sg.biz.yahoo.com Friday March 7, 10:37 PM

CARACAS -(Dow Jones)- A million Venezuelans, or about 10% of the workforce, will lose their jobs this year, said Manuel Cova, the secretary general of Venezuela's Fedecamaras labor group, according to a report Friday in local daily El Nacional.

Cova blamed the problem on political instability combined with plunging confidence in the country's judicial system - both of which deter investment necessary for job maintenance and creation, according to the report.

Cova couldn't be reached for further comment.

The comments come on the heels of the biggest industry chamber, Conindustria, saying unemployment will rise as high as 27% as more businesses cut production of goods subject to price controls the government recently introduced.

Unemployment currently stands at about 17%, according to the government, with the informal sector accounting for just over half the workforce.

Anything from street vendors to household servants and even small businesses with up to five employees make up the segment, which consists of unregistered workers who don't pay any form of taxes.

The government's unemployment figures are significantly lower than private estimates that put it as high 20%. Analysts have attributed the difference to polling methods.

El Nacional Web site: www.el-nacional.com

-By Jehan Senaratna, Dow Jones Newswires; 58212-564-1339; jehan.senaratna@dowjones.com

www.forbes.com Reuters, 03.07.03, 9:10 AM ET By Alistair Scrutton CARACAS, Venezuela, March 7 (Reuters) - To gauge how much business travel to tropical Venezuela has fallen amid political and economic chaos, just walk into a hotel lobby and take the temperature. It can be chillingly cold. "I visit two or three lobbies a day in Caracas' main hotels and mostly there's a frightful chill," said Hugo Arriojas, president of Venezuela's national hotel federation. "The air-conditioning is on but the lobbies are empty of visitors, there's too few human bodies to warm these places up," he said. "And hotel porters complain about the cold because they've nothing to do but wait." Caracas' hotel occupancy rates -- a barometer of investor interest in this oil-rich nation -- have plummeted to record lows of 15 percent in the last month, according to the federation. That is half from a year ago and compares with average rates of about 60 percent in 1999. Visitors are so few that many guests praise quick room service. "When an ordered sandwich arrives in five minutes you know you're one of the few guests," said one U.S. businessman. It is the latest sign of how foreign firms are shunning Venezuela, once known as the Saudi Arabia of Latin America. In the 1990s, the oil-rich country was a magnet of investment not only in the energy sector -- when oil fields were opened up to foreigners -- but also in telecommunications and manufacturing. Over the last year Venezuela has suffered crisis upon crisis as Chavez, an ex-paratrooper turned fiery "revolutionary," survived an April coup and a recent strike which slashed output in the world's No. 5 oil exporter. Even after the strike, foreigners are not flocking back. "In 32 years in the hotel business I've never seen so few businessmen coming to Caracas," said Arriojas. Hotel occupancy rates are at 5 percent in the country's Caribbean resorts. One of the few big foreign investment deals in the last six months was in the energy sector where U.S. oil major ChevronTexaco (nyse: CVX - news - people) and Norway's Statoil <STL.OL> signed a deal to develop natural gas in the offshore Deltana region. HARD GOING EVEN FOR THE TOUGH Most investment by foreign oil firms, which account for about a fifth of the country's oil output, have stagnated since Chavez introduced a nationalistic oil law two years ago. "The oil sector is used to difficult conditions (like Central Asia) but even these guys are worried about business conditions here," said Jose Gregorio Pineda, chief economist at the Venezuelan-American Chamber of Commerce. It is not just oil. When the Venezuelan-American Chamber held its annual meeting this year, the number of members who attended was about 300, about half a year ago. Even before the two-month strike that ended last month, new foreign investments had tumbled. According to the latest data available, investments totaled $246 million in January to September last year, down 58 percent from the previous year. And way below the $1.5 billion before Chavez came to power in late 1998. Returning executives are few in numbers and cautious. Having survived the strike, foreign executives are now angry at new state currency controls in which dollar purchases will need special government permission. The new mechanism's details have still not been ironed out, meaning most businesses have been unable to buy new imports for over six weeks. "Most businessmen tell me they've battened down the hatches in a wait-and-see mode," said one diplomat. "These currency controls have just paralyzed them with uncertainty." For example, the UK faces losing its biggest export market in Venezuela -- $120 million in annual whiskey sales -- after Chavez railed against the imported spirit, implying he would not grant permission for it to be imported under new controls. Unpredictable policies have generated rumors that have added to a fearful investment climate. Executives speculate officials may confiscate dollars when travelers leave the airport or that foreign trips may be limited to three a year. Many executives have sent families home. At one top English-language school, enrolment has fallen by a third. Embassy cocktails, the traditional hub of potential business deals and intelligence-gathering, are now rare events. "Business has become almost impossible. It's basically a matter of keeping our company's brand name in the country. But business? Just about zero," said one foreign executive of a medical equipment supplier, who asked not to be named. "We're doing more business these days in Central America (one of the poorest regions in the continent). I'm even thinking of moving there," the executive added. Outside one major hotel in Caracas, its taxi drivers had given up the ghost and gone to play dominoes rather than wait for a possible client. The lobby was empty. "The world has forgotten about us," said Miguel, a porter.

www.vheadline.com Posted: Wednesday, March 05, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: No one can predict the future, although many try. The problem with trying is that the risks and costs of being wrong are too high.

In Corporate Strategic Planning, foretelling the future has been replaced ... decades ago ... by the drawing of multiple scenarios, and the analysis of the impact that each scenario can have on our company, family or country, as the case may be.

• In this manner we can prepare ourselves to minimize the negative impact of an unfriendly scenario or maximize the benefits of a friendly one.

Planning our strategies for multiple futures has the additional advantage of being able to choose the preferred one and try to "make it happen."

This type of planning is very rational, but still largely limited to private business in developing countries ... national planning in these countries still tends to be highly deterministic and based on political dogma, more than on a more pragmatic analysis of possible futures.

These governments tend to assume that their "favorite" scenario is the only one worth considering, so that their planning becomes just a linear prediction.

Trying to anticipate where Venezuela will be in a few year's time requires drawing scenarios based on economic, political and social assumptions.

Such an exercise is characterized by uncertainty, although it is possible to assign probabilities to every assumption. In doing this we can be greatly helped by a cautious extrapolation of past trends.

Some of the key assumptions in the drawing of three basic Venezuelan scenarios include:

1. Political Environment, % Probability A. Consolidation of the Revolution B. Early elections, change of Government C. Open political violence

2. Economic Environment A. Low private investment, high unemployment, low government investment; B Increasing private investment, rising employment more capital expenditure by government C. Economic paralysis

3. Social Environment. A. Continued class struggle, great social unrest B. Diminishing social tensions, reconciliation C. Civil War.

Obviously the exercise calls for objective evaluation of probabilities rather than assigning maximum probabilities to our preferred scenario.

Although I clearly prefer scenario 1B, I can only assign it at this time equal probabilities to that of 1A ... and only a little more to 1C ... something along the lines of 35%, 35% and 30% respectively.

This is not what I would prefer since the "negative scenarios" combine for 65% of probability.

Whatever the political scenario becoming real, it will very strongly influence the economic and social scenarios.

The consolidation of the "revolution" would most probably lead, due to its ideological nature, to less private investment, higher capital flight, more unemployment, more State control ... more than good or bad this is factual.

Of course many followers of the current Venezuelan government will be most reluctant to accept that the "revolution" can only bring more poverty and increasing social and economic disarray.  They will be against accepting statistics to this effect.

• This is why I would recommend that international organizations such as the UN, the IMF, the IDB and the OAS provide most of these statistics.

I think it would be most advisable that the "Group of Friends" promotes a poll, supervised internationally, to measure the "mood" of the country ... today we have the government "truth" and the opposition "truth" but not the "truth."

So, where will Venezuela be in 2006?. Nobody knows...

But, every one of us can draw his/her own scenarios...

Many years ago, a bright student who wanted to make his old teacher look foolish, hid a small bird in his hands, behind his back. He asked his teacher: "Master, Is the bird I have in my hands dead or alive?" If he says dead, I will let it fly. If he says alive, I will strangle it...

The old teacher looked at him evenly and replied: "It will be as you wish..."

So it will be with Venezuela 2006.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.vheadline.com Posted: Monday, March 03, 2003 By: Patrick J. O'Donoghue

State prosecutor Luisa Ortega Diaz says Federation of Chambers of Industry & Commerce (Fedecamaras) president, Carlos Fernandez is trying to throw a spanner into Venezuela’s legal system and his upcoming trial.

“Mr. Fernandez denies that he was a member of the Coordinadora Democratica … everyone has seen him on TV during the national stoppage speaking day in and day out on behalf of CD.”

In a written questionnaire, Fernandez allegedly answered the question: Is Fedecamaras part of the CD replying that Fedecamaras is independent.

Ortega Diaz alleges the stoppage leaders’ tactic is to delay the investigation and avoid a trial.

The state prosecutor insists that Fernandez and Confederation of Trade Unions (CTV) leader, Carlos Ortega convened the national stoppage "in a hostile and public manner on December 2, 2002 representing Fedecamaras, CTV and CD."

www.abqtrib.com

In a bid to strengthen economic, governmental and cultural ties, a Venezuelan delegation is visiting New Mexico this week.

Bernardo Alvarez Herrera, Venezuelan ambassador to the United States, is scheduled to speak to the Senate this morning.

Venezuelan petroleum representatives also will meet with New Mexico oil and gas business leaders to discuss future trade and equipment development opportunities.

Other Venezuelan visitors will focus on tourism, finance and banking systems, economic development and environmental issues.

The delegation's visit comes on the heels of a two-month strike against Venezuela president Hugo Chavez that has crippled the country's oil exports.