www.vheadline.com Posted: Monday, February 17, 2003 By: Steve Ellner Universidad de Oriente economics professor Steve Ellner writes: As the general strike against President Hugo Chavez entered its third week in early December, a major TV channel broadcast statements by baseball hero Andres Galarraga and other celebrities calling on Venezuelans to put aside differences for the sake of peace. What was significant about the TV spots was that the channel, along with the rest of the Venezuelan media, has played a key role in promoting the strike as well as marches and acts of civil disobedience sponsored by the opposition. Gala raga's plea -- made beside a statue of the Virgin Mary -- reflects the conviction among the nation's 50% who are neither pro-government nor pro-opposition that Venezuela is on the brink of civil war.

Chavez counts on active support among popular sectors, specifically those lacking steady employment and labor benefits of any kind, who make up more than half the work force. He also counts on a more loyal armed forces than this past April, when a group of officers removed him from office for forty-eight hours. On the other hand, his radical rhetoric favoring the poor over the "privileged" has alienated the middle class, despite his recent efforts to create his own movement called "the positive middle class." The middle- and upper-class eastern part of Caracas has solidly supported the strike and its mobilizations.

While the success of the strike call has been at best mixed in commerce, public education, public transportation and the steel and aluminum industries, a large majority of administrative employees and executives of the all-important state petroleum company PDVSA (the fourth-largest US oil supplier and owner of Citgo) responded positively, as did many in charge of fuel transportation. When delays in gasoline distribution produced three-hour lines at the pumps on December 18, the government decreed that private trucks carrying fuel and food could be taken over and run for the duration of the conflict. Carlos Fernandez, president of the main business organization Fedecamaras, called the measure a "violation of property rights." A point of honor of the pro-Chavez movement is 100% state ownership of PDVSA, incorporated into the nation's new Constitution in 1999.

The opposition's militancy dates back not to 1998, when Chavez was elected President, but to 2001, when he radicalized his government by prioritizing economic and social reform. In November of that year he passed agrarian reform and legislation prohibiting private control of joint ventures for oil exploitation. Fedecamaras reacted by calling a one-day general strike. The business organization was joined by the main labor federation, the Confederation of Venezuelan Workers (CTV), whose leadership Chavez refused to recognize on the grounds that it had held fraudulent internal elections. Since then the CTV and Fedecamaras have called three more general strikes, including the one in April that led to the abortive military coup.

One unique feature of the general strike that began on December 2, is the absence of any demand other than the removal of President Chavez, either by resignation or immediate elections. All rhetoric is reduced to one simple message: Chavez must go. Recently, CTV president Carlos Ortega began calling Chavez "the dictator." Every evening Ortega and Fernandez sit next to each other and read a statement summing up the day's strike activity, which is broadcast live on the nation's four major TV channels. This prolonged cozy relationship between labor and management, in which all demands are subordinated to the government's ouster, is also a rarity for Latin America, if not the world.

Chavez has offered to hold a recall election in August, in accordance with the 1999 Constitution. But opposition leaders are unwilling to wait, claiming that by August, Chavez will have further consolidated his control of the armed forces by favoring his military loyalists with promotions. According to government supporters, the real reason is that the opposition wanted Chavez out by January 1, the date of Lula's presidential inauguration in Brazil, which, along with the recent election of leftist Lucio Gutierrez in Ecuador, fortifies Chavez' position. Both Lula and Chavez place anti-neoliberalism at the top of their agenda rather than promoting such radical visions as socialism, an approach now shared by many leftists throughout the continent. The two favor a government that plays a strong role in the economy in favor of economic development and social justice rather than bowing out to the private sector.

These explanations are just part of the story. A more decisive factor is the built-in vulnerability of the opposition. A political opposition based exclusively on attacking the head of state without presenting demands, proposals or alternatives tends to lose steam over time. The political parties of the opposition were discredited by the rampant corruption and economic contraction of the twenty years before Chavez' election. Now the media, Fedecamaras and the CTV have displaced them as key actors, a role that is unnatural and discredits them as time goes on. The CTV's alliance with the business sector is widely criticized even by those opposed to Chavez.

The US and Spanish governments were practically alone in welcoming the April coup against Chavez. While Spanish Prime Minister Jose Maria Aznar continues to support the Venezuelan opposition in its call for immediate elections, Washington has in recent months maintained an officially neutral position, despite the National Endowment for Democracy's generous funding of opposition groups over the past several years. Thus the United States now defers to the Organization of American States, whose secretary general, Cesar Gaviria, has brought both sides to the table in an attempt to work out a solution to the impasse. Only by Washington's adherence to this position, and its avoidance of its earlier, misguided endorsement of antidemocratic forces, can Gaviria's commendable efforts be given a chance.

Steve Ellner is professor of economic history at the Universidad de Oriente in Venezuela, where he has taught since 1977. His many publications include The Latin American Left: From the Fall of Allende to Perestroika (coedited) and Venezuela's Movimiento al Socialismo: From Guerrilla Defeat to Electoral Politics. He is author of Venezuela: Tarnished Democracy and coordinating editor of Post-Bonanza Venezuela, a special issue of Latin American Perspectives. He is also co-editor of Venezuelan Politics in the Chavez Era: Class, Polarization and Conflict, recently released by Lynne Rienner. You may email him at esteve74@cantv.net

www.bday.co.za

LAGOS - A threatened strike by Nigerian white-collar oil workers appeared to pose little threat to production or exports, amid conflicting claims over whether it had even begun.

The west African nation is the world's fifth largest oil exporter, and the strike warning had added to the fears of an industry already beset by political crises in Venezuela and the Middle East.

The PENGASSAN oil workers' union last week warned that strike action over pay by staff who supervise the loading of petroleum products at oil terminals could have a "biting effect" on exports.

On Monday, spokesmen for oil giants Shell and Mobil and the Nigerian national oil company (NNPC) tsaid that all operations were unaffected.

Emmanuel Agabir, spokesman for the oil ministry, said: "They're not going on strike as at the moment. I think they're going to hold some discussions."

But the secretary general of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Kenneth Narebor, said some workers at the oil companies' administrative headquarters had walked out on strike.

"From the reports I have now, it's started," Narebor said.

PENGASSAN called strike action for workers from Nigeria's Department of Petroleum Resources, who claim that they have still to be paid allowances for 2002 and had received December's salary a month late.

The workers oversee the various joint ventures between the NNPC and the oil multinationals which exploit Nigeria's rich fields, and was not clear whether they could significantly disrupt production.

Agabir said that he thought a strike would have little effect, in spite of the warnings from the union.

International oil prices are already at around their highest level in two years amid fears that a US-led attack on Iraq could disuript Middle East production and as strikes disrupt Venezuelan exports.   AFP

www.sun-sentinel.com by Doreen Hemlock Business Writer Posted February 17 2003 These are trying times for tourism executives in the Caribbean. Just ask Edison Briesen, tourism minister for Aruba, the Dutch island off Venezuela's coast that depends on overseas visitors for its livelihood. Briesen has been working overtime to counter a triple whammy: A global economic slump that has pummeled world tourism since early 2001. A drop in U.S. tourism abroad after the Sept. 11, 2001, terrorist attacks. And recent political turmoil in Venezuela that has slashed travel from that neighboring nation, long Aruba's No. 2 source of tourists. Yet even after Aruba managed to spend more on tourism marketing and arranged flights from new cities, the island suffered a 7 percent drop in overnight stays last year. That's about half of the average 14 percent drop in overnight arrivals to the Caribbean as a whole, but still represents a serious hit for the island economy, he said. "And now the threat of war in Iraq hangs over us as a Damocles sword," said Briesen, concerned that war may further throttle the world economy and overseas travel. No other world region feels the tourism pain as sharply as the Caribbean, because none depends so heavily on tourism. The travel industry accounts for roughly 30 percent of the Caribbean's economic activity and one in four jobs in the region of more than 30 million residents. Briesen said Aruba has tried to confront the challenges by boosting its marketing budget by several million dollars a year, even tapping the reserves of the government-owned telecom company to scrape together funding. It's spread the marketing dollars out to nontraditional markets including the U.S. Midwest, Scandinavia and Brazil. Plus, it's working more closely with airlines to lure flights from more cities, with Continental Airlines to start service from Houston in June. "It's tough," Briesen said. "Sometimes you don't have the financial means to do what you want." Still, Aruba has a somewhat easier task than other Caribbean destinations. The small, relatively affluent island of 100,000 people depends mainly on an upscale clientele, less affected by recession. The average room rate for its roughly 7,300 hotel rooms now tops $150 a night, without meals, and promotions target travelers with household incomes of at least $100,000 yearly, Briesen said. Destinations with far more hotel rooms and greater reliance on mass travel, such as Dominican Republic, have been harder hit by recession and forced to discount more. Even so, Aruba recognizes its role within the wider Caribbean, taking part in an ongoing ad campaign on U.S. TV touting the region as a single travel destination. Ideally, Briesen said he'd like to see even more aggressive regionwide marketing and more multi-destination packages, much as Europe offers. Yet short term, there's little relief in sight to the multiple challenges. Tourism analysts forecast it will take at least until next year -- or possibly 2005 -- until the Caribbean as a whole can recoup the levels of overnight stays posted in 2000. That means trying times for Briesen and his colleagues for many more months to come.

europe.cnn.com Monday, February 17, 2003 Posted: 1206 GMT

Demonstrators in Berlin take part in global anti-war protest at the weekend

BERLIN, Germany (Reuters) -- Only an end to tensions over Iraq could counteract a downturn in the global economy whose recovery slowed noticeably towards the end of last year, Germany's central bank said on Monday.

The Bundesbank said Germany saw a slight contraction in gross domestic product in the fourth quarter of last year, but it did not expect a recession -- defined as two successive quarters of economic shrinkage -- as there were recovery signs.

The central bank warned in its February monthly report that a prolonged conflict in Iraq would lead to sharper falls in world growth.

"The global economic recovery slowed noticeably in the autumn of 2002; in the group of industrial nations it even stood still. There was little change in this picture at the end of the year,'' the Bundesbank said.

The prospect of a war in Iraq and disturbances in Venezuela had led to a significant rise in oil prices which, combined with lower stock prices, dragged down growth.

Economic gloom would lift only when confidence improved.

"Reducing geopolitical tensions is unavoidable in this.... A longer (Iraq) conflict would result in a continuation of a higher oil price and renewed global slowdown.''

"The recent rise in the value of the euro is less an expression of the economic strength of the euro zone, it is much more the result of negative factors hitting other currencies,'' the report said.

German economy almost stagnant

The Bundesbank said Germany, Europe's largest economy, was effectively treading water in the final months of last year and fourth-quarter GDP shrank very slightly versus the previous quarter.

"By our initial reckoning, real GDP in the fourth quarter of 2002, excluding seasonal and calendar effects, was somewhat lower than in the previous three months,'' it said.

Year-on-year, fourth-quarter GDP was up around 0.5 percent, according to Bundesbank calculations, in line with forecasts that average gross domestic product in 2002 rose by 0.2 percent.

However, some leading indicators were pointing to a gradual recovery in Germany and the Bundesbank did not expect Germany to slip into recession.

"Increasingly signs from surveys of firms and industrial orders allow hope that the German economy will bottom out in the early months of this year. This is particularly true of industry,'' the Bundesbank said.

Production in the final quarter of 2002 was particularly affected by holidays, while cold weather hit construction hard.

"The economy has been in a phase of quasi-stagnation for over two years now. Global slowdown contributed to this and, additionally, Germany is particularly intensively involved in international trade,'' it said.

The central bank said the current slowdown could not be explained solely by cyclical factors and reform was needed.

"Home-made reasons are coming to the fore more and more, such as labour market rigidity, high tax and social contributions or lack of incentive in the social security system,'' it said.

"Insecurity about economic policy has also hit basic sentiment in economy,'' it said.

The central bank said the government had taken the first steps to reform the labour market by introducing reforms, such as those of the Hartz Commission. "However, introducing these will take time.''

The head of Germany's respected Ifo economic research institute said separately on Monday that he saw little scope for German recovery in 2003 even if no war erupts over Iraq.

"I think we can no longer expect the much desired recovery in 2003, but only a sluggish and dragged out improvement -- in a best case scenario,'' Hans-Werner Sinn, head of the think tank told Italian daily La Stampa in an interview.

Ifo's key business sentiment indicator rose for the first time in eight months in January, but Sinn said when the report was released late last month that it would be premature to say Germany's economy had turned the corner.

When asked what Germany must do at this current time of risk, Sinn added his voice to calls for reforms.

reuters.com Mon February 17, 2003 06:27 AM ET By Tom Ashby

LONDON (Reuters) - OPEC oil exporters will probably agree temporarily to suspend output quotas and pump at will if an attack on Iraq halts exports from the world's eighth largest exporter, an OPEC source said on Monday.

After two OPEC output hikes this year, only Saudi Arabia and perhaps United Arab Emirates have the capacity to make more supply available to world markets immediately.

"One or two countries could volunteer to make up for the loss of supplies should war start on Iraq, but they would need the blessing of other members," the source said, asking not to be named.

"It would be a temporary exemption, just as long as it takes to compensate for the loss and to cool off the market," he added.

The Organization of the Petroleum Exporting Countries, which is due to hold a policy meeting on March 11, is already raising output to cover for an unexpected cut in strike-hit Venezuela, and would be pushed to full capacity if Iraq also stops. Rich nations which rely on OPEC oil for their huge import needs are watching OPEC policy closely, with a view to releasing oil from their massive emergency stockpiles if any severe shortage occurs.

After any war, the source said OPEC would return to the current production ceiling of 24.5 million barrels per day (bpd).

If war has not broken out before OPEC ministers meet, the source said the cartel would probably make no change in the 24.5 million bpd ceiling.

"Until war starts, there is nothing more they can do. More production can't cool prices. They are high because of war hysteria," the source said.

The cartel of mostly Middle Eastern states is committed to covering any supply disruption to the limit of its capacity.

Oil industry analysts estimate that Saudi Arabia and UAE combined have about two million barrels per day (bpd) of spare oil output capacity, roughly equivalent to Iraq's current exports.