Venezuela Shoppers Hail Strike End but Outlook Grim

reuters.com Fri February 14, 2003 09:53 AM ET By Fabian Cambero

CARACAS, Venezuela (Reuters) - "Open again at last!" shouted one jubilant Venezuelan shopper as she entered the giant Sambil commercial center, the flagship of Caracas' shopping malls, which reopened this month after a two-month opposition strike.

The protest shutdown, launched on Dec. 2 to try to force leftist President Hugo Chavez to hold early elections, had deprived the capital's inhabitants of their favorite emporiums of fashion, fast food and Hollywood movies for nine weeks.

"I was desperate, just waiting for them to open," said 21-year-old Dayana Gutierrez, as she checked out the post-strike prices in her favorite clothing store.

Eager shoppers prowled the mall, hunting for bargains or just feasting their eyes on consumer goodies denied to them for weeks. Some emptied automatic drinks dispensers selling beverages that had become scarce during the shutdown.

After sacrificing lucrative Christmas and New Year sales in support of the strike, the country's shopping centers unlocked their doors this month when opposition leaders decided to lift the protest in non-oil sectors. Many small businesses and shops, facing bankruptcy, had already abandoned the strike.

Slashing oil output in the world's fifth largest petroleum exporter, the stoppage caused unprecedented gasoline and food shortages and plunged the oil-reliant economy into crisis. The strategic oil industry is still reeling from the impact.

But the protest failed to budge former paratrooper Chavez, who introduced tough currency and price controls to counter the financial emergency and is demanding that oil industry strikers he calls "terrorists" and "coup mongers" be sent to jail.

In this turbulent economic and political climate, shopping malls like the Sambil are trying to recoup some of their lost profits. Some shops still had their Christmas decorations up, while others were hurriedly re-dressing their front windows.

Luis Perez, who owns a chain of small outlets selling shirts, felt the strike had not been worth the sacrifice.

"We paid a high price to achieve so little," he told Reuters. As most of his stores are located in shopping malls which closed down, his December sales, which normally account for half of his annual income, were 70 percent below normal.

The lost income forced him to dig deep into savings. "I'm lucky because I could survive," Perez said.

FEW CUT-PRICE SALES

The drive to recover lost income meant there was a notable absence of the usual signs announcing New Year sales bargains.

"All my autumn-winter collection was left unsold on the racks and there's not going to be a spring collection ... so I don't think we'll be offering any sales," said Sussy Samuele, who runs an exclusive fashion store at the Sambil.

Some stores were already adjusting their price tags upward in anticipation of the impact of the stringent currency controls introduced by the government this month.

Chavez, who survived a coup last year, has declared a political vendetta against businesses which took part in the strike, saying he will restrict their access to hard currency. This will limit their capacity to import and in turn produce shortages and price hikes, businessmen and economists predict.

"I don't think we're going to get back to normal again soon. I think it will take time for us to recover," said the manager of a pharmacy, which suffered the loss of some products because they had passed their sell-by date during the strike.

Private business chambers and trades associations which overwhelmingly backed the anti-Chavez stoppage have declined to give details of the losses incurred by their members. But they are believed to be in the hundreds of millions of dollars.

Private sector leaders, who oppose Chavez because they say his anti-capitalist left-wing rhetoric and statist, interventionist economic policies are bad for business, say 500,000 jobs were lost in the trade sector alone in 2002.

They expected 800,000 more jobs to be lost in 2003.

The grueling opposition strike dragged down an economy already floundering in recession. Gross Domestic Product fell by 6.4 percent in the first nine months of last year.

In the absence of a definitive figure from the Central Bank, economists estimate the contraction for all of 2002 was at least 10 percent. They expect a bigger contraction in 2003.

Inflation ended the year at 31.2 percent and is still rising. It stood at 33.8 percent at end-January.

Unemployment too has been going up. It had reached a four-year high of 17 percent in September and most analysts expect the number of jobless to swell rapidly.

OUTLOOK BLEAK

The grim economic outlook has worsened the already bitter conflict between the government and the opposition, who have so far failed to agree on a date for elections in ongoing talks brokered by the Organization of American States.

Each side accuses the other of being inflexible.

Many ordinary citizens say they are fed up with both sides after their livelihoods have become increasingly squeezed by the politically fueled recession and the opposition strike.

In the modern El Recreo shopping center, the owner of a mobile telephone outlet said he had lost the equivalent of around $35,0000 in December because the mall had closed in support of the strike. He, however, had opposed the stoppage.

Shopping mall owners said they had polled their shop tenants about whether or not to take part in the strike.

"I didn't sign up in support ... there was a tendency to go ahead without the participation of everyone," said the mobile phone salesman, who asked not to be named.

Although he initially considered suing the shopping center for his lost business, he decided against it in the end. "If I let go of this place, I lose out ... I'm going to soldier on with the stocks I've got left from December," he said.

Supporters of the government, including several lawyers, have created a nongovernment organization called "Victims of the Strike" to encourage citizens to initiate court cases against the organizers of the protest.

They say that people who feel their lives or businesses were materially damaged by the strike should seek compensation from the strikers in the courts.

"If the strikers had a real blueprint for the country, they should have put forward an economic program ... not halt everything and carry all of their people into bankruptcy," said Andres Giussepe, president of the Victims of the Strike group.