Strike is driving Venezuelan firms out of business
www.miami.com Posted on Thu, Jan. 30, 2003 BY FRANCES ROBLES frobles@herald.com
CARACAS - According to business leaders, the two-month strike aimed at overthrowing Venezuelan president Hugo Chávez forced at least 25,000 companies to go out of business in December, one of many economic indicators forcing the president's opponents to reconsider their strategy.
''The cost of this strike is going to be higher than its benefits,'' said Vladimir Rojas, spokesman for Fedeindustria, the manufacturers association. ``The decision to strike was made with passion -- not cold, calculated business sense.''
On Wednesday, in a clear sign that the strike was weakening, banks agreed to return to normal operating hours Monday. Owners of shopping malls and food franchises also began offering signals that they were ready to open at least part-time.
Chávez and his supporters have refused to give in to what they consider unfair demands for the resignation of an elected president. They have also taken steps to reduce the most damaging effects of the strike.
The economy shrank 7 percent last year, and experts say it will fall another 25 percent in 2003, but many businesses have remained open in pro-Chávez neighborhoods, sparing residents from some of the most painful effects of the strike.
In addition, the government has nibbled away at the strike's core, a walkout that hobbled the oil industry of the world's No. 5 exporter. Output surpassed one million barrels a day this week, a third of normal but greater than at any time since the strike began.
Oil provides half of government income and 70 percent of export revenue.
PRESIDENT ENDURES
An alliance of business, labor and oil sectors went on strike Dec. 2, convinced that the weight of a nationwide work stoppage would topple the controversial president. But Chávez endured. And now some are questioning the wisdom of a 58-day strike that has cost the government alone at least $4 billion.
Like a hunger strike aimed at bringing attention to an important cause, the Venezuelan strike has starved the very people who started it.
Fedeindustria, whose membership makes up the backbone of the nation's business and commerce, estimates that up to 10 percent of Venezuela's small and medium-size manufacturers went under in December alone. If the strike continues, the group estimates another 60,000 will go bankrupt. Those that remain are left without supplies, gasoline or cash flow.
''That's just December,'' Rojas said. ``We haven't even counted January.''
Economists say that even if the strike is lifted now, Venezuela will lose half a million jobs this year. If it drags on, about one million more people will be out of work in a nation where two million are already unemployed, said economist Orlando Ochoa.
AT A STANDSTILL
As more and more businesses shut their doors for good, still others technically remain open but are at a standstill. The strike froze imports, leaving food companies without packing supplies, construction companies without cement, and shoe factories without glue. If the strike is lifted tomorrow and the materials suddenly appeared, experts say, it would not matter: Most business contracts and projects have been canceled.
The squeeze has forced businesses to negotiate with workers, having them work part time or take unpaid leave.
''You have to be honest with yourself and save yourself a lot of headaches,'' said José Antonio Couto, a contractor who shut his business when every pending deal was canceled. ``I paid my workers for doing nothing in December, but I just couldn't do it in January. That's 18 more people on the street.''
According to political science professor Janet Kelly, not a single industry has been spared.
Newspapers have published for nearly two months without running a single advertisement. The Venezuelan American Chamber of Commerce lost a deal to promote business in Florida, and had to make cutbacks. Kelly's own graduate school of business has its workers on ''voluntary'' leave -- in this climate, no firms are about to pay for executive business courses for managers.
'If you are honest and objective, you ask yourself, `Did you have to destroy $5 billion of the economy?' '' Kelly said. ``I think there was a cheaper way.''
As accountants calculate what the damage, strike leaders defend the decision and say it was the only way to avoid the imposition of a dictatorial, quasi-communist regime.
''The anguish and the patience has been worth it, because we want a free country,'' said Juan Fernández, a former manager of the state oil company, Petroleos de Venezuela, PDVSA, which has been at the forefront of the strike. ``Our democracy and our nation are at stake.''
According to independent pollsters, a solid 30 percent of the population remains fanatically devoted to Chávez. Government surveys show the opposite: Chávez enjoys 70 percent support.
Strike leaders also insist that the economic collapse that has engulfed Venezuela is not so much product of the strike, but of Chávez's policies.
To be sure, the economic decline began some time ago; many businesses started pulling back when the crisis bubbled a year ago, a situation that worsened after a short-lived coup in April.
DIFFERENT VIEWS
Despite the thousands whose names have been added to the unemployment rolls, many people outside the strike leadership also view the stoppage as the only means of ousting a leftist firebrand who threatens to shut down media and private business. Others say even the strike organizers know it was a big error, but have invested too much effort to abandon a strategy whose slogan is, ``Not one step back!''
''The attitude of most workers is that this strike is worth it,'' said travel agent Morela Cifuentes, who lost her job when the agency she worked for shut down. ``Right now, my household has zero income, and I continue totally to support the strike.''