April 20, 2003 | Issue #29  By Alex Contreras Baspineiro Reporting from Caracas with the Narco News Team April 16, 2002

“We should keep calling for the freedom and construction of one great nation in Latin America.”

• Evo Morales, Bolivian Congressman and Coca-Farming Leader

The indigenous and campesino leaders of the American continent, participating in the first World Gathering in Solidarity with the Bolivarian Revolution, have suggested the construction of a huge, single Latin American nation as an alternative to the unilateral power of the US in the region.

“We should keep calling for the freedom and construction of one great nation in Latin America,” said Bolivian congressman and coca farmers’ leader Evo Morales. “That is the only option we poor people have against this savage and murderous imperialism.” Events such as those going on today in Caracas, he said, should happen regularly in countries that dare to face these problems. In this way, the social and political movements of the continent can unite, and Latin America will no longer be simply “the trash heap of North American imperialism.”

“I don’t see another way, because today we see the arrogance of the Bush family in their invasion and politics of genocide in Iraq. Today we can see an inhuman, savage capitalism that wants to dominate the entire world,” he said.

Evo remembers that seven years ago, he told a journalist that the continent could produce many Cubas. “This worn-out leader, he doesn’t know what he’s saying,” the press responded. With his head held high, Evo said that now two revolutionary governments actually exist in this land called América: Cuba and Venezuela. Brazil and other countries, he continued, are now walking down the same path.

Rafael Alegría, leader of the Via Campesino de Honduras (Route of the Honduran Farmers), said that “if neoliberalism is to be a global system, then the struggles of the Latin American people should be globalized as well.”

A People on the March

Jaime Amorín, leader of the Brazilian Landless Workers Movement (MST in its Portuguese acronym) said, “we Latin Americans are a people on the march.” That march, he said, is towards a new model for Latin America, free of the imposition of genetically engineered food, free of the proposed Free Trade Area of the Americas (FTAA; a plan US President Bush is pushing to envelop the hemisphere in a single, US-led neoliberal market), and free of meddling non-governmental organizations (NGOs).

“We know what we want,” said the leader of the landless, “and we know where we want to go. And that’s one great Latin American Nation, free from the Yankees and free from the FTAA.”

These three agrarian leaders were the presenters at a workshop titled “Sovereignty and Food Security” in Caracas’s Teresa Carreño theatre. At this gathering, true democracy is being defended and, also, fomented in our América.

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April 16, 2003, 9:19PM HoustonChronicle.com-Reuters News Service

NEW YORK - Oil prices fell today after the U.S. military said Iraq's oilfields could be pumping at two-thirds of pre-war levels within weeks.

Crude oil for May delivery fell 11 cents, or 0.4 percent, to $29.18 a barrel on the New York Mercantile Exchange. Prices still were up 11 percent from an intraday low of $26.30 reached on March 21, the second day of the Iraqi invasion. In London, the June Brent crude-oil futures contract fell 14 cents, or 0.6 percent, to $25.02 a barrel on the International Petroleum Exchange.

Oil prices have slumped by 30 percent in a month, as Middle East oil flows have suffered less disruption than feared from the war in Iraq and U.S. ally Saudi Arabia has pumped up exports to cover for lost Iraqi supply.

Colonel Michael Morrow, adviser to U.S. forces chief General Tommy Franks at Central Command in Qatar, told Reuters that Iraq's oilfields would be in a position to pump 1.6 million barrels per day (bpd) within eight weeks.

"Our job is to fix it, get it pumping and let the new Iraqi government decide how to handle the exports," Morrow said.

The resumption of exports could be delayed by uncertainty over who will have the legal authority to issue contracts under the United Nations oil-for-food program, which has overseen Iraq's crude exports since 1996.

"That will take a political decision," Morrow said. "And that's way above my pay grade."

Before the war, Iraq was producing 2.5 million bpd -- 1.7 million bpd from its southern fields and 800,000 bpd from the north.

Iraq's northern Kirkuk oilfield was virtually untouched in the war, while the southern fields suffered some sabotage. The U.S. military said on Tuesday that the last blazing oil well had been snuffed out.

A fall in oil prices was kept in check by expectations that the Organization of the Petroleum Exporting Countries, which controls more than half the world's crude exports, would cut output at a meeting scheduled for April 24.

OPEC producers who were able to do so, chiefly Saudi Arabia, have raised their output to compensate for recent outages from Iraq, Nigeria and Venezuela.

The cartel is now pumping about 2 million bpd above its agreed ceiling of 24.5 million bpd.

OPEC now fears further price falls in the second quarter, as demand tails off at the end of winter in the northern hemisphere and the war in Iraq winds down with the country's oil infrastructure largely intact.

"I believe there is a glut in the market," said OPEC President Abdullah al-Attiyah. "The surplus is two-plus million barrels per day."

The International Energy Agency Wednesday urged OPEC to be cautious in reducing oil supply to the West, saying prices were still too high for companies to rebuild low stocks.

"I just think OPEC should be very cautious before taking strong decisions on output," said IEA chief Claude Mandil, adding that he did not expect Iraqi oil exports to resume within the next few weeks.

"Our view is there is no tidal wave of crude threatening to drown the market," Mandil said.

U.S. crude and refined product stocks last week held at lower-than-normal levels in the run-up to summer vacation driving demand, a government report said today.

U.S. crude oil stocks rose just 100,000 barrels to 277.2 million during the week ended April 11. Energy market analysts polled by Reuters had forecast a build of 2.5 million barrels.

Crude stocks are still just 3 percent above 26-year lows hit earlier this year. Gasoline stocks fell 300,000 barrels to 201.9 million and are 6 percent below last year's level ahead of summer.

<a href=www.latintrade.com<LatinTrade.com By James Wilson • Bogota, April, 2003

Selling wireless phones the way some sell toilet paper is the challenge that Mauricio Mesa, boss of Colombia’s recently conceived third cellular operator, has set for himself.

Colombia has lagged other large Latin American countries in bringing cellular services to its 44 million people. Only 10% of the population uses a cellular phone—far behind neighbors such as Venezuela, where 27% carry a cellular phone.

But Colombia Móvil, the new company that will challenge U.S. baby bell BellSouth and Mexico’s América Móvil for a piece of the domestic market, hopes Mesa’s track record shows he can drive up cellular use dramatically with innovative marketing for the masses.

Mesa was until January president of Familia-Sancela, whose paper and sanitary products, including toilet paper, are market leaders in Colombia. The company under Mesa doubled exports since 1996. Understanding how to move basic consumer goods appealed to Colombia Móvil’s shareholders, Mesa says. “This is a mass consumer product. We use cellphones like we use toilet paper. And at the end of the day we are going to sell in the same channels,” he says. He hints that his company’s phones could soon appear on supermarket shelves.

The planned start-up of Colombia Móvil services by year end will be the biggest shake-up in cellular telecom here since regional operating licenses were first issued in 1994. Services have become concentrated in the hands of Comcel, a division of Mexico’s América Móvil, and BellSouth, creating a national duopoly.

Colombia so far has missed the wireless boom. The government belatedly offered a PCS license for auction last year, and financially pressed international operators stayed away in droves. Existing cellular license holders BellSouth and Comcel were not allowed to bid, so Colombia Móvil saw its chance. The company is owned 50-50 by two municipally owned utilities: Empresa de Telecomunicaciones de Bogota (ETB), Bogota’s phone company, and Empresas Públicas de Medellin (EPM), Medellin’s utility provider. In January Colombia Móvil secured nationwide licenses for US$56 million, a fraction of the many millions previous operators paid under a complex national auction.

The companies hope the venture will be a money spinner for the two city halls. Paulo Orozco, ETB’s president, predicts Colombia Móvil will have at least as many clients as ETB now does—2 million—within a decade. “That is very conservative. Our aim is much more ambitious,” Orozco says.

So how does Colombia Móvil intend to compete with BellSouth and América Móvil, two of the biggest names in Latin American cellphones? América Móvil’s Comcel, particularly, has been plugging keenly priced offers furiously and lifted subscriber numbers by almost 50% in 2002; it now claims two-thirds of the 4.6 million current cellular users.

The newcomer’s exact business strategy is under wraps. But Colombia Móvil will try to capitalize on its local knowledge, and on databases of phone and utility customers owned by its public-sector parents. “Obviously, as far as possible, we are going to use all the possible synergies with ETB and EPM’s sales systems,” Mesa says. That could mean offering consumers fixed-line, long distance and mobile services in a package, a fashionable offering—not yet highly successful—in many global phone markets.

But Colombia Móvil lacks direct wireless experience. “Our own know-how will help at the beginning, but we have to develop a commercial strategy that is much more aggressive than we have had so far,” says León Darío Osorio, telecom manager for the Medellin utility company. Executives promise innovative tariff schemes and contract plans for all market sectors, with both pre-paid and post-paid services. Customers can also expect call billing for seconds of use, rather than rounding-up to the nearest minute as competitors do, the company has suggested.

Attack plan. A big hint as to strategy to come: Colombia Móvil chose Global System for Mobile Communication (GSM) technology rather than a rival system, called Code Division Multiple Access (CDMA). Mesa says GSM offers more flexibility to attack different market segments because of the greater and cheaper handset range. Carlos Rodríguez, a senior analyst at Pyramid Research in Cambridge, Massachusetts, says GSM is better to reach the mass market.

There is already friction between the newcomers and incumbents. BellSouth and Comcel have complained to the government that fixed-line company EPM’s technology in some areas has allowed customers to use home phones on the move as if they were cellular handsets. The dispute remains unresolved. América Móvil recently completed purchase of a 95% stake in Colombian wireless company Celcaribe for $9.6 million from Luxembourg telecom investor Millicom International Cellular.

Despite consolidation and what will clearly be a scramble to lock down new subscribers, analysts expect that there is space for everyone. Colombia is going to be one of the fastest-growing markets, because it has a long way to go, notes Rodríguez at Pyramid. Ever the salesman, Mesa remains upbeat: “Increased penetration will make the job much easier for everyone,” he says. “It is much easier to acquire new clients than to steal clients from other people.”

04/16/2003 - <a href=www.latintrade.com>LatinTrade.com-Source: BNamericas

Venezuelan cable TV and broadband Internet services provider Intercable will concentrate on maintaining its client base this year and does not expect to invest in expansion, a company spokesperson told BNamericas. Intercable expanded to capital Caracas late last year and closed 2002 with a nationwide client base of 350,000 TV subscribers, as well as almost 20,000 pure Internet users. But plans to launch telephony service, starting in Caracas, are on hold, corporate image manager Juan Carlos Gomez said.

As a result of the two-month general strike started last December users have tended to drop the premium services Intercable offers, rather than abandoning the company altogether, he said. Corporate services have also been hit hard because of the number of enterprises forced to close down after the strike. The company now aims to ensure client loyalty by offering budget plans with lower speed access, and by formulating promotions targeted at specific user groups. Intercable, a subsidiary of US-based investment group Hicks, Muse, Tate & Furst, offers cable TV in 70 cities, and Internet access in its home town Barquisimeto, as well as Maracaibo, Valencia, La Guaira, Guarenas, Maracay and Merida.

<a href=reuters.com>Reuters Wed April 16, 2003 12:00 PM ET (The following statement was released by the rating agency)

NEW YORK, April 16 - Standard & Poor's Ratings Services said today that it revised its outlook on its long-term rating on the Bolivarian Republic of Venezuela to stable from negative. Standard & Poor's also affirmed its 'CCC+' long-term and 'C' short-term foreign currency sovereign credit ratings on the republic. (Standard & Poor's does not rate Venezuela's bolivar-denominated debt.)

"The stable outlook balances improving liquidity stemming from recovering oil production against continuing, albeit diminished, economic pressures and political turmoil," said sovereign analyst Richard Francis. "Oil-based revenue, which normally accounts for nearly 50% of total government revenue, fell by an estimated 50% in the first few months of this year during the strike, but are expected to rebound to 40% of total revenue for 2003 as a whole," he added.

According to Mr. Francis, international reserves are also rising as sustained production surpasses 2.5 million barrels of oil per day. Reserves reached US$15.5 billion on April 14, 2003, up from US$14.1 billion a month earlier (and US$15.8 billion in early December 2002, before the strike began). "However, the level of international reserves could come under renewed pressure going forward, as Petroleos de Venezuela S.A. (PDVSA) uses the Macroeconomic Stabilization Fund (FIEM) to finance crucial investment, as capital controls are eased, and as debt payments ramp up, especially in June," Mr. Frances noted. "The central government's external debt service is modest in April and May, but rises to nearly 50% of average monthly current account receipts in June," he said.

Standard & Poor's said that, despite the pick-up in oil production, near-term challenges include political paralysis and weakened institutions, continued contraction in the nonoil sector, rising inflation, and higher unemployment. Failure to reach a political solution to the conflict over President Hugo Chavez's tenure and social unrest continue to constrain investment and economic growth. The economy is likely to contract by nearly 15% in 2003 (because of the sharp decline in the early months), on top of the 9% contraction in 2002.

"The strength of the emerging recovery, at present only in the oil sector, depends to a large extent on political factors," said Mr. Francis." A sharp fall in oil production or oil prices, heightened social unrest, or financial sector difficulties could put renewed pressures on the ratings. On the other hand, diminished political tensions, along with sustained oil output, could lead to improvements in creditworthiness," he concluded. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.