world.scmp.com Monday, January 20, 2003 VENEZUELA PASCAL FLETCHER of Reuters in Caracas

Updated at 10.57am: Venezuelan President Hugo Chavez overnight (HK time) named two loyal generals to top security jobs and said he was ''winning the war'' against opposition strikers who have crippled the country's vital oil industry for seven weeks.

The left-wing president, who has used troops to counter the strike, ruled out talks with opposition leaders who are trying to force him to resign and hold early elections.

Hardening his stance against the strikers, he repeated a threat to withdraw from peace talks with his foes being brokered by the Organization of American States. The talks have made little progress in more than two months.

''We are winning this oil war,'' Mr Chavez said, speaking on his weekly ''Hello President'' television and radio show.

The strike has slashed output in the world's number five petroleum exporter. It has also caused serious shortages of gasoline, cooking gas and some food items, sparking looting in some provincial towns and villages.

But Mr Chavez, a former paratrooper who was elected in 1998 and survived a coup last year, said his Government was making progress in restarting strike-bound oil fields and refineries.

Chavez named General Lucas Rincon, a former defence minister and ex-armed forces chief, as interior and justice minister and General Jorge Garcia Carneiro, as the new chief of the army - the most powerful branch of the armed forces.

Both generals are close allies of Mr Chavez, who has used the armed forces to take over strike-hit oil installations and, more recently, to raid food plants he accuses of deliberately hoarding goods to support the strike.

Since a short-lived coup against him in April, the president has purged his opponents from the military and is now doing the same in the strategic oil industry. Some 2,000 striking oil executives and employees have been fired.

In a move that drew howls of outrage from Mr Chavez's foes, National Guard troops on Friday broke into two private drinks manufacturing facilities. One was a local bottling affiliate of Coca-Cola and the other a storage plant belonging to Venezuela's biggest private company, Empresas Polar.

Mr Chavez overnight accused a US-controlled technology company, Intesa, of joining what he called a campaign of sabotage by the opposition strikers in thestate oil giant PDVSA.

Intesa, 60 per cent of which was owned by the US company Science Applications International Corporation (SAIC), had been responsible for running PDVSA's computer systems which Mr Chavez said were deliberately blocked and disrupted in the strike.

''The Intesa executives didn't want to co-operate... We'll have to rescind that contract... We're nationalising the brains of our oil industry,'' the president said.

Opposition leaders said Friday's (overnight Saturday, HK time) raids against the drinks firms were an attack on private property. They accuse Mr Chavez of trying to introduce Cuba-style communism in Venezuela.

Cuban President Fidel Castro overnight defended his friend and political ally Mr Chavez, praising him as a ''firm, good and intelligent man who is not going to abandon his people''.

Speaking in the eastern Cuban city of Santiago de Cuba, Castro said Mr Chavez's striking opponents were being defeated.

But the Venezuelan strikers on overnight vowed to continue their protest shutdown, extending it into an eighth week.

The strike at PDVSA has jolted world oil markets and cut off exports to the United States, which normally imports over 13 per cent of its oil from Venezuela.

Rejecting opposition reports that the strike-hit oil industry was still in the doldrums, Mr Chavez predicted that output could reach 2 million barrels per day (bpd) - two thirds of pre-strike levels - by the end of January.

He put current production at close to 1.2 million bpd. Striking PDVSA executives say output is around half of that.

Mr Chavez acknowledged that availability of gasoline was still ''critical,'' although he promised this would improve. Long lines formed outside gas stations across the country.

''We can't dialogue with terrorists,'' Mr Chavez said, adding his Government was considering quitting the talks with opposition negotiators chaired by OAS Secretary General Cesar Gaviria. The negotiations had been due to resume overnight on Tuesday.

Latin American leaders this week created a six-nation ''group of friends'' to support Mr Gaviria's efforts to solve Venezuela's political crisis. The group comprised the United States, Brazil, Chile, Mexico, Spain and Portugal.

But Chavez has said the group should be expanded to include nations such as China, Russia, Cuba and France.

www.wsws.org By Patrick Martin 20 January 2003

Leaders of the right-wing umbrella group seeking to overthrow Venezuelan president Hugo Chavez have dropped their demand that Chavez resign immediately as a condition for calling off the business shutdown that has dragged on for more than six weeks.

Representatives of the Democratic Coordinator also suggested that doctors, restaurant owners and other small businessmen were free to end their participation in the so-called general strike that began on December 2. Rafael Alfonzo, a leader of Fedecamaras, the Venezuelan chamber of commerce, said that many businesses were faced with bankruptcy if they remained closed. “We feel that the right decision is not one that kills the private sector,” he said. The question of whether to reopen is “pretty much at the individual level now.”

The sporadic lockouts by employers supporting the anti-Chavez campaign have had relatively little impact on the Venezuelan economy. Far more significant is the shutdown of the oil industry by executives and managers of PDVSA, the state-owned company that accounts for most of Venezuela’s exports and half of total governmentrevenue.

PDVSA officials, most of them appointed by previous right-wing governments and hostile to Chavez, had the support of the union representing white-collar workers and lower-level management. Many blue-collar workers remained on the job and expressed opposition to the shutdown.

The Chavez government succeeded in restarting oil production on a limited basis despite the sabotage at the top, as lower-level workers began to replace their bosses at the helm of two of the country’s three main refineries. Production has reached the level of 400,000 barrels per day, enough to meet the country’s domestic needs, although not enough to resume export shipments on any serious scale. These efforts have been supplemented by stopgap shipments of petroleum from Brazil, Russia and other countries opposed to the US-backed campaign to oust the Venezuelan president.

The real class divisions in the oil “strike” were clearly revealed in an account published in the New York Times December 29; one of the few honest pieces of reporting on events in Venezuela to appear in the North American press. Times reporter Ginger Thompson visited the PDVSA refinery at Puerto La Cruz and wrote:

“Nearly a month into Venezuela’s devastating national strike, all systems were back up and running close to normal this week at the refinery here that supplies gasoline to the eastern half of this country. Night shift workers were bursting with the pride of war heroes.

“Félix Deliso, who has worked at Petróleos de Venezuela, the state-owned oil company, for 12 years, stood watch over a console with so many blinking buttons and computer screens that it looked like the bridge of a spaceship. Mr. Deliso monitors 3,000 machines and processes that turn crude oil into gasoline. Though he has a high school education, he has been trained to be a specialist here, and he considers his job as delicate as disarming a live bomb.

“With skeleton crews working lots of overtime, Mr. Chavez is getting gasoline trickling back into Venezuela’s pumps. Officials here said that since the beginning of last week, this refinery had produced 60,000 barrels of gasoline a day, about 70 percent its normal capacity and almost a fourth of the 225,000 barrels normally consumed by this country each day....

“The refinery here at balmy Puerto La Cruz has become a showcase of the government’s comeback. Almost all high-level executives at the plant joined the strike. But officials said fewer than 20 percent of the operators, mechanics and technicians walked off the job. ‘We are prouder now than ever,’ said Wilfredo Bastardo, a 17-year oil veteran. ‘We have shown our supervisors that we can run this plant without them’”.

Chavez has dismissed 1,000 employees of PDVSA, most of them middle- and high-level. He suggested that the company will be broken up into two divisions in order to shake up the entrenched management, which has long used the company as a slush fund for Venezuela’s ruling elite distributing billions in kickbacks and sweetheart deals.

The resumption of oil refining and the failure of the “general strike” to spread beyond the largely upper class neighborhoods on the east side of Caracas made it possible for Chavez to leave the country without immediate danger of a coup. He traveled to Brasilia for the inauguration on January 2 of Brazil’s new president, Luis Inacio “Lula” da Silva, where he denounced the right-wing campaign as a “coup attempt disguised as a strike,” organized by “terrorists who are blocking oil and food distribution and sabotaging refineries.”

There were several attempts to revive the anti-Chavez campaign. On January 3, two men were shot to death during a confrontation between pro- and anti-Chavez groups on the streets of the capital. The Venezuelan media, which is completely controlled by the right wing, denounced the killings as an atrocious act of repression by the government. It later emerged, however, that both victims were supporters of Chavez, one of them a security guard at the Education Ministry, the other a poor street peddler with two children.

On January 8, as many businesses began to reopen, the Democratic Coordinator announced that a 48-hour strike of bank workers had been called to reinforce the anti-Chavez protests. Only one union, however, representing 30 percent of bank employees, endorsed the action. The remainder of the bank workers’ organizations opposed the walkout, which was imposed by the senior management of the banks, including US financial institutions like Citibank.

The bank lockout undermined rather than strengthened the right-wing campaign, since it denied small businessmen and sections of the middle class access to their funds, while having little impact on the largely cash economy of the barrios.

The role of the United States

In both the rise and the apparent decline of the anti-Chavez campaign, the US government has played a decisive role. The Democratic Coordinator announced it was scaling back the “general strike” almost immediately after US officials expressed concern over the protracted shutdown of the Venezuelan oil industry—which supplies 1.3 million barrels a day to the US market.

The Bush administration has twice in the past year thrown its backing behind the anti-Chavez campaign. During an April military coup, the US government was the only one in the Western Hemisphere that supported the overthrow of an elected president and his replacement by a junta. The newly installed head of state, Pedro Carmona, the president of Venezuela’s chamber of commerce, promptly announced the dissolution of the National Assembly and sought to rule by decree. Chavez was returned to power by the military after 48 hours, in the face of popular uprisings against the coup d’etat.

His right-wing opponents, however, regrouped and launched the employer lockout of December 2. The action was portrayed as a strike by the Venezuelan and North American media, a pretense sustained only by the support of the right-wing CTV union confederation, an outfit of stooge union leaders financed by the American AFL-CIO and the US State Department.

On December 13, the Bush administration again expressed its support for extra-constitutional action in Venezuela, as press secretary Ari Fleischer declared that the White House supported the holding of new elections, despite the fact that Chavez’ term runs through 2006. Three days later the administration retreated from this position, calling for an unspecified “electoral solution” to the Venezuelan crisis, but dropping the demand for Chavez to step down as demanded by the right-wing opposition.

Several foreign policy concerns drove this more cautious approach. The US was prepared to support an opposition shutdown of the oil industry if it resulted in the rapid ouster of Chavez. But once the Venezuelan government had succeeded in mitigating the immediate crisis of supply, by restarting production and obtaining emergency imports, the biggest effect of the shutdown was on the US oil market, where prices began to rise rapidly as supplies tightened. Loss of Venezuelan supplies for a long period would greatly exacerbate the expected effects on oil markets from the impending US invasion of Iraq.

As in the case of North Korea, the Bush administration seeks to avoid an immediate political showdown in Venezuela that would distract from its focus on war with Iraq. In addition, with the intervention of Brazil, Ecuador and other Latin American oil producers to provide emergency supplies to Venezuela, the campaign against Chavez threatened to become a larger crisis for US relations with the entire southern continent.

The Washington Post reported on January 10 that the administration was now seeking to defuse the crisis in Venezuela, in order “to head off a budding Venezuela initiative by Brazil’s new left-leaning government.” The newspaper said that in the State Department “concern about wider fallout from the upheaval there has overtaken its worries about Chavez’s politics.” One official told the Post bluntly, “We were getting 1.5 million barrels of oil each day, and we’re not getting it now.”

Chavez and the military

This pullback in no way means that the Bush administration has given up on a right-wing coup in Venezuela. But in the face of the opposition’s manifest failure to mobilize the public against the Chavez regime, the White House and State Department will return to their first choice: conspiring behind the scenes with sections of the military.

Throughout this period a subterranean struggle has been waged for the support of the police and the military. More than one hundred top officers were removed from their commands and forced to retire after the collapse of the US-backed coup attempt last April, and no military units have mutinied during the current crisis, despite open appeals from the Democratic Coordinator for a second coup against Chavez.

The Caracas police, however, have been mobilized by the city’s mayor, Alfonso Pena, a leading figure in the Democratic Coordinator, against pro-Chavez demonstrators. After the January 3 shootings, which the Caracas police either perpetrated or permitted, soldiers loyal to Chavez raided the police department headquarters to confiscate heavy weaponry, including submachine guns and shotguns, leaving the police only with sidearms.

Chavez, a former paratrooper who himself led a failed coup attempt against a right-wing government in 1992, has sought to balance politically between his popular support among the poor and oppressed, and his following within the military itself. Elected by a sizeable majority in 1998 and reelected in 2000, he has campaigned on the basis of populist demagogy, while presenting the military as an instrument of the people for carrying out social reforms, including developing the country’s social and economic infrastructure.

Chavez is not a socialist, but a Venezuelan nationalist and supporter of capitalism, whose reform policies have brought him into conflict with the entrenched privileges of the country’s economic and social elite.

The hatred of Chavez on the part of these elements was well described by an American observer of the political scene, who wrote: “... much of the hatred for Chavez arises from visceral class antipathy. The son of small-town schoolteachers, Chavez is a powerfully built mestizo with a wide, almost meaty face and thick hands. He’s the sort of man that upper-class Venezuelans expect to see hauling sacks of concrete at a construction site or driving a bus, not running the country. Many refuse even to sit in the same room as Chavez, let alone debate the details of macroeconomic policy or how to divvy up scarce state funds” (Barry C. Lynn, a former correspondent for Agence France-Presse in Venezuela, writing in the current issue of Mother Jones magazine).

A corrupted US media

The American media has played a particularly disgusting and criminal role in the Venezuelan events. The Washington Post, the New York Times, the Los Angeles Times and the Associated Press all maintain correspondents in Caracas who can see with their own eyes the social divisions underlying the right-wing campaign against Chavez. But all have reported the existence of a “general strike” as though it was a mass upheaval from below directed at the regime, rather than a mobilization of the upper ranks of Venezuelan society.

As in the United States, the media in Venezuela itself is monopolized by a handful of wealthy families. Gustavo Cisneros, believed to be the wealthiest man in the country with a fortune of $5.3 billion, is a media mogul—and a prominent anti-Chavista.

The New York Times actually hired a representative of the opposition, Francisco Toro, an economic analyst with the firm Veneconomia, to work as a correspondent. Toro resigned this week as a Times correspondent after refusing to shut down the anti-Chavez web site he maintains. His letter of resignation to Times editor Patrick J. Lyons acknowledges “conflict of interest concerns” related to his “lifestyle bound up with opposition activism.”

Sections of the extreme-right media in the US continue to push for an all-out attack on the Chavez regime. National Review, an influential organ of the ultra-right, published an online report January 8 claiming that Chavez had supplied funds to the Taliban regime in Afghanistan, after the September 11 attacks in the US, with the intention of aiding Al Qaeda. This echoes a false report by the Chicago Tribune, published during the abortive April coup, and later retracted, that Chavez had spoken favorably of Osama bin Laden.

The danger of a fascistic right-wing takeover in Venezuela is far from over. The oil industry may not recover from the current disruption for several months, and losses to national income and economic output are already severe. One economic forecaster warned this week that the Venezuelan economy would contract 40 percent in the first quarter and 9 percent for the entire year.

Chavez’s combination of populist demagogy and modest social reforms can neither significantly advance the social interests of the masses of Venezuelan workers and peasants, nor forestall indefinitely another round of US-backed subversion and violence. The implacable opposition of the Venezuelan ruling class and American imperialism can only be overcome through the mobilization of the working class—in Venezuela, Latin America and the US itself—on a common program of international socialism.

www.orlandosentinel.com By Susan Jacobson | Sentinel Staff Writer Posted January 20, 2003

Latin music filled the air at Lake Eola Park on Sunday as several hundred people gathered to protest the government of Venezuelan President Hugo Chavez.

The afternoon took on a festive air as participants danced and waved the red, blue and yellow flag of Venezuela.

Many also wore shirts, hats and bandannas bearing the colors and white stars of the flag, and some even had mini-flags painted on their faces.

"We just wanted to get together to pray and try to seek out positive energy to try to get back our country," said Ana Zorrilla, 28, who attended the rally with her two young children.

The gathering was sponsored by the Venezuelan Society of Orlando.

Organizers planned to get signatures on letters to President Bush, United Nations Secretary-General Kofi Annan and Organization of American States Secretary General César Gaviria, asking for their help.

In Miami, tens of thousands of Venezuelan exiles took to the streets Saturday to protest the actions of Chavez, comparing him to Cuban leader Fidel Castro and likening his recent actions to terrorism.

About 50,000 protesters jammed into the predominantly Cuban neighborhood of Little Havana, calling for the ouster of Chavez, who opponents say is dissolving the country's long-standing Democratic structure.

The Venezuelans were joined by Cuban-Americans and sympathizers from other Latin American nations.

Miami police reported no injuries or incidents of violence at the rally, which stretched for about five hours.

In an effort to force Chavez from office, Venezuelan business and labor groups are in the seventh week of a strike that threatens to destroy the country's economy.

Venezuela's opposition launched the strike Dec. 2 to demand that Chavez resign or call early elections if he loses a Feb. 2 nonbinding referendum on his rule.

In Orlando on Sunday, Alexandra Boszko was not shy about her feelings.

"I want him [Chavez] out," she shouted over the noise of the crowd.

Jessica Mann of the Sentinel staff contributed to this report. Wire services also were used. Susan Jacobson can be reached at sjacobson@orlandosentinel.com or 407-931-5946.

www.nytimes.com By GINGER THOMPSON

CARACAS, Venezuela, Jan. 19 — Despite mounting international pressure to resolve the political conflict that has pushed this country to the brink of anarchy, President Hugo Chávez hardened his public stand against his opponents today.

In appearances throughout the weekend, Mr. Chávez hinted that he would use military force if necessary to break a strike, now entering its eighth week, that has crippled most of the formal economy and caused shortages of food and fuel. Today, he appointed two loyal military officers to top security posts and threatened new raids on businesses he accused of hoarding essential goods. Advertisement

Mr. Chávez stirred international outrage late last week when he ordered national guard troops to seize private warehouses full of soft drinks, beer and bottled water, charging that the companies, including a Coca-Cola bottling affiliate and Venezuela's largest food corporation, with holding back food staples to support the strike.

Officials for the companies, however, responded that they had shut down operations after the strike started because of fuel shortages and security concerns.

In his weekly television appearance today, Mr. Chávez said he might intervene again. "Some businessmen have reflected and have started to open their factories," he said. "Those who refuse, who resist, well, be sure that today, tomorrow, or after we will raid your warehouses and stockpiles."

His comments came as new rounds of negotiations were to begin Monday between Mr. Chávez and a coalition of business people, union leaders and civic groups that began the strike in an effort to force the president from office. They accuse him of being an authoritarian leader who has undermined the country's four decades of democracy. They have vowed to keep up the strike until he agrees to call elections.

The strike has shut down most oil wells and refineries in Venezuela, the world's fifth largest exporter, cutting off supplies.

Negotiations overseen by the secretary general of the Organization of American States, César Gaviria, have dragged on since November. Last week, Mr. Gaviria's work was reinforced by the formation of a so-called group of friendly countries, including the United States, Mexico, Chile, Brazil, Spain and Portugal. On Monday, former President Jimmy Carter is scheduled to meet with Mr. Chávez and opposition leaders.

Mr. Carter reportedly spent this weekend on a fishing trip with Venezuela's most powerful businessman, Gustavo A. Cisneros, considered a key figure in the opposition against Mr. Chávez.

Mr. Chávez has denounced the opposition as "oligarchs" and "coup plotters." In his television broadcast today, he appointed Gen. Lucas Rincón, a former defense minister and former armed forces chief, as interior minister. He also appointed Gen. Jorge García Carneiro as the new chief of the army — the most powerful branch of the armed forces — replacing Gen. Julio García, who had held the post since an unsuccessful coup against Mr. Chávez in April.

Both generals are close allies of Mr. Chávez, himself a former lieutenant colonel.

www.nzherald.co.nz 20.01.2003 4.58 pm

CARACAS - Venezuelan President Hugo Chavez says he is "winning the oil war" against striking workers, restoring crude flows, restarting refineries and reopening ports crippled by a seven-week-old stoppage.

But the leftist leader said he faced resistance from "saboteurs," who cut off gasoline supplies to Caracas, hacked into computers controlling oil facilities and finances and persuaded some trading partners not to deal with the South American nation.

The oil industry is the focus of a power struggle between Chavez, who blames corrupt elites for trying to stop his "beautiful revolution," and opposition groups who see him leading the country to Cuban-style communism.

Crude oil output, which fell from three million barrels per day (bpd) to about half a million earlier this month, had recovered to almost 1.2 million bpd by Sunday (Venezuelan time), Chavez said.

"We are winning the oil war... We could reach two million barrels per day before the end of the month," he said during his weekly television and radio show "Hello President."

Striking employees of the state-owned Petroleos de Venezuela (PDVSA), who want to force Chavez to resign by cutting off his economic lifeline, estimated output was half the volume stated by Chavez at 650,000 bpd.

"Despite the figures given by Chavez, the oil industry is still paralyzed," said strike leader Juan Fernandez.

The government has sacked some 1,500 PDVSA employees, and is using retired staff, unemployed workers, the military and some foreigners to restore operations.