<a href=www.vheadline.com>Venezuela Electronic News Posted: Wednesday, March 26, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: The state of the Venezuelan nation is chaotic. Unemployment is nearing 30%, while under-employment (street vendors and occasional workers) is about 50%.  Only 20% of the working population are receiving some sort of regular income, largely minimum wage ($130 per month at the current official rate of exchange and about $100 on the black market).

As a result, the crime rate has increased significantly, converting Venezuela into the second most violent country in Latin America.

Land and private property invasions are almost out of control, and even universities have been invaded by squatters (University of Carabobo). More than a month has gone by since currency exchange controls were introduced, without the first dollar having been sold by government due to lack of systems and faulty organization.

• In fact, rumors are that the measure will be lifted, as the government is not able to apply it and as it was illegally decreed to start with.

Industry ... whatever is left ... can not import required inputs. Food price controls have been established, often below production costs, already producing severe shortages, as no one can be obliged to sell below cost.

The oil industry is severely crippled, especially the refining sector ... which means that no gasoline and light product exports are being made, and that some 6 million barrels of gasoline have been imported to attend local demand ... at huge losses of some $35 per barrel for the government. The mood of citizens ... government followers and opposition alike ... is increasingly gloomy, as if the future had ceased to exist.

Venezuela is essentially paralyzed. The economy, cultural and educational life, the normal coming and going of citizens are at an all time low. A fundamental component of a healthy society has disappeared: Trust in the capacity of the Nation to move ahead and in the capacity of the political leadership to correctly diagnose and solve our fundamental problems.

I have little doubt that our main malady is political ... political conflict has been the source of economic and social deterioration. If we can install a stable political environment, we can put the country back on track. I agree with Daniel Burnett's recent article in which he says that ideology will not solve Venezuelan problems but, I suggest, a rational, pragmatic approach.

While ideology is mostly words, pragmatism could be mostly action with a clear purpose.

Ideological conflict has not been good for our country ... it has done little more than hardening the resolve of the adversaries and putting hate in many hearts. The house is divided and the house is falling. If we want to come out of this crisis we must do two things almost simultaneously: One, go to the polls to select a new political leadership; and, two, structure a program, as direct and simple as possible, to without delay address the half dozen or so of main issues which are forcing our country down the ladder of progress.

We will find that these issues are closely interconnected and that, eventually, they boil down to one: How to convert people into citizens, how to convert economic invalids into producers, how to convert social dead wood into motors of progress.

The main issues to be tackled could be:

How to gain the trust of the national and international community through transparency, clear rules of the game and a modern attitude towards government;

How to generate mass employment in a country with millions already used to depend on government handouts;

How to lay the foundations for a just distribution of national income instead of the immense waste of government income prevailing nowadays; How to decentralize effectively and aggressively;

How to complement petroleum income in the short term through a crash tourist development program;

How to install an education revolution (yes, here the word applies) to create skilled workers in two year programs and, at the same time, create good citizens, instead of a parasitic population.

We could start arguing that we also need this, and we also need that, but this would be precisely the way to do nothing.

I believe that a country does not need an enormous amount of laws, old and new, and great numbers of experts at legalese ... but rather needs citizens with a new attitude towards social solidarity.

Attitudes, not laws, make a society move forward.

Venezuela, I have said before, is a country of bulky and numerous laws ... but is also a country without law. Laws are to be read, interpreted, argued about and often serve merely to provide a living for lawyers. But the law is something that is born from within your heart and depends on your level of civilization. The more civilized we can build our society the less laws we will need.

The sermon on the mountain is less than one page long. The Venezuelan Constitution has 350 articles while England has no Constitution. What society is doing better?.

We have to go to the polls while we have a country and not a bunch of politically independent tribes ... led by regional warlords, roaming the territory which used to be Venezuela, as it was the case in the 19th century.

We have to go to the polls before we live in a country from which freedom and happiness have disappeared, the two ingredients for which our country has been best known, together with oil and beautiful women and sweet oranges and 200 kinds of ice cream

We have to go to the polls to conserve our racial and religious harmony.

I would not care less about who was the next Venezuelan President ... but I do care about what kind of person s/he will be. Personally, I hope it is a woman ... I have always got along better with women, anyway. In Venezuela they are the most successful ingredient of society. They are brave, they are courageous, they make decisions, they work hard, they have been shouldering the burden of family for many years now, while the men are getting drunk and discussing about the sex of angels, baseball or politics.

All I would ask the new President (or Presidenta) is to play clean, to tell us what we have to know, to be compassionate but firm, to inspire his/her people to strive for civic decency (greatness is too much to ask for), to listen before taking decisions, to explain fully to people the import of those decisions, to surround the Presidential office with the best, the brightest and the more honest, to ask when he, she does not know since no one knows it all, to be light-hearted but not a clown, to have self esteem but not to be in love with him/herself.

In short, to be a Statesman or Stateswoman ... not a entertainer. Entertainers belong to TV and vaudeville ... but to be a President(a) is a a great call that must be honored with decorum, with decency and with an impeccable personal behavior that can be an inspiration to the people.

We need a Referendum as soon as possible ... August is already pretty far away, but we should resist all legal or illegal maneuvers to extend the date.

Honest Venezuelans from all political sides will have to accept that voting is urgently required.

All those who love our country should support the Referendum and work to make it happen as soon as possible...

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

More Reuters, 03.26.03, 3:52 PM ET

CARACAS, Venezuela, March 26 (Reuters) - Venezuelan President Hugo Chavez threatened on Wednesday to challenge the Central Bank in the Supreme Court if the nation's top financial body did not cut current interest rates. Venezuela's government, struggling with a fiscal crunch after an two-month opposition strike disrupted its vital oil production, is scrambling to revive the recession-bound economy of the world's No. 5 petroleum exporter. Active interest rates -- the rates banks charge on loans -- range from 25 to 65 percent depending on the type of credit, according to the Venezuelan Banking Association. Chavez said the government had urged the Central Bank to consider cutting rates. "If they do not respond in a positive way, the government cannot just sit with its arms folded. If we have to go to the Supreme Court we will," Chavez told a conference of small-business owners. "Interest rates of about 45 percent just kill small firms. In Venezuela those rates should be about 30 percent," he said. In February firebrand leftist Chavez proposed introducing controls on commercial bank lending rates for the first time in seven years. But he has not followed through with those proposals. Venezuela's economy is mired in recession after contracting nearly 9 percent last year. The strike from December to January by oil workers and opposition groups failed to oust Chavez but further dented the economy. Oil provides about 50 percent of the government's revenues. Private sector activity has further stagnated since late January when the government introduced a strict foreign exchange control system, which has shut off access to foreign currency for more than 60 days.

<a href=www.phillyimc.org>Read more By John S. James

"Bolivarian circles" -- Venezuela's community groups of about 10 people each -- have grown from zero to over 200,000 groups in the last two years. The national coordinator of these circles explained the movement on March 19, 2003, in Philadelphia.

"Bolivarian circles" are grassroots groups of about 10 people each, focused mainly on local practical needs and with funding from the government. First proposed in 2001, these circles grew so rapidly that there were 2,000 in Venezuela by mid December of that year. By the time the U.S.-supported failed coup occurred almost a year ago there were 75,000 Bolivarian circles; now there are 220,000. The national coordinator of Venezuela's Bolivarian Circles, Rodrigo Cháves, spoke on March 19 at Robin's Bookstore in Philadelphia.

Cháves explained that the main goal of the government, under President Hugo Chávez, is to end the poverty of 80% of the population in the resource-rich country, the world's fourth largest exporter of oil. For example, 90 people a day die of heart disease, 80% of them with no treatment. And indigenous communities have particularly severe problems, with some having a 90% tuberculosis rate and producing no food; the people would die if the state did not give them food.

The circles are only one of various antipoverty initiatives; for example, a microfinance system makes loans directly to women and indigenous people without using intermediaries. There are many other projects to develop agriculture, fishing, construction, and other industries. Chavez said that traditionally, 80% of oil revenues had gone to the public and 20% to the expenses of the oil company. But by 2000, with corporate privatization and outsourcing, 80% of the revenue went to expenses and only 20% to the public. Education, also, is particularly important, especially since most people in the country never had a chance for leadership or meaningful participation in the society, a condition that must change if poverty is to be successfully addressed. Much of the leadership in these movements has been from women.

Rodrigo Cháves admitted that the government had made mistakes while inventing new ways to construct participatory democracy -- a task made difficult by lack of examples in other countries. He suggested that the Bolivarian circles may have grown too rapidly (from zero to over 200,000 in less than two years), and that the emphasis now should be on quality.

The talk was organized on three days' notice, and sponsored by Global Women's Strike and Robin's Bookstore.

Analysis

Venezuela is bitterly divided between the poor majority, mostly people of color, and a mostly white, corporate elite that fears loss of its privileges. Both sides have done very well in mobilizing mass support and getting people out to their demonstrations. Bolivarian circles are seen as part of a permanent mobilization to defend the democratic revolution under President Chávez. But they are not a political party, and focus mainly on practical issues like improving schools, infrastructure, or access to healthcare.

These circles are important because they bring people together for ongoing work on projects they themselves have chosen, with the help of government financial and other support. People get to know each other and learn how to work together, building widespread popular solidarity.

Could Venezuela's Bolivarian circles be a model for grassroots organizing in the United States? Not in the same way, because they depend on government funding that will not be available here. In this country the government overwhelmingly supports big business (and now, selected religions), not popular mass organizing. The U.S. has many nonprofits, but funding realities, excessive paperwork, legal restrictions, limited missions, and entrenched bureaucracies damage their effectiveness. It has a handful of affinity groups, but little organized effort to develop affinity groups as a general social movement, able to help in everyday practical problems (like getting people jobs and healthcare) as well as in demonstrations and civil disobedience.

We can learn from the Bolivarian circle movement that behind the noisy facade of events, the real fight is for widespread public engagement within everyday life. Organizations, movements, and communities become real through ongoing cooperative work on important, self-chosen projects for individual and public good. The key issue is how to build widespread human cooperation without starting with a lot of money.

For More Information

Here are two mainstream U.S. newspaper reports with details of what the movement is, and a more recent overview of Venezuela on Znet:

• The Washington Post, "Venezuela's 'Bolivarian Circles' Get a Direct Line to President," December 4, 2001 www.rose-hulman.edu

• The Christian Science Monitor, "Venezuelans Square Off Over 'Circles'," May 13, 2002 www.csmonitor.com

• Znet Venezuela Watch, "Chavez is On the Offensive: He Does Not Intend to Share the Fate of Salvador Allende or Michael Manley," February 2003 www.zmag.org

For much more information check search engines (such as www.google.com -- we found different viewpoints through that site). Be aware that most media in Venezuela, or coming from that country, is owned and controlled by a corporate elite furiously opposed to the Chavez government, and to the Bolivarian circles.

Read Source By Associated Press, 3/26/2003 15:31

CARACAS, Venezuela (AP) President Hugo Chavez said Venezuela needs to restructure its $23 billion foreign debt as it struggles with a severe cash crunch in the wake of a devastating general strike.

''Venezuela needs to restructure its external debt, which is very heavy,'' Chavez said Wednesday in a speech to business owners. He did not elaborate.

Venezuela's foreign debt amounts to 37 percent of its $63 billion economy. The country faces payments of $5 billion this year to service its foreign debt, Chavez said.

The president also urged the Central Bank to lower interest rates, which he said averaged 50 percent. He said he would ask the Supreme Court to order the Central Bank to act if it didn't do so on its own.

Venezuela lost $6 billion during an unsuccessful two-month strike to demand Chavez's resignation or early elections, according to government estimates.

The walkout paralyzed Venezuela's oil industry, the world's fifth largest exporter and source of half of public revenue. Tax collection, the source of most of the remaining government income, also fell as thousands of businesses and the stock market closed.

Oil production is recovering. The government estimates production is more than 3 million barrels a day almost normal while strike leaders put it at 2.4 million barrels.

Private economists estimate Venezuela's economy could shrink up to 40 percent in the first three months of the year. It contracted almost 9 percent in 2002.

<a href=ogj.pennnet.com>Oil & Gas Journal Paula Dittrick Senior Staff Writer

HOUSTON, Mar. 26 -- Crude oil futures slid on the New York Mercantile Exchange Tuesday afternoon as news broke about an uprising against Iraq President Saddam Hussein in the southern Iraqi city of Basra.

Iraq's information minister denied the uprising report, but a British military official told Reuters news service that early signs suggested an uprising was under way. "We will be very keen to capitalize on it," the official told Reuters.

Analysts said the uprising renewed their previous hopes for a relatively short war in Iraq, and they noted that oil prices could have fallen more drastically had it not been for concerns regarding the civil strife in Nigeria's Niger Delta region.

The shutting of reportedly nearly 40% of Nigeria's oil output stemming from a military-tribal clash supported oil prices. Analysts are concerned about the impact on crude supplies from both Nigeria and Iraq.

United Nations officials said Tuesday that Iraq's official oil exports for the week ended Mar. 21 dropped to 443,000 b/d from 1.8 million bbl for the previous week.

Meanwhile, US Sec. of Energy Spencer Abraham has said world oil production remains steady. Energy Information Administration data showed production from the Organization of Petroleum Exporting Countries as of Mar. 20 was 26.5 million b/d, only slightly lower than the November 2002 figure of 26.9 million b/d.

"We appreciate the continued commitment by oil-producing countries to ensure stability in the world oil markets," Abraham said.

PDVSA Paraguana refining complex Venezuelan oil company Petroleos de Venezuela SA Monday reported an explosion in the Paraguana refining complex during an attempted restart of the Cardon refinery's delayed coking unit.

The Caracas-based Petroleumworld reported that PDVSA was trying to restart Cardon refinery's 100,000 b/d delayed coker and other units that were shut down during the nation's general strike against President Hugo Chávez.

Venezuela was the world's fifth largest oil exporter before the strike, and Paraguana has been an important source of gasoline imports for the US. A PDVSA spokesman told Reuters that the 100,000 b/d cracker at the Amuay refinery in the Paraguana refining complex was functioning again as of Mar. 12. The cracker is Amuay's biggest gasoline-producing unit.

Market prices The May contract for benchmark US light, sweet crudes fell by 69¢ to $27.97/bbl Tuesday on the New York Mercantile Exchange. The June contract was down $1.08 to $26.46/bbl.

Refined products also closed lower. Heating oil for April delivery plunged 4.88¢ to 73.49¢/gal. Unleaded gasoline for the same month dropped 1.30¢ to 88.49¢/gal.

The April natural gas contract lost 17.6¢ to $5.077/Mcf Tuesday on NYMEX. In Tuesday afternoon trading, the market followed crude oil futures on news of the Iraqi uprising.

"Natural gas futures broke below the $5.08 technical support level, which could send prices down into the mid-$4 range. However, if the market levels off at about $4.92, it could turn around and bounce right back," said analysts at Enerfax Daily.

The April contract expires Thursday. Meanwhile, most of the nation is experiencing mild weather, which traders said should limit the cash market upside for the near term.

The May contract for North Sea Brent oil lost $1.28 to $24.81/bbl Tuesday on the International Petroleum Exchange in London. The day's high was 26.92/bbl and the low was $24.60/bbl. The April natural gas contract gained 2¢ to the equivalent of $2.75/Mcf Friday on IPE.

The average price for OPEC's basket of seven benchmark rose by $1.14 to $26.84/bbl Tuesday.

Contact Paula Dittrick at Paulad@ogjonline.com.