Adamant: Hardest metal
Monday, April 14, 2003

Amnesty International: Venezuelan political class failed in April 11 investigation

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, April 13, 2003 By: Patrick J. O'Donoghue

Amnesty International (AI) has urged the Venezuelan government to investigate human rights violations during April 2002, in which more than 50 persons died. In a precise communique, AI hits out at Venezuela's political class for failing to assume its role in the tragedy and for not bringing those responsible to justice.  "The government and opposition should stop trying to use the events of April 11 to favor their own agendas." 

The document says the recent rejection of charges against some people accused of the deaths and the impunity of the police shows the weakness of the official investigation and raise serious concern about the State's capacity.

Stressing the recurring theme of impunity in Venezuela, AI contends that the investigation and legal process should ensure justice for the victims and their families to avoid a repetition of the impunity that has reigned in other cases of serious human rights abuses. 

According to AI, the only way forward to secure an impartial investigation is to recur to international observers and warns that the excessive use of force by police needs to be reformed immediately.

<a href=www.vheadline.com>Human Rights issues in Venezuela Discussion on human rights as they affect Venezuela and Venezuelans

Mayor Bernal confesses spending 80% quality time on revolution ... promises to make amends

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, April 13, 2003 By: Patrick J. O'Donoghue

Speaking at the "Solidarity with the Bolivarian Revolution" conference in Caracas, Libertador Mayor Freddy Bernal has finally admitted that he has not been taking too much care of his municipality. Answering a question from the floor about the deplorable state of the municipality and the high crime rate, Bernal declared that he had spent 80% of his time last year defending the Revolution.

"It's true ... if I had spent time on what people elected me for, there would have been less holes in the streets, hawkers relocated and the Plaza Bolivar would have has a couple of more lights put in but on April 11 they would have put us in front of firing squad."

Bernal promised to turn his attention to his municipality "now that the Process has been consolidated ... from now on, it will be 80% of time on municipal matters and 20% on hold...  just in case."

During his first three months as mayor, Bernal confessed that he had wanted to run away after seeing the state of things ... "I had never administered anything before I became Mayor, not even a corner store ... it was like a mad house."

The Mayor promised the audience that they would see a difference in the municipality within three months ... "Municipal directors are no longer going to get me to promise things I can't deliver on."

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Petrol peril: Why Iraq's oil wealth may do more harm than good?

The Boston Globe By Daphne Eviatar, 4/13/2003

JUAN PABLO PEREZ ALFONSO, the Venezuelan oil minister and cofounder of OPEC, was onto something. Years ago, even as the price of oil skyrocketed and his country swam in its viscous wealth, he didn't fall for the idea that this was ''black gold.'' ''The devil's excrement,'' he called it. ''We are drowning in the devil's excrement.''

That's not how most people see it today. Watching Iraqis celebrate the end of Saddam Hussein's regime in the devastated streets of Baghdad, many observers may take comfort in the thought that, in the long run, Iraqis will have the resources to rebuild and even prosper. After all, they have all that oil. Last week, White House spokesman Ari Fleischer said, ''Iraq will have a huge financial base from within upon which to draw. And that's because of their oil wealth.''

But having the world's second largest oil reserves doesn't necessarily improve Iraq's long-term prospects. On the contrary, the growing consensus among academics is that oil-rich developing countries are worse off than resource-poor ones. If oil exports account for a significant portion of their economies, studies show, they're likely to develop slowly, repress their people, and suffer from frequent conflict. As economists Jeffrey Sachs and Andrew Warner ask in a well-regarded 1995 study of resource-rich developing countries, ''Is there a curse to easy riches?''

The puzzle of the so-called ''resource curse,'' as Sachs and Warner recognized, dates back centuries. In the 1600s, imperial Spain went into decline despite its gold-rich colonies. In the 19th and 20th centuries, resource-poor Switzerland and Japan sped ahead of oil-rich states like Russia. And the so-called Asian Miracle provides the perfect counter-example today: The barren lands of Korea, Taiwan, and Hong Kong are models of modern development, while Angola, Nigeria, and Congo, soaked in oil, are among the poorest and most conflict-ridden in the world.

Oil has shaped world history since at least the late 19th century. Although Alexander the Great supposedly burned it to frighten his enemies' war elephants, petroleum wasn't routinely employed as an energy source until the mid-1800s, when it was put to use in the kerosene lamp. With the advent of the gasoline-powered internal combustion engine, it went on to fuel the industrial explosion of the 20th century. As Daniel Yergin writes in ''The Prize: The Epic Quest for Oil, Money and Power'' (1992), oil powered the first world war and was critical to the course of the second: The Japanese went after petroleum in the East Indies, while Hitler invaded the Soviet Union in large part to capture the oil fields of the Caucasus. Besides making the suburbs possible, oil-an essential component in chemicals, fertilizers, and plastics-has driven the enormous material progress of the industrialized world. So why, in so many places, has the path of development so often sloped downward?

Historically, the poor fortune of resource-rich countries was attributed to sloth. As the 16th-century French political philosopher Jean Bodin put it: ''Men of a fat and fertile soil are most commonly effeminate and cowards; whereas contrariwise a barren country makes men temperate by necessity, and by consequence careful, vigilant and industrious.''

Academics today offer more complicated explanations. But the gist is that if oil is discovered in a poor country, it's a bit like winning the lottery: just as the laborer might abandon his job, the government makes so much money exporting petroleum that it doesn't develop other industries. Governments then use the windfall to shelter their citizens from the painful process of competition, subsidizing inefficient businesses and expanding government payrolls.

Furthermore, an oil boom compounds the normal difficulties of industrial development because it inflates the local currency, ultimately making it cheaper to import goods than to produce them at home. This chain of events is known among economists as ''Dutch disease,'' a reference to the decline of Dutch industry after the discovery of massive natural gas reserves in the 1960s. A country can sustain itself on easy money for a while, as many did in the 1970s, but skyrocketing prices inevitably drop, as they did in the `80s. And economies collapse. Oil-rich Algeria, for example, booming three decades ago, suffers from 30 percent unemployment today. Saudi Arabia and Venezuela have experienced similar slides.

Although economies based on other re-

sources-say, diamonds or copper-face comparable problems, the trend is most pronounced for oil producers. Stanford political scientist Terry Lynn Karl, in ''The Paradox of Plenty: Oil Booms and Petro-States'' (1997), explains that oil tends to make up a far larger share of a country's exports than other minerals. In Venezuela, for example, oil provides more than 80 percent of export revenue; in Nigeria, it's more than 95 percent. And the oil industry requires even bigger capital investments than the mining industry, while often employing only 1 to 2 percent of the work force. Foreign oil companies, who can afford the investments, control the industry in many countries, and whisk much of the profit abroad. Meanwhile, the money that stays home goes straight to the central government-and often into the pockets of corrupt leaders.

That, in turn, contributes to another common feature of oil-producing states: They tend to be authoritarian, and exceptions to the general rule that higher-income countries are more likely to be democracies. Michael Ross, the UCLA political-science professor who reported this finding in an article in the journal World Politics in 2001, notes several possible reasons. First, an oil-rich government can provide vast social services without taxing the public. ''Because there's no taxation, there's less demand for representation,'' says Ross. These governments also tend to buy off the opposition and amass large internal security forces capable of crushing dissent. Finally, the skewed development of oil-dependent states means they lack the working- and middle-class citizens who have historically been the force pushing for democracy.

Compounding the problem, the slow growth and poverty associated with oil dependence also tends to fuel civil strife, Ross and others have found. This is most obvious in Africa, where the oil-producing states are among the poorest. In Nigeria, oil revenues are at the heart of ongoing civil unrest and widespread government corruption, despite the transition to civilian government in 1999. And in Angola, oil profits (along with the illicit diamond trade) fueled a 27-year civil war that only ended last year after the death of the insurgents' leader.

''Where oil is the main source of wealth, you're inevitably going to have a polarized society,'' warns Michael Klare, director of the Five College Program in Peace and World Security Studies at Hampshire College and author of ''Resource Wars: The New Landscape of Global Conflict'' (2001). ''It could be along class lines, ethnic lines, or regional lines, but whoever controls the state usually also controls oil income, and it's inevitably corrupting.''

Of course, an oil-rich country is not necessarily destined for doom. Consider, for example, the case of Norway. The world's third-largest exporter of oil, Norway has a steady growth rate, almost no poverty, and negligible unemployment. But then, it was already that way when it struck oil in the North Sea in the 1960s. Norway had a diverse economy based on agriculture, forestry, fishing and manufacturing, among other things, and its oil industry has developed amid much planning, bargaining, and public debate. Norway has created an economy that retained its progressive tax structure, re-invested its oil profits throughout the economy, and saved money to cushion future market shocks.

Unfortunately, Iraq couldn't be more different from Norway. During the 1970s oil boom the government created a vast welfare state and invested heavily in industry, infrastructure, and education, but it also poured billions into its military and security forces. Ever since the Iran-Iraq war of the 1980s, the country's infrastructure has been deteriorating, and studies estimate that it would require $40-$60 billion just to restore Iraq's oil facilities to good working order.

Once the tap is turned back on, how should a democratic Iraq manage its oil? After all, the business operates very differently around the world. In the weakest states, many of which are in Africa and Central Asia, and which lack the resources to conduct their own oil exploration, private multinational oil companies run the show. Their favorable contracts with the government, known as production-sharing agreements, give them ownership of the oil in particular fields and control the rules governing exploration and extraction. They are usually exempt from regulations and domestic taxes, instead paying a fixed fee to the government.

But better-off countries won't cede that kind of control. Many countries in Latin America and the Middle East nationalized their oil industries in the 1970s and have been reluctant to invite the multinationals back in. Venezuela, for example, didn't re-open its industry to foreign investments until the mid-1990s. Mexico allows only limited foreign investment, and the major oil-producing states of the Middle East-Saudi Arabia and Kuwait, for instance-have virtually slammed the door. Unfortunately, academic studies so far have not considered the long-term economic or political effects of these different arrangements. Michael Ross says the World Bank has repeatedly refused to fund his proposed studies on the subject.

Whatever roles the United States and the United Nations play in the reconstruction of Iraq, there's no question that foreign investment will be allowed. Once a new Iraq government takes power, there are some steps it could take to improve the likelihood that oil will help rather than hinder democracy and development.

First, it can make sure all contracts between a new Iraqi authority and private oil companies be made public, including all oil company payments to the government. That would go a long way toward reducing government corruption and encouraging public participation in decisions on how to spend oil revenues. The government could also create an independently monitored oil fund that collects oil profits and invests them in the creation of national infrastructure and broad-based economic development. It could also establish a trust fund, modeled on Norway's, that invests some of its oil income abroad to provide for the country during the inevitable market downturns.

Experts stress that there's nothing inevitable about the ''resource curse.'' Graham Davis, an economics professor at the Colorado School of Mines, who's been debating the theory for years, insists that ''there's no pattern we can rely upon to say a country that has oil therefore will not be democratic or will not develop adequately,'' he says. ''It's a trend. It's not a rule. One has to look at the kind of legal and economic institutions that are set up to serve the country. If they're bad ones-with lack of transparency, lack of judicial oversight-then the oil tends to be put to bad use.''

President Bush is optimistic. ''The nation of Iraq, with its proud heritage, abundant resources, and skilled and educated people, is fully capable of moving toward democracy and living in freedom,'' he said in February. That's certainly what most observers are hoping for. But for a new Iraqi government, it will be no small task. Iraq will need to defy the weight of not only its own history, but that of every other oil-producing nation in the developing world.

Black gold, or resource curse?

Top oil producers, as a percentage of world total Saudi Arabia 11.8 United States 9.9 Russia 9.7 Iran 5.2 Mexico 5.0 Venezuela 4.8 China 4.6 Norway 4.5 Rest of the world 44.5

Source: International Energy Agency, 2001

Oil exports, as a percentage of total merchandise exports Nigeria 99.6 Algeria 97.2 Saudi Arabia 92.1 Iran 88.5 Venezuela 86.1 Norway 63.9 Russia 51.0 Mexico 9.7 United States 1.9

Source: World Bank, 2000

Daphne Eviatar is a Brooklyn-based writer and contributing editor at The American Lawyer

For comments and suggestions, email ideas@globe.com

This story ran on page E1 of the Boston Globe on 4/13/2003.

Potential trouble for United States lurks worldwide

04/13/03 John Hassell The Plain Dealer-Newhouse News Service

International terrorism. Famine and AIDS in Africa. Nuclear brinkmanship in North Korea and Kashmir. Civil war in Colombia. Continuing clashes between Israelis and Palestinians.

Even if the United States was not at war in Iraq, the foreign-policy issues facing the Bush administration would loom as the most forbidding since the end of the Cold War, with potential crises lurking in nearly every corner of the globe. Try Our Classifieds

The likelihood that any one of these situations might explode, now that the attention of policy-makers and the news media is riveted on Baghdad, has only increased, according to retired U.S. diplomats and regional analysts.

"The foreign-policy agenda right now is overflowing, and there is great concern that important issues are not getting the attention they deserve," said Mark Schneider, senior vice president of the International Crisis Group, a think tank with headquarters in Brussels, Belgium. "These are issues that directly affect U.S. interests and security."

Asia

Perhaps the most serious challenge outside the Middle East is the situation in North Korea, where the regime of Kim Jong Il has announced its withdrawal from the international nuclear nonproliferation treaty and restarted a mothballed nuclear processing plant.

A nuclear-armed North Korea would pose several significant dangers, said Leon Sigal, director of the Northeast Asia Cooperative Security Project at the Social Science Research Council in New York.

First, Pyongyang's action could set off a nuclear arms race in the region. Japan, Sigal said, is capable of producing a nuclear weapon within three months, given the large supply of plutonium generated by its domestic power plants. South Korea, which halted a nuclear program in the 1970s at U.S. urging, also could build a weapon in a hurry.

Also, Taiwan could seek to become a nuclear power - a move that almost certainly would provoke China and set the stage for a showdown between Beijing and Washington, Taiwan's close ally, Sigal said.

A nuclear North Korea also raises concerns about weapons of mass destruction falling into the hands of terrorist groups like al-Qaida. Given the North Korean regime's dire financial straits and its implacable hatred of the United States, the sale of nuclear weapons to terrorists is a real threat, U.S. officials have said.

Another Asian hot spot is Indonesia, the world's most populous Muslim nation, where terrorists attacked two nightclubs in Bali last October. The invasion of Iraq, analysts say, has inflamed anti-American sentiment in Indonesia where the U.S.-friendly government of President Megawati Sukarnoputri faces serious problems.

Africa

Problems in Africa do not usually top foreign-policy priority lists in Washington. "If anything," says Princeton Lyman, a former U.S. ambassador to South Africa and Nigeria, "the continent is usually seen as a charity case."

The war on terror has changed that. Not only has the U.S.-led invasion of Iraq angered Muslim populations in northern Africa, but the continent's numerous failed or ailing states also provide fertile ground for terrorist groups.

Dealing with Africa's weaknesses, at least for the foreseeable future, will require grappling with a series of humanitarian disasters.

The most urgent is the famine that threatens the lives of about 30 million people. From southern Africa, where 14.4 million people face imminent starvation, to the African Horn, where another 10 million are at risk, "the need for humanitarian assistance is real and immediate," said Gwendolyn Mikell, a professor of sociology at Georgetown University and an expert on African politics and economics.

Causes of the famine include government mismanagement, climatic change and the devastation wrought by AIDS, which has destroyed the agricultural work force and left tens of millions of people weakened and more susceptible to hunger, Mikell said.

Europe

After several years of relative calm in the Balkans, the assassination of Serbia's reformist Prime Minister Zoran Djindjic on March 12 served notice to the world that the area remains unsettled. Djindjic's murder has been blamed on organized-crime figures loyal to former Serbian strongman Slobodan Milosevic.

The influence of organized-crime bosses in Serbia, coupled with the fact that elements of the military remain outside civilian control, poses a threat to the whole region, said Peter Palmer, a longtime Balkan analyst for the International Crisis Group. "The progress of reforms in Serbia has ramifications for Bosnia, Kosovo, Macedonia, Albania and beyond," he said.

Latin America

Closer to home, Washington faces a diplomatic test in dealing with the new wave of left-wing and center-left movements that have come to power in Venezuela and Brazil and gained strength in Argentina, Peru and Ecuador.

The phenomenon, analysts say, has been driven by economic collapse throughout much of Latin America.

The situation in Venezuela, where the populist president, Hugo Chavez, has presided over a debilitating national strike, is perhaps most worrisome, given that the country produces 15 percent of the oil consumed in the United States.

Venezuela's woes have helped drive fuel prices up as the Iraq war threatens Middle East production.

Anti-Chavez voices fade in Venezuela. A year after coup, opposition looks for new strategy

The Boston Globe By Mike Ceaser, Globe Correspondent, 4/13/2003

CARACAS -- Elisa Beth Aez stood on Caracas's Altamira Plaza, hearing a dissident general call President Hugo Chavez a ''bandit'' and a ''communist.''

Behind her, where thousands had rallied a few months ago, a few dozen protesters yelled and beat pots and pans.

The opposition ''has committed a few errors and weakened a little,'' said Aez, 60, who was selling her book of anti-Chavez poetry. ''But we're going to start hitting strong once again. . . This man has got to go this year.''

A year after military leaders arrested Chavez last April 11, only to have his supporters sweep him back to power three days later, the opposition has lost much of its fervor and power.

Having failed in its extra-constitutional methods, the opposition is now struggling to remake itself to challenge Chavez. A referendum could take place after mid-August.

Yesterday, a bomb ripped through an office building where government and opposition negotiators had negotiated terms for the referendum, police said. No one was was wounded.

Since the coup, the opposition has tried pressuring Chavez to resign, by organizing huge rallies and marches that culminated in December's two-month strike against the oil industry.

The efforts failed, and Chavez, who won landslide elections in 1998 and 2000 on promises of helping the poor majority, consolidated his power and emerged more popular.

After the coup, Chavez removed opposition military officers and used the failed petroleum strike to fire thousands of opponents from the state petroleum company.

The strike also further undermined an economy which shrank eight percent last year and is predicted to contract by about another 15 percent this year.

The opposition ''adopted a short-term strategy and used up their capital without gaining their objective,'' said Peter Hakim, president of Inter-American Dialogue, a group based in Washington. ''The president is now more firmly in power.''

Meanwhile, five months of dialogue facilitated by the Organization of American States secretary general, Csar Gaviria have produced an agreement on nonviolence and another endorsing democracy and the ground rules for the referendum.

Now, Chavez opponents, who accuse him of ruining the economy, weakening democratic checks and balances, and trying to impose communism, are focusing on winning a referendum, which the constitution allows after Aug. 19, the halfway point of Chavez's six-year term. A Chavez loss in the referendum would lead to new presidential elections.

However, some observers predict that Chavez will use legal mechanisms to block any election he is not confident of winning.

''He gives the impression that he won't permit elections,'' said Alfredo Keller, president of the Caracas polling firm Keller and Associates. ''Chavez can employ a series of obstacles.''

Keller says that Chvez, whose popularity is between 30 and 40 percent, would probably lose a referendum, but that he could win the elections to follow unless the fragmented opposition chooses a single candidate. The many potential opposition candidates score in the teens or lower in voter polls. Part of the reason, many say, is that the opposition has offered few ideas apart from hate for Chavez.

''After the strike, the opposition lost its cohesion,'' said Tarik William Saab, a parliamentarian and the leader of Chavez's Fifth Republic Movement party. ''They have no program, no support.''

And while Chavez's mostly poor supporters are a minority, they are passionate and dedicated.

''Chavez represents an opportunity to distribute the wealth more fairly, to create a more just society,'' said Francisco Garcia, 34, a construction worker.

Enrique Salas Romer, who lost to Chavez in the 1998 election and may run again, says the opposition coalition is now focusing on a single theme -- the economy. Unemployment is close to 30 percent, according to unofficial estimates.

''We're now entering a new phase in which the debate will center around human rights -- mostly the right to eat,'' Romer said.

But Romer acknowledges that, in the wake of the oil strike, Venezuelans also blame the opposition for the economic crisis.

With the anniversary's arrival, Venezuela's scene has heated up. Both sides have scheduled rallies and memorials for the dozens killed before and after the coup. Those deaths have never been investigated, and on Tuesday a court cleared of homicide charges four Chavez supporters who had been videotaped firing from a Caracas bridge hours before the coup. On Wednesday, a judge ordered the arrest of two former National Guard officers, alleging that they were planning another coup. for April 10, the next day.

Opposition leaders want to make the anniversary the beginning of a new effort to unseat Chavez.

''The opposition is now restructuring and relaunching its strategy,'' said Cesar Perez Vivas, leader of the Christian Socialist Party. ''All the efforts will now be for the revocatory referendum.''

This story ran on page A4 of the Boston Globe on 4/13/2003.