www.washingtonpost.com By Scott Wilson Washington Post Foreign Service Monday, January 20, 2003; Page A15

CARACAS, Venezuela -- A thriving black market in gasoline has emerged in Venezuela, which has one of the largest oil reserves outside the Middle East. Cargo ships pick up groceries for the nation at government expense in Colombian ports. The state oil company -- once considered well-run, now largely shuttered -- may face lasting damage if it is not restarted soon.

This is a grim snapshot of a teetering Venezuela 50 days into a general strike and political standoff that continue to defy a number of seemingly sensible solutions. Despite growing economic damage and social unrest, neither President Hugo Chavez nor the organized opposition seeking to remove him from office has given ground on several proposals that diplomats here say should, according to normal logic, bring agreement within reach, arrest the economic decline and head off fresh violence.

A number of diplomats, political analysts and opposition members say the central reason for the stalemate is simple, if misunderstood by outsiders, particularly in the United States.

Chavez, they say, believes Venezuela's public and private institutions must be broken down for his revolution to take root. Throughout his divisive four years in office, Chavez has viewed moments of political strife, some of his own design, as opportunities to remake institutions opposed to his political program. Indeed, he has described the current standoff, during which five people have died in street violence, as a natural part of the revolutionary process.

But his "Bolivarian revolution," a potent brand of populist nationalism named for the 19th-century liberation hero, Simon Bolivar, has bumped up against an equally powerful nostalgia among some opposition leaders for the hermetic two-party system that dominated Venezuelan politics before Chavez's election in 1998. As a result, the opposition appears unable to embrace any solution that would not take the nation back to those days, when power alternated between the Democratic Action Party, a Social Democratic group, and Copei, its Christian Democratic counterpart.

The clashing visions have deadlocked negotiations supervised by Cesar Gaviria, secretary general of the Organization of American States, to end a crisis that has consumed Venezuela for a year. As Chavez recently told a cheering crowd, "The revolution cannot be negotiated."

In coming weeks, the United States will join negotiations to end the crisis as part of a six-country advisory group designed to strengthen Gaviria's hand. The U.S. participation comes as Venezuela's pre-strike delivery of 1.5 million barrels of oil a day to the United States -- about 15 percent of U.S. oil imports -- has slowed to a trickle, as concerns mount that a possible war in Iraq would reduce Middle East oil shipments.

At the same time, frustrated opposition leaders have increasingly singled out the United States for aggravating the situation by failing to come down hard immediately on Chavez, who as an army lieutenant colonel in 1992 led an unsuccessful coup against the elected government of Carlos Andres Perez. In their view, the United States failed to understand that Chavez from the beginning had ambitions to alter Venezuela fundamentally in ways hostile to U.S. -- and their -- interests.

Since his election on a pledge to help Venezuela's poor -- a majority in the nation of 23 million people -- Chavez has looked and sounded like a Cold War-era revolutionary. He has favored military fatigues over business suits, delivered marathon speeches he ordered to be carried on private television channels and expressed admiration for Cuba's President Fidel Castro. Chavez called the rich "rancid oligarchs," labeled the Catholic Church a "tumor" on Venezuelan society and warned opposition media owners to tell the truth.

The initial U.S. approach to Chavez, formulated by then-Ambassador John F. Maisto, now on the National Security Council staff, was to judge him by actions, not words. That changed in October 2001, after Chavez criticized the U.S. war in Afghanistan and decreed a series of populist reforms that appeared to exceed his authority. In addition, he had organized several successful referendums that gave the country a new constitution tailored to his rule and was reelected in 2000 with a higher percentage of support.

Last April, when Chavez was ousted in a military-led coup d'etat, the White House quickly endorsed an interim government installed by the coup leaders. But the coup collapsed two days later and Chavez returned in triumph to the presidential palace. He then purged the military's upper ranks, and the troops have so far remained solidly behind him throughout the current crisis.

"The United States made a giant mistake adopting a pragmatic attitude toward Chavez, something they did ironically to guarantee a stable oil supply," said Alberto Garrido, a political analyst who has written several books on the roots of Chavez's political program. "Here, there is a clash of systems, something that neither Gaviria nor the United States understands. For this reason, no negotiation is possible."

Believing he is defeating his opponents, this view holds, Chavez has little incentive to end a standoff that appears to be accomplishing what many politicians and analysts here say are his long-term goals. Venezuela's private sector, long the source of resistance to his program, is withering under the weight of the strike. The National Institute for the Development of Small and Medium Size Industry warned Thursday that 10,000 small and medium-size businesses, 50 percent of such enterprises, are in danger of collapse.

"Fidel had to fight the bourgeoisie to defeat them," said Pastor Heydra, a congressman from the opposition Democratic Action Party. "Here, the bourgeoisie is killing itself."

At Petroleos de Venezuela, the state oil company that provides the government with nearly half of its $20 billion budget, Chavez has used the strike to fire 2,000 dissident employees. The likely result, said diplomats and oil analysts here, will be a company as politically pliable as the Venezuelan military since the president's post-April purge.

"They've handed themselves to Chavez on a platter," one foreign diplomat here said. "One of the things driving this strike is a sense of desperation that in Chavez's Venezuela there will be no place for the professional people of [the state oil company] or anyone else like them."

In recent weeks, Gaviria has placed much of the blame on the government for refusing to accept an agreement on an early presidential election; under the constitution, presidential elections are scheduled for 2006. Chavez has also refused to accept a nonbinding referendum on his administration set for Feb. 2, calling it unconstitutional. Venezuela's high court has yet to rule on the issue. He sent National Guard troops into a bottling plant affiliated with the Coca-Cola Co. on Friday to make sure soft drinks were distributed despite the strike.

Allowing a clean vote on Feb. 2 might be enough for the opposition to lift the strike, people close to the talks have said, but Chavez has refused to consider the idea. He said only a binding referendum on his administration, which could be held as early as Aug. 19, would be constitutional.

"They don't want any elections," said Rafael Alfonzo, an opposition negotiator. "If he loses in conflict, rather than elections, he will always be seen as a hero by his people."

But the opposition has failed to present an alternative political program, while misreading foreign governments that seem reluctant to challenge the legitimacy of a twice-elected president. Before the strike, many opposition leaders said they believed the United States and the OAS would weigh in against Chavez, whom they accuse of weakening essential state institutions to the extent that there are now no checks on his power. No such support has materialized.

Hoping to convince U.S. officials of their claim that they are battling a dictator disguised as a democrat, opposition leaders traveled to Washington and New York last week. They have also been informally consulting with James Carville, a Democratic strategist, for ideas to better explain their cause abroad.

"It seems like no one wants to end this for the good of the country," said a person close to the negotiations. "No one on either side."

www.globeandmail.com POSTED AT 10:10 PM EST    Sunday, January 19 Associated Press

Caracas — President Hugo Chavez on Sunday threatened to order more raids on striking private food producers and warned that the government may abandon negotiations with opponents trying to force him from office.

Meanwhile, thousands of Venezuelans with roots in Italy, Spain, Mexico, Brazil, Portugal and other countries marched for peace, waving the flags of their homelands and Venezuela. Some carried signs that read "liberty" and "union" in six languages.

"I've never seen the country so divided," said Jose Lopes, 60, a bookstore owner who immigrated to Venezuela from Portugal as a teenager. "We don't want to leave, but if Chavez doesn't leave it's a possibility."

Opponents accuse the 48-year-old President of running roughshod over democratic institutions and wrecking the economy with leftist policies.

A combination of opposition parties, business leaders and labour unions called for a general strike on Dec. 2 to demand Mr. Chavez accept the results of a non-binding referendum on his rule.

Venezuela's National Elections Council scheduled the vote for Feb. 2 after accepting an opposition petition, but Mr. Chavez's supporters have challenged the referendum in court. The Supreme Court is expected to rule on the issue soon.

Mr. Chavez, whose six-year term ends in 2007, insists his foes must wait until August — or halfway through his six-year term — when a recall referendum is permitted by the constitution.

The strike has brought Venezuela's economy to a standstill, causing shortages of gasoline, food and drink, including bottled water, milk, soft drinks and flour.

Local producers insist they are still making basic foodstuffs but that fuel shortages and lack of security for their transport workers have hampered deliveries.

"Some businessmen have reflected and have started to open their factories," Mr. Chavez said during his weekly television and radio show. "Those who refuse, who resist, well, be sure that today, tomorrow or after, we will raid your warehouses and stockpiles."

On Friday, National Guard soldiers seized water and soft drinks from two bottling plants. One was an affiliate of Coca-Cola, the other belonged to Venezuela's largest food and drinks producer, Empresas Polar.

Vice-President Jose Vicente Rangel on Sunday rejected U.S. Ambassador Charles Shapiro's criticism of the raids, which he said affected U.S. interests in Venezuela. Mr. Shapiro also questioned their legality.

"Ambassador, with all due respect, you are not an authority in this country," Mr. Rangel said Sunday while speaking to supporters in Venezuela's Margarita Island.

Bilateral "relations have to be on an equal plain of mutual respect. This is not a protectorate, it is not a colony," Mr. Rangel said.

Mr. Chavez also warned the government would walk away from negotiations sponsored by the Organization of American States if the opposition continued seeking his ouster through what he calls unconstitutional means.

"We are carefully evaluating the possibility that our representatives will leave the [negotiating] table," he said. "We don't talk with terrorists. We are willing to talk with any Venezuelan within the framework of the constitution."

The talks, which began in November, have yielded few results. Six countries — Brazil, Chile, Mexico, Portugal, Spain and the United States — have begun an initiative called "Friends of Venezuela" to support the negotiations.

The strike is strongest in Venezuela's oil industry, previously the world's fifth-largest exporter.

Oil production has dwindled to 800,000 barrels a day, compared with the three million barrels a day the country usually produces, according to the government. Strike leaders put the figure at 400,000 barrels a day.

Mr. Chavez, who has fired more than 1,000 strikers from the state oil monopoly, said Sunday that production could be restored to two million barrels a day by the end of the month.

But Mr. Chavez acknowledged that gasoline shortages have increased. He blamed the difficulties on "sabotage" by strikers and delayed gasoline imports. He also promised to reinforce troop presence at oil installations and said 60 gasoline trucks were on their way to Caracas, the capital, on Sunday.

"Keep rationing gasoline," Mr. Chavez urged listeners.

Besides the factory raid, troops have seized striking oil tankers and kept strikers out of oil installations. Five people have died in politically related violence since the strike began.

Also Sunday, Mr. Chavez appointed retired General Lucas Rincon as his Interior Minister, replacing Diosdado Cabello, who was named Infrastructure Minister last week. Gen. Rincon's appointment comes despite his role in April's failed coup and his later resignation as defence minister.

Gen. Rincon announced to the world that Mr. Chavez resigned after 19 people died during an opposition march on the presidential palace. Loyal soldiers restored Mr. Chavez to power two days later after an interim government dissolved the constitution.

Mr. Chavez also appointed General Jorge Garcia Carneiro as commander of Venezuela's army, replacing General Julio Garcia Montoya.

www.guardian.co.uk

www.guardian.co.uk Leader Monday January 20, 2003 The Guardian

As the long-running political crisis in Venezuela begins to have an ever-greater international impact, efforts to end a divisive general strike and get the country back to work continue to founder. Until this week, outside mediation intended to defuse the confrontation between President Hugo Chavez and his vociferous opponents has been led by Cesar Gaviria, secretary-general of the Organisation of American States. But Mr Gaviria has made no headway and has now been reinforced by a new group, to be known as the Friends of Venezuela, initiated by the new Brazilian president, Luiz Inacio "Lula" da Silva, and including Mexico, Chile, Spain, Portugal and the US. It is not yet clear what the "friends" may propose - but the problem is plain enough. Venezuela, losing $50m a day and moving ever closer to bankruptcy, escalating violence and possible civil war, cannot afford to allow the present situation to continue unresolved. The neighbours, and in particular the US, think so too.

Washington, unsurprisingly given its disproportionate wealth and power, has more to lose than most. Venezuela supplies about one-sixth of US oil imports or did so, at least, until managers at the state oil company joined the anti-Chavez rebellion at a cost to their country so far of $4bn. Non-emergency US crude stocks are now touching a 27-year low and pump prices are rising, just as its designs on Iraq threaten to disrupt Middle Eastern supply. For the US, the problem is increasingly strategic, not local.

Despite this growing sense of urgency and a clear US temptation to try to take charge, the damage caused by Washington's perceived backing for last year's abortive coup against Mr Chavez has taught it to tread warily. Last week, controversial Latin American policy chief Otto Reich was moved to a lesser position. The state department has meanwhile taken to emphasising the need for a "peaceful, constitutional, democratic and electoral" solution. Regional leader Brazil would in any case be likely to oppose any US attempt to force the pace and warns that "aiming for magic solutions could lead to more violent conflicts". Indeed, Mr da Silva is far from unsympathetic to Mr Chavez, and rightly so. While both have their flaws, both are elected presidents attempting to reform badly run countries, raise the poor and reverse decades of entrenched injustice. Pressure from special interests, from whatever quarter, should be resisted.

www.newsday.com Jan 14, 2003 By Letta Tayler Latin America Correspondent

January 20, 2003 Caracas -- For seven weeks, Lila Vega, a pediatrician, has worked only a fifth of her usual hours -- and earned a fifth of her usual income -- as part of a strike aimed at unseating populist President Hugo Chávez.

When Vega does go to her office, she bikes the six miles. That way, she doesn't have to wait hours in line to fill her car's tank with gasoline, which is almost impossible to find because Venezuela's oil monopoly has joined the strike.

Most teachers are participating, too, so Vega's daughters no longer attend school. "We have to continue the pressure,” said Vega, her mouth tightening. "We're not returning to our normal lives until Chávez leaves.”

As the massive strike entered its 49th day yesterday with Chávez showing no signs of resigning, daily routines have been turned upside down across Venezuela, and so has the mood of its 24 million citizens.

The realization that the strike could limp along indefinitely, severely wounding an economy that already was ill, has cast a combustible mix of determination, hostility and fear on this traditionally ebullient country.

"There was euphoria in the beginning of the strike, when the opposition thought Chávez would quickly leave,” said Caracas psychiatrist Ignacio Taboada. "But as people realize this could go on for months, the euphoria is being replaced by enormous anxiety, and anger.”

Strike organizers have in recent days quietly condoned an easing of the stoppage by participants who are going broke. Some stores and restaurants are cautiously reopening in areas frequented by the opposition, who are mostly in the middle and upper classes.

"I'm all for the strike, but I've got debts to pay and I need to eat,” said José Luis Martínez, a perfume-shop owner in an affluent area who recently reopened.

In Chávez strongholds, most stores have stayed open. But thousands are still closed in key industries, and more than half of schools and universities are shut or barely functioning. Cooking gas and cornmeal are widely unavailable except on the black market.

Most hospitals are handling only emergencies and lack many key medicines. Banks are open three hours daily, and movie theaters are shut.

Even Venezuela's beloved baseball league has canceled its winter season to support the strike. And its equally beloved beer, Polar, has stopped production, prompting guzzlers to turn to expensive imports, if they can afford to. The petroleum industry, which before the strike supplied 13 percent of U.S. oil imports, is producing a fraction of its normal output, which has pushed U.S. stocks of crude oil to nearly their lowest level in two decades.

Chávez's foes charge that he wants to impose a communist regime and is leading the country to economic ruin. Supporters counter that he is being targeted because he wants to share the nation's wealth with the 80 percent who are poor.

Chávez's popularity is at 30 percent, but he refuses to consider leaving until August, when the constitution allows a binding referendum on truncating his term. It is scheduled to end in 2007.

Many political observers believe opposition leaders have backed themselves into a corner by having declared early on that they'd continue the strike, which is costing the country $50 million a day, until they topple the leftist leader. "It was one thing to start the strike but another not to have any plan for the eventuality that Chávez wouldn't immediately leave,” said Janet Kelly, a political analyst here.

The strike has fallen into sometimes surreal patterns, even at the daily protests for and against the president. A few days ago, several thousand opposition housewives paraded through Caracas waving posters of the Virgin of Coromoto, the nation's patron saint, whom they implored to save them from "Chávez the dictator.”

A few hours later, flocks of kindergartners stomped jauntily through an adjacent neighborhood, chanting, "Chávez, friend! The children are with you!”

Sporadic violence has led to five deaths and hundreds of injuries, many involving children. The danger that her children could be caught in a confrontation is one reason Vega is relieved her daughters aren't attending school -- even if they only spend two hours daily studying lessons their teachers post on the Internet.

The other reason is that "they are receiving a valuable lesson in how citizens' participation can make a difference,” said Vega, who spends time collecting signatures for a constitutional amendment to force early presidential elections.

Others who disagree are gathering in increasing numbers to bang on school doors, declaring that the opposition has hijacked education.

Friction is even greater in poor Caracas neighborhoods such as La Pastora, a cluster of crumbling homes perched above a cliff. Though many La Pastora residents oppose Chávez, they expressed fury at finding cooking staples only on the expensive black market.

Rosa Martínez, a La Pastora housewife who lives with her husband and four children in a one-room apartment the size of a jail cell, said she paid almost seven times the normal rate for cooking gas and twice the normal price for cornmeal a few days ago.

"I didn't vote for Chávez, but I'd vote for him now if he ran again because what this strike is doing to us is even worse,” Martínez fumed.

"We're destroying the country to get rid of one man,” said Fanny García, a retired secretary who backs neither Chávez nor the opposition. "I wonder if it's worth it.”