Venezuela's Chavez Threatens Foes with Forex Curbs

abcnews.go.com Feb. 4 — By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez, gloating over his opponents' failure to oust him in a two-month strike, said Tuesday he would deny them access to hard currency through foreign exchange controls to be introduced this week.

"We're going to shut the door on them ... not a single dollar more for the coup mongers," left-wing populist Chavez said in a fiery speech promising a "revolutionary offensive" against his foes, who include many private businessmen.

Speaking at a ceremony to commemorate a botched coup bid he led in 1992, Chavez said foreign exchange curbs to be introduced Thursday would be administered by a loyal retired army officer, Capt. Edgar Hernandez.

Hernandez will head a currency control office set up to counter the economic damage from the nine-week-old opposition strike, which has triggered a financial crisis in the world's No. 5 oil exporter.

The government announced the controls, along with heavy budget cuts, to halt capital flight and a sharp drop in the bolivar currency caused by the grueling protest shutdown.

After support for the strike had crumbled, opposition leaders Sunday scaled it back, keeping it alive only in the strategic oil industry. The walkout there by thousands of state oil employees has slashed production and exports.

Chavez, wearing the red paratrooper's beret that is the symbol of his self-styled "revolution," said oil production was rising again. He said it was fast approaching 2 million barrels per day (bpd), two thirds of pre-strike levels.

Opposition oil strikers put output at 1.2 million bpd.

Chavez used baseball imagery to say the strikers had suffered a "tremendous defeat." "The coup mongering, fascist opposition had their turn with the bat and they've struck out three times ... now it's our turn to bat," he said.

"This is the year of the revolutionary offensive ... Chavez is still here, tougher and stronger than ever," he added after distributing property titles to poor families.

Anti-Chavez business leaders, their companies already hurting from the effects of the strike, say they fear the president will use the exchange controls to block their access to dollars and favor government supporters.

GOOD COUP, BAD COUP

Although full details of the controls have yet to be announced, Finance Minister Tobias Nobrega has said they will initially consist of a single exchange rate, to be adjusted monthly, followed by a dual rate later. The government will give priority to imports of fuel, medicine and food.

Chavez, who survived a coup by military opponents last year and repeatedly accuses his foes of trying to topple him again, taunted his opponents Tuesday by leading an official commemoration of his own Feb. 4, 1992 coup attempt.

"The coup plotters of 2002 are enemies of the nation, while we rebels of 1992 are patriots who always defend, and always will defend, the nation," the president said.

After his bungled assault against the presidential palace in 1992, Chavez was arrested and served two years in jail. The publicity he gained launched him on the path to the presidency, which he won with widespread support in a 1998 election.

He has rejected calls for early elections. In a switch of tactics, opposition leaders grouped in the Coordinadora Democratica coalition are now relaunching a campaign to try to trigger an early poll using constitutional mechanisms.

Chavez portrays his foes as a rich, resentful elite trying to defend their privileges. They condemn him as corrupt and inept, say he is seeking to install Cuba-style communism and accuse him of obstructing their campaign for early elections.

In a nationwide operation on Sunday, opposition leaders said they had collected more than 4 million signatures backing a constitutional amendment that would trigger early elections.

The government says its foes must wait until Aug. 19, halfway though the president's term. After that date, the constitution allows for a binding referendum on Chavez's rule.

The opposition, which appears divided over strategy and lacks a clear leader, wants elections sooner, or at the latest on Aug 19. The Organization of American States and a six-nation "group of friends" are backing the ongoing negotiations for an agreement on elections. (Additional reporting by Ana Isabel Martinez)