Venezuela Government To Withdraw $51 Million From FIEM Oil Fund-Report

sg.biz.yahoo.com Thursday March 13, 11:17 PM

CARACAS -(Dow Jones)- Venezuela's National Assembly has authorized the cash-strapped treasury to withdraw $51 million from the Macroeconomic Stabilization Fund, or FIEM, oil windfall account, local daily El Universal reported Thursday.

The withdrawal will wipe out the federal government's balance within the FIEM, leaving the fund with $1.608 billion, of which $208 million is earmarked for state governments and the remainder for state oil company Petroleos de Venezuela SA(E.PVZ), according to the report.

The FIEM is a rainy day fund that, in 2000 and 2001, absorbed half of Venezuela's oil revenues above budgeted levels. The account isn't expected to get any deposits until 2004 as a result of a new law.

Government income was severely affected by a two-month general strike against President Hugo Chavez's leadership that began Dec. 2, which all but shut down Venezuela's vital oil industry, among many other sectors.

Opposition leaders are demanding Chavez agree to early elections, blaming his left-leaning policies for the country's deepening economic crisis.

The economy contracted 8.9% in 2002, amid 17% unemployment and 32% annualized inflation sparked by a 46% devaluation of the bolivar. The currency lost a further 25% this year before currency sales were halted Jan. 21.

Chavez has said the problems are due to an "economic coup" led by his opponents.

El Universal Website: www.eluniversal.com

-By Jehan Senaratna, Dow Jones Newswires; 58212-564-1339; jehan.senaratna@dowjones.com