brazilian spreads narrow beneath 1,000 basis points, indicating a reduction in risk, analysts said they expect the country may want to issue new bonds. "The question for Brazil is the timing of reentry to the capital markets," said Siobhan Manning, Latin American debt strategist at Caboto, the Italian investment bank. "The market is held hostage to events in Iraq but resilient as investors look for a safe haven that offers yield," she added. Brazil C bonds <BRAZILC=RR> ended last week at a bid of 79, having recouped last year's losses. "We're days away from the C bond hitting 80," Molano said. "It could be this week." Brazilian spreads started 2002 trading at 830 basis points over U.S. Treasuries before blowing out to a high of 2,436 in late September, just before leftist candidate Luiz Inacio Lula da Silva won the October presidential election. Wider spreads reflect the perception of increased risk as measured against U.S. Treasury bonds. Since winning the presidency, Lula has pleasantly surprised investors by appointing a market-friendly cabinet and embracing fiscal austerity, seen by Wall Street as necessary for Brazil to shoulder its mountainous debt load. MARKET HOLDS UP DESPITE WAR Faced with much stronger-than-expected opposition from forces loyal to Iraqi President Saddam Hussein, U.S. troops dug in south of Baghdad on Sunday, apparently in no rush to assault the Iraqi capital until air strikes and artillery had ground down its defenders. "I've been impressed by the relative stability of emerging markets in a wartime situation," said Daniel Tillotson, an emerging markets analyst at Prudential Securities. One potential trouble spot, analysts agreed, is Venezuela, whose government last week said it planned to offer a voluntary debt swap during the second quarter of this year in a bid to lengthen bond maturities. Venezuela is facing a severe fiscal crunch after a two-month strike staged by opponents of leftist President Hugo Chavez who accuse him of trying to set up a Cuban-style authoritarian state. Investors are left to balance the longer-term economic risks against evidence that Venezuela is increasing its post-strike oil production. Oil exports account for around half of government revenues. "Chavez is trying to exert more control within a nominally democratic framework," said Mark Dow, a portfolio manager at MFS Investment in Boston. "I don't see how he can continue to regulate the economy without an eventual collapse." Venezuelan total returns are down nearly 6 percent so far this year.

Source

Venezuela is guaranteeing supplies of oil to its clients in the United States despite President Hugo Chavez's vocal opposition to the US-led war in Iraq, Venezuelan Energy Minister Rafael Ramirez said.

Left-winger Chavez, who has angered Washington in the past by maintaining friendly ties with Iraqi President Saddam Hussein, has sharply criticized the US and British military campaign against Baghdad, especially the civilian casualties it has caused.

Venezuela, the world's number 5 oil exporter, is a major provider of crude oil and products to the US market. Iraq's ambassador to Venezuela urged the world's oil producers to halt shipments to the United States and Britain.

Speaking on local television in Caracas, Ramirez said Chavez's anti-war stancewas no different to the positions expressed by other governments in the United Nations and by other members of the Organization of Petroleum Exporting Countries.

"The position that we have always maintained in OPEC, and it is the policy of this government, is that oil should not be converted into a political weapon," he said.

"We have guaranteed the supply of oil to all of our clients in the United States," Ramirez added in an interview with the private Televen television channel. Venezuela normally supplies more than 13% of all US oil imports.

Chavez, who has strengthened ties with states seen as hostile by Washington, like Iran and Cuba, infuriated the US government in 2000 by travelling to Baghdad to become the first head of state to meet with Hussein since the 1991 Gulf War.

Any decision by Venezuela on its oil production and exports would be taken within OPEC as a group, Ramirez said.

Venezuela, whose output and exports were slashed by a crippling opposition strike against Chavez in December and January, has been working to get oil operations back to normal since then. Oil exports are the country's economic lifeblood and account for around half of government revenues. Since the anti-Chavez strike fizzled out early in February, Venezuelan officials have gone out of their way to convince the US government that their country will remain a reliable supplier of crude and oil products.

The government insists oil production has been restored to pre-strike levels of 3.1 million barrels per day. Striking oil workers, more than 16,000 of whom have been fired by the government, have put current output at around 2.45 million bpd.

Ramirez said the stoppage, which tried but failed to force the Populist Chavez to resign and hold early elections, cost the country's strategic oil industry $US6 billion in lost revenues and damage to installations.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, March 30, 2003 By: Patrick J. O'Donoghue

Transparency International has listed Venezuela as the fourth most corrupt country in Latin America. 

Speaking at a seminar entitled, "Power and Corruption: How to Fight it," Transparency representative, Silke Pfeiffer gives Venezuela a 2.8/10 rating, just a bit higher than rivals: Paraguay, Ecuador and Haiti. 

"The rating has not changed much since 1999 when it was 2.6 ... it is impossible to implement national development programs without first attacking the problem of corruption ... the international banks know that." 

British Ambassador John Hughes, Inter American Development Bank (IADB) representative in Venezuela, Roman Mayorga were among those attending the seminar.

Higher Business Studies Institute (IESA) professor Rogelio Perez Perdomo says the government is paying money to support armed groups ready to move into action at any moment ... "these payments are necessarily irregular and if the government is using State funds, then it is embezzlement." Perez Perdomo adds that if business sectors are funding costs, then it's in return for government contracts.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, March 30, 2003 By: Patrick J. O'Donoghue

President Chavez Frias has handed over land deeds and agricultural credits to more than 400 peasants in the border State of Apure.

The media has picked up on the President's cue from Pope John Paul II  that private property over land  is not sacred. "If land is left idle and unproductive, others should have the right to produce on it."

Launching another idea during the visit to Apure, Chavez Frias hints that lands could be handed over to military garrisons to grow food for soldiers.

The President says he wants to hand over 1.5 million hectares of land and land deeds to peasants this year. It is part of his policy to depend less and less on imports and to create a different attitude towards the land.

Speaking to peasants, Chavez Frias announced the creation of food wholesale micro-businesses to include a new economic sector into the provincial economy and his Zamora Agricultural Plan.

Reuters, 03.30.03, 2:04 PM ET

CARACAS, Venezuela (Reuters) - Venezuela is guaranteeing supplies of oil to its clients in the United States despite President Hugo Chavez's vocal opposition to the U.S.-led war in Iraq, Venezuelan Energy Minister Rafael Ramirez said Sunday. Left-winger Chavez, who has angered Washington in the past by maintaining friendly ties with Iraqi President Saddam Hussein, has sharply criticized the U.S. and British military campaign against Baghdad, especially the civilian casualties it has caused. Venezuela, the world's No. 5 oil exporter, is a major provider of crude oil and products to the U.S. market. Iraq's ambassador to Venezuela urged the world's oil producers to halt shipments to the United State and Britain. Speaking on local television in Caracas, Ramirez said Chavez's anti-war stance was no different to the positions expressed by other governments in the United Nations and by other members of the Organization of Petroleum Exporting Countries. "The position that we have always maintained in OPEC, and it is the policy of this government, is that oil should not be converted into a political weapon," he said. "We have guaranteed the supply of oil to all of our clients in the United States," Ramirez added in an interview with the private Televen television channel. Venezuela normally supplies more than 13 percent of all U.S. oil imports. Chavez, who has strengthened ties with states seen as hostile by Washington, like Iran and Cuba, infuriated the U.S. government in 2000 by traveling to Baghdad to become the first head of state to meet with Hussein since the 1991 Gulf War. Any decision by Venezuela on its oil production and exports would be taken within OPEC as a group, Ramirez said. Venezuela, whose output and exports were slashed by a crippling opposition strike against Chavez in December and January, has been working to get oil operations back to normal since then. Oil exports are the country's economic lifeblood and account for around half of government revenues. Since the anti-Chavez strike fizzled out early in February, Venezuelan officials have gone out of their way to convince the U.S. government that their country will remain a reliable supplier of crude and oil products. The government insists oil production has been restored to pre-strike levels of 3.1 million barrels per day. Striking oil workers, more than 16,000 of whom have been fired by the government, have put current output at around 2.45 million bpd. Ramirez said the stoppage, which tried but failed to force the Populist Chavez to resign and hold early elections, cost the country's strategic oil industry $6 billion in lost revenues and damage to installations.