BBC News Venezuela's parliament failed to debate new legislation making it easier for the government to pass security and media laws when members loyal to President Hugo Chavez stayed away.

The pro-government MPs accused the opposition of planning to use violence against them in the chamber while the opposition said Mr Chavez's supporters merely feared they would not win a majority.

Parliamentary business has been in turmoil since last Friday when pro-government MPs held a bizarre open-air, alternative "session" in the capital, Caracas, after scuffles a few days earlier in the chamber.

The dispute is threatening to disrupt opposition efforts to have a mid-term referendum held on the maverick president's rule and the boycott comes on the eve of the latest planned mass protest against him.

Chavez recently survived a coup, then a crippling strike

"We won't present ourselves in the chamber while this climate of violence against us persists," said Nicolas Maduro, an MP from Mr Chavez's Fifth Republic Movement.

The opposition has threatened to prevent pro-government members from physically taking their seats in the chamber in protest at their insistence that Friday's open-air session be declared valid.

The opposition narrowly won a vote on the issue on Tuesday - a rare defeat for President Chavez's supporters - but the pro-government members said they would press for a new one. The opposition promptly declared this illegal.

One opposition MP, Rafael Octavio Rivero, said the government boycott was proof that it was "not capable of facing defeat because they simply are not democrats".

Street protest

The dispute comes a day before an anti-Chavez demonstration which the opposition plans to hold in the city's eastern Petare district, considered a government stronghold.

Chavez supporters say they face violent attack in the chamber

A similar protest in May in another pro-Chavez district of the city, Caricuao, led to violent clashes in which one person was killed.

The opposition has long been pushing to oust President Chavez whose radical, leftist policies and populist style of leadership have alienated the Venezuelan establishment as well as many liberals.

Following the defeat of a general strike which damaged the vital oil industry earlier this year, the opposition has focussed on having a referendum held on the elected president's rule: a move which the government appeared to accept in a deal brokered by the Organisation of American States in May.

But the referendum has to be organised by a new National Electoral Council, which cannot be appointed without a parliamentary vote.

The government has a wafer-thin majority in the unicameral 165-seat National Assembly but on Tuesday it fell one vote short of the 83 votes needed to pass its motion after three MPs abstained and a fourth failed to turn up.

Stanley A. Weiss IHT Friday, June 13, 2003 A blessing and a curse   LONDON Like a neighborhood drug pusher, Washington dangles the promise of billions in untapped petrodollars before the eyes of desperate Iraqis. Vice President Dick Cheney calls Iraq's oil reserves, the world's second largest, one of its "significant advantages." Secretary of State Colin Powell calls it a "marvelous treasure." Iraqis may see their black gold as a gift from God. But history shows why others have called oil "the devil's excrement." Around the world, oil states that should be economic powerhouses are basket cases. How can the blessing of oil become a curse? Like any narcotic, oil lets you forget about tomorrow. The immediate gratification of huge oil revenues may feel good at first, but after the high comes the crash. The irresistible lure of oil profits sucks capital and labor from other sectors like agriculture and manufacturing, afflicting countries with "Dutch Disease," as when the Netherlands' discovery of oil and natural gas in the 1950s wreaked havoc on the rest of the economy. Indeed, a truism of economic development is that the more a country relies on natural resources, the lower its growth rate. Bad economics also makes for bad politics. Easy oil money means petro-states can avoid hard choices, like painful economic reforms. And little or no economic progress outside the oil sector means no growing and prosperous middle class to clamor for more political freedom. It's no surprise that nine of the world's top ten oil exporters - countries like Saudi Arabia, Russia, Iran and Nigeria - are ranked as having little or no political rights and liberties by the nonprofit Freedom House. The one exception? Norway, a democracy long before it discovered oil in the 1960s. In Iraq's case, however, just saying no to oil won't work. Just as oil profits fueled Saddam Hussein's brutal regime, oil will be indispensable to Iraq's economic recovery. So how to keep Baghdad from getting hooked and becoming another oil junkie? First, separate the new rulers from the natural resources. Getting a future Iraqi government out of the oil business will help end the corruption that plagues most state-controlled oil economies. Only when open books and rule of law are in place should a new Iraqi government exercise a limited role in the oil industry. Second, ensure the petroleum benefits the people. From Venezuela to Angola to Indonesia, citizens of resource-rich countries tend to be worse off by every measure - income, jobs, education, health - than people in resource-poor countries. No wonder a former Saudi oil minister once lamented, "I wish we had discovered water." The new American-run, internationally monitored Development Fund for Iraq is a good start to rebuilding Iraq's devastated infrastructure with oil funds. Washington should also learn from other models. Norway's petroleum fund, now worth more than $100 billion, helps cushion hard economic times. From its oil revenues, Alaska cuts a check to every citizen every year. Revenues from a new pipeline in Chad are designated for health care, electricity and roads. Iraq's universities, hospitals, farms and entrepreneurial middle class were once the envy of the Arab world. They can be again. Iraq should follow the lead of Japan and the "four little dragons" (South Korea, Taiwan, Hong Kong, and Singapore), countries that achieved high growth by investing in the education and health of its people. Third, diversify. According to the World Bank, the entire Arab world, with its 300 million people, exports fewer non-oil goods than does Finland, with just five million people. In contrast, countries like Malaysia and Ireland have enjoyed economic growth through robust manufacturing exports. Mexico deliberately reduced its dependence on oil, spurring other industries and non-oil exports. Industrial parks in Iraq could be the seeds of a future Middle East manufacturing sector and help lay the foundation for regional peace and stability. That's the vision of Israeli entrepreneur Stef Wertheimer, who imagines a "New Marshall Plan" for the region, beginning with industrial parks in oil-free Jordan, Turkey and a future Palestinian state, modeled after his similar ventures in Israel. "When Arabs and Israelis have to meet delivery times for their orders from Japan" he tells me, "they will have neither the will nor the time to fight each other." Finally, deploy Iraq's secret weapon of mass construction - the world-wide diaspora of 4 million Iraqis, many of whom are highly-skilled and successful entrepreneurs. With Washington's help, some have already returned to Baghdad to play political roles. But Iraqi exiles I met with here seemed aware of their latent economic potential. These expatriates could serve as the bridge for vital foreign investment in their homeland. Can Iraq defy history as the only oil state to become a prosperous democracy? It won't be easy. But if used wisely over the long-term, revenues from Iraq's "marvelous treasure" can foster a more developed and economically diversified economy able to kick the dangerous habit of oil dependence. The future of the neighborhood will depend on it. The writer is founder and chairman of Business Executives for National Security and former chairman of American Premier, a mining and chemicals company. This is a personal comment.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 12, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Venezuela's chief executive made a statement, as reported by the El Nacional newspaper of June 12, reflecting a perhaps exaggerated position on the benefits of belonging to the Community of Andean Nations (CAN). These were his words: "The Andean Community is also stuck in gridlock. It is good for nothing; Andean integration is a lie, every country takes its own path."

This whole situation has been building since Colombia and Peru (member countries of the CAN) expressed interest in speeding up bilateral talks with the United States, inspired by Chile's experience with that country but especially motivated by the fact that the negotiations for the creation of the Free Trade Area of the Americas (FTAA) are subject to divergent perceptions that could slow down their progress.

Venezuela's Oresident said he was worried about the CAN's proposal, because it could lead to the loss of the strong negotiating power all the southern countries would have if they were united.

But this is happening just when the bloc of Western Hemisphere countries is on the verge of multiple international trade negotiations, the most visible of which are those for the FTAA. At the same time, a South American bloc is coming together, which will play a key role in the hemispheric trade negotiations.

The CAN and the Southern Common Market (MERCOSUR) will create a single free-trade area the negotiations for which are expected to conclude prior to December 31, 2003.

This is a new signal of the posture that our authorities take toward trade with other countries, alongside their refusal to spur the talks on entering the FTAA and their strong criticism of movement toward an CAN-United States bilateral trade treaty.

The most prudent thing to do would be to unify positions in the framework of the negotiations under way, with a view to taking advantage of the benefits that a potential CAN-MERCOSUR integration could bring.

• It needs to be recalled that this is a game that several can play; there is no one solution that will be entirely beneficial to all the participants.

The task is to make use of the economic benefits to compensate the sectors that will be hurt, and it is up to the negotiators to identify those sectors and obtain the best possible terms for their countries, while establishment internal compensation and adjustment arrangements to ensure the political viability of the agreements' implementation.

12 Jun 2003 19:14:11 GMT By Pascal Fletcher

CARACAS, Venezuela, June 12 Reuters) - Venezuela's divided National Assembly broke up in confusion on Thursday as supporters and foes of President Hugo Chavez deepened a parliamentary dispute that is delaying steps toward a possible referendum on the leftist president's rule.

Lawmakers loyal to Chavez refused to enter the assembly chamber, alleging the opposition planned to disrupt a scheduled vote on procedural reforms aimed at speeding up the passage of anti-terrorism and media laws drafted by the government.

Opposition deputies in the 165-member assembly accused government supporters of shying away from the vote because they could not muster the 83 votes needed to win.

The week-long dispute in the assembly, where Chavez supporters are struggling to hang onto a slim majority, is blocking the appointment by the parliament of a new National Electoral Council, the country's electoral authority.

"The country knows that without a National Electoral Council, there will be no elections," pro-Chavez deputy Nicolas Maduro told reporters as deputies from both sides traded accusations and recriminations in the assembly courtyard.

Naming a new electoral council is a key requirement for holding a referendum on Chavez's rule after Aug. 19, halfway through his current term.

The referendum was recommended in a peace accord signed by the government and its foes last month. The Organization of American States is backing the referendum as the best way to defuse the long-running conflict over Chavez's rule in the world's No. 5 oil exporter.

Pro-government lawmakers accuse the opposition of blocking controversial draft laws in parliament.

These include an anti-terrorism bill and legislation regulating television and radio broadcasting. Opposition leaders say they fear the laws will be used by the government to silence criticism and restrict anti-Chavez protests.

"They (the government side) are on the run because they can't hold a majority," opposition deputy Cesar Perez said.

Maduro said pro-Chavez lawmakers would try to negotiate with their opponents to reconvene the parliament next Tuesday.

Former paratrooper Chavez, who survived a coup last year, has said he is ready to submit to a referendum. But his foes, who accuse him of trying to install Cuban-style communism, say they fear he will attempt to avoid a poll.

MAYELA ARMAS H. EL UNIVERSAL

The directors of the Central Bank of Venezuela (BCV) have shown concern about the country’s indebtedness since this could have an impact on fiscal stability during the next few years.

BCV President, Diego Luis Castellanos, on June 9 sent a letter to the Finance Minister, Tobías Nóbrega, including some remarks made by the bank concerning a public borrowing transaction amounting to VEB 4.8 trillion ($3 billion) provided for in Public Borrowing Law for 2003.

In the letter, the official seriously opposed to the financial conditions surrounding the transactions, stating that the bank “is concerned that such a huge indebtedness -together with the Republic’s current debt- may have an impact on both the fiscal sustainability and the domestic market’s absorption capability, which may compromise the financial system’s stability.”

The BCV board of directors also questioned the three types of bond placements: in US dollars, euros and in the domestic market. Regarding transactions in dollars, it is believed that interest rates are too onerous and do not reflect the actual risk, while bond placements in euros are “also expensive and imply a foreign exchange risk.”

Concerning transactions with sovereign debt bonds (DPN), the bank estimated that titles subject to swap could not be used as a mode of payment, “since this can be considered as a debt refinancing, and that requires a special law. We suggest to suspend the use of dation in payment.”

In response, on June 10, Nóbrega sent a letter to Castellanos explaining the transaction. The Finance Minister shared BCV’s view as to the interest rates to be implemented for bond placements in US dollars, and added that such rates reflect the current conditions in world financial markets. As to the rates for operations in euros, Nóbrega claimed that spreads stemmed from the market values observed during the last few weeks.

The minister stated that internal public debt bonds' swapping is made with unmatured bonds, which do not require a special law. He affirmed that Venezuela’s borrowing is within the limits of the Umbrella Law of 2003.