<a href=www.vheadline.com>Venezuela's Electronic News Posted: Sunday, May 04, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita VENANCHAM

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: On Wednesday, April 30, the government announced a staged increase in the minimum wage to aid workers who have borne the brunt of the economic instability and a tight labor market and who also earn real salaries too low to allow them to buy the entire standard consumption basket. This measure covers public and private sector employees. A 10% adjustment will become payable on July 1 and a 20% additional adjustment will start on October 1. These increases are not retroactive.

According to CENDA's calculations, the basic food basket cost 353,876 bolivares per month in April 2003, 4.4% more than in February in spite of the price controls. That means that the Bs.190,080 per month minimum wage buys only 53.7% of the basket. But workers will have access to 59% of the basket's value starting July 1 (with a Bs.209,088 per month minimum wage) and 69% on October 1 (with a Bs.247,600 bolivar per month minimum wage) ... not counting the effects of inflation from now to then.

Whether they agree with the minimum wage hike or not, the question is whether businesses are in a position to absorb the impact of this salary decree. If they are, will it be large enough to improve workers' living standards?

In the first place, the private sector stated (through FEDECAMARAS) that it would abide by the Presidential Decree ... but FEDECAMARAS does not underestimate the tribulations of the Venezuelan economy, and indicated that a minimum wage increase would be irresponsible at the present time. In any event, an adjustment of over 80% would be necessary for the lowest-earning workers to be at least able to buy the complete basket of consumer goods. The National Treasury is clearly unable to bear a salary hike on that scale for the private sector, nor is the private sector for that matter.

The increase will cost the Treasury 800 billion bolivares according to the National Budget Office (OCEPRE). It will be funded by revenue raised through an extension of the Bank Debit Tax (BDT) and Central Bank profits.

Even so, the parties will have to bear costs associated with the increase. Private businesses, for their part, will have to cut payroll even more in order to reduce the measure's impact on costs. And workers who manage to keep their jobs may find themselves with more purchasing power only in the short run, given the inflationary pressure that will be generated by funding of the increase through the use of Central Bank foreign exchange profits.

The trend should be to keep jobs in existence, and even to create more of them ... but that cannot be achieved solely by an adjustment in the labor market; also needed is a set of economic measures to restore the country's productive activity, and legal, political, and social reforms to enhance the nation's institutional efficiency.

Article in Spanish

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

Mexican immigration officials have arrested a Venezuelan pilot and crew as well as 14 Chinese nationals and  for illegal entry in Cancun. Mexican authorities say they believe they uncovered illegal trafficking of people and confirm that the Chinese were all carrying false tourist papers. 

• The plane landed in Quintana Roo on a chartered flight from Venezuela. 

Mexican officials, who allowed the Chinese through have also been arrested on charges of corruption. Clarifying health risks, Mexican officials have confirmed that none of the Chinese aboard the flight have symptoms of SARS.

Venezuelan authorities say they are concerned about illegal trafficking of Chinese into Venezuela because the majority come from Hong Kong where the SARS outbreak started.

Reports have not indicated whether Mexico was the final destination or the USA. 

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

Guyanese Foreign Minister Rudy Insanally says Venezuela and Guyana have discussed the possibility of re-initiating United Nations mediation in the longstanding territorial conflict between the two countries. 

During a two-day meeting with his Venezuelan counterpart, Roy Chaderton Matos in Georgetown, Insanally comments that the method to be used in re-opening discussions will be that of the Good Officer, even though it has fallen into disuse over the last decade. 

The last Good Officer was former Barbados Foreign Minister, Oliver Jackman but nothing came of his good offices. 

Sectors in Venezuela have always complained that the UN has placed British Commonwealth personalities as Good Officers instead of independent persons, since Guyana is part of the British Commonwealth and Caribbean Economic Zone (Caricom) countries. 

The territorial conflict over the Esseqibo regime has been simmering for 100 years and has taken on special relevance over the last decade with the discovery of bauxite, aluminum and other minerals. 

Chaderton Matos says the matter was indeed discussed during his visit to Georgetown and he hopes an agreement will be reached ... "I don't know when ... it's up to the negotiators but there is political will."

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

Inter American Regional Worker's Organization (ORIT)  general secretary, Luis Anderson says the ORIT is closely following the situation in Venezuela and insists that Venezuelan President Hugo Chavez Frias has violated union freedoms.  

• ORIT is  International Free Trade Unions (ICFTU) American Continent regional office. 

"We have reported serious violations of International Labor Organizations agreements  No. 87 regarding union freedoms and No. 98 on collective bargaining processes."

Anderson has warned that these violations could affect Venezuela's international relations ... "in extreme cases, it could carry penalties from the International Monetary Fund (IMF) and the World Trade Organization (WHO)." 

Among other things, Anderson, whose ORIT office is housed in the Venezuelan Confederation of Trade Unions (CTV) building in Caracas, confirms that ORIT condemns the government's refusal to recognize CTV leaders, the arrest warrant against Carlos Ortega and the dismissal of the oil sector workers that joined the national stoppage.

The CTV had announced that Anderson would attend its May 1st march, but according to reports, Anderson thought it more prudent not to attend given the highly political content of the march.

The Salt lake Tribune

    Puerto Rico: The old U.S. Navy checkpoint on Vieques, for decades a symbol of bombing and repression, lay in pieces Thursday, slumped over like a grand piano on two legs. "Navy Down" was scrawled on it in blue, and a makeshift doll lay nearby in military police clothes, with a beauty-pageant style sash that said "Goodbye!" Many stopped to pose for pictures. For some, it was about recording history. For others, it was about redeeming those long gone. "I was wondering what my father would feel at this moment," said a misty-eyed Carlos "El Prieto" Ventura, an anti-Navy activist leader who took after his fisherman father. "I think he would be happy."         Colombia: Colombia's constitutional court has knocked down the nation's 8-month-old "state of emergency," a surprise political setback to President Alvaro Uribe's quest to gain an upper hand in the war against guerrillas. The court said Uribe illegally extended the state of emergency that lifted some civil liberties as part of his intensified campaign to counter rampant violence, kidnappings and terrorism. He made a mockery of congressional controls by having the legislature approve a 90-day extension two months before it was set to expire, the court said.         Venezuela: Uruguay said Wednesday it had granted asylum to two former Venezuelan military officers accused of participating in a coup against President Hugo Chavez last year. Both entered the Uruguayan Embassy in Caracas early Wednesday, claiming they were being "persecuted and don't trust the judicial system," said retired Navy Adm. Oscar Betancourt. Army Capts. Carlos Blondell and Otto Gebauer were granted asylum, Uruguay's foreign ministry said in a statement.         Brazil: Brazil's leftist president promoted his idea of regional economic integration in talks with his Bolivian counterpart -- the latest in a string of summit meetings reflecting Brazil's growing influence. "Latin American integration will no longer be a sentimental" notion, Luiz Inacio Lula da Silva stressed after he and Bolivian leader Gonzalo Sanchez de Lozada agreed last week to boost trade between the neighboring nations. The leaders of Colombia, Peru and Venezuela have visited in the past month, and the presidents of Uruguay and Ecuador will come later this month. The activity represents a move toward a united South America planning to negotiate hard over a proposed Americas free-trade zone.    -----     Roger Morton has reported from Argentina, Brazil, Canada and Mexico. rmorton@sltrib.com