www.dailynews.com209541145430,00.html Article Last Updated: Wednesday, January 29, 2003 - 10:27:03 PM MST By Juan Forero The New York Times

CARACAS, Venezuela -- President Hugo Chavez's government and his opponents are ready to discuss two proposals put forth by former President Carter to end a devastating national strike, a mediator in the talks and government foes said Wednesday.

The development is a shift for both sides, who had refused to entertain ideas on how to end a two-month walkout that has battered the economy. But that changed with Carter's intervention and the recent creation of a group of nations designed to guarantee that both sides comply with an accord.

"They are starting to look at the same reality," said Cesar Gaviria, secretary-general of the Organization of American States and the mediator in Caracas. "In December, they were looking at different realities."

The two sides will meet Friday, along with representatives from the so-called Group of Friends, which consists of the United States, Brazil, Mexico, Chile, Spain and Portugal.

In a Jan. 21 visit to Caracas, Carter made two suggestions to end the standoff. One was to adopt a constitutional amendment that would cut the president's term to four years from six, ending Chavez's presidency this year and leading to new elections. The other was to hold a recall referendum in August, asking whether the president should be removed from office. Chavez has long publicly supported a referendum.

"We favor a proposal that permits an accord to permit elections no later than August of this year," Jesus Torrealba, executive secretary of the Democratic Coordinator, the umbrella for opposition organizations, said in an interview. "The Carter proposals are an excellent base for negotiations."

Gaviria said acceptance of the proposals had ended the stalemate at the negotiating table and could lead to talks that might end a strike called Dec. 2 by business leaders, unions and political parties to force Chavez to resign or to convene early elections.

The walkout, affecting nearly every industry nationwide, has paralyzed the economy and nearly shut down the oil industry in Venezuela, a crucial supplier of petroleum to the United States. But Chavez's government, while low on cash and faced with mounting protests, proved to be more resilient than many opponents thought.

Now, many shops are operating normally. Banks have announced they will return to normal working hours, and larger businesses like malls are expected to open next week. Government opponents have called the changes a sign of their flexibility in the strike, though it is clear that Venezuelans are increasingly dropping their support.

www.miami.com Posted on Thu, Jan. 30, 2003 BY FRANCES ROBLES frobles@herald.com

CARACAS - According to business leaders, the two-month strike aimed at overthrowing Venezuelan president Hugo Chávez forced at least 25,000 companies to go out of business in December, one of many economic indicators forcing the president's opponents to reconsider their strategy.

''The cost of this strike is going to be higher than its benefits,'' said Vladimir Rojas, spokesman for Fedeindustria, the manufacturers association. ``The decision to strike was made with passion -- not cold, calculated business sense.''

On Wednesday, in a clear sign that the strike was weakening, banks agreed to return to normal operating hours Monday. Owners of shopping malls and food franchises also began offering signals that they were ready to open at least part-time.

Chávez and his supporters have refused to give in to what they consider unfair demands for the resignation of an elected president. They have also taken steps to reduce the most damaging effects of the strike.

The economy shrank 7 percent last year, and experts say it will fall another 25 percent in 2003, but many businesses have remained open in pro-Chávez neighborhoods, sparing residents from some of the most painful effects of the strike.

In addition, the government has nibbled away at the strike's core, a walkout that hobbled the oil industry of the world's No. 5 exporter. Output surpassed one million barrels a day this week, a third of normal but greater than at any time since the strike began.

Oil provides half of government income and 70 percent of export revenue.

PRESIDENT ENDURES

An alliance of business, labor and oil sectors went on strike Dec. 2, convinced that the weight of a nationwide work stoppage would topple the controversial president. But Chávez endured. And now some are questioning the wisdom of a 58-day strike that has cost the government alone at least $4 billion.

Like a hunger strike aimed at bringing attention to an important cause, the Venezuelan strike has starved the very people who started it.

Fedeindustria, whose membership makes up the backbone of the nation's business and commerce, estimates that up to 10 percent of Venezuela's small and medium-size manufacturers went under in December alone. If the strike continues, the group estimates another 60,000 will go bankrupt. Those that remain are left without supplies, gasoline or cash flow.

''That's just December,'' Rojas said. ``We haven't even counted January.''

Economists say that even if the strike is lifted now, Venezuela will lose half a million jobs this year. If it drags on, about one million more people will be out of work in a nation where two million are already unemployed, said economist Orlando Ochoa.

AT A STANDSTILL

As more and more businesses shut their doors for good, still others technically remain open but are at a standstill. The strike froze imports, leaving food companies without packing supplies, construction companies without cement, and shoe factories without glue. If the strike is lifted tomorrow and the materials suddenly appeared, experts say, it would not matter: Most business contracts and projects have been canceled.

The squeeze has forced businesses to negotiate with workers, having them work part time or take unpaid leave.

''You have to be honest with yourself and save yourself a lot of headaches,'' said José Antonio Couto, a contractor who shut his business when every pending deal was canceled. ``I paid my workers for doing nothing in December, but I just couldn't do it in January. That's 18 more people on the street.''

According to political science professor Janet Kelly, not a single industry has been spared.

Newspapers have published for nearly two months without running a single advertisement. The Venezuelan American Chamber of Commerce lost a deal to promote business in Florida, and had to make cutbacks. Kelly's own graduate school of business has its workers on ''voluntary'' leave -- in this climate, no firms are about to pay for executive business courses for managers.

'If you are honest and objective, you ask yourself, `Did you have to destroy $5 billion of the economy?' '' Kelly said. ``I think there was a cheaper way.''

As accountants calculate what the damage, strike leaders defend the decision and say it was the only way to avoid the imposition of a dictatorial, quasi-communist regime.

''The anguish and the patience has been worth it, because we want a free country,'' said Juan Fernández, a former manager of the state oil company, Petroleos de Venezuela, PDVSA, which has been at the forefront of the strike. ``Our democracy and our nation are at stake.''

According to independent pollsters, a solid 30 percent of the population remains fanatically devoted to Chávez. Government surveys show the opposite: Chávez enjoys 70 percent support.

Strike leaders also insist that the economic collapse that has engulfed Venezuela is not so much product of the strike, but of Chávez's policies.

To be sure, the economic decline began some time ago; many businesses started pulling back when the crisis bubbled a year ago, a situation that worsened after a short-lived coup in April.

DIFFERENT VIEWS

Despite the thousands whose names have been added to the unemployment rolls, many people outside the strike leadership also view the stoppage as the only means of ousting a leftist firebrand who threatens to shut down media and private business. Others say even the strike organizers know it was a big error, but have invested too much effort to abandon a strategy whose slogan is, ``Not one step back!''

''The attitude of most workers is that this strike is worth it,'' said travel agent Morela Cifuentes, who lost her job when the agency she worked for shut down. ``Right now, my household has zero income, and I continue totally to support the strike.''

www.miami.com Posted on Thu, Jan. 30, 2003 BY JANE BUSSEY jbussey@herald.com

Florida's exports to its key Latin American trading partners fell by $3.5 billion -- or by almost one-quarter -- in the first 10 months of last year compared to the year before, a reflection of the severe economic problems in key countries.

Brazil led the way in the fall-off, with a drop of $1.5 billion in exports in the first 10 months of 2002 compared to 2001. But Argentina's economic problems also bit deeply into goods that left Florida, with a drop of almost $1 billion.

From the experts who crunch trade numbers and follow the trends to the experience of import-export businesses, there are early signs of fundamental changes underway.

Charles Jainarain, president of Greenheart International in Miami, said Florida could see its leading share of trade with Latin America start eroding, flattening the rapid upward trend.

''It peaked in Miami,'' Jainarain said. ``It peaked in Florida and now we are seeing the top of that peak go off a little bit.''

Florida's trade -- especially the commerce recording in South Florida -- grew in leaps and bounds during the 1980s from the shipment of textiles back and forth between offshore apparel factories in the Caribbean Basin. This success was capped with a boom in computer and telecommunications exports in the 1990s.

But Jainarain sees the possibility that this trade could go elsewhere, including the migration of the apparel business to China and Southeast Asia, changing the main ports of entry to the West Coast. Other ports may try to capture some of Florida's share by offering lower shipping prices.

Lowering tariffs gives trade a one-time shot in the arm, producing a boom before and after new trade agreements go into effect. But once the lower tariffs are factored into trade patterns, other economic conditions weigh in: devaluations, tight finance credit and recession. This is what has been happening since late 2001. With economies in Argentina, Brazil, Uruguay and Venezuela shrinking and their currencies falling, exports have plunged.

Individual companies have noted other trends.

Mahmoud Zaher, who runs Mamco, an auto parts exporter that does around 80 percent of its sales in South America, said that business has been tough since the start of 2002. His business primarily supplies auto parts for repairing vehicles, for the end consumer and distributors.

Demand has fallen off from regular clients, but he also no longer receives as much new business.

''We used to get on a daily basis at least five customers contacting us or coming here,'' said Zaher, who has been in the business since 1986. ``These people have disappeared.''

But Zaher said that he plans to ride out the slow down because every area of trade is suffering.

There were some small bright spots in trade figures.

Florida's exports to the Falkland Islands -- two small islands 300 miles off the coast of Argentina with a population of 3,000 people -- jumped by 150 percent, as telecommunications equipment exports rose from zero in the first 10 months of 2001 to $171,000 in the same period in 2002.

www.globeandmail.com By NAOMI KLEIN Thursday, January 30, 2003 – Page A17

The key word at this year's World Social Forum, which ended Tuesday in Porto Alegre, Brazil, was "big." Big attendance: more than 100,000 delegates in all! Big speeches: more than 15,000 crammed in to see Noam Chomsky! And most of all, big men. Luiz Inacio Lula da Silva, the newly elected President of Brazil, came to the forum and addressed 75,000 adoring fans. Hugo Chavez, the controversial President of Venezuela, paid a "surprise" visit to announce that his embattled regime was part of the movement.

"The left in Latin America is being reborn," Mr. Chavez declared, as he pledged to vanquish his opponents at any cost. As evidence of this rebirth, he pointed to Lula's election in Brazil, Lucio Gutierrez's victory in Ecuador and Fidel Castro's tenacity in Cuba.

But wait a minute: How on earth did a gathering that was supposed to be a showcase for new grassroots movements become a celebration of men with a penchant for three-hour speeches about smashing the oligarchy?

Of course, the forum, in all its dizzying global diversity, was not only speeches, with huge crowds all facing the same direction. There were plenty of circles, with small groups of people facing each other. There were thousands of impromptu gatherings of activists excitedly swapping facts, tactics and analysis in their common struggles. But the big certainly put its mark on the event.

Two years ago, at the first World Social Forum, the key word was not "big" but "new": new ideas, new methods, new faces. Because if there was one thing that most delegates agreed on (and there wasn't much), it was that the left's traditional methods had failed.

This came from hard-won experience, experience that remains true even if some left-wing parties have been doing well in the polls recently. Many of the delegates at that first forum had spent their lives building labour parties, only to watch helplessly as those parties betrayed their roots once in power, throwing up their hands and implementing the paint-by-numbers policies dictated by global markets. Other delegates came with scarred bodies and broken hearts after fighting their entire lives to free their countries from dictatorship or racial apartheid, only to see their liberated land hand its sovereignty to the International Monetary Fund for a loan.

Still others who attended that first forum were refugees from doctrinaire Communist parties who had finally faced the fact that the socialist "utopias" of Eastern Europe had turned into centralized, bureaucratic and authoritarian nightmares. And outnumbering all of these veteran activists was a new and energetic generation of young people who had never trusted politicians, and were finding their own political voice on the streets of Seattle, Prague and Sao Paulo.

When this global rabble came together under the slogan "Another world is possible," it was clear to all but the most rigidly nostalgic that getting to this other world wouldn't be a matter of resuscitating the flawed models of the past, but imagining new movements.

The World Social Forum didn't produce a political blueprint -- a good start -- but there was a clear pattern to the alternatives that emerged. Politics had to be less about trusting well-meaning leaders, and more about empowering people to make their own decisions; democracy had to be less representative and more participatory. The ideas flying around included neighbourhood councils, participatory budgets, stronger city governments, land reform and co-operative farming -- a vision of politicized communities that could be networked internationally to resist further assaults from the IMF, the World Bank and World Trade Organization. For a left that had tended to look to centralized state solutions to solve almost every problem, this emphasis on decentralization and direct participation was a breakthrough.

At the first World Social Forum, Lula was cheered, too: not as a heroic figure who vowed to take on the forces of the market and eradicate hunger, but as an innovator whose party was at the forefront of developing tools for impoverished people to meet their own needs. Sadly, those themes of deep participation and democratic empowerment were largely absent from Mr. da Silva's campaign for president. Instead, he told and retold a personal story about how voters could trust him because he came from poverty, and knew their pain. But standing up to the demands of the international financial community isn't about whether an individual politician is trustworthy, it's about the fact that, as Mr. da Silva is already proving, no person or party is strong enough on its own.

Right now, it looks as if Lula has only two choices: abandoning his election promises of wealth redistribution or trying to force them through and ending up in a Chavez-style civil war. But there is another option, one his own Workers Party has tried before, one that made Porto Alegre itself a beacon of a new kind of politics: more democracy. He could simply hand power back to the citizens who elected him, on key issues from payment of the foreign debt, to land reform, to membership in the Free Trade Area of the Americas. There is a host of mechanisms that he could use: referendums, constituents' assemblies, networks of empowered local councils and assemblies. Choosing an alternative economic path would still spark fierce resistance, but his opponents would not have the luxury of being against Lula, as they are against Mr. Chavez, and would, instead, be forced to oppose the repeated and stated will of the majority -- to be against democracy itself.

Perhaps the reason why participatory democracy is being usurped at the World Social Forum by the big men is that there isn't much glory in it. A victory at the ballot box isn't a blank cheque for five years, but the beginning of an unending process of returning power to that electorate time and time again.

For some, the hijacking of the forum is proof that the movements against corporate globalization are finally maturing and "getting serious." But is it really so mature, amidst the graveyard of failed, left political projects, to believe that change will come by casting your ballot for the latest charismatic leader, then crossing your fingers and hoping for the best? Get serious. Naomi Klein, author of No Logo and Fences and Windows, resumes her monthly column in The Globe and Mail.

www.globeandmail.com By MICHAEL DEN TANDT Thursday, January 30, 2003 – Page B2

There can be no doubt now that U.S. President George W. Bush intends to make war on Iraq. How long the conflict lasts, or where it will lead, is anyone's guess.

Where will Canada stand? We don't know. The reason we don't know is that Prime Minister Jean Chrétien hasn't told us. The reason he hasn't told us is that -- much as he might like to flatly rule out Canada's taking part, absent unshakeable evidence of Iraqi weapons of mass destruction, and of an active alliance between Saddam Hussein and al-Qaeda -- he's afraid. And the reason he's afraid is that the United States is Canada's meal ticket.

Close the Canada-U.S. border, and 85 per cent of our exports have no home. Trade worth $2-billion a day evaporates. Thirty per cent of our gross domestic product goes down the tubes. Suddenly, we're beyond the American perimeter looking in, faces pressed to the glass. And it's cold out there. Imagine the lumber dispute, writ large.

Granted, no one in the Bush administration has even hinted at such measures, regardless of Canada's position on Iraq. But what if there were further terrorist attacks on the U.S. mainland? Hillary Clinton, the Democratic Senator from New York, did not take up Canada-bashing in a vacuum. She reflects a certain constituency. By the end of next year, the U.S. Immigration and Naturalization Service intends to register every person who crosses the border. Anyone can see the way the wind is blowing. We're sleeping with an elephant, and it is angry. Better tread softly and avoid giving offence.

But there's another way of seeing this, and here it is: The United States needs an open border as much as we do. It needs our lumber, our minerals, our car parts, and our energy. We are by far its largest export market -- larger than Japan, larger than all 15 European Union countries combined. If the trading relationship soured, Canada wouldn't suffer alone. South of the border, car plants would close, gasoline prices would soar. Thirty-seven states would lose their largest foreign customer. Recession would come quickly and brutally, and it would make the current economic malaise in the United States pale in comparison. That's not in Mr. Bush's interests, and he knows it.

Think of it this way. In 2001, the total value of Canada-U.S. exchange was $445-billion (U.S.) -- 61 per cent greater than the United States' trade with Mexico, the second-largest U.S. trading partner. That year, according to Canadian government figures, we bought $163-billion worth of U.S. goods. That's about $5,254 for each Canadian. U.S. exports to Ontario alone were worth nearly double those to Japan.

Break the numbers down state by state, and the results are startling. For example, 54 per cent of Michigan's foreign exports in 2001 went to Canada. The bulk of that, worth $8.7-billion, was in auto parts and components, but not all. We also bought $2.7-billion worth of Michigan-made cars, about a billion worth of her trucks, and a cool $4-billion in assorted chemicals, metals, machinery and other industrial equipment.

Or take New York: In 2001, Canada bought 23 per cent of the state's foreign exports -- worth $9.6-billion. About $1.4-billion of that was in car engines and parts. But we also purchased major quantities of telecom equipment ($1-billion), household goods ($1-billion), machinery ($591-million), chemicals $473-million) and agricultural products ($386-million). Where would Mrs. Clinton be, one wonders, if the jobs provided by those industries started to disappear? Across the American heartland, it's the same story. South Carolina, Alabama, Colorado, Arkansas -- all rely on Canada as their key foreign market. Now, some may say, big deal: U.S. states trade far more among themselves than they do with foreigners. True. But nevertheless, exports last year accounted for nearly 10 per cent of U.S. GDP.

And that's setting aside U.S. economic need for our exports -- lumber, car parts, and most important, oil. According to 2002 figures from the U.S. Energy Information Agency, Canada supplies 17 per cent of U.S. foreign crude supply. Saudi Arabia accounts for 13.9 per cent. Venezuela, before the general strike that sent U.S. oil inventories to 25-year lows, supplied about the same amount as the Saudis.

This is not to say that Canada would, or should, wield trade as a cudgel. But nor should Canadians assume that we must toe the American line, regardless of what we think is right, for the sake of bread and butter. Ottawa does have leverage -- enough to chart an independent course.