Thursday, May 29, 2003
Slowdown in Venezuela
<a href=www.iht.com>Bloomberg, AP
Saturday, May 24, 2003
Venezuela's economy shrank 29 percent in the first three months compared with the year-earlier period, the country's central bank said Friday.
The bank said a two-month strike that paralyzed oil production played a major role in the contraction.
The oil sector, which makes up roughly a third of economic activity in Venezuela, contracted by 46.7 percent while the non-oil sector shrank by 20.9 percent, the bank said.
Economic activity in the construction sector shrank 64 percent, manufacturing industry by 35 percent and commerce by 33 percent, the central bank said. The economy contracted by nearly 9 percent in 2002 after growing 2.8 percent in 2001. (AP)
Inquiry at Ericsson
Nine former executives at the wireless equipment maker LM Ericsson AB could face charges for obstructing a tax audit in 2001, a Swedish investigator said. The police believe some employees obstructed the audit by not accounting for 2.5 billion kronor ($317.8 million) paid to marketing consultants.
Police have not released the names of the nine, but an investigator said the inquiry centered on Ericsson's leadership in 1998 and 1999. (AP)
Security at exchange
The New York Stock Exchange has proposed taking fingerprints of its employees and those who regularly do business with the exchange so they can be submitted to the Federal Bureau of Investigation.
In a filing with the Securities and Exchange Commission, the exchange said tighter monitoring was needed because of heightened security concerns. The proposal, which seeks "accelerated" approval by May 30, would cover employees, service providers, contractors and even journalists. (AP)
Atari Inc.,the video game-maker that is majority owned by Infogrames Entertainment SA, said its "Enter The Matrix" game sold more than 1 million units in its first week. (Bloomberg)
Internet salesrose as a proportion of U.S. retail sales in the first quarter compared with the period a year earlier. Online sales were $11.9 billion, or 1.5 percent of all sales.(Bloomberg)
Carlo Tassara SpA, a steel company controlled by investor Romain Zaleski, increased its stake in Edison SpA to 15.3 percent from 7.1 percent. (Bloomberg)
Lagardere SCA said it had fired the chairman of Hachette Livre, Jean-Louis Lisimachio, over a "strategic disagreement" regarding a possible bid for Vivendi Universal Publishing. (AFX)
Steve Ballmer,the chief executive of Microsoft Corp., is selling an undisclosed number of shares for the first time in 12 years. He owned almost 471 million shares as of September. (Bloomberg)
Edison Schools Inc.,the largest for-profit manager of public schools in the United States, has defaulted on $59.5 million in loans, according to a regulatory filing. (AP)
Gap Inc.earned $202.5 million in its first quarter, more than five times its net income of $36.7 million in the period a year earlier. First-quarter sales were up 16 percent to $3.35 billion. (AP)
European Commission antitrust regulators have restarted an inquiry into General Electric Co.'s E2 billion purchase ($2.3 billion) of Instrumentarium Oyj. (Bloomberg)
Forbes calls for US oil embargo on Venezuela ... can it be true?
<a href=www.vheadline.com>Venezuela's Electronic News
Posted: Friday, May 23, 2003
By: Patrick J. O'Donoghue
Venezuelan Executive Vice President Jose Vicente Rangel has rejected assertions from Forbes magazine that real democracy doesn't exist in Venezuela and according to one Venezuelan news agency, the magazine's incredible call on the US government to order an oil embargo on Venezuela.
Rangel retorts, "I consider Forbes' assertions to be impertinent and completely out of touch with the Venezuelan reality."
As for the Human Rights Watch (HRW) report on freedom of expression in Venezuela, the Vice President says the opposition in Venezuela can fall back on exercising all its rights, especially freedom of expression ... the Armed Force (FAN) has a democratic and constitutional vocation ... the government respects public liberties and human rights as never before in Venezuela's history."
Rangel insists that the media content law that HRW general secretary Vivancos referred to is not the one that was approved in the second National Assembly(AN) sitting ... "I know Vivancos ... he's intelligent and it's clear we are not talking about the same draft law."
Venezuelan human rights group PROVEA general coordinator, Carlos Correa admits he has some complaints against the new media content law, the principal being that restricted viewing hours are far too long.
"Restricted timetable covers 12 0f 24 hours broadcasting ... the volume of protection is far too high along with the discretional penalizing power which is exclusively in the State's hands."
The public, Correa states, will be directly affected by the measure because it will not be able to enjoy absolute freedom of expression.
Venezuela, Opposition Reach Agreement on Chavez Vote (Update3)
Caracas, May 23 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuelan President Hugo Chavez and opposition leaders said they would sign an agreement next week to let an electoral board set the date for a binding referendum on the former army lieutenant colonel's rule.
The 19-point accord, brokered by Organization of American States Secretary General Cesar Gaviria after eight months of talks, pledges both sides to respect the right of the electoral board to set the date and opens the way for international observers to monitor the voting.
``We're very happy that the opposition is assuming a democratic attitude and is trying to convoke a referendum,'' Chavez told Panamericana television station in Peru, where he is attending a regional summit.
A referendum may end two years of protest and strikes by the opposition demanding that Chavez resign or call early elections. Opponents agreed to a binding referendum to be held after August, the midpoint of Chavez's six-year term, after a two-month national strike failed to force a non-binding vote in February.
Polls have indicated that Chavez, who was ousted by the military for two days last year during a failed coup attempt, would lose a referendum. After the strike crippled oil production and consumer spending, the economy fell 29 percent in the first quarter and unemployment rose to 21 percent, both records.
Opposition and OAS officials said last month they had an agreement with the government, only to have Chavez block the accord a day before it was to be signed. The previous version of the agreement set November 19 as the deadline for the referendum.
International Presence
The accord says that the OAS, the Carter Center and the United Nations may provide technical assistance before the vote and observe the referendum.
``We've guaranteed an international presence during the referendum,'' said Alejandro Armas, an opposition negotiator.
Congress earlier this week postponed until next week a vote to choose the five members and 10 alternates of the electoral board, which would administer the referendum.
Opposition congressmen said they objected to government legislators, who hold a narrow majority, picking three of the five board members.
The constitution requires about 2.5 million signatures, or 20 percent of the more than 12 million registered voters, to convoke a referendum. To oust Chavez, the number voting against him must exceed the total that voted him into office in 2000, when he got about 3.7 million votes.
The government and opposition leaders signed an agreement earlier this year pledging to refrain from violence and incendiary rhetoric.
It took Chavez about 24 minutes to break that accord,'' said Francisco Toro, an analyst with research company Veneconomy in Caracas, referring to the president's almost daily speeches.
We have more than four years to see that Chavez is not bound by any law, constitution or agreement.''
Last Updated: May 23, 2003 16:57 EDT
RPT-UPDATE 2-Venezuela's battered economy dives 29 pct 1st-qtr
Reuters, 05.23.03, 4:35 PM ET
By Pascal Fletcher
CARACAS, Venezuela, May 23 (Reuters) - Venezuela's economy plummeted a record 29 percent in the first quarter of 2003, squeezed by a anti-government strike and tight official currency controls, the Central Bank said on Friday.
Analysts said it was the worst economic collapse ever recorded by Venezuela, the world's No. 5 oil exporter, and probably also the steepest quarterly contraction ever seen in Latin America.
"It's unprecedented and reflects a destroyed economy," independent economist Alexander Guerrero told Reuters.
The Central Bank said Venezuela's strategic oil sector, which accounts for half of government revenues, shrank by 46.7 percent in the first quarter while the non-oil sector contracted 20.9 percent.
In December and January, left-wing Venezuelan President Hugo Chavez toughed out a general strike aimed at forcing him from office.
Crippling work stoppages temporarily slashed oil output and exports by state oil firm, PDVSA, choking off government revenues and triggering heavy capital flight.
This forced the government to introduce foreign exchange controls that reduced imports and exports.
"Firstly, it was the effect of the PDVSA strike and secondly the impact of the exchange controls," said Jose Cerritelli, an economist with Bear Stearns in New York.
He noted, however, that the government had managed to restore strategic oil production in the wake of the strike.
IDEAGlobal's Benito Berber said the unrelenting political conflict between populist Chavez and his political opponents had also contributed to the economic collapse.
"There is no purely economic factor that can explain this kind of fall, only a political one," he said.
DOWN, DOWN
The 29 percent gross domestic product (GDP) shrinkage in the first quarter followed an earlier record decline of 16.7 percent in the last quarter of 2002. In the whole of last year, when Venezuela was rocked by months of political turmoil culminating in a short-lived failed coup against Chavez, GDP fell nearly 9 percent.
In its first-quarter 2003 report, the Central Bank said the capital portion of the balance of payments registered a deficit of $1.5 billion against a $2.4 billion deficit a year ago.
The first quarter current account surplus stood at $1.9 billion compared with a surplus of $209 million a year earlier.
Although expected, the GDP collapse was a blow for Chavez, who since his election in late 1998 has struggled to implement his self-styled "revolution", an anti-poverty program based on government spending and a bigger state role in the economy.
His foes, who include business leaders and dissident military officers, accuse him of squandering the nation's oil riches and trying to implant Cuba-style communism.
Analysts said the crucial oil production recovery could slow the economic nosedive over the rest of the year.
The International Monetary Fund has predicted Venezuela's economy will shrink 17 percent in 2003. Finance Minister Tobias Nobrega sees a decline similar to last year, around 9 percent.
"Unfortunately, the currency controls continue to be asphyxiating," Bear Stearns' Cerritelli said.
Private importers and exporters say the painfully slow allocation of dollars by the state currency board Cadivi is strangling business activity, disrupting manufacturing and creating shortages.
Finance Minister Nobrega said on Thursday the government would correct faults in the currency regime.
The Central Bank said the public sector contracted by 34.8 percent in the first quarter of 2003, while the private sector shrank 25.6 percent. The worst hit sector was construction, which fell 64 percent, followed by manufacturing, which shrank 35.1 percent and trade that declined 33.5 percent. (Additional reporting by Tomas Sarmiento)
Venezuelan President to Sign Referendum Deal Next Week
<a href=www.voanews.com>VOA News
23 May 2003, 17:14 UTC
Venezuela's President Hugo Chavez says he will sign a long-awaited deal with political opponents next week, opening the door to a referendum on Mr. Chavez's presidency.
Mr. Chavez made the announcement Friday in Cuzco, Peru, where he is meeting with other Latin American leaders for the annual Rio Group summit. The deal came in talks late Thursday, which included the Secretary-General of the Organization of American States, Cesar Gaviria.
Last month, Mr. Gaviria brought the two sides close to an agreement, before Mr. Chavez rejected calls for international mediators in a future referendum.
Details on Friday's deal were not immediately available, but it is expected to allow for a vote on whether to allow Mr. Chavez to continue in power. Venezuela's constitution permits a recall referendum after the midpoint of a president's term, which comes on August 19th for Mr. Chavez.
Political opponents have been calling for Mr. Chavez to leave office, accusing him of leading the country toward economic ruin. Mr. Chavez has blamed the economic downturn on a two-month workers strike that ended earlier this year.