<a href=www.autonews.com>Reuters / June 17, 2003 SAO PAULO, Brazil -- The head of Ford Motor Co.'s Latin American business on Tuesday said the automaker may have to close its Venezuelan operations for a week every month to offset the impact of foreign exchange controls on production. The currency controls have made it difficult for Ford to import car parts from Brazil into Venezuela, where the vehicles are assembled, said Richard Canny, president of Ford of South America. "We are very worried about our ability to continue building in Venezuela," he said at a breakfast with reporters celebrating Ford's 84th anniversary in Brazil. All foreign-owned vehicle assemblers in Venezuela have faced difficulties importing essential parts since President Hugo Chavez halted foreign currency trading in January. Those difficulties have only worsened an already bleak sales outlook for the industry in the oil-rich country after a year of political turmoil that has pushed the economy further into recession.

June 17 (<a href=quote.bloomberg.com>Bloomberg) -- Venezuela's foreign exchange commission said it asked the public prosecutor to investigate at least 80 companies for fraudulent bids to receive dollars, which may lead to jail terms for executives, El Nacional reported.

The commission said the companies, which it didn't name, submitted forged or counterfeit tax and social security documents. If found guilty, officials from the companies could face up to five years in prison, the newspaper said, citing a commission press release.

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

(EN 6/17 B1) To see El Nacional's Web site, click on {NCNL }

<a href=www.vheadline.com>Venezuela's Electronic news Posted: Monday, June 16, 2003 By: Jose Gabriel Angarita

VenAmCham economist Jose Gabriel Angarita writes: In March and April of 2003, following the shut-down of the foreign exchange market, prevailing expectations focused on the possibility of the government's bringing interest rates in the Venezuelan financial system under control as well, in view of the banks' wide interest rate spreads and high profitability -- as then-Planning Minister Felipe Perez put it.

Opinions by highly qualified experts including the Central Bank Board were then expressed, insisting that the natural market mechanisms would effectively lower the cost of money and there was no need for controls, despite fears of a cessation of payments and inflation's expected impact on interest rates.

As expected, interest rates have come down. The average bank lending rate has fallen from 39.64% in December 2002 to 24.60% in May 2003, according to statistics published in this morning's edition of the El Nacional newspaper. This interest rate variation reflects the economic agents' inability to change bolivares to dollars as an investment alternative, which has flooded the system with liquidity.

But the pressure on interest rates has not induced a recovery of bank lending; indeed, it contracted by approximately 1.4 trillion bolivares between December 2002 and May 2003. The reason is quite simple: there has been no recovery of demand for credit among the economic agents. The economic contraction of 2002 and the 29% plunge in the supply of goods and services in the first quarter of 2003 have prevented companies and individuals from demanding financing for consumption, investment, and production.

A structural adjustment in the economic system is an indispensable necessity. Until the national economy recovers, until the market mechanisms for allocation of resources are set free, until a political environment free of conflict is restored, and until a climate of confidence among national and foreign investors is generated, the national financial system's credit portfolio will continue to be decisively influenced by the country's enormous macroeconomic instability -- not to mention the impact of the high proportion of total bank assets represented by government securities.

Reuters, 06.13.03, 12:47 PM ET CARACAS, Venezuela, June 13 (Reuters) - Venezuela's government said on Friday it had pushed back maturities on 49 percent of local debt bonds due Saturday -- about $188 million -- in the latest of a program of debt swaps aimed at easing a payments crunch this year. The Finance Ministry said in a statement that 301.2 billion bolivars ($188.3 million) were swapped in the operation Thursday, out of 616.4 billion bolivars ($385.2 million) worth of bonds which fell due June 14. Maturities were extended by periods of between two years and four months and three years and one month. It was the eighth internal debt swap carried out since November by leftist President Hugo Chavez's government, which is struggling to cope with the worst economic recession in Venezuela's recent history. Following a crippling opposition strike that disrupted Venezuelan oil exports in December and January, the economy of the world's No. 5 petroleum exporter contracted 29 percent in the first quarter of 2003. In Thursday's operation, the Finance Ministry offered new bonds known as VEBONOS up to a total amount of 750 billion bolivars ($468.8 million). For the first time since it began the debt swap program last November, the Finance Ministry introduced VEBONOS carrying a coupon rate based on 91-day Treasury Bills which it said more accurately reflected the country's sovereign risk. Venezuela's internal public debt stands at more than 15 trillion bolivars ($9.4 billion) and maturities are heavily concentrated over the next three years. The government is seeking to ease this payments squeeze through the swaps. In seven previous swaps carried out since November, Venezuela's government has pushed back maturities on internal debt bonds worth 4.4 trillion bolivars ($2.7 billion), according to Finance Ministry figures. The last swap was held April 10

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Thursday, June 12, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Venezuela's chief executive made a statement, as reported by the El Nacional newspaper of June 12, reflecting a perhaps exaggerated position on the benefits of belonging to the Community of Andean Nations (CAN). These were his words: "The Andean Community is also stuck in gridlock. It is good for nothing; Andean integration is a lie, every country takes its own path."

This whole situation has been building since Colombia and Peru (member countries of the CAN) expressed interest in speeding up bilateral talks with the United States, inspired by Chile's experience with that country but especially motivated by the fact that the negotiations for the creation of the Free Trade Area of the Americas (FTAA) are subject to divergent perceptions that could slow down their progress.

Venezuela's Oresident said he was worried about the CAN's proposal, because it could lead to the loss of the strong negotiating power all the southern countries would have if they were united.

But this is happening just when the bloc of Western Hemisphere countries is on the verge of multiple international trade negotiations, the most visible of which are those for the FTAA. At the same time, a South American bloc is coming together, which will play a key role in the hemispheric trade negotiations.

The CAN and the Southern Common Market (MERCOSUR) will create a single free-trade area the negotiations for which are expected to conclude prior to December 31, 2003.

This is a new signal of the posture that our authorities take toward trade with other countries, alongside their refusal to spur the talks on entering the FTAA and their strong criticism of movement toward an CAN-United States bilateral trade treaty.

The most prudent thing to do would be to unify positions in the framework of the negotiations under way, with a view to taking advantage of the benefits that a potential CAN-MERCOSUR integration could bring.

• It needs to be recalled that this is a game that several can play; there is no one solution that will be entirely beneficial to all the participants.

The task is to make use of the economic benefits to compensate the sectors that will be hurt, and it is up to the negotiators to identify those sectors and obtain the best possible terms for their countries, while establishment internal compensation and adjustment arrangements to ensure the political viability of the agreements' implementation.