Food, Fuel Shortages in Venezuela - Food, Fuel Shortages Caused by Venezuela Strike May Undermine Effort to Remove President

abcnews.go.com The Associated Press CARACAS, Venezuela Jan. 28 —

Schools, restaurants and malls may reopen amid fears that a 57-day-old strike called to force President Hugo Chavez from office could backfire, business leaders said, as the government extended a freeze on foreign currency sales for another week to protect its battered currency.

Business representatives expressed concern Monday that discontent with food and fuel shortages caused by the strike could undermine its objective of removing Chavez from office.

Julio Brazon, president of the Consecomercio business chamber, which represents about 450,000 stores and retailers, said businesses need "to recover earnings and avoid labor problems." He said shopping malls and franchises may be permitted to open part-time next week.

Carlos Avila, executive president of Subway de Venezuela, said fast food franchises were considering opening four days a week. Each of Subway's 76 branches in Venezuela have lost an average of $30,000 during the strike.

The National Association of Private Education, which represents 911 private schools, convoked assemblies this week to decide whether schools should open Feb. 3.

Strike organizers, who accuse Chavez of dragging this South American country into political and economic chaos, warned that easing the work stoppage would be counterproductive.

"If some sectors of the opposition, business sectors or political sectors, think they can save themselves from this regime by easing the strike, they are totally mistaken," labor boss Carlos Ortega said.

Strike leaders said the work stoppage in the oil industry, which provides half of government revenue, would continue.

"The protest by oil workers will continue because this is the path we are taking to find a solution to the crisis," dissident oil executive Juan Fernandez said at a press conference.

Crude output reached 966,000 barrels a day on Monday, according to striking executives at state oil monopoly Petroleos de Venezuela S.A., or PDVSA. Chavez claimed Sunday that daily production had surpassed 1 million barrels.

Oil production dropped as low as 150,000 barrels per day in December compared to pre-strike levels of 3.2 million barrels per day.

A waning strike could give Chavez the upper hand in negotiations with the opposition. Negotiations, mediated by the Organization of American States, have focused on whether to hold early presidential elections.

Meanwhile Tuesday, the Finance Ministry extended a freeze on foreign currency sales, first imposed last Wednesday, until Feb. 5. The suspension is designed to give the government more time to implement a new policy of foreign exchange controls, which will limit the amount of dollars and other foreign currencies Venezuelan can buy.

Exchange controls would stem the slide of Venezuela's bolivar currency, which has lost a quarter of its value this year. But they could hurt businesses that depend on dollars to buy imported goods.

The strike has cost Venezuela at least $4 billion so far. The economy could shrink by as much as 40 percent in the first quarter of 2003, the Santander Central Hispano investment bank has warned.

Chavez, a firebrand former paratrooper, was elected in 1998 and re-elected two years later. His term in office ends in 2007.

Government adversaries are now pinning hopes on amending the constitution to allow early elections. They must gather signatures from at least 15 percent of Venezuela's 12 million registered voters to call a referendum to cut the presidential term to four years.

Another option is waiting until August, when the constitution allows for a legally binding referendum on the president's rule.

Opposition parties are organizing a massive signature collection campaign on Feb. 2, the same day a nonbinding referendum on Chavez's presidency was supposed to be held. Citing a technicality, Venezuela's Supreme Court ruled last week balloting must be postponed indefinitely.