<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, June 03, 2003 By: Oscar Heck

VHeadline.com commentarist Oscar Heck writes:  “COPEI confirms second street offensive against government forces,” the Copei political party is planning a campaign effort in Petare on June 13, 2003.

This is a very dangerous and irresponsible thing to do, as was a similar event that took place in Catia recently.

Both Catia and Petare are two of the largest barrios (slum areas) of Caracas and if I am not mistaken, Petare alone has an estimated population of over one million.

Copei is one of the traditional Venezuelan political parties (and sides with the opposition) that has lost the trust of many Venezuelans due to it being associated with corruption.

So, why would such a party attempt to rally support in Petare?

Petare, a slum area with some very dangerous parts, is probably the last place that Copei will get support from. It is mostly the people from the barrios that have been affected by the past corruption of parties such as Copei. It is the people living in the barrios that had mostly been affected by the criminal tactics of the opposition during the stoppage in December 2002 and January 2003. It is mostly the people living in the barrios that have suffered from the antics of speculators and hoarders for the last several generations. (I am quite sure that most speculators and hoarders are pro-opposition … Chavez is trying to rid Venezuela of speculation and hoarding).

So why would a political party such as Copei (also an avid pro-opposition and anti-Chavez group) go to Petare?

It only makes sense if, as in the recent case in Catia, this planned rally has a hidden purpose. The purpose? To create another scenario of chaos, injuries and killings and then blame it on Chavez and the government.

It is almost certain that there will be violence at this “political rally.” All the opposition has to do is to pay people to dress in red (the Chavista color) and to don red berets, give them guns and let the shoot people.

The private opposition-backed media mafia will then say, “Bolivarian Circles, Chavez’ armed brigades, did it again!.” (Bolivarian Circles, contrary to what the opposition tries to make people believe, are small community-based groups that coordinate local community needs and improvements).

The planned June 13, 2003 Copei rally in Petare is further proof that the opposition is acting in a without-conscience fashion … as they did by blocking streets, sabotaging PDVSA, attempting to shut down banks and schools, hoarding, and heading a major anti-Chavez media campaign.

It is another example of how far the opposition is willing to go (murder?) in order to push their point and manipulate events to discredit the Chavez government.

Now, I recently received comments from a Venezuelan lady saying that I sometimes speak “against” Venezuela. As I mentioned to her, I do not speak against Venezuela or Venezuelans. I love Venezuela and Venezuelans. I do however speak (and will continue to do so) against the opposition and against the people who support the opposition. I also speak against the majority of the mid-to-upper classes because of their past and present abusive “habits.”

(Also, and not surprisingly, the vast majority of the mid-to-upper classes happen to be fiercely pro-opposition and anti-Chavez, and … as I mentioned to the Venezuelan lady, I have tried to find good things to say about mid-to-upper-class Venezuelans since I first stepped foot in Venezuela in 1976. To this day, I have, in a general sense, few positive comments to make about them).

The pro-opposition-mid-to-upper class Venezuelans that write to me (usually with insults and/or threats) seem to sincerely believe that “they” are representative of “Venezuelans.”

This cannot be. Only about 20% of the Venezuelan population is composed of mid-to-upper-class-pro-opposition people … and the socio-economic gap between them and the average Venezuelan (80%) is huge and often highly disproportionate.

There is also another interesting factor. Most mid-to-upper-class people are what would be considered as “white”, in generalized terms. This was very evident to a CBC (Canadian Broadcasting Corporation ú equivalent to the BBC) cameraman that I escorted through one of the Caracas barrios earlier this year. He, as I, also went to one of the big anti-Chavez marches (in the upscale eastern Caracas region) and felt very much out of place and very uneasy. He is black, very black, and he said to me that he was the only “black” person in the crowd. He felt very uncomfortable. He noted a marked difference, especially after having passed an entire day in one of the big Caracas barrio with me the previous day … where most people are “not-white.”

So, again, I consider that Venezuela is best represented by the majority of Venezuelans, that is, by the 80%, and not by the minority economically well-off 20% traditionally living behind 10-feet high broken-glass-embedded walls, chained metal gates and armed security.

Oscar Heck oscar@vheadline.com

Tue June 3, 2003 11:37 AM ET NEW YORK, June 3 (<a href=reuters.com>Reuters) - Emerging sovereign bonds drifted higher on Tuesday, bolstered by the bonds of Brazil, Ecuador and Venezuela as investors' sanguine view of Latin America and the hunt for high yield persisted.

The benchmark J.P. Morgan Emerging Market Bond Index Plus 11EMJ rose 0.37 percent in terms of daily returns as Brazil's share of the index, a hefty one-fifth of the total, climbed 0.3 percent on the day. Brazil's bellwether C bond BRAZILC=RR was unchanged at 89 bid.

The gains came as investors, uninspired by the rock-bottom yields offered by U.S. Treasuries, continued to funnel cash to Latin American debt. This year's flows to emerging markets, also buoyed by optimism over Brazilian President Luiz Inacio Lula da Silva's economic policies and reform agenda, have lifted the EMBI-Plus a heady 19.3 percent since Jan. 1.

While the emerging debt rally has lost some of its momentum in recent weeks, analysts said the view remains rosy.

"Overall, it's mainly positive sentiment" driving the market, said Ricardo Amorim, head of Latin American research at research firm IDEAGlobal. "The big oil producers -- Venezuela and Ecuador -- are performing well, mainly on oil prices."

With crude prices hovering above $30 a barrel amid concerns about inventory levels ahead of the U.S. summer driving season, Ecuador's share of the index added 0.76 percent and Venezuela gained 0.14 percent.

"There seems to be pretty good buy side with Venezuela," said an emerging debt trader. "Although prices haven't moved a ton, there's been pretty good volume in the past day and a half."

Credit agency Fitch revised its outlook for Brazil's ratings to positive from stable. Fitch said the shift reflected indications Lula could be on the way to building the political consensus needed to enact reforms.

Mexico's debt, meanwhile, felt the weight of new supply as the country offered a new 10-year bond denominated in euros, said the trader.

Its spread over U.S. Treasuries -- the premium investors demand to compensate for perceived risk -- widened 1 basis point to 234, while Mexico's share of the EMBI-Plus added 0.34 percent.

Mexico offered the 750 million bond on Tuesday in a deal that was expected to price later in the day. The spread was expected to be 173 basis points over the benchmark swaps curve.

Peru's debt was the session's primary dark spot as political concerns helped sink its share of the index 1.13 percent.

Peru's bonds have had a turbulent ride since President Alejandro Toledo imposed a state of emergency last week in an effort to quell violent protests and strikes by teachers, farmers, health care workers and court workers.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, June 03, 2003 By: David Coleman

Venezuelan Guayana Corporation (CVG) officials are denying disinformation published in Correo del Caroni, Monday, in which it is claimed that gold mine workers are threatening to pull out of Las Cristinas operations claiming that Canada-based Crystallex International (KRY) has reneged on a collective wage contract.

Union leader Joel Alvarez said the workers would begin an indefinite work stoppage but CVG officials say Crystallex is not involved in the dispute, although "darker domestic political interests" are attempting to link it to the dispute to garner foreign press coverage.

A CVG source told VHeadline.com this morning that a residue of some 24 workers who were due to be transferred from Mineras Las Cristinas (MINCA) late last year, are in dispute with Venezuela's heavy industry conglomerate over details in the transfer but that negotiations had been gridlocked partly due to the December/January national stoppage and union demands for payment above and beyond the national minimum wage (Bs.8,000 per day).

Labor Ministry officials have attempted to mediate in the dispute which focuses more on a political power struggle at local or regional level than any serious wage or conditions demand.  The union finds itself splintered after the abortive national stoppage and has not been able to find much financial support from the now almost bankrupted Confederation of Venezuelan Trade Unions (CTV) whose president, Carlos Ortega is a fugitive from justice after escaping to Costa Rica two months back.

"The reality is that union officials are seeking backhanders from whomsoever simply to go away and keep quiet ... they need money to keep the union alive and they have failed to extract their demands from the CVG and are now attempting to blackmail Crystallex and its Venezuelan subsidiary.  It's basically a stand-off in which nobody wins!"

Crystallex International executives in Toronto and New York are remaining resolutely tight-lipped about the debacle which they claim is entirely a matter between the CVG and employees who have not yet joined the Crystallex payroll.  Under Venezuelan law Crystallex does not have the legal authority to take issue in what is an internal CVG-union dispute which only delays a resolution to the 24 workers' employment status which Crystallex says it is ready to formalize as soon as the CVG-union dispute is settled.

BW5544 JUN 03,2003 6:52 PACIFIC 09:52 EASTERN

( BW)(NY-FITCH-RATINGS/OIL) Fitch Reports U.S. Oil Refining Makes a Comeback in '03

    Business Editors

    NEW YORK--(<a href=www.businesswire.com>BUSINESS WIRE)--June 3, 2003--The downstream sector of the U.S. oil industry rebounded in early 2003 as the cold winter, the general strike in Venezuela, the war in Iraq, and a strong demand for gasoline and distillates, resulted in refined product inventories plummeting during the first quarter of the year, according to an article titled 'U.S. Downstream Rebound in 2003?', published in the latest Fitch Ratings Oil & Gas Insights quarterly newsletter.

    Distillate demand was more than 10% higher than last year, averaging at a record 4.3 million barrels per day (mmbpd) during the first quarter. 'As the U.S. enters the summer driving season, refiners are running at near full throttle (more than 94% capacity and 15.8 mmbpd of throughput) to capture the historically strong summer margins,' says Bryan Caviness, Director, at Fitch. 'The key issue to sustaining the strong margins seen in the first quarter, is the refining sector's ability to control production.'

    In the new article, Fitch notes that sharp volatility continues to affect the downstream sector. 'The 2003 summer driving season will again be a critical period for the refining sector,' says Caviness. The remainder of 2003 is expected to be at mid-cycle or better as refiners begin investing the capital to meet the low-sulfur gasoline regulations in 2004 and diesel regulations in 2006. 'Looking forward into 2004, gasoline imports will be a key issue with the ultra low sulfur gasoline regulations. With nearly 40% of gasoline imports in the form of blending components and a significant percentage of refiners not required to meet similar specifications domestically, we expect a significant drop in gasoline imports in 2004.'

    The Oil & Gas Insights newsletter is published quarterly and can be found on the Fitch Ratings web site at 'www.fitchratings.com'. Other articles published in this issue of the newsletter include, 'Hydrocarbon Prices Remain Firm in 2003,' and 'Drilling and Services Activity Increases in 2003.'

--30--ALX/sf*

CONTACT: Fitch Ratings
         Bryan Caviness, +1-312-368-2056
         Matt Burkhard, +1-212-908-0540 (Media Relations)

KEYWORD: NEW YORK
INDUSTRY KEYWORD: BANKING BOND/STOCK RATINGS
SOURCE: Fitch Ratings