Taipei Times-BLOOMBERG Thursday, Apr 24, 2003,Page 12

SARS FIASCO: The financial crisis caused by the viral outbreak will be alleviated by loan guarantees to protect jobs and will help small, struggling businesses survive

Hong Kong Chief Executive Tung Chee-hwa plans an HK$11.8 billion (US$1.5 billion) package of spending and tax rebates to bail out companies after a deadly virus slashed consumer spending and tourist arrivals.

The plan, announced by Tung at a press briefing, includes waivers for property, sewage and water charges, plus loan guarantees to protect half a million jobs in the tourism, entertainment, retailing and catering industries. The government will rebate HK$2.3 billion of salaries tax to encourage spending.

Like similar steps taken by Singapore a week ago, the measures aim to help small businesses and companies such as Cathay Pacific Airways Ltd, hotelier Shangri-La Asia Ltd and fast-food chain Cafe de Coral Holdings Ltd. People are staying home to avoid exposure to severe acute respiratory syndrome, or SARS, which has infected 1,458 people and killed 105 in the city in two months.

"It's already too late, the damage is already being done," said John Koh, a fund manager at Daiwa Asset Management Ltd, which runs US$200 million in Asia.

"How many companies are still around to apply for these benefits?" he said.

Tommy Cheung, a Legislative Council member representing the catering industry, said more than 100 restaurants have shut since the outbreak of the disease. The number of tourists visiting Hong Kong plunged by a third between mid-March and mid-April from a year earlier.

The Hang Seng Index fell 52.31, or 0.6 percent, to 8519.60, the lowest since Oct. 9, 1998, at the 4 pm market close. The index dropped 8.6 percent so far this year, the world's fourth worst-performing benchmark index behind those of India, Japan and Venezuela.

Tung has been criticized by opposition lawmakers for responding too slowly to the outbreak. China's leaders, who control the selection process that put Tung into his job, are questioning local politicians behind the scenes about his leadership abilities, the South China Morning Post reported.

Tung said he needed to balance the needs of business with the government's goal of reducing its deficit, forecast to be HK$68 billion in the year that began April 1.

"The measures seek to relieve the short-term impact of atypical pneumonia on our economy," Tung told a press briefing.

"They have also taken into account the medium-term need to make sure our budget is in balance," he said.

SARS has caught Hong Kong as the city was rebounding from its second recession in five years. The government said it will cut its previous 3 percent economic growth forecast for this year.

Hong Kong's budget deficit will be wider and growth will be slower this year because of SARS, Financial Secretary Antony Leung (±Á¿A™Q) told reporters. He said the government still expects to balance its budget in the year ended April 2007.

Some investors said reviving growth should be the government's priority.

"A one-off package is a good idea," said Andrew Salton, who helps manage $2.5 billion at Standard Life Investments Ltd.

"I wouldn't be concerned about the impact on the deficit," he said.

Under the government's plan, commercial rents in public housing estates will be reduced by as much as half for three months. Rates, water and sewage charges will be waived for up to four months for everyone, and license fees for the worst-affected industries will be scrapped for a year. Residents will each receive up to HK$3,000 via salaries tax rebates.

In the hotel and leisure industries, which have been worst-affected by the outbreak of the disease, the city will provide HK$3.5 billion in loans to pay salaries and protect jobs. The government also plans to create 21,500 temporary jobs and waive license fees for the transportation sector for a year.

Anchorage Daily News-Nando Media-AP Online By FABIOLA SANCHEZ, Associated Press

PUERTO ORDAZ, Venezuela (April 23, 5:50 p.m. ADT) - Colombia and Venezuela agreed Wednesday to increase security along their remote border to stop crossings by Colombian guerrillas and paramilitaries.

Colombia has been fighting a 38-year-war against the leftist Revolutionary Armed Forces of Colombia, or FARC, and the smaller National Liberation Army as well as illegal paramilitary militias.

Colombian President Alvaro Uribe and Venezuelan President Hugo Chavez said Colombia's conflict increasingly threatened the stability of the entire Andean region. The two countries share a 1,500-mile border.

"We are going to do everything necessary so that neither rebels nor paramilitaries can cross the border," Uribe said after the leaders' one-day meeting in the southeastern mining town of Puerto Ordaz.

"We value the firm determination that President Chavez has expressed to coordinate (border) efforts," Uribe said.

Both leaders played down allegations that Venezuela harbors leftist Colombian guerrillas and that Venezuelan aircraft bombed rightist paramilitaries inside Colombia.

The two leaders agreed to meet again on July 22 in Medellin, Colombia.

Venezuela had been angered by Colombian accusations that Caracas shelters leftist insurgents.

"We don't understand how Venezuela has allowed itself to become a refuge for Colombian criminals," Colombian Attorney General Luis Camilo Osorio said in remarks published Sunday.

Venezuela, in turn, accused Colombia's military of having links with paramilitaries responsible for human rights crimes.

Chavez's government worries that increased fighting associated with the U.S.-backed Plan Colombia, which targets drug trafficking, is spilling into Venezuela.

Asked about Colombian claims that FARC guerrilla leader Angel Paris is hiding in Caracas, Chavez said his opponents "say everyone has passed through Caracas," including Osama Bin Laden and Saddam Hussein.

<a href=www.voanews.com>VOA News 24 Apr 2003, 01:57 UTC

Venezuelan President Hugo Chavez and Colombian President Alvaro Uribe have agreed to strengthen security to stop cross-border raids by Colombian leftist rebels and rightist paramilitaries.

The two presidents made the pledge Wednesday as they met in Puerto Ordaz, Venezuela to smooth over relations strained by a dispute concerning border security.

The talks followed weeks of tension fueled by accusations that Venezuela harbors Colombian leftist rebels.

Earlier this week, Colombian Attorney-General Luis Camilo Osorio said in published remarks that Venezuela has become a refuge for what he called "Colombian criminals" trying to topple Mr. Uribe's government.

President Chavez denies his government has ever aided Colombian guerrillas or knowingly allowed them to slip into Venezuelan territory.

Colombia also has demanded information about reports that Venezuelan military aircraft bombed a Colombian frontier hamlet in March in support of leftist rebels battling rightist paramilitaries. Venezuela denies those reports.

Officials in both Venezuela and Colombia say the border between the two countries has been the scene of numerous skirmishes between various military and paramilitary groups.

In addition to border security, Presidents Chavez and Uribe discussed bilateral trade and economic cooperation.

<a href=www.voanews.com>VOA News 23 Apr 2003, 23:02 UTC

The Colombian Supreme Court has approved the extradition of a leftist rebel wanted in the United States for the 1999 murders of three American Indian activists.

Authorities say the court ruled Wednesday in the case of Nelson Vargas Rueda, a member of the rebel Revolutionary Armed Forces of Colombia.

Vargas would be the first member of the group known as FARC to be extradited from Colombia to face charges in the United States.

The three Americans, Terence Freitas, Ingrid Washinawatok and Lahee'Enae Gay, were kidnapped in February 1999 as they worked with Indians in northeastern Colombia.

Days later, their bodies were found across the border in Venezuela. Vargas was one of several rebels indicted last year for killing the activists.

The United States considers the FARC and other outlawed Colombian groups as terrorists. In recent years, the United States has given Colombia about $2 billion in mainly military aid for counternarcotics efforts.

Washington has now expanded that effort to counterinsurgency efforts.

<a href=news.ft.com>Financial Times By Carola Hoyos Published: April 24 2003 5:00 | Last Updated: April 24 2003 5:00

Today's meeting of Opec ministers could be the last for the group's most important participant. Ali Naimi, Saudi Arabia's oil minister and the architect of the Organisation of Petroleum Exporting Countries price stabilisation policy, acknowledged yesterday that he might lose his position when the kingdom reshuffles its cabinet early next month.

"Nobody lives for ever," said Mr Naimi. "I'll find out at the same time as everybody else."

Mr Naimi, 67, took up his post in 1995, becoming only the third Saudi oil minister in 41 years. Most recently he helped patch up his country's strained relations with Washington when he quickly increased the kingdom's oil output ahead of the war with Iraq and warded off a rise in prices.

He has shepherded Opec through arguably its most successful period over the past three years, maintaining oil prices in the $20 a barrel range, well above market level, but not so high as to trigger a significant drop in demand because of recession or the growth of alternative suppliers. But the success came after the bitter lesson of 1997, when Mr Naimi pushed for an increase in Saudi Arabia's quota, misjudging world demand and pushing prices to below $10 a barrel.

Any successor would inherit a challenging job, taking over as Saudi Arabia faced the return of Iraq to the global oil market and the eventual task of relinquishing some of its market share to allow Baghdad to increase its exports and rejoin the Opec quota system.

Opec and Saudi Arabia in particular will also have to answer calls from members, such as Nigeria, Algeria and Venezuela, for a larger portion of the pie.

Another challenge will be Saudi Arabia's stalled negotiations over the $25bn gas initiative, which would allow international oil companies led by Royal Dutch/Shell and ExxonMobil a foothold in Iraq's gas industry.

Mr Naimi - whose career from office boy to oil minister has spanned 55 years, during which Saudi Arabia's oil sector has gone from one dominated by the "Seven Sisters" international oil companies to one run by the state without the help of outsiders - has driven a hard bargain since the deal was signed in 2001.

While international oil company executives hope for a more accommodating negotiation partner, Saudi oil ministry officials less health conscious than Mr Naimi are likely to keep their fingers crossed for a boss not prone to taking early morning jogs and one willing to overturn Mr Naimi's no-smoking policy.