Reuters, 01.08.03, 7:45 PM ET

CARACAS, Venezuela, Jan 8 (Reuters) - The Venezuelan bolivar plunged nearly 10 percent against the dollar on Wednesday as citizens, faced with a 48-hour bank shutdown during a five-week-long national strike, rushed to snap up the U.S. currency. The bolivar interbank rate <VEB=> <VEB2=> plummeted by nearly 10 percent against the U.S. greenback to an average low of 1,585 bolivars, traders said.

The Venezuelan Central Bank's reference rate <VEBFIX=> at the end of the day stood at 1,507/1,510.50 bolivars, a fall of 86.5 bolivars, or 5.7 percent, over Tuesday's close.

The battered currency has tumbled 12.3 percent, based on the official rate, since November 29, just before a general strike by opponents of President Hugo Chavez began on Dec. 2. The strike has now ground the South American nation's economy to a near standstill.

"Venezuelans are looking for refuge in the dollar, fearing that the 48-hour banking strike could be extended for a longer period," said Luis Oganes, a sovereign strategist at JP Morgan, who predicted further slippage in the exchange rate as the general strike persists. The bolivar, which has been falling steadily for at least six years, has shed more than 7 percent of its value against the U.S. currency since the start of the year.

It lost 46 percent against the dollar over 2002, when Chavez survived a short-lived coup against him in April by rebel military officers.

"Given that the government gains fiscally from currency depreciation, because oil revenues are received in U.S. dollars, it may actually have incentive to allow the currency to slide further in order to partially compensate for the impact of the strike on fiscal revenues," Oganes said.

Leaders of the Venezuelan bank workers' union Fetrabanca said on Wednesday a work stoppage at private and state banks would suspend banking services for 48 hours on Thursday and Friday. "That frightened a lot of people who went out and converted their bolivars into dollars, in case the situation gets worse," one trader said.

Opposition leaders said on Wednesday that they have prolonged the strike, aimed at forcing leftist President Hugo Chavez to resign and call elections in the world's No. 5 oil exporter, for a 39th day. The strike is strangling the country's oil production and exports, which account for half of government revenues and 80 percent of total export revenues.

Chavez was elected in 1998 vowing to wrest control from the country's corrupt elite and enact reforms to help the poor. But opposition has grown amid charges the president wants to establish a Cuban-style authoritarian state.

Reuters, 01.08.03, 7:00 PM ET

CARACAS, Venezuela (Reuters) - Rebel employees of state oil giant Petroleos de Venezuela (PDVSA) on Wednesday dismissed a government plan to restructure the firm to battle a 38-day strike against Venezuelan President Hugo Chavez.

The transitional plan, announced by oil minister Rafael Ramirez on Tuesday, shifts power away from the firm's current base in Caracas to two regional production centers and slashes PDVSA's management headcount. Striking PDVSA staff said those administrators were needed to run the vast international operations of South America's largest oil firm.

"How will they coordinate finances? Who will be responsible for coordinating and optimizing the movements of these mega-operating units," said dissident oil leader Edgar Paredes reading from a statement from striking PDVSA workers.

PDVSA's operations have been virtually paralyzed by the stoppage, slashing oil sales which account for about half of state revenues.

The government has been struggling to restart the oil industry of the world's No. 5 crude exporter despite strong support from key logistics PDVSA managers and executives in Caracas. Oil field and refinery workers, PDVSA tanker captains, pilots and docking crews are also taking part in the stoppage.

Oil exports have been cut to about 370,000 barrels per day (bpd) since the shutdown began on Dec. 2 compared to nearly 2.7 million bpd in November, according to official PDVSA figures. Crude production has been reduced to 450,000 bpd from 3.1 million bpd, one PDVSA executive said.

Chavez has vowed to use the strike, aimed at removing the leftist leader from power, to cull anti-government employees from the firm. PDVSA employees taking part in the stoppage say Chavez has appointed political allies to top posts ahead of more qualified personnel, and that they won't return to their jobs until he is out of power.

The striking PDVSA employees denied government claims that payroll expenses from Caracas administrators increased the costs associated with lifting crude from $3.50 a barrel to $15 a barrel.

Ramirez said 7,000 employees in the capital city cost PDVSA $1 billion. But dissident oil workers said it was government bureaucracy that was driving up the oil extraction expenses. The PDSVA strikers say government efforts to restart the industry using unqualified replacement workers is threatening installations and the safety of neighboring communities.

On Tuesday, the vacuum unit of Venezuela's 130,000 bpd El Palito domestic refinery was damaged during restart operations. The government had said before the accident that the refinery would be restarted in the coming week.

The hemisphere's largest refining complex, the 940,000 bpd Amuay-Cardon plants, remained stopped due to a lack of gas feedstock, General Manager Ivan Hernandez said on Tuesday. 277 2655))

Posted on Wed, Jan. 08, 2003 By TIM JOHNSON and ANDRES OPPENHEIMER Miami Herald

BEING REASSIGNED: Otto Reich failed to win Senate approval as the State Department's top official in charge of Latin American affairs. MIGUEL ROJO/AFP FILE

WASHINGTON - The Bush administration is expected to announce a reorganization of its Latin America policy team that will include the appointment of diplomat Otto Reich as a ''presidential envoy'' to the Americas, thus avoiding a confirmation battle with the Senate, administration officials said Tuesday.

The Cuban-born Reich, who had to step down last month as the State Department's top official in charge of Latin American affairs after failing to win Senate confirmation, would move to the White House and report directly to National Security Advisor Condoleezza Rice, the officials said. The announcement could be made as early as this week, they said.

Replacing Reich at the State Department's top job in charge of Latin American affairs will be Roger Noriega, another political appointee currently serving as ambassador to the Organization of American States, the sources said. It was unclear whether Noriega himself would have difficulty being confirmed.

Noriega is a former Latin American affairs staffer for former Sen. Jesse Helms, R-N.C., who retired last month.

Reich and Noriega are considered hard-liners on Cuba, and on several other Latin American issues. Reich, a former ambassador to Venezuela, had been effectively vetoed in the Senate by Sen. Christopher Dodd, D-Conn., and other Democrats who oppose the U.S. embargo on the island.

Ever since Reich's tenure at the State Department came to an end recently -- when he was obliged to step down by law because of a failure to win Senate approval -- it was unclear whether a new confirmation effort would be made this year.

The Bush administration decision to place Reich in a position that does not require Senate confirmation avoids the necessity of another battle in the Senate, where the outcome was uncertain even though Republicans control the chamber in the new Congress.

But Reich supporters saw it as a positive move nonetheless. ''It's a victory of the hard-liners,'' said one U.S. official.

Secretary of State Colin Powell is said to have wanted a career diplomat, U.S. ambassador to Colombia Anne Patterson, for the State Department Latin American affairs job. Well-placed State Department sources said Powell did not want to risk a fight with Congress -- where the administration will need every possible vote in the event of a war on Iraq -- over a lesser issue such as the Reich nomination.

The new position for Reich would amount to a somewhat diminished version of a ''presidential envoy'' office for Latin America created during the Clinton administration, and abolished by Bush.

Clinton tapped his boyhood friend and former chief of staff, Thomas ''Mack'' McLarty, to the Latin envoy post in 1996, giving him virtual Cabinet-level rank and an office in the West Wing of the White House. McLarty served until 1998.

Reich will have a small office and staff in a building adjacent to the White House, and will report to Rice, officials said. But supporters say he may play a powerful role because he will work close to Rice, and thus have potentially easy access to the Oval Office.

Press offices at both the State Department and White House said they could neither confirm nor deny any change in Reich's status.

Since the sudden end of Reich's State Department job, when he was given a temporary slot as Powell's ''special envoy'' to Latin America, Powell has kept him at arm's length.

Reich did not accompany Powell on a trip to Colombia Dec. 3-4, nor was he present at a White House meeting in mid-December with incoming Brazilian President Luiz Inácio Lula da Silva, who now heads South America's most powerful nation.

''Otto wasn't even in the room. He was the most senior official to have met with Lula but he wasn't asked to come,'' said a colleague ''disappointed'' at White House treatment of Reich.

On Monday, Reich did not attend a meeting Powell held with Oswaldo Payá, Cuba's leading opponent to Fidel Castro. But Reich met with Payá separately because he had a long-scheduled speech at the time of the meeting, said an official familiar with Reich's schedule.

Indeed, Reich's future in the government has been the subject of such a tug of war between the White House, the State Department and Congress, one source continued to express a measure of skepticism over the new appointment Tuesday.

''Until I hear somebody announce it standing on a podium with a seal on it, I won't believe it,'' said a close friend of Reich, who spoke on condition of anonymity. ``We've heard so many things.''

Powell and the White House had sounded out Reich about taking several lesser jobs, sparking angry chatter on Spanish-language radio stations in Miami and complaints from leaders in the Cuban-American community that one of its most prominent members was being treated poorly by the Bush administration.

Reich was first asked if he wanted to represent the United States in Geneva as its human rights representative, a position that normally serves to criticize the Cuban government's poor human rights record, sources said. Later, he was approached about serving in the National Security Council to replace Elliott Abrams as senior director for democracy and human rights, after Abrams left to become director of Middle Eastern affairs. Reich declined both jobs because he considered them a step down.

Another staffer said Reich supporters want the White House to assign Reich policy issues that he can handle separately from John Maisto, the career diplomat who is assigned the Western Hemisphere portfolio at the National Security Council.

''You have to give him specific assignments like free-trade issues, or hemisphere security issues, or Cuba and Venezuela,'' said one staffer, who declined to speak on the record.

By Brian Ellsworth UPI Business Correspondent From the Business & Economics Desk Published 1/8/2003 6:28 PM

CARACAS, Venezuela, Jan. 8 (UPI) -- Venezuela's government could soon be facing a serious cash flow shortage after being crippled by over a month of an opposition-led strike.

While the $1.5 billion dollar decline in petroleum revenue has severely damaged the finances of the world's fifth-largest exporter, a steep decline in tax revenue threatens to worsen the government's fiscal crisis.

The government has already confirmed a 12 percent decrease in this year's expected tax revenues, which make up roughly half of government funding. Finance Minister Tobías Nóbrega indicated that the current budget projections for 2003 may have to be trimmed by as much as 10 percent.

"The government was only able to collect 17 percent of its expected revenue for the month of December," said David Moran an economics professor at Metropolitan University in Caracas. "If this continues until February, the government will be facing a serious cash flow problem."

Adding to the complications, strike leaders have called for "tributary disobedience" by opposition sympathizers, who have been instructed to avoid paying sales tax. On Tuesday, thousands of opposition demonstrators marched to the offices of the country's tax collection service, tearing up tax collection forms and demanding that the government not be paid another penny.

In some of the country's supermarkets shoppers refused to pay sales tax, which last year was raised from 14.5 percent to 16 percent, leading to confrontations with storeowners who refused to exonerate the payments.

Attorney General Isaías Rodríguez warned citizens to pay their taxes and said the government may detain strike leaders for inciting tax evasion.

Regional governments complained Tuesday that the central government has not made payments on time. One governor said he was considering calling a financial emergency, and that 350,000 regional government workers may not receive their paychecks next week.

The Finance Ministry hopes to refinance bonds held by private sector banks to postpone payments. But the banking sector is unlikely to cooperate, since bank leaders announced Wednesday that they were shutting down their offices, electronic banking services and automatic teller machines for 48 hours to show solidarity with the strike.

Opposition leaders called a national strike in early December to force President Hugo Chávez into resigning or calling early elections. The petroleum industry, the backbone of the country's economy, joined the strike by shutting down refineries, paralyzing crude oil production and anchoring petroleum tankers. Most expected the strike would after several weeks, but more than a month after it started, there is no end in sight.

The government claims to have complete control over the industry, though the U.S. Energy Information Administration calculates that Venezuela is only producing 600,000 barrels per day. Countries from Chile to Jamaica have reported fuel interruptions as a result of the strike.

In addition, the U.S. Energy Department allowed oil companies to defer delivery of crude to the country's strategic reserves. Venezuela usually produces 2.8 million barrels per day.

Economic indicators continued to spiral, as the exchange rate closed on Wednesday at Bs. 1646 per dollar -- 13 percent higher than the closing rate the day before. This will make bond payments more expensive, since the government recently dollarized some bonds as part of a debt swap in November meant to solve short-term liquidity problems.

In addition, Venezuela's annual inflation rate for 2002 reached a five-year high of 31.5 percent as international reserves continue to dwindle.

The petroleum strike has weakened the financial position of the state oil giant PDVSA, who's bonds ratings have slipped to BB. Petroleum experts say that PDVSA debt, now at roughly $7 billion, has doubled in the last four years because President Chávez has made PDVSA borrow to shore up government finances.

The opposition called a similar petroleum strike in April of 2002, when political violence led to Chavez' brief ouster. An interim government dissolved the country's legislature and supreme court, provoking outraged Chavez supporters and loyalist troops to return him to power two days later.

by Lloyd Hart • Wednesday January 08, 2003 at 02:35 PM dadapop@dadapop.com Original article is at sf.indymedia.org.

I am sure it was not lost on the Kenyan population that when the IMF/World Bank dictates placed upon Daniel Moi's dictatorship to charge school fees for primary education moved to 40% of children between the ages of 5 and 14 into child labor

As the Global French Revolution Continues on Schedule

By Lloyd Hart

Even when Daniel Moi and his supporters stuffed as many ballot boxes as they could they still could not hold back the tide of Kenyans going to the polls out of absolute frustration from watching their country's economy collapse around their ears. I am sure it was not lost on the Kenyan population that when the IMF/World Bank dictates placed upon Daniel Moi's dictatorship to charge school fees for primary education moved to 40% of children between the ages of 5 and 14 into child labor, some of whom pick the very coffee beans that go into your morning cup of coffee becoming covered in pesticides day in day out for years, that it was not lost on the Kenyan population when they could no longer support their own children and had to abandon them to the streets to fend for themselves, that it was not lost on the Kenyan population when the very land their family had been on for thousands of years was suddenly privatized and pulled out from under them into the corporate plantation to grow coffee beans that their children then picked, I am sure it was not lost on the Kenyan population that a new kind of colonialism had taken place over the last 25 years.

With the election of Mwai Kibaki as Kenya's new president also came a proclamation to abolish school fees for primary education. This one great policy change has revealed in stark contrast what the elites in many so-called developing nation's have been feeling, a slight itching and sometimes a sharp pain of the guillotine in the back of their minds for the crimes they have committed against their own populations at the behest of our leaders in the U.S. and Europe. These third-world elites know that they must give in at this time knowing that if they don't they would very well provoke a violent convulsion against them from people who are tired of being worked to death. Country after country throughout the so-called developing world are throwing up new left-wing leaders, Lula in Brazil, Chavez in Venezuela, Kibaki in Kenya etc. etc.. But regardless of how these leaders fulfill their promises to the voters that put them in power it is quite evident that the people in these so-called developing nations are taking control of their own destinies knowing full well that the intentions of the European and American corporations are diametrically opposed to their well-being. So no matter what happens, a Global People's Revolution is taking place and will not be stopped by the pathetic meanderings of a drunken foreign policy that this bankrupt group of U.S. and European conservative elites attempt to put in play in their bid for global mastery.

For well over the year now, I have been writing about the coming Global French Revolution and the beginning of the end of the American empire. I am deeply encouraged to say that my analysis of the last year of developments throughout the world have proven me correct. And that we can look forward to the collapse of the American economy within the next a decade. To many this might seem completely disastrous but to me it can possibly signify a period in our history where equity for humanity and nature are possible. But no matter how feudalism attempts to resist this global revolution they must understand regardless of whether the revolution becomes a violent overthrow or simply continues as a democratic uprising the Rand Corporation's new world order will not stand in the end. As it will be hard for the elites to adjust to a less powerful lifestyle and in some cases to a jail cell, but they must come to terms with the reality of a planet with finite resources and 6 billion people they can no longer rule.

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