<a href=www.falkland-malvinas.com>Mercosur Monday, 05 May

A reshuffle in the Uruguayan cabinet in the international relations area is expected in the coming weeks according ours sources in Montevideo.

Minister D. Opertti Minister of Foreign Affairs Didier Opperti an expert in International Private Law apparently will be leaving for an international post in the Organization of American States and will be replaced by Raul Lago, a former Ambassador in Venezuela and currently Chief cabinet minister.

Mr. Lagos post will be filled by Carlos Ramela advisor to President Jorge Batlle who steered the Peace Commission tasked with finding a human and political solution to the tens of disappeared dissidents during military rule in Uruguay (1973/84), a bitter and controversial legacy that still divides Uruguayan society.

Mr. Opertti with a renowned international reputation and who presided over the United Nations General Assembly has been preparing to leave his post for some time.

However press reports indicate that some recent foreign affairs very personal actions of President Batlle have surprised Mr. Opperti, who has a more diplomatic approach.

During a press conference at the end of April after meeting President Bush in the White House, Mr. Batlle in response to a specific question regarding the shooting of three Cuban suspects Mr. Batlle said that “Mr. Castro is an assassin”. Mr. Batlle further openly supported President Bush for actions in Iraq and criticized the United Nations lack of initiative when the official Uruguayan position originally was giving more time to the arms inspectors before appealing to military response.

Uruguay has been at loggerheads with Cuban president Fidel Castro since it began co-sponsoring before the United Nations Human Rights Committee a proposal to send a human rights independent observer to the island. Mr. Castro insists in calling Mr. Batlle a “traitor” and a US “boot licker”.

President Batlle has also been indirectly critical of Mercosur by insisting in giving priority to trade and political relations with United States, an issue that caused concern in the new Brazilian government of President Lula da Silva and in Argentina.

Furthermore president Batlle has publicly and repeatedly forecasted that his good friend Carlos Menem will be the next Argentine president and also publicly counseled Paraguayan elected president Nicanor Duarte on how to proceed with the formation of his administration.

During meeting with President Bush, Secretary of State Collin Powell and Advisor Condoleeza Rice, that extended for double the time scheduled, Mr. Batlle thanked the Bush administration for its financial support last August during a crucial moment for the Uruguayan banking system and for speeding the opening of the US market to Uruguayan beef, one of the country’s main exports.

< Mr. Opperti belongs to one of the two main groups of the ruling Colorado party.

<a href=www.tuscaloosanews.com>The Associated Press May 04, 2003

President Hugo Chavez blamed his political foes Sunday for provoking a shooting spree that resulted in a man's death during an opposition march last week.

Chavez said the May Day violence was the latest attempt by his opponents to destabilize Venezuela and undermine his presidency.

"It's the same format, the same script, the same characters," Chavez said, drawing similarities with a failed military coup against him last year and a series of high-profile killings in recent months. On each occasion the opposition has blamed civilian deaths on violent supporters of the government and said a climate of impunity has prevented those responsible from being convicted.

Ricardo Herrera, a 46-year-old construction worker, was shot and killed at Thursday's rally by an unknown gunman who escaped on a motorcycle. Police have made several arrests in connection with the shooting.

Cofavic, a Venezuelan human rights group, said Saturday that political violence is on the rise and attributed the problem in party to a lax justice system. Cofavic said 57 people have been killed and over 300 injured by gunfire in politically motivated violence since the failed coup in April 2002.

Almost all the killings remain unsolved and no connection linking either the government or the opposition to any of the deaths has been established.

By Nesa Subrahmaniyan

Singapore, May 5 (<a href=quote.bloomberg.com>Bloomberg) -- Asian gasoil and jet-fuel markets face a glut after a shorter-than-expected war in Iraq left Saudi Aramco, the world's biggest oil company, and rival Kuwait Petroleum Corp. with unwanted supplies stored for military use.

Cargoes of diesel and jet kerosene are likely to head to Asia in the next two months as Middle East refiners look for buyers, according to a Bloomberg News survey of five oil refiners and traders. Kuwait Petroleum, which halted shipments of the fuels to Asia before the U.S.-led invasion, may resume exports this month.

``Oil products were stored for strategic purposes and now obviously, there's no need for that,'' said Abdallah Kharma, deputy head of international trading at China Aviation Oil (Singapore) Corp. Normal exports from the countries would be supplemented by fuel from reserves, he said.

An increase in supply of jet fuel would come after Asian airlines cut flights because of a viral outbreak that reduced travel demand. Severe acute respiratory syndrome has killed more than 400 people and infected more than 6,200, mostly in China and Hong Kong.

Asia's consumption of jet fuel, a type of kerosene, may decline between 5 percent and 10 percent between April and June compared with a year earlier, according to a Bloomberg survey last month of five oil trading companies, airlines and refiners.

SARS

The demand drop seems to be exacerbated because of SARS,'' said Katsunori Watanabe, director of research at Nihon Unicom Corp., a futures trading company in Tokyo. Jet fuel consumption is down in Asia by almost 20 percent.''

Asian carriers such as Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. slashed a total of more than 650 weekly flights last month.

Fuel prices may also be hit by the decline in crude oil costs. Middle East oil producers pumped more crude in the first quarter to offset supply disruptions from Venezuela, crippled by a strike, and from Iraq during the U.S.-led invasion.

As Venezuelan and Iraqi supplies return to the market, the Organization of Petroleum Exporting Countries is trying to rein back those additional barrels to avoid a glut. The group said it will reduce output by 2 million barrels a day starting June 1 in an effort to stem a drop in prices.

Brent crude oil prices on London's International petroleum Exchange, which mirror Persian Gulf crude price movements, have fallen more than 27 percent since their March 12 peak.

Fuels

Jet-fuel and gasoil prices in Asia have fallen even faster. Prices of jet fuel declined by 34 percent in Singapore, Asia's biggest oil trading center, to $28.75 a barrel on Friday from this year's high of $43.35 on Feb. 10, according to Bloomberg data.

Diesel, or gasoil, used to fuel tanks and trucks, has fallen 30 percent to $29.05 a barrel from this year's high of $41.70 a barrel on March 10.

Kuwait, which has bases for U.S. and U.K. troops, may restart exports in May that were suspended earlier in case the supplies were needed by the military, Nader Sultan, chief executive of state-owned Kuwait Petroleum Corp., said in an April 15 interview. Kuwait produces about 120,000 barrels of jet fuel a day.

Naphtha supplies from the Middle East have also risen because the raw material for gasoline and chemicals was produced at the same time as the gasoil. State-owned Kuwait Petroleum, which normally sells naphtha to customers under annual contracts, sold 100,000 tons in the spot market for loading in April, a company official said earlier.

Saudi Aramco officials declined to comment on reports that it offered two cargoes in the spot market in April. Naphtha prices delivered to Japan have declined 44 percent to $218.13 a ton from this year's high of $388.50 a ton on March 10, according to Bloomberg data.

Demand

I don't think there will be a problem with supply, the problem is going to be demand,'' said Kharma of China Aviation. The picture is not going to be great, probably end-May, end-June because I think we have quite a bit of products coming out.''

In the first quarter, shipments from the Middle East slowed because a war premium boosted freight rates in the region as the U.S. geared up to attack Iraq.

The freight rate between the Arabian Gulf and Japan, measured in World Scale points, an industry benchmark, has fallen 6.8 percent to 275 on Friday after rising to a one-year high of 295 on April 14.

``The shipping rates will come down now and the war risk premium will come down,'' lowering the rate at which fuels can be profitably shipped to Asia, China Aviation's Kharma said. Last Updated: May 4, 2003 12:01 EDT

Dollars & Sense BY ARTHUR MACEWAN   Before U.S. forces invaded Iraq, the United Nations inspection team that had been searching the country for weapons of mass destruction was unable to find either such weapons or a capacity to produce them in the near future. As of mid-April, while the U.S. military is apparently wrapping up its invasion, it too has not found the alleged weapons. The U.S. government continues to claim that weapons of mass destruction exist in Iraq but provides scant evidence to substantiate its claim.

While weapons of mass destruction are hard to find in Iraq, there is one thing that is relatively easy to find: oil. Lots of oil. With 112.5 billion barrels of proven reserves, Iraq has greater stores of oil than any country except Saudi Arabia. This combination—lots of oil and no weapons of mass destruction—begs the question: Is it oil and not weapons of mass destruction that motivates the U.S. government’s aggressive policy towards Iraq?

The U.S. "Need" for Oil?

Much of the discussion of the United States, oil, and Iraq focuses on the U.S. economy’s overall dependence on oil. We are a country highly dependent on oil, consuming far more than we produce. We have a small share, about 3%, of the world’s total proven oil reserves. By depleting our reserves at a much higher rate than most other countries, the United States accounts for about 10% of world production. But, by importing from the rest of the world, we can consume oil at a still higher rate: U.S. oil consumption is over 25% of the world’s total. (See the accompanying figures for these and related data.) Thus, the United States relies on the rest of the world’s oil in order to keep its economy running—or at least running in its present oil-dependent form. Moreover, for the United States to operate as it does and maintain current standards of living, we need access to oil at low prices. Otherwise we would have to turn over a large share of U.S. GDP as payment to those who supply us with oil.

Iraq could present the United States with supply problems. With a hostile government in Baghdad, the likelihood that the United States would be subject to some sort of boycott as in the early 1970s is greater than otherwise. Likewise, a government in Baghdad that does not cooperate with Washington could be a catalyst to a reinvigoration of the Organization of Petroleum Exporting Countries (OPEC) and the result could be higher oil prices.

Such threats, however, while real, are not as great as they might first appear. Boycotts are hard to maintain. The sellers of oil need to sell as much as the buyers need to buy; oil exporters depend on the U.S. market, just as U.S. consumers depend on those exporters. (An illustration of this mutual dependence is provided by the continuing oil trade between Iraq and the United States in recent years. During 2001, while the two countries were in a virtual state of war, the United States bought 284 million barrels of oil from Iraq, about 7% of U.S. imports and almost a third of Iraq’s exports.) Also, U.S. oil imports come from diverse sources, with less than half from OPEC countries and less than one-quarter from Persian Gulf nations.

Most important, ever since the initial surge of OPEC in the 1970s, the organization has followed a policy of price restraint. While price restraint may in part be a strategy of political cooperation, resulting from the close U.S.-Saudi relationship in particular, it is also a policy adopted because high prices are counter-productive for OPEC itself; high prices lead consumers to switch sources of supply and conserve energy, undercutting the longer term profits for the oil suppliers. Furthermore, a sudden rise in prices can lead to general economic disruption, which is no more desirable for the oil exporters than for the oil importers. To be sure, the United States would prefer to have cooperative governments in oil producing countries, but the specter of another boycott as in the 1970s or somewhat higher prices for oil hardly provides a rationale, let alone a justification, for war.

The Profits Problem

There is, however, also the importance of oil in the profits of large U.S. firms: the oil companies themselves (with ExxonMobil at the head of the list) but also the numerous drilling, shipping, refining, and marketing firms that make up the rest of the oil industry. Perhaps the most famous of this latter group, because former CEO Dick Cheney is now vice president, is the Halliburton Company, which supplies a wide range of equipment and engineering services to the industry. Even while many governments—Saudi Arabia, Kuwait, and Venezuela, for example—have taken ownership of their countries’ oil reserves, these companies have been able to maintain their profits because of their decisive roles at each stage in the long sequence from exploration through drilling to refining and marketing. Ultimately, however, as with any resource-based industry, the monopolistic position—and thus the large profits—of the firms that dominate the oil industry depends on their access to the supply of the resource. Their access, in turn, depends on the relations they are able to establish with the governments of oil-producing countries.

From the perspective of the major U.S. oil companies, a hostile Iraqi government presents a clear set of problems. To begin with, there is the obvious: because Iraq has a lot of oil, access to that oil would represent an important profit-making opportunity. What’s more, Iraqi oil can be easily extracted and thus produced at very low cost. With all oil selling at the same price on the world market, Iraqi oil thus presents opportunities for especially large profits per unit of production. According to the Guardian newspaper (London), Iraqi oil could cost as little as 97 cents a barrel to produce, compared to the UK’s North Sea oil produced at $3 to $4 per barrel. As one oil executive told the Guardian last November, "Ninety cents a barrel for oil that sells for $30—that’s the kind of business anyone would want to be in. A 97% profit margin—you can live with that." The Guardian continues: "The stakes are high. Iraq could be producing 8 million barrels a day within the decade. The math is impressive—8 million times 365 at $30 per barrel or $87.5 billion a year. Any share would be worth fighting for." The question for the oil companies is: what share will they be able to claim and what share will be claimed by the Iraqi government? The split would undoubtedly be more favorable for the oil companies with a compliant U.S.-installed government in Baghdad.

Furthermore, the conflict is not simply one between the private oil companies and the government of Iraq. The U.S.-based firms and their British (and British-Dutch) allies are vying with French, Russian, and Chinese firms for access to Iraqi oil. During recent years, firms from these other nations signed oil exploration and development contracts with the Hussein government in Iraq, and, if there were no "regime change," they would preempt the operations of the U.S. and British firms in that country. If, however, the U.S. government succeeds in replacing the government of Saddam Hussein with its preferred allies in the Iraqi opposition, the outlook will change dramatically. According to Ahmed Chalabi, head of the Iraqi National Congress and a figure in the Iraqi opposition who seems to be currently favored by Washington, "The future democratic government in Iraq will be grateful to the United States for helping the Iraqi people liberate themselves and getting rid of Saddam.... American companies, we expect, will play an important and leading role in the future oil situation." (In recent years, U.S. firms have not been fully frozen out of the oil business in Iraq. For example, according to a June 2001 report in the Washington Post, while Vice President Cheney was CEO at Halliburton Company during the late 1990s, the firm operated through subsidiaries to sell some $73 million of oil production equipment and spare parts to Iraq.)

The rivalry with French, Russian and Chinese oil companies is in part driven by the direct prize of the profits to be obtained from Iraqi operations. In addition, in order to maintain their dominant positions in the world oil industry, it is important for the U.S. and British-based firms to deprive their rivals of the growth potential that access to Iraq would afford. In any monopolistic industry, leading firms need to deny their potential competitors market position and control of new sources of supply; otherwise, those competitors will be in a better position to challenge the leaders. The British Guardian reports that the Hussein government is "believed to have offered the French company TotalFinaElf exclusive rights to the largest of Iraq’s oil fields, the Majoon, which would more than double the company’s entire output at a single stroke." Such a development would catapult TotalFinaElf from the second ranks into the first ranks of the major oil firms. The basic structure of the world oil industry would not change, but the sharing of power and profits among the leaders would be altered. Thus for ExxonMobil, Chevron, Shell and the other traditional "majors" in the industry, access to Iraq is a defensive as well as an offensive goal. ("Regime change" in Iraq will not necessarily provide the legal basis for cancellation of contracts signed between the Hussein regime and various oil companies. International law would not allow a new regime simply to turn things over to the U.S. oil companies. "Should ‘regime change’ happen, one thing is guaranteed," according to the Guardian, "shortly afterwards there will be the mother of all legal úbattles.")

Oil companies are big and powerful. The biggest, ExxonMobil, had 2002 profits of $15 billion, more than any other corporation, in the United States or in the world. Chevron-Texacocame in with $3.3 billion in 2002 profits, and Phillips-Tosco garnered $1.7 billion. British Petroleum-Amoco-Arco pulled in $8 billion, while Royal Dutch/Shell Group registered almost $11 billion. Firms of this magnitude have a large role affecting the policies of their governments, and, for that matter, the governments of many other countries.

With the ascendancy of the Bush-Cheney team to the White House in 2000, perhaps the relationship between oil and the government became more personal, but it was not new. Big oil has been important in shaping U.S. foreign policy since the end of the 19th century (to say nothing of its role in shaping other policy realms, particularly environmental regulation). From 1914, when the Marines landed at Mexico’s Tampico Bay to protect U.S. oil interests, to the CIA-engineered overthrow of the Mosadegh government in Iran in 1953, to the close relationship with the oppressive Saudi monarchy through the past 70 years, oil and the interests of the oil companies have been central factors in U.S. foreign policy. Iraq today is one more chapter in a long story.

The Larger Issue

Yet in Iraq today, as in many other instances of the U.S. government’s international actions, oil is not the whole story. The international policies of the U.S. government are certainly shaped in significant part by the interests of U.S.-based firms, but not only the oil companies. ExxonMobil may have had the largest 2002 profits, but there are many additional large U.S. firms with international interests: Citbank and the other huge financial firms; IBM, Microsoft, and other information technology companies; General Motors and Ford; Merck, Pfizer and the other pharmaceutical corporations; large retailers like MacDonald’s and Wal-Mart (and many more) depend on access to foreign markets and foreign sources of supply for large shares of their sales and profits.

The U.S. government (like other governments) has long defined its role in international affairs as protecting the interests of its nationals, and by far the largest interests of U.S. nationals abroad are the interests of these large U.S. companies. The day-to-day activities of U.S. embassies and consular offices around the world are dominated by efforts to further the interests of particular U.S. firms—for example, helping the firms establish local markets, negotiate a country’s regulations, or develop relations with local businesses. When the issue is large, such as when governments in low-income countries have attempted to assure the availability of HIV-AIDS drugs in spite of patents held by U.S. firms, Washington steps directly into the fray. On the broadest level, the U.S. government tries to shape the rules and institutions of the world economy in ways that work well for U.S. firms. These rules are summed up under the heading of "free trade," which in practice means free access of U.S. firms to the markets and resources of the rest of the world.

In normal times, Washington uses diplomacy and institutions like the International Monetary Fund, the World Bank, and the World Trade Organization to shape the rules of the world economy. But times are not always "normal." When governments have attempted to removetheir economies from the open system and break with the "rules of the game," the U.S. government has responded with overt or covert military interventions. Latin America has had a long history of such interventions, where Guatemala (1954), Cuba (1961), Chile (1973) and Nicaragua (1980s) provide fairly recent examples. The Middle East also provides several illustrations of this approach to foreign affairs, with U.S. interventions in Iran (1953), Lebanon (1958), Libya (1981), and now Iraq. These interventions are generally presented as efforts to preserve freedom and democracy, but, if freedom and democracy were actually the goals of U.S. interventions the record would be very different; both the Saudi monarchy and the Shah of Iran, in an earlier era, would then have been high on the U.S. hit list. (Also, as with maintaining the source of supply of oil, the U.S. government did not intervene in Guatemala in 1954 to maintain our supply of bananas; the profits of the United Fruit Company, however, did provide a powerful causal factor.)

The rhetorical rationale of U.S. foreign policy has seen many alterations and adjustments over the last century: at the end of the 19th century, U.S. officials spoke of the need to spread Christianity; Woodrow Wilson defined the mission as keeping the world safe for democracy; for most of the latter half of the 20th century, the fight against Communism was the paramount rationale; for a fleeting moment during the Carter administration, the protection of human rights entered the government’s vocabulary; in recent years we have seen the war against drugs; and now we have the current administration’s war against terrorism.

What distinguishes the current administration in Washington is neither its approach toward foreign affairs and U.S. business interests in general nor its policy in the Middle East and oil interests in particular. Even its rhetoric builds on well established traditions, albeit with new twists. What does distinguish the Bush administration is the clarity and aggressiveness with which it has put forth its goal of maintaining U.S. domination internationally. The "Bush Doctrine" that the administration has articulated claims legitimacy for pre-emptive action against those who might threaten U.S. interests, and it is clear from the statement of that doctrine in last September’s issuance of The National Security Strategy of the United States of America that "U.S. interests" includes economic interests.

The economic story is never the whole story, and oil is never the whole economic story. In the particular application of U.S. power, numerous strategic and political considerations come into play. With the application of the Bush Doctrine in the case of Iraq, the especially heinous character of the Hussein regime is certainly a factor, as is the regime’s history of conflict with other nations of the region (at times with U.S. support) and its apparent efforts at developing nuclear, chemical, and biological weapons; certainly the weakness of the Iraqi military also affects the U.S. government’s willingness to go to war. Yet, asSeptember’s Security Strategy document makes clear, the U.S. government is concerned with domination and a major factor driving that goal of domination is economic. In the Middle East, Iraq and elsewhere, oil—or, more precisely, the profit from oil—looms large in the picture.

An earlier version of this article was prepared for the newsletter of the Joiner Center for War and Social Consequences at the University of Massachusetts-Boston. This article was largely prepared before the start of the war on Iraq.

Arthur MacEwan teaches economics at the University of Massachusetts-Boston. His most recent book is Neoliberalism or Democracy? Economic Strategy, Markets, and Alternatives for the 21st Century (Zed Books, 1999). A founder of Dollars & Sense, he served as its "Ask Dr. Dollar" columnist from 1997 to 2001 and is a D&S associate.

Issue #247, May/June 2003

Dollars & Sense magazine, 740 Cambridge St., Cambridge, MA 02141, USA, provides left perspectives on economic affairs. It is published six times a year and is edited by a collective of economists, journalists, and activists committed to social justice and economic democracy.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, May 04, 2003 By: Patrick J. O'Donoghue

Las Ultimas Noticias editor Eleazar Diaz Rangel has released what seems to be snippets from General Melvin Lopez Hidalgo's report on US involvement in the April 11, 2002:

On April 8, 2002, when rumors were rife in the barracks and the conspiracy was afoot, US Embassy Naval Attache, Captain David H. Cazares approached a group of Venezuelan Army and Navy (Armada) officers and asked General Roberto Cardenas why he hadn't made contact with US ships off the coast and a submarine off La Guaira. 

"What were they waiting for?" 

General Gonzalez Cardenas said he didn't know what he was talking about and went off to speak to the Brazilian Military Attache. 

Cazares asked Navy Captain Moreno Leal if the person he was talking to was General Gonzalez , who served on the border ... "it's General Gonzalez alright but I don't know if he served on the border." He spoke to Gonzalez Cardenas again, asking why no contact was made with three ships and the submarine. Gonzalez Cardenas said he would find out. 

It is evident that Cazares had got the wrong Gonzalez ... he met the right one in the elevator and reminded him, "this will have an operational cost ... I await your answer."

On Friday April 12, US Embassy military attache, Colonel Donal F. McCarthy called the Venezuelan Air Force (FAV) Intelligence Office asking for authorization for an overflight of a Hercules C130 transporting a "diplomatic load" of 5 kilos of lithium battery, 5 kilos of compressed oxygen class 2.2, 56 kilos of 1.4 munitions, 30 kilos of flares, 40 kilos of demolition charges, and 2 kilos of detonator.

A General involved in the April conspiracy admitted that what took place on April 11 was a coup attempt. National Guard (GN)  General Alfonso Martinez told the Supreme Tribunal of Justice (TSJ)  but the majority of magistrates decided that there was a "vacuum of power" on April 11. The General's declaration found no echo in the media.

On Saturday, April 13 there was a US ship near La Orchila island from where a plane made several overflights without authorization from Venezuelan authorities but the movements were detected and recorded.

Las Ultimas Noticias published a photo of US Colonel James Rodgers driving his car in Fuerte Tiuna barracks during the coup d'etat ... the AFP agency reported that the Colonel had been there from Thursday, April 10 until Saturday, April 13 ob the 5th floor of the Army Command building.