The national Review Online May 2, 2003, 1200 p.m. By Rachel Ehrenfeld

hen Secretary of State Colin Powell arrives in Syria on Saturday, he will no doubt raise the issue of Hezbollah with Syrian president Bashar al-Assad. The Syrians claim that they have no control over Hezbollah. Besides, Damascus will argue, Hezbollah's terrorist activities are aimed only against Israel, and therefore are justifiable. But Secretary Powell should recall the recent statement of Hezbollah secretary-general Hassan Nasrallah, made in the run-up to the U.S.-led war in Iraq: "In the past, when the Marines were in Beirut, we screamed 'Death to America!' Today, when the region is being filled with hundreds of thousands of American soldiers, 'Death to America!' was, is, and will stay our slogan."

 Syria's support for the Lebanon-based Hezbollah has made it a virtual terrorist powerhouse. Syria not only shelters Hezbollah and transfers Iranian weapons, including thousands of short-range artillery rockets and ballistic missiles, to the group. It also provides them with arms from its own stockpiles and millions of dollars worth of assistance in the form of training facilities and logistical and technological support. This help has, to a large degree, made the Shiite militia's war on Israel possible. In return, Hezbollah officials understandably lavish Damascus with praise. In an interview on Syrian TV in June 2002, Hassan Nasrallah praised Syria for remaining a "safe haven for jihad . . . the geographical and political refuge adopting the resistance movements in the region." 

And Syria's support is just the tip of the iceberg. Deputy Secretary of State Richard Armitage was right to label Hezbollah as the "A-team" of today's terrorists. By conservative estimates, Hezbollah's international network includes at least 15,000 operatives in cells in the U.S., Canada, Argentina, Paraguay, Brazil, Belgium, Britain, France, Germany, Spain, Switzerland, Indonesia, Malaysia, and throughout Africa.

Hezbollah's presence in the lawless tri-border region of South America, where Argentina, Brazil, and Paraguay intersect, is of particular concern. In the mid-1980s, Hezbollah clerics and members of other Islamist organizations began proselytizing, planting operatives from the Middle East, and recruiting new members from among the tri-border region's residents. The jungles in the region were soon filled with terrorist training camps, which continue to turn out well-trained operatives to this day. In addition, Brazilian, Colombian, and Argentinean intelligence sources report that special weekend camps, run by Hezbollah, train children and teenagers in the use of weapons and combat techniques, as well as indoctrinate them with Ayatollah Khomeini's anti-American and anti-Jewish ideologies.

Hezbollah is heavily involved in the illegal drug trade in the tri-border region, as well as in money laundering, drugs-for-arms deals, and straightforward drug trafficking. Hezbollah operatives have developed strong relationships with major narco-terrorist and drug-trafficking organizations from Colombia, Peru, Bolivia, and Venezuela, including the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN) in Colombia, and the Sendero Luminoso (Shining Path) in Peru.

Brazilian authorities have estimated in recent years that criminals in the tri-border region have been laundering approximately $6 billion annually. According to Paraguayan interior minister Julio César Fanego, from 1999 to 2001 Hezbollah received anywhere from $50 to $500 million from this region alone. And Brazilian security agencies estimate that at least $261 million was sent from Islamist organizations operating in the tri-border region to the Middle East. Most of it went to Hezbollah just in the year 2000.

Secretary Powell's visit to Damascus provides the White House with the unique opportunity to press Syria to stop its involvement with and sponsorship of all terror organizations, particularly Hezbollah — possibly the single-largest threat to the U.S. after al Qaeda. If Powell is successful, we will be one step closer to victory in the war on terrorism.

— Rachel Ehrenfeld is director of the Manhattan-based American Center for Democracy. Her new book Funding Evil: How Terrorism Is Financed and How to Stop It, is due out this summer.

<a href=www.sfgate.com>SFGate.com Friday, May 2, 2003
(05-0) 16:39 PDT MEXICO CITY (AP) --

Mexican stocks closed higher in active trade Friday despite a semi-holiday trading atmosphere.

The market's key IPC index closed up 81.04 points or 1.2 percent to 6,590.92. Volume totaled 83.8 million shares traded worth 1.01 billion pesos (10.20 per dollar).

Heavy trading in broadcaster TV Azteca accounted for more than 30 percent of the volume on a day when many traders were absent between a Thursday holiday and the weekend.

TV Azteca CPOs rose 1.9 percent to 3.73 pesos with 27.4 million shares traded, apparently due to plans for a US$140 million this year.

Wireless communications company America Movil's L shares gained 3.6 percent to 6.39, phone operator Telmex's L shares rose 3.1 percent to 16.08 and retailer Comercial Mexicana's UBC shares advanced 2.2 percent to 6.39.

Losing ground were shares in retailer Elektra, which dipped 0.8 percent to 27.65.

SAO PAULO, Brazil (AP) -- Brazil's stock prices rose Friday as the country's C-bond hit levels unseen since the mid-1990s and the trade surplus for April came in at its widest point ever.

The main Sao Paulo index finished 2.0 percent ahead at 12,810 points compared with 12,556 points at Wednesday's close. The market was closed Thursday.

A lower outlook for inflation encouraged most investors. Brazil's benchmark C-bond, its most liquid foreign debt instrument, rose to 89 percent of face value and debt spreads measured by the J.P. Morgan EBMI+ index fell Friday.

The real, however, fell about 1.7 percent after a week of big gains.

Bellwether Telemar rose 4.3 percent to 32.55 reals (2.96 per dollar) after first-quarter results showed fast growth in its wireless unit but a wider-than-expected loss.

Eletropaulo's shares lost 4.1 percent after news the AES unit again failed to resolve debt talks with the national development bank.

BUENOS AIRES, Argentina (AP) -- Despite plummeting 8.6 percent Monday, the large-cap Merval Index rose Friday to end almost flat from its close of a week ago.

The Merval climbed 3.5 percent, or 22.30 points, closing at 658.25 points Friday. The broader General Index was up by 2.5 percent, or 738.32 points, at 30,121.98 points.

Banco Frances was up 2.9 percent at 5.35 pesos (2.795 per dollar). Grupo Financiero Galicia was up 4.0 percent at 87.6 centavos.

Steel firm Acindar was up 5.3 percent to 1.80. Carmaker Renault soared 6.0 percent to 1.59.

SANTIAGO, Chile (AP) -- Blue-chip share prices on the Santiago Stock Exchange closed sharply higher again Friday after positive earnings reports.

Chile's blue-chip Ipsa index rose 1.8 percent to 1,184.35 points from 1,164.12 Wednesday. The narrower Inter-10 index of more liquid internationally traded Chilean shares rose 2 percent to 115.86 from 113.59.

Volume dropped to 20.00 billion pesos (698.30 per dollar).

Airline LanChile jumped 12 percent to 1,120.00 pesos after rising 13.4 percent Wednesday. Retailer D&S rose 6.0 percent to 530.01.

CARACAS, Venezuela (AP) -- Venezuelan shares ended mostly unchanged Friday in thin trade with investors out of town for a long weekend.

The IBC General Stock Index closed at 8,594 points, down 37 points, or about 0.43 percent, in an equivalent of about US$60,000 in total trades.

The market's biggest stock, CA Nacional Telefonos de Venezuela gained 15 bolivars (1,598 per dollar) to close at 2,420.

<a href=news.independent.co.uk>news.independent.co.uk By Liz Vaughan-Adams 03 May 2003

The oil giant Royal Dutch/Shell yesterday joined its industry rivals in posting a record set of profits for the first quarter of the year after the war in Iraq sent crude prices soaring.

The Anglo-Dutch group unveiled an adjusted profit of $3.9bn (£2.4bn) for the first three months – a 96 per cent increase from the $1.9bn recorded in the same period a year before.

Crude oil prices soared in the first quarter with Brent prices averaging $31.50 a barrel, up from $21.15, although the group also benefited from strong US natural gas prices.

"It's a strong performance in an exceptional quarter," a spokesman said, noting the companyalso benefited from increased oil prices due to strikes in Venezuela and unrest in Nigeria.

Royal Dutch/Shell's profit figure, which excluded a $1.3bn gain from selling its 14.75 per cent stake in Germany's Ruhrgas to the utility E.ON, was far ahead of the $3.7bn consensus forecast.

The company is the latest in a line of oil giants to have reported bumper profits on the back of the sharp rise in oil prices. Earlier this week, BP unveiled a $3.7bn profit in the first quarter, or $41m a day, more than double the $1.6bn made for the same period last year while Exxon Mobil's profits more than tripled from a year before.

The US oil group ChevronTexaco also reported bumper first-quarter figures yesterday with record net income of $1.9bn – more than double that achieved the year before.

Royal Dutch/Shell, which last year bought Enterprise Oil, said it produced 4.2 million barrels of oil equivalent a day – a 6 per cent rise from last year.

Shares in the group closed up 3.3 per cent at 384.5p with analysts pointing to a weaker second quarter since oil prices have since fallen. Crude fell to below $25 a barrel this week.

Sir Philip Watts, Shell's chairman, described the performance as "strong and highly competitive". "These results demonstrate the ability of Shell's uniquely well-balanced portfolio to produce impressive earnings and strong cash generation. We have a clear strategic direction for what we believe is the best portfolio in the sector and we continue to deliver value for our shareholders," he said.

The company remained tight-lipped, however, on the timing of the possible restart of its share buyback programme. It has previously indicated that a share buyback programme was unlikely in the first half of the year.

Friday, May 2, 2003 By ALEXANDRA OLSON <a href=www.napanews.com>Associated Press Writer

HAVANA -- Fidel Castro accused the United States of wanting to attack Cuba, speaking at a May Day celebration on Thursday that aimed to defend the island's socialist system against criticism from abroad.

"In Miami and Washington they are now discussing where, how and when Cuba will be attacked," the Cuban president told a crowd of hundreds of thousands gathered for the celebration in Havana's Plaza of the Revolution.

"I want to convey a message to the world and the American people: We do not want the blood of Cubans and Americans to be shed in a war," he said.

The crowd responded with cries of "Whatever it takes, Fidel!" while waving handheld Cuban flags. One group hoisted an effigy of President Bush that read, "Bush: Don't mess with Cuba."

Castro spoke for less than two hours -- brief for the 76-year-old president. He said U.S. officials "provoke and encourage" attacks like the recent hijackings of Cuban planes and boats.

There was no immediate response from the U.S. State Department. Defense Secretary Donald H. Rumsfeld said recently that "there are no plans for military action against Cuba."

May Day events were also held elsewhere in the world and some turned violent:

• In Germany, youths set cars alight and pelted police with stones, bottles and fireworks Thursday in a Berlin neighborhood famed for its May Day clashes after some 5,000 protesters staged a peaceful march in support of a variety of leftist causes. Police used tear gas and water cannons to disperse troublemakers.

• In Venezuela, gunshots rang out at a rally against the government of President Hugo Chavez in Caracas, leaving one dead and one wounded, officials said. Police fired tear gas and rubber bullets to disperse demonstrators angered by the shooting. The Opposition is seeking a referendum on Chavez's rule, accusing the leader of attempting to amass too much power.

• In Moscow, diverse Russian political forces marched in competing rallies. About 15,000 people gathered at the Communist Party's march, calling for the government's resignation. During the Cold War, tens of thousands of Russians flooded Red Square on May 1 in rallies meant to demonstrate loyalty to the communist state and solidarity with workers abroad.

• In Asia, thousands of people in Indonesia, South Korea and the Philippines celebrated May Day by protesting for higher wages, shorter work weeks and political change.

The gathering in Cuba came two weeks after the firing-squad executions of three men convicted of terrorism for trying to hijack a Cuban ferry full of passengers to the United States. No one was hurt in the hijacking -- one of at least four over a few weeks.

The Bush administration -- along with other governments and international human rights groups -- condemned the quick trial and execution of the men.

Castro said the executions were necessary to halt the hijackings and stem a growing migration crisis.

But he said he respected the opinions of Pope John Paul II and some of his longtime supporters, including the New York Rev. Lucius Walker Jr., who have asked him to abolish the death penalty. The Cuban leader said he would consider their arguments.

"Cuba, you are a world leader in human rights and respect for human life," Walker told the crowd earlier in the morning. "The death penalty demeans that."

Walker, pastor of Salvation Baptist Church in Brooklyn, and executive director of New York-based Pastors for Peace is among Cuba's best-known American supporters.

"The day will come when we can accede to the wishes for the abolition of this penalty so nobly expressed here by Reverend Lucius Walker," Castro said. "A wave of hijackings had been unleashed and was already in full development -- it had to be stopped."

Cuba also faces stern criticism for sending 75 dissidents to prison on charges of collaborating with U.S. diplomats to destabilize the socialist regime. It was the island's harshest crackdown on opponents in decades, drawing condemnation even from leftist intellectuals traditionally sympathetic to Cuba.

Castro said he was disheartened with "those friends of Cuba" -- such as Mexican novelist Carlos Fuentes -- who have "attacked Cuba unjustly."

He warned they would "suffer infinite sorrow" if Cuba were attacked and "they realized their declarations were shamelessly manipulated by the aggressors to justify a military attack."

timesonline.co.uk May 03, 2003 By James Doran

THE oilmen of Midland, who consider themselves to be among the last of their kind, were looking forward to squeezing a living over the next few years from what is left of the most lucrative onshore oilfields in America.

Now they face the prospect of Iraq upsetting their retirement plans by wreaking havoc in the oil markets with a flood of crude from perhaps the largest untapped reserves in the world.

After 80 years of boom and bust, Midland’s oilmen know that there remains only 20 or 30 years’ worth of black gold beneath the cactus, gravel and rattlesnake skins that litter the West Texas desert floor. All the good stuff was long ago drained from the Permian Basin, where production peaked at seven million barrels a day in 1973.

Today, the town’s weather-beaten prospectors must pump water or carbon dioxide down old wells to force out the last drops of Texas tea from the porous sandstone.

What these so-called roughnecks want is stability in the oil market with a steady price around $25 a barrel. But most of them fear that Iraq’s emergence as a major oil producer will result in anything but. “We live and die by the oil price here,” says Paul Page, the head of Page Petroleum, a small, independent company based in Midland.

If the price falls too low, as last happened during the Venezuelan crisis in 1998 when crude fell to about $8 a barrel, few of Midland’s independents will survive. And when those companies go down they drag most of the town’s 110,000 inhabitants with them.

Page says: “This town is dependent on the oil industry. Men working for the oil companies get laid off. Then there are the service companies and other local businesses too. The oil business makes the money that gets spent in Midland.”

In 1998 Midland became a ghost town. It is recovering today, with an oil price between $24 and $27 a barrel, but it is a far cry from the heady days of the 1950s, when former President George Bush made his fortune, or the booms of the 1970s and 1980s, which made his son, the current President, the man he is today.

“The worst-case scenario,” says Joseph O’Neill, another Midland oilman and a friend of President Bush, “would be Iraq, or whoever controls it, getting in a fight with Opec, like Venezuela did. Waiting for Opec and a country like that to blink first would cripple us all.”

The oil price dropped by about 9 per cent last month when victory in Iraq became apparent. It has continued to fall towards $23 a barrel as the market fears a postwar glut when Iraq is back on stream.

The fluctuations in price are making Midland jumpy. “If it looks like we are getting down toward $20 a barrel things will get bad here,” O’Neill says.

Opec, too, is concerned. The cartel is ready to reduce production in anticipation of an expected glut once Iraq’s capabilities are realised.

Jim Henry, chief executive of Henry Petroleum, believes that getting Iraq up to full production and securing the country within the Opec cartel is crucial to the global economy. “With Iraq not producing anywhere near capacity today, and problems in Venezuela and Nigeria, Opec is producing pretty near flat out,” he says. “The market needs Iraq to ease the burden and bring some stability. But it must be handled properly and quickly.”

He believes that as the world economy picks up over the next decade, demand for oil will far outreach supply, unless Iraq is in full production mode and producing about 2.6 million barrels a day.

But Henry has deeper fears than O’Neill and Page, who cling to the belief that Opec and President Bush will come to their aid if prices get out of hand. “Who is going to invest the billions of dollars needed to get the oil out of Iraq?” he asks. “Will the oil companies do what is needed given the political situation there? I don’t think so.

“They are only going to invest in a region if they are sure it is sound. And they will not get that surety for quite some time to come. All the while they are waiting, the oil that the global economy needs stays in the ground in Iraq.”

Iraq’s oilfields have not been updated for close to 30 years. The infrastructure is crumbling and the technology is outdated. The country has about 112 billion barrels of proven reserves of oil, second only to Saudi Arabia. Most experts agree that with modern exploration techniques Iraq could find many billions more.

If Iraq’s production is not stepped up, Henry fears, the world could face oil shortages such as those in the 1970s. Shortages lead to rising oil prices. The West Texas reserves of the Permian Basin are not big enough any more to benefit from a rocketing oil price.

“In that circumstance cashflow goes up but so do costs,” says Henry. “Sustained rises in oil prices lead to windfall taxes aimed at the majors. But we have to pay them too. And we can’t afford them. Instability from high prices can just as easily put us out of business as low prices.”

The Midlanders know that their rough and raw Texas town, dotted with nodding donkeys — or pump jacks — will live or die depending on how Iraq is reintroduced to the global oil market.

“There is no doubt,” says Henry. “This war is inextricably linked to the fortunes of Midland. We are fighting for our lives.”

Desert song for the President

The tiny desert town of Midland, Texas, owes everything it has to the discovery of oil and the political success of the Bush family. So thankful was Midland when a second son, George W. Bush, became President that the town anthem was rewritten in his honour.

“Midland, Texas, where the oil comes gushing from the ground. And the high school scamps become state champs; Where the best in Texas can be found! “Midland, Texas, ev-ry night my family and I, can clearly see to eternity and the only limit is the sky. The town where we live is neat, and a ‘Bush’ means more than just mesquite! “And when we say that Midland is o-kay We’re sayin’...

“We’re doin’ fine here in Midland, Texas! Hoo-ray!”