Venezuela Opposition Mulls Limited Strike Rollback

www.morningstar.ca 27 Jan 03(1:17 PM) |  E-mail Article to a Friend By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuela's opposition on Monday debated scaling back its strike against leftist President Hugo Chavez to ease the burden on a struggling private sector now also threatened by government currency curbs and price controls.

But two months into the grueling stoppage, there was no sign that rebel oil workers -- the backbone of the strike protest -- would end their disruption to crude oil production and shipments from the world's fifth largest petroleum exporter.

Some opposition leaders, who began the strike on Dec. 2 to force Chavez to call elections, said they may allow some shopping centers and food franchises to reopen as the long-running protest squeezes private businesses.

"People have held on for more than 50 days and made a great sacrifice," opposition leader Julio Borges told reporters. "Some people plan to reopen some commerce, industry and work activity. We must respect that as the strike is voluntary."

But there were clear divisions within the opposition ranks over strategy. Carlos Fernandez, a strike leader, said the protest would continue and played down comments by colleagues that it could be eased in some sectors.

"The only thing I can say is that the protest continues," Fernandez said.

The debate underscored the opposition's struggle to maintain momentum for their strike and left a question mark over the fate of thousands of striking workers at the state oil firm PDVSA, who may be left more isolated in their fight to oust the populist Chavez.

The shutdown has driven Venezuela's economy deeper into recession by choking off its lifeblood oil exports that account for half of government revenues. Severe gasoline shortages coupled with disruptions in food supplies have also fueled tensions in the oil-rich South American country.

Faced with the possibility of bankruptcy, many private businesses, restaurants and stores have already broken the strike and opened their doors. Commerce has been bustling in the center and west of Caracas for weeks although private banks are still only open for limited hours.

Chavez, who has fought back by firing 3,000 state oil workers and sending troops to oil installations, said on Sunday he would introduce price controls and foreign exchange restrictions to counter the strike's economic impact.

The president, who was elected in 1998 and survived a coup in April, has vowed he will defeat the shutdown he portrays as an attempt by "terrorists" to topple his self-styled revolutionary government. He dismisses opposition calls for early elections.

Speaking in Porto Alegre, Brazil, Chavez said on Sunday his government was studying putting a levy on speculative financial market transactions. The government last week suspended foreign exchange trading to shore up the battered bolivar currency and preserve its international reserves from capital flight.

The bolivar, which has tumbled more than 28 percent against the U.S. dollar since the start of the strike, lost 46 percent of its value last year as it was buffeted by investor jitters.

Opposition leaders say that Chavez is responsible for the sharp downturn in the nation's economy. Rather than helping the poor, they say, his corrupt and dictatorial rule has driven Venezuela into economic and political chaos.

Chavez's foes said the government's new control measures would only worsen the financial crisis and could be used to punish striking businesses by limiting their access to U.S. currency. "All these actions are going to bring severe consequences," Rafael Alfonzo, an opposition business leader told El Universal newspaper in an interview.

International attempts to broker an end to the stalemate have so far failed. Negotiations chaired by the Organization of American States are stalled over the timing of possible elections. Representatives from six nations, led by the United States and Brazil, will arrive Thursday in Caracas to lend weight to the OAS talks.

Both sides are studying proposals by former U.S. President and Nobel Peace Prize winner Jimmy Carter for either a constitutional reform that will shorten the president's term or a binding referendum on his rule in August -- halfway though Chavez's current term.