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To: Chris McConnel who wrote (6720)	3/22/2003 6:41:08 PM
From: Chris McConnel	Read Replies (1) \| Respond to of 29609

Oil, Iraq, and Latin America March, 2003 Latin America might seem a world away from the Middle East, but the beating of the war drums has both economic and political implications for the economies of Latin America. The most obvious impact involves the current high price for a barrel of oil, which is a negative for some and a positive for others. The oil producers of the region stand to benefit from more US dollars entering their respective government coffers. The problem for the region's largest producer, Venezuela, is whether it can actually produce and export its oil. While the national strike is over, workers of the state oil company, Petróleos de Venezuela, SA (PDVSA), have remained absent from their posts, forcing pro-government employees and the military to try to ramp up production to pre-strike levels (about three million barrels a day). The problem is that these workers lack the technical expertise and institutional memory of the more than 2,000 (out of 30,000 striking managers and supervisors) PDVSA employees that were fired by President Hugo Chavez during the strike. The impact of the strike on the economy is substantial, and GDP is forecast to contract up to 12.0% this year after the 8.9% decline in 2002. Optimistic estimates indicate that it will take four months for the Venezuelan oil industry to fully recover following the end of the ongoing strike by oil employees (whenever that occurs), but it will probably take much longer. The international prestige that PDVSA enjoyed prior to the Chavez presidency is certainly lost, and will only be regained when Chavez leaves the Miraflores Palace. ntrs.com