Six-Nation Group Pushes for Venezuela Election Deal

reuters.com Thu January 30, 2003 01:52 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - A six-nation group began a mission on Thursday to secure peaceful elections to end Venezuela's crippling opposition strike as the government worked on emergency measures to patch up a wounded economy.

Envoys from the United States, Brazil, Mexico, Chile, Spain and Portugal gathered in Caracas to bolster talks between President Hugo Chavez and his opponents, who are feuding over his leftist leadership of the world's No. 5 oil exporter.

Despite growing hopes for an accord, Chavez, a firebrand ex-paratrooper who survived a coup last year, has given no indication he will accept opposition calls for an early poll.

Although overall support for the strike has clearly weakened, state oil employees have vowed to stay out until Chavez agrees to elections. The eight-week stoppage is still draining oil revenues despite government moves to restore output, which it says reached 1.4 million barrels per day (bpd) Wednesday. Strike leaders put output at around 1 million bpd.

Finance Minister Tobias Nobrega said the strike, which he called a "kamikaze attack" on the strategic oil sector, had cut economic growth and would increase inflation and unemployment.

He said the government would introduce a fixed currency exchange rate as part of controls to staunch capital flight which has bled the nation's reserves during the strike.

The specific controls are expected to be introduced next week along with heavy budget cuts and other measures.

DEEP CRISIS

The six-nation talks Thursday and Friday seek to hammer out an electoral accord to halt the strike that threatens Venezuela with economic ruin and has raised world oil prices.

Fears of violent social upheaval have added urgency to the mission of the "group of friends," which was formed this month to help Organization of American States Secretary General Cesar Gaviria broker a deal between the government and opposition.

"The nation needs solutions. ... The crisis is too deep," opposition negotiator Rafael Alfonzo told Reuters.

Chavez, whose opponents accuse him of dragging the South American nation toward Cuba-style communism, refuses to resign. The opposition has proposed a constitutional amendment to cut his term to four from six years and trigger early elections.

Dampening hopes for an accord, Chavez, elected in 1998, told strikers Wednesday to forget about him leaving office. "I can't work with terrorists and coup mongers," he said.

He has vowed to beat the strike, which he portrays as an attempt to topple him by wealthy, hostile elites opposed to his self-styled "revolution" in favor of the nation's poor.

Foreign Minister Roy Chaderton, a government negotiator, underscored Chavez's determination, saying: "The government is not interested in getting rid of itself. It is not seeking either a shortened term or early elections or any change of government even within the framework of the constitution."

Observers of the talks said the six-nations wanted to build a climate of confidence, focus attention on the key electoral issue and act as guarantors of any agreement.

But they added that a settlement did not appear close. "I haven't heard anyone who is in the middle of the (negotiating) table saying that ... the process is still ongoing," said Matthew Hodes of the Atlanta-based Carter Center, which is headed by former U.S. President Jimmy Carter.