www.washingtonpost.com Marcela Sanchez Thursday, January 30, 2003; 2:47 PM

In order to understand the crisis in Venezuela, one must live it. There is no doubt about that.

Last week, representatives of the polarized forces that are ripping that South American nation apart made their pilgrimage to Washington. Their only shared intention, it seems, was to act out their drama on a world stage.

If their words were any indication, a solution to the problem is as distant as ever. Each side has mastered the fine art of pointing the finger at the other. It is they, one said of the other, who have used a position of privilege to call for discord, violence and death. Both seemed determined not to make the least concession to the other, who, after all, was the true enemy of democracy.

Each side, of course, was making an effort to offer its best diagnosis of the crisis. If the symptoms are not recognized, Foreign Minister Roy Chaderton explained, how can one prescribe a cure? True.

Yet one was left with the impression that both were spending far more time, passion and talent revealing the depth of their suffering than seeking a salve to soothe it.

The two sides seemed to agree most on one complaint: The world fails to understand their dilemma. No surprise then that they both endorsed, as the first step of international response to a crisis that could no longer be ignored, the creation of a Group of Friends to take part in negotiations between the Venezuelan government and the opposition.

The group might satisfy that desire for international attention. But more critically, it should make everyone realize that world attention and understanding does not necessarily translate into adopting wholesale the view of one side or the other.

Various Washington analysts concurred this week that the group could be especially helpful in restoring confidence to the discussions and pressing Venezuelans to alter their apocalyptic rhetoric. It also could exert pressure to explore compromise solutions and help to reinforce them--although it is hard to imagine any pressure greater than that imposed in the last two months by the Venezuelan opposition's devastating national strike.

It is too early to tell how successful the Friends will be. Somewhat predictably, the initial meeting of its foreign ministers and their deputies here last week ended with few concrete results.

More importantly, Brazilian Foreign Minister Celso Amorim, speaking on behalf of the six member states (Brazil, Chile, Spain, Mexico, Portugal and the United States), sent forth one very essential message: Solutions to the problems in Venezuela must come from Venezuelans. That message may seem simplistic. Yet the point here is that the Group of Friends could prove to be useless especially if its existence becomes yet another excuse for inaction.

During the 1990s, many Colombians looked abroad for solutions. Worn down by an internal conflict that had spun out of control, many looked especially to the United States as the only source of hope for a solution. At the end of the day, however, with Washington unwilling to be the savior and their own internal crisis worsening, the Colombians seemed to recognize the need to do more for themselves.

In situations like the one in Venezuela, self-examination is not easy. It is easier, even comforting, to look abroad and grab convenient, predictable, ever-assuring allies. President Hugo Chavez seems to have just such a find in the Cuban leader Fidel Castro; and, curiously but not surprisingly, the Venezuelan opposition has found its own version of the same in Castro's archenemy--the Cuban exile community, especially of Miami.

Castro and the exiles are neither friends in need nor friends in deed. Their approach to their own country's situation has resulted in a diplomatic impasse four decades long. Given the level of tension present now, Venezuela needs open minds on the sidelines, not cheerleaders. Of what value are friends more interested in pulling apart the two sides than bringing them together?

The intensity of Venezuela's strike appeared to be subsiding this week but this is no time to declare winners or losers. A true victory won't be something claimed but something gained. The Group of Friends might help Venezuelans realize the need for another type of sacrifice--the one that brings them together instead of tearing them apart.

Marcela Sanchez's e-mail address is desdewash@washpost.com.

www.gopbi.com By Ted Jackson, Palm Beach Post Staff Writer Friday, January 31, 2003

Gasoline prices are fast approaching the highest levels ever recorded amid fears of an approaching war in the Middle East and petroleum production shutdowns in Venezuela.

Analysts say that if oil prices do not fall before the spring, technical factors affecting refining costs because of Clean Air Act regulations could send gas prices to their highest levels in history.

This could mean trouble for the economy as consumers spend more on energy and less at the mall.

Already the consumer, whose spending accounts for two-thirds of the economy, appears to be in trouble. As part of its report on overall economic growth, the U.S. Commerce Department revealed Thursday that consumer spending increased by the smallest amount in 10 years last quarter.

Driven by soaring oil prices, the price of gas in Palm Beach County is less than 10 percent below the all-time high of $1.725 per gallon reached in May 2001. At $1.579 per gallon for regular unleaded, gas prices are 30 percent higher than at this time last year.

Local station owners say their business has been hurt.

Joseph Williams, proprietor of the 45th Street Hess station in West Palm Beach, said that sales have declined over the past month and a half as gas prices have climbed.

"It's bad," Williams said.

Analysts say the outlook for gas prices is difficult to ascertain because so much of the recent increase in oil prices is due to political developments, which are difficult to forecast.

"So much of what the future holds depends on how the oil strike in Venezuela is resolved and, to a lesser extent, on developments with respect to Iraq in the Middle East," said John Lichtblau, chairman of the Petroleum Industry Research Foundation in New York.

But if oil prices do not fall before spring, AAA auto club spokesman Geoff Sundstrom believes, gas prices could set new records by summer.

When gasoline refiners begin using regional blends dictated by the Clean Air Act it could add 10 cents per gallon to the price, Sundstrom said.

"So if oil prices don't fall, we will be in trouble," he said.

Faced with a slowdown in consumer spending, analysts say, if oil prices continue to rise President Bush might decide to release stocks from the nation's Strategic Petroleum Reserve.

This might mitigate increases in gas prices at the pump.

The president already has begun diverting oil supplies meant for the reserve to commercial oil stockpiles, which in recent weeks have fallen below the five-year average for this time of year.

One bright spot is that production in Venezuela, a key U.S. oil supplier, is starting to ramp up.

The strike by oil company workers and management there continues, but the beleaguered government of President Hugo Chavez has managed to increase production to 33 percent of capacity, according to Jim Smith, president of the Florida Petroleum Marketers and Convenience Store Association.

Several weeks ago, Venezuela was producing virtually no oil.

ted_jackson@pbpost.com

english.eastday.com

Venezuelan Foreign Minister Roy Chaderton affirmed Thursday that the government rejects any initiative for an early end to the administration of President Hugo Chavez and early elections.

"The government will not gather signatures, nor will it participate in formulas to reduce its duties, for that is up to the opposition," the diplomat told the local radio.

Chaderton is one of the representatives of the government in dialogues with the opposition, promoted by the Organization of American States (OAS) to solve the political crisis in Venezuela.

The senior official added "there are no moves for early elections, nor for a change of government, not even within the constitutional framework."

"The fact we respect that within the Constitution there are considerations for the anticipation of elections to comply with the goal of a particular sector of the population, does not mean the government has to back such an initiative," he said.

The opposition, headed by businessmen and trade union workers, concentrated in the so-called Democratic Coordination (CD), Thursday called for a constitutional amendment in order to oust Chavez.

On Jan. 22, Jimmy Carter, former US president and Nobel Peace Price winner in 2002, claimed as a solution to the crisis in Venezuela the drafting of a constitutional amendment or a referendum on the fate of the Chavez government on August 19. Xinhua news

www.sunherald.com Posted on Fri, Jan. 31, 2003 JORGE RUEDA Associated Press

CARACAS, Venezuela - Government foes facing dwindling support for a two-month strike sought international backing Friday in their drive to shorten President Hugo Chavez's term.

High-level envoys, meanwhile, from the United States, Brazil, Chile, Mexico, Portugal and Spain - dubbed the "Group of Friends" - were to meet with Chavez and opposition leaders Friday. The group also planned to attend negotiations sponsored by Cesar Gaviria, secretary-general of the Organization of American States.

The envoys are urging both sides to agree on one of two proposals made by Nobel Peace laureate and former President Jimmy Carter. The first is to amend the constitution to shorten Chavez's term and clear the way for early elections. The second is for both sides to wait for a midterm referendum on Chavez's rule.

The diplomatic push for a settlement came as shopping malls, banks, franchises and schools prepared to reopen next week. Production also was creeping upward in the oil industry, where the 61-day walkout has been the most damaging.

The opposition called the strike on Dec. 2 to demand a nonbinding referendum on Chavez's rule in February. It later upped the ante to demand Chavez's ouster.

But the Supreme Court, citing a technicality, indefinitely postponed the referendum. Chavez shows no signs of leaving.

Opponents were planning an afternoon march on the Melia hotel - where the foreign diplomats are staying - to protest government investigations against three private television stations accused of supporting efforts to overthrow Chavez. The investigations could culminate in the shutdown of the stations.

The opposition has proposed a constitutional amendment that would cut Chavez's term from six years to four and clear the way for presidential and congressional elections this year. The opposition plan also calls for a new elections council and a Supreme Court ruling to determine when a referendum on Chavez's rule can be held.

Under the proposal, Chavez and pro-government lawmakers could run for re-election. He has been president since 1999 and his term ends in 2007.

The government said it was studying the opposition's proposal but won't allow it to shorten Chavez's term.

Strike leader Manuel Cova of the Venezuelan Workers Confederation said Thursday a new presidential election could be held as early as March and should be done this year.

"To do this we need the guarantees of the international community," Cova said. "If we don't do it this year, we'll be in prison, or in exile, there won't be press freedom."

Opposition groups are organizing a nationwide campaign on Feb. 2 to collect nearly 2 million signatures needed from Venezuela's 12 million voters for the amendment proposal.

Both sides recognize international mediation "is essential to open the path for negotiation," said Gaviria, who has tried to broker an end to the political tug-of-war since November.

Chavez has welcomed the "Group of Friends" initiative, but he has warned others not to meddle in Venezuela's domestic affairs. He also has vowed not to strike a deal with an opposition he refers to as a "coup-plotting oligarchy." Chavez was briefly ousted in a failed April coup.

The standoff has devastated Venezuela's oil-dependent economy, though the government has revived production to about 1 million barrels a day. Output fell to about 200,000 barrels a day in December from the norm of more than 3 million.

Analysts predict the economy will shrink 25 percent this year after an 8 percent contraction last year. Unemployment has reached 17 percent and is expected to rise.

The government has slashed its 2003 budget by 10 percent from $25 billion and announced it will cut the state-owned oil monopoly's budget from US$8 billion to $2.7 billion.

Oil accounts for half of government income and 30 percent of Venezuela's $100 billion gross domestic product.

www.forbes.com Reuters, 01.30.03, 9:52 PM ET India  Australia   By Bill Tarrant

SINGAPORE, Jan 31 (Reuters) - The dollar rose and Asian stocks fell on Friday following a mauling on Wall Street, while gold, oil and bonds were firm after U.S. President George W. Bush said he would give diplomacy just weeks to avert a war with Iraq.

The dollar drew comfort from an open letter published in several newspapers by the leaders of eight European nations that called on others -- implicitly France, Germany and Russia -- to support Bush's attempts to disarm Iraq. The letter raised the possibility that the United States would not go to war alone.

Japanese stocks sliced through a two-decade low on Friday, after U.S. stocks fell two percent overnight, as AOL Time Warner Inc's (nyse: AOL - news - people) massive loss compounded economic and war worries.

Crude futures eased in electronic trading in Asia after rising for a third day in New York amid growing worries that war with Iraq could erupt within weeks and disrupt supplies.

A report showing U.S. economic growth had stalled in the final quarter of 2002 hit stocks in the world's biggest economy and added fuel to a rally in U.S. Treasuries.

"It's still unclear when the attack on Iraq will begin and these worries are the biggest factor dragging down stocks globally as well as in Japan," said Tetsuya Ishijima, strategist at Okasan Securities.

"What stock markets hate more than anything is uncertainty." Bush on Thursday welcomed the idea of exile for Iraqi President Saddam Hussein and said he would give diplomacy "weeks not months" to end the showdown over disarming Baghdad.

Chief weapons inspector Hans Blix said U.N. investigators had seen no sign of increased cooperation from Iraq since they had handed in their report to the Security Council on Monday.

The Nikkei average <.N225> was down 0.66 percent at 8,262.26 as of 0240 GMT, after falling under a two-decade closing low that it had hit in November. The broader TOPIX index <.TOPX> was down 0.91 percent at 817.68.

Other key Asia-Pacific markets were down as well, with trading thinned as many countries in the region began celebrating the oriental Lunar New Year.

Australian shares <.AXJO> fell 0.7 percent, down for a third straight day, with News Corp <NCP.AX> off 2.9 percent following the drubbing that AOL Time Warner took.

Markets in Hong Kong, Taiwan, China, South Korea and Malaysia were shut and Singapore wwas to close after the morning session.

The blue-chip Dow Jones Industrial average <.DJI> fell 2.04 percent to 7,945, finishing below the key psychological 8,000 level for the second time this week. The Standard & Poor's 500 index <.SPX> fell 2.29 percent to 844.57. The tech-loaded Nasdaq Composite <.IXIC> ended down 2.65 percent at 1,322.11.

U.S. investors have yet to see solid evidence of a healthy recovery in corporate profits at the height of the fourth-quarter reporting season. AOL Time Warner's stock fell 14 percent after the company posted a 2002 net loss of nearly $100 billion -- the largest in U.S. corporate history.

Gross domestic product, a broad measure of economic activity within U.S. borders, crept ahead at a 0.7 percent annual rate in the October-December quarter, well off the 4 percent of the prior quarter but in line with expectations.

Front-month March crude stood at $33.80 per barrel at 0220 GMT, down five cents from Thursday's close in New York, where the contract settled 22 cents higher at $33.85.

Traders said U.S. Secretary of State Colin Powell's briefing to the U.N. Security Council next Wednesday could give the United States more ammunition to justify military action soon.

Venezuela's two-month oil strike seemed to falter as the government said output was now up to 1.4 million barrels per day (bpd), recovering steadily from lows of 150,000 bpd in December.

Currency traders said the market would look ahead to Bush's meeting with British Prime Minister Tony Blair later in the day to see if any timeframe emerged for a possible attack.

As of 0220 GMT, the dollar was at 119.18 yen <JPY=> compared with 119.02 in late U.S. trade. The euro was at $1.0812 <EUR=> against 1.0815 and 128.67 yen <EURJPY=R> versus 128.71.

The euro withstood comments from European central bank council member Ernst Welteke, who reiterated on Thursday the pace of the euro's rise, if maintained, could hamper euro zone growth.

Spot Gold <XAU=> was trading around $368.75 an ounce in Asia after closing $2.30 higher at $369.70 an ounce in New York.

The U.S. 30-year bond <US30YT=RR> rallied 27/32 higher to 107-28/32 to yield 4.9 percent. Two-year notes rose 5/32 to 99-28/32 and were yielding 1.68 percent.