<a href=www.vheadline.com>venezuela's Electronic News Posted: Thursday, May 15, 2003 By: Patrick J. O'Donoghue   Responding to criticism from many quarters, including the Central Bank of Venezuela (BCV) about the slowness in handing over dollars, Venezuelan Exchange Administration Office (Cadivi)  deputy president, Adina Bastidas says her office is doing all it can to speed up authorizations and blames the delays on other factors. 

Addressing the National Assembly (AN), former Venezuelan Executive Vice President Bastidas complains that many companies have not requested dollars ... "formerly 4,000 applications were handled ... now we are handling much less." 

The banks have not been pulling their weight either, Bastidas claims,  and are "disinforming" rather than informing clients as regards how to go about applying. 

Bastidas calls on the AN to investigate the situation with importers, whom she claims continue to conspire against the government. 

"They already have imported a lot and have reserves." 

The government, Bastidas says,  will guarantee private sector foreign exchange debts, even though she admits that the company register will only start this week. 

"We are reassuring people abroad and we consider Eximbank's decision to close credits as a political and not economic decision." 

Venezuelan columnist Miguel Salazar says Bastidas has the "power to baptize and excommunicate" now that she is in Cadivi and warns about the presence of exchange control brokers with easy access to Cadivi ... "just think Adina dreams of becoming Petroleos de Venezuela (PDVSA) president."

Caracas, May 15 (<a href=quote.bloomberg.com>Bloomberg) -- Miss Venezuela may have to skip next week's Miss Universe competition, in which the country is one of the most frequent winners, because she can't get the dollars needed to attend the beauty pageant, El Nacional said.

Venezuela's restrictions on buying dollars has left the Miss Venezuela Organization, owned by Gustavo Cisneros' Venevision television station, short of the $60,000 needed to send Mariangel Ruiz, this year's Miss Venezuela, to Panama for the contest, the newspaper said.

If the organization can't buy the dollars it needs, Venezuela won't have a beauty queen in the pageant for the first time since 1959. Venezuelan women have won the Miss Universe title four times since then, tying with Puerto Rico as the second-most frequent winner. Women from the U.S. have won the title six times. The pageant begins next week, with the crowning on June 3.

Venezuela banned dollar sales in January to stem a decline in international reserves after a two-month strike cut oil output, which accounts for 43 percent of government revenue. Limited dollar sales began last month but only for some foods, medicines and students studying abroad.

Ruiz said a decision should be made later today, the paper said. Venevision officials declined immediate comment.

(EN, 5/15, A20)

To see El Nacional's Web site, click on {NCNL } Last Updated: May 15, 2003 10:18 EDT

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 14, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Venezuelan government spokesmen have recently said the duration of the exchange control system inaugurated on January 21 is directly related to the volume of foreign reserves held by the Central Bank of Venezuela (BCV). They have specifically indicated that a reserve level in the US$18-20 billion range would be considered adequate, and the government expects that level to be reached by December of this year."

This volume of foreign reserves held by the Central Bank would seem to reflect a goal of having reserves equivalent to one year's imports, but that target is unquestionably satisfied and then some by the current stock of reserves. So there must be another reason for wanting to accumulate the aforementioned amount, which was last held in 1997 following the maxi-devaluation that following the elimination of the previous exchange control system.

Going to the figures, we find that Venezuela's foreign reserves grew by $3.593 billion between January 21 and May 12, and that growth has apparently led the authorities to believe the target level will be reached or exceeded by December.

What the government does not seem to understand is that there are pressing un-met needs for foreign exchange to import and pay private debt service costs, not to mention covering the cost of the government's food import plan.

Hence, the authorities' foreign reserve build-up target is practically impossible to achieve without an indefinite continuation of the current dearth of dollars ... but that would provoke a total paralysis of productive activity that would make a foreign reserve accumulation that much harder to achieve.

So far this year there has been intense conflict surrounding CADIVI, in view of its operating problems and refusal to authorize foreign exchange distributions to sectors "not considered top priority" even though they have repeatedly asserted that companies meeting the requirements would have access to dollars.

For all these reasons, we cannot expect major changes in the control system to occur, and every day's marginal contribution of foreign exchange restriction further weakens national industry, drives up unemployment and forces more companies to close their doors.

In a nutshell, the likelihood of accumulating the amount of foreign reserves the authorities believe will allow them to lift the controls becomes more and more remote with every day the current policy remains in force.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, May 14, 2003 By: Patrick J. O'Donoghue

President Hugo Chavez Frias says he has ordered Petroleos de Venezuela (PDVSA) president, Ali Rodriguez Araque and Energy & Mines (MEM) Minister, Rafael Ramirez not to allow anyone that joined the PDVSA stoppage to return to the company. 

"We must not be weak and give in to arguments that those who left have families or have the technology." 

Speaking to new PDVSA workers and supporters in Maracaibo (Zulia), Chavez Frias repeated his resolve against former PDVSA employees whom he accuses of sabotaging Venezuela. 

"Those people have done a lot of damage, even though they are skilled, capable and have experience ... I would prefer to bring in people from other countries who have the expertise rather than bring any of them back and I am a nationalist!" 

The President told his followers, "what good is it to have a country full of technocrats or prepared persons with university titles and PhDs, if they are not proud of being Venezuelans of belonging here?" 

Calling the leaders rebel PDVSA leaders "terrorists," the President says Venezuela's Criminal Code should be applied against them and a trial opened against them for treason meriting a 30-year prison sentence. 

Referring to the media, Chavez Frias it would be a waste of time shutting them down ... "it would give them the ammunition they want ... it doesn't matter ... nobody here or abroad believes them anymore."

Former PDVSA employees congregated early in the morning and closed off the Maracaibo-Cabimas road for several hours until the National Guard (GN) came to restore order.

Caracas, May 13 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela's flour mills have begun to shut down because they can't get dollars from the country's foreign exchange commission to import grain, El Universal reported.

Three of the country's 16 mills have already closed, Alirio Perez, who heads the country's wheat association.

``We can't continue importing (wheat) because we have no guarantee that they will give us dollars,'' Perez said, the newspaper reported. Perez earlier warned that mills would run out of flour by the end of the month.

Venezuela banned dollar sales in January to stem a decline in international reserves after a two-month strike cut oil output, which accounts for 43 percent of government revenue. Limited dollar sales began last month. The country imports about 60 percent of the products it consumes.

(EU, 5/13, 1-12)

To see El Universal's Web site, click on {EUDC } Last Updated: May 13, 2003 09:02 EDT