Sunday, April 13, 2003 By KATHLEEN CARROLL <a href=www.northjersey.com>HERALD NEWS

During last Wednesday's editorial meeting of The Clarion, the blackboard in Room 219 at Hawthorne High School was filled with students' ideas for upcoming articles:

Prom Costs; SARS Virus; Budget/Voting; Boycott on France & Germany; Latin Program - cut?; Why Fashion Show Was Canceled; End of the World.

"Wait, I want to do something about Venezuela," said Cherish Persaud, 16. "Right now, everyone is only focusing on Saddam Hussein, who we call a dictator. But all the other dictators are getting a free chance to do whatever they want."

A teacher knocked into an ancient desk and sent the tabletop crashing to the floor.

"Vote for the budget!" someone joked, referencing the school budget referendum on this week's election ballot.

"Can we do a story about broken desks?" another student asked.

Some student editors of high-school newspapers are redrawing their papers' boundaries, publishing their classmates' articles about the war in Iraq alongside articles about under-stocked soda machines.

"We want to write powerful, real-world things that keep people informed," said Beth Alimena, 17, the editor in chief of The Clarion. Since September, Clarion writers have covered antiwar protests in New York City, high school drug tests, prayer in school, illegal immigrants, state-mandated affordable housing and the failure of the Environmental Protection Agency to meet air-quality standards.

"This is getting us ready," she said. "It's important to get out of the bubble and see what's going on. We're the future - I know that sounds so corny, but you look around and think, one of these days ... "

The Clarion ceased publication during the late 1990s and was revived as a 12-page, bi-monthly paper by two journalism teachers at Hawthorne High last year.

"We're trying to get away from the usual fluff that fills high school newspapers," said Sean Van Winkle, a faculty adviser to The Clarion and reporter for the Hawthorne Press, a community weekly. "We have school issues, but we also have our students look at the larger picture."

In a recent issue, one student's political cartoon showed President Bush in the center of a clock, counting off hours named after U.N. weapons inspections and war resolutions, waiting for the clock to strike 12, or war, o'clock.

"We try to make the paper interesting for students to read, but not so interesting that it gets the principal in trouble," said David Browne, principal of Hawthorne High School. As with most high-school newspapers, the principal reviews each issue before it goes to print.

At The Torch, at John F. Kennedy High School in Paterson, "students have some really deep issues on their minds," said Lories Nye-Flockbower, the paper's adviser and a former newspaper reporter.

"There's always a controversial issue, but no one says, 'Don't print it.'"

Articles about being gay in high school, the beating death of a homeless man by Kennedy students and gang warfare in Paterson have had prominent placement in recent issues of The Torch. The paper, whose history stretches back to Paterson's old Central High, has built a reputation for responsibility that frees its editors from the principal's oversight.

Last month, the editor in chief of The Torch, Ejona Shehu, 17, asked students and teachers for their opinions about the war. She quoted pacifist teachers, students with parents in the military, enlisted students and peace protesters.

"We wanted to relate things to students going into the military, and to the many students here who are Muslim," said Ejona, a Muslim who immigrated from Albania when she was 9. "Our students need to read about this. Since the Iraqi conflict started, everyone automatically assumed that if you are Arabic or Muslim, you would be against the war. Some people tend to think differently, even though they are Muslim."

Across town, at Eastside High School, student editorials about the war are featured in the next issue of The Criterion, that school's longtime student newspaper. At Clifton High School, writers for The Hub are concentrating on local affairs, said adviser Rita Whetton. Students at Wallington High School are also sticking with stories close to home, said Maria Tomassi, student editor of The Courier.

"We deal with positive reactions to reinforce what we're doing in school," she said. "We only have a few issues every year, so we try to get in a lot of school stuff. We don't have a lot of room to put other articles in."

For the papers that cast wide nets, keeping the focus on students is a major challenge.

"We wrote about Iraq, and then about a girl in school who is disabled," Ejona said. "We go from a big issue to what somebody on the outside would call a minor issue. We have things that our students can only read about in The Torch. No outside newspaper is going to come and write about our prom."

"This gives students a voice that can't otherwise be heard," said Beth, The Clarion editor. After a recent article about a broken Gatorade machine, the board of education responded and the problem is being fixed.

"We're not going to get 20 more teachers tomorrow, or 50 new desks, I know. But a thought-out, well-written article is listened to more than a complaint made in anger. It gives us a chance to go after things in a mature way."

"That's a big thing when you're dealing with adults," she explained.

Reach Kathleen Carroll at (973) 569-7135 or carroll@northjersey.com.

<a href=usinfo.state.gov>Washington File 13 April 2003

The International Monetary and Financial Committee (IMFC) of the International Monetary Fund (IMF) April 12 unanimously agreed that the international community, including the World Bank and International Monetary Fund (IMF), is "essential for sustained economic, social and political development in Iraq" and the Iraqi people are responsible for determining their own future, according to the committee's chairman, Gordon Brown, of Britain.

The committee further agreed that a new United Nations Security Council resolution regarding Iraq's future is needed, said Brown, briefing reporters following the committee's semi-annual meeting in Washington. The meeting was part of the World Bank/IMF spring meetings, which conclude April 13. Brown added that the IMFC didn't discuss the contents of a resolution.

"The Committee notes that the present situation in Iraq poses significant challenges, with an urgent need to restore security, relieve human suffering and promote economic growth and poverty reduction," the committee said in a post-meeting communiqué.

It urged early involvement of the Paris Club on the issue of Iraqi debt. The Paris Club is an informal group of official creditors. The amount of debt will first need to be determined before talks of debt restructuring or forgiveness can take place, said Horst Köhler, IMF managing director, at the briefing.

Brown said he was pleased with the spirit of cooperation at the IMFC meeting, which was based on a "common approach" and "shared values" towards poverty reduction.

The IMFC projects stronger growth in the second half of 2003 by the world's advanced economies, the communiqué said.

It said low-income countries could boost their prospects for growth through "improved economic policies, stronger institutions, progress in resolving regional conflicts and increased donor resources," including debt relief under the IMF/World Bank heavily indebted poor country (HIPC) program.

Brown stress the importance of trade liberalization and called on industrialized, emerging and developing countries to renew efforts to address obstacles to trade negotiations in advance of the World Trade Organization (WTO) meeting in Mexico later this year. Four areas needing urgent attention are agriculture, pharmaceuticals, services and healthcare for developing countries, he said.

The committee noted that accelerated labor and product market reforms are needed in Europe more steps to strengthen the banking and corporate sectors and to end deflation are needed in Japan.

WTO Director-General Supachai Panitchpakdi addressed the committee, Brown noted.

The IFMC welcomed progress with the standards and codes process, the communiqué said. It also supports the IMF's continued efforts to make surveillance of members' economic policies more comprehensive and accountable, it said.

The communiqué also said the IMF should have an important role in assisting poor countries make progress toward meeting the Millennium Development Goals of reducing poverty by half by 2015.

Other areas the IMFC supports, according to the communiqué are:

-- the inclusion of collection action clauses in international sovereign debt issues, done most recently by Mexico; -- continued work on developing a "concrete" sovereign debt restructuring mechanism"; -- an increase in the voluntary publication of country IMF staff reports; -- encouraging policies to reduce countries' credit vulnerabilities; -- promoting more effective economic crisis resolution mechanisms; -- actions by members to combat money laundering and the financing of terrorism; and -- strengthening the voice of African nations in the IMF.

The next meeting of the IMFC will be September 21 in Dubai.

Following is the text of the IMFC communique:

(begin text)

Communiqué of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund

The International Monetary and Financial Committee held its seventh meeting in Washington, D.C. on April 12, 2003, under the Chairmanship of Mr. Gordon Brown, Chancellor of the Exchequer of the United Kingdom.

Global Economic Outlook

Meeting at a time of economic uncertainty, the Committee reaffirms its commitment to close international cooperation to strengthen confidence and support the global recovery. It underscores the importance of continued vigilance. But with readiness to adjust policies as necessary and determined further action on the structural front, the world economy has the prospect of strengthening growth and renewed prosperity. Substantial and concrete progress with multilateral trade liberalization is a key priority for the coming months and has the full political commitment of Ministers.

In the advanced economies, sound fundamentals and policies should deliver stronger growth in the second half of the year. With inflationary pressures well contained, monetary policies should remain accommodative, and in many countries there is room to ease monetary policy further if needed. On the fiscal side, the automatic stabilizers should be generally allowed to operate, though in many countries action is needed to address medium-term fiscal pressures, including those arising from ageing populations. The advanced economies have a shared responsibility to go further in implementing structural reforms -- to enhance prospects for a sustained broad-based world recovery that helps correct global imbalances. In the United States, policies consistent with a sound medium-term fiscal position remain important. In Europe, labor and product market reforms need to be accelerated. In Japan, further steps are needed to strengthen the banking and corporate sectors and end deflation, accompanied by a start toward strengthening the medium-term fiscal position.

Emerging market countries will need to continue to strengthen their policies for macroeconomic stability and structural reforms and therefore their resilience to adverse global developments. In countries facing external financing constraints, efforts to sustain macroeconomic stability will continue to be key to restoring confidence. For all countries, the continued implementation of reforms to strengthen banking and corporate sectors and underpin growth remains a priority. The IMF has a key role to play in supporting these efforts.

Prospects for stronger growth in low-income countries should be supported by improved economic policies, stronger institutions, progress in resolving regional conflicts, and increased donor resources, including through debt relief under the HIPC Initiative. Sustained implementation of sound policies, supported by strong ownership and the Monterrey Consensus, will remain key to reducing poverty and meeting the Millennium Development Goals (MDGs). African countries need to continue to press ahead with the wide-ranging reforms embedded in the New Partnership for Africa's Development (NEPAD) -- in particular to improve the quality of their institutions and ensure peace and security. The Committee reiterates the importance of technical assistance, including the contribution of AFRITACs [African Regional Technical Assistance Centers] and other regional technical assistance centers. It calls on the international community to urgently mobilize additional assistance to address the serious food shortage in Africa.

The Committee notes that the present situation in Iraq poses significant challenges, with an urgent need to restore security, relieve human suffering and promote economic growth and poverty reduction. We support a further UN Security Council resolution. We further note that engagement by the international community including the Bretton Woods institutions would be essential for sustained economic, social, and political development in Iraq, recognizing that the Iraqi people have the responsibility to implement the right policies and build their own future. The IMF and the World Bank stand ready to play their normal role in Iraq's re-development at the appropriate time. They will also monitor closely the impact of the conflict on all their members and stand ready to help and support those adversely affected. It is important to address the debt issue, and we look forward to early engagement of the Paris Club.

The Committee -- having greatly benefited from the views of Dr. Supachai Panitchpakdi, Director-General of the World Trade Organization -- underscores the urgency of concrete progress toward multilateral trade liberalization under the Doha Round through the continued commitment of the international community. This will be critical in supporting higher economic growth and poverty reduction, and enabling developing countries to participate more fully in the benefits of globalization. The Committee accordingly calls on industrial, emerging, and developing countries to play their part in renewed efforts to address obstacles to further progress in advance of the ministerial meeting of the World Trade Organization in Cancún next September. Urgent progress is needed in a number of areas, including agriculture, where better market access and lower trade distorting subsidies are particularly important for developing countries. The IMF, in collaboration with other international institutions, stands ready to support members' closer regional cooperation in the context of deeper integration into world markets.

Strengthening Crisis Prevention

The Committee reiterates the importance it attaches to strengthening the IMF's crisis prevention capacity and welcomes the steps in many countries to improve economic resilience and financial stability. However, there is still room for further improvement. Going forward, sustained implementation of a strengthened framework of bilateral, regional, and multilateral surveillance will be essential to provide more robust assessments of crisis vulnerabilities, debt sustainability, currency mismatches and other balance sheet and capital account developments, as well as further progress in strengthening data provision to the IMF and data dissemination to the public.

The Committee welcomes progress with the standards and codes process and the Financial Sector Assessment Program (FSAP) and the role these play in enhancing IMF surveillance. It calls on the IMF to continue to move forward with these initiatives to strengthen members' institutions, policy frameworks, and financial sectors, including through technical assistance. It stresses the importance of further enhancing the quality and effectiveness of standards and codes assessments, and calls on the IMF to implement quickly agreed measures to strengthen prioritization, technical assistance, and follow up of FSAP and ROSC assessments. In this context, the Committee looks forward to the further work of the Financial Stability Forum and standard-setting bodies on strengthening the content and coverage of standards in accounting, auditing, and corporate governance, and on improving transparency and financial disclosure.

The Committee supports the IMF's continued efforts to make surveillance more comprehensive and accountable, including through strengthening the IMF's policy advice on reducing vulnerabilities; greater attention to the spillovers from policies in countries of systemic or regional importance; more effective use of the IMF's cross-country experience; enhanced awareness of political economy factors; and bringing to bear a fresh perspective in surveillance of program countries. The Committee looks forward to the IMF's further work on surveillance and other crisis prevention issues and a report on progress for this year's Annual Meetings.

The Committee welcomes the increase in voluntary publication of country staff reports, but notes that the rate of publication across countries and regions remains uneven. It looks forward to further progress through the forthcoming review of the IMF's transparency policy, and stresses that the candor of the IMF's analysis and advice should be preserved.

The Committee emphasizes support for ways to achieve the objectives of the Contingent Credit Lines (CCL) in encouraging policies to reduce vulnerabilities and providing a means of support for members with strong policies in dealing with global financial developments. It looks forward to a report on how best to promote these objectives following the conclusion of the review of the facility.

Improving the Capacity to Resolve Financial Crises

Effective crisis resolution mechanisms, by promoting sound policies and better functioning capital markets, contribute to crisis prevention. The Committee welcomes the strengthened framework on access to IMF resources. This includes: the substantive criteria for exceptional access in capital account crises; and strengthened procedures, such as early involvement of the Executive Board in the process and a separate report evaluating the case for exceptional access. Consistent implementation of the framework will provide members and markets with clarity and predictability about IMF decisions in crises.

The Committee welcomes the inclusion of collective action clauses (CACs) by several countries, most recently Mexico, in international sovereign bond issues. It also welcomes the announcement that, by June of this year, those EU countries issuing bonds under foreign jurisdictions will include CACs. The Committee welcomes the work of the G-10, emerging markets, and the private sector in contributing to the development of CACs. It looks forward to the inclusion of CACs in international bond issues becoming standard market practice, and calls on the IMF to promote the voluntary inclusion of CACs in the context of its surveillance. The Committee welcomes recent initiatives to formulate a voluntary code of conduct for debtors and their creditors, which will improve the restructuring process, and encourages the IMF to contribute to this work.

The Committee welcomes the work of the IMF in developing a concrete proposal for a statutory sovereign debt restructuring mechanism (SDRM) and expresses its appreciation for the IMF management and staff's efforts. The extensive analysis and consultation undertaken in developing the proposal have served to promote better understanding of the issues to be addressed in bringing about orderly resolution of crises. The Managing Director's report sets out the current position. The Committee, while recognizing that it is not feasible now to move forward to establish the SDRM, agrees that work should continue on issues raised in its development that are of general relevance to the orderly resolution of financial crises. These issues include inter-creditor equity considerations, enhancing transparency and disclosure, and aggregation issues. The IMF will report on progress at the Committee's next meeting.

Implementing Initiatives to Support Low-Income Countries

The Committee recognizes the urgent need to address the challenge of meeting the Millennium Development Goals, and reiterates that the IMF continues to have an important role to play in assisting low-income countries progress toward them. This will require enhanced efforts by developing and developed countries working in partnership. The Committee stresses the importance of sound macroeconomic policies and strong public expenditure and financial management systems. The Committee recognizes the urgent need to enhance market access and to increase the level and effectiveness of donor resources for developing countries. Proposals to achieve this, including facilities, are being considered, and the Committee looks forward to progress in the coming months. Building on countries' poverty reduction strategy papers (PRSPs), the Committee encourages the IMF to work with low-income countries to strengthen further the alignment of the PRGF, domestic budgets, and the PRSP approach. This will be facilitated through more realistic economic projections, systematic analysis of the sources of growth, effective Bank-Fund collaboration, and flexibility in program design, including to accommodate higher aid inflows. The Committee encourages donors to coordinate and harmonize their assistance in line with PRSP priorities, and to provide technical assistance to help members build the needed capacity to design and operationalize PRSP strategies and to improve public expenditure management. It endorses further work on the linkages between growth and poverty reduction, including the role of the private sector. The Committee also looks forward to the review of the role of the IMF in low-income countries over the medium term, and its paper on helping low-income countries to deal with shocks.

The Committee welcomes the further progress made in implementing the HIPC Initiative, but notes that some countries have experienced delays in reaching the completion point, and that other eligible countries are facing obstacles to participation in the Initiative. It looks forward to a review of these issues at its next meeting. The Committee reaffirms its commitment to the full financing of the Initiative. It urges all creditors to participate fully, and encourages further Bank-Fund efforts to help creditor and debtor countries address HIPC-to-HIPC debt relief and creditor litigation issues. It emphasizes the need to ensure lasting debt sustainability, which will require both the full implementation and financing of the Initiative, and continued sound economic policies, good governance, and prudent debt management. In this context, the Committee welcomes the efforts by some countries to provide additional debt relief beyond HIPC terms. The Committee supports joint Bank-Fund work to improve its assessments of longer-term debt sustainability for heavily indebted poor countries, and looks forward to a progress report at the next meeting.

Other Issues

The Committee welcomes the further actions by members to combat money laundering and the financing of terrorism, and notes with satisfaction the progress with the 12-month pilot program of AML/CFT [anti-money laundering/combating the financing of terrorism] assessments. It underscores the importance of continued close cooperation between the IMF, the World Bank, the FATF [Financial action Task Force], and regional bodies to complete the pilot successfully, and of further enhancing the delivery of critically needed technical assistance. The Committee encourages all members to adopt AML/CFT laws and practices consistent with the agreed international standards, and looks forward to a full report at the conclusion of the pilot program.

The Committee considers it important that, as pointed out in the Monterrey Consensus, all members should have an adequate voice and representation in the institution. It welcomes recent administrative steps to strengthen the capacity of the African constituencies. The Committee notes that the Twelfth General Review of Quotas has been concluded and that the IMF is well positioned to meet the projected needs of its members. The Committee looks forward to receiving a status report by the 2003 Annual Meetings on the adequacy of IMF resources, the distribution of quotas, and measures to strengthen IMF governance, consistent with the resolution of the Board of Governors, in the context of the Thirteenth General Review of Quotas. The Committee recommends completion of the ratification of the Fourth Amendment.

The Committee welcomes the thorough follow up being given to the first report of the Independent Evaluation Office on prolonged use of IMF resources. It looks forward to future IEO reports as a way of enhancing the listening and learning culture within the IMF.

The Committee expresses its appreciation of the work of Eduardo Aninat as Deputy Managing Director.

The next meeting of the IMFC will be held in Dubai, on September 21, 2003.

INTERNATIONAL MONETARY AND FINANCIAL COMMITTEE ATTENDANCE April 12, 2003

Chairman, Gordon Brown Managing Director, Horst Köhler

Members or Alternates

Hamad Al-Sayari, Governor, Saudi Arabian Monetary Agency (Alternate for Ibrahim A. Al-Assaf, Minister of Finance and National Economy, Saudi Arabia)

Edward George, Governor, Bank of England, United Kingdom (Alternate for Gordon Brown, Chancellor of the Exchequer, United Kingdom)

Felipe Pérez Martí, Minister of Planning and Development, República Bolivariana de Venezuela (Alternate for Diego L. Castellanos, Governor, Banco Central de Venezuela)

Ian Campbell, Parliamentary Secretary to the Treasurer, Australia (Alternate for Peter Costello, Treasurer of the Commonwealth of Australia)

Job Graca, Deputy Minister of Finance, Angola (Alternate for José Pedro de Morais, Jr., Minister of Finance, Angola)

Hans Eichel, Minister of Finance, Germany

Geir Hilmar Haarde, Minister of Finance, Iceland

A.H.E.M. Wellink, President, De Nederlandsche Bank N.V. (Alternate for Hans Hoogervorst, Minister of Finance, The Netherlands)

Jamaludin Mohd Jarjis, Finance Minister II, Malaysia

Mohammed K. Khirbash, Minister of State for Finance and Industry, United Arab Emirates

Aleksei Kudrin, Deputy Chairman of the Government and Minister of Finance, Russian Federation

Mohammed Laksaci, Governor, Banque d'Algérie

Roberto Lavagna, Minister of Economy, Argentina

John Manley, Minister of Finance, Canada

Francis Mer, Minister of Economy, Finance and Industry, France

Antonio Palocci, Minister of Finance, Brazil

Guy Quaden, Governor, Banque Nationale de Belgique (Alternate for Didier Reynders, Minister of Finance, Belgium)

Masajuro Shiokawa, Minister of Finance, Japan

Bimal Jalan, Governor, Reserve Bank of India (Alternate for Jaswant Singh, Minister of Finance and Company Affairs, India)

John W. Snow, Secretary of the Treasury, United States

Paul Toungui, Minister of State, Minister of Finance, Economy, Budget and Privatization, Gabon

Giulio Tremonti, Minister of Economy and Finance, Italy

Kaspar Villiger, Minister of Finance, Switzerland

Li Ruogu, Assistant Governor, People's Bank of China (Alternate for Zhou Xiaochuan, Governor, People's Bank of China)

Observers

Oscar de Rojas, Acting Head, Financing for Development Office, Department of Economic and Social Affairs, United Nations (UN)

Willem F. Duisenberg, President, European Central Bank (ECB)

Heiner Flassbeck, Chief, Macroeconomic and Development Policies Branch, United Nations Conference on Trade and Development (UNCTAD)

Donald J. Johnston, Secretary-General, Organisation for Economic Cooperation and Development (OECD)

Malcolm D. Knight, General Manager, Bank for International Settlements (BIS)

Caio Koch-Weser, Interim Chairman, Financial Stability Forum (FSF)

Eddy Lee, Economic Adviser and Director, International Policy Group Department, International Labour Organization (ILO)

Trevor A. Manuel, Chairman, Joint Development Committee

Pedro Solbes, Commissioner for Economic and Monetary Affairs, European Commission

Supachai Panitchpakdi, Director-General, World Trade Organization (WTO)

James D. Wolfensohn, President, World Bank

(end text)

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This site is produced and maintained by the U.S. Department of State's Office of International Information Programs (usinfo.state.gov). Links to other Internet sites should not be construed as an endorsement of the views contained therein.

<a href=www.sfgate.com>SFGate.com Verne Kopytoff, Chronicle Staff Writer Sunday, April 13, 2003

WHO HAS THE OIL?

PRODUCTION Average daily oil production for 2002 in millions of barrels:

1. Saudi Arabia 7.62
2. Russia 7.41
3. United States 5.82
4. Iran 3.44
5. China 3.39
6. Mexico 3.17
7. Norway 2.99
8. Venezuela 2.60
9. United Kingdom 2.29
10. Canada 2.17
11. Nigeria 2.12
12. United Arab Emirates 2.08
13. Iraq 2.02

RESERVES Known crude oil reserves in 2002 in billions of barrels:

1. Saudi Arabia 259.2
2. Iraq 112.5
3. United Arab Emirates 97.8
4. Kuwait 94.0
5. Iran 89.7
6. Venezuela 77.7
7. Former Soviet Union 57.0
8. Libya 29.5
9. Mexico 26.9
10. China 24.0
11. Nigeria 24.0
12. United States 22.0

Source: U.S. Energy Information Administration / Source: American Petroleum Institute

Iraq's oil fields have emerged relatively unscathed after nearly a month of warfare, but the plan to revive the nation's most lucrative industry faces minor logistical problems and major diplomatic pressure.

U.S. leaders are confident they can get the fields up and running soon. The largest impediment to that effort is not in the desert, but in the theater of diplomacy where international leaders are expressing concerns over how the Iraqi riches will be managed, and by whom.

"Iraq's oil is a huge prize," said James Paul, executive director for Global Policy Forum, a New York organization that monitors the United Nations. "There's a tremendous interest from foreign oil companies to lay their hands on it."

At week's end, U.S.-led forces were occupying all of Iraq's major oil fields after capturing the important northern city of Kirkuk.

Iraq's oil industry has escaped the doomsday scenario many had feared before the invasion. U.S. officials worried about a repeat of the first Persian Gulf War in 1991, when Iraqis sabotaged nearly 750 wells in Kuwait.

"The situation is a lot better than had been expected," said John Lichtblau,

chairman of the Petroleum Industry Research Foundation in New York. "I think there's going to be every effort made to begin production and exports as soon as possible."

Before the war, fears that Iraq might set its oil fields ablaze -- in addition to an oil-worker strike in Venezuela -- sent crude prices skyrocketing to nearly $40 a barrel. Now the price for a barrel of oil has declined from $37.42 in mid-March to $28.25 on Friday.

Instead of an oil shortage, traders are now talking about a glut. Fears that Iraqi oil will soon flood the market has prompted members of the Organization of Petroleum Exporting Countries to discuss cutting their production -- after they had raised it in response to the war.

POST-WAR PRODUCTION

Vice President Dick Cheney said Wednesday that Iraq's oil production could surpass prewar levels of 2 million barrels a day and reach 3 million barrels a day within a year if given enough investment. Annual revenue could total as much as $20 billion, he said, which would go to rebuilding the war-damaged nation.

"The oil revenue is not to be diverted to any purpose other than specifically to service the immediate and, hopefully, long-term needs of the people of Iraq," Cheney said.

Iraq's oil is critical because it is expected to bankroll the nation's rebuilding. Plans to revive the industry are being watched closely, with many people suspicious that the United States is trying to gain undue control of Iraq's vast natural wealth.

Potentially, Iraq could become an oil powerhouse. It has the world's second- largest petroleum reserve, which was only modestly tapped under Saddam Hussein because of technological neglect and U.N. sanctions.

U.S. and British forces now control Iraq's southern oil fields, where 60 percent of the nation's crude is produced. In the north, soldiers are in the process of securing the other 40 percent.

The wells and pumping stations in the northern fields are largely intact. But Defense Secretary Donald Rumsfeld said that Iraqis may have rigged some of the equipment with explosives, as was the case in the southern part of the country.

During the initial days of the invasion, Iraqis sabotaged about a dozen wells in the southern Rumailah field. Only one of the resulting nine fires is still burning.

BUSH'S OIL PLAN

The Bush administration's plan for restarting the country's oil industry calls for setting up an interim authority to oversee production. The team will be made up primarily of Iraqis, Cheney emphasized, but will also include international advisers.

Philip Carroll, a former chief executive of Shell Oil Co. who went on to lead the construction giant Flour, will reportedly lead the interim oil authority.

Iraq's citizens are expected to regain control of its oil industry after a government is formed. Analysts believe that could take up to a year.

The Iraqi oil ministry will be advised by a group of Iraqis who are sponsored by the State Department. The members have met several times, most recently in London last weekend.

Dara Attar, an oil consultant from London who represents the Kurds in the advisory group, said members already agree on several key points. One is that foreign oil companies should be allowed into Iraq.

The firms could begin drilling new fields in perhaps three or four years, Attar said. They would share their proceeds with the Iraqi government in deals similar to those signed by other nations and foreign firms, he said.

"Our oil industry is ruined," Attar said. "We are going to try to raise our production, and for this purpose we need foreign help."

Chris Gidez, a spokesman for ChevronTexaco, the oil giant headquartered in San Ramon, said his company is always considering future opportunities, including Iraq. But he added that it's too soon to speculate about specific opportunities there.

One fear is that U.S. oil companies such as ChevronTexaco and ExxonMobil will have an advantage getting contracts because of the wartime role of the U. S. military. The French and Russians worry about being frozen out, though Attar said that will not be the case.

"It will be a fair process," he said.

Oil companies from France, Russia and China already hold contracts signed years ago under Saddam Hussein to open new fields in Iraq, but they have yet to begin pumping because of the U.N. sanctions. It's unclear whether the contracts will be honored by a new Iraqi government.

'POLITICAL FAVORS'

Attar said many of the contracts were granted "as political favors" and should be reviewed. However, the Russians in particular have said they will file suit if their deals are thrown out.

Another issue agreed on by the advisory group is that money from oil should be spent evenly throughout Iraq. Under Saddam Hussein, the money was handed out to favored regions and cities.

Currently, Iraq's southern oil field is being maintained by Halliburton, an oil services company from Texas formerly led by Vice President Cheney. The deal could be worth up to $7 billion over two years.

The contract has raised questions from some members of Congress, who criticize the fact that it was awarded without competitive bidding. The U.S. Army Corps of Engineers, which gave Halliburton the contract, said it did so for the sake of speed and because the firm had a previous contract to plan the rebuilding of Iraq's oil industry.

Analysts expect Iraq to begin exporting oil again within the next few months. But damage and outdated equipment is just one of the problems facing the nation's oil industry.

A diplomatic rift between the United States and other U.N. members has emerged over who can sell Iraq's oil in the near term.

QUEST FOR AUTHORITY

The United States clearly wants the authority. However, some of the other permanent members of the Security Council -- France, Russia, China and Britain -- may think otherwise.

The Security Council has oversight of Iraqi oil as part of its oil-for-food program. Proceeds from oil sales go into an escrow account controlled by the United Nations.

The system was imposed on Iraq in 1995, as a way to pay for that nation's food and medicine without it being diverted to buy weapons. It's still in place, even though Hussein's regime has fallen.

"The legalities will be addressed," White House spokesman Ari Fleischer said Friday. "It doesn't require necessarily an international stamp to engage in commercial transactions legally. The United States provides products around the world that the United Nations doesn't have to say we can do."

Paul, from the Global Policy Forum, said sanctions against Iraq will be lifted at some point. But he added that there would be opposition to oil money then flowing directly "into the pockets of the occupation authority."

Iraq already has 9.2 million barrels of oil in storage at Ceyhan, a Mediterranean port in Turkey. Loadings of Iraqi oil there stopped just before the war began.

Buyers were confused about the oil's ownership. Moreover, no one was answering the phone at Iraq's oil marketing company to consummate the deal.

If not for diplomatic issues, loadings could begin at Ceyhan at any time.

The United Nations has agreed to adjust orders of goods yet to be delivered through the oil-for-food program to better address the immediate needs of Iraq.

About $2.8 billion in cash remains in the program's escrow accounts.

E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.

Apr 13 2003 <a href=icnewcastle.icnetwork.co.uk>By The Sunday Sun

Green campaigners have called for trials of genetically modified crops to be halted after new research showed that they actually feed the insects they are designed to kill.

Pests have become immune to specially engineered toxins on the "Frankenstein" plants, according to a startling study.

The new evidence undermines one of the key claims of the biotechnology industry . . . that insects cannot live on GM crops.

Pete Riley, the North spokesman for Friends of the Earth, said: "This research shows we don't understand the full impact that this technology will have on the environment.

"The Government and biotech companies are potentially taking a massive risk with people's lives by allowing these crops to be planted in open fields.

"We are calling for a full cessation of ongoing and future GM trials."

Companies have added genes from the poisonous bacterium Bacillus thuringiensis (Bt) to a number of GM crops in an effort to kill insects.

The natural toxin is widely used by organic farmers to spray pest-infested crops once or twice a year.

This short blitz reduces the risk of the insects becoming immune.

But when the poison is built into GM crops, insects are continually exposed to the toxin over several generations and can become resistant.

The new research by scientists at Imperial College London and the Universidad Simon Rodrigues in Venezuela found that, once the insects become resistant, the poison acts as a food supplement that helps them thrive.

Researchers found that larvae of the diamondback moth - a major pest in the US - grew twice as fast after eating GM cabbage leaves.

Mr Riley said: "The GM companies have continually got things wrong.

"They said genes could not be cross-transmitted between species but Newcastle University research found bacteria in human guts were picking up DNA from GM food.

"This could be a disaster for humanity because many of these GM crops contain antibiotics that bacteria could become immune to."

advice

Biotech companies are conducting small field trials of genetically modified crops in the North and across the rest of the UK.

A spokeswoman for the Department for Environment, Food and Rural Affairs said: "We cannot comment at this stage.

"We've drawn attention to the Advisory Committee on Releases in the Environment on this research and have asked for their advice.

"It has no immediate implications for the UK as Bt crops are not currently grown here."

<a href=www.vheadline.com> Venezuela's Electronic News Posted: Sunday, April 13, 2003 By: Joyce Paterson

VHeadline reader Joyce Paterson reviews the BBC FOUR screening: The Revolution will not be televised -- Was this a coup, or wasn’t it? It was good to view two reports of the same series of happenings because they complemented each other; the first, all hand-held immediacy, blurry, uncut, and the second more measured, structured, focused. In both accounts the sincerity of the followers of Hugo Chavez shone through; these people believed passionately in the justice of their cause and in the ability of Chavez to secure that justice for them. No hidden agendas for them; they were so low that the only way was up, with Chavez extending a hand to pull them from their miserable poverty towards a share in the good things that Venezuela’s oil, their country’s oil, might offer them. More credit, then, to the sole state-owned television channel for giving them air-time, for showing their resounding support for Chavez.

That was the have-nots; the haves, too, had their own sincerity, of its kind. They believed with equal passion in their undisputed right to the good things of life by virtue of being industrious, decent citizens who had got where they were by hard work; this is the doctrine of those who believe, as an article of faith, that the poor are poor because they deserve to be so, that they have neither the brains nor the will to be otherwise.

How should these two camps have anything but scorn for one another? It must be well nigh impossible, with the social divide between them, that either could sympathize with the feelings and aspirations of the other. Gross ignorance of each other’s situation could only exacerbate the tensions between them.

So did these events arise spontaneously, from intolerable internal pressures?

Not, myself, being a great fan of conspiracy theories, I am reluctant to jump to easy conclusions; nevertheless, one has to ask the question -ú who has the most to gain from removing Chavez from power?

From where I sit (several thousand miles distant), it does seem to me that the wealthy few had relatively little to fear from Chavez’s projected share-out of the country’s oil wealth. Suppose, for a minute, that Chavez had already implemented his promises of a fairer division of wealth; Sure, initially the very rich would have moaned and complained, but, unless the redistribution had been very radical indeed, those on top of the social heap would be unlikely to find that their comfortable way of life had been drastically altered; who knows, they might even have found that a fully-employed and aspiring populace was less threatening than unemployed, hopeless and desperate masses. In short, the old Victorian ethic of Enlightened Self-Interest might have kicked in, and they might have found there were gains all round, with a more stable, safer country to live in.

Was there, then, any evidence that what Chavez had in mind was a Soviet Union style rearrangement of the social order?

Did the rich really believe he intended to bring about a Marxist-type society, with the wealthy forced to live in barracks and dig ditches?

Being a simple soul, I thought, ‘hmm, define your terms’ ... so I looked up coup d’etat in Collins English Dictionary, where it is described as ‘a sudden violent or illegal seizure of government.’

To my mind, this would mean that a faction within a country fervently desired a change of government; for example, if enough of the Iraqi army had conspired to remove Saddam Hussein from power.

Well, in Venezuela, it was certainly not the oppressed masses rising up against a hated tyrant; nor did the entire fighting force conspire to change the head of state -ú in fact, it was notable that few of the forces appeared to be in favor of Chavez’s removal.

If this was a coup, then it was a singularly inept one; it would seem axiomatic to be sure of your power base before attempting a step which risked violent destabilization of one’s country. And, whilst the upper classes might fervently desire a change of President, it is hard to see how they could engineer this without the wholehearted acceptance of the military.

It would, however, be extraordinarily easy for an outsider who had a vested interest in Chavez’s removal, to manipulate public opinion in such a way as to create a climate in which this could happen with apparent spontaneity.

To do this you need only play on two things -ú wealthy people’s avarice and their fear of the mob. Remember that almost all the media in Venezuela are privately-owned; how easy to plant the idea that Chavez is mentally unstable, that he is a danger to his country, that he is planning to strip the wealthy of everything they have sweated so hard to acquire.

How easy, too, with sophisticated editing techniques and spin, to make the raw television images tell the story the way you want it -ú so that the victim of bullets becomes the attacker, the mediator becomes the fomenter of unrest.

What can one say of the clumsy scheme physically to remove Chavez to ‘an island’ -ú from whence he is publicly rescued by the overwhelmingly loyal military?

It doesn’t sound as if his Generals thought Chavez was mad, does it?

No, from where I sit, it looks rather more like a maladroit attempt to foment fear and anxiety, inciting his own people physically to remove Chavez.

Coup? I don’t think so -ú but you choose.

Joyce Paterson aljopat2@btinternet.com

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