SCOOP Tuesday, 10 June 2003, 10:16 am Speech: US State Department

Intervention at the Plenary of the General Assembly of the Organization of American States

Secretary Colin L. Powell Santiago, Chile June 9, 2003

SECRETARY POWELL: Madam Chairman, Distinguished Colleagues,

Twelve years ago, at the last general assembly in Santiago, our heads of delegation approved the Santiago Commitment to Democracy and the Renewal of the Inter-American System. The meeting set an ambitious agenda to promote and defend representative democracy and human rights.

We as a hemisphere have made much progress since 1991. The Americashave truly emerged from the shadow of authoritarian rule. As President Bush has stated, This hemisphere is on the path of reform, and our nations travel it together. We share a vision a partnership of strong, equal and prosperous countries, living and trading in freedom.

The Inter-American Democratic Charter we adopted nearly two years ago in Lima is the purest expression of our common conviction that democracy is the only legitimate form of government and that our people deserve nothing less.

Experience has shown time and again that freedom works, and political and economic freedoms work together, they work in concert.

Collectively, we have recognized that only a sustained commitment to political and economic liberty can help millions of poor people in our hemisphere lift themselves out of misery. But our distinguished host country has rightly called our attention to the fact that we have not completed the work that was begun here in 1991.

Our citizens know that free and fair elections alone do not guarantee effective, accountable government. Nor does an unfettered market alone guarantee sustained development.

We are here today to make sure that democracy delivers for the people of this hemisphere. Political democracy and economic opportunity come together in good governance. Respect for the rule of law, fairness, accountability in government and sound economic policies bring hope and opportunity equally to all.

Our Inter-American Democratic Charter is correct to declare that democracy and social and economic development are interdependent and are mutually reinforcing. By focusing our discussion on democratic governance at this meeting, the government of Chile has wisely placed the emphasis on what states can and must do to extend economic opportunity to all of their people.

New democracies created with high hopes can founder if the lives of ordinary citizens do not change for the better. Transitions can be chaotic. Transitions can be wrenching. We know that corruption will squander a nation's treasure and more importantly, it will undermine public trust. And extremists will feed on frustration and fears about the future.

That is why it is so important that we meet the goal set by our heads of state and government through the Summit of the Americas process to create by 2005 the Free Trade Area of the Americas. This Free Trade Area would create greater prosperity for nearly 800 million people in 34 countries of our hemisphere.

Free trade and open markets can bring investment and job-generating growth, if they rest on a foundation of fairness. Governments must be willing to put what resources they have in quality education, adequate health and nutritional care, basic sanitation, and personal security.

President Bush is determined to help countries across the globe struggling to do the right thing for their people. This February he presented his groundbreaking Millennium Challenge Account Initiative to the United States Congress.

As President Bush has said, the Millennium Challenge Initiative is a powerful way "to draw whole nations into an expanding circle of opportunity and enterprise." If fully funded, the initiative would provide the largest increase in US development assistance since the Marshall Plan. By 2006, it would represent an addition of 50% to our core development assistance funding of 2002. From 2006 onward, we would put $5 billion per year in the Millennium Challenge Account.

The Millennium Challenge Account would target only countries that govern justly, invest in their people and encourage economic freedom. Several countries in the hemisphere meet the basic income threshold to compete for Millennium Challenge Account funds during the first year of the program. And many more countries in the Americas are likely to do so in succeeding years.

Innovative bilateral efforts such as the Millennium Challenge Account Initiative are important. At the same time, regional cooperation is imperative, because so many of the domestic problems countries confront also have major transnational implications. Twelve years ago, the OAS didn't have the mechanisms for regional cooperation that were needed. Today, we do.

The Inter-American Convention Against Corruption and its follow-up mechanism immediately come to mind. Twelve years ago, it would have been unthinkable to suggest that the countries of the hemisphere should evaluate each other s efforts to combat corruption. But that is precisely what the convention provides for.

The increased effectiveness of the Inter-American Drug Abuse Control Commission is another case in point. Inherent in the commission's mandate is the consensus that drug abuse and drug trafficking threaten all of our societies and that we must work in concert to stop them.

After September 11, 2001, we worked together to reenergize the Inter-American Committee Against Terrorism. And our approval at last year s general assembly in Barbados of the Inter-American Convention Against Terrorism underscores our determination to protect our region against this vicious enemy that knows no limits, national or moral.

Regional efforts have played an important role in defense of democracy itself. As we all know, for over a year, Venezuela s democracy has been under serious strain. The United States welcomes the May 29 agreement reached between the Government of Venezuela and the opposition Democratic Coordinating Committee.

The Secretary General s tireless efforts were instrumental in this process, and we thank you.

Venezuelans must take responsibility for their own future, but we are committed to working with the OAS, the Group of Friends and others to bolster implementation of this agreement with practical support.

The people of Haiti have waited a long time -- too long - for their leaders to meet their obligations under OAS Resolutions 806 and 822. Haiti's democracy and economic growth are undermined by the government's failure to create the conditions for an electoral solution to the political impasse.

Led by the efforts of OAS Assistant Secretary General Einaudi and the OAS Special Mission, the international community has provided substantial support for strengthening Haiti s institutional capacity and civil society.

As a further sign of the commitment of the United States to this effort, I am pleased to announce that the United States will provide an additional $1 million to the OAS Special Mission to help improve the security climate for what we hope will be free and fair elections in Haiti. In addition, the United States has increased our humanitarian assistance to $70 million in the current fiscal year.

However, if by this September the government of Haiti has not created the climate of security essential to the formation of a credible, neutral and independent provisional electoral council, we should reevaluate the role of the OAS in Haiti.

The OAS has taken other important initiatives in support of democracy in our region. Member states raised their voices in unison to denounce the appalling terrorist bombing of a club in Colombia last February. We realize that the narco-trafficking attacks against the people of Colombia are a threat to all of us -- to our human and democratic values and to our shared interests in a secure and prosperous hemisphere. Colombia deserves our steadfast solidarity and our full support.

The people of Cuba increasingly look to the OAS for help in defending their fundamental freedoms against the depredations of our hemisphere s only dictatorship.

We deplore the crackdown of recent weeks against Cuban citizens seeking to act upon their basic human rights. We protest the harsh sentences that are being meted out to them.

The Inter-American Democratic Charter declares that the peoples of the Americas have a right to democracy. It does not say that the peoples of the Americas, except Cubans, have a right to democracy.

I commend the OAS members who stood by their principles and the Cuban people by supporting the recent declaration on human rights in Cuba on the floor of the permanent council. My government looks forward to working with our partners in the OAS to find ways to hasten the inevitable democratic transition in Cuba.

If our experience over the last quarter century in this hemisphere and across the globe has taught us anything, it is that dictatorships cannot withstand the force of freedom.

My friends; tyrants, traffickers and terrorists cannot thrive in an inter-American community of robust democracies, healthy citizenries and dynamic economies. President Bush remains deeply determined to working with fellow signatories of the Inter-American Democratic Charter to achieve our shared vision: a hemisphere of hopes realized.

Making hopes real is why the theme of this general assembly -- "a new commitment to good governance" is so timely and important.

Making hopes real is why each of our delegations need to pay special attention to the "Declaration of Santiago on Democracy and the Public Trust."

We must take concrete steps to keep freedom's hope strong among the people of our hemisphere. The citizens of the Americas expect to see results, sooner not later, they expect to see results from their democracies and from having market economies. We must not fail them. We must deliver. Thank you very much, Madame Chairman. [End]

Released on June 9, 2003

International herald Tribune Neela Banerjee NYT Tuesday, June 10, 2003   KUWAIT CITY This was supposed to be a tough season for the world's largest exporters of crude oil: They expected demand for petroleum to look weak, Iraq's postwar return to the oil market to be strong - and prices, as a consequence, to fall. But none of that has come to pass. So when the Organization of the Petroleum Exporting Countries meets Wednesday in Doha, Qatar, oil industry analysts said, it is expected to do nothing about production levels. "OPEC gets a free pass at this meeting" from making a decision, said Lawrence Goldstein, president of the Petroleum Industry Research Foundation in New York. During the war, oil traders said that Iraqi exports would resume by late May or early June. Now, those exports are very likely to be delayed at least a month. "Iraq is coming back slower and weaker than originally thought," Goldstein said. "Prices are hovering around $30 a barrel, and we're going into seasons of stronger demand in the third and fourth quarters." As far back as early March, OPEC members were concerned about how an Iraq free of Saddam Hussein and United Nations sanctions would affect the strategy the cartel has used successfully for almost four years to keep prices fairly high, despite global economic cycles. Iraq was a founder and an active member of OPEC, but since the Gulf War of 1991, its exports have been regulated by the UN oil-for-food program, not OPEC's quota system. OPEC understood that a U.S. victory in a war with Iraq, which seemed assured, would prompt a repeal of the UN program. After the war, the U.S.-appointed civil administration in Baghdad and the Iraqi Oil Ministry set an aggressive schedule for resuming exports. Two weeks ago, after sanctions were lifted, Thamir Ghadhban, interim chief executive of the Oil Ministry, said that Iraq would be exporting a million barrels a day by mid-June. Iraq was exporting nothing then and was not even producing a million barrels a day. Iraq is selling 10 million barrels of oil in storage in Turkey and Gulf countries. But starting a regular flow for export has been hampered by security problems in its southern oil region, particularly the vast Rumaila fields. Jabbar Ali Leaby, director of South Oil Co. of Iraq, which is responsible for production at Rumaila and other areas near Basra, has complained long and bitterly that security problems and continued looting have made increasing production difficult. Looting has destroyed the Garmat Ali water-treatment installation, which supplied water to Rumaila for injection into wells to aid in oil extraction. The U.S. Army Corps of Engineers, which has been coordinating the reconstruction of Iraqi oil facilities, insists that production at Rumaila can increase without the water injection. But independent oil experts disagree. Raad Alkadiri, director of the Market Intelligence Service for the consulting group PFC Energy, a Washington consulting group, wrote after a recent trip to Baghdad, "Ongoing looting, and the inability of Southern Oil Co. personnel to carry out appraisals of the local fields because of a lack of security, has severely hampered the process of bringing production back online at the country's workhorse southern fields." Commercial supplies of gasoline and diesel oil in the United States and other major oil-consuming countries have remained low, though OPEC produced far above quota levels early this year. Industry analysts said that one reason supplies have been persistently low may be that demand was greater than thought, despite the sluggish economy and, in some places, the outbreak of SARS, severe acute respiratory syndrome. Another reason, analysts said, may be that some OPEC members exaggerated output. Goldstein said his company estimated that Venezuela produces 500,000 fewer barrels a day than the 3 million barrels the government has reported. Vera de Ladoucette, senior director for Middle East research at Cambridge Energy Research Associates, said Indonesia and Iran had fallen short of their OPEC quotas. Cambridge Energy estimated that OPEC exported 26.1 million barrels a day in April, compared with its official tally of 27.4 million barrels a day.

June 9 (<a href=quote.bloomberg.com>Bloomberg) -- Brazil's real gained for a fourth day in five on investors' expectations the government and companies will sell foreign currency bonds, keeping capital flowing to the country high even as bonds mature.

Brazil's real rose 0.4 percent to 2.8655 per dollar in Sao Paulo. Earlier, it gained 0.7 percent to 2.8550 after rising and fell as much as 0.2 percent to 2.8795. It has gained 24 percent this year, the best performer of 59 world currencies tracked by Bloomberg. Colombia's peso rose and Mexico's peso reversed declines to rise.

Brazilian banks and companies have contracted more than $6 billion of foreign currency bonds this year. Usinas Siderurgicas de Minas Gerais SA said today it plans to sell at least $50 billion of foreign bonds. In the last week banks such as Banco Banespa SA, a unit of Spain's Banco Santander Central Hispano SA sold more than $500 million of debt. Brazil's government may also sell.

```The rumors of a Brazilian sovereign sale are strong,'' said Marcelo Peregrino, who helps manage 25 million reais of bonds and stocks for Ativa SA, a Rio de Janeiro fund manager. ``The talk about the government selling a bond is helping the currency.''

The sales and planned sales are expected to help companies refinance the $1.5 billion of corporate bonds due between now and the end of July, Peregrino added. When Brazilian companies sell foreign currency bonds and convert the proceeds into reais, its increases demand for Brazil's currency, helping it gain against the dollar.

See-Saw Trading

In a day of see-saw trading that saw the real swing from a high of 2.8550 to the dollar to a low of 2.8795, gains were limited as some investors took advantage of last week's 3.2 percent rise in the real to buy dollars to pay for imports or make payments on foreign currency debts.

``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.

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.

Votorantim and Santander have both sold debt in the last week.

``There is a lot of maturing debt but beyond this, every week it seems we have someone else selling debt,'' Peregrino said.

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, he added.

Brazil's benchmark 8 percent bond maturing in 2014 fell a quarter cent to 91.38 cents on the dollar, boosting the yield to 10.11 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.

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 the country's economic policy.

The peso gained 0.5 percent to 2,814 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.

Colombian President Alvaro Uribe replaced Junguito with Deputy Finance Minister Alberto Carrasquilla, 44, a former technical vice director at the central bank. 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. in New York.

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 0.4 percent to 717.05 per dollar, paring its gain in 2003 to 0.5 percent.

Mexico's peso reversed declines to rise for the second day in three, adding 0.7 percent to 10.6560 per dollar, paring its decline in 2003 to 2.7 percent, the worst performance among the 16 most widely trade currencies.

Argentina's peso rose 0.6 percent to 2.8125 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 3.4825 per dollar from 3.4818 on Friday. Venezuela this year fixed its bolivar at 1,598 per dollar.

El Universal, Executive Daily News & Summary Alberto Garrido

As Enrique Mendoza, a leader of opposition umbrella group Democratic Coordinator, said it: "I think that some people were waiting for some kind of magical agreement, but we have to put our feet firmly on the ground when negotiating (a pact)." Asked about the date when a referendum to revoke president Hugo Chávez' mandate may be held, Mendoza said that the National Electoral Council (CNE) could change it, "because the law authorizes them to do so. CNE determines the deadlines and time required for activities related to any electoral process. So I think we have to be a little bit rational." Mendoza has his feet firmly on the ground. Some members of the Democratic Coordinator have announced that the recall referendum is to be held on August 19, while others have said that it would be made 90 days later, "in accordance with the law."

More than a year ago, on April 2002, Hugo Chávez defined Venezuela's current scenario. In the event that the country decided to have a referendum, the vote to terminate the president's mandate would be the last one to be held -elections to revoke the mandates of governors and mayors would had to be made first. Chávez later made clear that the agreement reached by the Negotiation and Agreement Table, which he claimed was a "political victory" for the Bolivarian revolution, would not automatically lead to "his" recall referendum. According to Chávez, for holding "his" recall referendum, a new CNE's board of directors must be elected, a new electoral register must be created, new signatures requesting the vote must be gathered, and the new signatures collected must be reviewed -just to begin with. Subsequently, other revoking votes may be conducted.

Chávez, as usual, has clear tactics. The Democratic Coordinator expects him to oppose to the revoking referendum, as this would be a good ground for the opposition to demand both the National Armed Force and the international agencies to intervene in the country's affairs. But Chávez will not oppose. Holding his Constitution in hand, he will manage to get a turtle to look like a hare.

Time for political bureaucrats is not time for a process that has to walk through the path of hegemony by destroying the political, economic, and social status quo in order to earn the qualification of revolution,. Besides, the Bolivarian revolution has to move fast, as the United States is creating a new list of priorities in its global war and is making its calculations based on the oil Chávez is -for the moment- selling to Washington.

Meanwhile, jobless people in Venezuela shall wither on the vine; the streets shall permanently belong to homeless children; poor patients will end up in the graveyard; shortages of basic items will be the rule; Colombia will no longer be just a reference about any kind of crimes; university professors will resort to barter by using the bonds handed to them as a compensation; mass media will no more be the media but the end of communication, and so on.

This is the third scenario of the national reality, which goes beyond the agreements signed by the government and opposition groups.

The revoking referendum is a commitment between Hugo Chávez' administration and the Democratic Coordinator. That is true. It should be held in a peaceful and democratic way. That is desirable. The Democratic Coordinator should fight so that the voting is held as soon as possible. That is its duty. The problem is that, beyond good intentions, a real revolution has never existed within the framework of a representative democracy. Agreements, as Mendoza said, are not magical.

Translated by Patricia Torres

<a href=www.vheadline.com>Venezuela's Electronic news Posted: Monday, June 09, 2003 By: Patrick J. O'Donoghue

Minority opposition parliamentarians have stated that they will not attend the National Assembly (AN) until institutionality has been restored. Movimiento al Socialismo (MAS) leader Leopoldo Puchi says they will ask the Supreme Tribunal of Justice (TSJ) to declare decisions taken by the majority parliamentary bench at El Calvario to be null and void. 

However, international opinion seems to be the main trump card the opposition will brandish to win support and moral backing. "Parliamentarians of the world will be surprised to see how the government is attempting to eliminate a public power with a long tradition." 

The opposition has promised to call public protests to indicate public rejection of the government's attack on parliament and given the Coordinadora Democratica full authority to organize street action. 

Independent observers comment that the opposition position means more freebies to Washington and the capitals of Europe, especially Spain and a continuation of dependence on international bodies to govern Venezuela.

Perhaps opposition politicians will be surprised to find less sympathy among foreign parliaments than they imagined ... running abroad to complain about events at home could backfire as politicians urge Venezuelans to sort out their own problems. 

The opposition will also be hard put to explain their approach to majority-minority democracy, as well as their constant obstructionist tactics.