Wednesday, January 01, 2003

CARACAS, Venezuela — The embattled Venezuelan president — his rule under threat from turmoil in the strikebound oil-producing nation — left the country Wednesday to attend the inauguration of the new Brazilian president.

In what could be a daring move given the upheaval shaking Venezuela, President Hugo Chavez arrived in the Brasilia for the ceremony installing President Luiz Inacio "Lula" da Silva, whom he considers a friend and ally.

As Chavez arrived at his Brasilia hotel, he told reporters the strike will fail and he wasn't worried about being toppled from power while out of the country.

"It's not a strike, it is a conspiracy," he said. "Venezuelan workers are on the side of the government. ... The country hasn't stopped."

As the old year turned to new Wednesday, thousands of protesters filled a downtown highway in Caracas to celebrate and demand that Chavez hold a referendum on his embattled presidency.

The demonstrators waved flags, shot off firecrackers and chanted, "Not one step back," in a call to continue a month-long general strike aimed at ousting Chavez from power.

A few miles away, about 1,000 Chavez supporters held their own rally with a loud celebration party outside one of Venezuela's state-run oil company buildings.

The capital awoke to silence Wednesday morning and streets littered with exploded fire crackers and broken beer glass. People stayed home and shops were closed — either for the strike or for the holiday.

The dueling celebrations highlighted the divisions in this South American country, where even family holidays have turned political. New Year's is traditionally a family celebration in Venezuela, the world's fifth-largest oil exporter.

The oil industry, which produces one-third of the gross domestic product and 70 percent of export revenue, has been paralyzed by the strike, which began Dec. 2.

Chavez responded by firing dozens of strikers at Petroleos de Venezuela S.A. and importing gasoline and food to counteract shortages.

At the opposition rally, the rhetoric toward Chavez was bitter.

"He is a bandit, an illiterate. He doesn't know how to speak well; he's primitive," said Carmen Carrillo, 63, as she watched what the opposition called a Party for Peace.

Strike leaders said Tuesday that if Chavez does not bow to demands for a Feb. 2 referendum on his presidency, they will lead another march on the heavily defended presidential palace.

"I say let's go," said Carlos Ortega, head of Venezuela's largest labor confederation. "And if they are going to kill us, let them kill us once and for all."

Nineteen people were killed in the opposition's last march on the palace, which prompted a failed two-day coup last April.

Already, protests have erupted at empty service stations. Many Venezuelans predict full-scale riots if Chavez cannot begin delivering gasoline.

Many citizens also are embarrassed that a nation with the largest oil reserves outside the Middle East has been forced to import gasoline from other countries.

At the pro-Chavez rally, the president's supporters listened closely to Chavez' year-end message. The speech, broadcast nationally and presented on a giant screen at the rally, offered little hope for a quick end to the crisis. The president instead braced his country for a tough year to come.

"We must prepare to face difficulties in the first quarter of the year: economic difficulties and difficulties in continuing all the government's plans," he said.

"Let's prepare ourselves for the battle, but prepare ourselves with the conviction that 2003 will be a good year. A year of bounty, progress, prosperity, and the consolidation of peace, to leave behind the winds of war that still blow."

The Chavistas, as the president's supporters are called, danced under Christmas lights as a 13-piece band played "gaitas," traditional holiday music, while fireworks lit the sky.

"Chavez is the president of the poor and we trust he'll make our lives better. That's why we're going to continue by his side in 2003," said 69-year-old Lourdes Cardenas. "United, we'll overcome adversity."

— NEW YORK (Reuters) - Tight security prevented incidents at major New Year's events, but the world marked the first day of 2003 under a cloud of terror fears, political uncertainty and looming war.

A grenade attack had killed nine people in an active Muslim rebel area of the Philippines shortly before midnight and a fireworks explosion in Mexico killed at least 37.

A total of at least 10 were killed as the Philippines rang in the New Year, in the grenade attack and celebratory gunfire. Over 400 were injured in separate incidents involving fireworks but officials said the figure was lower than previous years.

In the south of the mainly Roman Catholic country, where Muslim rebels are known to be active, an unidentified man threw a grenade into a street full of firecracker vendors, killing at least nine and wounding more than 30.

In Veracruz, Mexico, an explosion and fire in a street market packed with fireworks stalls killed 28 people and injured more than 50 in the port city of Veracruz.

In New York, up to 1 million people, screened for alcohol, drugs and weapons by police metal detectors, screamed and sang as the traditional crystal ball dropped at One Times Square.

But thousands of extra police were on duty; mailboxes and trash cans were removed and manhole covers were welded shut. The Coast Guard closed New York harbor to private pleasure boats, and police increased harbor patrols in response to what was called an "uncorroborated" threat of an attack.

PROSPECT OF WAR

At Camp Doha in the Kuwaiti desert, U.S. soldiers facing the prospect of war in neighboring Iraq welcomed 2003 in the conservative Islamic country with alcohol-free beer.

In Vatican City, Pope John Paul appealed for peace in his first message of 2003.

"In the face of today's conflicts and the menacing tensions of the moment, yet again I invited prayer to pursue pacific means for settlement," he said during his homily to celebrate the Roman Catholic Church's World Day of Peace.

In Iraq, U.N. weapons inspectors visited four suspect sites on Wednesday, taking no break for the new year, a public holiday in Iraq. A unanimous U.N. Security Council resolution in November gave Baghdad a final chance to reveal all details of its weapons programs or face "serious consequences."

North Korea issues a new year's message calling on its people to build "a powerful nation" under its "army-based policy." Pyongyang, accused by Washington of secretly developing nuclear arms, has started reactivating a complex capable of producing weapons-grade plutonium and has expelled U.N. inspectors monitoring it.

As Americans celebrated, the FBI hunted five men believed to have entered the United States illegally and wanted for questioning as part of the U.S.-declared war on terror after the Sept. 11, 2001, attacks.

U.S. air authorities marked the new year by starting to screen all checked luggage for explosives, compared with only 5 percent before the 2001 hijacked plane attacks.

But bad weather, not terror fear, delayed Philadelphia's annual "Mummers Parade" until Saturday. Forecasters anticipated rain and wind that would damage the Mummers' famed fancy costumes and fanciful displays.

POLITICAL CHANGE

Throngs of Brazilians celebrated the start of a new era as former metalworker Luiz Inacio Lula da Silva was sworn in as the first working-class and first leftist president of Latin America's largest country on Wednesday.

In Venezuela, a 31-day general strike that has choked the country's lifeblood oil business dragged on with a massive New Year's street party that organizers said was a show of determination to oust populist President Hugo Chavez.

In London and Paris, tens of thousands celebrated and extra police patrolled after recent arrests of suspects on terror charges. Cars were banned around Paris' famed Champs Elysees.

Remembering two bombs that killed more than 180 in Bali in October, two-thirds of Indonesia's police were deployed across the world's biggest Muslim nation.

Balinese put on a brave face at festivities on the famous Kuta Beach, blocks away from where bombs tore up nightclubs.

In Sydney, Lord Mayor Frank Sartor praised the 700,000 who showed up to celebrate. "They didn't listen to the doomsayers; we didn't listen to the malcontents; we went on and celebrated and had a great party," he said.

Fireworks over the harbor ended a year of drought, brush fires and the Bali bombings that killed up to 90 Australians.

In Russia, 250,000 police patrolled as tens of thousands of people ventured out despite extreme cold. Moscow's City Hall banned alcohol sales in the town center to prevent drink-fueled violence, such as marred World Cup crowds in the summer.

A candlelight vigil in Seoul, South Korea, which organizers had predicted would attract 1 million brought only 12,000 to protest against the U.S. military for the deaths of two girls killed in an accident by an American army vehicle.

The West African country of Ivory Coast relaxed a curfew for the first time since a failed coup on Sept. 19 sparked a civil war. It pushed back a strict 7 p.m. deadline in the maincity Abidjan to midnight to allow New Year celebrations.

BRASILIA (Brazil) Jan 1 - Luiz Inacio Lula da Silva, who dropped out of school as a boy to shine shoes and went on to become the leader of Brazil's leftist Workers Party, was to be inaugurated Wednesday as the 36th president of Latin America's biggest nation.

Silva, 57, takes over from Fernando Henrique Cardoso in Brazil's first transition between two democratically elected presidents in over 40 years.

Silva, a one-time radical union leader who used to espouse socialism, has promised to end hunger and economic misery in a country where an estimated 50 million of the 175 million citizens live in poverty.

But he faces huge challenges: inflation that has crept into the double digits for the first time in years, and a regional economic crisis that has plunged Brazil's neighbors into financial chaos.

Brazil's currency, the real, lost 35 percent of its value against the dollar last year, in part because of investor concerns over whether Silva will keep his pledge of financing the country's large foreign debt burden or Brazil will default, as Argentina did a year ago.

People showing up to watch the ceremony said Silva is up to the job but will have a tough time keeping his campaign promises.

``I hope he's going to change things, but it's a huge challenge for him,'' said Fabiane Cristina, a 20-year-old baby sitter who lives in Brasilia.

Leaders and representatives of 119 countries - including at least seven Latin American nations - planned to attend the ceremony.

Venezuelan President Hugo Chavez arrived Wednesday morning in Brasilia, leaving Venezuela despite a crippling strike in his country that has virtually paralyzed oil production for the world's fifth largest exporter.

But the most prominent guest was Cuban President Fidel Castro, who arrived in Brasilia on Tuesday night. Castro looked healthy and in good spirits after recovering from a serious leg infection that kept him out of sight in Cuba for two weeks last month.

As he entered a Brasilia hotel, Castro waved to photographers and said that he was happy Cuba no longer holds the ``monopoly of Jan. 1,'' the day that Cubans celebrate the revolution that brought Castro to power. Silva, who is popularly known as Lula, counts Castro and Chavez among his friends

Other leaders began arriving Tuesday and Wednesday morning as tens of thousands of Brazilians swarmed to Brasilia to take part in a huge inauguration party at a vast park within view of Brazil's Congress, where Silva was to be sworn in. The United States sent U.S. Trade Representative Robert Zoellick.

By Wednesday morning, thousands of Brazilians were staking out spots to watch Silva motor to Congress in an antique Rolls-Royce down the wide Esplanada dos Minsterios, a boulevard lined with government buildings designed by a renowned Brazilian architect.

In a break with tradition, organisers set up huge TV screens in the park and a stage where Brazilian pop groups were to play after the inauguration. Hundreds of outdoor stalls sold everything from grilled pork to T-shirts and beer.

After spending 14 hours on a bus from the financial capital, Sao Paulo, musician Joao Carlos Souza stretched his legs and changed into a bright red T-shirt saying ``100 percent Lula.''

He'd never been to a Brazilian inauguration before, saying the previous events ``were for people in suits drinking champagne.''

``This time it's going to be fun to participate in history,'' Souza said. - AP

01 Jan 2003 18:10

(Recasts with Chavez)

By Jason Webb

CARACAS, Venezuela, Jan 1 (Reuters) - Venezuela began the New Year in a grim deadlock on Wednesday, as leftist President Hugo Chavez said that strikers who have cut off the nation's petroleum lifeblood were doomed to defeat.

The 31-day-old general strike, led by business and unions and supported by most Venezuelans, according to polls, has reduced oil shipments from the world's fifth-largest oil exporter to a trickle in a bid to force the president to quit or call early elections.

But Chavez, a former paratrooper jailed for a coup attempt in 1992 but elected in 1998, was his usual defiant self as he attended the inauguration of Brazil's new president.

"This is a coup d'etat disguised as a strike," he told reporters in Brasilia, where he arrived wearing a dark suit instead of the military-style uniform and red beret he often favors for populist rallies.

"The coup-mongers have a date with defeat," said Chavez, who survived a coup attempt in April, dismissing the strike leaders as "a business elite and a corrupt union elite."

Tens of thousands of opposition supporters fired off fireworks and waved yellow-red-and-blue Venezuelan flags to see off 2002 on Tuesday night in Caracas, in a massive street party that was a show of determination to force Chavez out.

"We all want Chavez to go, preferably through elections," said Maria Pinto, whose family runs a clothing shop that has stayed shut for more than a month in support of the strike.

Although the key to the strike is petroleum in a country so dependent on oil, many other businesses have closed in the wealthier parts of Caracas, giving the tropical city a permanent holiday air.

The opposition accuses Chavez of abuse of authority, economic incompetence and corruption, accusing him of stirring class hatred with his inflammatory rhetoric and arming supporters in the slums.

It says he wants to convert Venezuela -- oil-rich but marked by gaping differences between rich and poor -- into a communist dictatorship.

Economic recession despite high oil prices has contributed to a slump in support for Chavez, whose term is due to run until 2007. But his popularity rating of just under 30 percent is still greater than that of any single opposition figure.

THREAT OF ECONOMIC DISASTER

Many of Venezuela's poor majority say Chavez, a man of mixed race and lower middle-class origins, is the only politician who has ever addressed their concerns.

The strike, overwhelmingly backed by managerial staff from state oil giant PDVSA, threatens economic disaster for a country where 80 percent of exports and 50 percent of government revenues come from oil.

But Chavez has fired PDVSA strike ringleaders and sent troops aboard halted oil tankers.

Lines for gasoline hundreds of cars long are now a common sight in the country. The government says it hopes to get oil production back up to 1.2 million barrels per day over the next week, but the opposition says wells are pumping only about 150,000 bpd, a twentieth of the normal rate.

Chavez is grateful to Brazil's new leader, Luiz Inacio Lula da Silva, like him a left-winger, for approving the sale of Brazilian gasoline to Venezuela. It was the first time the country had imported such fuel in 40 years.

World oil markets, already fretting about a possible war in Iraq, have been seriously unnerved by the strike in Venezuela, which normally supplies about 13 percent of U.S. crude imports. Prices are near two-year highs.

The opposition hopes to hold a nonbinding referendum on Chavez's rule on Feb. 2, but he has said he will pay no attention to the results. He is sticking to a date in August, halfway through his current term, when he says the constitution allows for a binding referendum on his mandate.

The strike has begun to fray at the edges, and smaller firms and restaurants are beginning to open again in Caracas.

Despite signs of frustration in the opposition ranks, leaders have vowed to pile up the pressure against Chavez in January with bolder street protests, including a possible march on the Miraflores presidential palace.

Miraflores has been off-limits to protesters since a coup was triggered in April by a demonstration that ended with 19 people shot to death by gunmen and more than 100 injured. Both government and opposition blamed each other for the killings.

Chavez says his reforms, which include a nationalistic oil strategy, increased state intervention in the economy and cheap credits and land grants for the poor, are aimed at eliminating minority privileges and distributing oil wealth more fairly.

The Angolan Foreign Minister, João Miranda, on Monday here assured that the "excellent" political and commercial relations between Angola and Brazil will be maintained with the Government of President Lula da Silva.

João Miranda said so while addressing press, at Luanda airport, before leaving to Brazil, where he will represent the Angolan Head of State, José Eduardo dos Santos, at the swear-in ceremony of Lula da Silva, on January 01, 2003, in Brazilia.

He informed that he got sureties from the future Brazilian Minister of Treasury, António Palloci, on the reinforcement of ties between both countries, during his visit to Brazil.

Mr João Miranda added that the Secretary General of Brazil's Labour Party (PT) assured him that the relations will be good, due to the traditional ties and political "neighbourhood" between the ruling parties of Angola (MPLA) and Brazil (PT), which will rule that south American country.

"The signs that we have been receiving from the new authorities tell us that the relationship will be reinforced more and more", the Angolan chief diplomat said.

João Miranda also said that in case of a contact with President Lula da Silva, he will transmit to him a message of hope so that major solidarity from Brazil's people and Government toward the Angolan could exist.

He said he will also ask Brazilian business people to invest in Angola, where the doors are opened to whoever whishes to do so.

Sources with the Brazilian Foreign Ministry confirmed the presences of the Heads of State of Portugal (Jorge Sampaio,) Argentina (Eduardo Dugalde), Bolivia (Gonzalo Lozada), Chile (Ricardo Lagos), Peru (Alejandro Toledo), Uruguay (Jeorge Batle), and Venezuela (Hugo Chaves) at the ceremony.

Present at the event will also be the Heads of State of Sweden (Goeran Persson), of Guyana (Samuel Hinds), of Belize (Said Nuzio Dangieri), plus Prince Filipe of Spain.

Lula da Silva, winner of the October Presidential elections, will replace President Fernando Henrique Cardoso, who ruled the country during two consecutive mandates, from 1995 to 2002.