<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, April 02, 2003 By: Patrick J. O'Donoghue

The Caracas (Simon Bolivar) international airport at Maiquetia authority (Iaaim) has laid off 90 workers as a reaction to tax and other income losses incurred during the December-January national stoppage. 

Iaaim director Captain (ret.) Jose Vielma Mora says the company lost more than 14 billion bolivares in Q1 and argues that there is no other solution but to dismiss workers. 

• The 90 workers are not on the permanent payroll and their contract has already expired . 

Over the last two years, 426  persons were given contract jobs at the airport in operations, public relations, protocol, security, maintenance and marketing.  The first 30 layoffs took place last week and included 14 security agents. 

Vielma Mora says he knows the dismissals will hit an already suffering Vargas State but adds that he hopes to recover taxes and normal income by the end of April.

Daily Press Wednesday, April 2, 2003 By JAMES RAMAGE/Staff Writer

Though gasoline prices stabilizing statewide, local companies have had to make difficult decisions

VICTORVILLE — These days, Orlando Mellan's livelihood comes down to pizza and gasoline. For the cook and co-owner of Carpino's, a pizzeria on Bear Valley Road in Hesperia, the price of gas determines how late he stays open and how much he charges for remote deliveries. He's not alone. Local businesses across the High Desert have been dealing with escalating fuel costs by considering or taking painful measures to maximize, or simply earn, profits. For many, the end of high prices cannot come soon enough. "The gas is so expensive here," Mellan said, "The drivers don't want to work." Because his drivers must pay for their own gas, as well as try to make their money through small commissions and tips, their returns are smaller than ever, Mellan said. "Now I must schedule my hours when my drivers will work," he said. Also, Mellan has started charging customers for deliveries outside of Victorville and Hesperia. For instance, deliveries beyond the Mall of Victor Valley or Ranchero Road will cost an additional $2 or $3. There are positive signs though. According to the state Energy Commission, the average price of gasoline in California fell on Monday by 1.3 cents from the previous week. At Hesperia Chevron Gas, owner Sager Fakhoury said the price of gas one year ago was $1.39 a gallon for regular unleaded. Today the price is $2.19. Fakhoury acknowledged that he's marked down the price 10 cents a gallon to get more business, even though it has eaten into profits. If customers pay with ATM cards, where each payment costs his business 45 cents to process, his profits all but disappear. According to Rob Schlichting, spokesman for the state Energy Commission, shipping costs and federal environmental regulations for California — which require gasoline blends that reduce air pollution — account for the nation's cleanest, yet priciest, gasolines. A harsh winter across the country and uncertainty about events in oil-producing countries Iraq and Venezuela have only compounded the problem. Some businesses take comfort knowing that price hikes have affected everyone. "We're paying $2.25 a gallon today, which seems like twice what we were paying several months ago," said Lorraine Chilelli, manager of Victor Valley Florist in Victorville, of her delivery truck fuel costs on Monday. Chilelli's company has had to raise delivery costs in the Victor Valley by $1 a customer. "At least we know that all the other florists have raised their prices, too," she said. James Ramage can be reached at james_ramage@link.freedom.com or 951-6242.

Miami Today News By Paola Iuspa

   While some financial institutions have stopped financing Argentine-bound exports, others are being creative to provide financing for Venezuelan-bound products.    Making loans to US exporters doing business with Argentina and Venezuela is being considered too risky because of those countries' continued economic and political turmoil during the past two years.    Argentina fell out of grace more than a year ago when it defaulted its foreign debt amidst a fiscal crisis that sent more than half of its population to below-poverty levels and government instability. Governed by a populist president, Venezuela's economy has been a victim of a series of national strikes, government opposition and new currency regulations limiting the access of US dollars to the country.    Carlos Milian, president and CEO of ImportCard Financial, a subsidiary of Hemisphere National Bank in Miami, said his firm three months ago stopped export-loan programs for Venezuelan customers.    "We were lucky," he said. "All of our Venezuelan customers paid us. We did not incur any loss."    His company was not so lucky in Argentina, he said, where at least three clients defaulted on loans.    "The climate there became worse," said Mr. Milian. "We had to pull out in 2001."    With about 95 exporters as customers, ImportCard provides 60-day credit lines to assist small- and mid-size companies.    Mr. Milian said the Export-Import Bank of the United States, or Ex-Im Bank, guarantees many of the loan programs available for other Latin American countries. But the Ex-Im bank is no longer operating in Argentina and Venezuela, reeling from double-digit negative growth, according to the bank.    "We are monitoring the situation in Argentina and Venezuela," said Jeffrey Miller, senior vice president for Ex-Im Bank's Export Finance division. "As soon as we see some changes, we will restart our programs."    While the Ex-Im Bank is closed for routine trade finance transactions, it will consider structured finance arrangements such as Ex-Im Bank's project finance program, asset-based aircraft leases and other financing that offers a reasonable assurance of repayment, including reliable access to adequate foreign exchange, Mr. Miller told a group of Miami entrepreneurs this year.    Ex-Im Bank's job is to finance exports, even in difficult times and difficult markets, to enable creditworthy national governments, municipalities and private-sector borrowers in emerging markets to buy goods and services from US exporters, according to the bank. Ex-Im Bank last year authorized more than $3 billion in financing for Latin America and the Caribbean last year.    Mr. Miller said last year Mexico was his bank's No. 1 market in the world, with $1.6 billion in authorizations. The federal agency guaranties private banks' export loans reducing the risk factor for the lending institutions.    Despite Ex-Im Bank's ceasing commercial-export loans to two South American nations, some banks are still providing financing for export transactions to Venezuela, but only when the loans are backed with private insurance. Those banks are lending money without government guarantees.    Alberto Valdes, heading The International Bank of Miami, said his firm still does business with Venezuela but analyzes each export transaction carefully before approving any export loans. He said customers with a long-standing relationship with his bank and able to provide private guarantees often get credits.    On the other hand, his bank has temporarily discontinued lending programs to Argentina-bound exports, said Mr. Valdes, also president of the Florida International Bankers Association, an industry advocate.    "Many banks are facing the same challenge," he said.    David Konfino, president of Union Planters Bank International, said his bank has open lines of credit for Argentina-bound exports, but only when exporters provide cash collateral or private insurance.    "In countries like Argentina and Venezuela we need to be more creative," he said. "We work with structured transactions. We look at each transaction and find a financing solution unique to each situation."    Mr. Miller said the outlook for the rest of Latin America is brighter.    Despite last year's depreciation of Brazil's currency, the economy grew by about 1% in 2002, a sharp contrast to the 13% and 10% declines for Argentina and Venezuela.    And in Central America, economists expect Mexico's gross domestic product to grow about 3.5%.    The Dominican Republic's economic growth is also expected to pick up after last year's global slowdown. Ex-Im Bank has supported efforts by the Mejia government to improve infrastructure, including housing, according to the federal bank.    "I hear many financial institutions are moving away from the international trade finance world," said John Zdanowicz, a professor of finance at Florida International University's College of Business Administration. "Some banks are refocusing away from Latin American trade financing. But it won't be like this forever."

NBCSandiego.com POSTED: 11:21 a.m. EST April 2, 2003 UPDATED: 11:21 a.m. EST April 2, 2003

State Will Continue To Monitor Natural Gas, Gasoline Markets

SACRAMENTO, Calif. -- Recent price spikes in gasoline and natural gas prices were not the result of market manipulation, two state agencies concluded in a report, but officials say they'll continue to watch California's prices closely

Gasoline and natural gas prices rose sharply in March, prompting Gov. Gray Davis to order the California Energy Commission and the California Public Utilities Commission to investigate.

Retail gasoline prices peaked mid-March at an average of $2.15 per gallon, said William Keese, chairman of the California Energy Commission. Even though wholesale prices have dropped about 42 cents per gallon since then, retail prices have only dropped an average of one cent, he said.

Prices should be under $2 at most pumps at the end of this week, and "if they are not, we'll be concerned," Keese said, adding that it's not uncommon for prices to rise more rapidly than they fall.

The spike in gasoline was due to several factors, including the doubling of crude oil prices because of uncertainty about war in the Middle East.

"The cost increases that we have seen from crude oil shouldn't reflect that high a price," Keese said.

Other factors included an oil strike in Venezuela last year that cut supplies, a cold winter in the eastern states increased demand for heating oil and delays in refinery maintenance in California.

Natural gas prices generally run higher in the winter when demand is greater, said PUC Commissioner Michael Peevey.

"We didn't find any manipulation in natural gas prices," Peevey said. "But (we did find) a repetition of a pattern we've seen in California before, where there's a sharp price spike due to conditions outside the state."

The cold weather conditions in the East also contributed to California's higher natural gas prices, officials said. When consumers there are willing to pay higher prices "that sucks the gas in that direction rapidly, and California ends up having to pay," Keese said.

The report doesn't recommend the attorney general investigate the price increases, saying "the Energy Commission has no evidence to claim that any refiners are exercising market power."

Davis said the state would continue to monitor natural gas and gasoline markets "to ensure that no energy companies pull Enron-like tricks to artificially drive up the price of energy."

Copyright 2003 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reuters,, 04.02.03, 12:00 PM ET By Missy Ryan LIMA, Peru, April 2 (Reuters) - Housekeeper Dulia Aguilar has heard President Alejandro Toledo's promises of cheap, subsidized houses for thousands of poor Peruvians, but she can't come up with the $164 a month she would need to buy her own. That means she continues to take the daily hour-and-a-half bus ride to work from the humble neighborhood where she and her daughter rent a sparsely furnished room and share a bathroom with a dozen others for 200 soles ($57) a month. Aguilar is just one of the millions of Peruvians who shake their heads in dismay as they listen to the Toledo government boast that Peru has Latin America's fastest growing and most promising economy. "They say that to look good outside of Peru, but things at home are different," she said. "We don't feel (growth)." The Peruvian economy has indeed shown signs of strength and potential -- growing 5.2 percent in 2002 -- and the Toledo government is hoping those figures will attract needed trade and investment. But it remains to be seen if the nation can fully turn the page and attract new business only three years after being rocked by a corruption scandal that ended the 10-year presidency of Alberto Fujimori and a decades-long rebel conflict involving the Maoist Shining Path. Dark as parts of Peru's political side have been, opportunities to capitalize on the country's growth may help to shroud its past. "The numbers don't lie. Peru's doing extremely well by Latin American standards and better than anyone, even government officials, had anticipated," said Mauro Leos, sovereign credit analyst at Moody's ratings agency. But it's "difficult to get a sense of what lies ahead," he added, echoing other analysts' warnings that Peru must work hard to keep fiscal and political challenges in line to fend off world economy woes and sustain growth. They insist that Peru -- which has long relied on exporting raw materials like minerals and marine products -- must create more jobs, boost private investment and resist the temptation to take on too much debt. NEW LIFE AFTER SLUMP The Toledo government says Latin America's No. 7 economy is booming after a four-year slump, thanks to rekindled consumer demand, manufacturing growth, a state housing push, strong mining output and prospects for increased trade. Peru's strong showing last year contrasts those of neighbors like Argentina, whose economy contracted an estimated 11 percent last year amid currency and debt woes. Peru shares borders with violence-ridden Colombia and Brazil, which last year elected left-leaning Luiz Inacio Lula da Silva as president. In oil-rich Venezuela, the economy shrank 8.9 percent last year amid political unrest and a crippling two-month-long nationwide strike that aimed to oust President Hugo Chavez. The region's biggest economy, Brazil, grew just 1.5 percent in 2002 and the entire region shrank around 0.5 percent last year, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The Peruvian government forecasts 4 to 5 percent economic growth for this year -- almost double the region-wide growth estimate of 2.1 percent for 2003. But some economists say the country will fall short of its projection. "There is an economic advance, but unfortunately it's not sustainable over time and doesn't enhance people's quality of life because it isn't creating jobs," said Enrique Cornejo, an adviser to the main opposition party APRA in Peru's Congress. Peru grew at a brisk pace in the early 1990s, but in 1998 was hit by fallout from the Asian financial crisis and the devastating weather phenomenon El Nino. Then came the downfall of Fujimori, who had been praised for bringing economic reform and growth to Peru in the 1990s. Fujimori's chief of secret police and close adviser, Vladimiro Montesinos, was also accused of corruption, bribery and lesser crimes. Montesinos fled the country in 2000, but was back earlier this year to stand trial. On March 24, he was sentenced to five years and four months in jail for arranging favors for his former mistress' relatives. The Fujimori/Montesinos debacle, as well as a bloody rebel conflict that killed 30,000 people and inflicted $25 billion in damages in the 1980s and 1990s, rattled some investors. The Shining Path, Peru's fiercest rebel group, is now a shadow of its former self but the government says rebel die-hards still pose a threat. All this has left President Toledo with the task of restoring Peru's patina with the international community. POLISHING THE IMAGE Analysts say that even now Peru cannot let strong headline economic figures distract it from such critical issues as tax reforms and making sure that the country's labor laws favor companies and not just workers. They say Toledo, whose popularity dipped to 21 percent in a recent poll, must remain focused on political issues that could create distractions for him if they go unattended. Toledo's Peru Posible party boasts the largest bloc in Congress, but the leader has faced divisions, such as a heated debate over phone rates, even among party loyalists. Toledo sparred with Congress over a bill to eliminate a fixed monthly telephone fee, which would have altered a 1994 privatization contract and reduced revenue for telecoms leader Telefonica del Peru (nyse: TDP - news - people). Some analysts say that kind of legislative action could frighten investors. "There is a perceived risk from Congress ... but it can be minimized because of the executive's tendency to reject laws that could cloud the long-term outlook for investment risk," said Jorge Luis Rodriguez, an analyst at Centura brokerage. Peru must kindle private investment, which the Central Bank says should grow 5.4 percent in 2003, to sustain growth, while increasing export capacity to take advantage of trade deals. Last year, the country cheered inclusion of new products like apparel in a trade deal that gives duty-free access to U.S. markets for certain goods from Peru, Bolivia, Ecuador and Colombia. Peru is also seeking a bilateral U.S. trade deal. Debt, which worries investors, must also be kept under control, analysts say. The Toledo government has faced fiscal shortfalls after failing as planned to privatize state assets. Peru has sold $750 million in bonds on world capital markets so far this year. "(The new debt) solves a problem in the short term, but in 10 years, will Peru have the cash it needs to meet those obligations?" APRA economist Cornejo said, warning that debt service costs were out of proportion with exports. Peru generally pays $2.5 billion a year in debt service while exports grew to $7.68 billion in 2002. But the government says the new debt will help shelter it from the effects of war and a shaky world economy. "We're about to enter a period of heightened uncertainty ... and if there's one thing we've learned in Latin America, it's how sensitive and vulnerable economies are. Peru is no exception to external shocks," Moody's analyst Leos added.