<a href=www.sfgate.com>More Thursday, March 27, 2003
(03-27) 07:23 PST CARACAS, Venezuela (AP) --

Venezuela won't stop paying its foreign debt obligations despite a severe cash crunch stemming from a crippling two-month strike, the finance ministry said.

"Venezuela completely dismisses the possibility of moratorium, halt of payments or forced restructuring of public foreign debt," the ministry said in a statement released late Wednesday.

The statement came after President Hugo Chavez announced in a speech to business owners that Venezuela may have to restructure its foreign debt. Chavez did not provide details.

The Finance Ministry said Venezuela planned to propose a voluntary bond swap, among other measures, to deal with the cash crunch. Venezuela's foreign debt amounts to about $23 billion, or 37 percent of its $63 billion economy. The country faces $5 billion in debt payments this year.

Last week, the government swapped maturing local debt worth more than 160 billion bolivars ($100 million) for new bonds with terms of up to two-and-a-half years. Since last year, the government has extended maturities on 3.8 trillion bolivars ($2.4 billion) in local debt, the finance ministry said.

The South American country lost $6 billion during a strike to force Chavez's resignation or early elections. The walkout hobbled the world's fifth-largest oil exporting industry and source of half of public revenue for Venezuela. Tax collection, the source of most of the rest of government income, also fell as thousands of businesses and the stock market closed.

The strike fizzled last month with Chavez solidly in power.

Ali Rodriguez, president of the government oil monopoly, said Thursday oil production reached 3.1 million barrels a day. Exports are 2.8 million barrels a day, Rodriguez told state news agency Venpres. Executives fired from Petroleos de Venezuela SA for leading the strike say output is 2.4 million barrels a day.

Private economists predict gross domestic product could shrink more than 20 percent this year. GDP contracted 9 percent in 2002.

The Nation (Nairobi) March 27, 2003 Posted to the web March 27, 2003 Nation Reporter Nairobi

Many countries have cut the free flow of news and arrested journalists. The war on terrorism is being used to curb press freedom around the world, an international media watchdog has said.

In addition, some 54 journalists were killed and press freedom violations recorded in 176 countries and territories, the International Press Institute's (IPI) World Press Freedom Review 2002 said.

In the first full year after the September 11 attacks, the war on terrorism continues to affect freedom of the press.

Across the globe, governments have used the war to justify their own short-term interests, said the report. While some additional security measures have been legitimate, many countries have enacted restrictive laws, reduced the free flow of information, arrested journalists, closed media outlets and suppressed dissenters, all in the name of terrorism.

With 10 journalists killed in Europe, press freedom is under pressure, particularly in eastern Europe where governments victimise the media.

Almost every country in Europe has introduced new anti-terrorism laws after September 11 and a number have inhibited the media's work, it said.

In Russia, where eight journalists were killed, a new draft law seeks to regulate the media during an attack by terrorists.

In Asia, with 13 journalists murdered, the governments of Indonesia and the Philippines have proposed new anti-terrorism measures while, in Malaysia, the war on terrorism undermined efforts to repeal the notorious Internal Security Act.

After securing the favour of the United States in the war on terrorism, countries such as Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan suppress the media with impunity. Terrorists and security forces in Nepal also targeted the media this year, but there were improvements in Sri Lanka.

Fuelled by conflict in Palestine and Israel, seven journalists were killed in the Middle East and North Africa, where countries routinely stifle dissent and free speech. In Iran, the struggle between conservatives and reformers has led to the closure of publications and harsh prison terms for journalists.

The Americas is still the most dangerous region in the world with 22 journalists killed, 15 of them by left and right-wing terrorists in Colombia.

In the United States, growing surveillance and enforcement powers to combat terrorism have raised fears over the balance struck between security and liberty, while Venezuela and other Latin American countries contain groups united in their hatred of the media.

A deepening recession and taxation problems also concern the media in the Americas. In Canada, worries exist that powerful media owners are exercising ultimate editorial control.

Although no journalists were killed in the Australasian and Oceanic region, the influence of traditional kings and local politicians is ever present. The media are often prevented from reporting critically and even excluded from some territories.

EDITORIAL • March 27, 2003      Venezuela struck a curiously magnanimous tone in recent days, promising to be a reliable wartime supplier of oil. "We are and will continue to be the most secure supplier of oil to the United States," said Venezuela's Vice President Jose Vicente Rangel last week, as the United States appeared on the brink of war with Iraq.      Surely, any pledge of goodwill from Venezuela towards the United States raises eyebrows these days, given the recent testy exchanges between the two countries. But, despite the tensions, Venezuela could hardly be expected to punish itself economically by halting oil exports to the United States.      Venezuela has traditionally provided about 20 percent of America's crude-oil imports, and it is the world's largest oil producer outside of the Middle East. In the wake of a two-month nationwide strike that began Dec. 4, Venezuela's oil production has been impaired. About 40 percent of the workers at Venezuela's state oil company were fired for striking. Before the strike, Venezuela was exporting about 2.5 million barrels a day, of which 1.5 million (60 percent) went to the United States. Estimates vary on what Venezuela is currently exporting.      Some private analysts believe Venezuela is exporting 1.8 million barrels a day and producing 2.4 million barrels a day. The government says it has passed its OPEC production quota of 2.8 million barrels a day, and can even push up production to 4 million barrels by April, if there's a supply emergency.      Regardless of the varying estimates, the company's ability to recover from the strike is impressive. And the United States does indeed need Venezuelan oil, particularly now. The Bush administration has successfully balanced its need for Venezuelan oil with its determination to hold Mr. Chavez accountable for his actions. The administration criticized Venezuela's arrests of strikers, for example, to which Mr. Chavez responded by telling the United States to mind its own business.      Now, with some Iraqi oil wells set on fire and the war possibly disrupting oil production for an unknown period of time, it may be tempting for the United States to go silent on its concerns about Mr. Chavez. But a continuation of the Bush administration's calibrated policy would bolster U.S. credibility and leadership. Also, the engagement of the United States and other countries in the Group of Friends initiative — an effort to broker agreements between the government and the opposition — keeps Mr. Chavez's policies within certain democratic bounds. The Group of Friends may also be moderating the opposition's tactics. A more restrained Mr. Chavez helps avert the kind of crisis that would disrupt Venezuela's oil production over the medium or long term.      The best guarantor of stability and oil production in Venezuela will be the international community's steady engagement. At this point, the whole world has a stake in Venezuela's future.

<a href=www.tuscaloosanews.com>URL The Associated Press March 26, 2003

Venezuela will grant safe conduct to anti-government labor leader Carlos Ortega when he goes into exile in Costa Rica, officials said Wednesday. Ortega, president of the million-member Venezuelan Workers Confederation, took refuge in the Central American nation's embassy to avoid arrest on treason and rebellion charges stemming his role in leading a crippling nationwide strike. "Safe conduct has been granted, which will facilitate Mr. Ortega exit: first from our embassy, and secondly, from Venezuela to our country," said Costa Rican Ambassador Ricardo Lizano. It wasn't immediately clear when Ortega would leave Venezuela. The general strike was aimed at forcing the resignation of President Hugo Chavez and early elections. Chavez has demanded 20-year prison sentences for Ortega and co-strike leader Carlos Fernandez, saying that they must be punished because the work stoppage cost Venezuela an estimated $6 billion, caused fuel and food shortages and suffering among the nation's poor majority. Ortega slipped into the Costa Rican embassy on March 14, and that nation granted him asylum after he expressed fears that his life could be in danger. Last week, an appeals court ordered the release of Fernandez, who escaped charges of rebellion. Fernandez was previously held under house arrest.

<a href=news.ft.com>URL By Vincent Boland in New York Published: March 27 2003 1:11 | Last Updated: March 27 2003 1:11

President Hugo Chávez of Venezuela sent a ripple of uncertainty through capital markets on Wednesday with an announcement that he wanted to restructure the country's domestic and foreign debt.

The comment, which was broadcast on television but was not detailed, was initially interpreted by investors to mean that Venezuela could be about to pursue the forced debt swap imposed on investors by Argentina.

Mr Chávez's remark sent Venezuela's debt prices briefly into a slump in New York trading, mainly because of a lack of detail about what he had said. He told an audience of business people that the cost of servicing Venezuela's debt was too heavy for a country with its budgetary and fiscal problems and that the government would take steps to have it restructured.

Debt servicing costs, including repayments, on the debt are estimated at more than $5bn this year. Mr Chávez said this was "too much money for our beaten down budget and our beaten up situation".

Tobias Nobrega, finance minister, later told Reuters that a moratorium on repayments or a forced restructuring were not being considered, but that swap proposals would be put to investors in the next few months. Venezuela would also continue to comply with its debt obligations.

Analysts who watch Venezuela closely said the country's problem  and the chief difference with Argentina's situation  was not the size of its debt burden, which includes $22.4bn in foreign debt and more than $7bn of domestic debt, but a crisis of government revenue.

"The general perception is that Venezuela has a liquidity problem [rather than a debt burden problem]," said Benito Berber, a Venezuela specialist at IDEAglobal, an economics consultancy in New York. "That's where it differs from Argentina."  

Venezuela is struggling in the aftermath of a bitter and prolonged strike aimed at removing the country's populist president from office. The strike shut down oil production, Venezuela's chief export earner. Although production is now back to pre-strike levels, PDVSA, the state oil company, is unable to recover nearly $2bn in receivables.

This has deprived the government of badly needed revenues at a time when it should be able to take advantage of relatively high oil prices and worries over supplies because of the war in Iraq.

Venezuela's creditworthiness rating, while extremely low, is still several notches above default levels, at Caa1 from Moody's Investors Service and CCC+ from Standard & Poor's.