<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, May 22, 2003 By: David Coleman

CVG Alcasa and Switzerland-based Glencore AG say that, after several months work on the construction of a 5th aluminum reduction train, a Memorandum of Understanding has been signed by both companies in a first factory expansion phase.  Venezuelan Guayana Corporation (CVG) president, Major General (ret.) Francisco Rangel Gomez views the news as "a tremendous advance for CVG Alcasa which has worked doligently to overcome a strong economic recession over the last space of years."

"CVG Alcasa was created with 5 trains in mind, but only four were constructed and then trains 1 and 2 had to be closed five years, when they (the previous government) tried to privatize it ... only two trains were left in production and it was not sufficient to achieve break-even."

The newly-announced Train 5 plans will have an important and positive impact on the southeastern Guayana region of Venezuela since it will require the participation of regional small-to medium supply industries and will generate a considerable number of jobs in road construction ... CVG president Rangel Gomez estimates some 3,000 jobs during the construction development and 270 more permanent jobs on top of 2,700 workers currently employed at CVG Alcasa whose president, Dixon Rosillon says the company now faces the real prospect of economic recovery to become a profitable force in the international market for aluminum and products.  Rosillion sees full production phased in over the next 36 months after the construction work begins early next year on completion of environmental impact and other studies and recommendations.

Glencore International AG director general Michael Ambrusten says the signing of a Memorandum of Understanding is an important first stage from which will derive contract definitions and other processes to begin construction of the new Train 5.  Last February, CVG Alcasa had announced that it would enter into a joint venture led by Glencore also with the participation of French Pechiney and US Fluor Daniel.

Rangel Gomez says "CVG Alcasa is currently producing 210,000 tonnes of aluminum per year and the incorporation of Train 5 will add another 240,000 tonnes to arrive at 450,000 metric tonnes per year ... bringing additional revenues in the order of US$350 million ... it is yet another example of renewed faith in foreign investment in Venezuela ...  we're talking of an investment in the region of $650 million where Alcasa itself will contribute $105 million with the remaining capital from Glencore to build what is today recognized to be the largest aluminum reduction facility in Latin America.

<a href=www.lapress.org>LatinAmericaPress.com Wednesday,  May 28,  2003 Gen. Néstor González Paolo Moiola.  May 22, 2003

The Four Seasons hotel on the Plaza Altamira — in Chacao, the most exclusive district in Caracas — has turned into a kind of headquarters for members of the military who, for over six months now, have declared military disobedience against the government of President Hugo Chávez (LP, Nov. 4, 2002).

They call themselves the "democratic military" and refer to the Plaza Altamira as "liberated territory." Paolo Moiola, a Latinamerica Press correspondent, spoke with one of the dissident commanders, Gen. Néstor González, who has 28 years of active service in the Venezuelan Army under his belt.

Why are you here on the plaza?

This is not something many people understand. I’ve used all of the existing legal methods to make the president respect the Constitution. I’ve made public my opposition to political involvement in the military via all of the official channels — the army, the Ministry of Defense and the President of the Republic. I’ve maintained that to politicize the armed forces will bring about division as well as leadership and operational difficulties.

This followed the events of April 11, 2002, the attempted coup against Chávez (LP, April 22, 2002). I stopped Chávez deploying troops and tanks on the streets to massacre the people demanding his resignation. That was the intention of Chávez, to use the troops to hijack the people and impose a totalitarian communist regime, aided by [Cuban President] Fidel Castro and the international leftist movement.

After this I, together with other democratic officials, reached the conclusion that rights were no longer being respected in our country and we came to the Plaza Altamira to denounce what was happening. That was October 22, 2002. We’re still here because nothing has changed since. There isn’t even a place where we can denounce what’s going on because the state is hostile towards us.

We decided to retire from the army and stay at the plaza to publicly denounce what Chávez is doing to the Venezuelan people. He’s allowed foreign elements into the country to repress the popular revolt. He’s destroyed the institutions and used the widespread misery currently experienced across the country to take forward a leftist project, aiming to destabilize the whole of Latin America and probably world peace as well.

How many members of the military share your position?

There are 135 of us occupying the liberated territory. But not all of us live here. Some go home at night, others have various safe houses for security reasons. There are many generals, discredited or retired, who want to see the back of Chávez.

I assume you are talking about a peaceful exit for the president?

Whatever! When someone sells the country down the river, when they betray the people by imposing an outside regime that has no interest in the greater good, the well-being and peace of the people, freedom must be achieved whatever the cost.

We’ve begun peacefully, but if we have to resort to other methods, we will. We must recuperate the freedom of a nation and a people in suffering. In that sense, the international community has not totally understood our situation.

Why not? Venezuela has received plenty of media coverage.

Simply because the government has manipulated the information. Chávez has spent a lot of money creating an international lobby that publicizes a Constitution that not even he respects. He wants to create an image of himself as a democrat, when in reality he’s a dictator trying to impose a communist and fundamentalist regime.

How much popular support does Chávez have?

We calculate that he has a core support of between 12 and 15 percent. There’s another 15 percent who we call "light Chavistas," many of whom are within the armed forces. Bought and corrupted. Chávez has bought the dignity and conscience of most of the people around him, but when the money runs out they won’t stick around because they don’t identify with him. There is a common misconception that he has the support of the poor neighborhoods. When we collected signatures for an anti-Chávez petition many of the people, who came forward of their own accord, came from those areas.

Where do the armed forces stand?

Anyone who thinks the armed forces are with the president is wrong. Chávez has brought many foreigners to Venezuelan territory: Colombian guerrillas ready to offer armed support and Cubans disguised as sports instructors, but armed all the same. On top of that, he’s armed a part of the population, telling them they are defending the revolution.

Are you talking about the Bolivarian Circles (LP, June 3, 2002)?

Exactly. Chávez organized them because he knows the armed forces are against him, that they have an institutional position, and that one day they will unite the people and capture him.

What do you think of the opposition Democratic Coordinating Group (LP, May 7, 2003)?

One of the tactics employed by Chávez is to divide the opposition, the Democratic Coordinating Group (DCG) included. The DCG has served to create divisions amongst the political opposition through personal, economic and party interests. The DCG members will be cast aside when the people realize that they don’t represent the interests of the Venezuelan on the street.

Chávez scorns any democratic initiative and constantly ridicules all of the political solutions proposed by the people. It’s true that the president enjoys between 25 and 30 percent popular support, but it’s also true that 70 percent of the people are against him, as they regularly make known on the street, not only here in the Plaza Altamira, but throughout Caracas.

This has never happened before, not even with the ex-President Rafael Caldera (1964-74 and 1994-99) who [in his second term] had just 15 percent approval, but the remaining 85 percent of the people were indifferent and took what they got. Everything was kept within a democratic context, without ever creating divisions between rich and poor or blacks and whites, as Chávez is attempting to do now (LP, April 9, 2003).

What does the immediate future hold?

The people must continue coming to the plaza to show the international community that our struggle is just. Peace, liberty and the future of Venezuela mean a lot not just for South America, but also for the West and the rest of the world.

A minority group cannot be allowed to hijack the liberty and justice of a country. We will continue our march forwards, at whatever cost.

There was US$39 billion of capital flight from Latin America in 2002, according to the Economic Commission for Latin America and the Caribbean, which says that the region faces an uncertain financial future in 2003.

Nicaragua took a claim for the sovereignty of the San Andrés archipelago to the International Court of Justice in The Hague, Holland, at the end of April. The group of islands is currently controlled by Colombia.

The Bolivian police made a mid-April seizure of a cargo of pre-Colombus archaeological artifacts, seemingly of Peruvian origin, being smuggled to the United States from Bolivia. The boxes contained original and replica masks, drinking vessels and silver chains of incalculable value.

United States pharmaceutical companies are demanding US government enforcement of commercial penalties against Mexico for its use of generic medicines. Mexico is the largest pharmaceutical market in Latin America, with sales topping US$6 billion in 2002.

On May 5, the Inter-American Court of Human Rights ordered the government of Ecuador to protect the life and integrity of the Sarayaku indigenous community threatened in conflicts with the General Fuel Company, an Argentinean subsidiary of the US consortium Texaco-Chevron (LP, March 26, 2003).

Early May floods in the eastern province of Santa Fe in Argentina left at least 18 people dead, some 300 injured and 50,000 homeless. Heavy rains caused the River Salado to flood one third of the 133,000 square kilometer farming province. The financial cost is likely to be more than US$200 million.

May 22nd 2003 From <a href=www.economist.com>The Economist print edition

THREE decades ago, the Organisation of Petroleum Exporting Countries (OPEC) sent oil prices rocketing. By 1980, a barrel cost $30, ten times the price in 1970. Consumers suffered, whereas oil producers reaped an enormous windfall. Many assumed then that oil was a gift of God that would transform poor countries into flourishing economies within a generation. Yet even during those heady early days there were doubts. Juan Pablo Pérez Alfonso, a founder of OPEC, complained in 1975: “I call petroleum the devil's excrement. It brings trouble...Look at this locura—waste, corruption, consumption, our public services falling apart. And debt, debt we shall have for years.”

Several new publications argue that history has proved him right. A new book from the Open Society Institute, a foundation financed by George Soros, points out that resource-poor countries grew two to three times faster than resource-rich countries between 1960 and 1990 (even after adjusting for differences in population, initial income per head and other variables). Revealingly, the resource-rich countries began to lag only after the 1970s—in other words, only after oil wealth started to pour in.

The Open Society Institute publishes “Caspian Oil Windfalls: Who Will Benefit?”. Christian Aid publishes “Fuelling Poverty: Oil, War and Corruption” by Andrew Pendleton et al. The University of California recently hosted a conference on oil and human rights (the website includes links to many papers on the topic). Articles by Michael Ross are online, including “How Does Mineral Wealth Affect the Poor?”. Publish What You Pay campaigns for more openness from big oil companies. Britain's government launched the Extractive Industries Transparency Initiative in 2002. See also OPEC.

Two factors explain this. The main economic problem is known as Dutch Disease, after the effects of the discovery of natural gas in the Netherlands in the 1960s. An oil bonanza causes a sudden rush of foreign earnings; this drives up the value of the currency. That, in turn, makes domestically produced goods less competitive at home and abroad. Over time, domestic manufacturing and agriculture fade and growth suffers.

Tricky as this problem is, oil economies such as Norway and Alaska have come up with a clever (though still imperfect) solution: they hive off much of the oil income into “stabilisation” funds, disbursing “dividends” to citizens slowly—directly in Alaska, via social spending in Norway—so that the economy does not overheat. Chile, one of the world's more successful developing countries, has a similar fund for its copper revenues.

Contrast this cautious approach with the recklessness of the OPEC countries of the Middle East, which expanded domestic spending by about 50% a year between 1974 and 1979. This enriched the elite, but spawned white-elephant projects and fuelled inflation of more than 15% a year. Venezuela has earned over $600 billion in oil money since the 1970s, but the real income per head of its citizens fell by 15% between 1973 and 1985. It is falling again today.

On top of these economic difficulties can come even worse political problems. Because oil infrastructure can be controlled easily by a few, it often leads to a concentration of political power. Michael Ross, of the University of California at Los Angeles, argues that oil worsens poverty by stunting democratic development, among other things. It also tends to cause, or at least aggravate, civil wars. A new report by Christian Aid, a charity, says that oil economies are more likely than non-oil economies to maintain large armies, and generally do worse on literacy, life expectancy and other measures of human development. In addition, sudden oil wealth affords ample opportunity for corrupting the politicians who award contracts to foreign oil firms. Wishful thinking?

These recent reports are troubling, but is there really any prospect of change? Surprisingly, the answer may be yes. For some time now, Publish What You Pay—a collection of activist groups—has been pestering Big Oil to reveal all the payments it makes to governments, which usually insist that such details be kept secret. Now some big investors are getting in on the act too. On May 19th, ten investment funds managing some $600 billion of assets declared their support for transparency: “This is a significant business risk, making companies vulnerable to accusations of complicity in corrupt behaviour...and possibly compromising their long-term commercial prospects.” Tony Blair has been promoting the Extractive Industries Transparency Initiative, a scheme that calls for voluntary disclosures. Britain now plans to push for an international approach by raising the topic at the G8 summit in France next weekend and at a ministerial meeting on June 17th.

A multilateral approach would certainly be more realistic than any national or unilateral steps. That is what BP discovered when it recently voluntarily revealed the terms of its contracts in Angola. No other oil company followed suit, and the local powers let it be known that they were displeased. A multilateral approach could involve the World Bank and the International Monetary Fund, which could push countries to publish the details of contracts and to set up resource funds. Some countries howl that such initiatives violate their sovereignty, but that is a smokescreen: rulers with nothing to hide would surely welcome transparency. Others, including Abu Dhabi and Kazakhstan, boast that they already have such funds—but these are weakened by a lack of proper oversight. In contrast, the American proposal for dealing with Iraqi oil revenues could result in the creation of a fund monitored by Kofi Annan.

But reform will not be easy. The World Bank recently demanded transparency in return for backing a controversial pipeline running from Chad to Cameroon. After much hesitation, both countries agreed to set up mechanisms that will allow outside monitoring of oil revenues and vowed that the funds will be used only for development purposes. The ink had barely dried on the accord when Chad's ruler was caught diverting oil money to military spending. Getting firms to “publish what you pay is an essential first step,” observed George Soros at the launch of the Open Society book, but the harder step is to get governments to “publish what you receive...and then be accountable for what you receive.”

<a href=www.vheadline.com>venezuela's Electronic News Posted: Thursday, May 22, 2003 By: W. Wingfield

Date: Thu, 22 May 2003 11:54:30 +0000 From: W. Wingfield  will46@att.net To: Editor@VHeadline.com Subject: Reality

Dear Editor: I have read your web site with interest over the past year.  In that time I have read many differing viewpoints from those with diverse backgrounds.  I have hesitated to write more letters since the two that I have written prompted a deluge of negative (some threatening) responses to me.  My wife is Venezuelan and I am in contact with her family in Venezuela on a regular basis.  I know what is happening to the Venezuelan economy and the people: it is a tragedy.

I have read with amusement and sometimes amazement the diatribes and epistles of the "pro government" reporters on your web site.  Too often their editorials focus on the emotionalized political aspects of the struggle in Venezuela between the self-destructive Chavez and the inept opposition.

The reality is that there is no effective opposition in Venezuela.  What opposition exists certainly doesn't have any answers other than to blame all the country's ills on the elected megalomaniac President. 

The Chavez regime certainly can't take all of the blame for Venezuela's problems.  For decades Venezuela was in a political "malaise" and only now has it been "woken up" by Mr. Chavez.  The problem for Venezuela is not simply an entrenched pseudo-democratic dictator.

The real problem is that NOBODY is willing to work on any real solutions.

The reality in Venezuela is that there are shortages ... there is a shortage of honesty, of integrity, of justice, of security, and of food.  Of all the shortages the one that will plunge Venezuela into ultimate chaos is the lack of food.  Every day it is becoming more difficult to obtain foodstuffs from the markets in Venezuela.  Goods (the majority imported) are disappearing off of the store shelves due to the draconian fiscal policies imposed by its embattled regime.

A modern society is integrated with the world and no country can thrive when it isolates itself from that world economy.  All of the political rhetoric and dogma can't change the reality of the Venezuelan situation.

The absolute reality is that Venezuela is on the road to a blood-letting that it has not experienced in its modern history.

All the political garbage about the "Bolivarian" revolution won't matter when the people are hungry and adequate food is unavailable.  The cry of "Valor Venezuela" will be replaced by the cries of hungry children.  Time is running out for the Venezuelan people.

One of your frequent commentators, a Mr. Heck, is fond of reminding the readers that Venezuela's problems can only be solved by Venezuelans.  This is true and the Venezuelan people will find the courage to take the necessary steps to rectify the current situation.

When this happens, then it will not matter how many of the military are receiving "extra monetary compensation" from Mr. Chavez; for even they (the rank and file) will not shoot their family and friends: they most likely will turn their sights on Mr. Chavez and his entourage.

I spoke with some friends in Margarita yesterday.  They have told me that the police are almost non-existent in Porlamar now and that crime is rising at an alarming rate.  They have also that food is becoming more scarce at the market and that the once thriving tourist trade is only now a dream. 

Mr. Editor you say that your site is objective: is it really? *

Whenever I read the fantastic "reports" of Mr. Heck I can only imagine; is he simply a "mouthpiece" for the corrupt regime or does he really believe most of the profuse lies that he regularly submits as editorials?

Venezuela in 2003 is not the Cuba of 1959 and all of the "guidance" that Mr. Chavez receives from his master in Havana will not stop the inevitable.

W. Wingfield will46@att.net

Editor's response: We make no claim in our editorial policy statement other to be "a wholly independent e-publication promoting democracy in its fullest expression and the inalienable right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference." Our declared editorial bias * is pro-democracy and pro-Venezuela.  Oscar Heck expresses his feeely-held opinion in the same way as Gustavo Coronel and other commentators of the Venezuelan scene expresses theirs ... that is the essence of press freedom in that we recognize the freedom of expression of all sides in the Venezuelan debate.  Like you apparently have been, we are also subjected to an effusion of hate-mail and abuse by those unfortunate individuals who are so deeply entrenched in their own bigotries that they do not recognize the possibility of any opinion other than the one to which they religiously cling.  We at VHeadline.com encourage and publish well-formulated editorial opinions provided they are within the usual concepts of upholding the law and recognized forms of democracy.  We have a zero tolerance policy on abuse and hate-mail.