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Caracas — The Venezuelan government has fired 828 more employees from the state oil monopoly for participating in a two-month illegal strike aimed at ousting President Hugo Chavez, the company said Thursday.

The latest dismissals brought the total number dismissed to 17,871 — almost half the 38,000-member workforce at Petroleos de Venezuela S.A., a PDVSA spokesman said.

Most PDVSA workers, including management, joined the national strike to demand Chavez's resignation or early elections.

The stoppage paralyzed the world's fifth largest oil industry and cost Venezuela some $6-billion US. But the strike fizzled last month without achieving its goal.

Despite the reduced personnel, the government says it has restored crude oil production to prestrike levels of more than three million barrels a day. Fired executives say output is 2.4 million barrels a day.

Mr. Chavez has rejected pressure from the opposition and foreign governments to reincorporate the fired workers, saying they cannot be trusted to avoid illegal strikes in future. Many also participated in an April, 2002, walkout that helped trigger a short-lived coup.

The government also says it is taking advantage of the strike to reorganize PDVSA, reduce excess bureaucracy and increase government control over the company.

The strike was supported by the country's economic elite and many in the middle class who fear plans by Mr. Chavez to distribute more of Venezuela's wealth among its poor majority.

<a href=news.ft.com>Financial Times By Carola Hoyos, Energy Correspondent Published: April 3 2003 18:52 | Last Updated: April 3 2003 18:52

As Baghdad looms larger in the sights of US and British soldiers, the nightmare of oil at $50 or even $100 a barrel is fading.

Although oil prices will remain vulnerable as the battle for Baghdad begins, they are a long way from their March high of $39.99 a barrel.

And as long as most of Iraq's oil wells remain intact, analysts say, there is little chance that prices will reach the $41.15 peak prices hit after Iraq invaded Kuwait in 1990.

Two main factors explain why this war with Iraq has had far less impact on oil prices than the last: timing and the fact that Saddam Hussein has not managed to wreak havoc in the oilfields as he did in 1991.

Then his troops damaged 700 Kuwaiti oil wells, leaving the emirate to spend two years rehabilitating its oil sector before it could return to full production.

Since the beginning of the current conflict, the world has lost 2.4m barrels a day of Iraqi production, which has been made up by Saudi Arabia and other Opec members, who increased their output quota to 24.5m barrels a day in January and then suspended restrictions altogether at the start of the conflict.

Spencer Abraham, US energy secretary, on Thursday confirmed Opec's key role, saying: "We've seen a substantial increase in Opec-10 production, more than enough to compensate for losses in Iraq and Nigeria."

But perhaps the most important factor was the timing of President George W. Bush's decision to launch his campaign, at a time when Venezuela's exports were recovering from the interruption in December and January caused by the country's national strike.

March also brought the first signs of spring to the northern hemisphere and a reduction in the level of oil required for winter heating.

This helped offset the loss of Iraq's oil and some of Nigeria's production, which was halted by ethnic violence ahead of this month's elections.

Oil refiners have even begun to rebuild their stocks, which earlier this year had fallen to levels not seen since the mid-1970s.

Meanwhile, the governments of US, Japan, Germany and South Korea were able hold on to their strategic stockpiles of oil which they were ready to release in the event of a serious interruption in supplies.

However, the uncertainty over the conflict in Iraq and the loss of Venezuela's exports have left their mark.

UK benchmark Brent crude oil prices averaged $31.47 a barrel during the first quarter of this year, $5 more than the fourth quarter of 2002 and $10 more than a year ago, according to BP's latest trading statement.

The jump in the price of WTI, the US benchmark crude, was even more dramatic. It averaged $34 a barrel, from $28.31 at the end of 2002 and more than $12 above prices a year ago.

Friday,  April 4,  2003 <a href=www.lapress.org>LATIN AMERICA Andrés Gaudin.  Apr 3, 2003

US increases military exercises in region in war against terrorism. Under the pretext of combating terrorism, the United States plans to escalate its military build-up in Latin America. Until at least June of this year, US soldiers and military instructors are to be sent to countries across the region with the objective of carrying out bilateral or multilateral air, river and land exercises. With long-term operations already being conducted in several countries, analysts have stated that this new military build-up could lead the way to the militarization of Latin America. Since the September 11 terrorist attacks, President George Bush has asserted that Latin America could become the next operative base of Islamic groups such as Al Qaeda, Hezbollah and Hamas. In the first half of this year, new operations are to be implemented in Paraguay, the Dominican Republic and Argentina, where Exercise Eagle III will involve air forces from the US and six other Southern Cone countries. There is already a strong US military presence in the Andean region, the Amazon Basin and Central America, and plans are being developed to set up a customs and migration control program that would be supervised by the US. “One could say that Latin America is on its way to becoming a militarized region dedicated to the warmongering strategies of the White House,” said Dominican congressman Pelegrín Castillo. Operation New Horizons, which began last January and was due to run until May 31, aimed to bring some 400 US troops to the Dominican Republic every month. On March 17, however, Maj Gen. Carlos Diaz Morfa, head of the Dominican Army announced the suspension of any further joint military exercises due to the impending war in Iraq. Nonetheless, it is estimated that over one hundred US soldiers remain on Dominican soil, carrying out social programs such as the building of schools and rural clinics. A further phase of Operation New Horizons is scheduled in Paraguay between April and June. Southern Command Special Operation forces will be sent to train Paraguayan forces in anti-terrorism strategies. However, the most significant military exercises are planned for next June in Argentina, involving forces from the US, Brazil, Paraguay, Uruguay, Chile, Bolivia and Argentina. “Eagle III will have the added attraction of including the participation of the US Air Force, which will provide F-16s and a team of instructors highly experienced in real conflict situations,” said Commodore Jorge Reta, head of information for the Argentine Air Force. The Argentine minister of defense, Eduardo Jaunarena, has said that the US will bankroll a large part of Eagle III expenses. He admitted, however, that Congress has yet to formally authorize the entry of foreign troops into the country. Last December, the foreign ministries of Argentina, Brazil and Paraguay agreed to a US proposal to carry out the joint patrolling of the Iguazú and Paraná rivers. It is still unknown when this operation will begin but the Pentagon has said that it will provide personnel, speedboats and radar equipment. Both rivers run across the so-called Triple Frontier, the shared border area of Paraguay, Argentina and Brazil. The population of the zone is estimated at 200,000 people, including 30,000 of Arab descent (LP, Nov. 5, 2001). From the mid-90s, both the CIA and the FBI have considered the zone a haven for active and “sleeper” cells of Al Qaeda, Hezbollah and Hamas. However, the Argentine vice-chancellor, Martin Redrado, retorted late last year that “no terrorist activities, whether current or in their formative stages, have been detected. The same applies to the existence of sleeper cells.” The US also intends to increase its presence in Latin America by creating a naval cordon to shield the Atlantic and Pacific coasts “from the entry of terrorist groups.” The idea was presented by the US defense secretary, Donald Rumsfeld, at the Summit of Ministers of Defense of the Americas in Chile last December. According to Jaunarena, the plan — outlined in the document “New Threats to Regional Security” — will be debated in a future meeting of ministers of defense. A US global customs system has also been formulated via a resolution passed by the Treasury Oct. 31, 2002. “The resolution decrees that US Customs will have their own personnel at our ports,” said lawyer Arturo Ravina. “This cannot be justified as a part of the fight against terrorism. Moreover, it is the first step towards establishing a control over our countries’ immigration,” he said. The US has already cited the war on terrorism as justification for stationing forces and intelligence personnel at bases in Ecuador, Cuba, Venezuela, Panama, Honduras, El Salvador, Uruguay and the Triple Frontier countries. In May, US marines will cease their long-term military maneuvers on Vieques Island in Puerto Rico. Ever since marine jets accidentally killed a civilian in 1999, hundreds of protestors have regularly disrupted exercises at the bombing range (LP, March 6, 2000 and Sept. 10, 2001). Meanwhile, the US has stepped up its military involvement in the conflict in Colombia, which many critics say will only serve to escalate the situation (LP, March 12, 2002). In 2000, US$1.3 billion of military aid was granted under Plan Colombia. (LP, April 10, 2000). The Pentagon has described the plan as being of an intermediate operational level, turning it over to two private armies, Military Professional Resources Incorporated and DynCorp. Argentine analyst Gabriel Tokatlian has warned of “the dangerous possibility of privatizing armed conflicts. The commercialization of the region’s security matters could be the threshold of a new form of internationalized private war,” he said.

Venamcham José Gregorio Pineda, Economista Jefe. José Gabriel Angarita, Economista.

En noviembre 21 de 2001, una sentencia de la Sala Constitucional del máximo tribunal, especificó que limitar las operaciones con moneda estadounidense era una decisión que escapaba de las manos del Gobierno y que cualquier medida, como el actual control de cambio, debía estar amparada por una ley que se aprobase en la Asamblea o por suspensión de las garantías económicas de Venezuela.

Actualmente existe una revisión de la legalidad del control de cambio implementado por el Ejecutivo el pasado 21 de enero, que podría implicar una reapertura del mercado cambiario en condiciones no previstas inicialmente, que de no considerar las previsiones correspondientes podría ser tan perjudicial como el mismo control.

Después de 70 días de la medida, la dinámica del mercado nacional está afectada por una demanda de dólares represada que, en caso de que se reactive el mercado sin ejecutar ninguna acción de política cambiaria, ejercerá presiones sobre el tipo de cambio depreciando aún más al bolívar. Por esto muchos sectores se han pronunciado a favor de un sistema dual, con un tipo de cambio de 1.600 bolívares por dólar para la adquisición de bienes prioritarios y otro libre para el resto de las transacciones.

Es evidente que el control de cambio ha representado para la economía venezolana un duro golpe cuyos efectos no podrán ser revertidos en el corto plazo, inclusive si el TSJ lo declara inconstitucional.

Existe entonces la posibilidad de que el TSJ se pronuncie en contra del control de cambio. ¿Pero será posible qué dicha medida cambie en algo los efectos devastadores que la actual cesación de cambio tiene sobre la economía? La historia y el discurso oficialista nos hacen pensar lo contrario, "el control de cambio llegó para quedarse". Es lógico esperar que una sentencia desfavorable del TSJ, si la hubiera, no represente mayores cambios a la situación actual, ya que simplemente el mercado seguiría suspendido (al igual que lo está ahora) mientras se aprueba el control de cambio en la Asamblea Nacional.

Las perspectivas en torno al suministro de divisas no son alentadoras. No se observa una voluntad por parte de las autoridades en acelerar el proceso y últimamente vemos como comienzan las acusaciones entre los diversos entes involucrados sobre la responsabilidad de la inoperatividad del sistema.

La mejor alternativa es ejercer presión para que ocurra una flexibilización del sistema, mediante un sistema dual y acelerar el otorgamiento de las divisas, aprovechando las mejoras en la facturación de PDVSA y los aumentos de las reservas internacionales.

De no producirse dicha flexibilización podríamos estar en la irónica situación donde las reservas internacionales podrían estar en los niveles previos al paro (15.788 millones de dólares, solamente unos 725 millones de dólares más que el nivel al 28 de marzo de 2003) y el mercado continué sin suministros de divisas con las devastadoras consecuencias sobre el sector productivo.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, April 03, 2003 By: VenAmCham

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Officers of the Venezuelan Federation of Workers (CTV) have demanded that the government urgently raise the minimum wage to counteract the economic destabilization's effects on workers' real salaries.

The arguments in favor of such a measure put forward by the union leaders are, first, the 3 million barrels of oil per day the government claims to have achieved, which permits no evasion of the union demand by the national government, and second, the claim that higher salaries would stimulate aggregate demand and produce a tonic effect on economic activity.

• The CTV calls for a minimum wage hike of at least 30%, just to achieve a partial compensation for the real salary's loss of purchasing power due to last year's inflation, but without any compensation for the 9.4% inflation rate in the first quarter of this year.

The CTV's demand was to be expected, since the government has repeatedly expressed its intention to create a parallel labor organization. The CTV's logical reaction to that threat to its primacy was to take anticipatory action demonstrating the strength of its defense of workers' interests. This move makes all the more sense considering that the members of that pro-government parallel union organization have announced similar demands. It should come as no surprise, then, that the CTV is doing the same, because it is under pressure from competition in the labor movement.

The private sector has reacted negatively, which was also to be expected.

Businessmen say this would be highly irresponsible under current economic conditions, when about 15% of all companies shut down for good in the first quarter of 2003, no foreign exchange is available, and a large number of workers have lost their jobs.

The private sector made it clear that it is much wiser to maintain employment and avoid hurting the workers who still have steady jobs. Workers need a salary adjustment sooner rather than later, in view of the drastic reduction of real incomes to a point where many of them cannot even acquire the complete basic consumption basket. But the business sector's ability to absorb the necessary wage increases under prevailing economic conditions is in serious doubt.

Hence, if the minimum wage is raised, unemployment could become even worse in the short term.

The presumed umpire, the national government, finds itself in the strange position of being an employer on the one hand (so a salary hike would inflate its expenses) and having bad relations with the country's business and labor organizations, on the other.

Workers and businessmen, each group playing their own roles, have posed a debate that had to take place sooner or later. We should not view as surprising an annual controversy to which we had accustomed ourselves, especially because it is now easier than ever to resolve it amicably.

Time will tell.

Full Article in Spanish.

¿Será posible llegar a un acuerdo en materia salarial?

José Gregorio Pineda, Economista Jefe. José Gabriel Angarita, Economista.

Dirigentes de la Confederación de Trabajadores de Venezuela (CTV) exigen al Gobierno que aumente el salario mínimo con carácter de urgencia para contrarrestar los efectos que la desestabilización económica tiene en el salario real de los trabajadores.

Los argumentos que manejan los dirigentes sindicales para estimular la medida son en primer lugar, la producción petrolera de 3 millones de barriles diarios que dice el gobierno tener, con lo que no se justifica la evasión de la solicitud por parte del Ejecutivo Nacional; y en segundo lugar, mayores salarios estimularían la demanda agregada interna con su efecto en la producción de la economía.

Se plantea incrementar por lo menos en un 30% el salario mínimo, para simplemente recuperar, aunque sea parcialmente, el salario real ajustándolo a la inflación del año pasado, sin contar con el 9.4% de inflación acumulada en el primer trimestre de este año 2003.

La petición por parte de la CTV era de esperarse, ya que insistentemente se han dado anuncios por parte del gobierno de crear una central obrera paralela. Ante tal posibilidad la reacción lógica de la CTV era anticiparse a este movimiento y mostrar públicamente su defensa de los intereses de los trabajadores. Esto tiene mucho más sentido si se toma en cuenta el hecho que los propios miembros de esa posible central obrera paralela anunciaron peticiones similares, por lo tanto no debe sorprendernos la petición de la CTV dadas las presiones a que está sujeta por la competencia en el espacio sindical.

Las reacciones en el sector privado han sido adversas, lo que también era de esperarse. Los empresarios expresan que la medida sería un acto de total irresponsabilidad bajo la coyuntura actual del sector, donde en el primer trimestre del año 2003 se han cerrado aproximadamente 15% de las empresas, existe una paralización en la asignación de divisas y se han generado un gran número de desempleados. El sector dejó claro que es mucho más sensato mantener el empleo y evitar perjudicar a aquellos que aún disponen de un empleo permanente.

Los trabajadores necesitan un ajuste en sus salarios más temprano que tarde, dada la profunda disminución del ingreso real que en muchos casos les impide acceder a los bienes de la cesta básica. Pero está en duda la capacidad del sector empresarial de absorber este aumento en la situación económica actual, que de concretarse, llevaría a un desempleo aún mayor en el corto plazo.

Aquí el supuesto gran arbitro, el Gobierno Nacional, se encuentra en la extraña posición de ser patrono por un lado (afectado en sus gastos por el incremento salarial) y por el otro no tener buenas relaciones con las máximas agrupaciones tanto del sector empresarial como laboral.

Trabajadores y empresarios, cada uno cumpliendo con su rol, han puesto en el tapete una discusión que tenía que llegar tarde o temprano. No debemos ver como algo insólito esta controversia que antes nos había resultado normal, sobre todo porque hoy más que nunca puede ser resuelta amistosamente. El tiempo dirá.