Reuters, 06.05.03, 11:14 PM ET By Raju Gopalakrishnan SINGAPORE, June 6 (Reuters) - Asian stock markets were mixed on Friday with some investors locking in profits after strong gains this week and others awaiting U.S. payroll data later in the day for more clues on the economic recovery story. The euro remained firm against the dollar at about $1.1855 <EUR=> after ticking up in the aftermath of Thursday's widely anticipated half-point interest rate cut by the European Central Bank. Gold prices slipped after surging on Thursday on the strength of the euro, and oil futures nudged higher on more talk of OPEC supply cuts. After a week of the best gains seen this year, Asian stock markets sobered ahead of the weekend. Japan's Nikkei average <.N225> was up a slight 0.19 percent at midday around its best levels since late February. But markets in Australia <.AXJO>, Singapore <.STI>, Hong Kong <.HSI> and Taiwan <.TWII> were marginally down or flat. South Korea was closed for a holiday. "Investors are unwinding long positions ahead of the weekend and given that we've been rising almost unchecked since last week," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities in Tokyo. "Also, the market is worried about data on the U.S. economy coming out later today. It could be quite grim," he said. JOBS OUTLOOK CLOUDY The United States is to announce the May jobs report later on Friday and analysts expect unemployment in the month to have risen to 6.1 percent from April's 6.0 percent. But sizable statistical revisions and uncertainty about how quickly the recent rebound in confidence will induce firms to begin hiring again have left many in the market not knowing what to expect. On Thursday, the U.S. government said applicants for initial jobless benefits rose last week to 442,000, the highest level in more than a month. Economists had forecast 420,000 new jobless claims and the weekly figure raised some anxiety before the monthly report. To offset the gloom, an upbeat sales forecast by Intel Corp (nasdaq: INTC - news - people) offered cheer to technology companies in Asia. Intel is the world's largest semiconductor manufacturer and its forecasts are widely viewed as an indicator of demand in the PC industry. In its report issued after Wall Street closed on Thursday, Intel narrowed its revenue forecast but said sales of its microprocessors, chipsets and motherboards, which account for more than 80 percent of total revenue and are included in most personal computers, were "trending to the high end of the normal seasonal patterns". In the currency markets, the dollar crept lower against the yen, but quickly moved back to about 117.90 <JPY=> by 0245 GMT from 117.30 yen as intervention fears resurfaced. The Australian dollar <AUD=> broke above 67 U.S. cents for the first time since July 1999 after the Reserve Bank of Australia governor said the local currency's rally had not been excessive. U.S. Treasuries firmed slightly in Asia after slipping overnight ahead of the jobs report. The benchmark 10-year note <US10YT=RR> was last at 102-18/32 for a yield of 3.32 percent, down from 3.34 percent in late New York trade. Spot gold <XAU=> was weaker as the euro came off its highs, inching down in Asian trade to about $367.05 per ounce from about $368.75 in late New York. Front-end NYMEX oil futures were eight cents higher at $30.82 per barrel after gaining 69 cents on Thursday, boosted by news that two key OPEC oil ministers will meet their counterpart from nonaligned Mexico. The talks between Saudi Arabia's Ali al-Naimi, Venezuela's Rafael Ramirez and Mexico's Ernesto Martens will come ahead of next week's OPEC meeting. The three countries were the architects of drastic oil curbs in 1998 and 1999.

Michael Kiefer The Arizona Republic Jun. 6, 2003 12:00 AM

Isabel Allende moved from Chile to San Francisco in 1988 to be with a man. She married that man so she could get a green card and stay in the country. She became an American citizen in 1992. But on Sept. 11, 2001, as the Twin Towers fell, the bestselling novelist finally decided that she had become American. The events of that day brought back painful memories of another Sept. 11, in 1973 - also a Tuesday - the day her uncle, Chilean President Salvador Allende, was killed in a military coup. "The images of burning buildings, smoke, flames and panic are similar in both settings," she writes in her new book, My Invented Country. "That distant Tuesday in 1973, my life was split in two; nothing was ever again the same: I lost a country. That fateful Tuesday in 2001 was also a decisive moment; nothing will ever again be the same, and I gained a country." Allende, 60, is the author of 11 books, most of them fiction. "Among the more commercial writers, she's probably the one taken most seriously," says Raymond L. Williams, professor of Latin American literature at the University of California-Riverside. Yet here is one of Latin America's most famous living authors, calling herself a norteamericana, an estadounidense (a U.S. citizen). She wants to stay, not just for love of a man, but because she wants to belong, to take part. She'd lived away from her native Chile for many years - but as an exile. Now she is an immigrant. "The exile looks toward the past, licking his wounds," she writes, "the immigrant looks toward the future, ready to take advantage of the opportunities within his reach." On Tuesday, Allende will talk about that conversion in Tempe, where she will read from My Invented Country, which is now out in English. Expect a good show: Allende has as great a reputation for her speeches as for her outsized personality. "When I met her for the first time, I was dazzled," says friend and novelist Amy Tan. "She has these great big luminous eyes, and she has a funny mouth. She opens her mouth and - you have no idea - you think she's going to spout magical realism, based on everything you've read about her, and then she comes out with this dirty joke, and your mouth drops open and you can't believe what you heard."

Memories and whimsy

The new book is subtitled A Nostalgic Journey Through Chile, which doesn't let on that it's also a journey from Chile, through time as well as space, a critical look at a country Allende thinks she remembers. Her grandchildren tell her she recalls things that never happened. Indeed, the word inventado in the book's Spanish title is more whimsical than its nearest English equivalent, "invented," and it carries a stronger connotation of things made up. "From the moment I crossed the cordillera of the Andes one rainy winter morning," she writes, "I unconsciously began the process of inventing a country." Allende was a journalist in Chile in 1973 when Gen. Augusto Pinochet took control of the government. Two years later, because of her name and her politics, she fled to Venezuela with her husband and two children. Allende was a foreigner in Venezuela, and it tinged her books. The Spanish word for foreigner is extranjero, whose root is linked to the words extraño, "strange," and extrañar, "to miss or to long for." "I think it's good for a writer to be searching for roots, to cling to memory, to try to understand your circumstances," she said in a recent telephone interview. "You don't take anything for granted. You observe carefully. I think the writing comes from my need to preserve my memory and to find a place to plant my roots, because I don't have a geographical place. It has to be a mythical place or a metaphorical place, which is the books." Allende's debut as a novelist came unexpectedly. In 1981, she started a letter to her grandfather, who was dying, and it turned into her first novel, The House of the Spirits, which came out a year later. Allende was immediately lauded as a "magical realist," a term often used to describe the fiction of Nobel-prize winner Gabriel García Márquez. Simply put, it describes a playful and quasi-mystical storytelling style that seems to give equal weight to the probable and the improbable, tongue-in-cheek and straight-faced. Allende, an urban and urbane Chilean, was surprised to be categorized with a tropical Colombian. "We are perceived as one continent abroad," Allende says, "because these writers seemed so similar or familiar in a way, and they were writing different stories in different styles, but everything was under the big label of Latin American Magical Realism." And though they are culturally different, they share a language that allows a looser perception of reality, but that depicts a reality nonetheless. And both, as professor Williams points out, listened to stories passed down orally from grandparents, stories that later found their way into their fiction. Tan went to hear Allende read shortly after she published her own first novel, The Joy Luck Club. She was delighted when Allende introduced the ghost of her grandmother, who, she told the audience, was standing next to her. "I couldn't tell if she was joking or serious," Tan recalls, "because she just sort of turned to the side and introduced her grandmother, and you could practically see her grandmother there, she was so lively." Williams says that much of Allende's appeal lies in her storytelling abilities, partly because, like García Márquez, she started out as a journalist and "consequently understands quite well how to communicate to a large audience." Critics describe her as the most-read Latin American female writer; she has sold more than 35 million books in 30 languages. "She's had an exceptional life," Williams says, "and she has an incredible ability to tell stories about that." Allende sees this at the heart of her or any writer's work. "All that one writes is based on our own experience, or one writes about things one cares for," she says. Exile was too much for Allende's marriage. In 1988, she met William Gordon, who would become her second husband, and she began her odyssey toward becoming an American. But even that word is loaded. South and Central Americans, Canadians and Mexicans often bristle that we in the United States have appropriated the word "American" to describe ourselves. Technically, they're all "Americans." "I didn't want to become an American or move forever to this country," Allende says. "I was just having an affair with a guy that I fell in lust with. And then after we started living together, things started to work." She liked California, liked its yoga classes and bookstores, and most of all liked its freedoms in lifestyle and politics.

Marriage of convenience

Then her visa ran out and she had to leave the country. She didn't want to stay illegally, she says, because she had been illegal before during her years in exile, and so she decided to marry Gordon. "I forced this poor man into marriage because I needed a green card," she says, her voice rising. "For no other reason - I'm not kidding! We've been very happy for 16 years, but that's just a miracle. The reason I married him is I couldn't be an alien." And though she became a citizen in 1992, actually considering herself American was not so easy, she found. She polished her English but felt she still didn't understand the nuances of the language and the codes and subtleties of the people who speak it. And perhaps they didn't understand her, and once again, she found herself relegated to a linguistic barrio. "I speak Spanish. Here, I'm just another Latino and I should be cleaning houses. What am I doing there on a platform with a microphone? That's the first question," she says with a laugh. "As a Latin American in the United States, people don't make much of a difference between Mexico or Argentina or Uruguay or Chile. It's different to be a Cuban in Miami than to be a Mexican farm worker in California." Or a Chilean novelist in the Bay area. But she's optimistic: She's an immigrant now, not an exile. She carries Chile in her heart and in her imagination, but she plans a future in the United States. "I don't want to be a customer," she says. "I want to belong to a community that goes somewhere and is doing something. So I want to be a citizen and I want to be involved."

Reach the reporter at (602) 444-8994.

Friday, 6 June 2003, 12:37 pm Press Release: Council on Hemispheric Affairs

www.coha.org Council on Hemispheric Affairs Monitoring Political, Economic and Diplomatic Issues Affecting the Western Hemisphere Memorandum to the Press 03.31 6 June 2003

COHA Research Memorandum:

The OAS Meets: A New Latin America Emerges?

• Fallout from the bitter debate over war in Iraq can be expected to play a dominating role at the summit and reshape major relationships among OAS members-if not in the meeting hall, then in the corridors.

• The Kirchner administration makes its first major foreign policy debut, and can be expected to signal whether it plans to follow a predominantly pro-Mercosur or pro-FTAA agenda.

-. The issue of Cuba returns to the agenda and is sure to further divide the assembly.

• Look at the role of Brazil, the region's new grand diva.

On June 8, foreign ministers of the thirty-five members of the Organization of American States will descend upon Santiago, Chile for the annual meeting of that body's General Assembly, a gathering at which delicate diplomacy aimed at patching up, or at least submerging, the disagreements that have divided the hemisphere over the past year can be expected to overshadow the official agenda item of "good governance." Just as the recent G8 summit in France was more a diplomatic pageant than a productive discussion about the state of the world economy, the significance of this OAS meeting will lie not in any concrete product or declaration expected to emerge, but rather in the web of evolving interhemispheric relations showcased there-relations that have been badly fractured of late by issues as diverse as the war on Iraq, the proposed Free Trade Area of the Americas and the crackdown on dissidents in Cuba. Equally important, this meeting marks the OAS debut of the administrations of Presidents Luis Inácio "Lula" da Silva of Brazil and Néstor Kirchner of Argentina. Thus it can be expected to help set the tone of relations between a growing political grouping of center-left South American leaders led by Lula, with a strong orientation towards multilateralism and progressive social policy, and the unilateralist, free-trading Bush administration, as represented in Santiago by Secretary of State Colin Powell.

The OAS Post-Iraq: Tentative Rapprochement?

Clearly, the most sensitive issue being faced by the OAS member states is the same one that dominated the G-8 summit: the aftermath of the unilateral American invasion of Iraq, which was at the time staunchly opposed by many OAS members and universally rejected in public opinion polls throughout the region, including Canada. Diplomatically, U.S. policy was challenged in the UN Security Council by the two Latin American delegations there, Chile and Mexico. However, now that the Bush administration has been somewhat appeased by the sacking of Chile's UN ambassador Juan Gabriel Valdés, who vocally opposed the war, Santiago can expect far more cordiality upon the appearance of the somewhat tarnished Powell in Chile than President Chirac recently received from Bush when the two met in Evián.

For its part, the Lagos administration has made it extremely clear that it wishes to bury any trace of recent disagreements with Washington as soon as possible, almost groveling as it insisted repeatedly that Powell would be most welcome at the OAS gathering-in spite of his probable finagling with intelligence data to justify his charge at the UN that Iraq possessed weapons of mass destruction. In fact, the Chilean paper El Mercurio went so far as to declare that he would be the "star" of the event; other Chilean diplomatic sources cited in the same conservative paper indicated that Powell's visit to Santiago had been undertaken precisely in order to smooth things over (limar esperezas) following the Iraq fracas.

At the same time, it is highly doubtful that American relations with Mexico, the other Security Council dissident, will be mended quite as rapidly. In the case of Chile, there were economic incentives for the government to humble itself and make amends: namely, the Lagos administration's desire to see the US-Chile free trade agreement, which had already been concluded and initialed by President Bush, sent to Congress for its approval and ratification. In contrast, Mexico and the United States have engaged in a series of trade skirmishes lately over agricultural exports under NAFTA, disputes which have grown steadily more acrimonious and show no signs of being close to resolution. There is also a heavy load of lingering ill-will over the failure to conclude an immigration agreement that would regularize the status of Mexican immigrants in the U.S. and facilitate the issuing of tens of thousands of new visas under a revised "guest worker" program. In general, a malaise of resentment prevails among Mexican opinion makers over the Bush administration's complete (if benign) neglect of Mexican-American relations since September 11, and particularly since the UN votes on Iraq.

All of these unresolved issues make it unlikely that relations in Santiago between Powell and his Mexican counterpart, Foreign Minister Luiz Ernesto Derbez will be particularly warm. This more pessimistic view was underscored by remarks made in comments by Luigi Einaudi, former American diplomat and now assistant secretary-general of the OAS. He suggested that Latin American governments had underestimated the extent to which they had harmed their standing in Washington by opposing the war, and that in fact "it was not possible in Santiago or Mexico City to realize the degree of disappointment of President George Bush" at the perfidy of his hemispheric compatriots.

Argentina and Brazil: New Administrations Make a Hemispheric Debut

Not only will the atmosphere of this summit be one of heightened tensions as a result of the Iraq crisis, there is also a certain air of expectancy as Foreign Ministers Celso Amorim of Brazil and Rafael Bielsa of Argentina make their OAS debuts as the representatives of the newly elected administrations of Presidents da Silva and Kirchner, respectively. While Amorim can be expected to re-articulate the same regionalist and pro-Mercosur agenda that the Lula administration has aggressively promoted over the last six months, Bielsa will be under singular scrutiny; this is one of his first opportunities to articulate the new Argentine administration's foreign policy in a highly visible forum, with the two hemispheric heavyweights, Brazil and the United States, likely aggressively courting him in an effort to line up a valuable ally for their respective causes.

On the one hand, Brasília is hoping for the support of Buenos Aires in its project of regional integration, which entails strengthening and expanding Mercosur and postponing further FTAA negotiations until a united South American position can be reached that will call for U.S. concessions on crucial issues such as agricultural subsidies. Washington, on the other hand, would like to enlist Argentina as a FTAA supporter, a stance that would require Buenos Aires to deprioritize Mercosur, at least in the immediate future. Thus far, the Kirchner administration has made tantalizing promises to both sides. While campaigning, Kirchner declared Argentina's strategic alliance with Brazil to be his main foreign policy priority, and Bielsa has already met with his counterpart Amorim to discuss Mercosur, trade issues and the desired expansion of the UN Security Council, which might make another seat for Latin America available. A date for a meeting between Lula and Kirchner is to be finalized within the next fifteen days. At the same time, Foreign Minister Bielsa assured Powell in a personal conversation that "our work of subregional integration far from excludes continental integration, which we hope to construct on a realistic and harmonious footing . . .[taking] into account the diversity and so the needs of each country."

While until now the Kirchner administration has been able to please everyone, the upcoming summit may well mark the end of its honeymoon period of foreign policy neutrality. When Bielsa meets Powell in Santiago on June 8, and especially after the latter goes on to Buenos Aires to meet President Kirchner in person on June 10, the latter's administration will be forced to tilt its hand, either making commitments to Washington that Brasília will find extremely unpalatable or staking out a more reserved position vis-à-vis the U.S. and committing itself to a regionalist, pro-Brazil agenda. The choice will have momentous repercussions for both Argentina and Latin America as a whole.

Cuba: The Ripple Effects of Repression

Competing with these complex maneuverings will be the recent crackdown in Cuba, where more than seventy-five dissidents were arrested and imprisoned in March and April, and the failure of earlier attempts to craft any hemispheric initiative to condemn these events. Following the arrests, the ambassadors of Canada, Chile and Uruguay presented a declaration to the Permanent Council of the OAS (composed of the ambassadors of all the member states) that expressed "their deep concern for the grave deterioration of the human rights situation in Cuba . . . as evidenced by the arrest and severe sentences for more than seventy-five Cuban citizens who had participated in peaceful political activities." The declaration was supported by the United States, Argentina, Colombia, Bolivia, Ecuador, Peru and most of Central America, but opposed by Brazil, Venezuela and the fifteen members of Caricom; Mexico and Guatemala expressed sympathy for the aims of the resolution but maintained that the Permanent Council was not an appropriate forum in which to address this question because Cuba had no opportunity to defend itself.

Ultimately, the declaration received the support of only sixteen OAS members, and its sponsors were forced to withdraw it on May 20. They declared their intention of submitting it as a pronouncement of the group to the Assembly, though it cannot be considered an official document. Despite the deadlock, further debate on the subject can certainly be expected, and however much Secretary Powell and the Bush administration may wish for the OAS to unite in denouncing recent events in Cuba-which in large measure, they had helped to provoke by instructingU.S. diplomatic personnel in Havana to supply and closely liaise with the dissidents-the adoption of a joint OAS position on the subject is highly unlikely. Brazil, Mexico (the only Latin American country to maintain continuous relations with Cuba) and especially Venezuela will not readily abandon their defense of Cuba in deference to Washington's wishes.

This new wave of diplomatic maneuvering over Cuba is another reminder of the persistent divisiveness of this issue in hemispheric relations. Recently, it has seemed possible that Castro's long isolation, vigilantly enforced from Washington, may be significantly easing up with the emergence of Chávez, Lula and even Kirchner (at whose inauguration Castro was enthusiastically cheered) as supporters of a policy of relaxation toward Havana; the dynamics of the debate over Cuba at the OAS meeting will be crucial in revealing the nature and strength of this possible nascent pro-Castro coalition.

Finally, yet another matter of great import as the OAS assembly unfolds will be the comparison of the Santiago meeting with that of the recently concluded Rio Group in Lima. More and more, Latin American pundits are looking upon the all-Latin Rio nations as forming the basis of a new regional grouping in which the U.S. and Canada will have only observer status, as is the case with the former metropole nations in the Organization of African Unity, and the OAS meeting will be closely looked to as a source of further evidence for or against this theory.

Momentous events over the past six months both inside and outside the hemisphere have engendered a situation in which relations among American states are both particularly tense and remarkably fluid. While recent debates over Iraq and Cuba have provided hints at the foreign policy positions of major Latin American players, much is still to be determined about the emerging contours of hemispheric relations. The upcoming OAS summit should be closely watched as positions are staked out and sides chosen in the explosive debates to come over democratization, multilateralism and trade. Indeed, there is a strong possibility that the OAS will be more fundamentally divided at this meeting than ever before, split between Washington's more compliant free trading clients and an emerging Latin American bloc willing and able to push a very different agenda.

This analysis was prepared by Jessica Leight, research associates at the Council on Hemispheric Affairs. Issued 6 June 2003

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, please see our web page at www.coha.org; or contact our Washington offices by phone (202) 216-9261, fax (202) 223-6035, or email coha@coha.org.

NZoom> Oil prices rose above $US30 a barrel on Thursday as Opec producers Saudi Arabia and Venezuela prepared to seek assurances from non-member Mexico that it would follow the cartel in any move to tighten supply.

A meeting on Friday in Madrid between Saudi Oil Minister Ali al-Naimi and his counterparts, Venezuela's Rafael Ramirez and Mexico's Ernesto Martens, comes just days before next Wednesday's Opec meeting in Qatar to decide third-quarter cartel production.

The three countries were the architects of drastic oil output curbs in 1998 and 1999 which laid the groundwork for a five-year price boom, and are regrouping to prepare the ground for the resumption of Iraq's oil exports.

US crude futures jumped 69 cents to $US30.74 a barrel, nearing Wednesday's six-week peak of $US31. In London, benchmark Brent crude was 63 cents higher at $US27.44 a barrel.

"They aren't meeting to ask the Mexicans to pump more oil. So the question will be if they get Mexico to agree to cut," said a New York trader.

Iraq earlier on Thursday announced it was tendering to sell 10 million barrels of crude stored at export terminals, its first oil sales since the US-led invasion in mid-March.

Baghdad is aiming for some 1.5 million bpd of production by the end of this month, over half of that set for export, although continued looting in the southern region is hampering efforts to restart supplies, an official there said Wednesday.

"We believe that the market will continue to be surprised at the slowness of output recovery in Iraq and by the length of time before the security situation allows for a stabilisation of Iraqi capacity," said Paul Horsnell, an analyst with JP Morgan.

A full recovery to its previous over two million bpd exports - some four percent of globally traded oil - appears distant.

Some analysts believe Opec could opt to postpone any further cut in supplies as prices remain above its $US25 a barrel target, analysts say.

"Prices being where they are, we don't think they will do anything," said Leo Drollas at London's Centre for Global Energy Studies.

On Wednesday, Indonesian Energy Minister Purnomo Yusgiantoro said no cut was necessary as long as prices stayed within the group's $US22-$US28 price band. The Opec basket price stood at $US26.72 on Wednesday.

Oil markets have now recovered most of their losses following US governmentdata showing an unexpected rise in crude and gasoline supplies on Wednesday, somewhat easing concerns of a potential summer supply crunch.

Crude oil stocks jumped 2.8 million barrels in the week to May 30 while gasoline supplies rose 2.3 million barrels, the Department of Energy's statistical arm said.

Crude supplies are still down 11% against last year's levels, while gasoline is down 5%.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 05, 2003 By: David Coleman

US Drug Enforcement Administration (DEA) agents say over 100k of cocaine transported by Colombian and Italian nationals has been seized at Rome's Fiumicino airport as it arrived from Caracas destined for drug markets in Italy and in Spain ... it was the second major seizure at Fiumicino airport after an Italian national was arrested in January with 24k cocaine.

An ongoing investigation of the drug traffickers led to the additional arrest of four Italian nationals with more arrests expected shortly, according to the DEA which is conducting the investigation in liaison with the DEA's Caracas office and Venezuelan anti-narcotics police.

In its 2002 International Narcotics Control Strategy Report, the US State Department, said that cocaine destined for Italian and other European consumption originates with Colombian and Mexican criminal groups. Heroin and cocaine are smuggled into Italy via boat and overland via truck and privately-owned vehicle. In smaller quantities, the drugs are transported via (primarily Nigerian and Colombian) couriers or air express parcels.

The report says that Colombian FARC, ELN and AUC terrorist group control much of Colombia's narcotics production and distribution, reaping enormous profits ... the United States remains committed to supporting the Colombian government's unified campaign against drug trafficking and designated foreign terrorist organizations.

Meanwhile the US State Department reports several major drug busts in Italy in 2002 that had South American connections. In February, 279k of cocaine packaged in a containerized shipment were seized at the port of Naples, while in April, 25k of cocaine were seized by Italian customs agents. The cocaine arrived in Italy via two pieces of luggage from Caracas via France.

Fishing vessels transport large quantities of narcotics from Colombia to Mexico and other countries, with the final destination being the United States and Europe, the report said, adding that the vessels are often loaded and off-loaded at sea by "go-fast" boats operating from secluded coastal areas. Fishing vessels are considered well-suited for smuggling operations, as they have the ability to remain at sea for long periods, transit vast distances, draw minimal attention, and hide among legitimate fishing boats.