www.accessatlanta.com Ex-president seeks end to 8-week-old crisis

By SUSAN FERRISS The Atlanta Journal-Constitution

CARACAS, Venezuela -- Former President Jimmy Carter met Monday with Venezuelan President Hugo Chavez and opposition figures for talks on how to resolve the country's political crisis and end a devastating 8-week-old anti-government strike.

An anti-government protester was killed Monday and 12 were wounded by gunfire during an anti-Chavez march in a community outside Caracas. Six people have died in gunfire during protests since the strike began.

Carter, who accepted the Nobel Peace Prize last month, emerged from Chavez's Miraflores Palace and told reporters in Spanish that his initial meeting with Chavez was "very positive."

Venezuela was the world's fifth biggest oil producer before the strike and supplied the United States with 15 percent of its petroleum imports. But striking national oil workers have nearly paralyzed the industry, in an action that is costing Venezuela $50 million a day.

The strike has shut down factories and shopping centers, and caused food and gasoline shortages. Motorists have to wait in lines as long as eight hours for fuel.

"President Carter is coming at a very difficult time," said Cesar Gaviria, secretary general of the Organization of American States. Gaviria also met with Carter in Caracas.

"Circumstances have changed a lot in the last few days. There's much more tension," said Gaviria, who has been struggling to negotiate a solution.

This weekend, Chavez threatened to pull out of negotiations and complained about a new "Friends of Venezuela" group that is trying to broker a deal. The group consists of the United States, Mexico, Spain, Portugal, Chile and Brazil. Chavez tried to persuade Brazil's new president, socialist Luis Ignacio Lula da Silva, to agree to add other nations, including Cuba, Algiers and China.

Silva declined. Some here speculate that Chavez, a left-wing nationalist, was deeply disappointed.

Opposition figures, led by a business group and a labor union, hoped a "civic strike" they declared on Dec. 2 would topple Chavez or force him to submit to an early election they are certain he would lose.

Tens of thousands of opponents regularly march against Chavez, accusing him of pushing Venezuela toward an authoritarian, Cuban-style state, and contending that he has committed a host of abuses of power and driven the country further into economic hardship.

Chavez, a former army paratrooper, survived a coup attempt in April when supporters, largely from Caracas' poor barrios, rose up to defend him as the first president who has identified with the poor. Despite its oil wealth, about 80 percent of Venezuelans live in poverty, and for decades the country has been awash in political corruption.

Chavez, elected as a populist maverick in 1998, has called strike leaders "fascists" and accused them of sabotaging the country.

On Friday, representatives of the "Friends of Venezuela" countries are to meet in Washington at the Organization of American States headquarters to discuss how the group will operate.

Gaviria said he hoped the group would advance talks and help both sides "see reality, to interpret it, put a little pressure so that they realize the damage being done to the country."

news.ft.com By Guy de Jonquieres and William Hall Published: January 21 2003 4:00 | Last Updated: January 21 2003 4:00

Dancing the night away is no longer part of the programme for the 2,000 business and government leaders gathering in Davos for the annual meeting of the World Economic Forum. The weekend gala soirée, traditionally the social high point of the six-day event that starts on Thursday, has been scrapped.

The reason is concern that conspicuous partying would send the wrong signals to a world preoccupied with the threat of an Iraq war, terrorism, the North Korean crisis, economic fragility and plunging financial markets. Klaus Schwab, the forum's president, said the times called for a more puritan image.

Uncertainty about the international political and economic outlook is set to weigh heavily on the meeting, which is back in the Swiss resort after the September 11 terrorist attacks led it to decamp to New York last year.

Veteran Davos-goers say the agenda has seldom been more loaded with intractable problems. "Global leaders are at the most important crossroads since the end of the cold war," said Jeffrey Garten, dean of the Yale school of management. "They face massive challenges that are hard to come to grips with."

The perception that the world is a more dangerous place will be heightened by reinforced security, at a cost of $10m (£6.2m). Two thousand soldiers and police will patrol Davos, with more deployed in other cities. Air traffic over Davos will be restricted and unauthorised aircraft risk being shot down.

Anti-globalisation demonstrators, a regular feature of the meeting, will be allowed an orderly weekend march. They will be vetted at the insistence of the US, which is sending a high-profile delegation with cabinet members headed by Colin Powell, secretary of state, and including John Ashcroft, the attorney-general.

This year's headline theme is "building trust". Mr Powell's presence may help reassure an audience worried that the sole superpower is bent on flexing its military muscle.

"The US is perhaps getting the message that if things go on this way it will suffer huge unpopularity globally," said the head of one of Europe's largest companies. "But it still has a big public-relations job to do."

For business leaders Iraq is only one of the clouds on the horizon. Many complain of a more pervasive sense of drift. "There is a sombre attitude among chief executives everywhere," said Peter Sutherland, chairman of BP and Goldman Sachs International and a former Davos chairman. "Many of their concerns are about issues beyond their control."

These hesitations are in stark contrast to the mood of top managers at Davos meetings in the late 1990s, when they coasted on a wave of exuberance propelled by the internet, the new economy, the unstoppable forces of globalisation and confidence in their own infallibility.

It seemed then as though "Davos man", effortlessly bestriding the twin peaks of business and high policy, was master of all he surveyed. But now he - and participants are still predominantly men - has come down to earth.

Triumphalism has been replaced by defensive introspection as the cult of the chief executive has been shattered by the bursting of the stock market bubble, collapsing profits and a succession of US corporate scandals.

"Business leaders' reputations have been trashed," said Mr Garten. "Their attention is still on what went wrong in the last two years, not on what needs to be done for the future."

Others will aim to strike a more positive note. Luis Inácio Lula da Silva, president of Brazil, and Recep Tayyip Erdogan, leader of Turkey's ruling Justice and Development party, will be talking up their new governments' policies. Religious leaders, headed by Lord Carey, former archbishop of Canterbury, will be on hand to offer spiritual uplift.

Many say the real value of the event lies not in the presentations but in the opportunity to network and compare notes. Most big names arrive with diaries full of meetings scheduled far in advance.

What all the talking will achieve is another matter. Mr Schwab has long sought to make Davos an agenda-setting event that generates concrete initiatives. Now, he admits, that task is harder. "Seven or eight years ago you could propose solutions. But many fewer are possible today. If we can contribute to better understanding we will already have done a lot," he said.

For many participants that will be enough. "If Davos did not exist, you would want to create it," said Stuart Eizenstat, a former US deputy Treasury secretary and now a Washington lawyer. "It is about the only place where business and government can exchange ideas and get a sense of direction."

Whether they will have a clearer vision of where they are heading after this year's meeting is an open question.

Additional reporting by William Hall in Zurich Lessons from terror, Page 19 www.ft.com/globaleconomy

www.chinapost.com.tw 2003/1/21

CARACAS, Venezuela, AP Bloody clashes between foes and followers of President Hugo Chavez overshadowed efforts by former U.S. President Jimmy Carter to help resolve Venezuela's crisis and end a strike that has crippled the world's fifth largest oil exporter.

One man was killed and 27 were injured Monday when gunfire erupted as Chavez supporters confronted opposition marchers in Charallave, a town 30 kilometers (19 miles) south of Caracas.

Both sides threw rocks, bottles and sticks at each other, and police struggled to keep them apart, but it was not clear who fired the live ammunition.

Opposition leaders blamed the violence on the government, saying Chavez sympathizers, instigated by the president's fiery rhetoric, attacked their march.

"The only one responsible is the government," said Juan Fernandez, an executive fired from the state oil monopoly, Petroleos de Venezuela S.A., for leading the strike.

Carter, who won the Nobel Peace Prize in October, attended negotiations between the government and opposition Monday and met separately with Chavez and strike leaders. His Atlanta-based Carter Center, the Organization of American States and the United Nations are sponsoring the talks.

Business leaders, labor unions and opposition parties launched the strike Dec. 2 to demand that Chavez resign or call early elections. After two months of negotiations, the two sides seem little closer to an agreement.

Chavez threatened Sunday to walk out of talks, accusing the opposition of trying to topple him even as they negotiated.

Strike leader Carlos Ortega said opponents would continue negotiating, but called Chavez undemocratic and said he would never accept a vote on his rule.

Ortega, president of the 1 million member Confederation of Venezuelan Workers, said Gaviria and Carter should "convince themselves once and for all that we are dealing with a regime that is not democratic, and that as long as Chavez stays in power there is no possibility of holding elections."

The National Elections Council, accepting an opposition petition, agreed to organize a Feb. 2 nonbinding referendum asking citizens whether Chavez should step down.

Chavez says the vote would be unconstitutional and his supporters have challenged it in the Supreme Court. But the president has welcomed a possible binding referendum halfway through his six-year-term, or August, as allowed by the constitution.

The strike has slashed Venezuela's oil production by more than two-thirds and caused shortages of gasoline, food and drinking water. It has cost Venezuela US$4 billion, according to the government, and contributed to the plummeting of the bolivar currency.

Six countries _ Brazil, Chile, Mexico, Portugal, Spain and the United States _ began an initiative called "Friends of Venezuela" to help end the crisis. Chavez warned that his government will not allow interference in domestic affairs.

The 48-year-old Chavez was elected in 1998 and re-elected in 2000 on promises to redistribute the country's vast oil wealth among the poor majority.

His opponents accusing him of steering the economy into recession with leftist policies and running roughshod over democratic institutions.

news.ft.com By Reuters - January 21 2003 0:25

CARACAS, Venezuela - One person has been killed and two dozen wounded by gunfire during street clashes in Venezuela as Nobel Peace Prize winner Jimmy Carter tried to salvage peace talks between leftist President Hugo Chavez and his foes, officials said.

Clashes involving police and rival protesters broke out on Monday when Chavez supporters attacked an opposition march in Charallave, about 30 miles (50 km) south of Caracas, where demonstrators exchanged volleys of bottles and rocks.

Local television images showed one man opening fire into a crowd with a handgun as he rode on the roof of a jeep. Both sides blamed each other for the violence.

Initial accounts of casualties were confused. But a Civil Protection official said one man was shot dead and 24 people were wounded by gunfire in the fighting. It was unclear who had opened fire. At least four others were injured in the clashes.

"The number of wounded is up to 28 and 17 of those are in critical condition," Edith Garcia, a Civil Protection spokesperson told Reuters.

Venezuela's tense, often violent political conflict has intensified during a seven-week-old opposition strike aimed at pressing Chavez to resign and call elections in the world's fifth largest oil exporter.

Carter, a former U.S. president on his second visit to Caracas in less than a year, held meetings with Chavez and the opposition, who have been locked in a political standoff since April when the Venezuelan leader survived a short-lived coup.

"There is always hope for a resolution and I hope that will be soon," Carter told reporters as he arrived in Caracas to meet with Organisation of American States head Cesar Gaviria, who brokered the peace talks.

Carter, who carries out international peace work through his Atlanta-based Carter Centre, has been in Venezuela for about a week on a fishing trip. Carter Centre officials have supported the peace talks since they began two months ago.

CHAVEZ THREAT TO QUIT TALKS

Negotiations between Chavez and his foes were thrown into doubt over the weekend after the populist leader threatened to quit the talks even as the international community stepped up support for OAS mediation.

The talks have been stalled over the timing of elections and how to end the opposition strike that has cut oil output and severely disrupted fuel and food supplies.

Chavez, elected in 1998 six years after leading a botched coup, has dismissed his foes as "fascist terrorists" plotting to overthrow him. But his critics, who say Chavez has wielded power like a corrupt, inept dictator, have vowed to keep up the strike until he steps down. Chavez rejects their calls for early elections.

The strike deadlock has raised international concern over global oil supplies at a time when energy markets are already jittery over a possible U.S.-led war against Iraq. Venezuela usually supplies about one-sixth of U.S. oil imports.

Oil prices crept higher Monday after Washington said time was running out for Baghdad to prove compliance with United Nations disarmament resolutions. U.S. crude prices last week hit two-year highs of $34 a barrel.

Crude supply fears have intensified diplomatic efforts to end the Venezuelan crisis. The United States, Brazil and other governments have agreed to form a group of six nations to lend weight to mediation efforts by OAS chief Gaviria.

U.N. ENVOY TO VENEZUELA

United Nations Secretary-General Kofi Annan plans to send an envoy to Venezuela to take part in the initiative, which also includes Spain, Portugal, Chile and Mexico. The group will hold its first meeting in Washington on Friday, the Brazilian foreign minister said.

But Chavez cast doubt on the plan by insisting that other countries, such as Russia, Cuba and France, also be included.

Opposition leaders are also planning to hold a nonbinding referendum on his rule on February 2. But Chavez insists a binding referendum can only be held after August 19, halfway through his current term.

The Venezuelan leader said on Sunday he was restarting the strike-bound oil industry, which accounts for about half of the government's revenues, using troops and replacement crews. But strikers insist production is still mostly paralysed.

Government officials on Monday warned two private television stations, which have been critical of Chavez, that they faced fines for running commercials backing the strike. The stations slammed the move as an attack on media freedom.

Chavez has also ordered troops to raid factories, banks and schools joining the stoppage, as well as food and drink manufacturers he accuses of hoarding supplies. National Guard troops sparked opposition outrage on Friday after they broke into a local bottling affiliate of Cola-Cola Co. to take away crates of drinks.

www.nytimes.com By TIM WEINER

CADEREYTA, Mexico — Tony Cantu grew up with the giant oil refinery that Pemex, Mexico's state-owned oil company, runs here in his hometown. He helped build it and operate it, rising from construction worker to computer programmer to chemical engineer.

Mr. Cantu gave Pemex a decade of his working life. But he will never work there again. He can explain why in one word. Advertisement

"Corruption," he said, gazing at the refinery, 20 miles outside Monterrey in northern Mexico. "People being stepped on, forced to be corrupt — I hated that. There were a lot of things you had to shut up about. The bosses would kill to protect themselves. People were subjugated by fear."

For more than 60 years, Pemex, the world's fifth-largest oil company, has been Mexico's economic lifeblood. A $50 billion-a-year enterprise, it controls every gas pump in Mexico, and it sells nearly as much oil to the United States as Saudi Arabia does.

Today, with some oil producers like Iraq and Venezuela facing nation-shaking crises, Mexico looks like a sure and steady source of oil. The United States may be tempted to rely on it even more.

But Pemex is in danger of breaking down. "Financially, we are falling," its director, Raúl Muñoz Leos, said in an interview. Nearly every peso of Pemex's profits goes to run the government of Mexico. The company, after paying taxes and royalties, actually lost $3.5 billion in in 2001. Without a huge restructuring, tens of billions of dollars in foreign investment, or a huge budget increase, Mr. Muñoz Leos warned recently, "We would face, in the short term, a collapse."

One reason is a rottenness at Pemex's core. The company loses at least $1 billion a year to corruption, its executives say, in a continuous corrosion of the machine that keeps Mexico solvent.

Fixing Pemex is as crucial to Mexico's future as it is to American oil supplies. When Vicente Fox became president two years ago after defeating the political machine that ran Mexico for 71 years — the Institutional Revolutionary Party, or PRI — he vowed to make his country more open and democratic and to make Pemex run like a 21st-century corporation.

To change Mexico, Mr. Fox must first change Pemex. It has been a cash machine for the government, a slush fund for politicians and a patronage mill for party loyalists since the party created Petróleos Mexicanos, or Pemex, in 1938.

After nationalizing American and British oil interests, the party promptly changed the Constitution to bar foreign investment in underground oil and gas. It was a declaration of independence: "Expropriation Day" is still celebrated each year.

Even today, the PRI, which still holds a plurality in Congress, is fighting changes to the Constitution and at the oil giant it created, in part on grounds of patriotism. President Fox's attempts at reform have been hamstrung by PRI resistance — and Pemex's history of corruption.

Pemex's last director, Rogelio Montemayor, a former PRI governor, and its union boss, Carlos Romero Deschamps, a PRI senator, each stand accused of stealing tens of millions of dollars from Pemex for the PRI's 2000 presidential campaign against Mr. Fox.

Both men deny the charges. Mr. Romero Deschamps is battling an attempt in Congress to strip him of the legal immunity he enjoys as a sitting senator. Mr. Montemayor fled Mexico last year and is fighting extradition from Houston. The PRI, struggling to defend them — and itself, is also resisting every effort to transform Pemex.

"The political will needed to reform Pemex has just not coalesced," said Eduardo Cepeda, the head of J. P. Morgan Chase's Mexico office.

Edward L. Morse, executive adviser at Hess Energy Trading Co. and former publisher of Petroleum Intelligence Weekly, said by telephone from New York that "the effort to reform the beast" had failed. President Fox, he said, does not "understand how thoroughly ingrained in the national political culture the monopoly of Pemex is."

Pemex remains one of the world's few national oil companies with no competition from within or without. Its resulting inefficiencies are stark.