www.sundayherald.com Sunday Herald - 12 January 2003

Forty days of strikes and protests have split Venezuelan opinion over President Chávez, who is begging for more time to make things right. Alberto Letona in Caracas reports on the crisis

I was on the verge of giving up when the telephone finally rang in my hotel bedroom. It was the call I had been waiting for from the Miraflores Presidential Palace. Hugo Chávez, the Venezuelan president, had agreed to the interview I had been requesting for more than a month.

This was last May, and just a few days before permission was granted for the interview, a large opposition demonstration had ended up with 16 people dead after a confrontation with the president's supporters.

The local media attributed the 'massacre' to the Circulos Bolivarianos, a paramilitary organisation close to Chávez, and the following day the president was briefly arrested by some of his army officers and the business association leader, Pedro Carmona, proclaimed himself the new president. It was a failed coup d'?tat that lasted for less than 24 hours. The army took command of the situation and handed the reins of power back to Chávez.

It was mid-morning when I met President Chávez in Fuerte Tiuna, one of the army's main headquarters located 10 miles from Caracas. Holding a crucifix in one hand, he talked calmly about social justice and a national development programme to build roads, schools, hospitals and low-cost housing for the country's poorest citizens.

Ch‡vez openly criticised the 'savage neoliberalism' that he says runs the policies of many countries in Latin America. But he was far less communicative on the subject of Venezuela's relationship with neighbouring Colombia and the United States. The former US ambassador to Peru, Dennis Jett, brands Venezuela's president 'one of the biggest threats to democracy in Latin America', and it is said that Washington would give its approval to a coup against Chávez.

But Chávez, a former military man who spent two years in prison as a result of a failed coup d'?tat in February 1992 and then became a democratically elected president in 1999, is a man of strong character and many dreams. The mere mention of his name provokes varying reactions in Venezuela. For some, he is the leader of the poor and Fidel Castro's natural heir in Latin America. For others, Chávez is the key culprit responsible for the social and economic difficulties his country faces.

Chávez in turn blames previous governments' corruption and negligence for Venezuela's problems and begs for time by quoting the hero of the Latin American liberation struggle, Simon Bolivar: 'Stand firm, have patience, and more patience.'

But for a large section of the Venezuelan population, that patience has already run out. After 40 days of strikes and the oil industry's almost total paralysis, the world's fifth-largest producer of oil is in a bad way.

On Friday, Venezuelan banks and supermarkets closed their doors for the second consecutive day in support of the gruelling strike. Unemployment is running at 42% and political violence and street crime are rife.

The current crisis dates back to October 2001 when Chávez passed 49 new laws enforcing social and political changes. One of them allowed the government to seize unproductive private farmlands and turn them over to landless peasants.

In response, the ranching association and leading business groups called for a national strike. Since then, the relationship between the president and the opposition has gone from bad to worse.

In Caracas the distinctive scars of poverty, compounded by the current instability, are ever present.

'There is no investment because nobody wants to risk their money in a country led by a corrupt government,' says Oscar García Mendoza, president of the Banco Venezolano de Crédito, one of the country's leading banks.

From his elegant top-floor office, the most deprived areas of Caracas -- the 'ranchitos' -- are clearly visible. In the densely populated Barrio 23rd January, not far from the presidential palace, the houses are built on mud slopes and lack proper foundations. Clean running water and electricity might be in short supply, but there is strong support for Chávez.

Juan Contreras is in his late 20s and is one of the few people living in the barrio who holds a university degree and is ready to fight the anti-Chavistas. 'The president is our only hope for the future. We will not stand by if he is ousted by violence,' Contreras says.

For Alberto Garrido, a political analyst and author of many books about guerrilla movements in Latin America, the Venezuelan president is a seller of dreams -- and those most dispossessed are the keenest buyers.

'The president has given a political identity to people who never had it before. Overthrowing him could lead the country to a really undesirable situation,' warns Garrido.

Over the past three years, more than 250,000 members of Venezuela's upper and middle classes have emigrated to the United States, Spain and France, taking their money with them. Around $12 million was taken out of the country last year.

The Country Club is a suburban area of Caracas. Here, barbed-wire fences crown the walls of many houses and sports clubs where the wealthy caraque–os socialise. Security is tight everywhere in the area and, as soon I park my car, two men arrive to challenge me. I ask one of the neighbours, a middle-aged woman, about the situation facing Venezuela.

'It is awful. The president hates the rich and has succeeded in passing the same feeling on to the poor. It wasn't like that before,' she complains, declining to give her name.

Tens of thousands of anti-Chávez demonstrators now take to the streets almost daily. Most want to force the president to accept a non-binding referendum on his rule, blaming him for the deepening economic crisis and political polarisation of the country.

'His rhetoric is inflammatory,' says Jorge Olavarria, a 65-year-old writer and former friend of the president. 'Chávez's ideology is a sort of tutti-frutti with Marxist ingredients, military and a Perónista influence,' he adds, referring to the Argentinian general Juan Domingo Perón.

When the opposition doesn't rally, it is the turn of the Chavistas to emerge from the ranchitos to downtown Caracas in a show of strength.

Over the past 10 days, thousands of the president's supporters, wearing red paratrooper's berets just like his, marched through the streets of the capital to protest against the killing of two comrades at the hands of the Metropolitan police. They also denounced the general strike that has left Venezuela having to import food from its neighbours to beat shortages.

Iris Varela is a parliamentarian and one of the leaders of the Movimiento Quinta Republica, a party launched by Ch‡vez with his military comrades and some leftist civilian parties as coalition partners. For her, the president is not a 'caudillo'.

'He has called, and won, eight referendums. The people said yes to our new constitution, which is progressive and democratic: this is not a mere strike, this is another coup d'?tat,' she says vehemently.

Few doubt that on the political and economic front the outlook for Chávez is gloomy. The only bright spot is the backing of his Latin American neighbours, especially Brazil's new president, Lula da Silva. But all this could quickly change if Chávez fails to restore calm in the country.

Another problem is that his 'vision' is not confined to Venezuela but extends wider within the region, giving rise to friction with the United States. He has doubts about the proposed Free-Trade Area of the Americas, and he is also perceived by the US administration as a close ally to Castro's regime.

For now, Chávez has failed to improve meaningfully the lives of the poor, his most loyal constituency, and his government is close to bankruptcy. His plans to nurture a fairer society, it seems, will have to wait.

Meanwhile, those opposing him are disorganised and fragmented . Carlos Ortega, president of the Union Trade Confederation, feels that Chávez is trying to dilute their power, and has asked Venezuelans not to pay taxes in order to intensify pressure on the president. Ortega says civil disobedience is the way to oust Chávez, but there are some who say he should be overthrown by force. Among the most vociferous is the National Emergency Junta, a group supported by the military and middle upper classes.

Hugo Chávez might still be the democratically elected president of Venezuela, but the pressure on him is growing inexorably. While Venezuela's constitution includes a referendum on replacing the president, it cannot be implemented before January 2004, when Chávez is half-way through his term. Before then, however, anything could have happened. Few doubt the potential for a worst-case scenario.

As Alfredo Peña, mayor of Caracas and one of Ch‡vez's main opponents, put it recently: 'There is a real risk of civil war.'

www.morningstar.ca 11 Jan 03(6:09 PM) |  E-mail Article to a Friend By Richard Mably and Andrew Mitchell

VIENNA (Reuters) - OPEC producers prepared on Saturday for emergency talks that will decide how far to open the oil taps to prevent a price shock as war looms in Iraq.

Cartel ministers, meeting at 1130 GMT on Sunday, must also plug a gap in supplies from the group's third biggest producer Venezuela, hit by a six-week-old general strike.

Arriving in Vienna, influential Saudi Oil Minister Ali al-Naimi sent a strong message to world oil markets, where prices recently hit a two-year high, above $33 a barrel, for U.S. crude.

"There is a shortage. It is significant," said Naimi of the Venezuelan outage. "I can assure you that there will be no shortage." He predicted that oil prices "will be lower" after Sunday's meeting.

OPEC is under pressure from the United States to stop prices running out of control ahead of a possible U.S. attack against Baghdad, that some fear could be just weeks away.

Washington is worried that sluggish economic growth, having failed to respond to a series of interest rate cuts, could be snuffed out by another jump in energy costs.

"With oil stocks in the United States already close to estimated minimum operating levels, OPEC has been forced to act," said Washington's Petroleum Finance Company.

"The combination of the twin disruption scenarios represents a political nightmare of sorts for OPEC, which will be accused of having failed its mission if prices climb above $35 a barrel."

U.S. Energy Secretary Spencer Abraham, who normally avoids making public comment on OPEC, said on Friday he had been in contact with producers. He said they were readying a "substantial increase."

HOW MUCH?

Ministers must judge the volume of additional crude required to contain prices inside their preferred $22-$28 target range.

Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah has said the group is discussing a rise of 1.0-1.5 million barrels a day, up 4-7 percent on limits now of 23 million bpd.

Saudi Arabia, in control of most of the world's spare production capacity, wants an increase at the top end of the range.

Most independent estimates are that it is already pumping just over eight million bpd. A Gulf official familiar with Saudi policy said it could reach 9-9.5 million immediately and 10 million at two weeks notice. Full capacity of 10.5 million bpd can be reached in 90 days.

Others including the UAE, Iran, Algeria and Libya are fearful that an end to the Venezuelan strike could push prices sharply lower and prefer just one million barrels daily.

Whatever the formal decision, Saudi is likely to raise flows by as much as it thinks is necessary for keeping crude under $30 -- to smooth diplomatic relations with Washington and prevent accusations in the Arab world that it is benefiting from war.

Riyadh sees its long-term interest in keeping prices under control to foster the world economic growth that fuels demand for its oil.

"We want to make sure prices aren't too high for the economy or for oil demand. We want to avoid politics, this is business," said a Gulf official.

Already Saudi customers and shippers report preparations for extra deliveries, particularly to the United States, which relies on Venezuela for 13 percent of its imports.

Sunday's meeting will have to address the delicate issue of how to divide additional supply allocations.

Some may want Venezuela excluded from a new deal, leaving nine members of OPEC to share out the incremental supply, giving those with spare capacity greater licence to lift production.

Caracas is sending a powerful delegation headed by Oil Minister Rafael Ramirez and state oil company head Ali Rodriguez to argue against that strategy. It does not want to see its share of the OPEC pie shrink now for fear it fails to recover its full stake in the future.

Venezuela is expected to get backing for a request that new quotas be given temporary status, making it clear that previous limits be restored once its output recovers.

news.bbc.co.uk The Coca-Cola bottler in Venezuela has closed its doors Sunday, 12 January, 2003, 00:15 GMT

By Adam Easton BBC correspondent in Caracas

Venezuela's 41-day-old general strike has crippled the country's oil-rich economy and is threatening to bankrupt thousands of small and medium businesses.

I've been getting up at two o'clock in the morning for the last three days to stand in line waiting for gas Caracas housewife

Opposition leaders called the strike, saying president Hugo Chavez has mismanaged the economy and is trying to impose a left-wing dictatorship.

They want him to resign and call elections.

Mr Chavez is refusing to do so, even though his government is losing billions of dollars as oil production has virtually ground to a halt.

He says the strike leaders are "traitors" who are trying to overthrow a democratically-elected leader.

But it is not just the government that is losing. Many striking businesses can no longer afford to pay their bills or employees.

Venezuelans can wait for hours to get petrol and cooking gas. Queuing up

Nancy Aranguren stands in a queue in the working-class neighbourhood of Catia in the capital Caracas. Petrol is hard to find

"I've been getting up at two o'clock in the morning for the last three days to stand in line waiting for gas.

"Yesterday, we were here until two o'clock in the afternoon. I'm having to use a small electric cooker," Ms Aranguren says.

In Catia, most of the shops and businesses have remained open throughout the strike. People cannot afford to close.

Outside a nearby bakery, a street vendor shouts, "Yes, we have flour."

Inside, manager Javier Alexander says some basic products are no longer available.

At the beginning of the strike people stockpiled food in anticipation of a long walkout and truck drivers who deliver food joined the stoppage.

"We've been affected most by the lack of flour, sugar, milk and juices. Soft drinks as well, you can't get any of them."

Lost business

Mr Alexander says the strike does not solve anything.

"Many people here need to work. There are lots of unemployed," he says.

The protestors say Chavez is starving the people

Thousands of businesses that have remained closed during the strike are in danger of going under.

Self-made businessman Carlos Avila owns a chain of Subway sandwich shops.

Sitting inside one of them in the leafy Santa Eduvigis neighbourhood - where most businesses support the opposition - he says he has lost more than $200,000 since the strike began.

He says he will not reopen until President Chavez calls elections.

"We know there will come a point in time when we will not have any money to pay our employees or to buy food for our families," he says.

"We definitely do not want the totalitarian government that we have and all we're doing is calling for early elections."

Working overtime

The strike, which is being supported by state company oil managers and workers, has seriously disrupted operations in what is normally the world's fifth largest oil exporter.

When you put your own ambition or your own political question over the interests of your country, you become a traitor

Antonio Valladares

For the first time in 40 years Venezuela has been forced to import fuel.

At one of the country's main oil export terminals in Puerto La Cruz, more than 300km to the east of Caracas, there are few workers to be seen.

Its manager, Antonio Valladares, says striking oil workers have devastated the industry.

"When you put your own ambition or your own political question over the interests of your country, you become a traitor," he says.

Shops are struggling to stay open

"I've been working overtime, I have a few hours with my family, but you must put all your heart and soul and strength for your country."

Back in Caracas street vendors line both sides of one of the city's busiest shopping streets. They have carried on working throughout the strike.

Iviys Chauran sells t-shirts in the colours of the Venezuelan flag. In this political dispute, everybody wants to display their national pride, she says.

"While they're killing each other we're working. Both Chavez supporters and his opponents want to buy the t-shirts with the Venezuelan flag on them. That suits me."

While both sides feel patriotic, this strike has deepened divisions within the country.

The longer it goes on, the harder it will be for Venezuela to get its economy back to normal.

news.bbc.co.uk Sunday, 12 January, 2003, 00:28 GMT Venezuela's strikes have hit exports very badly

By Andrew Walker BBC economics correspondent in Vienna The oil producers' organisation Opec holds a meeting in the Austrian capital on Sunday, which is expected to agree an increase in production.

I support making sure the market is well-balanced

Ali al-Nu'aymi Saudi Oil Minister

The emergency meeting of ministers and officials from the organisation's 11 member countries was prompted by a sharp rise in prices, caused by the continuing strike in Venezuela's oilfields.

Since mid-December the price of crude oil has been above the top of Opec's target range of $22 to $28 a barrel.

The meeting is widely expected to agree that Opec's other members should increase their production to compensate for the Venezuelan shortfall.

Prices up

Saudi Arabia's Oil Minister, Ali al-Nu'aymi, said when he arrived here in Vienna, that there is now a shortage of oil.

The reason is the strike in Venezuela, normally Opec's third largest producer.

But its output has fallen by around four-fifths and the shortfall has driven prices up.

"I can tell you I support making sure the market is well-balanced," said Mr al-Nu'aymi.

"There will be no shortage of supply in the market when the market is well-balanced," he said.

Low stocks

The prospect of a deal to increase production has already brought prices down slightly, and an agreement could take crude oil back into Opec's target range.

But it will not lead to a sharp fall.

Stocks of oil in consuming countries are low, and there is always the prospect of a war in Iraq, which would push prices higher again.

It is only a few weeks since Opec agreed to cut production to prevent a feared price fall later this year.

That agreement reflected their mistaken belief that the strike in Venezuela would be very brief.

www.dailytimes.com.pk By Paula Bustamante

CARACAS: Six weeks into a crippling strike aimed at forcing President Hugo Chavez from office, Venezuela appears no closer to solving the deep crisis that has rocked oil markets and stoked fears of further violence.

The embattled president is more determined than ever to break the back of the ruinous strike and has no intention of recognizing a referendum on his mandate his foes hope to hold on February 2. The opposition, for its part, is determined to pursue its protest until Chavez is on his way out.

As both sides fight it out, the economy is caught in the crossfire. The first 30 days of the strike, which has mainly targeted the vital oil sector, caused losses of more than four billion dollars, or 4.57 percent of gross domestic product, according to a congressional report.

The battle has accentuated the country’s deep polarization, leaving few people on the sidelines.

Among the few government supporters to enjoy a level of respect among the opposition is lawmaker Rafael Simon Jimenez, who warned that unless the sides reach a negotiated solution, Venezuela will be plunged into “generalized violence that will undoubtedly lead to a dictatorship.”

He insisted the strike was “totally absurd.” “It is not correct to play an ‘all or nothing’ game with no certainty of the outcome,” he told AFP.

Lacking strong individual leadership or a common ideology, the opposition, headed by the main business and labor federations as well as an alliance of political parties, “is based on an important common ideal: they all reject Chavez,” said political consultant Luis Vicente Leon, head of Datanalisis.

The opposition alliance leading the strike does recognize that Chavez received a legitimate mandate in 1998 and again in 2000. But it also believes he has since destabilized the country by violating the Constitution, accumulating powers and attacking key sectors of society, Leon said.

Rejection of the president is particularly strong among the middle-class and moneyed Venezuelans, who have participated massively in almost daily street protests and in some cases shut down shopping malls, cinemas and other businesses. Some of the demonstrations that ended in violent clashes with Chavez supporters left two dead and dozens wounded so far this year.

With the specter of further bloodshed jarring Venezuelans’ nerves, the potential role of the armed forces remained a crucial question.

“The most likely way to get rid of Chavez is violence, and faced with the possibility of riots, troops who now support him could be tempted to stage a coup against him,” said Leon.

The opposition is increasingly courting the military with television clips urging soldiers to side with the people, while Chavez raised the possibility of a further militarization of the economy, after soldiers already seized control of oil installations from the strikers. Worried about the situation in the South American country, the United States — Venezuelaa’s main oil client — is looking at new ways of solving the crisis.

Washington is considering the creation of a “Friends of Venezuela” group of interested countries to complement mediation by the Organization of American States. —AFP