Venezuela's President embarks on new action to infuriate opposition

Correspondents Report - Sunday, 27 April , 2003 Reporter: Neil Weise

HAMISH ROBERTSON: Venezuela's controversial President, Hugo Chavez, who's already survived a coup and a crippling general strike, has embarked on a new course of action design to infuriate his opponents.

Having first agreed to a referendum on his future, President Chavez has suddenly backed away from the agreement.

Our Correspondent, Neil Weise, who makes frequent visits to Venezuela from his base in Miami, says that Mr Chavez is presiding over a potentially prosperous nation, which is now one of the hemisphere's worst economic performers.

NEIL WEISE: Venezuela's economy will shrink this year by between seven and 15 per cent, per capita income is forecast to drop by 50 per cent, and in the past quarter alone, one in three households has lost a working member to unemployment.

Chavez argues that his opponents are responsible for the meltdown, for bringing on a two-month civic strike early this year that cost the Government between six and seven billion dollars, mostly from lost oil revenue.

The opposition says Chavez has bankrupted the country, by taking it down the same socialist path that Cuba's Fidel Castro travelled. Chavez himself says his so-called Bolivarian revolution will not be derailed by the self-serving oligarchy that drove Venezuela's poverty levels to 70 per cent before he was elected for the first time five years ago.

Certainly the opposition coalition comprising some business, union and military leaders failed with their strike to remove Chavez, and even some of their supporters agree they must take part of the blame for the economic upheaval the strike caused.

Their next chance to remove the President will come as early as August when, constitutionally, they can use petitions to force a plebiscite on his rule. A majority of voters could force the President's resignation.

Hugo Chavez last week said he was looking forward to the vote, to see off his opponents once and for all, but this week his Government objected to foreign observers, saying: "Venezuela is not a colony." The President also said a referendum cannot be held until electoral rolls are updated and a new Electoral Commission is appointed by Parliament.

Chavez takes counsel from a group of advisers who include the ubiquitous, Ali Rodriguez, head of oil-rich Venezuela's state-owned oil company, PDVSA. Rodriguez is a former guerrilla who graduated from blowing up foreign oil company installations to become the Secretary-General of OPEC.

The two men have long viewed PDVSA, the nation's biggest company, as the Trojan horse of opposition to their Administration, and they've sacked a massive 45 per cent of the company's 39,000 employees since the civic strike.

The strike's effects have depleted Treasury coffers, and Venezuela has put feelers out to foreign lending agencies for loans. President Chavez said this week he would not accept, as a lending condition, the kind of austerity measures the IMF seeks from other nations, saying: "If they don't want to lend us money, then don't. This is a sovereign nation."

It's 11 years since paratrooper, Lieutenant Colonel Chavez, was jailed for leading a failed coup to oust what he called the corrupt government. It's a year since he himself survived such an attempt.

The President may yet subject himself to a referendum this year, but as a disparate and dispirited opposition has already discovered, Hugo Chavez's crisis-honed instincts have taught him how to dodge that proverbial bullet, no matter who's firing.

Neil Wiese in Miami for Correspondents' Report.