Venezuela's Chavez Fires 700 Oil Workers

www.fredericksburg.com By CHRISTOPHER TOOTHAKER Associated Press Writer

President Hugo Chavez fired 700 workers from the state oil monopoly Friday, hoping to break a 40-day-old strike that 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 a nationwide strike to demand early presidential elections. Chavez sacked 300 managers of the company earlier in the strike.

"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 Friday, and a bank strike prompted authorities to suspend dollar auctions for a second day in a row after Venezuela's currency fell.

The Bush administration was talking with other nations in the Americas 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, Fleischer said, "An electoral solution is the direction the United States sees."

A nonbinding referendum on Chavez's rule is scheduled for Feb. 2. Chavez insists the constitution only requires him to respect a possible recall referendum in August, the midpoint of his six-year term.

Chavez said the government would have to invest "thousands of millions of dollars" to revive the oil industry. He urged Venezuela's attorney general to imprison strikers, whom he called "criminals" and "traitors to the country."

The strike has shut thousands of businesses and brought Venezuela's oil industry to a virtual halt. Chavez has tried to jump-start oil production, and crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels. Exports, normally 2.5 million barrels a day, are at 500,000 barrels a day.

Bank workers and other opposition sympathizers were rallying in Caracas and 11 other cities Friday, a day after violence broke out at similar protests.

Hundreds gathered in Caracas to march on the Melia hotel, where Organization of American States Secretary-General Cesar Gaviria, who is mediating between the two sides, is staying.

Fleischer said 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 Central Bank suspended dollar auctions for a second day Friday 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 since the start of the year.

Analysts speculated 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.

Meanwhile, unknown assailants tossed a grenade at the residence of Algerian Ambassador Mohamed Khelladi on Thursday night, the embassy said Friday. Nobody was injured and no arrests were made.

The motive for the attack wasn't known. Algeria has offered to send technicians to help jump-start Venezuela's oil industry.

Vice President Jose Vicente Rangel said the government reinforced security at embassies and diplomatic residences after the attack and a series of telephoned bomb threats at the Australian, Canadian, German, Libyan and Uruguayan embassies.

Chavez opponents claim the president's fiery rhetoric incites violent reactions from his most radical backers. But the president, a former paratroop commander who was elected in 1998 and re-elected two years later, accuses the opposition-backed media of whipping up emotions and campaigning for his ouster.

Bloodshed last year spurred a coup and Chavez's brief ouster. Loyalists in the military returned him to power on April 14.

Spokesmen at three of Venezuela's largest banks _ Banco de Venezuela, Banco Provincial and Banesco _ said 80 percent of the country's nearly 60,000 bank employees stayed home Thursday. Friday, Jan. 10, 2003