Bank staff turn up heat on Chávez

www.smh.com.au January 11 2003

Thousands of bank employees went on strike yesterday to support a national work stoppage that has dried up income in the world's fifth-largest oil exporter while seeking to oust President Hugo Chavez.

Jose Torres, president of the Fetrabanca workers union, claimed 80 per cent of the country's nearly 60,000 bank employees were participating in the two-day strike. He urged workers to provide only minimal services, such as such as processing payments for medical emergencies.

Spokeswomen for three of Venezuela's four largest banks - Banco Provincial, Banco de Venezuela and Banesco - said at least 80 per cent of their branches in the country were closed. Officials at the second biggest, Banco Mercantile, were not available for comment.

An official with the Venezuelan Bank Association, who spoke on condition of anonymity, said 70 per cent of branches nationwide were closed. The association represents all of Venezuela's private banks.

But many branches opened in downtown Caracas, and people began lining up at automatic teller machines many of which were stocked with cash despite union threats to shut them down.

Those banks that were not shuttered only opened for three hours as they have since December 9 in a management decision to support the national strike against Chavez.

The Central Bank suspended its dollar auctions Thursday after the local bolivar currency plunged to a record low against the dollar Wednesday. The Central Bank has been auctioning $US45 million a day since Wednesday.

Chavez has threatened to nationalise private banks. In Caracas, thousands of people line up each morning outside banks splattered with graffiti reading "I want my money!" and "Banker thieves!"

Demand for dollars soared on speculation that Chavez's government, facing a fiscal crisis because of dwindling oil and tax revenues, would devalue the bolivar to balance its budget. Nervous depositors wanted dollars before the banks closed, not knowing what the bolivar would be worth when banks reopen next week.

The bank strike underscored the intransigence of both sides, despite international pleas for them to join the Organization of American States in negotiating a solution to the 5-week-old national work stoppage.

The bolivar plunged by as much as 13 per cent before its official close at 1,510 bolivars per dollar, down 6 per cent, said the Central Bank, which uses an average of all the day's trading prices. Previously the lowest close was 1,492 per dollar on September 15.

Before Thursday, the bolivar's value had fallen by more than 45 per cent since Chavez abandoned exchange controls last year to curb capital flight. Venezuela spent $US6 billion in 2001 to support the bolivar.

The government, meanwhile, tried to raise money by offering 40.5 billion bolivars in government bonds, worth $US29 million at that point. There were no takers.

Strike leaders are calling for a February 2 nonbinding referendum on Chavez's rule and want him to schedule elections in 30 days if he loses the referendum.

Chavez insists the constitution only requires him to respect a possible recall referendum next August, the midpoint of his six-year term.

The strike briefly sent international oil prices above $US30. The state oil company is gradually resuming production but still operating well below normal. Crude output is estimated at about 400,000 barrels a day, compared to the pre-strike level of 3 million barrels a day. Exports, normally 2.5 million barrels a day, are at 500,000 barrels a day.

Chavez has managed to somewhat stabilize domestic gasoline supplies through imports. Caracas streets were jammed with traffic, and many businesses were open. However, international franchises, large malls and many factories were closed, emptying industrial parks. Public schools have opened for the new year, but some private schools have delayed classes.

Energy Minister Rafael Ramirez has vowed to crush the strike by decentralising the oil monopoly, where 30,000 workers are on strike.

Chavez's government will cut jobs at the Caracas headquarters of the company, a hotbed of dissent where 7,000 are employed, Ramirez said. The government is systematically firing strikers throughout the giant corporation.

The strike has all but shut down Venezuela's oil industry, which contributes half of government income. Other revenue is down because thousands of businesses closed, affecting tax collection. The government has said it may cut its $US25 billion 2003 budget by 10 per cent.