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Venezuela's severe contraction*** Venezuelan President Hugo Chavez may have triumphed over the opposition-led national strike that ended last month, but the country's economy has been badly wounded. The Venezuelan subsidiary of Spanish bank BBVA, called Banco Provincial, predicted the country will suffer the largest economic contraction in its history and that oil production will be seriously hampered. The bank's projections help clarify Venezuela's economic conditions, since the assessments made by the government and private sector (which is often aligned with the opposition) have varied widely, and have sometimes been regarded as too subjective.

Washington is observing Venezuela's economic development closely. Last year, Venezuela supplied America with 13 percent of its crude oil imports. The severe economic problems could signal unabated instability and further disruptions in oil production. According to Banco Provincial, in the first quarter of this year, Venezuela's economy will shrink 40 percent and oil sector activity will drop by 69 percent. To put this in perspective, this slowdown would be more severe than America's sharpest Great Depression contraction. The bank also said that the non-oil sector would contract by 33 percent and the unemployment rate would rise to 25 percent from the official rate of 18 percent. ***

Bad news in the southern front of the war on terrorism*** A little-noticed -- and preposterous -- development is taking place in the southern front of the war on terrorism: Colombia's narco-terrorist guerrillas have scored a big diplomatic victory following the decisions by Brazil, Ecuador and Venezuela not to brand them as ``terrorists.''

It was more than a propaganda victory for the Revolutionary Armed Forces of Colombia, the 17,000-strong guerrilla group that, according to Colombian and U.S. officials, was behind the bomb that leveled Bogotá's El Nogal social club last month, killing 35 people -- including six children -- and injuring 175 others. It was a public snub to Colombian President Alvaro Uribe that seems to have emboldened the FARC, courtesy of the Brazil-Ecuador-Venezuela axis of diplomatic spinelessness.***