Bank Strike Deepens Venezuelan Standoff

By James Anderson Associated Press Writer Wednesday, January 8, 2003; 2:27 PM

CARACAS, Venezuela –– Venezuela's bankers said Wednesday they will close for two days to support a 38-day-old strike seeking President Hugo Chavez's ouster.

Chavez has gone so far as to threaten nationalizing striking banks, which have opened just three hours a day since Dec. 9, a week into the strike. Thousands line up each morning outside Caracas banks splattered with graffiti reading "I want my money!" and "Banker Thieves!"

Jose Torres, president of Fetrabanca, the umbrella group for bank workers unions, said banks will close Thursday and Friday. Local banks include subsidiaries of Citibank, Banco Santander Central Hispano and Banco Bilbao Vizcaya Argentaria S.A.

The action underscored intransigence by both sides in Venezuela's crisis despite international pleas to help Organization of American States Secretary General Cesar Gaviria find a solution.

National guardsmen fired tear gas Wednesday to disperse pro-Chavez street activists throwing objects at the National Elections Council building, where opposition leaders were holding a news conference.

The strike leaders are calling for a Feb. 2 nonbinding referendum on Chavez's rule and want him to schedule elections in 30 days if he loses the referendum.

Chavez insists the constitution only requires him to respect a possible recall referendum next August, the midpoint of his six-year term.

Colombian President Alvaro Uribe urged Venezuelans to avoid the violence that has plagued Colombia for 38 years. "You should listen to us Colombians, because here we have suffered so much," Uribe said.

The strike briefly sent international oil prices above $30. The state oil company is seen as gradually picking up activity but is still operating well below normal. Crude output is estimated at around 400,000 barrels per day, compared to the pre-strike level of 3 million barrels a day. Exports, normally 2.5 million barrels a day, are at 500,000 barrels a day.

Chavez has managed to somewhat stabilize domestic gasoline supplies through imports. Caracas streets were jammed with traffic Wednesday, and many businesses were open. However, international franchises, large malls and many factories were closed, emptying industrial parks. Public schools opened for the new year on Monday but some private schools have delayed classes.

Three Venezuelan navy ships were collecting Colombian rice, beans and other staples to alleviate strike shortages in Venezuela.

Late Tuesday, Energy Minister Rafael Ramirez vowed to crush the strike by decentralizing Venezuela's state-owned oil monopoly, where 30,000 workers are on strike.

Chavez's government will cut jobs at the Caracas headquarters of Petroleos de Venezuela S.A., a hotbed of dissent where 7,000 are employed, Ramirez said. His government is systematically firing strikers at the giant company, the world's fifth-biggest oil exporter.

Paul MacAvoy, an economics professor at Yale University who has followed the industry for 30 years, said he's never seen a restructuring plan like the one proposed by Chavez.

Since production, refining and distribution operations are scattered, a single operational headquarters – rather than two separate ones, as proposed by Chavez – is the industry norm, he said.

"This looks like a political ploy to show (Chavez) supporters the company is being dismantled for their benefit," said MacAvoy.

The strike has all but shut Venezuela's oil industry, which contributes half of government income. Other revenue is down because thousands of businesses closed, affecting tax collection. The government is cutting its $25 billion 2003 budget by 10 percent.

The head of Venezuela's tax authority announced Tuesday a 12 percent cut in expected 2003 collections. More may come if businesses adhere to opposition calls for a tax boycott.

Ed Silliere, vice president of risk management at Energy Merchant LLC in New York, said the planned shake-up of the state oil monopoly "could become a problem rather than create more efficiency. ... This is certainly not a move seen in a democracy. It looks like something done under a controlling state."

"It's a step backward, costs and inefficiency will rise," insisted state oil company executive Gonzalo Feijoo, who was fired by Chavez. "The headquarters in the capital is of utmost importance to the organization."