www.forbes.com Reuters, 01.12.03, 3:49 PM ET

MEXICO CITY, Jan 12 (Reuters) - Latin American stock investors will monitor the U.S. economy and corporations as well as the world political stage next week, while investors in Argentina will watch to see if the government closes a badly needed aid deal with the International Monetary Fund. CHILE's bourse is expected to rise this week, though important reports on the state of the U.S. and local economies could be the deciding factor, analysts said. All eyes will be on the United States on Wednesday when the Federal Reserve issues the Beige Book summary of the health of the U.S. economy. "If the report is optimistic, it could push up the stocks. If not they could fall," said Cesar Perez, analyst with Celfin brokerage. Chile's top export market is the United States and the two countries reached a free trade agreement in December. Chile's market will also closely watch the first annual earnings reports of important U.S. companies which are due to start filing through this week, said Rodrigo Cristi, analyst with Alfa brokerage. On the domestic market the most important news of the week will be the Central Bank's release of the November economic activity index (IMACEC) and December trade balance on Friday. "The IMACEC will show us where the economy is going and also will provide data on imports and exports which will give an idea of the internal and external demand," Perez said. However, Cristi maintains the IMACEC is unlikely to influence trade in the first four days of the week and that U.S. company reports will weigh much more heavily. The IPSA blue-chip index <.IPSA> gained 0.02 percent on the week to finish on Friday at 1,030.20 points. With little local macroeconomic news scheduled for release next week, MEXICAN stock investors, who traded relatively few shares last week, are unlikely to bid stocks higher, and instead will probably remain cautious as they watch the U.S. economy and ongoing crises with Iraq and North Korea. "The market won't necessarily be more bullish next week, but there should be more volume," Prudential Apolo trader Pablo Miller said. Since before the holiday season the Mexican market has suffered from faltering volume, which has led to higher price volatility, because investors have been wary of making new bets in the face of world economic and political uncertainty. "It's the beginning of the year. You have to do something with the money that's been liquid since the end of last year," he said. Mexico's IPC benchmark stock index <.MXX> gained 0.36 percent to close at 6,353.03 on Friday after the central bank tightened its monetary policy in order to get a jump on its 2003 fight against inflation. For the week the IPC index added 1.59 percent. The central bank increased the amount of cash it holds back from the market, called the "short," to 550 million pesos from 475 million. "The increase in the short was taken well. It wasn't expected by everyone, so it definitely had an effect on the market," said Juan Carlos Flores, a broker at Mexico City's Vector brokerage. In BRAZIL, investors remain cautiously optimistic about the coming days after a strong run in the first two weeks of the month, backed by growing confidence in the new left-wing administration of President Luiz Inacio Lula da Silva. The Sao Paulo Stock Exchange's benchmark Bovespa <.BVSP> index closed on Friday at 12,243 points, up 8.7 percent since the start of the year. "The only factor holding us back is the threat of war abroad. I think locally we still have some space to rise, but it's going to depend a lot on foreign news," said Flavio Barros, a trader at Sao Paulo's Clickinvest brokerage. Investors hammered Brazil's stock market for most of last year, worried that Lula would bungle Brazil's economy, Latin America's largest, if elected. But since his landslide victory in October, markets have warmed up to the formal metalworker after he appointed a market-friendly economic team that has vowed to stick to conservative economic policies. "There's relative optimism. We like the speeches and we're going to want to see some action. But we also have to give them some time," Barros said. ARGENTINE stocks fell on Friday as investors took advantage of recent gains amid high expectations the government will soon close a short-term aid deal with the IMF. Leading stocks rose an average of 15 percent this week as an accord looked close. Traders said they expect the market to remain stable next week, without big gains, as investors await more news from the IMF. Shares slid 2.6 percent on Friday to close at 575.8 points on the benchmark Merval <.MERV> stock index. Traders said the profit taking ahead of the weekend was expected. "I still like what I'm seeing in the market despite this correction. My feeling is that the (IMF) agreement is closer than ever," said Nestor De Cesare, a trader at Allaria Ledesma y Compania brokerage. "Given this situation, expectations are that next week we'll see investors staying in the market and simply adjusting their portfolios," De Cesare said. An IMF mission arrived in Buenos Aires on Thursday to continue negotiations with the government on a deal expected to delay around $5 billion of debt coming due through June. Argentina needs the deal to buy it valuable time to end its worst ever recession. The IMF board is expected to make a decision about a short-term lending program by Jan. 17, the day Argentina must meet a $1 billion debt payment due to the fund or face another default that would cut off its last avenue to aid.

www.miami.com Posted on Sun, Jan. 12, 2003 BY JORDAN LEVIN jlevin@herald.com

A revolution is brewing in Latin American pop music.

Inspired by the political turmoil sweeping the continent, a new generation of artists -- part of the pop and rock mainstream -- is turning meaningful songs into chart-topping hits.

They are a far cry from the folk-style protest music that accompanied the struggles between right and left in the 1960s and '70s in the United States and Latin America.

Instead, their message strikes a balance between bubblegum materialism and didactic politics. They call for individual responsibility over revolutionary action, for involvement instead of escape via the sugary romantic lyrics that have long dominated Latin pop.

Argentine pop singer Diego Torres is among them. He was named Best Male Artist Southeast in the MTV Latin America Video Music awards for his inspirational Color Esperanza (The Color of Hope), a huge hit in his economically troubled homeland, and just garnered an American Grammy nomination for Best Latin Pop Album.

''People are asking songwriters for songs with a message,'' Torres says. ``In moments of crisis, people look for something different.''

Music offers a coping mechanism to listeners, points out Abraham Lavender, a sociology professor at Florida International University.

''In Latin America, things are so bad in some places and so insecure,'' Lavender says. ``Some of it is calling for help. Some of it is just getting it off your chest. Some of it is to wake up other people.''

Such wake-up calls can be unpopular with government officials or the entertainment establishment. When Mexican rap-metal band Molotov released its debut recording in 1997, ¿Dónde Jugarán Las Niñas? (Where Will the Girls Play?), it featured songs that lambasted Mexico's upper classes and called on U.S. Latinos to vote. The recording was banned from Mexican television and radio -- but sold 400,000 copies in Mexico and more than one million worldwide.

''A lot of times, the communications media manipulates the news for the convenience of whoever is in power,'' says Miguel ''Mickey'' Huidobro, the band's lead singer. ``Music is a way to slip in other kinds of ideas.''

LIGHT THEMES

Latin popular music has always tended to be about romance and heartbreak, with occasional breaks to party. And fluffy pop music and love songs certainly haven't disappeared from the Latin charts.

''In general, people are more inclined to love songs,'' says Mario Diament, an Argentine playwright and journalist who teaches at Florida International University. ``But one of these musicians will include a song of protest or a social-based song in their repertoire and it will be very well received because of the anger. It's very difficult to believe much in love songs in Argentina nowadays where there is so little hope.''

With a wave of troubles and changes crossing Latin America -- civil war in Colombia, economic chaos in Argentina, political turmoil in Venezuela, a splintering establishment in Mexico -- Latin music listeners seem to be yearning for songs that speak to their situation in ways other than simply providing an escape from it.

''Things are really changing,'' says Colombian rocker Juanes, whose song A Dios Le Pido (I'll Ask God), a prayer for peace and love in an unsafe world, has hit No. 1 in 10 countries in Latin America since its release last spring. ``Kids in Latin America are on the Internet. They know the world is changing. They're much more astute, and they're demanding more.''

''I think that we are the people responsible for our situation,'' adds Torres. ``With the situation that we're living in Argentina, in Latin America, the way to change things is for you to do it. People need to change, but without generating violence, and without repeating the same mistakes we've made before.''

Some examples of artists whose calls for change are striking a chord:

• Torres' Color Esperanza, which encourages people in his disheartened and economically chaotic homeland with lines like ''you know you can get rid of your fears . . . paint your face the color of hope,'' catapulted him from mid- to high-level stardom and sold 1.2 million copies across Latin America.

• The latest album from popular Mexican pop-rockers Maná contains some of the most bluntly political and socially themed songs in the group's history, including Angel de Amor, a song decrying abuse of women, and Pobre Juan, about the death of a Mexican immigrant.

• Los Prisioneros, a punkish rock group from Chile that had songs banned during the right-wing dictatorship of Augusto Pinochet, recently reunited after 10 years with concerts that drew 140,000 people in Chile and 2,000 in Miami.

• Colombian pop-vallenato star Carlos Vives has songs mourning violence and proclaiming Colombian pride on his hit 2001 release Dejame Entrar.

SONGS WITH SUBSTANCE

Wendy Hooth, a Peruvian who lives in Fort Lauderdale and is a fan of artists like Juanes and Maná, says it was Maná's focus on issues like indigenous rights and environmental destruction that gave her a taste for music with substance.

''The hits don't do anything for me right now -- they're empty,'' says Hooth, 30. ``I like the ones who tell you something. [Maná's] music gets you involved. Now I'm reading articles about certain things, and I write to the person who wrote the news and tell them how I think.''

Music with leftist political themes is not new in Latin America. In the 1960s and early 1970s, the ''New Song'' movement echoed the themes and style of American folk/protest songs, and its leading artists were closely allied with progressive or socialist politics. At the same time, artists from Brazil's counter-culture tropicalia movement and early rockers in Argentina protested their country's dictatorships -- and sometimes were exiled or imprisoned.

IN THE MAINSTREAM

But as the Latin music industry has become largely the province of international corporations and commercial marketing schemes, counter-cultural musical styles have been pushed to the margins. And many of the early leftist musical icons have become pop icons who are part of the social and musical mainstream.

Cuban singer-songwriters Pablo Milanés and Silvio Rodríguez, totems of the Cuban Revolution, run recording studios and foundations on the island and are revered by artists across Latin America. Milanés' last album was a series of duets with famous Latin singers.

Brazilian pop star Gilberto Gil, a founder of the tropicalia movement who continues to tackle issues like race and environmental degradation, was just appointed Brazil's Minister of Culture by newly elected president Luiz Inacio Lula da Silva.

Ruben Blades, who infused salsa with sharp social consciousness in the 1970s, is now focusing on musical experimentation, and singing about racial consciousness and personal liberation.

SUBCULTURE

In Mexico in the 1960s and early 1970s, rock was considered doubly subversive; not only was it equated with protesting students and liberal political movements, but it was also the music of the Yankee north.

''We survived the era when to be a rock-and-roller was like being a [drug-dealing] Satanist,'' says Alex Lora of El Tri, the 35-year-old band considered the godfathers of Mexican rock.

That attitude changed as rock en español grew into the Latin American pop mainstream in the 1990s.

'Before, when I went on television or radio, they'd say, `No dirty words or criticizing the government,' '' Lora says. ``Now they ask me to do that.''

While many artists may want to address the problems of their homeland, they don't want to be caught up in the right-vs.-left battles of an earlier era.

''I have so many questions and frustrations about seeing my continent so poorly managed. I would like to write more . . . songs [addressing problems], but those revolutionary movements are so discredited,'' says Colombian-born Jorge Villamizar, leader of Miami-based Bacilos, who has written songs about class differences and alienation as well as love and relationships.

``I don't believe in socialism. But whenever you talk about things like distribution of income you get put in this socialist bag.''

But that doesn't stop him or his musical compatriots from singing to their countrymen about this painfully uncertain time in Latin American history.

''Things are very difficult in Colombia now,'' says Juanes. ``But people keep loving, fighting, dreaming -- they keep on going. As an artist I want to speak the truth, to unburden myself -- and I want people to be able to unburden themselves too.''

www.miami.com Posted on Sun, Jan. 12, 2003 BY CHRISTINA HOAG choag@herald.com

A political deadlock has all but strangled Venezuela's oil flow, the fourth-largest in the world. The looming U.S. invasion of Iraq would dam another river of petroleum.

That double whammy means the global oil market could face a shortfall of four million barrels a day of the vital stuff that keeps economic engines humming. Who's George W. Bush gonna call?

Try Saudi Arabia.

Like it or not, the world's biggest oil consumer is still hostage to the vast desert kingdom despite diminishing its reliance on Saudi oil in the decade since the Gulf War.

The reason is not so much the staggering amount of petroleum that the Saudis produce every day -- more than eight million barrels. It's the fact that they can churn out even more while other major U.S. suppliers, such as Canada, Mexico and the United Kingdom, are pumping all they can.

''There is virtually no excess capacity anywhere else in the world,'' said Edward S. Walker, a former U.S. ambassador to Israel, Egypt and the United Arab Emirates who now presides the Middle East Institute in Washington.

STRAINED TIES

The House of Saud has traditionally been one of Washington's strongest allies in the volatile Persian Gulf, with oil the linchpin of the relationship. But ties between the two nations have been seriously strained since Sept. 11, 2001.

Fifteen of the 19 Arab terrorists who rammed commercial airliners in the World Trade Center and the Pentagon and crashed another into a rural field turned out to be Saudis.

Since then, U.S. investigators have discovered that Saudi money has been financing radical Muslim groups around the world.

Americans have also been taking more note of the restricted civil liberties in the closed, archly conservative society, which run counter to democratic values actively promoted by Washington elsewhere in the world.

This chill in the previously warm U.S.-Saudi relationship has sparked calls for the United States to lessen reliance on the kingdom's crude, which was the second-biggest foreign supply to the United States in 2002.

To some extent, Washington had already done that since the Gulf War, when similar calls to seek supplies away from the tinderbox Middle East were heeded.

In 1991, Saudi Arabia supplied almost a quarter, 23.6 percent, of U.S. imports. Last year, it provided about 13.5 percent, according to the American Petroleum Institute.

''There has been some diversification, with more imports coming from the Western Hemisphere,'' said Ron Planting, institute economist. ``Middle Eastern oil has been going to Asia, where demand has been growing fastest.''

TOP SUPPLIER

Canada's Alberta province is now the top foreign supplier to the United States, advancing from 13.6 percent of imports in 1991 to about 17 percent last year.

And until a national strike cut off its oil exports in December, Venezuela was the No. 3 supplier with about 13.8 percent of the market, about the same as in 1991. Mexico, the fourth-largest supplier, has moved up from 10.6 percent to about 13 percent last year, also.

Trouble is, when production drops at one of these main suppliers -- as is the case with Venezuela, where oil exports remain all but paralyzed -- all eyes turn to Saudi Arabia to make up the shortfall and keep prices from going through the roof.

'They are the `swing' producers,'' said John Lichtblau, chairman of the Petroleum Industry Research Foundation in New York. ``They have about two million barrels a day of spare capacity.''

The oil market is especially jittery because another war with Baghdad appears likely -- and could happen within the next 60 days. An invasion would shut down Iraqi oil fields, taking another two million barrels of oil a day off the trading floor.

Although the United States has sharply curtailed purchases of Iraqi oil over the past few months -- it was the seventh-biggest supplier to the United States until October when it dropped off the top 10 list -- a shutdown of the Iraqi industry would raise prices.

And even if Venezuela's strike ends before war breaks out in the Middle East, it could take several months before the industry ramps up production to where it was before the strike, around 2.5 million barrels a day.

Washington has been preparing for a tighter oil supply by gradually increasing the nation's Strategic Petroleum Reserve to about 600 million barrels. If both Venezuela and Iraq are out of the picture, the Department of Energy will likely start putting that oil on the market to keep prices down.

''We're not facing a crude shortage,'' Lichtblau said. ``We can release several million barrels a day for three, four, five months, which is enough time for Iraq and Venezuela to get back on line.''

INCREASED OUTPUT

OPEC is also doing its part. In a special meeting today, the oil producers' club is expected to authorize a Saudi-led move to increase production by one million to 1.5 million barrels a day, which will alleviate the current shortage resulting from the Venezuelan crisis.

''That has a significant effect on calming prices,'' said John Kilduff, analyst at Fimat USA. ``But it points up how difficult it is to replace Venezuelan crude.''

With growth in oil demand expected to continue, Washington has also been seeking new sources of crude oil as well as refined products.

The Caspian Basin, Western Africa, and South and Central America are all seen as potential providers, but none of those places will reach significant production levels until 2025, according to the U.S. Department of Energy.

Analysts say it will take years for those undeveloped regions to net the billions of dollars in private investment needed to build infrastructure, as well as sort out often turbulent political environments. In some places, tough geographical terrain requires developing new technology to drill and transport hard-to-get-at oil.

In the meantime, the Saudis, whose crude is easy to access, export and refine, will continue as the world's oil heavyweight. ''Saudi Arabia still sits in the catbird seat,'' said Walker of the Middle East Institute.

www.nytimes.com By ADAM COHEN

AVANA — Cuba's oddest tourist attraction may well be the Rincón de los Cretinos, or Corner of Cretins. Tucked into a dim hallway of the Museum of the Revolution, it features life-size caricatures of Ronald Reagan and George H. W. Bush. The plaque beside Mr. Reagan reads, "Thanks you cretin for helping us to strengthen the revolution." The first President Bush is thanked for helping to "consolidate" the revolution.

It is great Communist kitsch, but also dead-on political commentary. America's hard-line Cuba policy, particularly our embargo on trade and tourism, is cruel to 11 million Cubans, who live in poverty as a result of the embargo. And it makes us look loutish to the world community, which has denounced the embargo in the United Nations for the last 11 years, most recently by a vote of 173 to 3.

The embargo is also inane strategically because it does just the opposite of what its supporters intend. By insulating Cuba from American economic influence, and most actual Americans, conservatives have indeed "strengthened" and "consolidated" Cuban Communism in the name of trying to pull it down.

Momentum is building fast to bring an end to Washington's benighted policies. Cuba watchers have long said that relations will not change until Fidel Castro, who is 76, departs. But now we may be on the brink of transformation. Members of Congress, Republicans as well as Democrats, are vowing to undo the embargo, and they are taking aim at its cornerstone: the ban on tourism.

Cuba is a hot tourist spot these days — for Europeans and for 200,000 Americans a year, who go legally, under exceptions to the ban, and illegally. It has many of the usual tropical charms: enjoying moonlight and mojitas at the Hotel Nacional, chasing Hemingway's ghost around Old Havana. But what sets it apart is that in a world grown homogenous, it still delivers a frisson of exoticism, just 90 miles off the coast of Florida.

The revolution, and the four decades of embargo that followed, locked Cuba into a late-50's freeze-frame. Many of the cars careering down Havana's streets are, famously, '57 Chevys. Few buildings are newer than the Riviera, the Miami Beach-style hotel where Rat Packers once roamed and Meyer Lansky ran the casino.

The embargo's most striking visual impact is that it has spared Cuba the detritus of American capitalism. Havana's quaint Parquo Central has no golden arches or Starbucks. The Malecón, Havana's charming seafront boulevard — lined on one side by crumbling architectural gems, on the other by crashing waves — is billboard-free. It has as much Old World romance as any spot a traveler is likely to come upon.

To visit Cuba is to be a student of history, with a new set of lessons. Cubans see their engagement with the United States as part of a centuries-long struggle to throw off the colonial yoke — first Spain's, then ours. For us, Teddy Roosevelt's fabled charge up San Juan Hill evokes victory in the Spanish-American War and the New World's liberation. For the Cubans, it meant substituting American control for Spanish colonialism.

Cubans view Castro's revolution, which deposed the American-backed dictator, Fulgencio Batista, as less about Marxism than about finally winning self-determination. And they see the embargo, like the Bay of Pigs invasion and the C.I.A.'s many attempts on Castro's life, as a fit of pique by a superpower that hasn't forgiven the little island that slipped from its grasp.

For an administration that seeks "moral clarity" in foreign policy, the embargo offers anything but. Cuba is oppressive — it lacks freedom of speech and real elections — but is not much different than China and other nations that trade with the United States. In a world of shadowy terror cells and madmen developing nuclear bombs, the notion that Cuba is a leading security threat is laughable — as is the fact that Americans who cannot travel to Cuba are free under U.S. law to ship off for North Korea.

The embargo is especially wrongheaded in these complicated times. It hands more ammunition to critics who accuse the U.S. of flouting world opinion. And it particularly sets us back in Latin America, where two strategically vital nations — Venezuela and Brazil — now have leaders who see Castro as a compañero.

The embargo — and above all the travel ban — also frays our own democratic principles. It makes no sense to protest Cubans' lack of freedom by depriving American citizens of theirs.

It is Miami's Cubans, of course, who are driving all this. The community is not as uniformly hard-line as it once was; young Cuban-Americans, in particular, are starting to speak out for normalization. But President Bush still owes his win in Florida, and his presidency, to the Hands-Off-Elián-González crowd.

Things are different, however, in Congress. The bipartisan Cuba Working Group is pushing hard to end the embargo because it is the right thing to do, and because its members' constituents — farmers, factory hands, dockworkers — pay the price.

Congress eased the embargo in 2000, authorizing sales of food and medicine, on a cash basis only. Jeff Flake, a conservative Arizona Republican who opposes the embargo, expects the travel ban to unravel in the next year. "We're getting dangerously close to veto-proof majorities," he said.

The embargo's end will improve the lives of ordinary Cubans. It could even topple the current regime by unleashing the power of capitalism on a country that has long been protected from it. But these changes will come at the cost of an onslaught of American culture, lobbed from 90 miles away. Cubans will listen to less trova music and watch more of "The Bachelor," and American multinationals will descend on it. A T-shirt being sold in Miami's Cuban community not long ago showed the Malecón lined with U.S. fast-food restaurants.

Which means that in these crazy times, when it's difficult to see even one step into the future in many parts of the world, in Cuba it is possible to see two: the end of the embargo and — just as inevitably — embargo nostalgia.

THREATS AND RESPONSES: GUANTÁNAMO BAY; Beijing Says Chinese Muslims Are Among Detainees in Cuba

www.washingtonpost.com Sunday, January 12, 2003; Page H02

Still on the Hot Seat Remember those corporate scandals? They seemed to fade from the spotlight, especially after the Securities and Exchange Commission and several major investment banks, including Credit Suisse First Boston, J.P. Morgan Chase and Goldman Sachs, agreed to multimillion-dollar fines. But some probing and enforcing is still going on: Investigators are looking at not just famous analysts such as Henry Blodget but also their bosses. The U.S. Sentencing Commission voted to impose stiffer penalties on white-collar criminals who bilk large numbers of investors. And the SEC may require company lawyers to quit and inform the SEC if a client fails to stop illegal activity the lawyers have identified.

Oil Price Maneuverings With Venezuela's oil production reduced by a strike and political unrest, and war with Iraq in full loom, the United States stepped up efforts to increase world supply and bring down prices that hovered above $30 per barrel. The United States is lobbying OPEC countries to boost production, which the organization's ministers say is in the works. That dropped crude prices, but only temporarily. And after seeking to avoid involvement in the Venezuela conflict, U.S. diplomats have put together a group of intermediaries that will try to mediate between Venezuela's government and opposition forces.

More Jobs Disappear It was a grim week on the job front. Pittsburgh-based Alcoa announced layoffs of 8,000, on the heels of 10,000 cuts last year. America Online, the Virginia-based division of AOL Time Warner, said it would aggressively slash costs and workers this year, though it did not specify how many of the unit's 18,000 employees would be shown the door. (Also, the parent company plans to take a $10 billion charge against earnings.) At AT&T, the number will be 3,500. At the end of the week, the Labor Department surprised analysts by announcing that 101,000 jobs were lost in December, due largely to less-than-expected holiday hiring.

Those Annoying Calls The Federal Trade Commission has been working on a plan to stop some of those unsolicited sales pitches: a national do-not-call list that would let consumers put in their own phone numbers. If a telemarketing firm called a number on the list, it could be fined as much as $11,000. FTC Chairman Timothy J. Muris wants $16 million from Congress to start get the program; eventually it will be subsidized by the telemarketers. But Rep. W.J. "Billy" Tauzin (R-La.) held up a stop sign, saying he wanted his Energy and Commerce Committee to review it. Tauzin now says he's on board, but it's uncertain just where the money will come from.

Bio-Food Fight The United States is considering hauling the European Union before the World Trade Organization over the EU nations' refusal to accept genetically modified food. U.S. Trade Representative Robert B. Zoellick said the suit would seek to overturn a four-year EU ban on gene-altered plants such as corn and soybeans. The comments spurred speculation of further deterioration of trade relations between the two sides. U.S. farmers and agricultural companies favor WTO action.