www.nytimes.com January 16, 2003 By GINGER THOMPSON

ARACAS, Venezuela, Jan. 15 — The sign on the door says "closed." The lights are dim. The staff is not in uniform. Customers are only allowed in through the out door. But in the seventh week of a national strike aimed at shutting down the economy and toppling President Hugo Chávez, Blockbuster Video began covert operations in at least two popular stores in the capital.

The staff and managers refused to fully identify themselves, or to even respond to simple queries about store hours and movie releases coming soon. However, in one brief outburst, a store manager who identified herself only as Eugenia, strived to make clear that her decision to open for business weighed heavily on her conscience.

"It is hard to work," she said. "But it is harder not to work."

The strike that once left most commercial areas of the city dark and abandoned — at an economic cost of more than $50 million a day — is now a collage of contrasts: abandoned shopping malls and bustling street markets; long lines outside gas stations and traffic jams; shuttered McDonald's outlets and packed gourmet restaurants. Venezuelan beer has been replaced by Mexican and German brands. Movie theaters are closed, but neighborhoods are setting up screens in parks and plazas.

Since it began on Dec. 2, the strike has become the fault line that divides this society into rival camps, wreaking havoc on neighborhoods and families alike. It was organized by a coalition of business executives, union leaders and civic organizations to force Mr. Chávez to call new elections.

So far, the strike leaders have failed to accomplish that goal. In the lingering war of attrition between President Chávez and his opponents, Venezuelan society has begun to take stock of the consequences. The economy is in ruins. A country that already endures one of the highest violent crime rates in the hemisphere — dozens of people are killed on an average weekend in this metropolitan area — has now been pushed to the brink of civil conflict. Mr. Chávez shows no sign of leaving.

In some places the strike holds firm, particularly in the state-owned oil company, which pumps the black blood of Venezuela's economy and is a chief supplier to the United States. Thirty-thousand workers walked off the job soon after the strike started. The government has been unable to lure them back in significant numbers, causing oil shortages around the world.

Marches by flag-waving Chávez opponents, rolling through the city like red, blue and yellow tidal waves, continue almost every other day; the most vibrant display, some analysts say, of the politicization of a once comfortable middle class that considered politics a frivolous pursuit. In a nightly ritual called the "cacerolazo," or pot-banging, a cacophonous clatter echoes through the skyscrapers and condominium complexes across this valley city at 8 p.m. as opponents of Mr. Chávez — housewives and professionals, rich and working class — emerge from their homes and offices to blow whistles and bang on cooking pots.

In a local newspaper interview, the poet Rafael Arráiz Lucca described the atmosphere: "Venezuelans are living a collective hypnosis very close to hysteria."

Still, in the day-to-day life of the city, the strike comes more in fits and starts. Some private and public schools have not reopened. Others have opened with the help of neighborhood volunteers. Banks and supermarkets are open for limited hours. Subway and bus service continues as normal.

"This is not a strike that will be lifted," said Ibsen Martinez, a newspaper columnist. "This is a strike that will slowly languish."

The opposition's base of support among the Venezuelan middle class — especially the owners of small and medium-sized businesses — consider President Chávez a dictator in a democrat's clothes. They point to his control over the Congress and the justice system as signs of a grand plan to install a Cuba-style government. But their dwindling financial resources have them grappling over how much longer they can hold out.

Gonzalo García, owner of a Subway sandwich shop, has lost more than $30,000 since the strike began. He added that if the Chávez government survives the strike, he and his family would leave their homeland.

"I would love to recover my store and even open others," he said, but "I cannot let my children grow up in an atmosphere of violence."

Lawlessness is not limited to Caracas. Local news media reported that three people were shot and wounded today as looters ransacked the town of Guiria, 310 miles east of the capital. Looting also was reported in Ciudad Bolívar, 280 miles southeast of Caracas.

Supporters of President Chávez seem simply fed up. Behind the marches and cacerolazos, they see a plot orchestrated by a group of the wealthy elite who are determined to impose their will on a democratically elected president.

Nicolasa Veita, a nurse the Centro Médico de Caracas, said the privately owned hospital had closed all but its emergency services. Last Friday, supervisors notified the nursing staff that they would not be paid this month. But she and the 130 other nurses refused to walk off the job.

"The first right that all people have, no matter what their political views, is the right to life," she said. "The doctors are looking for an excuse to close the hospitals and blame it on the government. The nurses are not going to let that happen."

On Tuesday the political storm that has battered this country came crashing down on the Mater Salvatori girls' school. Two-thousand parents — almost all of them mothers — packed into the small assembly hall to vote on whether to break the strike by opening the sprawling, affluent campus for classes.

The meeting turned into a rally, with parents roused from their seats, chanting "Not one step back." By the end of the morning, there was no need to take a vote.

One daring father stood briefly against the furious female outpouring against Mr. Chávez to ask how long parents were willing to keep their children out of school, and how teachers planned to make up the classes that would be lost.

The assembly hall filled with hissing. Then another father spoke up.

"This is not about losing some classes, or even the whole semester if that is what is necessary," he said, his bespectacled face turning red with emotion. "This is about losing our country."

School meetings like that one have become flashpoints for the strike against Mr. Chávez. After a vote at a private elementary school in a neighborhood called California Norte, Elenitza Guevara, a lawyer and mother of two, left fed up. The parents, she said, were not interested in a real debate about closing the school, she said. People like her, who were opposed to closing, were shunned. "I told them, what kind of tolerance are we going to be able to teach our children if we cannot let everyone express their views?" she said, still riled from the meeting. "The truth is, there was no room for negotiation."

What made her even more angry, she said, was that the cost of the decision had been passed on to the parents. While school administrators encouraged parents not to reopen the school, they advised the parents that they would be expected to make this month's tuition payments.

"If some parents do not want to send their children to school, they should have that right," she said. "But why should they take away my right to send my child to school? Why should they take away my child's right to an education?"

U.S. to Join Mediation Group

WASHINGTON, Jan. 15 (Agence France-Presse) — The United States said today that it would take part in a new group to assist regional mediation efforts to end the political crisis in Venezuela, whether President Hugo Chávez likes it or not.

"We would expect to be part of it and others would expect us to be part of it," said Richard Boucher, a State Department spokesman. After initial opposition, the United States now supports the creation of a "Friends of Venezuela" group to help mediation by the secretary general of the Organization of American States, César Gaviria.

Otto J. Reich, the United States special envoy to Latin America, discussed the plans on Tuesday with Mr. Gaviria in Quito, where they were attending the inauguration of the new Ecuadorean president, Lucio Gutierrez.

Earlier, Mr. Chávez, who also attended Mr. Gutierrez's inauguration, had signaled that he did not want Washington to take part in meetings to set up the group.

www.adn.com By GONZALO SOLANO, Associated Press

QUITO, Ecuador (January 15, 6:46 p.m. AST) - Several Latin American leaders agreed Wednesday to create a regional forum to seek solutions for a seven-week-old strike in Venezuela that has divided that nation and crippled its key oil industry.

The decision was warmly welcomed by Venezuelan President Hugo Chavez, who endorsed such a group two weeks ago.

"A group of friendly nations can help the world understand what is really happening in Venezuela and share ideas - like convincing the opposition of what a political opposition should do in keeping with the constitution and not through subversive acts," Chavez said.

Wednesday's meeting coincided with the inauguration of Ecuadorean President Lucio Gutierrez, which brought Latin American presidents together. It also augmented ongoing negotiations in Venezuela led by the Organization of American States.

"We are seeking a solution that is peaceful, constitutional, democratic and electoral," OAS Secretary General Cesar Gaviria said after the meeting.

Gaviria said the forum, informally known as the "Group of Friends of Venezuela," would include representatives from the United States, Mexico, Brazil, Chile, Spain and Portugal.

The U.S. State Department has voiced support for Gaviria's mission on an almost daily basis for weeks. U.S. State Department spokesman Richard Boucher reaffirmed that support on Friday, but he also spoke of bringing Mexico into the "Group of Friends" to support the OAS efforts.

"We look forward to being a part of this group and to beginning its important work," U.S. State Department spokesman Lou Fintor said Wednesday.

Citing political and economic unrest, Venezuela's opposition launched a general strike Dec. 2 to demand that Chavez resign or call early elections if he loses a Feb. 2 nonbinding referendum on his rule.

Chavez, who was elected in 1998 and re-elected in 2000, has said he will ignore the referendum.

Wednesday's meeting was attended by Brazilian President Luiz Inacio Lula da Silva, Chilean President Ricardo Lagos, Peruvian President Alejandro Toledo, Colombian President Alvaro Uribe and Bolivian President Gonzalo Sanchez de Lozada.

Chavez, as well as Cuban President Fidel Castro and Ecuador's Gutierrez, who were in Quito, did not attend the meeting.

"It was prudent that Chavez was not present, because he cannot judge on his own behalf," Peru's Toledo told reporters after the meeting.

http://www.timesdaily.com/apps/pbcs.dll/article?Date=20030115&Category=API&ArtNo=301151235&Ref=AR

By GONZALO SOLANO Associated Press Writer January 15. 2003 10:35PM

Former U.S. President Jimmy Carter, left, is escorted by Venezuelan businessman Gustavo Cisneros upon his arrival to Simon Bolivar airport in Caracas, Venezuela, Wednesday, Jan 15, 2002. Carter will meet with OAS Secretary General Cesar Gaviria next Monday to support the dialogue between Venezuelan government and the opposition.

Several Latin American leaders agreed Wednesday to create a regional forum to seek solutions for a seven-week-old strike in Venezuela that has divided that nation and crippled its key oil industry.

The decision was warmly welcomed by Venezuelan President Hugo Chavez, who endorsed such a group two weeks ago.

"A group of friendly nations can help the world understand what is really happening in Venezuela and share ideas - like convincing the opposition of what a political opposition should do in keeping with the constitution and not through subversive acts," Chavez said.

Wednesday's meeting coincided with the inauguration of Ecuadorean President Lucio Gutierrez, which brought Latin American presidents together. It also augmented ongoing negotiations in Venezuela led by the Organization of American States.

"We are seeking a solution that is peaceful, constitutional, democratic and electoral," OAS Secretary General Cesar Gaviria said after the meeting.

Gaviria said the forum, informally known as the "Group of Friends of Venezuela," would include representatives from the United States, Mexico, Brazil, Chile, Spain and Portugal.

The U.S. State Department has voiced support for Gaviria's mission on an almost daily basis for weeks. U.S. State Department spokesman Richard Boucher reaffirmed that support on Friday, but he also spoke of bringing Mexico into the "Group of Friends" to support the OAS efforts.

"We look forward to being a part of this group and to beginning its important work," U.S. State Department spokesman Lou Fintor said Wednesday.

Citing political and economic unrest, Venezuela's opposition launched a general strike Dec. 2 to demand that Chavez resign or call early elections if he loses a Feb. 2 nonbinding referendum on his rule.

Chavez, who was elected in 1998 and re-elected in 2000, has said he will ignore the referendum.

Wednesday's meeting was attended by Brazilian President Luiz Inacio Lula da Silva, Chilean President Ricardo Lagos, Peruvian President Alejandro Toledo, Colombian President Alvaro Uribe and Bolivian President Gonzalo Sanchez de Lozada.

Chavez, as well as Cuban President Fidel Castro and Ecuador's Gutierrez, who were in Quito, did not attend the meeting.

"It was prudent that Chavez was not present, because he cannot judge on his own behalf," Peru's Toledo told reporters after the meeting.

www.guardian.co.uk Duncan Campbell Thursday January 16, 2003 The Guardian

The former colonel who came to power in Ecuador with a pledge to smash corruption has warned that he will encourage his supporters to take to the streets if his reforms are thwarted.

Lucio Gutierrez, a leftwinger who was elected president last November in a runoff with the country's richest businessman, took office yesterday warning that he would punish corrupt politicians and officials.

In an address to the Supreme Electoral Tribunal in Quito earlier this week, Mr Gutierrez proposed a new approach to government, saying he wanted a country based on "ethical values, moral values... with social justice." He also said that he would govern the country of 13 million energetically and "with love".

Latin American leaders and foreign ministers have gathered in Quito for the inauguration, and also to discuss how to solve the growing crisis in Venezuela.

A group called Friends of Venezuela - first proposed earlier this month at the inauguration of the Brazilian president Lula da Silva - is being formed, with the backing of the US, to try to end the deadlock there.

Mr Gutierrez has been likened to the Venezuelan president Hugo Chavez: both men took part in coup attempts for which they were jailed, and both later ran for electoral office and were returned with large majorities on pledges to fight poverty and corruption.

Since the Venezuela crisis, however, Mr Gutierrez, 45, has distanced himself from Mr Chavez, and his pronouncements are more muted.

"At some moment the country must change, or if it doesn't I will convoke marches," he said in an interview this week in the Ecuadorean newspaper Hoy.

"We will not permit the mafia to destroy what we want to build," Mr Gutierrez said. During his campaign, he promised that he would redress inequalities in what is one of the continent's most corrupt countries.

With no previous political experience and a new political party, Mr Gutierrez has already been accused of naivety. With only 17 of the 100 seats in Congress under his control, he has had to back down from a claim that he would take his oath of office in front of "the people" rather than Congress. He has also apologised for saying that all the country's former presidents should be in jail.

www.guardian.co.uk

Heather Stewart Thursday January 16, 2003 The Guardian

Crude oil stocks in America have run dangerously low, raising fears that the government will be forced to tap its strategic reserves even before any full-blown conflict with Iraq.

Inventories are down to their second-lowest level since records began in 1976 as the oil workers' strike in Venezuela holds back supply, the US department of energy revealed yesterday.

Official estimates put the minimum stocks needed to run US refineries at 270m barrels a day but the DoE said there were only 272.3m barrels left in the system, down 6.4m barrels from a week earlier.

The shortfall helped send oil prices soaring again yesterday, with Brent crude for February delivery up 64 cents a barrel to $31.25 by the afternoon.

Paul Horsnell, oil analyst at JP Morgan, said that with US refineries guzzling 15m barrels of crude every day there was just four hours worth of slack in the system.

"Things are getting a bit tight if it gets below 300m barrels," Mr Horsnell said. "Once you start running below that level, prices become more and more sensitive even to minor changes in supply."

With the build-up to a conflict in Iraq accelerating, Mr Horsnell said, there was considerable potential for interruptions in supply in coming months. "What's alarming about this is that it's got nothing to do with Iraq - it's got nothing to do with the Middle East," he said.

The US government holds a massive strategic petrol reserve in salt caverns below Texas and Louisiana. Despite the spike in the oil price, industry spokesmen insisted yesterday that it was not yet time to turn on the taps.

"I don't see a reason, really, to release the SPR," said John Felmy, chief economist for trade body the American Petroleum Institute, arguing that there was not yet a crisis. "We can't declare an emergency at this point."

Mr Horsnell said that, although the oil price would be high enough normally to justify dipping into the SPR, the White House might be hoping to keep back supplies until the outbreak of a war with Iraq, when prices might rise further.

There is little sign of an early resumption of normal oil supplies from Venezuela, the world's fifth-largest exporter, where striking workers are trying to force president Hugo Chavez to call early elections by starving the oil-dependent economy of cash. Cumulative loss of production is approaching 100m barrels.

The oil markets were temporarily calmed last week by the prospect of a compensatory increase in supplies from Opec, the oil producers' cartel. But yesterday's jump in prices suggested traders are losing faith in Opec's ability to help. Oil ministers from the Opec countries agreed to raise production by 1.5m barrels a day at a meeting in Vienna last weekend.

Lawrence Eagles, at commodity analyst GNI, said the 270m-barrel floor was probably an overestimate of the minimum amount needed to keep refineries running, and just-in-time production methods meant a smaller margin for error was sufficient.

"Regardless of whether that particular cut-off point is right, though, we have clearly gone down to very low stocks," he added. Mr Eagles calculates that reserves, plus the SPR and stocks of finished oil products, could keep the US economy going for 77 days.