www.vheadline.com Posted: Friday, February 14, 2003 By: Charles Presswell Date: Fri, 14 Feb 2003 00:43:40 -0500 From: Charles Presswell charles.presswell@sympatico.ca To: editor@vheadline.com Subject: government is not concerned

Dear Editor: Please Mr. Forstell -- tell us all -- which opposition party has the interest of the poor in mind?

What are their platforms for reforming Venezuela?

Where is this noble opposition?

Who are these devoted citizens that allowed Mr. Chavez to be elected in the first place?

What are their great political ideals?

If Mr. Chavez "...is concerned only with accumulating power and maintaining it," the opposition is apparently concerned only with destroying the democratically-elected party of Mr. Chavez and keeping it out of the political process altogether.

Surely you can't be referring to the likes of Mr. Carmona ... this Venezuelan patriot fled to the US at the first opportunity didn't he?

Sir, where are the opposition?

When will we see a clear plan from any one of them on the future of Venezuela?

The anti-Chavez argument is pretty tired -- don't you think?

Or are the intentions of the opposition so sinister that they must keep them secret?

Are the opposition so morally bankrupt that their privileged position and the grinding poverty that they have helped to create is what they really want to sustain?

Please enlighten us ... we all know there are "millions" of you out there ... what exactly do you have to offer to counter Chavez politically?

Only gutter talk and sabotage?

Charles Presswell Toronto, Canada charles.presswell@sympatico.ca

reuters.com Fri February 14, 2003 09:53 AM ET By Fabian Cambero

CARACAS, Venezuela (Reuters) - "Open again at last!" shouted one jubilant Venezuelan shopper as she entered the giant Sambil commercial center, the flagship of Caracas' shopping malls, which reopened this month after a two-month opposition strike.

The protest shutdown, launched on Dec. 2 to try to force leftist President Hugo Chavez to hold early elections, had deprived the capital's inhabitants of their favorite emporiums of fashion, fast food and Hollywood movies for nine weeks.

"I was desperate, just waiting for them to open," said 21-year-old Dayana Gutierrez, as she checked out the post-strike prices in her favorite clothing store.

Eager shoppers prowled the mall, hunting for bargains or just feasting their eyes on consumer goodies denied to them for weeks. Some emptied automatic drinks dispensers selling beverages that had become scarce during the shutdown.

After sacrificing lucrative Christmas and New Year sales in support of the strike, the country's shopping centers unlocked their doors this month when opposition leaders decided to lift the protest in non-oil sectors. Many small businesses and shops, facing bankruptcy, had already abandoned the strike.

Slashing oil output in the world's fifth largest petroleum exporter, the stoppage caused unprecedented gasoline and food shortages and plunged the oil-reliant economy into crisis. The strategic oil industry is still reeling from the impact.

But the protest failed to budge former paratrooper Chavez, who introduced tough currency and price controls to counter the financial emergency and is demanding that oil industry strikers he calls "terrorists" and "coup mongers" be sent to jail.

In this turbulent economic and political climate, shopping malls like the Sambil are trying to recoup some of their lost profits. Some shops still had their Christmas decorations up, while others were hurriedly re-dressing their front windows.

Luis Perez, who owns a chain of small outlets selling shirts, felt the strike had not been worth the sacrifice.

"We paid a high price to achieve so little," he told Reuters. As most of his stores are located in shopping malls which closed down, his December sales, which normally account for half of his annual income, were 70 percent below normal.

The lost income forced him to dig deep into savings. "I'm lucky because I could survive," Perez said.

FEW CUT-PRICE SALES

The drive to recover lost income meant there was a notable absence of the usual signs announcing New Year sales bargains.

"All my autumn-winter collection was left unsold on the racks and there's not going to be a spring collection ... so I don't think we'll be offering any sales," said Sussy Samuele, who runs an exclusive fashion store at the Sambil.

Some stores were already adjusting their price tags upward in anticipation of the impact of the stringent currency controls introduced by the government this month.

Chavez, who survived a coup last year, has declared a political vendetta against businesses which took part in the strike, saying he will restrict their access to hard currency. This will limit their capacity to import and in turn produce shortages and price hikes, businessmen and economists predict.

"I don't think we're going to get back to normal again soon. I think it will take time for us to recover," said the manager of a pharmacy, which suffered the loss of some products because they had passed their sell-by date during the strike.

Private business chambers and trades associations which overwhelmingly backed the anti-Chavez stoppage have declined to give details of the losses incurred by their members. But they are believed to be in the hundreds of millions of dollars.

Private sector leaders, who oppose Chavez because they say his anti-capitalist left-wing rhetoric and statist, interventionist economic policies are bad for business, say 500,000 jobs were lost in the trade sector alone in 2002.

They expected 800,000 more jobs to be lost in 2003.

The grueling opposition strike dragged down an economy already floundering in recession. Gross Domestic Product fell by 6.4 percent in the first nine months of last year.

In the absence of a definitive figure from the Central Bank, economists estimate the contraction for all of 2002 was at least 10 percent. They expect a bigger contraction in 2003.

Inflation ended the year at 31.2 percent and is still rising. It stood at 33.8 percent at end-January.

Unemployment too has been going up. It had reached a four-year high of 17 percent in September and most analysts expect the number of jobless to swell rapidly.

OUTLOOK BLEAK

The grim economic outlook has worsened the already bitter conflict between the government and the opposition, who have so far failed to agree on a date for elections in ongoing talks brokered by the Organization of American States.

Each side accuses the other of being inflexible.

Many ordinary citizens say they are fed up with both sides after their livelihoods have become increasingly squeezed by the politically fueled recession and the opposition strike.

In the modern El Recreo shopping center, the owner of a mobile telephone outlet said he had lost the equivalent of around $35,0000 in December because the mall had closed in support of the strike. He, however, had opposed the stoppage.

Shopping mall owners said they had polled their shop tenants about whether or not to take part in the strike.

"I didn't sign up in support ... there was a tendency to go ahead without the participation of everyone," said the mobile phone salesman, who asked not to be named.

Although he initially considered suing the shopping center for his lost business, he decided against it in the end. "If I let go of this place, I lose out ... I'm going to soldier on with the stocks I've got left from December," he said.

Supporters of the government, including several lawyers, have created a nongovernment organization called "Victims of the Strike" to encourage citizens to initiate court cases against the organizers of the protest.

They say that people who feel their lives or businesses were materially damaged by the strike should seek compensation from the strikers in the courts.

"If the strikers had a real blueprint for the country, they should have put forward an economic program ... not halt everything and carry all of their people into bankruptcy," said Andres Giussepe, president of the Victims of the Strike group.

www.forbes.com Reuters, 02.13.03, 5:47 PM ET CARACAS, Venezuela, Feb 13 (Reuters) - Venezuelan state oil firm Petroleos de Venezuela (PDVSA) will withdraw $1.1 billion from the government's FIEM rainy-day savings fund to finance investment after a two-month opposition strike slashed its revenues, government representatives said Thursday. The government introduced the request Wednesday into the National Assembly and the measure could be approved next week, said government deputy Angel Emiro Vera, vice president of the assembly's finance commission. "We have to approve it in the next week," Vera told Reuters by telephone. Vera said PDVSA holds about $2.44 billion in the FIEM, which had total deposits of $2.58 billion on Feb. 11, according to the Central Bank. The proposed withdrawal would account for 42.5 percent of the total in the FIEM, created in the 1990s to hold state savings for use when oil revenues were scarce. Assembly member Ricardo Sanguino, also part of the finance commission, said the withdrawal was justified because the funds would be used for investment. The state oil firm, the economic engine of the world's No. 5 petroleum exporter, has been battered by the strike by thousands of its employees. The stoppage began by opposition leaders in December slashed the oil exports that account for half of the government's revenues. In December, the assembly approved a reform in the FIEM law which allowed PDVSA swifter access to its savings in the fund. Before the strike, aimed at pressuring Chavez into early elections, PDVSA produced 3.1 million barrels a day (bpd) of crude. But output has been cut to around 2 million bpd after workers walked out, according the government. Rebel oil workers, more than 11,000 of whom have been fired by Chavez for striking, say production is closer to 1.4 million barrels per day despite government efforts to restart the sector with troops and replacement crews. PDVSA is in the middle of a restructuring, which is part of the government's counter measures against the strike. PDVSA has been forced to import huge volumes of gasoline to offset severe domestic fuel shortages caused by the strike, which has paralyzed most of the nation's refineries. At the start of December, the firm invoked "force majeure" to avoid legal action in case it could not complete its contractual obligations due to the sharp slide in its production and revenues.

www.alertnet.org 13 Feb 2003 22:09

(Recasts with Gaviria comments, oil figures) By Phil Stewart

CARACAS, Venezuela, Feb 13 (Reuters) - After three months of tortured talks, the chief mediator in Venezuela warned on Thursday of a long, deadly road ahead if friends and foes of President Hugo Chavez fail to strike a deal quickly.

Organization of American States chief Cesar Gaviria said he would push for a nonviolence pact aimed at defusing the explosive divide in the world's fifth largest oil exporter.

At least seven people have been killed and scores injured in street clashes since December, as negotiations drag on.

"We are working with the wording to see if we can put out a declaration against violence, and the confrontational rhetoric, the hateful (rhetoric) that has prevailed in the country," said Gaviria, at a forum on the country's deep political crisis.

"Venezuela's recovery will be very long, very traumatic and also very difficult to bring to a good ending" without a deal soon, Gaviria said, warning "many more lives" could be lost.

Opponents of Chavez, who charge that his so-called peaceful revolution is a mask for Cuba-style communism, have demanded that he step down and agree to elections.

Chavez has refused and has accused his opponents of supporting a coup that briefly ousted him last year. He has hardened his stance in talks and has slowly eroded a 10-week-old oil strike aimed at forcing him from power by bankrupting the state.

The populist president, whose term ends in 2007, has fired more than 11,000 employees of the state oil firm PDVSA.

Negotiations to end the crisis began in November and are being brokered by Gaviria and backed by the United States, Brazil and four other nations.

OIL FLOW CUT

The flow of oil from Venezuela to the United States, which had been about 13 percent of all U.S. oil imports, has slowed dramatically during the strike. The stoppage has further jolted world oil prices, already reeling from war worries in Iraq.

Chavez said this week production was at about 2 million barrels per day (bpd) compared with pre-strike levels of 3.1 million bpd. The government on Thursday pegged exports at about half normal levels, or 1.3 to 1.5 million bpd.

Rebel oil workers put the output lower, at a modest 1.4 million bpd, and say exports are at about 1 million bpd.

Still, with oil exports limping along, and more than $11 billion in foreign currency reserves, analysts say Chavez can hold on for months even if the standoff deepens.

Chavez introduced sweeping price controls on Wednesday on everything from tomatoes to funeral services to shield the poor majority from spiraling inflation.

Opposition leaders warned that the new controls would further damage shopkeepers, many of whom shuttered their businesses for nearly two months as part of a general strike abandoned earlier in February. Capping wholesale prices will also hurt industry and farmers, already mired in recession.

"Is the desire to make everyone self-destruct? What this could do is shut down the country's productive sector," said Rafael Alfonzo, an opposition negotiator and business leader.

Chavez suspended foreign exchange trading on Jan. 22 before announcing controls to shore up international reserves and the bolivar currency. Trading was still closed on Thursday, leaving businesses starved of the much-needed U.S. currency in a nation that imports more than 60 percent of its goods.