Opec urges members to respect quotas
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OPEC
April 22, 2003
By Sapa-AFP
Vienna - Opec, faced with falling oil prices in the wake of the Iraq war, is to call on its members to respect production quotas, an Opec official said on Tuesday.
The official said ministers from Opec's 11 member states would call at a meeting Thursday in Vienna for the cartel to hold to its current quota of 24.5 million barrels per day (bpd).
But analysts in Singapore said deciding how output should be reduced, and by whom, could prove difficult.
In London, oil prices held steady in early trading Tuesday. Reference Brent North Sea crude for June delivery fell seven cents to $25.78 a barrel in early deals.
New York's benchmark light sweet crude contract for May slipped 20 cents to $30.63 a barrel during out-of-hours electronic trading.
Traders said that fluctuations in the US price were largely caused by technical factors associated with the expiry of the May contract on Tuesday.
"The oil market is waiting to see what happens at the Opec meeting later this week," said analyst Andrew Whittock at Williams de Broe.
It remained uncertain what the cartel might decide on, said GNI trader Paul Goodhew.
"People are kind of expecting a cut of production of around one (million) to 1.5 million barrels per day, but what Opec actually gives us remains to be seen," he said.
Over the weekend, the president of the Organization of Oil Producing Countries, Abdullah bin Hamad al-Attiyah, said that the group must act to curb a surplus of two million barrels a day on the market since the Iraq war.
However, a dealer in Singapore with a regional trading firm, commented: "They (Opec) should not complain too much since oil prices have held at relatively high levels ."
Among the factors clouding the group's deliberations will be the continuing uncertainty over when Iraqi oil exports are most likely to resume.
Opec had announced in January an output increase, raising its combined output ceiling by 6.5 percent to 24.5 million bpd, to curb a surge in prices triggered by a strike in Venezuela and the threat of war in Iraq.
Since then, Opec members have produced over the quota as the price of oil soared up to $40 per barrel.
There is concern now that oil prices could collapse due to oversupply.
A return to the quota "is the most likely scenario" to seek to adjust prices, the Opec official said.
Opec seeks to have oil prices within a band of $22-$28 per barrel.
With Iraq's oil exports expected to begin flowing again following the US-led war to unseat the regime of Saddam Hussein, Opec has been anxious to avoid a plunge in global prices through oversupply.
However, analysts said there were fresh concerns over supplies from Nigeria, where violence has flared following a disputed presidential election.
Nigerian soldiers shot dead eight opposition supporters after coming under fire during an election day protest at the weekend, a police spokesman told AFP on Tuesday.
Last month around a third of all Nigeria's oil exports were halted due to civil and political unrest. - Sapa-AFP
New Report Shows U.S. Proximity Aids Latin Economies
Daily Research News On Line
The ‘2003 Latin American Marketing Report,’ published this week by Strategy Research Corporation (SRC), now part of Synovate, presents buying power estimates for 18 countries, plus Puerto Rico, and 70 metropolitan markets across Latin America.
According to Rick Tobin, president of SRC and co-author of the report, a few islands of economic brightness have surfaced in an ocean of South American gloom. Latin American nations located closest to the United States appear to have fared better in general than those furthest from the U.S., according to Dr. Adolfo Chiri, SRC's chief economist, the report's other co-author.
Argentina, Uruguay, Paraguay and Venezuela (a notable exception to the ‘proximity’ rule) led the 10% downturn in consumer buying power in Latin America, estimated to total $1.2 trillion.
While the combined economies for the region are not experiencing growth, there are some obvious winners and losers. Puerto Rico and Mexico have the highest levels of average buying power per household, among the 125 million Latin American households, the report says. Twenty-two percent of Mexicans and 21% of Costa Ricans feel they are personally better off economically than in the previous year, while 64% of Latin Americans feel that their personal economic situations are worse than the year before.
Optimistically, 58% of Latin Americans expect their personal economic situations to be the same or better next year. At the same time, 54% of Latin Americans consider that their countries' economic situations will be the same or better next year, while 38% believe their country's economic situations will be worse. It is important to note that Argentina experienced a 62% decline in consumer buying power this year, while other countries, including Ecuador, experienced an 18% growth in buying power for the same period.
Twenty-five percent of Latin American households report doing grocery shopping daily. Sixty percent prefer grocery shopping in supermarkets, while 28% shop for groceries in traditional markets. Interestingly, shoppers are influenced most by quality, rather than price or taste when making their purchasing decisions.
Unemployment and security are among the leading problems that concern Latin Americans, while urban transportation and fixed phone services are the services with which Latin Americans are least satisfied.
In electronic services, 85% of Latin American households connected to the Internet do so by dial-up connection. Seventy-five percent of Internet users use it primarily for e-mail, while 63% report using online banking for paying bills. Latin Americans listen to the radio an average of 19 hours per week.
Further information is available at www.strategyresearch.com
Economist Intelligence Unit e-readiness rankings
ECONOMIST
E-business is taking root just about everywhere—but some countries are pioneers, others laggards. Which are faring best in e-business, and what characterises their success? The answers can be found in the 2002 edition of the Economist Intelligence Unit's e-readiness rankings.
‘E-readiness’ is shorthand for the extent to which a country’s business environment is conducive to Internet-based commercial opportunities. It is a concept that spans a wide range of factors, from telephone penetration to online security to intellectual property protection.
‘Despite the dotcom bust, the Internet is still reshaping the way companies do business, and countries' e-readiness will be a vital feature of the global competitive landscape,’ says Daniel Franklin, Editorial Director of the Economist Intelligence Unit.
Covering the world's 60 largest markets, the rankings provide a useful guide for companies seeking to invest in technology-savvy countries, as well as governments looking to reap the benefits of the digital age. The US leads the pack, as it did in 2000 and 2001. However, due partially to changes in methodology, and mostly to developments in countries’ infrastructure, regulatory environment and economy, there have been significant shifts further down in the rankings. The Netherlands has moved into second place from tenth in 2001, for example, and northern Europe now claims most of the other top spots, thanks not only to sophisticated IT infrastructures and high mobile-phone penetration, but also to smart government policy and a good overall business environment. Asia, Latin America and Africa trail further behind, but a few standouts in each region have made significant gains: Venezuela, for instance, improved its ranking from 47th in 2001 to 37th in the current rankings.
Among the main conclusions suggested by the new rankings:
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Western economies take the lead. North America and Western Europe dominate the top ten places in our rankings, with Australia the lonely outsider. These countries score highest both because consumers and businesses have embraced the Internet, and because their economic and political stability and openness to foreign investment make them good bets for all kinds of business, particularly e-business.
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Other regions have pockets of promise. Outside of Western Europe and North America, e-business is less uniformly developed. Singapore and Hong Kong lead the pack in Asia, taking 11th and 13th place, respectively, while Vietnam and Pakistan languish at the bottom of the heap, in 56th and 57th place. The same is true of Latin American, where advanced Chile ranks 28th, while Ecuador stumbles into 50th place. In the Middle East and Africa, Israel alone ranks among the rankings’ top 30 countries.
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Bigger is not always better. The US may rule the roost, but many of the world’s largest economies, including Japan, Germany and France, are outpaced by smaller, more agile competitors, such as the Netherlands, Switzerland and Sweden. What sets these countries apart is the broad accessibility and affordability of the Internet, thanks to state-of-the-art IT infrastructure and high per capita income.
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Business culture is decisive. The US tops the rankings because of the degree to which the Internet has become embedded in commercial culture. Nowhere is so much business conducted over the Internet so routinely. This explains why the US scored highest in the category for e-business supporting services (the consulting and IT services and back-office solutions used to facilitate online business) as well as in the social and cultural category (which considers, among other things, the degree of innovation and entrepreneurship in business). It also explains why Singapore and Hong Kong rank as the most competitive telecoms markets in the world, and among the best equipped, yet don’t figure among the top ten countries. While high-grade infrastructure is important, more important is how people use it.
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Infrastructure is still evolving. Even top-ranked countries have not yet satisfied consumer demand for fast, cheap, secure and reliable Internet connectivity. High-speed, broadband services are not universally available and Internet-ready mobile phones are still in their infancy—even in mobile-crazed Scandinavia.
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Governments have wide influence. Internet business thrives when governments have a clear strategy—and money to spend—to develop IT infrastructure. But that’s not the only area for official involvement. Successful e-business depends on a strong legal framework that protects private property and encourages entrepreneurship. Increasingly, it also requires Internet-specific legislation. In the crucial category of legal and policy environment, Australia comes in first, followed by Sweden, Switzerland, Finland and the UK. Other countries—even those without a strong e-business culture, such as Mexico and Chile—are enacting smart Internet legislation, recognising that good laws promote industry growth.
This year, working in association with IBM’s Institute for Business Value, the Economist Intelligence Unit adjusted the rankings framework to take into account the shift away from the dotcom era’s emphasis on e-commerce to the new imperatives of corporate efficiency, security and global connectivity. The Economist Intelligence Unit was solely responsible for scoring the 60 countries.
The six categories that feed into the rankings (and their weight in the model) are: connectivity and technology infrastructure (25%); business environment (20%), using the 70 indicators covered by the Economist Intelligence Unit’s for 60 countries; consumer and business adoption (20%); social and cultural infrastructure (15%); legal and policy environment (15%); and supporting e-services (5%).
Reform of the Venezuelan Education System
<a href=www.vheadline.com>Venezuela's Electronic News
Posted: Tuesday, April 22, 2003
By: Oliver L. Campbell
VHeadline.com commentarist Oliver L. Campbell writes: Mr Burnett gave us some interesting ideas in his article (20 March 2003) about failed policies of the past. His aim of creating a highly educated population in Venezuela deserves our support but, as explained below, when it comes to priorities I have different views. His contribution on the USA education system was helpful, and he may care to expand on other aspects he believes would benefit Venezuela. Details of the United Kingdom (UK) system are given below as a comparison.
In the UK, education is compulsory from 5-16 years and children are tested nationally at 7, 11 (when they finish primary school), 14 and 16. For those who continue, there is a further national test at 18. In secondary education, seven percent of students attend private schools, and eight per cent state grammar schools where entry is by selection. The great majority go to state schools known as “comprehensives” where there is no selection and in this respect are similar to the High Schools of the USA and the “Liceos” of Venezuela. However, all private schools, state grammar schools and most comprehensives adopt “streaming” for subjects such as maths, sciences and languages and place students of any one year in different sets according to ability.
Secondary education is broadly based and at 16 students are examined for the General Certificate of Secondary Education (GCSE) on up to 12 subjects. Many students then leave school but others continue with further education of a vocational nature for two years at a college of technology. The academically inclined choose 3 or 4 subjects to study at an advanced level (GCE A-Levels) on which they are examined at 18. Their exam results (with minimum marks in brackets) are graded A (80%), B (70%), C (60%), D (50%) and E (40%). They can then leave school or attend a university that accepts the grades they obtained. The universities do not normally set their own entrance exams.
For some courses, like Veterinary Science, three A’s are required but for “softer” options such as Media Studies, three D’s may be sufficient. This specialization in only three subjects has been criticised, but it does mean that students are well advanced in the subject they are going to study when they enter university. The government, however, have been talking about making the exam at 18 broader based with about six subjects, more in line with the French baccalaureate.
University courses take three years for a standard bachelor’s degree, four years for an honours degree, a further 12 to 18 months for a taught master’s degree, two years for a master’s research degree, and three years for a doctorate. A few courses, such as medicine, take up to six years for a first degree. The big difference with Venezuelan universities, particularly in non-scientific and non-technical courses, is that students learn largely by themselves e.g. the hours spent attending lectures can be as few as 10 hours a week. On the other hand, the library facilities and computer networks are excellent and extensively used for study. Universities are funded by the government on the basis of the number of students and the amount of research carried out. The latter encourages research and some universities hold valuable patents.
Up to 16, when they finish their compulsory education, students progress each year to the next grade even if they have not passed all the exams. At university, students who fail one subject in June can retake it in August and, if they pass it, go into second year. If they fail they must leave the university. In subsequent years, if they fail one subject they still go into the next but it will affect the class of degree they obtain. If they fail more than one subject they must leave the university. This strict regime is in contrast with the Venezuelan acceptance of “repitientes” (repeating a year) and means students must study hard or they are out.
University education used to be free but, as the number of students increased, the government found it necessary to introduce fees. However, these are set at a nominal level and at present the student pays the equivalent of US$1,735 per year, though they are soon likely to be increased. The student that is hard up can obtain a government-sponsored loan to cover both the fee and living expenses till he or she graduates. The loan is then repayable in easy instalments when the student starts work.
There are many very strongly held views in the UK on education. The teachers have a powerful union and a number hold very egalitarian principles. For instance, many believe having private schools and state schools which have a selection process is socially divisive and they should not exist. Just recently, they voted for the national tests to be abolished on the grounds “they distort teaching, narrow the curriculum, and cause distress to children and parents.” They also object to performance-related pay for teachers instituted by the government in order to reward class-room competence.
The government have recently introduced discrimination into the university system so that, where applicants have the same grades, those from less privileged backgrounds and/or schools with poor records will be given preference. Parents whose children attend private schools and the better state schools object to this “social engineering” as they fear their children will be excluded from the better universities.
Another controversial aim of the government is that, within the next few years, half of all students will attend university compared with the present one third. This goal is already reflected in the recent erosion or “dumbing down” of standards so that more students can get into university, and some universities will now accept two E grades which only require a 40 percent pass mark. Obviously such students find the going tough and there is a high fall-out rate. Another problem is that there are not enough challenging jobs for all the graduates, and many have to take jobs that really do not require a graduate calibre.
A disturbing fact is that many students in secondary education just cannot wait to reach 16 so they can leave school. They become bored and lose interest in academic subjects and either want to start work or take a course in one of over 500 colleges that offer vocational education and training. The government has responded by allowing some comprehensive secondary schools to become “specialist schools” that give more emphasis to one or two vocational subjects. This tinkering round the edges does not really resolve the problem.
To permit further comparison, some readers may appreciate a brief description of the Venezuelan system. Compulsory education starts at the age of seven, which is a year later than in the USA, Germany, France, Italy and Spain, and is organised as follows:
1st stage of basic education grades 1 to 3
2nd stage of basic education grades 4 to 6
These correspond to primary school
3rd stage of basic education grades 7 to 9
Compulsory education finishes with most students being 16 years old.
Diversified cycle of sciences or humanities
Those students wishing to continue, and this is obligatory for entrance to university, study either sciences or humanities for a further two years. Universities apply their own entrance examinations and set minimum pass marks for the study of individual subjects.
Students who re-sit exams and still fail are usually required to repeat the year. This follows the French practice which the writer does not favour but recognises is debateable.
Would I recommend the British system for application in Venezuela? The simple answer is no. However, there are two aspects of the system that are worth considering:
a) Students aiming to take a scientific or technical subject at university could specialise in just three subjects from the age of 16 i.e. on completion of the third stage of basic education. This means they would enter university with a better grounding in the subject they are going to study.
b) The majority of university courses could be shortened to four years by lengthening the semesters and making the students work harder. I don’t believe British engineers and scientists are any less competent than Venezuelan ones because their course lasts only four years.
I do not support Mr Burnett’s assertion that in Venezuela most children’s education does not surpass that of their parents. I found that, in general, Venezuelan parents are very ambitious for their children, much more so than, say, in the UK. It is not uncommon to find many poorly paid maids and labourers who have scraped to send their children to university.
He makes the point that, for technical subjects, the USA has the best universities in the world. Though the government has limited funds, I agree Venezuela would benefit if they sent the brightest students there to complete a master’s degree. The money spent could be found by funding fewer students for doctorates since that qualification is superfluous except for academics, researchers and theologians (for some reason we like our clerics and rabbis to be doctors). Certainly in business and government service, the three years would be better spent acquiring on-the-job experience.
When Mr Burnet proposes restricting university courses to those that are “economically beneficial” to Venezuela, he is on a slippery path. How do you define “beneficial?” What about journalists, lawyers, linguists, psychologists, sociologists and many more? They are all needed and the question is rather one of quantity i.e. limiting the number to those required in the labour market. Even that goes against the grain since many, including this writer, would argue a university education gives a person a greater potential whether it is academic or vocational. The proposal also clashes with the goal of creating a highly educated population because so many students would be excluded. This writer could never have studied mathematics, physics, engineering, etc because he does not have that sort of brain.
Incidentally, if the government want to influence the number of students studying particular courses, they should adopt the UK system of paying university grants based on the number of students. It is then a simple matter of making differential payments per student for the different courses. The sacred cow of university autonomy has to be sacrificed on the altar of expediency. The government should insist “The man that pays the piper calls the tune” and make the grants on any basis they feel achieves their aims.
Mr Burnett’s proposals to provide three free meals a day and to extend school hours for a period of supervised homework are laudable. There is no doubt the children’s performance would improve if they were all properly fed. A start has been made with the new “escuelas bolivarianas” (Bolivarian schools) where two meals a day will be provided. In the UK, all state schools provide low-cost lunches, free for those who cannot afford to pay, and perhaps that should be the first step. Both ideas present a difficulty in those few cases where school premises are used for two shifts (“turnos”) of students. Perhaps a free breakfast for the first shift and a free lunch for the second would be the answer.
Making sure the exams are rigorous is also a fine goal. However, as noted above, teachers in the UK are strongly opposed to national testing because they say it takes much of their time that could be better spent teaching. Venezuela has had a national curriculum for many years, but to ensure exams are evenly marked across the country would mean extending the system of school inspection. This costs money that right now could be better spent on improving school facilities. Perhaps more frequent testing on a national basis could be a longer term goal.
I have a passionate interest in education but as a means to an end. There are millions of Venezuelans who live in poverty because they lack the skills required in the market place.
I also believe many of the young people, as in the United Kingdom, are turned off by academic subjects and would prefer to learn something practical instead. That is why it is essential the education system is reformed and, after ninth grade, students given the choice to follow a vocational course rather than continuing academic studies with the diversified cycle. In this respect, the German system described below has a lot to commend it.
Education in Germany is compulsory between 6 and 15 i.e. to grade 9, but it is notable most students continue their education and graduate from a vocational school at 18, or a vocational technical school at 18, or an academically oriented school at 19 i.e. at the end of grade 13.
Elementary school (Grundschule) grades 1 to 4
All students take the same subjects and then, at the age of 10, they choose which of three High Schools to enter provided their marks are good enough:
High School (Hauptschule) grades 5 to 9
High School (Realschule) grades 5 to 10
High School (Gymnasium) grades 5 to 13
The “Hauptschule”, “Realschule” and “Gymnasium” all teach academic subjects, but the “Hauptschule” is academically less demanding, and leads to enrolment in a vocational school (“Berufsschule”) which combines classes and an apprenticeship till 18. The “Realschule” is academically tougher, and leads to enrolment in a higher vocational course at a technical school (“Berufsfachschule”) till18. Students bright enough can switch to a “Gymnasium” after completing their High School (“Realschule”) at age 16. The “Gymnasium” is academically demanding, similar to the Venezuelan system, and leads to a qualification called the “Abitur” which is necessary to enter university.
Classes start at 7.30 or 8.00 am and finish at 1.00 pm, but homework is set for the afternoon. Surprisingly, there are 220 school days per year in comparison with 180 in Venezuela and the USA and about 190 in the UK. The summer holiday lasts only six weeks. Another difference, certainly with the UK and Venezuela, is that teachers are well paid and much respected in the community.
My priorities on education are influenced by my opinions. I believe primary schools are doing a reasonable job, reflected in the very good literacy rate, and I would say the same as regards universities. I worked 30 years in Venezuela with professional colleagues of many disciplines and found most of them to be of a high standard. In all branches of engineering and in medicine, I would classify them as first-class. Some had completed masters’ degrees abroad, but by no means the majority. The problem, I suggest, is the same as in the UK where standards vary between universities and many of the “softer” courses, mostly non-scientific or non-technical, could be more rigorous.
That leaves the secondary schools which do not do a bad job preparing students for university, but do not cater for the majority who are not academically inclined. My first priority would be to adopt a system which does meet the latter’s needs. Several countries, including the UK, France, Italy and Spain, have vocational options, but I believe the German education system, suitably modified, best fits the bill and should be considered for implementation in Venezuela.
Many people believe Germany produces the best artisans and technicians in Europe, and nowadays the latter can earn as much as university graduates as exemplified by this joke. It is winter and a lawyer has called a plumber to repair a burst pipe. The plumber charges him $200 for an hour’s work and the lawyer remonstrates “But I am a lawyer and I can’t charge $200 an hour. And neither could I when I was a lawyer” replies the plumber!
The German system is fundamentally different. Providing three options for secondary education goes against the “comprehensive” concept of the USA High School, the UK Comprehensive School, and the Venezuelan “Liceo”. Its great advantage is that it recognises not all students have the same aptitudes, attitudes, interests and aspirations. However, having three types of school is not a practical proposition for Venezuela. That means the present system should continue up to the end of the ninth grade when students complete their compulsory education. It is then the option to follow the academic or vocational route would be given, and students choosing the vocational route would receive two years of vocational training at a technical school from which they would graduate with a diploma at the age of 18.
The academically inclined could continue with the two years of the diversified cycle required for entering university. However, the writer believes there is a bolder option which would be to start primary school at the age of 6 instead of 7. This would allow the change to take place at 15, as in the “hauptschule”, and let students take a vocational course for three years rather than two so they become exceptionally well qualified. To achieve this goal, however, it is essential that the technical schools adopt the higher standard of the “berufsfachschule”. In this respect, Venezuela can build on its experience and success with the short vocational courses given by INCE (“Instituto Nacional de Cooperación Educativa”).
The government have limited resources for increasing the education budget so it is necessary to prioritise. My proposal is that virtually all the real increase, i.e. after inflation, should be allocated to the creation and running of technical schools. At one time there were several of them but they were allowed to die: now is the time to resurrect them. Giving the universities little or no increase will not be popular with them, but remember many parents are accustomed to paying for their children’s education in private schools so there is no reason they should not continue to do so at university. This will take the strain off the state sector and allow the government to continue with free university tuition for those whose parents are unable to pay for it.
To summarise, I believe boys and girls are much the same in Venezuela as in the UK. Some enjoy academic subjects, but many are bored by them and cannot wait to leave school. It is important the latter learn the “Three R’s” (reading, writing and ’rithmatic), and other core subjects to a basic level, but then have the opportunity to learn some useful skill, that motivates them, to a standard which will enable them to obtain a good job.
To achieve this objective, I would recommend the following:
a) Starting primary education at the age of 6 rather than 7 so the average student finishes grade 9 at the age of 15
b) changing the secondary school system so those pupils not academically inclined can attend a technical school from the age of 15 (or 16 as an alternative if primary school still starts at 7)
c) constructing many more technical schools throughout the country
d) allocating any increased funds available for education to technical schools
e) using people to teach technical subjects who have the ability but have not necessarily been to a teacher’s college (as a temporary solution to the lack of technical teachers)
These are just some ideas which, as I pointed out, are aimed not so much at improving Venezuelans’ education in the traditional sense as to taking thousands of young people out of their poverty by teaching them some useful skill. By earning their living, they will gain that self-respect which comes from being a valued member of society. They will also, as Mr Burnett pointed out, become part of the “wealth” of the country and contribute to the national economy.
To parody Clemenceau, education is too important a matter to be left to the school-teachers. A debate on the subject can only be productive and, through VHeadline.com, readers are invited to put forward ideas they think are better, and describe other education systems they know and feel could be adopted in Venezuela in preference to the German model.
Oliver L Campbell, MBA, DipM, FCCA, ACMA, MCIM was born in El Callao in 1931 where his father worked in the gold mining industry. He spent the WWII years in England, returning to Venezuela in 1953 to work with Shell de Venezuela (CSV), later as Finance Coordinator at Petroleos de Venezuela (PDVSA). In 1982 he returned to the UK with his family and retired early in 2002. Campbell returns frequently to Venezuela and maintains an active interest in political affairs: "I am most passionate about changing the education system so that those who are not academically inclined can have the chance to learn a useful skill ... the main goal, of course, is to allow many of the poor to get well paid jobs as artisans and technicians." You may contact Oliver L Campbell at email: oliver@lbcampbell.com
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