<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 11, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: As is to be expected, the Venezuelan government's debt restructuring strategy will focus mainly on internal debt instruments, reflecting the advantages provided to the government by the exchange control system. The authorities are announcing new debt swaps to be held next Thursday June 12.

The more intensive debt restructuring activity in the internal market is expected to prevail over the alternative of making external adjustments, whose cost would be very high. The preference for rolling over internal bonds is supported by the excess liquidity now present in the economic system as a result of the controls on the foreign exchange market. But many internal public debt maturities are highly concentrated in the 2003-2005 period, implying that the Treasury will continue to apply its domestic refinancing policy.

The composition of national public debt as a percentage of gross domestic product changed between 1998 and 2002, according to Finance Ministry figures. Total debt represented 30% of GDP in 1998 and rose to 41% by 2002. Internal debt amounted to 4% of GDP in the earlier year and soared to 12% in the later one, while external debt declined from 25% of GDP in 1998 to just 19% in 2001 before rebounding to 29% of GDP last year.

The trend of internal government borrowing has been upward in the last four years, and the National Treasury is expected to continue with that policy in the rest of 2003 and quite possibly next year as well, to gain more maneuvering room and be able to meet the budget's internal and external spending commitments.

Furthermore, until the restrictions on the national economy are relaxed, operations of this kind will be beneficial to the fiscal accounts, because the banks will have no choice but to "voluntarily" acquire public securities as their intermediation activity contract.

BY MARK SHENK <a href=www.nwanews.com>BLOOMBERG NEWS Posted on Wednesday, June 11, 2003

Crude oil rose to a 12-week high Tuesday as fires closed units at Louisiana refineries operated by Exxon Mobil Corp. and Murphy Oil Corp., raising concerns of possible limited gasoline supplies during the fuel’s busiest season.

U.S. gasoline inventories, for the week that ended May 30, were down 4 percent from a year earlier, Energy Department figures show. Refiners that week operated at 98 percent of capacity, a two-year high. "When refineries are running at such a high rate there are going to be problems," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York, a gasoline and heating oil marketer. "You can expect to see units blow up."

Crude oil for July delivery rose 28 cents, or 0.9 percent, to $31.73 a barrel on the New York Mercantile Exchange, the highest closing price since March 17.

Oil had fallen as low as $30.90 a barrel before the rally, after OPEC officials, gathering in Doha, Qatar, for a meeting today, said they saw no need to cut oil output quotas.

Meantime, gasoline for July delivery rose 2.06 cents, or 2.3 percent, to 91.71 cents a gallon in New York, the highest close since March 31. U.S. gasoline demand peaks during the vacation season, which runs from Memorial Day in May to Labor Day in early September. "Gasoline has been a steadying influence on the crude-oil market," said Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York. "When crude oil was falling flat on its face earlier today, gasoline limited the decline."

Exxon Mobil said a fire broke out Tuesday at a coker unit in its Chalmette, La., refinery. All other units at the refinery were operating normally, spokesman Kimberly Brasington said. The refinery, a joint venture with Venezuela’s state oil company Petroleos de Venezuela SA, can process 180,000 barrels of crude oil a day.

Murphy Oil, which is based in El Dorado, Ark., shut its refinery in Meraux, La., after a fire broke out in the residual-oil supercritical extraction and vacuum units about 2 a.m. Tuesday, according to a company statement. The fire in the vacuum unit was extinguished by 5:15 a.m., and Murphy said Tuesday afternoon that the fire in the extraction unit also was out.

Two employees suffered minor injuries at the refinery, which can process about 100,000 barrels of crude a day.

The Organization of Petroleum Exporting Countries is unlikely to change oil-output quotas as long as oil prices stay within a range of $22 to $28 a barrel, OPEC Secretary-General Alvaro Silva Calderon said Tuesday in Qatar. OPEC’s basket of seven crude oils averaged $27.53 a barrel Monday.

OPEC, which produces a third of the world’s oil, had considered cutting output to make room for renewed exports from Iraq, where the U.S.-led invasion in March halted shipments.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 11, 2003 By: David Coleman

Venezuela has warned of the destructive potential of rebels who attempted to overthrow the government of President Hugo Chavez Frias in an April 11, 2002 coup d'etat and says that they are still trying to overthrow democracy.  Speaking at the 33rd Organization of American States (OAS) General Assembly in Santiago de Chile, Venezuela's OAS Ambassador Jorge Valero highlighted the interim dictatorship of Pedro Carmona Estanga, who had moved immediately to dissolve the constitution, congress and the judiciary ... "OAS member nations should not disregard the reappearance of Latin American dictatorships."

Analyzing democratic governability in the Latin American region, Ambassador Valero qualified Venezuelan Foreign Minister (MRE) Roy Chaderton Matos' Monday attack on the opposition-controlled Venezuelan print & broadcast media saying "there are anti-national sectors in Venezuela who obstinately, audaciously and irrationally defend privileges which have been seen in all kinds of anti-democratic actions to interrupt the process of democratic, peaceful  and constitutional transformation the government puts forward."

"In Venezuela we have had to counter enormous obstacles in the exercise of democratic government ... the coup d'etat of April 11-12, 2002, the calling of a series of illegal strikes, the criminal sabotage of our petroleum industry."

"We must not fail to recognize that authoritarian regimes and officious dictatorships can easily return to our continent ... we must make every effort to construct a more equitable society and in solidarity to face-off covert resistance to necessary democratic reforms."

Posted on Wed, Jun. 11, 2003 By Catherine Wilson THE ASSOCIATED PRESS

MIAMI - Prosecutors proved to a judge's satisfaction Tuesday that a Colombian rebel in their custody is Nelson Vargas Rueda, but his attorney questioned whether the man is one of six rebels wanted in the killing of three American aid workers.

U.S. Magistrate Judge William Turnoff ruled that prosecutors met the minimum legal standard for identifying Vargas because he acknowledges that's his name, but the judge said the disputed issue may come up again in future court hearings in Washington.

"The only issue before me is whether the person in court is the person named in the indictment," Turnoff told the defense. "The arguments you've made may be significant down the line."

Vargas was identified in a Colombian lineup as one of the gunmen who killed Americans helping set up a rural school system near the Colombia-Venezuela border in 1999, said Assistant U.S. Attorney Hugo Black. Vargas, 33, was extradited to the United States on May 28.

Celeste Higgins, Vargas' attorney, claimed Colombian investigators thought Vargas was a different indicted rebel known as "El Marrano," Spanish slang for "The Pig," for two of the three years he has been in custody.

"El Marrano" is now thought to be someone else. The indictment issued last year listed two other aliases for Vargas: Alfredo and Hugo.

"Clearly they didn't know who it was they had detained," Higgins told the judge. "They simply injected his name into the indictment and brought him over to the United States."

Indictment vague on identities

Some of the questions are raised by the indictment itself, which offers full names for only three of the six suspects. Two suspects are listed only with a single name matched to a photograph.

The murky operations of the rebel group, Revolutionary Armed Forces of Colombia, add to the confusion. The FARC has been at war with the Colombian government for nearly 40 years and has more than 15,000 soldiers.

Vargas is the only suspect to be arrested so far.

The decision lets agents move Vargas to Washington for a bail hearing.

Vargas' attorney also challenged the indictment's reference to his using the alias Alfredo. Higgins said Alfredo was a rebel who was part of the group blamed for the murders but was killed about six months ago.

The FARC considered the three victims to be either U.S. military advisers or CIA agents, the indictment said. The kidnapped Americans were handed over to "El Marrano," who insisted the three were CIA agents using the school project as a front.

Terence Freitas, 24, of Los Angeles, Ingrid Washinawatok, 41, of New York City, and Lahe'ena'e Gay, 39, of Pahoa, Hawaii, were shot to death a week after they were forced into a commandeered taxi.

The bodies were dumped near the Venezuelan town of La Victoria across the Arauca River from Colombia on March 4, 1999. FARC leaders admit executing the three and blame a rogue commander.

The murders prompted the United States to suspend all contact with the leftist rebel group. The United States lists the FARC as an international terrorist organization.

Vargas is the first Colombian rebel ever to be extradited to the United States.

The Miami Herald Posted on Wed, Jun. 11, 2003 BY TIM JOHNSON tjohnson@herald.com

WASHINGTON - The Bush administration has yanked the U.S. visa of a retired Venezuelan army general, accusing him of scheming to overthrow President Hugo Chávez and citing U.S. antiterrorism legislation.

The U.S. action affects retired Gen. Enrique Medina Gómez, who served as military attaché at the Venezuelan embassy in Washington until his dismissal from the post following a failed military coup against Chávez in April 2002.

Chávez alleged that Medina had secretly supported the coup, but he was never officially accused.

Medina denied the charge but late last year led a group of some 100 active-duty and retired military officers who set up camp in a Caracas square to demand Chávez's ouster. The active-duty officers were later cashiered.

The camp in the centrally located Plaza Altamira remains a center of activity for civilians and retired military officers who want Chávez, a leftist populist whose rule has seen once-stable Venezuela plunge into a nearly continuous crisis, to leave office.

''A significant body of evidence indicated that [Medina Gómez] was coup plotting,'' a senior U.S. official said, speaking on condition of anonymity.

The visa revocation, which occurred last month but became public Tuesday, appeared aimed at signaling the opposition to Chávez that it should focus on legal means to end his mandate, rather than violent ones.

The official said the State Department acted using a provision of the Immigration and Nationality Act that was altered following the Sept. 11, 2001, attacks to block entry of foreigners who ``endorse or espouse terrorist activity, or persuade others to support terrorist activity or a terrorist organization.''

U.S. officials did not reveal what evidence they have of Medina Gómez's alleged coupplotting, saying only that it did not appear to present a current threat to the Chávez government.

The Bush administration clearly dislikes Chávez, who maintains a close friendship with Cuban President Fidel Castro, frequently criticizes free-market policies that Washington espouses and has angered much of Venezuela's middle and upper classes.

Following the brief coup against Chávez last year, the Bush administration has tried to lower the profile of its involvement in Venezuela's political crisis, stung by perceptions that they cheered on the coup.

Washington previously yanked U.S. visas of Venezuelan Navy Vice Adm. Carlos Molina, who participated in the four-day coup, and businessman Pedro Carmona, appointed by the military to succeed Chávez. Carmona now lives in Colombia and Molina is believed to be in Europe.

Chávez and his opposition reached an agreement in May, brokered by the Organization of American States, to hold a binding referendum on his rule sometime after Aug. 19, which is halfway through his current term.