www.vheadline.com Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

The judicial war has started with 4th Appeal Court Chamber judge’s decision to lift the house arrest of Federation of Chambers of Industry & Commerce (Fedecamaras) president, Carlos Fernandez.

One of Fernandez’ lawyers, Jose Tadeo Sainz says the decision means Fernandez is free because the judge did not find sufficient motives to continue with legal proceedings.

“The Attorney General’s office admits in a preliminary hearing that it was initiating an investigation against Fernandez and has not presented charges.” Fernandez’ lawyer says the government has no proof that his client took part in an armed insurrection against President Hugo Chavez Frias.

“What does figure in the acts accusing Fernandez is the development of the national stoppage, in which the only weapons used were flags and whistles.”

The government is expected to appeal the decision and formally specify charges.

www.forbes.com Reuters, 03.20.03, 1:49 PM ET By Ana Isabel Martinez

CARACAS, Venezuela, March 20 (Reuters) - Gleaming in showroom display windows across Venezuela, thousands of new cars are awaiting a buyer. But many will go unsold.

Battered by last year's 9 percent slide in the oil-rich nation's economy, Venezuela's automobile industry is bracing for plummeting sales after a two-month political opposition strike pushed the country even deeper into recession.

Industry representatives are forecasting a 30 percent decline in sales for 2003. A major factor, they say, will be a lack of dollars following the government's introduction of currency controls, which have cut off access to greenbacks for two months and paralyzed the import-reliant economy.

In the last year, car sales had fallen 40.7 percent as the local bolivar currency collapsed 46 percent against the dollar, inflation topped 31 percent, and interest rates climbed.

"Sales could fall this year as much as 30 percent, mostly in the first half. We might see an eventual improvement in the second half, if we manage to export more units assembled here," Roberto Madero, director of Venezuela's automobile business chamber, told Reuters.

Sales fell about 77 percent in the first two months, compared with the same period a year earlier, mainly due to the opposition strike that began in early December. It failed to unseat leftist President Hugo Chavez, but severely disrupted the nation's vital oil industry.

"It has been chaotic. The few people who come here just turn right around when they start talking about prices," said Jose Vicente Fossi, who sells Chryslers in an exclusive showroom in eastern Caracas.

The cheapest vehicle on the market -- with two doors and no air-conditioning -- costs 9 million bolivars ($5,625) in this poverty-ridden country, where the minimum salary is equal to $120 a month.

Fossi smiled as he recalled selling 100 to 120 units a month during 2001 -- a year that saw record sales of 217,000 units -- and the 50 cars a month he sold last year. This year he has been selling only seven cars a month.

In 2002, 128,623 vehicles -- 41 percent of them imported models -- were sold in Venezuela.

"It has been really ugly," said the salesman, who spends long hours surfing the Internet while waiting for customers.

FLIGHT FROM HIGH PRICES

Madero said he hoped interest rates on car purchases would drop from the roughly 50 percent range to stimulate demand. But growing unemployment and weakened consumer purchasing power meant Venezuelans were unlikely to keep buying top model cars and trading them in frequently as they did in the past, he said.

In a nation where petrol is cheaper than mineral water, the two-month opposition strike hit car-loving Venezuelans hard by disrupting gasoline supplies. Drivers were forced to wait for hours in long lines outside filling stations.

Madero underscored the negative impact of the lack of access to dollars for a sector that relies on imports for 60 percent of its products. The bleak market outlook has been compounded by a steep rise in prices as the local bolivar currency lost ground against the dollar.

The bolivar fell 24 percent from the beginning of the year until the government closed currency trading in late January to prepare for its new foreign exchange controls.

The Venezuelan currency stands at 1,600 bolivars to the dollar since the government implemented controls and a fixed exchange rate -- an appreciation of 16 percent from the last day of trading. But on the black market, the greenback is already trading at 2,300 bolivars.

Jorge Garcia Tunon, director of a Chevrolet concession, managed to sell 410 cars in one month in 2001. His tally for this year: no cars in January, 70 in February, 20 in March even with the discounts, preferential interest rates and special offers on the cheapest cars on the market.

"We really worried because we made huge investments to establish this concession, and now those plans are paralyzed," he said.

CRISIS HITS EVERYONE

The used car market also saw sales slip dramatically.

"We have never seen the market in such bad shape," said Carlos Padron, a veteran of 20 years in the business. "Before, you could sell about 12 to 15 cars a month. Now it's more like two or three -- if you are lucky."

Most sales representatives are feeling the pinch because they live on commissions; many have even sold their own cars because they need the cash.

Inmaculada Torres, a Ford saleswoman, bites her lip nervously as she talks about her future and the market on which she is so dependant.

"I rent my home, and we are thinking of moving to a cheaper place. I had to sell my car and buy an older one to cut costs," she said on the verge of tears. "I'm father and mother to my teenage kids."

For others, the crisis means the end of a family business and an introduction into the growing ranks of the unemployed.

Venezuela's jobless rate is 16 percent, according to government figures.

"We're getting squeezed. If this doesn't improve soon, we'll be closing down bit by bit," said Luis Miguel Sanchez, the owner and director of a family business selling Japanese cars. "We've given ourselves until April 30. What can we do?"

www.vheadline.com Posted: Thursday, March 20, 2003 By: Patrick J. O'Donoghue

Venezuelan Ambassador Jorge Rondon left Iraq Monday evening on instructions from the Venezuelan Foreign Ministry and will remain in diplomatic service in Jordan.

Political Sciences professor and anti-government columnis, Anibal Romero claims that the attack on Iraq will affect Venezuela. Firstly, Romero contends, the USA will be seeking out outbreaks of terrorism and divert money from development projects to intelligence gathering and military objectives.

After the war oil prices will probably drop as Iraqi oil flows on to the market … “Venezuela will lose markets as other countries turn to Iraq for supplies … very ironic for Venezuela ... Chavez Frias will not to antagonize the USA since he finds himself in a weak position.”

Romero has harsh words for the French and their attitude towards the war ... “the French imperialists received Zimbabwe’s Mugabe, do business with Chavez Frias and other third world dictators … they are the principle investors in the Iraqi oil industry.”

msnbc.com MSNBC NEWS SERVICES

March 21 — Several oil wells were on fire in southern Iraq on Friday, but exactly how many was unclear, with U.S. military officials estimating seven fires and Britain saying up to 30 oil wells could be ablaze. Officials noted that in any case, the number is far fewer than the 400 wells in the area, which is near Basra. “PUT INTO context, that’s perhaps not as bad as we might have feared,” British Defense Secretary Geoff Hoon told reporters in London. The oil fields of southern Iraq pump about half of the country’s daily output of 2.5 million barrels. A British military spokesman said the fires were set by Iraq. “Several of the oil heads have been set on fire by (Iraqi President) Saddam Hussein’s forces in an attempt to deflect us from the task,” Capt. Al Lockwood told Reuters. Another British spokesman, Col. Chris Vernon, told Reuters that “U.S. Marines are moving well into the ... oil fields and it seems like we will be able to seize much of the oil structure intact.” The picture in northern Iraq was less clear amid unconfirmed reports U.S. special operations forces had secured the giant oilfields around Kirkuk, the biggest of Iraq’s 15 operational fields. A U.S. official said earlier this month that Iraq had placed explosives at the Kirkuk oilfields to prevent them being captured in the event of a U.S. invasion.

An arrow points to smoke plumes seen in an image taken Thursday by a U.S. satellite. The plumes are consistent with oil fires detected from space before, the National Oceanic and Atmospheric Administration said.

MARKETS HAPPY Oil markets seemed to take comfort from the speed of the U.S.-British advance and shrugged off the latest news of an increased number of Iraqi oil well fires. The lack of an impact from the war on oil shipments from Kuwait also inspired confidence.

     Kuwait<ampersand/>#8217;s state-run radio said Kuwaiti ports were operating normally Friday, and an oil industry source said crude shipments from Kuwaiti oil terminals were continuing without interruption.
   The Pentagon has said it would try to secure Iraq<ampersand/>#8217;s oil fields quickly to prevent Iraqi forces from damaging the country<ampersand/>#8217;s 1,685 wells.

Saddam uses oil as weapon in 1991

1 / 6 Oil as a weapon Jan. 15, 1991 - In the lead up to the Gulf War, military analysts considered how Saddam Hussein might use oil to thwart coalition air strikes, clog desalination plants in the Gulf and disrupt Kuwaiti oil production for years to come. NBC's Fred Francis reports.

2 / 6 A trip into hell March 16, 1991 - In the Kuwaiti desert 500 oil wells burn out of control. Coping with land mines and the spectacular sights, sounds and searing heat of roaring fires, teams of well control experts struggle to control the blazes. NBC's Bill Lagatuta reports.

3 / 6 Gushers and blazes March 26, 1991 - The Wild Well Control team from Texas began trying to cap a gushing oil well, but not enough water and equipment had yet arrived to wrestle the blazing fires. NBC's Deborah Roberts reports.

4 / 6 Still a prisoner of Saddam March 21, 1991 - Burning petroleum containing high levels of sulphur and lead poisoned the air, while a slick larger than the world had ever seen blackened the waters; a health and environmental nightmare. NBC's Deborah Roberts reports.

5 / 6 The health debate June 10, 1991 - If hell had a national park it would be here, but what is the impact on global health. NBC's Robert Hager reports.

6 / 6 380 down, 370 to go Sept. 13, 1991 - Six months after Desert Storm, half of the 750 burning oil wells still burn. NBC's Arthur Kent reports.

1991 FIRES
Even before the current war began, the Pentagon had expressed fears that Saddam Hussein had planned to sabotage Iraq’s oil fields. In 1991, Iraqi troops destroyed more than 700 well heads in Kuwait, turning its oil fields into a desert inferno that took seven months to extinguish. When Iraqi troops retreated from Kuwait in February 1991, they attached plastic explosives to well heads and piled sandbags against them to direct the force of the explosions for maximum effect. The result was geysers of burning crude at 603 wells, serious damage at more than 100 others and widespread environmental degradation. Teams of firefighters from the United States, Canada and eight other countries worked from April until November to put out the fires.
Most of the teams used seawater pumped through Kuwait’s empty oil pipelines to battle the fires. The heat was so intense, at more than 2,000 degrees Fahrenheit, that water sometimes continued boiling on the ground for two days afterward, said Mark Badick of Safety Boss, Inc. “We’ve had fire helmets melt on our heads,” said Badick, whose Calgary-based firm put out 180 of the Kuwaiti well fires.
Firefighters from Hungary had a different technique, using two jet engines mounted horizontally on a tank chassis — a homemade vehicle they called “Big Wind” — to blast flame-retardant foam at the fires. It took Kuwait more than two years and $50 billion to restore its oil output to prewar levels. If Iraq sabotaged its oil fields, any cleanup could take far longer and cost much more.

12 YEARS OF SANCTIONS Iraq’s fields and pipelines are badly run down after 12 years of U.N. economic sanctions. Its fields are also much farther from the sea than those in Kuwait, meaning a ready source of water might not be so easily available. Destruction could be especially bad if Iraqis set off explosives underground, deep within the well shafts themselves. If that happened, firefighters would have to drill a new “relief well” and pump a mixture of sand, gel and mud into each damaged shaft to try to plug it up and stop the blowout. “It’s a long, arduous process,” Badick said. Whereas he and his crews put out as many as five fires a day in Kuwait, cleaning up after a single underground explosion can take two months.

www.guardian.co.uk By ALEXANDRA OLSON Associated Press Writer March 20. 2003 12:43PM

An appeals court on Thursday ordered the release of a businessman who has spent nearly a month under house arrest for leading an unsuccessful strike to oust President Hugo Chavez.

The Caracas court ruled that prosecutors have not presented enough evidence to keep Carlos Fernandez in custody on charges of rebellion and instigation, Judge Luis Lecuna told Globovision television.

Fernandez, 52, was arrested by secret police on Feb. 20. He was placed under house arrest three days later in the central city of Valencia, about 70 miles from Caracas.

Fernandez helped organize a two-month strike to demand Chavez's resignation or early elections. The strike paralyzed the world's fifth-largest oil exporting industry and cost Venezuela $6 billion. But it fizzled last month with Chavez firmly in power.

The United States and other countries have criticized Chavez for cracking down on opponents after the strike. Chavez told the United States not to meddle in Venezuela's affairs and insisted independent judges had ordered the arrests.

Chavez has demanded 20-year prison sentences for strike leaders, accusing them of subjecting the population to shortages of gasoline and food. The government had no immediate comment on the court ruling.

Albiz Munoz, vice president of the Fedecamaras business chamber, said Fernandez and other opposition leaders were victims of "political persecution" and have received death threats from armed civilian groups allied with the government.

Another strike leader, Carlos Ortega, slipped into the Costa Rican embassy last week after weeks of hiding from charges of rebellion, treason and instigation. Costa Rica granted him asylum, and Ortega is waiting for Venezuelan authorities to give him safe conduct to the Central American nation. Venezuela's government has indicated it would grant the safe passage. Ortega heads Venezuela's biggest labor union.

On Tuesday, seven former executives of the state oil monopoly emerged from hiding after a judge revoked warrants for their arrests on charges of interrupting the country's fuel supply. The seven were among 15,000 workers - almost half the work force at Petroleos de Venezuela S.A. - fired for participating in the walkout.

Chavez's opponents - labor leaders, the business community, and much of the local news media - accuse him of grabbing too much power in his self-described "revolution" to help Venezuela's many poor. Chavez counters the opposition is trying to overthrow a democratically elected leader and restore power to two corrupt traditional parties.