José M. Barrionuevo Barclays Capital Director of Emerging Markets Strategy New York, April 3, 2003

Summary: Venezuela's willingness to pay its external debt is tied both to the country's sharp financing constraint and to Mr. Chavez's ability to resolve the political crisis this year. The authorities' willingness to pay has dropped markedly after the sharp drop in reserves in Q1, and they are unlikely to be willing to lose much more in dollar reserves as the year progresses. In this setting, investor participation in a debt exchange should remain limited as long as the political crisis remains unresolved.

With or without elections, Venezuela's ability to pay will be greatly hampered by falling oil prices after a successful resolution of the Iraqi War, suggesting a high chance of debt default in Q4. Given the remarkable inability of the Venezuelan opposition to unify and present a sole candidate, Mr. Chavez does stand a chance to win and stay in office through 2007, assuming the Supreme Court rules that he can run. As long as Mr. Chavez perceives that he can win a presidential election, every effort will likely be made to avoid default. Regardless of the political outcome, the likelihood of default continues to grow in Venezuela (ability to pay). Its timing, however, remains underpinned by the government's ability to solve the political crisis (willingness to pay).

Read complete report..Emerging_Call (application/pdf, 122 KB)

from Barclays Capital Markets-Ve03Apr3

José M. Barrionuevo Barclays Capital Director of Emerging Markets Strategy New York, April 10, 2003

Summary: Venezuela's DCBs implied market default probability is 57%, in our view, compared with the 24% implied by current market spreads. We recommend investors to further reduce exposure to Venezuela and to consider a trade that sells Venezuela DCBs and buys '27s. The key implication of Mr. Chávez's comments regarding the need to restructure external debt this year is that Venezuela's debt default probability is rising rapidly now. Despite a probable further 31% devaluation this year, dollar reserves should decline by a total of USD 3bn in 2003. With dollar reserves falling below USD 12bn this year, default is now a strong possibility in September, when reserves will hit this threshold. Default could happen as early as June if oil prices drop more rapidly. With domestic debt issuance nearing a limit as inflationary pressures from the equivalence of debt and money financing emerge, for the first time external debt default is a serious choice in Venezuela.

Read complete report..Venezuela's_Default_Story (application/pdf, 355 KB)

from Barclays Capital Research-Ve03Apr10

Titulares del Día

Con el decisivo voto de siete países latinoamericanos, la 59na. Comisión de Derechos Humanos de Naciones Unidas aprobó ayer una resolución que mantiene lapresión sobre el régimen de Fidel Castro al solicitarle a Cuba que acepte y coopere con una enviada internacional para investigar lasituación de la isla.

La propuesta fue aprobada en el plenario deGinebra por un reñido margen de 24 votos a favor y 20 en contra, con nueve abstenciones, elevando así a 14 el número de condenas recibidas por el régimen castrista desde que en 1988 el tema de Cuba fue llevado por primera vez ante ese organismo.

Sin embargo, minutos antes de aprobarse el documento, fueron derrotadas sendas enmiendas al proyecto de resolución, presentadas la víspera por Costa Rica y Cuba. La delegación costarricense pretendía endurecer el lenguaje de la propuesta inicial con una moción de último minuto que criticaba la ola de arrestos, condenas sumarias y fusilamientos ocurridos recientemente en la isla.

El texto de la resolución final --definida como moderada por los observadores-- insta a La Habana a que reciba a la jurista francesa Christine Chanet, representante especial del Alto Comisionado de Derechos Humanos, y ``ponga a su disposición todos los medios necesarios para permitirle cumplir totalmente su mandato''.

Por segundo año consecutivo, la iniciativa de sentar a Cuba en el banquillode los violadores de derechos humanos es promovida por Uruguay con el respaldo mayoritario del bloque de países latinoamericano.

De los 53 países miembros de la Comisión, además de Uruguay se alinearon a favor del documento Armenia, Australia, Austria, Bélgica, Camerún, Canadá, Chile, Costa Rica, Croacia, Francia, Alemania, Guatemala, Irlanda, Japón, México, Paraguay, Perú, Polonia, Sudcorea, Sierra Leona, Suecia, Gran Bretaña y Estados Unidos.

En contra se pronunciaron Argelia, Bahrein, Burkina Faso, China, Cuba, República Democrática del Congo, Gabón, India, Libia, Malasia, Pakistán, Rusia, Arabia Saudita, Sudáfrica, Sudán, Siria, Ucrania, Venezuela, Viet Nam y Zimbabwe. Las abstenciones fueron de Argentina, Brasil, Kenya, Senegal, Sri Lanka, Swazilandia, Tailandia, Togo y Uganda.

La noticia fue saludada por Washington como ''una señal correcta'' de la Comisión a los cubanos que dentro de la isla ``luchan diariamente para ejercer sus libertades civiles y políticas básicas''.

La Casa Blanca aprovechó también para sugerir a Naciones Unidas que impida el próximo año la participación de Cuba como miembro de la Comisión de Derechos Humanos, considerando que se trata de un país quesocava ''de manera consistente y a propósito'' el espíritu de esa entidad.

''Es una victoria indiscutible, especialmente porque América Latina retomóel protagonismo de las críticas al régimen, con el liderazgo de México'', comentó ayer el activista Ricardo Bofill, miembro del Comité Cubano Pro Derechos Humanos y veterano participante en el foro de Ginebra.

En Miami, la Fundación Nacional Cubano Americana (FNCA) destacó el hecho como ``una victoria del movimiento opositor dentro de Cuba''.

'Esos votos representan la voz de hombres que como Raúl Rivero, Martha Beatriz Roque y Víctor Rolando Arroyo, se elevan por encima de la represión de una dictadura que no puede acallar las ansias de libertad del pueblo cubano', dijo Jorge Mas Santos, presidente de la junta directiva de la FNCA.

El Consejo por la Libertad de Cuba, que en las últimas semanas gestionó activamente el respaldo latinoamericano a la resolución, envió ayer cartas de agradecimiento a los presidentes de los países que respaldaron el documento.

Como sucedió en ocasiones anteriores ante el revés de su delegación en Ginebra, Cuba se apresuró a valorar la votación como ''una victoria moral'' y señaló que Estados Unidos logró ``imponer su ejercicio anticubano a través de un aguado y cínico documento presentado por sus lacayos de Uruguay, Costa Rica y Perú, y secundado por la Europa de la OTAN''.

''Quedó también en evidencia la hipocresía y doble moral de países como México y Chile, incapaces de contradecir al imperio'', añadió una nota oficial que pasó por alto la referencia a la aceptación o no del viaje de Chanet a la isla.

Con anterioridad, el gobierno cubano dijo que no permitirá la entrada de la relatora, y reiteró que no aceptará ''ni chantajes ni presiones'' de ningún tipo.

Ayer, el canciller peruano Allan Wagner rechazó los calificativos emitidos por Cuba y pidió de inmediato explicaciones a La Habana.

''Esto está revelando una incapacidad de algunos funcionarios y posiblemente del propio gobierno cubano para reconocer una realidad: que los derechos humanos son universales'', aseveró Wagner.

No obstante, la derrota de la enmienda de Costa Rica por votación de 31-15 y siete abstenciones, fue interpretada como un gesto de cobardía de la Comisión por los congresistas cubanoamericanos Ileana Ros-Lehtinen, Mario y Lincoln Díaz-Balart, republicanos por la Florida.

''Cada voto en contra de esa enmienda ha constituido un acto de infamia'', indicó un texto conjunto de los tres legisladores. ``En gran medida, la derrota de esa enmienda demuestra una profunda falta de interés de seriedad y de rigor por parte del Departamento de Estado y sus burócratas''.

También el líder de la minoría demócrata de la Cámara, el cubanoamericano Bob Menéndez (Nueva Jersey), consideró débil el texto aprobado en Ginebra.

''Esta es la más débil resolución sobre derechos humanos que recuerdo enmis 29 años de servicio público'', dijo Menéndez, quien señaló que la credibilidad de la Comisión como organismo protector de los derechos ciudadanos está en ``serio cuestionamiento''.

''Hay una absoluta desconexión entre el lenguaje de la resolución aprobada hoy [ayer] y la nueva ola de represión desatada contra el pueblo cubano'', enfatizó el congresista.

SierraTimes.com By Emiliano Antunez

As the Images of a few joyous Iraqis celebrating their "liberation" aired on television, some sobering news was being delivered back home. The Federal Bureau of Prisons reported that over two million Americans are currently incarcerated. America thought of as the home of the "free," actually has one of the highest per-capita incarceration rates in the world.

The War on Drugs is the biggest culprit; it's the biggest contributor to our burgeoning prison population. Lighting a blunt or doing a line in the confine of one's home is harmless to everyone, except the person indulging. That's of course until you make marijuana and cocaine illegal, naturally attracting the attention of violent criminals all across the globe looking to make the big score. Of course these violent criminals must be stopped. An alphabet soup of bureaucracies and laws must be produced to put a stop to this newly created criminal class. Jails must be built to house the offenders and make the streets "safe". This plan of action would make the Taliban green with envy.

Laws based on religious and moral values, also make jailbirds of folks whose crimes consist of putting their private parts in the wrong place. Paying for your sexual pleasures can also land you a stint in the poky. Who would have thought that at the dawn of the 21st century someone would go to jail for having a same sex partner? It happened recently in Texas where police on a faulty tip broke into the wrong apartment, but still managed to collar two homosexuals getting it on. Saddam would admire such action, and Uday might have even joined in the festivities.

Perhaps you don't indulge in drugs the government classifies as illegal? You are not in the habit of paying for your sex, nor accustomed to sexual relationships the Lord does not approve of? Well, maybe the IRS wants to review your W2,1099 or 1040? Not that they suspect you of cheating on your taxes. We all know how happy you are to hand over more than 40% of your income to the niggardly and efficient U.S. Government. If you have a "not for profit" organization that is not in lockstep with the administration in power's views, you will more than likely be blessed with an audit. If by chance you are not satisfied with the way the government spends your money, you can always enjoy the life of leisure in a federal penitentiary. Fidel Castro dreams of the day when he can make Cubans produce for him the way Americans do for "Uncle Sam."

Maybe you pay your "fair share" of taxes? You don't have a not for profit, and stay out of politics. By chance, do you own your own business? In that case, do you know who your customers really are? The Department of Homeland Security thinks you should. Do you make large cash deposits? The IRS wants to know. Do all your employees have a Social Security card and or a green card? The INS wants to see them. Maybe you're into importing and exporting? U.S. Customs wants to know exactly what and how much. Marx could only fantasize about such a level of economic control.

You say you own some land or rental property. Do you know what's on every inch of your property? Do you know what all your tenants are up to 24/7? The DEA and the FBI think you should. If they suspect you are not a good property owner, they are more than willing and able to take it off your hands, and auction it to a more responsible individual. There are credible reports that Venezuela's aspiring dictator, Hugo Chavez is studying "Zero Tolerance" policies to model his own private property confiscation laws after.

Do you have children? Are you raising them "correctly"? Your states Department of Children and Family services would like to know. Are they getting an "adequate" education? The Department of Education and your local school board are truly interested. Are they reciting their Pledge of allegiance every morning? Hitler could only dream of exercising such subtle mind control over his youth.

Some Iraqi's may really believe they have been "liberated," in time many will be faced with the ugly truth. Perhaps like most people in the United States they won't notice or care. Iraqi's may soon be to busy finding out who's winning in "Arabian Idol," or the latest edition of that other reality show "Choose Your Harem." Maybe the latest Nintendo version of "Saddam Palace Raid" or "B2s Over Baghdad" will be all the rage. If history is any indication, Iraqi "liberation" will be very short lived, if it ever even existed.

Visit the author's home page.

<a href=reuters.com>Reuters, Tue April 15, 2003 01:20 AM ET SINGAPORE (Reuters) - Oil prices ticked lower on Tuesday but kept a narrow trading range as traders weighed the possibility of a reduction in OPEC supplies with abnormally low fuel stocks in many consuming countries.

U.S. light crude fell 14 cents to $28.49 a barrel, while London's Brent crude lost 15 cents to $24.70 a barrel.

Traders are waiting to see whether the OPEC producers' cartel will curb crude flows to the world market at an emergency meeting proposed for either late April or early May.

The Organisation of the Petroleum Exporting Countries fears that prices, which sank 10 percent after the start of the war in Iraq, could tumble to $20 or below during the remainder of the second quarter when oil demand usually drops off by about two million barrels per day (bpd).

OPEC has ramped up output by almost two million bpd over its official production ceiling to cover supply disruptions in Venezuela, Nigeria and Iraq.

It now fears that with Venezuelan and Nigerian production making a recovery, supply will sharply outpace demand, leading to big builds in stock levels and downward pressure on prices.

The winding down of the war in Iraq with its oil infrastructure largely undamaged also has raised speculation that crude exports from the Gulf producer could resume in a few months although administrative and legal issues may delay physical barrels from hitting the market.

Iraq exported about 1.7 million bpd of its daily output of roughly 2.5 million barrels before the war to oust Saddam Hussein.

OPEC officials have said the group might agree to tighten compliance to current production quotas, or cut the group production limit of 24.5 million bpd.

"While the market continues to prevaricate over the direction of the next move, we move closer to likely OPEC action, which reduces the risk of a sharp downside move," said Sydney-based oil analyst Simon Games-Thomas, who pegged $30 a barrel as "fair value" for crude at the moment given low Western oil stocks.

"The current discount reflects relief that Iraq's oil infrastructure is generally intact and concerns that there will be an early return to export status, which will threaten the status quo and cause a sell-off in oil prices."

WATCHDOG WARNING

The International Energy Agency (IEA), which acts as a watchdog for 26 industrialized nations on energy issues, warned producers last week that any cut to supplies would be imprudent for the time being despite a backlog of OPEC oil on the water waiting to hit consumer shores.

Crude inventories in the United States, the world's biggest oil user, have been running this year at a big deficit to 2002 levels and close to 270 million barrels, which the government considers the minimum needed to keep the nation's refineries operating smoothly.

Stocks of gasoline are also lower than at the same time in 2002, and some analysts fear that if refiners do not start to replenish tanks soon, there could be a supply crunch when motor fuel is in peak demand in the summer.

The government's Energy Information Administration (EIA) will release its weekly report on the health of U.S. fuel stocks on Wednesday. Traders closely monitor the EIA data for a snapshot of overall demand for oil.

Six analysts polled by Reuters predicted crude stocks to grow by 2.5 million barrels in the week to April 11, with gasoline inventories rising 1.55 million barrels.