Venezuela's Chavez says wealth gap could boil over

www.forbes.com Reuters, 01.26.03, 8:01 PM ET

PORTO ALEGRE, Brazil, Jan 26 (Reuters) - Venezuelan President Hugo Chavez on Sunday said rich countries must do more to lower trade barriers and ease developing countries' debts or the simmering discontent over the wealth disparity could eventually boil over.

"If we do not manage to do it in peace... tomorrow, or the day after tomorrow, that explosive charge will explode." he told a news conference. "Without a doubt, the international trade system is terribly unfair."

The colorful leader, who is facing an 8-week-long strike at home as opponents try to force him to resign and make way for early elections, said Latin Americans could also build institutions of their own to help dig themselves out of debt.

"No, it is not the market that is going to solve the world's problems, it's politics...it requires political will," he told a news conference at the World Social Forum.

"We have proposed for example that a Latin American Monetary Fund be created, and each of us put in what he can," he said, adding such a fund might include the barter of goods.

While he spoke, hundreds of rowdy flag-waving supporters were gathered outside the building. Some were pushed back by police after they tried to barge their way in, but there were no injuries. The WSF, which is in its third year, grew out a desire to counter the meeting of the world financial and business elite at the World Economic Forum in Davos, Switzerland.

Earlier, Brazil's recently-elected left-wing president, Luiz Inacio Lula da Silva ,took the social message he delivered at the WSF to Davos and urged rich countries to declare "war on hunger" and create a global fund to fight poverty.

The Brazilian event has seen intellectuals, unionists, and grass-root social groups rail against trade barriers of richer nations like the United States, particularly on agricultural products, which they say do not let poorer countries develop.

"That is why we have to reform the world order... that is why this (world) social forum is important," Chavez said.

Chavez also echoed comments by many at the conference in this southern Brazilian city who argued that multilateral institutions like the International Monetary Fund and World Bank impose impossible conditions on their assistance.

Venezuela had paid some $20 billion of its debts in the last four years and still owed $26 billion, he said.

He also suggested Latin American state oil companies such as Brazil's Petroleo Brasileiro (Petrobras) <PET4.SA> (nyse: PBR - news - people) and Venezuela's Petroleos de Venezuela (PDVSA) band together and create a South American OPEC.