Posted on Fri, Jan. 03, 2003 BY PATRICK MARKEY Reuters

CARACAS, Venezuela - Two people were shot dead and two dozen were wounded on Friday when foes and supporters of Venezuelan President Hugo Chavez clashed in Caracas as the opposition stepped up street protests in its drive to force the leftist leader to resign.

Demonstrators and police ran for cover after dozens of gunshots rang out near the capital's military headquarters, breaking the uneasy Christmas calm that had settled over the streets during an ongoing 33-day-old opposition strike.

"There was a volley of shots. We all threw ourselves to the ground. There was chaos and total panic. The shooting didn't stop," said a Reuters photographer at the scene.

National Guard troops and police fired tear gas and shotgun pellets to stop a few hundred Chavez supporters from attacking thousands of opposition marchers, who were also forced back by troops. Confused running battles broke out as groups from both sides hurled rocks.

City health officials said two of six people hit by gunfire had died. Another person was injured by police shotgun pellets and at least 20 people were wounded by stones and objects thrown by protesters.

It was unclear who had opened fire, but witnesses saw several people on both sides produce handguns after the shooting began.

Columns of smoke wafted high above apartment blocks in the southwest part of Caracas as pro-Chavez demonstrators set up burning barricades near Fuerte Tiuna military base to block the opposition marchers demanding the government free a dissident general detained this week.

STALEMATE OVER OIL SHUTDOWN

The opposition strike, started on Dec. 2, has choked oil shipments and stoked fears of violence in the world's No. 5 petroleum exporter. Global oil prices have hit two-year highs due to the strike and a possible U.S. war with Iraq.

Opposition leaders are locked in a stalemate with the government as they vow to keep up the strike until Chavez quits and accepts early elections. They have held daily marches and urged supporters not to pay taxes to keep up the pressure.

But the populist president has refused to quit and promised to defeat the shutdown, which he calls an attempt to topple him. Chavez said that he would only consider declaring a state of emergency if the situation required such a measure.

"That would be decided by the circumstances," Chavez said. "I am obliged to protect public order."

Opponents and supporters of the president have been caught up in a bitter political conflict for more than a year and rival rallies and marches have often ended in violent clashes.

Foes of Chavez say he has failed in his electoral promise to tackle poverty and corruption. Instead, they say, his self-styled "revolution" has driven Venezuela toward economic ruin and chaos with its left-wing reforms and mismanagement.

Since his 1998 election, Chavez has portrayed himself as a champion of the poor in a nation where impoverished slums sit uneasily alongside rich neighborhoods. Despite Venezuela's vast oil wealth, most of its population lives in poverty.

Opposition leaders, who accuse former paratrooper Chavez of ruling like a dictator, have appealed to the armed forces to help secure the release of Gen. Carlos Alfonso Martinez, who was involved in a short-lived April coup against Chavez.

Provoking opposition outrage, the National Guard general is being held despite a court order for his release. Military authorities have not announced formal charges against him. But he and more than 100 other anti-Chavez officers have staged a peaceful protest in an east Caracas square since late October.

ELECTION CONTROVERSY

Fears over splits within the armed forces have rattled Venezuela since April when Chavez was briefly toppled by rebel generals and admirals. Top military commanders appear to back the president despite calls for popular resistance.

Nearly five weeks into the strike, the government and opposition are locked in a struggle for control of the oil industry. Chavez, who has tried to restart strike-bound state oil giant PDVSA using troops, loyal workers and retirees.

But strikers have argued it would take at least four months for operations to resume.

Talks between both sides chaired by the Organization of American States and backed by the United States have gone nowhere. Negotiations continued Friday with no result.

The opposition is demanding elections in the first three months of this year. They also want to hold a nonbinding referendum on Chavez's rule on Feb. 2, hoping to illustrate how far his popularity has fallen. Chavez said on Friday the referendum still needed to be ratified by the Supreme Court, but the opposition said it would go ahead with the poll.

The president has said he will ignore the vote, saying the constitution only allows a referendum on his mandate in August -- halfway through his current term which ends in 2007.

(Additional reporting by Ana Isabel Martinez and Kim White)

By GINGER THOMPSON

ARACAS, Venezuela, Jan. 3 — As many as three people were wounded by gunfire today in clashes between opponents of President Hugo Chávez and pro-government groups, as a peaceful protest involving thousands deteriorated into a huge street fight.

It is unclear who fired the shots.

Hospital officials reported at least a dozen people hurt by rocks and rubber bullets, and soldiers fired dozens of rounds of tear gas to disperse the crowds. Advertisement

The disturbances lasted until sunset, with many people at the scene expressing concern that as a national strike against the president entered its 33rd day, the atmosphere here would only get worse.

"This country is like a time bomb," said Antonio Melchor, his clothes drenched in sweat and his eyes bloodshot from the tear gas. "Instead of elections, it seems the president wants civil war."

The strike has shut down most major industry, including crucial oil production, generating serious shortages of gasoline and cooking fuel.

As part of his effort to break the strike, Mr. Chávez has had talks with officials from Algeria about the possibility of importing oil workers, and is reportedly exploring similar options with India and the Philippines.

He said today that he expected a team of Algerians to arrive soon. He described them as "tanker crews, some experts in energy matters, refining, production, and especially systems analysts."

In Washington, the State Department reacted negatively to an effort by President Chávez to form a coalition of heads of state, called "Friends of Venezuela," to help negotiate a settlement to the crisis. Mr. Chávez talked about forming such a group during a visit to Brazil this week.

The State Department spokesman, Richard A. Boucher, instead expressed American support for talks currently being mediated by the Organization of American States.

The violence here today began when tens of thousands of protesters approached a bridge leading to the main military base at Fort Tiuna, witnesses said. Protesters urging the military to join their side also sought the release of a dissident general detained last week by government security forces.

Chávez supporters, shouting that they had come to defend the army, intercepted the marchers. Beneath the bridge other pro-government groups, their faces covered by masks made from their T-shirts, began to throw rocks and bottles.

Almost every day since the strike began, opponents of the president have held marches and rallies, at times as many as half a million people, to press him to resign and hold new elections. The protesters say Mr. Chávez, who proclaims himself a champion of the poor, is seeking to impose a Cuban-style government. Meanwhile, the country is convulsed by its deepest recession in more than a decade.

Labeling protesters terrorists and coup plotters, the president has ignored calls to resign. He has further inflamed opponents by threatening to prosecute their leaders and by playing down the strike's impact.

But the violent scenes broadcast live on all major Venezuelan networks today only emphasized the depth of the turmoil here.

Pro-government groups stood at one side of the bridge, waving a flag that read, "The Bolivarian Revolution will not negotiate!" Some began to set fire to the fields of shrubs beneath the bridge and throw rocks.

On the other side, tensions heightened among opposition protesters, who had come armed only with flags and whistles. Some of them began throwing rocks. Some chanted, "Not one step back," which has become a kind of battle cry for those who oppose President Chávez.

Venezuela Strife Pushes Crude Oil to $30  (December 17, 2002)  $ Venezuelan Leader Says He'll Weather Strike by Opponents  (December 16, 2002)

The Associated Press Published Friday, January 3rd, 2003

RIO DE JANEIRO, Brazil (AP) - A senator with a degree in geology on Friday will take the helm of Brazil's state-controlled oil giant, Petrobras.

The appointment of Workers Party Sen. Eduardo Dutra as Petrobras' new president was announced Thursday night by Andre Singer, spokesman for new President Luiz Inacio Lula da Silva.

Market analysts have said that the 45-year-old Dutra, who will replace Francisco Gros, lacks the business experience needed to head one of Brazil's most profitable and heavily traded companies. They said investors would view Dutra as a political appointee, which could undermine credibility in the company.

Analysts have also said that Dutra's appointment could mean greater government intervention on Petrobras' fuel pricing policy.

But Wagner Victer, energy secretary for the state of Rio de Janeiro, said Dutra was "a suitable choice. He has the requisites needed to be a good president."

Brazil's new mines and energy minister, Dilma Roussef, told a news conference before Dutra was sworn in that the government was trying to find mechanisms to limit the volatility of gasoline prices.

Future price controls would not mean subsidizing gasoline prices, though, Roussef said.

Before a liberalization of the petroleum sector in January 2002, the government fixed gasoline prices every couple of months through a complicated pricing system that ran large deficits. The government used the controls to put off necessary fuel price increases and curb inflation.

03 Jan 2003 21:16

WASHINGTON, Jan 3 (Reuters) - The United States said on Friday it saw no need for a new mediator in the conflict between Venezuelan President Hugo Chavez and his opponents.

The Organization of American States (OAS) has been trying to settle the political dispute and end a 33-day opposition-led strike that has crippled Venezuela's oil industry and devastated the economy.

Chavez said in Brazil on Thursday that he favored the creation of a "Friends of Venezuela" group to help end the crisis. Venezuelan officials said the group could include Brazil, France, Russia and some members of the Organization of Petroleum Exporting Countries.

But State Department spokesman Richard Boucher said Washington preferred to rely on the OAS mission led by Secretary-General Cesar Gaviria, who arranged another session of talks in Caracas on Thursday.

"We don't think that there needs to be some separate Group of Friends formed," Boucher told a briefing.

"We urge both sides to demonstrate maximum flexibility in working with the Organization of American States to achieve peaceful, democratic, constitutional and electoral solutions to the crisis," the spokesman added.

At least one person was shot and wounded on Friday as both sides took to the streets, with Venezuelan troops firing tear gas and shotgun pellets to keep apart Chavez supporters and opposition marchers. In addition, the government slashed growth prospects for the recession-hit Venezuelan economy.

The United States has kept its distance from the conflict in Venezuela but it has criticized Chavez in the past and was slow to condemn a short-lived coup against him in April last year.

Its main concern now is supplies of oil from Venezuela, which normally provides 13 percent of U.S. oil imports. World oil prices have jumped as supplies from Venezuela dry up.

Boucher declined detailed comment on meetings in Brazil on Thursday among Latin American leftist leaders, in which newly-elected Brazilian President Luiz Inacio Lula da Silva held separate talks with Chavez and Fidel Castro of Cuba.

"We have an excellent relationship with Brazil and ... we look forward to building on that relationship and working on the common values and common goals that we have with our neighbors in this hemisphere," he said.

(BRASILIA, Brazil) Venezuelan President Hugo Chavez on Thursday announced a plan to involve European and Latin American countries in solving the economic and political turmoil that has paralysed his country and roiled international oil markets.

Mr Chavez, who faces a month-long strike that has hobbled his country's oil industry, said the 'Group of Nation Friends' would also involve the Organisation of Oil Exporting Countries and would help mediate talks between his government and the opposition groups that seek his ouster.

'This has to be the way out (of the crisis),' Mr Chavez said. 'There is no other way.'

He said the plan was the result of talks he held in Caracas with foreign diplomats a few days ago. 'I thought it was a good idea and began immediately making phone calls,' he said, but did not specify which countries he had contacted.

Mr Chavez spoke at a two-hour news conference in Brasilia after an overnight meeting with Cuban leader Fidel Castro. Both were in Brazil to attend the inauguration of the country's new president, former union leader Luiz Inacio Lula da Silva.

Mr Chavez also called for the creation of a pan-Latin American oil company, to be called Petro-America, in an attempt to increase cooperation among state-owned oil industries. 'It would become a sort of Latin American Opec,' he said, adding that the company could include Venezuela's PDVSA, Brazil's Petrobras, Colombia's Ecopetrol, Ecuador's PetroEcuador, and Trinidad and Tobago's PetroTrinidad.

Also on Thursday, Mr Chavez asked the Brazilian president to consider sending technical experts from Petrobras to replace some of the 30,000 Venezuelan state oil company workers who have walked off their jobs.

In Caracas, opposition legislator Alejandro Armas said the opposition had already proposed an international effort to mediate the dispute.

The idea drew support from opposition labour leader Manuel Cova, secretary general of the one million-member Venezuelan Workers Confederation. 'Whatever international initiative leading to an electoral solution is welcome,' he said.

In London, crude oil rose as traders doubted whether Venezuela would soon recover from the month-long strike, even though Mr Chavez said the country would have oil production back to three million barrels a day in 45 days. Output is now 172,000 barrels a day, strikers said.

Brent crude oil for February delivery was 40 US cents, or 1.4 per cent, higher at US$29.83 a barrel at 10.59am London time. - AP, Reuters