<a href=famulus.msnbc.com>MSNBC News, By Pascal Fletcher

CARACAS, Venezuela, May 28 — A peace accord reached between Venezuela's feuding government and opposition could lead to a referendum on President Hugo Chavez's controversial rule around November, the chief international mediator said on Wednesday.

       Cesar Gaviria, a former Colombian president and secretary general of the Organization of American States, told foreign correspondents in Caracas the agreement, to be signed Thursday, would not magically resolve the political conflict and economic problems that have shaken the world's No. 5 oil exporter since late 2001.

       ''I believe there will be a recall referendum (on Chavez's presidency) around November, if the constitutional conditions are met,'' the OAS chief said.

       Gaviria was the main architect of a pact reached last week between Chavez's government and its critics. The agreement recommends a constitutional referendum as the solution to the political confrontation between the two sides.

       Under Venezuela's constitution, the opposition can force a referendum on Chavez's mandate after Aug. 19 -- halfway through his term -- if they collect the signatures of at least 20 percent of voters.

       The agreement followed more than six months of talks, accompanied by sometimes deadly street clashes between followers and foes of the left-wing president, who survived a short-lived coup last year. Both sides agree in the accord to shun violence.

       Opposition leaders say they still fear that Chavez, a former paratrooper who led a failed 1992 coup six years before winning elections, will still try to avoid a referendum. They accuse him of dragging the country toward Cuba-style communism.

       But Gaviria was optimistic. ''We sat down to these negotiations with one objective, to achieve a peaceful, democratic and constitutional solution through elections. This agreement guarantees that solution,'' he said.

But he added: ''It doesn't resolve Venezuela's problems.''

       He predicted the run-up to the referendum would be very difficult. ''There are going to be a lot of tensions,'' he said.

       Venezuela faces a deep recession, high inflation and unemployment following a two-month opposition strike in December and January that disrupted oil exports and slashed government revenues.

<a href=reuters.com>Reuters (The following statement was released by the ratings agency) MOODY'S CHANGES ITS OUTLOOK FOR ALL RATED BANKS IN VENEZUELA TO STABLE FROM DEVELOPING AS OIL PRODUCTION RETURNS TO NORMAL

New York, May 28, 2003 -- With Venezuelan oil production returned to more routine levels, Moody's Investors Service has changed its outlooks for all of its rated banks in the country to stable from developing. The action is a direct result of Moody's change in outlook to stable from developing on Venezuela's foreign currency ceilings that was announced on May 26.

The outlook change for the banks covers the E+ bank financial strength ratings (BFSR), and Caa1 foreign currency deposit ratings of Banco Mercantil S.A., BBVA Banco Provincial S.A., Banco de Venezuela Grupo Santander S.A., Banco del Caribe S.A., and Banco Banesco S.A.

Moody's says the stable outlook is based on the almost-complete return to the level of oil production that was experienced at PDVSA, the state-owned oil company, prior to the December strike by oil workers. Combined with the initiation of widespread capital controls, normalized oil production means that the central government is in a stronger political position than it enjoyed before the weeks of labor unrest.

The outlook reflects a combination of the still relatively low public-sector foreign currency debt ratios and the still relatively large international reserves. International reserves have increased following the imposition of capital controls.

The stable outlook for the Venezuelan banks' ratings incorporates the deep and potentially long-lasting damage to the country's main source of foreign currency earnings that has been suffered as a result of the ongoing restructuring of PDVSA, the foreign currency exchange controls, as well as an extremely weak operating environment.

May 28 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's real gained for the fourth day in six on investors' expectations of new capital flows as local industrial companies and banks sell bonds abroad.

The real rose 0.5 percent to 3.0140 per dollar at 2:29 p.m. New York time from 3.028 yesterday. The real has gained 17 percent against the dollar in 2003, the best performance of the 16 most widely traded currencies. Mexico's peso strengthened.

Brazil's Banco Votorantim SA, the finance arm of the Votorantim cement, mining and industrial group, today said it plans to sell at least $100 million of two-year bonds. Banco Bradesco SA, Brazil's third-largest commercial bank, yesterday said it plans to sell $50 million of 18-month bonds, and Cia. de Saneamento Basico do Estado de Sao Paulo, the country's largest water and sewerage company, said it plans to sell $200 million of debt in the next two weeks.

The capital flows are still coming,'' said Flavio Farah, head of the Treasury Dept. at the Sao Paulo unit of Westdeutsche Landesbank Girozentrale. There seems to be a growing feeling the real will hold around 3 to the dollar for the near term.''

Brazilian banks have borrowed the bulk of the more than $5 billion borrowed overseas by corporate Brazil this year. They have taken advantage of low rates abroad, benchmark U.S. Treasury debt yields are at their lowest in more than 40 years, to buy Brazilian government bonds paying yields at four-year highs.

The U.S. 10-year Treasury bond, a benchmark for U.S. borrowing, yields 3.43 percent while the benchmark Brazilian rate is 26.5 percent. Thirteen-month Brazilian, fixed-rate notes were sold to yield 23.54 percent yesterday.

Meirelles

Investor expectations that Brazilian yields may remain high were supported by Brazilian central bank President Henrique Meirelles today, who told a congressional committee in the capital, Brasilia, that inflation has not yet ``controlled.''

The 12-month inflation rate in April was 16.8 percent, nearly twice the governments 8.5 percent target for 2003. Meirelles' comment raised investors expectation rates may not decline after central bank monetary policy meetings next month.

Meirelles is just following a synchronized speech: that they won't bow to pressure unless inflation subdues effectively,'' said Sandra Utsumi, chief economist with BES Securities do Brasil in Sao Paulo. In a way, they are saying `This may not be the right time to cut rates.'''

Overnight interest rates rose in the futures market.

The overnight interest-rate future for Jan. 2 settlement, the most-traded on Sao Paulo's BM&F futures and commodities exchange fell 7 basis points to 24.1 percent. The contract reflects interest-rate expectations for the end of December. A basis point is 0.01 percentage point.

Brazil's 8 percent bond maturing in 2014 fell 0.56 cent to 88.69 cents on the dollar, pushing the yield up to 10.82 percent, according to J.P. Morgan Chase & Co.

Mexico

Mexico's peso rebounded from its biggest decline in four months to rise on investor expectations an economic rebound in the world's largest economy will boost demand for Mexico's exports from its biggest customer.

The peso strengthened 0.4 percent to 10.3825 per dollar after declining 1.8 percent to 10.4225 yesterday, its largest one-day loss since Jan. 21.

The peso on March 6 fell to a record low of 11.2644 per dollar on investor concern U.S. growth might stall this year amid indications the Mexican economy might contract. The U.S. buys about 85 percent of Mexico's exports, accounting for a quarter of its $600 billion economy, and is behind about 70 percent of the foreign investment flow into Latin America's largest economy

The currency fell yesterday after yields on the government's benchmark 28-day Treasury notes fell to 4.91 percent, 1 basis point above the record low reached two weeks ago, prompting some investors to seek higher returns in other markets.

Regional Currencies

Argentina's peso declined for the fourth day in five, losing 0.6 percent to 2.8825 per dollar from 2.8650 per dollar.

Chile's peso weakened for a second day, losing 0.5 percent to 713.85 per dollar, while Colombia's peso strengthened for the first day in three, rising 0.3 percent to 2,857.00 per dollar.

Peru's new sol was little changed at 3.4964 per dollar from 3.4920 per dollar yesterdy. Venezuela fixed its bolivar at 1,598 per dollar earlier this year. Last Updated: May 28, 2003 14:30 EDT

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 28, 2003 By: Elio Cequea

Date: Wed, 28 May 2003 12:57:08 -0500 From: Elio Cequea feico57@aol.com To: Editor@VHeadline.com Subject: Time for our leaders and intellectuals to raise the standard

Dear Editor: Its time for our leaders and intellectuals to raise the standard: Please, get rid of that low "developing country" self-esteem.

Steve Forbes wrote an article about Venezuela and the article became a headliner in a Venezuelan national newspaper. If you read what he wrote, it is hard NOT to conclude that it is far from anything worth the attention of a "national" newspaper.

Steve's May-26 "Fact and Comment" does nothing but repeat some of the opposition best slogans ... he starts with the "attempt to make Venezuela a second Cuba" and ends by calling for the army to "send Chavez to Havana on a permanent vacation."

Steve Forbes wrote that the protests against Chavez were "spontaneous." He does not make any attempt to support his opinion with facts or intelligent arguments. To put it mildly, his work was ordinary at best ... even though, somebody considered his work good enough to be a national headliner. Why?

A couple of days later, Gustavo Coronel writes about his personal problem with the friendship between former US Congressman Jack Kemp and Venezuelan Ambassador to the US Bernardo Alvarez Herrera. He seems to feel threatened by that relationship. Why?

Can that friendship have negative or positive effects on Venezuela's politics?

Apparently that is what GC thinks ... he "explains" that the reason Jack kemp is a friend of the Ambassador is because of his misunderstanding of the Venezuelan situation. Is something as trivial as a friendship an issue that would affect Venezuela's national security?

Jack Kemp has the right to be a friend with whomsoever he chooses. Steve Forbes has the right to have any opinion he wants. Neither the friendships of one, nor the opinions of the other, should have any effect on Venezuela's politics. They are not even in a position of power ... if they do have an effect, we definitely have a major self-esteem problem.

It is a good time to practice to be "intellectually developed" as a country ... it only requires independence of thought.

Our leaders and intellectuals should take the lead on this matter ... El Universal could have found something more meaningful than the mediocre Steve Forbes article as a headliner.

I am also sure that Gustavo Coronel has better things to put his mind to than worry about who are the friends of Bernardo Alvarez Herrera and why.

We Venezuelans only need of our own opinions to solve our problems!

Come on people concentrate!

Elio Cequea feico57@aol.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 28, 2003 By: David Coleman

Trinidadian author and investigator Daurius Figueira is scheduled to blow the gaff on Venezuelan trans-shipments of Colombian cocaine in a Trinidad radio broadcast scheduled for Sunday.  A specialist on narcotics investigations, Figueira says he has given key information to Trinidad & Tobago Special Branch police on how the drug shipments are controlled by his country's corrupt elites to fund a local cell of the Al Qaeda terrorist network.

In an interview with Newsday reporter Nalinee Seelal, Special Branch official Frank Diaz denied discussing details with Figueira and claimed that no reports had been forwarded to him, otherwise they would be thoroughly investigated.

Figueira, however, says that the Jamaat Al Muslimeen ... led by Imam Yasin Abu Bakr ... is not linked to Al Qaeda but that there are clear links with the Indo-Muslim community ... he claims that Al Qaeda members are not interested in toppling the T&T government but they concentrate on the drug trade, until assignments are shifted.

Figueira have preliminary details about the T&T branch of the Al Qaeda network at a crime conference saying that Al Qaeda is carrying out a thriving trade with drugs in T&T with the connivance of "some businessmen and politicians."   He said that Special Branch police had listened to what he had to say two months ago ... but they have not contacted him since then.

"I have a network of persons who carry out intelligence and information gathering operations in T&T but we don't know who is who since some of the most influential persons here are linked to Al Qaeda."

Figueira, who converted to Islam in 1990, claims that Al Qaeda members can be found in key offices throughout Trinidad, and their mission is to ensure that the large shipments of drugs from Venezuela and Colombia which pass through Trinidad & Tobago are chanelled to buyers ... "local Al Qaeda members are often visited by operatives from Saudi Arabia and Pakistan, but they have not visited T&T since the 9/11 World Trade Centre bombings."

Darius Figueira says that Al Qaeda has recruited Trinidadians to go to Muslim countries for studies and that the terrorist network is also involved in the import of guns which are sold to criminal elements. He says that T&T has become a narco-democracy since nothing is being done to put a stop to the drug trade because Al Qaeda had penetrated all the key organizations in the country.