Reuters, 04.02.03, 5:54 PM ET BRASILIA, Brazil, April 2 (Reuters) - Brazil's lower chamber of Congress approved on Wednesday a bill changing the legal framework of the financial system which could pave the way for Central Bank autonomy, lawmakers said. The approval of the so-called constitutional amendment marked an important political victory for the centre-left government of President Luiz Inacio Lula da Silva as it showed it can mobilize lawmakers on key votes, boding well for key economic reforms. The lower house voted by an impressive margin of 442 lawmakers favoring the bill and 13 against, underscoring the Lula government's capacity in this vote to win large support from its coalition allies and opposition lawmakers. The Senate has already approved the bill. Wednesday's bill allows for changes to the legal framework of Brazil's financial system under the constitution -- a necessary precursor to any legislation giving the Central Bank operational autonomy later on. The government has not detailed when, or what proposals it will make on changing the bank's status, but some analysts say Brazil's Central Bank has one of the least independent institutional frameworks in Latin America.

Reuters, 04.02.03, 4:37 PM ET In SAO PAULO story headlined "Brazil paper and pulp sector hot for loans to grow", please read in fifth paragraph ... at least $1 billion ... instead of ... at least 1 billion reais ($302 million) ... (corrects figure to dollars from reais). A corrected version follows: By Cesar Bianconi SAO PAULO, Brazil, April 2 (Reuters) - Brazil's paper and pulp sector is at almost full capacity and the industry is looking to the National Social and Economic Development Bank (BNDES) for help to fund their expansion. The hunt for financing has also taken on a new urgency as pulp prices are on the rise. The price of a tonne of pulp has risen 17 percent since the start of the year to $540 in April. The Brazilian Paper and Pulp Association (Bracelpa) says that is due to poor weather in the Northern Hemisphere that has slowed the delivery of timber to plants. Top executives say the U.S.-led war in Iraq has not spoiled the party in Brazil either. "So far we are not feeling any significant direct impact (from the war)," Miguel Sampol Pou, the director-general of leading paper company Klabin <KLBN4.SA>, told Reuters. "We have our sales volumes sewn up. There has only been a slight rise in freight costs to some destinations." Bracelpa President Osmar Zogbi, who is preparing a sector outlook for the government of President Luiz Inacio Lula da Silva, says the sector requires annual investment of the order of at least $1 billion. "We are finishing a study of the next 10 years, showing what investments are necessary, the potential, the opportunities, the obstacles," he said. "It will be delivered at the end of April, depending on Lula's schedule." Bracelpa expects annual Brazilian paper production to rise to 8 million tonnes in 2003 from 7.7 million tonnes in 2002, and pulp production to increase to 9 million tonnes from 8 million tonnes, but forecasts weakness in demand in Brazil. "The local market for paper is a little weaker than it was last year, which is why the companies have made a big export drive," Zogbi said. A recent study by the Institute of Study for Industrial Development, or Iedi by its Portuguese acronym, said the paper and pulp sector would be the recipient of the greatest investment in the industrial sector. Unibanco paper sector analyst Simone Risoto said time was not critical but that the clock is ticking closer to when the industry will be operating at full capacity. "I don't know if it will reach the limit in 2003, so it isn't a problem yet, but it could become one," she said. ARACRUZ AND SUZANO HEAD TO TO BNDES Calos Lessa, the new president of the BNDES, which has loaned 2.4 billion reais to paper and pulp firms over the past two years, has made it clear that the bank will offer credit to sectors that generate revenue and are close to their output capacity. Aracruz Celulose <ARCZ6.SA> (nyse: ARA - news - people), the world's biggest producer of bleached eucalyptus pulp, is currently studying building a $1 billion plant in the northeastern state of Bahia in a 50-50 venture with Finland's Stora Enso <STERV.HE>. The Brazilian company has started negotiations with the BNDES for a loan that will add to its own cash and external financing to help pay for its stake in the Veracel plant. "I am going to begin those talks because the BNDES has gone through changes," said Carlos Aguiar, the president of Aracruz, adding that the deal was expected by the end of June. "I think Veracel means everything the new government wants: exports, jobs, and a foreign partner," he said. The company's pulp is used to make a variety of paper, from letter-writing pads to toilet tissue. Rival Suzano <SUZA4.SA>, which invested $150 million to expand a plant over the past two years, says it is carrying out a feasibility study on an $800 million plant. Murilo Passos, the company's director, told Reuters the "relationship with the BNDES is very good. We have some projects with the bank."

<a href=www.latintrade.com>Latin Trade 04/04/2003 - Source: Business News Americas (BNamericas.com) (BNamericas.com) - Brazilian iron alloy producers fear their cost positions may be squeezed by government policies aimed at attracting investments in the electric power generation sector, an official from the country's iron ore association Abrafe told BNamericas.

"The big concern is how the model for the electric power sector is going to be and that rates remain compatible with those of other countries," said the official, Abrafe VP Marco Antonio Marques Jordao.

The new federal government led by Luiz Inacio Lula da Silva, who took office on January 1, has continued the power policies of the previous administration, but there have been discussions on adapting a new model so as to attract more investment in the sector. One possibility is that prices for metals sector companies reflect the state of the power market rather than the market for the particular metal concerned.

"The iron alloy sector as well as the rest of Brazil's industry is interested in the expansion of power supplies, but it is important that energy costs are on a par with those of other countries," Jordao said.

Electric power is one of the most important inputs for the iron alloy sector, accounting for 10% to over 30% of production costs, depending on the alloy produced, he said.

The Abrafe official said iron alloy producers are not investing in expanding output because it is a mature sector, and investments in current operations still hang in the balance and could be disrupted by high energy costs.

At present, electric energy costs for Brazilian industry hover over US$20/MWh, although this varies widely depending on the region and terms of contract. The price is compatible with most other countries, but some countries like Norway and South Africa provide energy at much cheaper prices.

Jordao said the sector faces a positive market outlook this year. "Demand from steel companies has grown, but there are uncertainties regarding what will be the impact of the war in Iraq and growth in the world economy. The demand from the aluminum and silicon industries is expected to be steady," he said.

By Luis Gómez Narco News Andean Bureau Chief April 5, 2003

As Manuel Rocha, the former US Ambassador to Bolivia, tries to present his credentials as the new Ambassador in Venezuela to that nation's President Hugo Chávez, the new Viceroy has arrived here: David N. Greenlee. His trajectory as a repressive agent in this country, that dates back 15 years, is surprising… And in recent days he has demonstrated that he is hell-bent on maintaining the Bolivian chapter of the so-called War on Drugs. In a few moments, kind readers: the story.

According to a report published in the biweekly Bolivian magazine, El Juguete Rabioso ("The Rabid Toy"), Greenlee's relation to this country dates back to 1965, when the new ambassador served as a Peace Corps volunteer. Later, he left for Vietnam, and became an expert in undercover operations in the US "diplomatic" schools… where he shared experiences with the ex "Southern Command chief Gary Speer, and with Otto Reich." The article in El Juguete Rabioso can be read, in Spanish, here:

membres.lycos.fr

Greenlee met his wife, Clara Jeanet Murillo, here in Bolivia, and has worked here as a diplomatic official. In fact, at the end of the 1980s he was interim ambassador for nearly two years, after the 1986 resignation of Edward Rowell. All of this was the product of an internal crisis caused by Bolivia's largest drug scandal, the tragedy in Huanchaca, in which not only were various people assassinated (including the scientist Noel Kempff and the Congressman Edmundo Salazar), but also, the first (and only one ever found in Bolivia) cocaine hydrochloride laboratory was discovered for making the famous white powder.

Greenlee took advantage of his nomination as ambassador to initiate a wartime policy, according to the Juguete Rabioso report, focusing the entire war against narco-trafficking upon a single enemy: the coca growers' movement. In fact, Congressman Evo Morales once commented to Narco News that "Greenlee personally led various repressive operations in the Chapare, and planned some of them such as the Villa Tunari massacre," in 1988, where twelve people were assassinated (including women and children) and more than twenty were wounded.

This, without even mentioning - and we will bring you this story - that it was Greenlee who, from the second largest US Embassy in Latin America (it is barely smaller than that of Brazil), pushed the passage of a law that for a long time violated the rights of the farmers, users, and drug addicts, as well as having criminalized the coca leaf ever since: Law 1008. "About the regulation of coca and controlled substances," as the law is titled, which is to say, the local anti-drug law.

But Mr. Greenlee, who counts among his abilities the speaking of Quechua (the most spoken language in the Chapare) isn't just part of a black past in Bolivia. After having been US Ambassador to Paraguay, he was nominated last September 5th by George Bush to his new job in Bolivia. And don David Nicol, returning to the country of his wife, did not waste time… After a little more than a half year of pressuring President Gonzalo Sánchez de Lozada to change his position on coca in the Chapare, as Narco News Authentic Journalist Alex Contreras has already reported.

A few weeks ago, after the February 11 to 13 rebellion in La Paz, there was an action - it can't be called "undercover" - to destabilize, or, as the leader of the Movement toward Socialism party (MAS) says: To threaten the principal leaders of the party of the coca growers and the other Bolivian social movements with death.

"I got a letter yesterday..."

On Saturday morning, March 22nd, Congressman and coca growers' leader Evo Morales met with the Vice President of Bolivia, the former journalist Carlos Mesa. The Vice President delivered a "letter" sent directly from the office of Ambassador Greenlee. This same letter, days before, had been delivered by Mesa to the Senate Leader for the MAS party, the veteran union and social leader Filemón Escóbar.

The document, a white page without stationary nor anyone's signature, said that the United States Embassy had obtained "trustworthy" information about a supposed coup d'etat that the MAS was planning for April, together with "key military personnel." According to the "diplomatic" letter, the leaders of this witchcraft would be Antonio Peredo Leigue, the former Vice Presidential candidate for the MAS and current National Congressman, and the same Evo Morales, but that "internal struggles inside the party might delay the execution of this plan, and might even make the execution of this plan impossible so that it won't happen."

Internal fights? Well, certainly events prior to the delivery of this singular "letter" from Mr. Greenlee had demonstrated that problems exist inside of the MAS party, but the reference made by the document is much more serious: "There is a group inside of MAS that wants to see Evo Morales and Filemón Escóbar assassinated during this coup in April." Kind readers: Did you get that? Well, they got it in the MAS too, because on March 27th they formally responded to Ambassador Greenlee.

In a communiqué titled "We defend Democracy: No to the Coup!" the MAS clarified that it is "not, directly or indirectly, promoting attitudes to alter the life of a democratic order in the country, such as the state of law." And with respect to the supposed intentions to assassinate Evo and Filemón Escóbar, they made two convincing points:

1. "We publicly and formally challenge Mr. David Greenlee… to demonstrate in a documented, trustworthy, and real, manner on what he bases his asseverations," as well as calling upon the Ambassador to identify "who is plotting against the life of compañero Evo Morales Ayma."

2. To leave it "clearly established to national and international public opinion that the national government and the United States Embassy will be held exclusively responsible for any attempt upon the life of our national leader, compañero Evo Morales.

What has the Viceroy David Nicol Greenlee said in response? Well, nothing, or barely a pair of mentions in the local press about a United States law that obliges him to inform friendly governments about this kind of threat and his "moral" obligation: "As the U.S. government, we have certain ethical, legal, and moral, requirements that we always try to comply with." And as for the source of the "letter?" "I have no comment."

It seems that this decorated Vietnam veteran has ripped a hole in his "undercover" work… because his nighttime threats have been responded to… clearly, not like he demanded in writing last March 14th, the date on which he met with Vice President Mesa to deliver his little letter: "We solicit your collaboration to inform Morales about this attempt, in a manner in which he understands and accepts the seriousness of this information so that he takes the appropriate measures to protect himself. At the same time, we solicit you to confirm to us that this warning was delivered/reported and, later, to also let us know the reaction of Morales to this information."

On and on... No one can believe that an Ambassador with so much experience in the field of intelligence and repression could be naïve. He's not. The insidious planting of rumors inside of the MAS (that a group "inside of the MAS would want to have Evo Morales and Filemón Escóbar assassinated during this coup in April") has had its effects, but, on the other hand, it has caused the government and its intelligence agencies to have to work to cover their tracks.

A difficult swallow and the government's "investigations"

Last week, due to the internal tensions generated by Greenlee's "letter," and the more important tensions in the Chapare and in the Parliament, the MAS had to swallow a bitter pill. On Wednesday, March 26, in open session of the National Congress (Senators and Deputies together), Senator Filemón Escóbar, tired of legislative inactivity, publicly denounced this letter, warning that the mentioned coup d'etat would not have the current president as its victim, but, "rather, the MAS and Evo Morales."

During almost 48 hours there were statements and problems between Evo, Filemón, and other MAS leaders, demonstrating that all was not well inside that movement, as Filemón confirmed later in an interview with the daily La Razón in La Paz (March 28, 2003). In a press conference in the halls of Congress on the 27th, and again with the coca growers on the 29th, the MAS came back and demonstrated that internal unity reins and that the political enemy could not divide them.

Amid a grand assembly in the Chapare town of Lauca Ñ, the coca growers showed their solidarity with Filemón Escóbar and Evo Morales against the death threats and what appeared to be a plot for a "self-coup" by the current government.

They also decided to radicalize their actions against the institutions of so-called "alternative development" and, beyond that, in all corners of the Chapare region, the forced eradication of coca leaf is being resisted by small groups and demonstrations trying to kick the military's Joint Task Force out of the zone.

Internal divisions? Sure there are: It's a political party! But this incident has caused the opposite of what Mr. David Nicol Greenlee wanted: Today the coca growers and the MAS are more united than ever and their struggle in defense of their sacred leaf is stronger.

On the other hand, in a show of speed and "intelligence," the government, in just a few days, had to really work its agents to make sure that none of its interrogators would leak the letter by the Viceroy Greenlee. Last Saturday the news spread that the government of Sánchez de Lozada already knew about the "coup" for mid-April and that some military soldiers would be involved with it. (Don't forget, kind readers, how a mid-April date of a coup in Bolivia would resonate with the anniversary of last April 11th's attempted and failed coup in Venezuela: Was that the idea behind the timing? To simulate a coup from the Left to discredit the pro-democracy cause in Latin America?) Supported by a simplicity the broke the record of operating speed by the Brazilian intelligence agencies (even faster than when they were led by the narco-nazi Klaus Barbie years ago), the Bolivian president asked the opposition to let him govern and not be seditious…

Evo gave it back to him hard: "The seditious one is he who doesn't listen to the people and governs instead in his own interests, those of his social class and of the multinational corporations... (Sánchez de Lozada) has to change his advisors and see the reality that the people live in and not that of his partners… A half block from Murillo Plaza, there are people begging while their children lick the streets."

Thus, kind readers, Mr. Greenlee could not frighten the embattled social fighters of the MAS and its bases of support. But he tried, enthusiastically, to do it… albeit through an absurd route. And while the New Viceroy spends the money of U.S. taxpayers writing seditious letters, the coca growers have taken the offense and are fighting hard battles in the Chapare… We pray that you stay in contact with Narco News, from where, soon, you will be able to receive more reports about the War on Drugs in Bolivia, the New Viceroy Greenlee, the heroic defense of the coca leaf and the democracy that continues, alive and well, in this country.

PJStar.com April 5, 2003

Whether you were looking for a new car, a plane ticket or even a new pair of shoes, 2002 was a great year to be a buyer of just about anything to help you get around.

If you were a seller, ’02 was pretty much a train wreck.

A recent Consumer Price Index report by the Bureau of Labor Statistics shows prices for a wide range of transportation-related goods and services either fell or remained flat between the Decembers of 2001 and 2002.

At the same time, the overall CPI - the rate of inflation in price of all goods - hit a benign 2.4 percent in 2002 amid a nationwide economic malaise.

The notable exceptions? You won’t be shocked if you ever leave your house or pay your bills. Gasoline prices skyrocketed throughout 2002, and car insurance prices took a big upward hike. But those increases were the exception and far from the rule for transportation-related buys of all kinds.

The average price of all new cars and trucks - amid zero-percent financing deals designed to spur car-buying demand - fell 2 percent; used car and truck prices (hit hard by buyers being lured by cheap financing for new cars) dipped by 5 percent; and car and truck leases fell 2 percent.

The only increased pricing for car acquisitions was a modest one: rental car and truck costs went up 0.5 percent.

The cost of getting a set of tires for your car was up a tiny 0.1 percent, while car repair costs were up 3.7 percent, not much over the rate of inflation. Car-related governmental regulatory fees were up 3.3 percent, while car insurance costs were up 9 percent.

The biggest transportation-related increase - indeed, one of the biggest consumer-related price increases of any type - was in gasoline, up 24.8 percent for all grades and up 25.8 percent for unleaded regular-grade gas.

The blame for gas price spikes at the end of last year fell on the threat of the now-real war with Iraq, low reserves and political woes in Venezuela, America’s fourth-largest crude oil source.

Going by plane? Airfares were down 2.4 percent, as a post-Sept. 11, 2001, travel slump and a business traveler revolt against high walk-up fares continued through 2002. How about by boat? Ship fares were down 1.8 percent.

For those without wheels and lacking access to a jet or yacht, public transportation fares were down 0.9 percent, while footwear prices were up only 0.1 percent in the discount-crazy retail industry.

The bottom line? While investors decried depressed stock prices stemming from slack revenues, and while some industries (notably airlines) struggled to bring costs in line with what consumers were willing to pay, 2002 was a great time to go somewhere on the cheap.

But buyer beware: Businesses of all types won’t be able to sustain themselves - and the jobs they offer - without a reasonable increase in prices or a major restructuring of business models this year.

To see the 96-page price report yourself (which includes not only transportation-related items but just about any consumer-related goods or services) go online to www.bls.gov/cpi/cpid0212.pdf.

• Omar Sofradzija covers transportation issues for the Journal Star. His column appears every other Saturday. He can be reached at 686-3187 or osofradzija@pjstar.com, or by mail c/o Journal Star, 1 News Plaza, Peoria, IL 61643.