Venezuela banks end protest; protest frays

www.abs-cbnnews.com Thursday, January 30, 2003 1:28:34 p.m

CARACAS, Venezuela - Venezuelan private banks decided on Wednesday (early Thursday in Manila) to restore normal working hours, delivering a fresh blow to a faltering 8-week-old opposition strike against leftist President Hugo Chavez.

But striking oil workers at the heart of the opposition campaign stayed firm in their shutdown, which has battered Venezuela's fragile economy and rattled energy markets by slashing crude output in the world's No. 5 petroleum exporter.

Commercial banks, which make up nearly 90 percent of the Venezuelan financial sector, had been operating for limited daily hours and restricting transactions since December in support of the strike to pressure Chavez from office.

"This is a result of demands from the public and deposit holders ... banks don't belong to their presidents," Federal banking group President Nelson Mezerhane said after banking associations voted to restore normal hours beginning on Monday.

Chavez, a populist former paratrooper, had threatened to seize striking banks, schools and factories to break the strike.

As the shutdown nears the two-month mark, backing for the protest in non-oil sectors has begun to fray as private businesses and stores reopen to fend off bankruptcy.

Opposition leaders, who brand Chavez's rule as dictatorial, inept and corrupt, offered on Tuesday to ease their strike by exempting food production and education. But they have vowed to stay out until Chavez accepts elections. The president, whose term ends in 2007, has so far shown no signs of accepting their proposals for an early vote.

But economic pressure is building on the government. With the strike disrupting oil exports that account for half of its revenues, the government plans to slash its budget and has suspended foreign currency trading while it prepares a fixed exchange rate to protect its reserves.

Battered by economic uncertainty, the local bolivar currency has plummeted more than 24 percent and Venezuela's international reserves have dipped more than 7 percent to $11.05 billion since the start of the year.

Venezuela's sovereign bonds climbed more than 1 percent on Wednesday as the cracks in the strike gave investors hope that stalled economic activity and oil output could recover.

Chavez, who was elected in 1998 and survived a coup last year, has dismissed calls for him to resign. Though his popularity has fallen sharply this year, he maintains a solid base of support among poorer voters who believe his left-wing reforms are the key to a better life.

The Venezuelan leader, who led a botched coup himself six years before his ballot box victory, has fought back against the strikers by firing oil workers and deploying troops and replacement crews to oil installations.

"To the oligarchs, the immoral traitors who are threatening to oust me from government I say you will not manage it," Chavez said in a national broadcast.

Still, attempts to restart the industry have had limited success. Crude production stands at about one third of the 3.1 million barrels per day the OPEC member produced in November.

The opposition, a loose alliance of political parties, unions and business leaders, has struggled to present a united front recently as they debate strategy to sustain the strike. Some are pushing for shopping centers and franchises to reopen to ease the toll on the weakened private sector.

But the creeping rollback has left a question mark over the future of thousands of striking oil workers, who are demanding fired colleagues be reinstated. That could prove a sticking point in negotiations to end the strike as the state oil firm PDVSA is now more firmly under government control.

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