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May you all find peace, freedom and happiness on Christmas!!

December 25, 2002

     RIO DE JANEIRO, Brazil, Dec. 25 (UPI) -- Stocks were mostly up across Latin America in this abbreviated holiday week of trading. In Brazil, soothing moderate statements emanated from the president-elect, while Argentina saw fresh hopes for multilateral aid.      Brazil's President-elect Luiz Inacio Lula da Silva completed his Cabinet this week, with appointments spread throughout the myriad political parties in the country. This, coupled with repeated statements from the future minister of finance and central bank president in regard to fighting inflation, keeping spending in check and continuing debt payments, has cheered investors.      Brazil's currency -- the real -- has gained about 8 percent since mid-December, further bolstering the market. Investors, while aware that Lula -- as the president elect is known -- has much to prove once he takes office on Jan. 1, are nevertheless confident that the worst of the country's economic turbulence is behind it.      The biggest worry for investors in Brazil has been the country's massive $230 billion debt, much of which is linked to floating interest rates and the dollar. Fears of an imminent default have lessened -- though by no means dissipated -- as currency gains alleviate the debt burden, or at least slow its growth somewhat.      Markets in the country have so far given a vote of confidence to Lula. Since his Oct. 27 election, the main stock index is up 15 percent, the currency has added 6.2 percent and the benchmark bond due in 2014 grew 17 percent.      Over in Argentina, investors were relieved by word from the International Monetary Fund that a transitional aid package may be on the way. The country has been negotiating for more than a year to have aid resumed.      A statement from the U.S. Treasury lending support to the idea of a temporary aid package to see Argentina through elections next April helped the market move upward. The statement noted that an agreement was expected sometime in January.      But the Clarin newspaper reported Tuesday that Argentina will have to weaken its foreign exchange controls if it hopes to the new IMF aid. The government imposed limits on how much money individuals and corporations alike can send abroad in an effort to bolster foreign reserves.      The IMF wants companies to have the freedom to send money outside of Argentina in order to service their debts. While a seemingly reasonable request, the issues is a politically sticky one with Argentine lawmakers.      The biggest corporate news of the week came as Mexico's Coca-Cola Femsa bought Panamerican Beverages, Latin America's largest soft-drink bottler, in a $3.6 billion deal.      Coca-Cola Co. in Atlanta owns 30 percent of Coca-Cola Femsa.      The new company, which will operate under the Coca-Cola Femsa name, will become the world's No. 2 bottler of Coke products, and its biggest bottler outside of the United States.      The move significantly bolsters Coca-Cola's distribution network in Latin America, where its sales have slumped of late. The buy also gives it a stronger presence in the key Latin American markets of Brazil, Mexico, Argentina and Venezuela, as well as some Central American countries.      As for the markets, Brazil's Bovespa stock index ended last Thursday up 2 percent at 11,207. The local currency had gained more than 6 percent since the beginning of the week, cheering investors.      Friday brought a healthy 2.5 percent jump to 11,207 for the index. Investors were bullish on comments from the Lula camp about fighting inflation. Fixed-line phone company Telemar gained 2.3 percent, while oil company Petrobras added 3.2 percent.      On Monday the Bovespa lost 0.2 percent to close at 11,470. The country's largest private bank -- Bradesco -- lost 2.5 percent. The Bovespa was shuttered on Tuesday as well as for Christmas on Wednesday.      In Mexico, the IPC index ended last Thursday 0.5 percent up at 6,120, shrugging off losses on Wall Street. The index then rose Friday to 6,131. Wireless operator America Movil added 2.1 percent.      Monday brought a gain of 0.4 percent to 6,153 for the IPC. Bottler Coca-Cola Femsa, though, lost 3.8 percent after it announced plans to purchase Miami-based Panamerican Beverages. On Tuesday, the IPC lost 0.3 percent to end at 6,151. Coca-Cola Femsa gained back slightly, rising 3.17 percent. But retailers were hit hard, as sluggish sales soured investors. Elektra lost 3.5 percent. The market was closed Wednesday.      Argentina's Merval index rose 1.74 percent to 496 last Thursday on hopes for new IMF aid. On Friday, the one-year anniversary of the resignation of former President Fernando de la Rua, the index gained 1.57 percent to 503.9.      Monday saw the Merval rise 3.35 percent to 520.8 after the late Friday announcement that the IMF was considering a transitional aid package. The index then added 0.5 percent to 523.9 on Tuesday, with utilities gaining nicely. Electricity company Central Puerto added 4 percent, while oil company Perez Companc gained 0.9 percent. The Merval was closed Wednesday.      In Chile, the IPSA index rose 1.2 percent to 85.05 Thursday. The index then dropped to 84.92 Friday. Monday saw a gain of 0.2 percent to 85.15, while Tuesday brought a loss of 1.11 percent to 84.19.      Venezuela's markets were closed for the week as a general strike paralyzed the country. The markets last traded on Nov. 29. Protesters are seeking the ouster of President Hugo Chavez, blaming him for the economic woes of the country.

Opponents of Venezuela's embattled leader Hugo Chavez have apparently toned down recent demands for his immediate ouster.

The opposition has revived previous calls for Mr Chavez to call for elections if he loses a referendum they want planned for February.Advertisement

Opposition leaders said massive street protests and a crippling four week old general strike clearly showed that the people wanted Mr Chavez to resign.

"Accept that if you lose it you should call general elections within no more than 30 days. And we, who have confronted you with a general civic strike will get the country moving," said strike leader Carlos Ortega.

Venezuela's opposition tones down demand for Chavez to quit now

Opponents of Venezuela's embattled leader Hugo Chavez have apparently toned down recent demands for his immediate ouster.

The opposition has revived previous calls for Mr Chavez to call for elections if he loses a referendum they want planned for February.

Opposition leaders said massive street protests and a crippling four week old general strike clearly showed that the people wanted Mr Chavez to resign.

"Accept that if you lose it you should call general elections within no more than 30 days. And we, who have confronted you with a general civic strike will get the country moving," said strike leader Carlos Ortega.

Venezuelans spent Christmas still in the grip of a general strike now in its fourth week.

The walkout has crippled the vital oil sector, prompting government warnings strike organizers could face criminal charges.

Scarce fuel supplies meant many Venezuelans have had to cancel family reunions.

The strike has so far cost the state oil monopoly US$1.3 billion, with world prices edging above US$31 a barrel.

Caracas entered Christmas Day with an eerie calm, as strike leaders told protesters to rest and prepare for new, massive rallies.

But protestors still gathered in one of the city's largest squares to press their demands for Mr Chavez to step down.

In a gesture for reconciliation, the president issued a message of goodwill to his countrymen to mark the festive season.

He still refuses to quit and has vowed to beat the strike and take control of the state oil company.

His foes are equally as determined to keep it shut down until he leaves office.

Both sides are due to resume internationally mediated negotiations later Thursday.

The government has made it clear it would maintain a tough stance at the talks.

December 26 2002

Venezuela's chief oil official, Ali Rodriguez, has said he will begin a series of sweeping changes - including worker lay-offs and the hiring of foreign specialists - in response to the general strike that has battered the state-owned oil company for most of the month.

Mr Rodriguez, president of the national oil company, Petroleos de Venezuela, acknowledged to American reporters that the strike, aimed at pressuring President Hugo Chavez to resign and call new elections, had brought the company close to collapse. Crude exports have plummeted, he said, from more than 2.5million barrels a day to fewer than 2million barrels this month, and refineries, wells and tankers were all but unmanned and inoperable.

The crisis in Venezuela has pushed crude oil prices to more than US$30 a barrel.

However, Mr Rodriguez contended that the strike organisers had failed. He said the Government, which has had the support of the armed forces during the conflict, had begun to regain control of Petroleos de Venezuela and operations would quickly return to normal.

When asked about the queues of cars that stretch for kilometres outside most petrol stations, Mr Rodriguez, who was appointed by Mr Chavez, acknowledged that the country had come close to chaos. He blamed strike leaders and said they would be prosecuted for conspiring to overthrow the Government.    advertisement       advertisement

Openly beleaguered, Mr Rodriguez offered a stark contrast to the demeanour of Mr Chavez, who routinely issues upbeat reports on the effects of the strike.

Mr Rodriguez, who once participated in guerilla movements and later went on to become the president of OPEC, saved his most bitter remarks for the oil executives he says are leading the strike and trying, in his eyes, to use oil to take over the country.

He said he had suspended several oil executives.

Striking oil workers said on Tuesday that he had fired 90 managers. Mr Rodriguez acknowledged that some people had been fired, but declined to provide details.

He also said the Government was preparing to sue some of the strike leaders over damage done to the oil company and, in some cases, pursue criminal prosecutions.

"In Venezuela, a group of managers, taking advantage of their positions, decided to use Venezuelan oil as a political weapon to impose their will on the state and on society," Mr Rodriguez said.

Mr Rodriguez's comments, combined with recent oil tanker departures and petrol deliveries, were the first concrete signs that the Government had succeeded in beating back the immediate threat of economic or political collapse.

Although most service stations have closed and the most important oil fields and refineries are severely crippled, Mr Rodriguez pledged that Venezuelans would have fresh supplies by next week. He also promised Venezuela's international clients that exports would resume normal levels by next month.

"I'm talking about the exports of crude," he said. "It will take time to restart the wells and to equip the plants."

Privately, supporters of the strike said they had underestimated Mr Chavez's ability to keep gas and oil flowing, even though at critically low levels, for this long. Political analysts said the conflict between Mr Chavez and his opponents had reached a kind of stalemate.

However, opposition leaders pledged to keep up the strike. The New York Times, Los Angeles Times