www.boston.com By Associated Press, 1/11/2003

WASHINGTON - The Bush administration called on the international community yesterday for help in resolving the five-week strike in Venezuela that is crippling oil exports, promoting violence, and threatening the stability of the government of President Hugo Chavez.

''The severe damage being caused to Venezuela's economy, as well as the increasing likelihood of violence and civil conflict, requires a solution,'' said White House press secretary Ari Fleischer.

He said the United States continued to support mediation efforts by Cesar Gaviria, secretary general of the Organization of American States, ''to facilitate a dialogue between both sides that leads to a peaceful, democratic, constitutional and electoral solution to Venezuela's crisis.''

Meanwhile in Venezuela, Chavez fired 700 workers from the state oil monopoly, hoping to break the strike, which has paralyzed the world's fifth-largest oil exporter.

At least 30,000 of the 40,000 workers at Petroleos de Venezuela S.A. are participating in the strike to demand early presidential elections. Chavez already had sacked 300 managers of the company.

''The revolutionary government is standing firm,'' Chavez said. ''An oligarchy ... has reared like a poisonous serpent to destroy the path of justice that we are paving. The people and our morals won't let them.''

The firings inflamed an already unstable situation. Chavez's opponents took to the streets yesterday. Bank workers and other opposition sympathizers were rallying in Caracas and 11 other cities yesterday, a day after violence broke out at similar protests. Hundreds gathered in Caracas to march on the Melia hotel, where Gaviria is staying.

The Central Bank suspended dollar auctions for a second day after the currency, the bolivar, dropped to a record low of 1,593 to the dollar Thursday, 5 percent weaker than Wednesday and down 12 percent this month.

Analysts speculated that Chavez's government may have to devalue the bolivar to balance its budget. Most government income is in dollars, and a weaker bolivar would increase its domestic spending power.

The Bush administration is working with the Organization of American States and member nations to peacefully end the standoff between the Chavez government and its opponents, Fleischer said. He pointed out that Gaviria has been quietly discussing options with other OAS states, including formation of a ''Friends of Venezuela'' group ''to help the Venezuelans find a solution.''

The Washington Post reported yesterday that the United States was putting aside its reluctance to get involved in Venezuela's internal affairs and readying an initiative to form a group of nations to try to end the deadlock.

The initiative may be rolled out next week, the newspaper said. It said the proposal's immediate goal would be to end the strike. The group would seek to develop a compromise calling for early Venezuelan elections and building on OAS mediation efforts already under way, the newspaper said.

This story ran on page A14 of the Boston Globe on 1/11/2003.

www.news-journal.com By CHRISTOPHER TOOTHAKER Associated Press Writer

CARACAS, Venezuela (AP)--Lack of funding and disorganization in Venezuela's elections council could thwart opposition hopes to weaken Hugo Chavez's presidency in a referendum set for next month.

Chavez is opposed to holding the vote, arguing it's illegal, and the Chavez-dominated Congress has yet to authorize $22 million required for balloting.

Alfredo Avella, president of the National Elections Council, said Friday the vote may be postponed to ``a later date that permits the viability of the process.''

Venezuela's opposition launched a strike Dec. 2 to pressure Chavez, who was elected in 1998 and re-elected two years later, to resign and call elections if he loses the nonbinding referendum on his rule.

Chavez insists Venezuela's constitution only permits recall referendum on his presidency halfway into his six-year term, or this August.

The strike has paralyzed the world's fifth largest oil exporter and caused fuel shortages while opponents stage daily street marches and urge tax evasion to force Chavez from office.

Chavez has refused to give in to opposition demands. He threatened Friday to deploy soldiers to seize control of food-production facilities to deal with domestic food shortages.

The former paratroop commander told troops to be ready ``to militarily seize the food production plants.'' He asked state governors belonging to his political coalition to be ready to cooperate.

This is an economic coup. They are trying to deny the people food, medicine and even water,'' Chavez told thousands of supporters in western Cojedes state. They won't succeed.''

The Venezuelan-American Chamber of Commerce repudiated the president's statements and told its members that seizures of food plants would be illegal.

The president also said he fired 1,000 workers from the state oil monopoly Petroleos de Venezuela S.A., or PDVSA. An estimated 30,000 of the company's 40,000 employees have joined the strike.

Thousands of anti-Chavez protesters fought through tear gas and gunfire from pro-Chavez street thugs on Nov. 4 to deliver 2 million signatures to convoke the Feb. 2 plebiscite. Venezuelan law requires at least 10 percent of its 12 million registered voters to call a referendum.

Opposition leaders say if they have to, they'll pay for the February referendum themselves. But many Venezuelans won't pay to vote during the nation's worst recession in decades.

``The politicians asking for money are the same ones who robbed the country, and they are responsible for the economic crisis. Why should I give them any money?'' said Manuel Arteaga, 45, who sells cigarettes on the sidewalks of downtown Caracas.

Other potential delays include organizing 180,000 volunteers to monitor voting booths, printing 12 million ballots, and protecting voting centers and materials.

While citizens opposed to Chavez wait to go to the ballot, the South American nation of 24 million is gripped with unrest.

Police used tear gas Friday to prevent pro- and anti-Chavez protesters from clashing in Venezuela's Margarita Island. Several children inside a nearby daycare were hospitalized for asphyxiation, a local civil defense spokesman said.

Five people have died in protests since the strike began.

Negotiations to end the stalemate, led by Cesar Gaviria, secretary-general of the Organization of American States, have made little progress.

``There's no exit from this crisis without an agreement,'' Gaviria said after Friday's round of talks.

In Washington, the Bush administration was talking with OAS-member nations on ways to end the strike, White House spokesman Ari Fleischer said Friday.

We remain deeply concerned about the deteriorating situation in Venezuela,'' Fleischer said. Asked about a possible U.S. role in a breakthrough, he said, An electoral solution is the direction the United States sees.''

www.voanews.com VOA News 11 Jan 2003, 07:05 UTC

Venezuela's embattled President Hugo Chavez is threatening to use the military to help run the country's economy in a bid to break a month-long opposition-led strike crippling the country.

In remarks directed at the business community, Mr. Chavez told a rally of supporters Friday he will do everything necessary to ending the strike, including sending in troops to seize privately-owned production plants idled by the protest.

Mr. Chavez already has ordered the military to take control of Venezuela's oil production facilities shut down by the strike and announced the firing of a thousand dissident oil workers.

The stern warning came, as fuel pumps again went dry at many service stations around the country and bank employees and supermarket employees completed a two-day walkout in support of striking petroleum workers and managers.

President Chavez's opponents began the general strike in December second to force him to resign and call early elections. He refuses to step down, saying the labor action amounts to a coup attempt.

The opposition says government policies are to blame for the shortages.

Venezuela is the world's fifth-largest oil exporter and a key U.S. supplier. The political crisis has paralyzed the petroleum industry, which accounts for about 80 percent of Venezuela's export revenues, and has helped push up world oil prices.

washingtontimes.com EDITORIAL • January 11, 2003

     The potential political contagion of the turmoil in Venezuela, where warring factions are killing each other in the streets, is cause for serious concern. However, much of the world also is focused on Venezuela's ability to affect a more tangible matter — oil prices. A six-week-long oil strike, waged to oust Venezuelan President Hugo Chavez, sent prices up to two-year highs, to almost $34 a barrel last week. Prices have tapered off on news that Russia and Saudi Arabia will step up production, but continue to hover around record highs.

     America has long depended on the world's fifth-largest oil exporter as a reliable standby in the market and a convenient counterweight to the oil-rich Middle East, getting more than 13 percent of its imported oil from Venezuela. The Venezuelan strike has reduced the flow of oil to world markets by about 2 million barrels per day and has caused U.S. oil companies' inventories of crude and petroleum products to drop to a 26-year low.

     Plans by Russia and Saudi Arabia to bolster production are cushioning the blow somewhat, but oil from these countries takes more than a month to arrive to the United States, while oil from Venezuela arrives within five days. This gap in supply may be felt over the next four months. So, the Energy Department has allowed oil companies to sell on the open market the oil that was slated to go to the government's Strategic Petroleum Reserve in February. The reserve currently has about 598 million barrels of crude oil, which is comparable to the stockpile in the reserve leading up to the 1991 Persian Gulf War. Still, the reserve couldn't compensate for the worst case — simultaneous supply disruptions from Venezuela and Iraq.

     Venezuela is only outputting 200,000 barrels a day, compared to prestrike levels of 3 million, while the possibility of an oil crunch already is seen on the global market. Meanwhile, Mr. Chavez continues to take a hard line, saying striking oil workers will be fired and replaced with new hires from other countries, and the opposition refuses to deviate from its demands that Mr. Chavez hold a binding referendum or election amid the current chaos.

     The Bush administration has reportedly been working behind the scenes to try to broker a deal that would restore stability and the flow of oil from Venezuela. The State Department has publicly called on both sides to show "maximum flexibility." If some kind of deal isn't reached soon, Venezuela will be the primary loser. Oil generates 80 percent of Venezuela's export revenue, and half of the government's revenue. The Venezuelan economy was tottering before the strike, with a contraction of 8 percent expected for last year and unemployment close to 20 percent. The government says it has lost about $2 billion as a result of the strike.

     It is hoped that the White House and other parties move Venezuelans toward a truce sooner rather than later.

frontpagemag.com By Thor L. Halvorssen The American Enterprise Online | January 10, 2003

On January 1 Venezuela entered into its second month of a national work stoppage. Close to 90 percent of the working population refuses to participate as producers in an economy that supports the regime of Lieutenant Col. Hugo Chavez. In a disorganized and chaotic fashion, without any single leader or political party, the people (known as “the opposition”) have taken a page out of Ayn Rand’s novel, Atlas Shrugged, and tried to answer an important question in that literary masterpiece: what would happen if the productive forces laboring under a despotic government went on strike and ceased subsidizing their own subjugation?

Chavez, a radical Marxist, was elected four years ago on a campaign promising to eradicate poverty and do away with government corruption. Since he was elected he has done away with the rule of law and private property while presiding over the greatest oil boom in Venezuela’s history. Corruption and poverty have grown to levels unseen in the country’s history. Chavez passed 49 decrees that expropriated private property in the name of his “revolution.” He terrorizes the opposition with his militia, the Circulos Bolivarianos—armed thugs financed by the government. But there is hope.

The country is united against Chavez. The labor unions and the chamber of commerce oppose him. They all speak of liberty, dignity, and the right to work for one’s prosperity. They see his rule as a threat and on December 1, 2002 they discontinued their complicity. The unions orchestrated the closing of industry for one day. Then they extended it another day. And another... New Year’s Day was the 30th day. But most surprising and encouraging: the government’s main source of revenue, the state-owned oil company, PDVSA, has also stopped.

The drama of the oil stoppage illustrates the magical realism that South America is famous for. Beyond the 40,000 laborers, engineers, and technicians that left the refineries and oil fields, the stoppage climaxed at sea. Dozens of oil tankers, part of the merchant marine, suddenly dropped their anchors and declared solidarity with the opposition. One ship, the Pilin Leon, was headed for Cuba (Chavez supplied free oil to Fidel Castro’s government). Some companies use names of kings and heroes, others use names of presidents or business leaders, in Venezuela, oil tankers are named after the country’s second greatest export: beauty queens. Pilin Leon was the Venezuelan beauty queen who became Miss World 1981. The drama surrounding the Pilin Leon became the focus of the struggle. Miss Leon herself, in London judging the Miss Universe contest that had recently been moved from Nigeria, sent the ship’s crew a message that she was proud of them and hoped they would stand firm. They did.

Days later, The tanker was taken over in a commando-style raid by Venezuela’s armed forces after Chavez decreed the lethal use of force in order to protect the “energy supply of the revolution.” Other tankers were also forced back to port but most remain anchored—Chavez does not have the manpower with the expertise to sail them at full capacity. Oil facilities use less than 10 percent of their capacity.

The governments of the hemisphere have abandoned the liberty-lovingproducers of Venezuela (Brazil’s government, now headed by Chavez sympathizer Luiz Inacio Lula da Silva, has shipped tankers with gasoline to break the work stoppage) and the U.S. Ambassador here has blithely mouthed platitudes about the importance of democracy while disregarding the crimes of the government. He even failed to condemn the televised murder of opposition members by Chavez thugs, instead engaging in moral equivalency and blaming “two sides.”

Perhaps the U.S. government’s policy on Chavez (nefariously influenced by President Clinton’s former Ambassador to Venezuela who is now Condoleezza Rice’s National Security Council advisor for Latin America) is betting on the chance that Chavez can weather the work stoppage and get the oil flowing soon (for an Iraq war timetable?). Venezuela supplies the U.S. with 15 percent of its oil imports.

As in Rand’s novel, things get progressively worse and government rhetoric cannot alter the reality. Chavez calls the country’s workers “Traitors who have stabbed their country in the back.” His ministers publicly suggested that lethal force be used to compel the workers to return to their posts.

There is no fear in Venezuela. There is resolve, indignation, and determination. The oil workers have daily meetings, massive gatherings taking place at amphitheaters, universities, and even ballrooms. Their will is unshakeable in the face of the tyrant. The wheels of production have stopped turning. For now Atlas has shrugged.

—Thor L. Halvorssen has served as a political strategist and campaign consultant in two Venezuelan presidential elections. He lives in Philadelphia.