Venezuela's currency plunges to new low; Chavez's control in Congress weakens with movement for early elections

www.sfgate.com CHRISTOPHER TOOTHAKER, Associated Press Writer Wednesday, January 15, 2003

(01-15) 15:48 PST CARACAS, Venezuela (AP) --

A seven-week-old opposition strike against President Hugo Chavez dropped Venezuela's currency to a new low Wednesday and sent Venezuelans in the capital scrambling to banks to buy dollars.

Support for Chavez's adamant refusal to consider early elections showed signs of crumbling as three pro-Chavez lawmakers unveiled a plan for an early vote on his presidency.

The strike has slashed oil exports to a trickle, depriving the government of half its income. Venezuela's bolivar currency closed at 1,716 to the U.S. dollar, down 6 percent from Tuesday. In Caracas, hundreds of citizens waited in long lines at banks and exchange houses to buy dollars.

Trying to calm fears of an economic crash, the government denied speculation that it plans to devalue the bolivar so it can balance its $25 billion budget. Most government income is in dollars and a weaker bolivar would increase its domestic spending power.

Venezuela has acknowledged the oil strike has cost $4 billion so far.

Venezuela's opposition launched the strike Dec. 2 to demand that Chavez resign or call early elections if he loses a Feb. 2 nonbinding referendum on his rule.

The National Elections Council is organizing the vote, but Chavez says he will ignore it, and ruling party lawmakers have challenged its legality in court. Venezuela's constitution allows citizens to petition for a binding referendum halfway through a six-year presidential term, or August. Opposition leaders fear Chavez will find a way to postpone it.

Chavez was elected in 1998 and re-elected in 2000.

Rafael Simon Jimenez, a pro-Chavez lawmaker who quit the leftist Podemos party, said he and two other legislators would introduce a measure as early as next week to amend the constitution. It would end Chavez's term later this year and allow general elections.

The proposal by Jimenez and Chavez supporters Guillermo Palacios and Luis Salas would leave opposition legislators just one vote shy of a simple majority needed to pass an amendment in the 165-seat Congress. Jimenez said he was looking for that vote.

Elections are the only way to solve Venezuela's political crisis and end the 45-day-old strike, which has raised gasoline and oil prices abroad, Jimenez said.

"We don't see an elections as a break with Chavez. We see elections as a response to the country's crisis," Jimenez said.

Legislator Freddy Lepage of the opposition Democratic Action party said Chavez was steadily losing support in Congress as the crisis deepened. "We still don't have the majority, but I'm confident we'll have it soon," he said.

Chavez enjoys the support of the military, which he purged of dissidents after a brief April coup. The government claims oil production is back up to 800,000 barrels a day, compared to a pre-strike level of 3 million barrels a day.

The U.S. Energy Department says American motorists could pay up to $1.54 per gallon of gasoline this spring even if war is averted in Iraq. Home heating oil prices rose 4.7 percent in December.

Negotiations mediated by Cesar Gaviria, secretary general of the Organization of American States, were briefly suspended while the region's leaders attended the Wednesday inauguration of Ecuadorean President Lucio Gutierrez.

In Quito, Ecuador, Chavez lashed out at his opponents as "a subversive movement from the far right, a fascist movement backed by economic elites."

Chavez was to meet with U.N. Secretary General Kofi Annan in New York on Thursday before returning to Caracas. Some strike leaders, meanwhile, were in the United States pleading their case with U.S. government and business leaders.

Several nations voiced support for a so-called "Friends of Venezuela" proposal to strengthen the efforts of Gaviria, who has had little success in mediating talks since November.

"The solution must be democratic, constitutional, and, it seems, electoral," said Bolivian President Gonzalo Sanchez de Lozada.

Former President Jimmy Carter arrived in Venezuela on Wednesday for a fishing trip with Venezuelan businessman Gustavo Cisneros. Carter, whose Atlanta, Georgia-based Carter Center also is trying to resolve Venezuela's crisis, said that he would meet with Gaviria and government and opposition leaders next week.