<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 14, 2003 By: David Coleman

Corruption convicted Venezuelan ex-President Carlos Andres Perez has surfaced in details surrounding the Paris (France) trial of top former executives and shady political associates of France's Elf Aquitaine oil company.

Massive under-the-table dealings with the Venezuelan government of 10 years ago have involved witness accounts of espionage, Swiss bank accounts; brown envelopes filled cash for politicians, luxury Paris apartments and mansions in Corsica, bribes and treachery.

The trial's latest sensational revelation is an accusation by a top aide that former Elf executive Loik Le Floch-Prigent had pocketing around $2.5 million from Venezuelan business dealings.

Alfred Sirven, one-time right hand man to Le Floch-Prigent detailed the Venezuela side of a deal where he admitted that another $2.5 million found its way to his own Swiss account.

The trial, seen as France's largest corruption case in recent history, began in March and is expected to continue runs through early July taking two investigative magistrates eight years of pre-trial work to detail charges in a 657-page report.

A previous trial, nicknamed Elf 1 had held the French nation enthralled in 2001 when it was revealed that former French Foreign Minister Roland Dumas and his ex-mistress, Christine Deviers-Joncour had also been involved up to their necks in shady dealings.

 They were all given prison sentences and hefty fines, though an appeals court later acquitted Dumas. Deviers-Joncour ... a former lingerie model ... later published several books including "The Whore of the Republic,"  detailing her dealings with Elf and top government executives.

In the Elf 2 trial, a total of 37 people have been charged with receiving corrupt payoffs and illicit funding involving tens of millions of dollars and highlights testimony by former French secret service agent Pierre Lethier who had been on the run from charges in connection with bribes allegedly paid to acquire a German oil refinery in 1992 ... Lethier turned himself in last month, after hiding for years in Switzerland and Britain.

Former Elf energy director Andre Tarallo ... nicknamed "Mr. Africa" because he directed many of the company's extensive dealings there, including alleged payoffs to African leaders ... had bought a mansion in Corsica with $11 million, allegedly lifted from Elf profits.

The trial is expected to uncover a tight relationship between Elf executives and top politicians who allegedly picked up cashed-stuffed envelopes as "campaign contributions."

Sirven admits paying off former French Prime Minister Edith Cresson and two former German ministers for the acquisition of the Leuna refinery more than 10 years ago.

Le Floch-Prigent has already admitted being "swept away by the folly of grandeur." Aluxurious, $9.3 million apartment in Paris' elegant 16th arrondissement was allegedly bought with funds from Elf. Asked to explain some $100,000 spent to equip Le Floch-Prigent's kitchen, his former wife Fatima Belaid said simply "my ex-husband loved cooking."

<a href=www.middle-east-online.com>Middle East Online

IISS says Washington encourages privatisation of Iraqi oil sector as alternative to Saudi Arabian supply.

LONDON - Washington has encouraged the privatisation of the Iraqi oil sector as it seeks to reduce its dependence on Saudi Arabia for oil since the September 11 attacks, the London-based IISS security think-tank said Tuesday.

Since the al-Qaeda attacks in Washington and New York in 2001, the United States has also sought oil-supply alternatives to the Middle East, particularly to Saudi Arabia, the International Institute for Strategic Studies said in its annual evaluation and forecast of world affairs.

"The neo-conservative gameplan that would reshape Iraq in the aftermath of the US military campaign into a market-reforming economy" has prominent supporters inside the US administration, IISS's strategic survey said.

"This influential group... takes the position that change in Iraq could be steered to bring more democratic principles to the Middle East, while leveraging expanding Iraqi oil production to undermine the dominance of other oil producers and render OPEC less important," it said.

"This is a highly optimistic and arguably unrealistic scenario," IISS said.

"While no one can say with certainty how democratic change in Iraq might alter the region, autocracy has always been a dominant feature of the Middle Eastern political landscape," the report said.

More than 60 percent of the world's proven oil reserves are concentrated in the Middle East region, which currently answers a third of the global demand. One quarter of all oil reserves are found in Saudi Arabia.

Iraq, Iran, Syria, Sudan and Libya, - so-called "countries of concern" to the United States - produce about 10 percent of the world's oil supply, the IISS report said.

A second trend in Washington "calls for a major grassroots initiative in energy source diversity", such as encouraging renewable energies, the report said.

A change in Iraq's status meanwhile could unleash competition among oil producers within the Organisation of Petroleum Exporting Countries (OPEC) that has been dormant for years, the IISS said.

Elsewhere OPEC faces a different picture with Venezuela's capacity constrained by well shut-ins, reservoir damage, and with civil unrest in Nigeria.

How the oil landscape will look in the five-to-10-year horizon is hard to predict, given the wide range of variables including geology, global environment politics, technological change and the shifting geopolitical relationships of the post-September 11 world, the survey said.

"Russia and the newly independent states of its southern flank are ranked second in undiscovered oil potential after the Persian Gulf, holding about 27 percent of the world's oil reserves," IISS said.

The region ranks first globally in undiscovered natural gas, it added.

But, IISS said, Russia has a long way to catch up with Saudi Arabia's oil in terms of exports.

"Thus, although Russia will be increasingly important to the US plans to diversify oil supply, a more varied strategy is still needed," the survey concluded.

Peter Morton <a href=www.nationalpost.com>Financial Post, with files from Reuters Wednesday, May 14, 2003

WASHINGTON - Soaring oil imports in March helped push the U.S. trade deficit to near record highs even as American exporters are beginning to see a turnaround in sales abroad.

The U.S. deficit hit US$43.5-billion, up from the US$40.4-billion shortfall in February, the U.S. Commerce Department said yesterday. The March deficit is just shy of the record US$44.9-billion deficit last December.

Economists said oil imports surged in March as U.S. refineries began to rebuild stocks after the oil workers strike in Venezuela and war worries pushed global oil prices higher.

"Away from energy, we don't expect much of an improvement in the trade balance over the next few months," said Kevin Logan, a senior market economist at Dresdner Kleinwort Wasserstein in New York. "Other economies are still quite weak, with growth very sluggish, so we don't expect the demand for exports to increase much."

The U.S. economy grew at a 1.6% annual rate during the first quarter while Japan is expected to see growth of just 0.4% during the same period. Most economists believe the economy of the European Union likely shrank during the first three months of the year.

U.S. exporters did see a 0.6% increase in foreign sales to US$82.8-billion in March from US$82.3-billion the previous month, mostly of semiconductors and consumer goods, thanks to a weaker U.S. dollar.

"It's kind of hopeful that we're seeing a modest increase in exports, which is better than the declines we had seen earlier," said Jade Zelnik, chief economist with RBS Greenwich Capital Markets, in Greenwich, Conn. "So perhaps the weaker dollar is beginning to support exports."

The administration of George W. Bush appears to be quietly changing a decade-old "strong dollar policy" with John Snow, the Treasury Secretary, repeating that a "sound currency" is key to a sound economy.

The U.S. dollar fell to a four-year low against the euro Monday after Mr. Snow said on the weekend a weaker dollar would help U.S. exports. The U.S dollar has fallen by 28% against the euro over the past 12 months and 17% over the past six months. It has also fallen by 12% against the Canadian dollar and by 5% against a basket of currencies from the U.S.'s biggest trading partners.

"Persistent weakness in the dollar and an expected rebound in overseas growth later this year should help to improve the U.S. trade picture down the road," said Joseph Abate, senior economist at Lehman Brothers Inc. in New York.

The weak dollar may have also contributed to a 2.9% increase in imports in March to US$126.3-billion -- the second highest on record after September, 2000. Imports from Western Europe also jumped in March to a new record as the trade deficit with the EC countries rose to US$7.8-billion from US$6.6-billion.

The value of crude oil imports surged to a record US$9.1-billion from US$7.5-billion the previous month while the U.S. imported 300.7 million barrels of oil in March, up from 247.1 million the previous month.

The U.S. trade deficit with Japan widened to US$5.8-billion from US$5.3-billion while its deficit with the Organization ofPetroleum Exporting Countries expanded to a record US$5-billion from US$3.4 billion.

Its deficit with Canada, its largest trading partner, hit US$5.2-billion from US$4.3-billion in February. The deficit with its other NAFTA partner, Mexico, remained steady at US$3.9-billion.

Meanwhile, John Manley, Canadian Finance Minister, said yesterday he will bring concerns about large U.S. current account and trade deficits to a finance ministers meeting of Group of Seven nations this week.

pmorton@nationalpost.com

GNN Walden Bello,  May 13, 2003

After its successful invasion of Iraq, the U.S. appears to be at the height of its power. One can understand why many feel the U.S. is supreme and omnipotent. Indeed, this is precisely what Washington wants the world to think.

No doubt, the U.S. is very powerful militarily. There is good reason to think, however, that it is overextended. In fact, the main strategic result of the occupation of Iraq is to worsen this condition of overextension.

Overextension

Overextension refers to a mismatch between goals and means, with means referring not only to military resources but to political and ideological ones as well. Under the reigning neoconservatives, Washington's goal is to achieve overwhelming military dominance over any rival or coalition of rivals. This quest for even greater global dominance, however, inevitably generates opposition, and it is in this resistance that we see the roots of overextension. Overextension is relative--an overextended power may in fact be in a worse condition even with a significant increase in its military power if resistance to its power increases by an even greater degree.

This point may sound surreal after the massive firepower we witnessed on television night after night over the past month. But consider the following and ask whether they are not signs of overreach: the failure to consolidate a pro-U.S. regime in Afghanistan outside of Kabul; the inability of a key ally, Israel, to quell, even with Washington's unrestricted support, the Palestinian people's uprising; the inflaming of Arab and Muslim sentiment in the Middle East, South Asia, and Southeast Asia, resulting in massive ideological gains for Islamic fundamentalists--which was what Osama bin Laden had been hoping for in the first place; the collapse of the cold war "Atlantic Alliance" and the emergence of a new countervailing alliance, with Germany and France at the center of it; the forging of a powerful global civil society movement against U.S. unilateralism, militarism, and economic hegemony, the most recent significant expression of which is the anti-war movement; the loss of legitimacy of Washington's foreign policy and global military presence, with its global leadership now widely viewed, even among its allies, as imperial domination; the emergence of a powerful anti-American movement in South Korea, which is the forward point of the U.S. military presence in East Asia; the coming to power of anti-neoliberal, anti-U.S. movements in Washington's own backyard--Brazil, Venezuela, and Ecuador--as the Bush administration is preoccupied with the Middle East; an increasingly negative impact of militarism on the economy, as U.S. military spending becomes dependent on deficit spending, and deficit spending becomes more and more dependent on financing from foreign sources, creating more stresses and strains within an economy that is already in the grip of deflation.

Just a few days after its military victory over a fourth-rate power, we are already witnessing the political quicksand that the Americans have stepped into in Iraq, as fundamentalist Islamic political currents among the majority Shiites appear to be the political inheritors of the deposing of Saddam Hussein. If a stable, pro-U.S. order in the Middle East is Washington's goal, then that is nowhere in sight. What is likely instead is greater instability that will tempt Washington to employ more military power and deploy more military units, leading to a spiral of violence from which there is no easy exit.

Pax Romana versus Pax Americana

Nearly three millennia ago, another empire confronted the same problem of overextension. Its solution enabled it to last 700 years. The Roman solution was not just or even principally military in character. The Romans realized that an important component of successful imperial domination was consensus among the dominated of the "rightness" of the Roman order. As sociologist Michael Mann notes in his classic, Sources of Social Power, the extension of Roman citizenship to ruling groups and non-slave peoples throughout the empire was the political breakthrough that won the mass allegiance among the nations dominated by the Romans. Political citizenship combined with the vision of the empire providing peace and prosperity for all to create that intangible but essential moral element called legitimacy.

Needless to say, extension of citizenship plays no role in the U.S. imperial order. In fact, U.S. citizenship is jealously reserved for a very tiny minority of the world's population, entry into whose territory is tightly controlled. Subordinate populations are not to be integrated but kept in check either by force, or the threat of the use of force, or by a system of global or regional rules and institutions--the World Trade Organization, the Bretton Woods system, NATO--that are increasingly blatantly manipulated to serve the interests of the imperial center.

Though extension of universal citizenship was never a tool in the American imperial arsenal, during its struggle with communism in the post-World War II period Washington did come up with a political formula to legitimize its global reach. The two elements of this formula were multilateralism as a system of global governance and liberal democracy.

In the immediate aftermath of the cold war, there were, in fact, widespread expectations of a modern-day version of Pax Romana. There was hope in liberal circles that the U.S. would use its sole superpower status to undergird a multilateral order that would institutionalize its hegemony but assure an Augustan peace globally. That was the path of economic globalization and multilateral governance. That was the path eliminated by George W. Bush's unilateralism.

As Frances Fitzgerald observed in "Fire in the Lake," the promise of extending liberal democracy was a very powerful ideal that accompanied American arms during the cold war. Today, however, Washington or Westminster-type liberal democracy is in trouble throughout the developing world, where it has been reduced to providing a façade for oligarchic rule, as in the Philippines, pre-Musharraf Pakistan, and throughout Latin America. In fact, liberal democracy in America has become both less democratic and less liberal. Certainly, few in the developing world see a system fueled and corrupted by corporate money as a model.

Recovery of the moral vision needed to create consensus for U.S. hegemony will be extremely difficult. Indeed, the thinking in Washington these days is that the most effective consensus builder is the threat of the use of force. Moreover, despite their talk about imposing democracy in the Arab world, the main aim of influential neoconservative writers like Robert Kaplan, Robert Kagan, and Charles Krauthammer is transparent: the manipulation of liberal democratic mechanisms to create pluralistic competition that would destroy Arab unity. Bringing democracy to the Arabs is not even an afterthought as a slogan that is uttered tongue in cheek.

The Bush people are not interested in creating a new Pax Romana. What they want is a Pax Americana, where most of the subordinate populations--like the Arabs--are kept in check by a healthy respect for lethal American power, while the loyalty of other groups--such as the Philippine government--is purchased with the promise of cash. With no moral vision to bind the global majority to the imperial center, this mode of imperial management can only inspire one thing: resistance.

Challenges to the Empire

The present in Afghanistan is likely to be the future in Iraq--that is, an inability to consolidate a stable political order, much less a truly representative and democratic one.

The combination of their policies of internal repression and their failure to come to the aid of the Palestinians and the Iraqis is likely to put the Arab regimes allied to the U.S.--the most noteworthy of which are the governments in Saudi Arabia, Jordan, and Egypt--in an even more precarious position with respect to the Arab masses. A strengthening of political Islam is a likely result, and Islamic groups are likely to either come to power or be serious contenders for power in many of these countries. Ironically, a democratic opening up of the political systems in these countries--which Washington is said to be desirous of--is likely to lead to this outcome, even in Iraq, where the radical stream of Shiite Islamic politics is dominant. The same boost to Islamic groups is likely to be the result in the rest of the Muslim world, especially in two places considered extremely strategic by the U.S.: Pakistan and Indonesia.

Like Washington's security, Israel's security, the enhancement of which has been a primordial objective of neoconservatives like Paul Wolfowitz and William Kristol, will be compromised even further. This, as well as the bigger frustration of failing to create a stable political base for American hegemony via formal democratic mechanisms, will lead the U.S. to contemplate an unpalatable choice: withdraw or impose direct colonial rule. It will, however, try not to face this choice as long as possible and continue to pour more money and resources to unworkable political arrangements.

At the same time, local variants of the new global civil society movement for peace and against corporate-driven globalization will achieve power or threaten to come to power in other parts of the world, particularly in Latin America. The examples of Brazil, Ecuador, and Venezuela will become more attractive as neoliberal economics becomes even more discredited in the context of prolonged economic stagnation at the national, regional, and global levels.

With the U.S. increasingly seen as a universal threat and with their economic interests increasingly at odds with Washington, France, Germany, Russia, and China will consolidate the balancing coalition that emerged during the Iraq crisis. Some of the more weighty developing countries, like Brazil, India, and South Korea, might eventually join this formation. This balancing coalition is likely to be a permanent fixture, though its members may change.

One consequence of this diplomatic alliance will be closer coordination in military matters. Indeed, the formation of a European Defense Force distinct from NATO is likely. Another will be increased military spending, arms buildups, and arms research by members of the balancing coalition, whether separately or in cooperation with one another. Still another will be greater economic and technological cooperation to create the economic infrastructure for protracted military competition. Ironically, Washington's crusade to monopolize weapons of mass destruction will lead to greater investment in the development of such weapons among its big country rivals, while not stopping their development by smaller countries or by non-state actors.

Global economic stagnation and U.S. unilateralism will lead to a further weakening of the IMF and WTO and a strengthening of trends toward protectionism and regionalism. Regional economic arrangements, combining trade preferences, capital controls, and technological cooperation will become even more attractive in opposition to both multilateral free trade arrangements and bilateral trade deals with the U.S. and the EU. Trade wars will become more frequent and more destabilizing.

One actor will be central in all this: China. As the American economy is mired in stagnation and Washington is overextended militarily and politically, China will grow in relative strength. The unilateralists will grow more and more preoccupied with China's growing strength and will sharpen their political and ideological competition with Beijing. At the same time, their options will continue to be limited given Wall Street's increasing financial stakes in China, American corporations' increasing dependence on investment in that country, and the U.S. consumers' escalating reliance on imports from China, from low-tech commodities to high-tech goods. Washington will not find an easy exit from its Chinese conundrum.

Finally--and ironically, given recent events--the UN will enjoy a new lease on life, as countries realize that its ability to grant or withhold legitimacy remains an important tool in international realpolitik. The role of the UN as a mechanism for isolating the U.S. will be enhanced, and Washington is likely to respond with even more vituperation and threats to cut off funding, though it will not be able to boycott the organization.

Like Nazi Germany and Fascist Italy prior to the Second World War, the U.S. is likely to be more and more isolated in the community of nations while retaining the immense power to plunge that community into disorder.

One thing is certain: if the Romans were around today, they would come up with one conclusion: this is no way to manage an empire.

Walden Bello is a professor of sociology and public administration at the University of the Philippines and executive director of Focus on the Global South (online at www.focusweb.org) where this first appeared. This article is reprinted with permission from our friends at Foreign Policy in Focus (www.fpif.org).

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By Tom Bower <a href=news.mysanantonio.com>San Antonio Express-News Web Posted : 05/14/2003 12:00 AM   As temperatures go up this summer, San Antonio residents can expect to see a bigger-than-expected jump in their utility bills.

Higher natural gas prices and less power from the South Texas Project nuclear plant mean the average electric bill could go up 33 percent this summer compared to last year, City Public Service officials said Tuesday.

Average monthly residential electric bills for June through September are projected to average $158.62, compared to last year's $118.89.

"We normally do this (summer projections) in late May, but we wanted to get this information to the news media and the public earlier this year so they can take action today to minimize the impact of these factors on their utility bills," said Steve Bartley, CPS director of regulatory relations.

The public wasn't amused.

"Somebody's gouging us," said a city employee who asked that his name not be used. "My salary doesn't go up one-third, how come my utility bill goes up one-third?"

The 66-year-old man, who lives in an apartment, noted there's not much that can be done about it, however.

"You can (complain) and scream, but you can't plug in anywhere else," he said.

Some residents worried whether seniors on fixed incomes will be able to afford the increases, while others said they'll have to curtail other expenses to make ends meet.

Cathy Gordon, 40, said her family already got rid of a waterbed because it was getting too expensive to keep heated. She'll have to take other measures to pay the higher bills, she said.

"I was a little dismayed, but it wasn't unexpected," said the single mother of two. "Emotionally, I can handle it. Financially, that's another story."

Last summer's bills were lower than expected because of heavy rains, Bartley said. He added that the National Weather Service Climate Prediction Center is forecasting temperatures to be normal this summer, which would be warmer and more humid than last year.

The city-owned utility contributes 14 percent of its gross revenues to the city's general fund.

While the rate charges for electricity have not changed since 1991, CPS can pass along to customers cost increases for producing power, known as a "fuel adjustment charge."

Bartley said the higher monthly bills are the result of two things: customers using more electricity to run their air conditioners, and power becoming more costly to produce, mainly because of higher natural gas prices.

Although natural gas prices have dropped from a high of $20 per thousand cubic feet in February, Bartley said the utility is projecting it will pay an average market price of $5.75 this summer. That's 60 percent higher than the $3.50 paid last summer.

Throughout the year, CPS generates about 15 percent of its electricity with natural gas, 46 percent with coal and 27 percent with nuclear power. Another 12 percent comes from purchased power and wind-generated. However, more natural gas is used in the summer to help CPS fire up backup generators to meet peak demands.

Another factor, Bartley said, is that CPS will be getting only about half the electricity the utility normally does out of its 28 percent ownership of the nuclear power plant in Bay City.

Last April, a routine inspection revealed signs of a leak from the Unit 1 reactor's coolant system. The reactor was shut down; it's unknown when it will return to service.

Bartley said other factors also affect the price of natural gas, including a shortage of gas in storage, economic reverberations from Gulf War II and the oil industry strike in Venezuela.

The agency's monthly newsletter includes rates charged per 1,000 kilowatt-hours, and CPS regularly is among the cheapest. In March, for example, the most recent month available, Central Power & Light charged $110.33 per 1,000 kilowatt-hours in Corpus Christi, and El Paso Electric charged $104.97, while Houston's Reliant Energy charged $95.81.

By comparison, CPS charged $65.95 that month.

Marcos Espinoza, 48, pointed out that difference, noting San Antonio residents are lucky to pay rates lower than in other cities, but said he expects that advantage to end sometime.

"Sooner or later it's going to catch up to us," the construction worker said.

tbower@express-news.net Staff Writer Karen Adler contributed to this report.