www.sfgate.com CHRISTOPHER TOOTHAKER, Associated Press Writer Wednesday, January 15, 2003

(01-15) 15:48 PST CARACAS, Venezuela (AP) --

A seven-week-old opposition strike against President Hugo Chavez dropped Venezuela's currency to a new low Wednesday and sent Venezuelans in the capital scrambling to banks to buy dollars.

Support for Chavez's adamant refusal to consider early elections showed signs of crumbling as three pro-Chavez lawmakers unveiled a plan for an early vote on his presidency.

The strike has slashed oil exports to a trickle, depriving the government of half its income. Venezuela's bolivar currency closed at 1,716 to the U.S. dollar, down 6 percent from Tuesday. In Caracas, hundreds of citizens waited in long lines at banks and exchange houses to buy dollars.

Trying to calm fears of an economic crash, the government denied speculation that it plans to devalue the bolivar so it can balance its $25 billion budget. Most government income is in dollars and a weaker bolivar would increase its domestic spending power.

Venezuela has acknowledged the oil strike has cost $4 billion so far.

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.

The National Elections Council is organizing the vote, but Chavez says he will ignore it, and ruling party lawmakers have challenged its legality in court. Venezuela's constitution allows citizens to petition for a binding referendum halfway through a six-year presidential term, or August. Opposition leaders fear Chavez will find a way to postpone it.

Chavez was elected in 1998 and re-elected in 2000.

Rafael Simon Jimenez, a pro-Chavez lawmaker who quit the leftist Podemos party, said he and two other legislators would introduce a measure as early as next week to amend the constitution. It would end Chavez's term later this year and allow general elections.

The proposal by Jimenez and Chavez supporters Guillermo Palacios and Luis Salas would leave opposition legislators just one vote shy of a simple majority needed to pass an amendment in the 165-seat Congress. Jimenez said he was looking for that vote.

Elections are the only way to solve Venezuela's political crisis and end the 45-day-old strike, which has raised gasoline and oil prices abroad, Jimenez said.

"We don't see an elections as a break with Chavez. We see elections as a response to the country's crisis," Jimenez said.

Legislator Freddy Lepage of the opposition Democratic Action party said Chavez was steadily losing support in Congress as the crisis deepened. "We still don't have the majority, but I'm confident we'll have it soon," he said.

Chavez enjoys the support of the military, which he purged of dissidents after a brief April coup. The government claims oil production is back up to 800,000 barrels a day, compared to a pre-strike level of 3 million barrels a day.

The U.S. Energy Department says American motorists could pay up to $1.54 per gallon of gasoline this spring even if war is averted in Iraq. Home heating oil prices rose 4.7 percent in December.

Negotiations mediated by Cesar Gaviria, secretary general of the Organization of American States, were briefly suspended while the region's leaders attended the Wednesday inauguration of Ecuadorean President Lucio Gutierrez.

In Quito, Ecuador, Chavez lashed out at his opponents as "a subversive movement from the far right, a fascist movement backed by economic elites."

Chavez was to meet with U.N. Secretary General Kofi Annan in New York on Thursday before returning to Caracas. Some strike leaders, meanwhile, were in the United States pleading their case with U.S. government and business leaders.

Several nations voiced support for a so-called "Friends of Venezuela" proposal to strengthen the efforts of Gaviria, who has had little success in mediating talks since November.

"The solution must be democratic, constitutional, and, it seems, electoral," said Bolivian President Gonzalo Sanchez de Lozada.

Former President Jimmy Carter arrived in Venezuela on Wednesday for a fishing trip with Venezuelan businessman Gustavo Cisneros. Carter, whose Atlanta, Georgia-based Carter Center also is trying to resolve Venezuela's crisis, said that he would meet with Gaviria and government and opposition leaders next week.

www.forbes.com Reuters, 01.15.03, 6:24 PM ET

CARACAS, Venezuela, Jan 15 (Reuters) - Venezuela's opposition on Wednesday extended for a 46th day a protest strike aimed at pressuring President Hugo Chavez to resign and call elections in the world's fifth largest oil exporter.

The opposition stoppage, which began on Dec. 2, has cutback Venezuela's vital petroleum production, hiked oil prices and inflamed the feud over ex-paratrooper Chavez's rule. Venezuela usually supplies about one sixth of U.S. oil imports.

"We will stay in the streets, defending the country," anti-Chavez business leader Jose Luis Betancourt told reporters.

Opposition leaders and rebel managers at state oil firm PDVSA have promised to maintain the shutdown until Chavez quits. But the combative president has dismissed calls for early elections and scoffed at charges from foes of corruption, economic mismanagement and authoritarian rule.

Chavez, who was elected in 1998 and survived a coup in April, has vowed to defeat the strike, which he dismisses as an attempt to topple him illegally through oil industry sabotage. Oil sales provide about half of government revenues.

usinfo.state.gov 15 January 2003 State Department Noon Briefing Transcript

QUESTION: President Chavez said today that he's not particularly interested in having the US be a part of the -- of any Friends of Venezuela group. So now you've got him saying that and the Venezuelan opposition saying they don't want Brazil to be in it. So what are your thoughts on this sticky wicket?

MR. BOUCHER: Well, as you know, the goal of this group is to - I am sorry?

QUESTION: Do you have any comment on the archaism --

MR. BOUCHER: I am not going to comment on the bombast -- or the sticky wicket, either. (Laughter).

The goal of putting together some kind of 'friends group' has been to support the Secretary General and his efforts to have people on the ground that can help him. The United States has been very active, both with the government and the opposition and, indeed, civil society in general in Venezuela, to try to encourage people to reach a settlement, to reach a political solution. We would expect to continue to do that and therefore do believe that we should continue to do that with any grouping that is formed. The issue of support for the Secretary General is one I think that members of the OAS and any other interested parties would consider and decide amongst themselves.

QUESTION: So it sounds to me that if you're saying that the United States would insist on being part of such a grouping?

MR. BOUCHER: I think we would expect to be part of it, and others would expect us to be part of it.

QUESTION: Right. Okay. And would you also expect Brazil to be a part of it.

MR. BOUCHER: Again, with that -- I do not want to start today what I did yesterday; not start naming specific countries to be members.

QUESTION: Except for your own?

MR. BOUCHER: I suppose everybody could -- who wants to be on it -- could say that they want to be on it if they wish, yes.

QUESTION: Yes, but you do realize you carry a great deal of weight, the United States does in these kinds of things.

MR. BOUCHER: Yes?

QUESTION: So one would think that if the United States --

MR. BOUCHER: We would expect to be there to carry our weight.

QUESTION: -- support of Brazil, that they would be in.

MR. BOUCHER: That is why I have not started naming any particular country or not naming any particular other country.

QUESTION: Okay.

MR. BOUCHER: Terri?

QUESTION: On the matter of clubs, can you tell us whether you made any progress on keeping Libya off the human rights -- from heading the Human Rights Commission? Anything new on it?

MR. BOUCHER: There is really nothing new on that today. There is a I think the matter gets voted on next week of January 20th, so we have had our embassies approach people and we have made clear our view that there needs to be a vote, that people should vote their conscience and we would say not vote for a chairmanship by country that is a human rights violator and that is under UN sanctions.

QUESTION: But you were not very optimistic that people were going to view it that way. Have you heard anything about.

MR. BOUCHER: I try not to gauge our chances. Just say it is something we are working on and we have asked our embassies to follow up. As we have said, we think it is important for each country to consider carefully how it might vote and whether it can, in good conscience, vote for a human rights violator and a country under UN sanctions to be chairman of the UN Human Rights Committee.

QUESTION: On Venezuela. Does the need for this group called the Friends of Venezuela, does that imply that the OAS has failed?

MR. BOUCHER: No. It implies that the OAS needs and deserves every possible support it can get from the countries of the hemisphere, all of whom are pledged to support democracy, all except one who are pledged to support democracy. The members of the OAS, I think, do want to do what they can. There was an OAS meeting specifically on the subject where all the nations expressed their strong support for Secretary General Gaviria's efforts and this is another way that we think we can put people on the ground and work with the Secretary General to really support him in every possible way.

QUESTION: Will you welcome European countries to be part of this group?

MR. BOUCHER: I am not naming any regions or countries at this point. We will see what emerges from the discussions that we are having with others.

MR. BOUCHER: Okay, thank you.

(The briefing was concluded at 1:45 p.m.)

(end transcript)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)

seattlepi.nwsource.com Wednesday, January 15, 2003 · Last updated 2:03 p.m. PT By MASOOD FARIVAR DOW JONES NEWSWIRES     Iraqi President Saddam Hussein, right, receives unidentified Jordanian tribal leaders in Baghdad, Wednesday, Jan. 15, 2003. (AP Photo/INA)

NEW YORK -- Under sanctions and an erratic leader, Iraq has hardly been a reliable global oil supplier.

But in an odd twist, the United States has grown increasingly reliant on Iraqi oil exports to replace supplies cut off by a seven-week-old strike in Venezuela - even as the Bush Administration steps up preparations for a possible invasion - raising further concerns about the impact a U.S. attack would have on the oil market.

"The United States gets several hundred thousand barrels a day of crude oil from Iraq," said John Lichtblau, chairman of PIRA Energy in New York. "That's not insignificant."

Unpublished, preliminary government data indicate exports of Iraqi oil to the United States have been rising in recent weeks. Since the Dec. 2 start of the labor strike in Venezuela, Iraq's crude oil exports to the United States have averaged more than 500,000 barrels a day, nearly double the volume reported during the September-November period, the data show.

Last week, Iraqi oil exports to the United States jumped to 830,000 barrels a day, their highest level since early last year and nearly 10 percent of total U.S. imports that week, according to an Energy Department analyst.

While Iraq's exports remain below levels seen in 2001 and early 2002, the recent surge, including the shipments to the United States, is making a difference, analysts said.

The surge in Iraqi shipments helped boost total crude oil imports into the United States by 200,000 barrels a day last week to 8.5 million barrels a day.

"That's probably in reaction to the loss of Venezuelan exports," said Aaron Brady, an analyst at Energy Security Analysis Inc., a consulting firm in Wakefield, Mass. "You need to make it up somehow. Iraqi oil is doing its share filing in that gap."

Iraqi oil exports have been erratic since the start of the United Nations oil-for-food program six years ago. The program allows Iraq to sell as much oil as it likes provided revenue go into a U.N. account and are used mostly for humanitarian purposes.

After topping 1 million barrels a day in January and February of last year, Iraqi oil exports to the United States nose-dived. The decline came in response to the onerous conditions of a new U.N. pricing policy imposed to frustrate Baghdad's efforts to collect an illegal surcharge from traders.

Iraq compounded the problem by cutting off its exports in April in an ill-fated effort to spark a broad oil embargo in support of the Palestinians.

For much of last year, Iraqi exports averaged less than 1 million barrels a day, with less than half coming to the United States.

Faced with a sharp loss of revenue and U.S. threats of military action, Iraq quietly dropped the surcharge demand in September. Some analysts saw the move as an attempt to build commercial ties as a bulwark against a U.S. attack.

Whatever the motive, the change prompted major international oil companies to return to the Iraqi market for the first time in nearly two years, according to industry analysts and U.N. diplomats.

The result has been a clear rise in Iraq's oil exports, according to U.N. figures. Since the start of September, Iraqi exports have averaged about 1.5 million barrels a day, the figures show.

Iraq typically ships between 40 percent and 50 percent of its oil exports to the U.S. market. But even if more oil goes to Europe, in a global market it makes little difference, Brady said.

"It frees up other oil to be sent to the United States," Brady said. "It's helping right now."

With Iraqi oil exports rising and Venezuelan oil largely off the market, analysts are increasingly concerned about the prospect of losing both producers at the same time.

Those concerns have driven oil prices up over $33 a barrel to two-year highs in New York. Prices are now 75 percent higher than they were a year ago.

To help offset the loss of Venezuelan oil, the Organization of Petroleum Exporting Countries agreed Sunday to hike production by 1.5 million barrels a day beginning Feb. 1.

Iraq, an OPEC member, wasn't part of the agreement, because its exports are controlled by the U.N.

OPEC officials said they will hike production again if Iraqi oil supplies are disrupted by a war.

The Bush administration has so far resisted pressure to release oil from the nation's Strategic Petroleum Reserve to counter the Venezuelan supply shortfall. Observers believe the administration wants to have the option of tapping the reserve if there is a war with Iraq.

www.jta.org By Julie Drucker Jewish Journal of Greater Los Angeles

LOS ANGELES, Jan. 13 — These are sad days for the Jewish community in Venezuela as many begin to question whether this country, once so hospitable to Jewish life, can still be called home.

As the country faces nearly its sixth week of a devastating strike calling for early elections or the resignation of President Hugo Chávez, Venzuela’s economy, already set to shrink by 6 percent this year, has been hurled into utter chaos. Poverty levels are estimated at 80 percent— a tragedy for one of the wealthiest and most stable countries in Latin America.

The economic deterioration that began with the Latin America debt crisis of 1983 and has continued unabated is now coming to a head under the rule of Chávez. A former army officer and ex-coup leader, Chávez has initiated a self-styled “revolution” marked by fiery, anti-wealth rhetoric and little action. His close ties to Cuban dictator Fidel Castro and leftist policies have deeply polarized the country, with twoentrenched camps on both sides of the strike — neither of which is showing any signs of backing down. After a month of paralysis, more people are armed, food and supplies are growing scarce, and oil production has ground to almost a halt. The nation is on the brink of chaos, and anything could happen.

Venezuela’s present predicament is particularly disappointing. Once viewed as a beacon of democracy in a region dominated by military dictatorships, Venezuela had enjoyed nearly a half-century of stability and economic growth — thanks largely to its great reserves of oil. The resulting opportunities drew substantial numbers of Jews to Venezuela. Although Jews began immigrating to Venezuela at the beginning of the 19th century, it was not until after World War II that most Jews arrived and formed a strong and vibrant community. The Jewish population received yet another boost after the Six-Day War in 1967, when a large influx of Sephardi Jews from Morocco arrived and settled mostly in the capital of Caracas.

At the peak of the boom years, the ’60s and ’70s, it was estimated that affiliated Jews numbered approximately 30,000, split evenly between Sephardim and Ashkenazim. Middle-to-upper-class professionals and business owners established associations, schools, synagogues and community centers. They developed deep ties to the country and a strong sense of patriotism. They acculturated and settled into a comfortable “live-and-let-live” rapport with the government — the government welcomed the community and the Jewish community kept a low profile.

A snapshot of the Jewish community at present shows a different picture. On the economic front, many Jews, just as the population at large, are slowly being squeezed out of the middle class. Once lucrative professions now barely pay enough to make ends meet. An experienced university professor, for example, now makes approximately $200-$300 a month. This forces professionals to become small entrepreneurs, or leave.

Dr. Marcko Glijenschi, founding member of the Confederation of Israeli-Venezuelan Associations, an umbrella organization that organizes the Ashkenazi and Sephardi communities in Venezuela, reports a notable increase in assistance recipients. An average caseload prior to Chávez was around 100 cases; it now is approximately 400. In addition, the requests are changing from items such as matzah and candles to staples, such as soap or toothpaste.

Another telling event is the recent closure of one of the campuses of the well-established day school in the old Jewish neighborhood of San Bernardino in Caracas. The 450-student school was under financial strain. Its capacity to provide aid to an increasing number of families requesting scholarships, or enrolling their children and not keeping up with payments, became impaired by the simultaneous reduction in donations.

All this may seem reminiscent of Argentina. But according to Venezuelan community leaders, the Jewish community’s present predicament is not the same. Argentina’s social structure was different, with a large Jewish

proletariat class. By contrast, Venezuela’s Jews are mostly middle to upper class. Argentina has seen a full quarter of its Jewish population slip into poverty, while in Venezuela, the Jewish community’s economic problems are, so far, small enough to be handled locally, within the community. Resources are strained, however, and time is running out. The red flags have been raised, prompting a visit from the American Jewish Joint Distribution Committee to instruct community leaders as to what to do if the situation deteriorates.

Although these events are alarming, the greatest current threat to the community is widespread emigration. Since the 1980s, Jews have been gradually emigrating due to worsening economic conditions. Under Chávez, the trend has become dramatic. Glijenschi comments that prior to Chávez’s election in 1998, the population of affiliated Jews numbered 20,000; now, it has shrunk to 14,000.

The custom of sending college-age children abroad — often to the United States — to get a university education and then return to settle in Caracas, is now turning into a slow emigration pattern. Children are no longer encouraged to return. In addition, many Venezuelans are physically leaving the country, but still keeping business ties.

Finally, young professionals facing an unpromising future are being forced to leave. Just recently, for example, 250 professional Jewish Venezuelans met in Miami to discuss prospects for immigration to the United States and a new life. Understandably, the mood has become bleak and pessimism prevails. Will the community survive?

Rabbi Pynchas Brener, head rabbi of La Unión Israelita, a large modern Orthodox temple that also runs a day school and community center for approximately 1,500 families, sees three potential scenarios, all linked to the outcome of the present conflict: If Chávez stays in office, and continues present policies, Jews will continue to emigrate at the rate of 2 percent to 3 percent a year, slowly but systematically shrinking the community; if Chávez succeeds in his Castro-style “Bolivarian Revolution” and implements extreme leftist policies, 50 percent of the community would leave rapidly; and, if Chávez loses the present conflict and resigns, the community would be invigorated by the return of 30 percent to 50 percent of the recent emigrants.

Ena Rotkopf, director of the Venezuelan Federation of Jewish Women,agreed: “If the situation changes, I have no doubt that those who emigrated will return because our community is very united, the country is beautiful, and the Jews who left have very deep ties. Our present leaders are all graduates of our day schools, they love their community, they love their country.”

Julie Drucker, a language and marketing consultant for the Latin market, grew up in Venezuela and lives in Los Angeles. She can be reached at JulieDrucker@yahoo.com.