www.theage.com.au February 22 2003 By Owain Johnson Caracas

Venezuela's opposition has accused President Hugo Chavez of beginning a witch-hunt against his critics, after a leading opposition figure was arrested in a dramatic raid and another was forced into hiding.

Henry Ramos Allup, president of the opposition party Democratic Action, said he had reliable information that the Government planned to arrest a further 25 key opponents. He said the list included politicians, businesspeople, union leaders, representatives of striking oil workers and media bosses.

The claim came after the arrest of Carlos Fernandez, the leader of business association Fedecamaras, in a swoop on a Caracas restaurant by masked, armed police just after midnight on Wednesday. Mr Fernandez was a leader of a crippling two-month general strike that forced Venezuela to suspend crucial oil exports and severely damaged its fragile economy.

According to witnesses, the heavily armed men did not show identification or an arrest warrant. Mr Fernandez tried to escape in his car but was quickly caught and taken to police headquarters. Diners who tried to stop the arrest were driven off by the police, who fired into the air.

Mr Chavez spoke about Mr Fernandez's arrest at a trade forum on Thursday: "I went to bed with a smile. One of the coup plotters was arrested last night. It was about time, and see how the others are running to hide."    advertisement       advertisement

A second leader of the general strike, Carlos Ortega, president of the Confederation of Venezuelan Workers, was in hiding yesterday with a warrant out for his arrest.

He said he did not trust Venezuelan justice and warned that the Government wanted "to kidnap me and eliminate me".

A pro-Government deputy, Luis Velasquez, later confirmed that 100 people could expect to be questioned about their role in promoting the strike. "This shouldn't be a source of alarm," Mr Velasquez said. "They simply have to answer to the courts."

The Government had asked the public prosecutor's office to charge Mr Fernandez and Mr Ortega with rebellion, treason, instigation to commit criminal acts, conspiracy and sabotage.

Mr Fernandez's arrest took place just days after the discovery of the bodies of three dissident soldiers and a young woman, who had disappeared over the weekend. The four victims, who had been shot dead, were found bound and gagged. Their bodies showed injuries consistent with torture.

The three men were part of a group of rebel officers who have declared themselves in rebellion against Mr Chavez, and their families immediately condemned their murders as politically inspired.

The opposition was due to hold crisis talks late Thursday to discuss its response to these latest developments in Venezuela's long-running political crisis. Last April, dissident military officers launched a short-lived coup.

Mr Chavez's opponents accuse him of authoritarianism and of seeking to install Cuban-style socialism in Venezuela. The President rejects these allegations and accuses his critics of seeking to prevent him carrying out much needed social reforms.

A senior opposition figure, Andres Velasquez, leader of the Radical Cause party, has urged his colleagues to call a further one-day strike to protest against the arrest of Mr Fernandez.

Mr Velasquez said the arrest had "torn into pieces" the accord reached on Tuesday by the Government and opposition to ease tension in the oil-rich country. The accord was the first tangible sign of progress in three months of negotiations between the two sides under the auspices of the Organisation of American States.

Mr Velasquez said the opposition leader's arrest was "an insult" to OAS secretary-general Cesar Gaviria, who chaired the negotiations and had left Caracas only hours earlier.

• Guardian

www.vheadline.com Posted: Friday, February 21, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: I have recently received two letters on a similar subject ... both sent to VHeadline.com. One is from Keith Davis from the Bolivarian Fund. The other is from Paul Volgyesi, who writes frequent letters.  Mr. Davis' letter comments on my editorial "A Government that does not Govern" while Paul's letter comments on my "Corruption in the times of Chavez."

Keith Davis claims that the definition of a legitimate government sounds good and noble but is "not realistic," adding ... to prove his point ... that overwhelming consensus was not present in Bush's economic proposals.

Davis did not read my piece well since I talk about the need for overwhelming consensus on the legitimacy of the system, not on every policy followed by government.

What I said is that there is far from overwhelming consensus on the legitimacy of Chavez' government. In fact, there seems to be overwhelming consensus on its illegitimacy, after four years of disastrous performance and increasing contempt for democratic procedures.

Davis says that an effective bureaucracy can be "a blessing or a curse." Frankly, I will run that risk any time since I can not see how an effective bureaucracy can be a curse, while in the Venezuela of Chavez I clearly see how an ineffective bureaucracy is definitely a curse.

The example given by Davis about the PDVSA bureaucracy swelling with political patrons shows that he is not well-informed about this subject. Politicization of PDVSA is taking place now ... of the worst kind, since the people coming into the company now is a "lumpen" without the slightest idea of what a petroleum company is all about.

To claim, as Davis does, that the old PDVSA increased production to glut the world markets, shows considerable ignorance of the subject matter, since Venezuelan production lacks the punch to "glut" world markets.  When the oil price fell to $7 a barrel, all OPEC producers were overproducing.

Control over the military is a pre-requisite of a democracy. In April last year the military ousted Chavez and another military group put him back in. Today, the only support left to Chavez is that of a small group of the military which, however, concentrates most of the fire power. The Generals leading these groups are on Chavez's payroll but the arrangement is fragile. The important concept is that we can not have a civilized country when the President is the puppet of a small group of Generals.

The second section of the letter gets less easy to understand.

Mr. Davis feels that I should suggest replacements to the scoundrels who make up today's Chavez cabinet ... but, who am I to suggest such a thing?  Chavez has selected them, no others ... they are the ones Chavez likes.

What I said is that Venezuela has many distinguished men and women who could accompany a President in the tasks of government. But, I also said that Chavez is not interested in the best but in the most servile ... he despises the best, probably because he sees them as the type of people he can not hope to be.

Mr. Davis seems to believe that Chavez would pay attention to my suggestions for replacement of the gallery of horrors that he has built.  Who is being naive?

On the other hand, I have to say that no decent Venezuelan would accept a cabinet position in a Chavez' government. This, Mr. Davis, is a matter of principle.

Mr. Davis seems to believe that I shared government responsibilities in the past. I have never been a politician ... always a manager ... never had a political appointment, except for three months as Secretary of State in Carabobo, in a career of 35 years. The tragedies of mismanagement in Venezuela did not happened "on my watch," as you mention.

Two final observations.

One, Chavez has never attempted reconciliation. Second, my job today is that of a critic of this grotesque government. This is the way I feel I can best  serve my country. This is what I will continue to do. I am amazed at your offer to "finance half the cost of rebuilding the school system of Venezuela." You must have great financial power. But, you see, Mr. Davis: Education is not a matter of money but of values and manners. A bunch of gorillas with millions of dollars can only produce a society of more numerous gorillas. So, Thank you for your offer but, no thanks.

The letter from Paul Volgyesi is more compact and easier to read. It is also kinder although Mr. Davis's letter was not aggressive. He starts by saying that I am "a lonely voice of the decent opposition." Not true. The decent opposition runs into the thousands, dear friend. My activities, I would like to think, are an asset to my country, not to Chavez. I have dedicated years to fighting corruption, but I do not believe Chavez is interested in doing that. In four years he has not done it. It is theoretically true that I do not have to like Chavez to help Chavez to govern. But the problem is deeper than that. More than liking or disliking, this is an issue of values.  My values are different from Chavez's. How can I help him if this means betraying my values?

Dear Paul, I wish I could tell Chavez that his place in history depends on the zeal with which he engaged in a fight against corruption ... and I wish he listened. The problem is that he does not listen. The problem is that he has used his time pursuing other objectives. The problem is that he is not the man to put this country right.

I appreciate the way you treat me in your letter, with velvet gloves. This is encouraging to me as it means that you believe in my sincerity even if you do not agree with my opinions.

This is not always the case. I can assure you that I want a true democracy for Venezuela, one in which the President will be a President for all, without hate in his heart. I want to see independent institutions ... honest and courageous political leaders. I want to see education as the cornerstone of the fight against poverty, rather than handouts. I want to see a concerted action among members of society to minimize the tragedy of street children.

But, most of all, I very badly miss the country we had before Chavez ... a country in which we could all smile to each other.

• I do not say that that country did not have to be put right.

I am saying that to put that country right, we did not have to include hate and resentment and distrust into our social equation.

Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.vheadline.com Posted: Friday, February 21, 2003 By: Robert Rudnicki

US investors are believed to be growing increasingly concerned about the situation in Venezuela following the arrest of Venezuelan Federation of Chamber of Commerce & Industry (Fedecamaras) president Carlos Fernandez. Reuters quoted MFS Investment portfolio manager Mark Dow as saying "Chavez has won and it appears he is consolidating his hold on power."

Dow went on to question recently imposed foreign exchange controls and the current weak fiscal position, speculating that the government may be setting the stage to print money to cover public sector borrowing requirements, a move which could drastically effect inflation.  He says "it is almost impossible that Chavez' economic policies will work, so the non-oil economy will continue to deteriorate."

reuters.com Fri February 21, 2003 07:41 AM ET By Tom Ashby

LONDON (Reuters) - World oil prices rebounded on Friday toward two-year highs as the United States said it had massed enough troops in the Gulf to attack Iraq, the world's eighth largest oil exporter.

Defense Secretary Donald Rumsfeld said more than 150,000 troops were ready to move on Baghdad if Washington decided to attack, while Turkey and the United States moved closer to a deal over troops.

International benchmark Brent crude oil rose 41 cents to $31.97 a barrel, versus a two-year high of $33.10 hit last week. U.S. crude futures climbed 47 cents to $35.21.

"Oil prices are unlikely to shift too far away from a continuing upward bias until the situation with respect to Iraq moves to a more decisive phase," said Paul Horsnell of investment bank J.P. Morgan.

The global oil market had slipped on Thursday on U.S. data showing an unexpected recovery in U.S. commercial crude oil stocks from their lowest levels in 27 years.

But prices are still some 50 percent up in three months as the market has absorbed the threat to Iraq's two million barrel per day of exports.

Turkey held out hope for a late "aid for bases" deal with the United States that would allow Washington to deploy tens of thousands of troops on Turkish soil for a possible invasion of Iraq. "There is mutual understanding," Prime Minister Abdullah Gul said.

HEATING OIL RUNNING LOW

Blistering cold weather in the northeastern United States has also boosted demand for heating oil in a world market that is otherwise suffering from slow growth.

Commercial U.S. stocks of heating oil are running at almost 31 percent below last year, latest official data shows.

Inventories have also been crimped by a cut in supplies from Venezuela, which is struggling to restore normal exports after 10 weeks of strike by key oil company employees.

Venezuela, the world's fifth largest exporter before the strike, is now pumping about half its normal three million barrel per day rate.

TotalFinaElf chief Thierry Desmarest said on Friday he expected oil prices to rise further if the United States went ahead with war on Iraq, but said OPEC would easily be able to cover for any interruption in Iraqi supply.

Desmarest predicted prices would rise for a few weeks if the U.S. launched an assault against Baghdad but then fall in the second half of the year because of slow growth in global oil demand.

Washington plans to propose a new resolution to the U.N. Security Council next week authorizing a strike against Baghdad.

But the United States, backed by ally Britain, is likely to face strong opposition from France, Russia and China, who want U.N. arms inspectors to be given more time to search for Iraq's alleged stockpiles of biological, chemical and nuclear weapons.

Baghdad denies it has such weapons.

www.mpa.gr Thessaloniki, 21 February 2003 (12:44 UTC+2)

There will be significant consequences on the global and European economy (decrease in production and exports, increase of inflation) if there is a military intervention in Iraq, according to the appreciation of Greek Petroleums' consultant Giorgos Halvatzoglou, who did not rule out the possibility of oil prices doubling if the crises lasts. However, as he stated to the mpa.gr, the consequences of a crisis will not have the same effect on Greece, mainly due to its energy reserves, which can cover its needs for more than 90 days. “The import percentage of oil to Greece from Iraq is under 10%”, stated Mr. Halvatzoglou, and added that the greater percentage of oil imports are from Russia, Libya and other countries. Besides, he noted that the volume of oil exported from Iraq is determined by the UN and that the end of the crisis in Venezuela will play an important role in balancing the market. Regarding the informal EU Energy Minister's Meeting on Saturday, he characterized it as an important initiative of the Ministry of Development for the promotion of a common management policy for energy and the effort to form a observation post which will watch over developments in the global market and form the choices of the EU. He also mentioned that the possible participation of OPEC's Secretary General in the meeting, could lead to commitments from the side of the Organization for increases in the productivity of its member-states, if it is deemed necessary. According to Mr. Halvatzoglou, the EU's energy dependence has already made it turn to the use of alternative power sources, friendly to the environment, such as natural gas and wind powered energy production, at 20% of the total energy produced. Furthermore, he characterized the initiative of the Greek Ministry of Development to form a body for the control of fuel circulation especially useful to the Greek market. “The checks seem to be working, as smuggling and mixing of fuels has dropped and prices and quality are held at the same level”, he said. On Greece's role in the Balkans regarding energy transportation towards Europe, he supported that their strategic position will prove as even more of a hub, both for oil and natural gas pipelines, as well as electricity distribution from Asia and Africa.