Thursday, June 5, 2003 01:52 PM ET     CARACAS -(<a href=www.quicken.com>Dow Jones)- Oil ministers of Venezuela, Mexico and Saudi Arabia will gather next Monday in Madrid to discuss current world oil markets and cooperation of non-OPEC oil producing nations, the state-run news agency Venpres said Thursday.

Venezuela's Oil Minister Rafael Ramirez was quoted as saying he would meet his Saudi Arabian counterpart Ali Naimi and Mexico's Ernesto Martens in the Spanish capital Monday. Ramirez is then also set to meet his Norwegian counterpart, although it isn't clear when and where that meeting would take place.

"This is a very important meeting because it allows us to study the world oil markets and the oil prices," Ramirez was quoted as saying. Ramirez couldn't be reached for additional comment. Oil ministers from the three countries have met on a regular basis during the past few years in an effort to coordinate oil output policy. Mexico, a major non-OPEC member, has been cooperating with OPEC.

The meeting of the three oil ministers comes just before the Organization of Petroleum Exporting Countries, or OPEC, meets in Doha, Qatar, June 11. OPEC has to decide whether to curb production in an effort to anticipate the return of Iraqi oil exports.

OPEC in April decided to hike the ceiling to 25.4 million barrels a day while at the same time, it pledged to remove 2 million b/d from the market.

By Fred Pals, Dow Jones Newswires; 58212-5641339; fred.pals@dowjones.com;

<a href=www.vheadline.com>Venezuela's Electronic NewsPosted: Wednesday, June 04, 2003 By: Patrick J. O'Donoghue

Venezuelan Confederation of Trade Unions (CTV)  general secretary, Manual Cova is getting edgy about proposals from Venezuelan Captains of Industry regarding flexibilizing labor relations. 

Covering his back against  possible grass-root backlash, Cova has told national stoppage ally, the Confederation of Industry (Conindustria),  that business sectors must assume some quota of sacrifice to avoid more layoffs. 

The fear of companies laying off workers after the national stoppage has been in the back of CTV leaders' minds as business sectors try to find their feet again after failing to rid Venezuela of President Hugo Chavez Frias. 

CTV leaders have told business leaders that part of the sacrifice involves tightening their own public expenditures, such as holidays abroad and purchases of luxury items. The image of Federation of Chambers of Industry & Commerce (Fedecamaras) president, Carlos Fernandez bathing in the Aruba during the Christmas holidays supposedly recovering from a heart condition did not go down well with union leaders sweating it out on Caracas streets. 

Cova confirms that the CTV will make an effort to avoid job losses but the sacrifice must be for all sectors and not just the workers. Conindustria's solution is to reduce work hours and work days to keep jobs and expects the CTV to agree to what employers see as a temporary and emergency measure.

 On the international front, the CTV executive committee has demanded that the International Labor Organization (ILO) "expel the recently created National Union of Workers (UNT) from ILO general assembly sessions. 

CTV executive secretary, Froilan Barrios says former CTV legal adviser and current ILO Administration Council president, Jesus Urbieta has handed the ILO verification committee a Venezuelan National Electoral College (CNE) document confirming the CTV as Venezuela's major worker's central. "The ILO has also received the text of a Supreme Tribunal of Justice (TSJ)  ruling that the CTV is the most representative union organization in Venezuela."

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 04, 2003 By: Patrick J. O'Donoghue

According to Chamber of Private Schools president, Octavio De Lamo, private schools are passing through a critical situation because a lot of parents are several months in arrears because of the national stoppage, which the Chamber backed to the hilt, and because many parents now find themselves out of work. 

"I have been meeting with directors throughout Venezuela to gauge the situation ... in February, 70% of parents were in arrears owing to the national stoppage and that included parents, who before were punctual in payments." 

De Lamo says many parents are now paid up and others have re-financed their debt ... "at the moment 50% are fully up to date with payments and others have reached an arrangement."  

Since January,  private school directors have reported an exodus of students between 10-15%, partly because parents cannot afford to keep their children in private schools and partly because some have emigrated. The Chamber has announced that it will conduct a deeper study into the current situation to discover exactly how many students have abandoned private schools. 

Apart from the difficulty of payment, De Lamo comments that some parents have unfortunately taken advantage of the situation not to pay school fees. "What is important is to create conscience and keep schools open at subsistence level." 

The Chamber president has called on parents to go to the school and state their economic problems ... "installments and special arrangements can be agreed upon ... it is time for mutual solidarity."

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Wednesday, June 04, 2003 By: David Coleman

Venezuelan Guayana Corporation (CVG) president, Major General (ret.) Francisco Rangel Gomez says a new CVG telecommunications subsidiary uses 1,500 kilometers of fiber optic cables supplied by electricity power provider EDELCA to establish its own telecommunications network in Venezuela.

“The project has just been completed and is to be introduced to investors in Caracas where several national and foreign enterprises have expressed interest in being our partners in the project which already has an installed infrastructure for special services to introduce a new business model for the CVG and Venezuela."

The Guayana Project is a strategic alliance between the public and private sectors to assure reliable support mechanisms by the CVG to reinforce small to middle sized companies in the Guayana region ... “we specifically speak about six strategies acting as a background to the main CVG objectives: the strengthening and consolidation of the existent productive sector, new investment promotion, selective replacement for import; infrastructure development and support services and the creation of suitable financial tools for small businesses (Pymes).”

Rangel Gomez says that each of the strategies details definite actions seeking not only commercial and industrial sector support but communities as well.  “More than ever now, we are committed to generate development in Venezuela and consolidate as a non-oil economic choice.”  The 2nd bridge over the Orinoco River, the Pulp & Paper Plant, CVG Alcasa Line V and the enterprises recuperation like Hoturvensa as seen as recent successes ... “we are looking for new companies to take over, in joint venture with us, the challenge of recovering nearly-lost opportunities and to promote them as an important regional investment attraction.”

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Tuesday, June 03, 2003 By: Jose Gregorio Pineda & Jose Gabriel Angarita

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write:  May saw an upturn in the Consumer Price Index for the Caracas Metropolitan Area (CPI-CMA) ... its 2.3% increase put the cumulative inflation rate for the first five months of the year at 13.8% and the annualized rate (over the last 12 months) at 35%. The Wholesale Price Index, which measures the value of goods and services at wholesale, rose 3.1% in May, to make for a 62.3% surge in the January-May 2003 period. At the same time, the Workers' Documentation & Analysis Center (CENDA) announced that the cost of its staple food basket rose 8% from April to May.

All this is paradoxically happening at a time when price controls are in force.

The government, for its part, announced this week that it will authorize price increases for some regulated products ... and said that, as it analyzes the situation of each segment of agriculture, it will continue relaxing its price controls.

There is not the slightest doubt that price and exchange controls have provoked serious distortions in the Venezuelan market. Producers find it very difficult to produce because of the lack of foreign exchange to acquire inputs, and price controls cause "formal" merchants to prefer reducing supply of goods as a way to avoid losses or penalties for selling at prices above the regulated levels.

Historically, price controls have proved to be inefficient ways to prevent the generation of inflationary processes; not only do they distort the allocation of resources, but they merely postpone inevitable price adjustments, making things worse in the long run.

The causes of inflation lie in the inconsistencies among monetary, fiscal, and exchange policies ... fiscal pressures generate a monetary financing of budget deficits, which results in an excessive expansion of liquidity and successive devaluations of the currency, which in turn drive up prices.

All this leads us to believe that, if there is no change in these policies, and if additional devaluation, rising budget deficits, and excessive liquidity expansion are not avoided, the price control system will accomplish nothing but repress price adjustments that will have to happen sooner or later. But if there is an improvement on those fronts, the future price deregulation will have a smaller impact, because the incentives for a massive acceleration of price growth will be smaller. Decontrol will then only affect the price level, but not its rate of growth.