U.S., Brazil Join Bid to End Venezuela Strike

asia.reuters.com Wed January 15, 2003 08:54 PM ET By Phil Stewart and Patrick Markey

QUITO/CARACAS (Reuters) - A coalition including the United States and Brazil pledged on Wednesday to help Venezuela negotiate an end its political crisis and a six-week-old strike against President Hugo Chavez that has choked-off vital oil exports.

Latin American presidents meeting in Quito for the inauguration of President Lucio Gutierrez approved the creation of the "group of friends," which will sit at the negotiating table to aid so-far fruitless talks led by the head of the Organization of American States, Cesar Gaviria.

"We're looking for solution that is peaceful, constitutional, democratic," Gaviria said.

But Brazil, spearheading the group, said there was no quick fix to the bitter standoff and warned that clashes between the Venezuelan opposition and pro-Chavez militants could easily escalate without the right accord.

"There are no magic solutions. On the contrary, aiming for magic solutions could lead to more violent conflicts," said Brazil's Foreign Minister Celso Amorim.

Venezuela's opposition strike, which began Dec. 2, has threatened to plunge the world's No. 5 petroleum exporter into economic turmoil and helped push global oil prices to two-year highs. Strikers, including rebel state oil firm managers, have vowed to keep up the stoppage until Chavez quits.

U.S. oil futures on Wednesday settled up 84 cents at $33.21 as energy markets were rattled by the strike and fears of an attack on Iraq. Venezuela usually supplies about one sixth of U.S. oil imports.

Venezuela's bolivar currency, battered by political and economic uncertainty, fell 6.1 percent on Wednesday against the dollar. The economy was mired in recession even before the strike, which has cost Venezuela about $4 billion so far.

The industrial shut-down has intensified the bitter feuding between Chavez and his foes, who accuse him of driving Venezuela into economic and political turmoil with his reforms aimed at easing poverty. The opposition has stepped up its campaign since Chavez survived a brief coup in April.

BRAZIL'S DARING DIPLOMACY

The "group of friends," which will also include Mexico, Chile, Spain and Portugal, is the brainchild of Brazil's first leftist leader -- Luiz Inacio Lula da Silva, who took office just two weeks ago.

Lula, as the former union leader is universally known, had pitched the "group of friends" to Chavez during a breakfast on the Brazilian's first working day as president, the Venezuelan leader told reporters.

"Lula and Brazil should assume and are assuming the prominent role in the leadership of Latin America," Chavez said shortly before a closed-door meeting with the Brazilian president in Quito. "Brazil's initiative is positive, and we completely agree with it," he said.

At the same time, Chavez left little hope for negotiation. He branded his opponents "fascists" and "terrorists" and said he was fighting the same campaign that Jesus Christ had.

"The whole world is divided," the embattled leader told a reporter in Quito. "Why do you think that Christ came to the world 2,000 years ago to fight for the poor against the powerful? We are waging this battle."

Lula told reporters that his main objective wasn't to please Chavez, but to end the conflict.

"The goal of the countries grouped as 'friends of Venezuela,' is to find a calm, peaceful solution which would above all satisfy the people of Venezuela," Lula said.

The Venezuelan opposition has cautiously accepted the "friendly nations" initiative as long as it supports the OAS talks. But opposition negotiator, Timoteo Zambrano, told Reuters Monday that he rejected Brazil as part of the group.

Brazil angered strikers recently when it sent gasoline to Venezuela to help offset fuel shortages caused by the shutdown. The opposition described the move as "unfriendly."

Nobel Peace Prize winner and former U.S. president Jimmy Carter arrived Wednesday in Venezuela, where he plans to hold talks with both sides next week.

Venezuela's opposition leaders, anticipating the Supreme Court will block their proposed nonbinding Feb. 2 referendum on whether Chavez should quit, on Wednesday started to examine alternatives in their campaign for elections.

While a consultative referendum could not force Chavez from power, the opposition hopes that a decisive rejection of his government would strengthen their legitimacy.