June 9 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's currency pared early gains as investors and companies took advantage last week's rally in the real to buy dollars to pay for imports and maturing debt.

Brazil's real was unchanged at 2.8755 per dollar in Sao Paulo at 12:33 p.m. New York time. Earlier, it gained 0.7 percent to 2.8550 after rising 3.2 percent last week, the best performance of the 16 most-traded currencies. Colombia's peso rose and Mexico's peso reversed declines to rise.

Brazilian banks this Thursday must pay $550 million of foreign bonds. Of that, $300 million is owed by Banco Garantia, the Brazilian unit of Credit Suisse Group, $100 million by the Brazilian unit of Madrid-based Banco Santander SA and $150 million by Sao Paulo's Banco Votorantim SA.

``I'm hearing people say that at current levels, it's a good time to buy dollars,'' said Carlos Gandolfo, a partner at Pioneer Corretora de Cambio Ltda., a Sao Paulo currency brokerage that handles about a third of all trades in Brazil's spot market.

Brazil's benchmark 8 percent bond maturing in 2014 gained 0.25 cent to 91.88 cents on the dollar, paring the yield to 9.98 percent, according to J.P. Morgan Chase & Co. The bond closed at a record high of 91.63 on Friday after earlier rising as high as 92.63 in intraday trading in New York and London.

Further declines may have been limited by investor expectations that the government will sell a foreign currency bond in the coming days.

There is a lot of maturing debt but beyond this, every week it seems we have someone else selling debt,'' said Marcel Peregrino, who helps manages about 25 million reais of bonds and stocks for Ativa SA, a Rio de Janeiro fund management company. The rumors of a Brazilian sovereign sale are also strong.''

Some of the banks paying maturing debt, such as Votorantim and Santander have already secured new finance to pay their maturing debt.

The rough balance of maturing debt and new bond sales should keep the real in the 2.85 reais to the dollar to 2.95 reais to the dollar range for the next few weeks, Peregrino said.

Colombia

Colombia's peso rose for the sixth day in seven after Finance Minister Roberto Junguito's resignation Friday led to the designation of his deputy to assume the post, allaying investor concern about continuity of economic policy.

The peso gained 0.3 percent to 2,817.5 per dollar in Bogota, and the benchmark 10 percent bond due January 2012 rose for a sixth day, adding 0.1 cent on the dollar to 114.35, paring its yield to 7.69 percent, according to J.P. Morgan Chase & Co. The yield has declined from a high of 14.46 percent on Sept. 19.

President Alvaro Uribe moved quickly Friday to fill the ministry post, naming 44-year-old Deputy Finance Minister Alberto Carrasquilla, a former technical vice director at the central bank, as Junguito's successor. Carrasquilla, who said he would continue the economic policies undertaken by Junguito, will be sworn in June 20.

``It's clear the economic program is going to continue on the same track and at the same pace without skipping a beat,'' said Jose Cerritelli, an analyst at Bear, Stearns & Co.

Growth Course

Junguito, a former Colombian representative to the International Monetary Fund, was instrumental in signing a $2.1 billion, two-year standby loan accord with the IMF. He also helped push key pension, tax and labor bills through Congress aimed at cutting deficit spending and boosting growth.

Junguito felt he'd completed his mission,'' said Alvaro Camaro, head of research at Acciones y Valores SA brokerage. He got the accord with the IMF and he pushed through the key reforms.''

The government on Friday announced that industrial output, excluding coffee processing, rose 15.3 percent in March from the year-earlier month, the national statistics agency said in Bogota. Industrial sales rose 14.8 percent.

Accelerating industrial output may help the economy maintain its momentum after growing 3.8 percent in the first quarter, the biggest gain in the gross domestic product in five years.

Interest rates near historic lows have helped boost the construction industry, raising demand for metal products and other items used in building and helping create jobs.

Regional Currencies

Chile's peso fell for the fourth day in five, sliding 0.3 percent to 716.35 per dollar.

Mexico's peso reversed declines to rise for the second day in three, adding 0.4 percent to 10.6851 per dollar, paring its decline in 2003 to 3 percent, the worst performance among the 16 most widely trade currencies.

Argen4percent to 2.8175 per dollar, boosting its gains in 2003 to 19 percent, the second-best performance among 59 currencies tracked by Bloomberg worldwide.

Peru's new sol was little changed at 3.4833 per dollar. Venezuela this year fixed its bolivar at 1,598 per dollar.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, June 09, 2003 By: Luis Zuleta

Date: Mon, 9 Jun 2003 11:35:59 -0300 From: Luis Zuleta luiszuleta@hotmail.com To: Editor@VHeadline.com Subject: The constitution DOES NOT state

Dear Editor: I'm reading Mr. Roy S. Carson's article "Come in Houston ... opposition PR has a problem understanding democracy" and two things stand out.

1 - He claims that the Venezuelan opposition is paranoid by making certain assumptions about the government's willingness to allow (or not to block) a referendum on Mr. Chavez' mandate. As much as I agree that the opposition (and anyone for that matter) would be wrong to ignore the constitution or even think about going over it in order to remove Mr. Chavez, I'm wondering why he thinks the "Venezuelan Community Abroad" goes into an "extraterrestrial trajectory" in their statement. When reading the statement by the VCA, even those paragraphs carefully chosen by Mr. Carson to distort the meaning and context of it, it seems to me that the VCA is expressing concerns based on the fact that, as of today, the mechanism to allow the referendum is not in place. By this I mean, there is no electoral council (CNE) and the existence of that CNE depends largely (make that fully) on the willingness of the still government-controlled National Assembly to DO THEIR JOBS and select one. Those concerns seem well founded since Mr. Ameliach continues to call on permanent or urgent sessions to discuss anything the Chavez' faction can come up with or put on a public spectacle like it happened last Friday except to determine the members of the new CNE.

The concerns of the VCA about the impossibility to have an early Presidential election, if the recall doesn't succeed before Mr. Chavez enters the last two years of his mandate, is actually founded in the fact that the recall could be affected by the government's intent through the National Assembly to delay it as much as possible (based on their actions) by not designating a CNE in time to make it happen. If this is the case, and evidence points in that direction, then there is a big problem, since the constitution would not allow taking this into account and making the necessary adjustments. If the recall does not take place in time because the government blocks the election of the CNE, denies funding, or any other maneuver, then it should be the Supreme Court's job to intervene ... but wait there is a law being pushed by the government to increase the number of justices by 10 and therefore regain control of the TSJ.  See a trend here?

The constitution DOES NOT state that a recall referendum's process begins after August 19 ... it was the TSJ. The constitution states that a recall can take place at the midpoint of the term, but it is the TSJ who determines that midpoint. See the concern now? The VCA does not seem to be calling on the international community to punish Mr. Chavez for something he might do or might not do ... they seem to be calling on the international community to continue their role as an impartial arbitrator to guarantee BOTH SIDES that the agreement will be fulfilled.

That to me IS understanding democracy.

2 - Every time someone writes about Mr. Chavez and his little coup in 1992, everyone supporting this man (or "objective" writers simply telling it like it is) go crazy and complain about how that cannot justify what happened in April, which is true. But, I'm wondering why Mr. Carson and everyone else writing about the Venezuelan situation continuously feels the need to "remind" anyone not supporting Mr. Chavez about "Dictator for a day" Mr. Carmona, basically assuming that everyone opposing Mr. Chavez back then supported him in his attempt to undermine democracy, or that anyone opposing Mr. Chavez today still does support what this man did.

Over one year after those unfortunate events (those of Mr. Carmona, not of the people fighting for their cause) I think is time to drop that once and for all, and to stop assuming that ANYONE opposing Mr. Chavez was supporting that monumental violation of democratic principles.

Best Regards, Luis Zuleta luiszuleta@hotmail.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, June 09, 2003 By: Juan C. Nagel

VHeadline.com guest commentarist Juan C. Nagel writes: Wait until August. Be patient. For more than a year, the Venezuelan opposition has been hearing this self-righteous nonsense from President Hugo Chavez and from elements of the foreign media charmed by his revolutionary rhetoric and horrified at the opposition's haste in calling for the resignation of a "democratically-elected" leader. After all, the Venezuelan Constitution allows for a Recall Referendum on the President to take place after the mid-point of his or her term (in Mr. Chavez' case, August 19). All the opposition needs to do is collect the signatures and make sure more people vote to recall Chavez than those that put him in power in the first place.

Simple, right?

Not quite. The opposition has agreed to go down this route, only to see a myriad of booby traps in the road ahead. These tricks (to paraphrase Jimmy Carter) make it very difficult for the referendum to take place under fair conditions. First of all, the Chavez government decided that the current Electoral Council was no good, so no elections could be held. Fine, they weren't geniuses, but they were good enough for Chavez when he named them in his typical, autocratic fashion. The opposition agreed to help name a new electoral body that everyone can trust, and who is the main chavista candidate? The only member of the current disqualified Electoral Council who still votes with Chavez. Congress is now indefinitely deadlocked on the election of a new electoral body.

Next up are the signatures.

The opposition, in a remarkable show of force, organized a petition drive that compiled more signatures than those needed to petition the referendum to take place. Now the government is saying these signatures are false, are insufficient, were collected extemporarily, and were cloned. Never mind that no one in the government has seen them; never mind that the Constitution does not limit the periods during which one can collect signatures; never mind that a respected NGO is guarding, counting and verifying the signatures. The new "thug-with-oil" has decided they are no good.

Other tricks include the government's failure to provide funds needed to hold the referendum, the use of government moneys for campaigning, and whether Chavez can participate in an election that will follow once his mandate is recalled (the Constitutional Court, under Chavez' control, will surely say he can). However, one of the most appalling ones is the strategy announced by this great democrat and his party: that they will actively campaign for their followers to abstain from voting.

The desired effect of this is clear. If the only people going to vote are opposed to Mr. Chavez, people in poorer districts, where the rule of law is a mirage and armed, pro-government gangs (modeled on Saddam Hussein's fedayeen) roam unchallenged, will be too scared to go vote. If turnout is low, the opposition will lose the referendum.

The picture this paints is a clear one: it is nearly impossible for a majority of Venezuelans to exercise their constitutional right to choose their own leader, and to do so in a safe and fair environment. Institutions are practically non-existent, and the government ... with its enormous oil wealth and its legal and illegal weaponry ... is bent on intimidating and breaking the opposition using any means necessary. The international community can help keep the government in check, but so far they have achieved next to nothing, in spite of the moral obligation they have towards a country that supported the region's democratic struggles when it was under military rule.

These "tricks" are not democratic.

It is shameful for a political party that exercises power thanks to the will of the people to make those same voters afraid to go cast their vote now that the tides have clearly turned against them. Chavez' tricks are preventing Venezuelans from exercising their constitutional rights. Venezuelans and the international community cannot stand for these shenanigans. Chavez is clearly in Mugabe territory now, which shouldn't be surprising. After all, Mugabe is still in power, so his tricks are worth a try.

Juan C Nagel is an economist with a degree from UCAB, and a Ph.D. Candidate in Economics at the University of Michigan. He is also a Senior Economist at ApplEcon, LLC, a small economics consulting firm based in Ann Arbor, Michigan, USA.  You may email him at jnagel@umich.edu

Oil ministry chief does not expect output to reach pre-war levels for at least one year due to looting, weak power.

By Kamal Taha - BAGHDAD - <a href=www.middle-east-online.com>Middle East Online Iraq plans to resume oil exports in the third week of June but does not expect production to return to pre-war levels for at least a year, acting oil ministry chief Thamir Ghadhban said Monday.

"We are processing contracts now with various interested parties and we hope that during the third week of this month the first shipment will be made available to the international market," Ghadhban said.

"Hopefully by the end of this month we will be producing about 1.5 million barrels per day (bpd) of crude oil and about two-thirds of that will be made available for export."

Ghadhban said output had already reached 500,000 bpd in the northern oil fields and 200,000 bpd in the south, but said he did not expect output to reach its pre-war levels for at least a year because of continued looting of the infrastructure and the wartime collapse of the power grid.

He has previously put pre-war production at three million bpd, although most Western analysts estimate it at closer to 2.5 million.

Ghadhban said the oil ministry had already recruited 3,000 security guards to protect facilities and expected to take on more.

The Iraqi bureaucrat said his staff and their advisors from the US-led coalition were reviewing all the existing contracts signed under the old regime, which favoured Chinese, French and Russian firms.

"We will be studying our contracts and evaluating them for contractual, legal and economic viability and take the proper decision in the future in the right time," he said.

But he promised that all foreign oil firms would be treated fairly as Iraq valued its position as a major supplier.

"We will be fair and just to everybody," he said.

"We are an international oil industry and therefore we are very careful and very serious about having amicable relationships with all international oil companies."

Ghadhban said Iraq was keen to reopen a 2.5-billion-dollar pipeline to Saudi Arabia which has been closed since Saddam Hussein's 1990 invasion of Kuwait and said he hoped the Saudi authorities would recognize Iraqi ownership over its entire length now that the strongman has been ousted.

He said it would not be for him to decide the fate of a pre-war agreement under which Jordan received all its import needs from Iraq, half of it for free and the rest at preferential rates.

"The agreement was between governments, not between oil ministers," he said. "That's why it is not a matter for the oil ministry to decide."

Ghadhban reiterated that there were no immediate plans to pull Iraq out of the OPEC oil cartel, although it would ultimately be a matter for a future Iraqi government to decide.

"Iraq is one of the founder members of OPEC with Saudi Arabia, Kuwait, Iran and Venezuela and ... has been and remains a member," he said.

"I am certain that as soon as the government is established, it is going to take the appropriate decision and Iraq certainly has all the means to remain a member."

British and US officials have made clear that they do not foresee handing over power to a sovereign Iraqi government for between one and two years.

In the meantime, US officials have pledged they will do nothing to prejudice the eventual decision.

"We will want to make sure that any decision on their future participation in OPEC is a decision that the representative government takes," US Under Secretary of State for Economics and Business Alan Larson told a Senate committee earlier this month.

"We need to be careful not to be seen as steering that because it does need to be seen as a decision they make in the interests of Iraq."

The Age June 10 2003 By David Adams

Related links: Crackdown on alleged 'terror boss' Terror expert calls for checks on airport staff Website: Islamic Youth Movement

A CIA report has named a Sydney man as Osama bin Laden's "man on the ground" in Australia, it was claimed last night.

According to Four Corners, the CIA report, issued last June and based on uncorroborated intelligence from the Palestinian Authority, said al-Qaeda was very active in Australia.

It said there were "rank and file and leadership elements heading to Australia with forged passports". It named Bilal Khazal, a resident of Lakemba, Sydney, as having connections with al-Qaeda and Osama bin Laden.

"The al-Qaeda leadership has allegedly delegated responsibility to Bilal Khazal," it said.

It said Mr Khazal, named by the program as the man behind the Sydney-based Islamic Youth Movement's magazine and website, had been closely watched since September 11.

The report claimed Mr Khazal was "reportedly planning an explosives attack against some US embassies", including one in Venezuela, as well as against US interests in the Philippines.

The program also said that in mid-2000 "there was intelligence that Mr Khazal was sending recruits from Australia overseas to train in Afghanistan".

Four Corners said it had been able to verify much of the detail in the CIA report but that Mr Khazal refused to comment on the record. The Age could not contact Mr Khazal last night.

According to Four Corners, Mr Khazal's home has twice been raided by authorities. The program said his passport was confiscated in February last year, the day before he was due to go overseas.

It also said that Mr Khazal was shifted from his job as a baggage handler at Sydney airport's international terminal following a security review in the lead-up to the Olympics.

The program also detailed allegations that al-Qaeda and banned terrorist group Jemaah Islamiah had plotted to bomb Israeli targets in Sydney and Canberra and to kill Jewish mining millionaire Joseph Gutnick.

The program also claimed that investigations had revealed the operations of the Philippines-based rebel group MILF (Moro Islamic Liberation Front) were being partly financed from Australia.