Luiz Inacio Lula da Silva, the leftist populist who was inaugurated Wednesday as president of Brazil, has been hinting that he doesn’t intend to diverge much from the free-market economic policies that have brought his country eight years of steady growth and stability. Maybe that’s because he doesn’t need to look too far for cautionary lessons.

To the south, Argentina’s corrupt and spineless political elite has spent a year in a futile quest to evade the consequences of its bad financial management during the 1990s, even as the country’s living standard has plummeted.

To the north, an even worse Latin-American nightmare is underway: Venezuela, ruined and riven by the disastrous attempt of populist President Hugo Chavez to remake the country with half-baked socialism, is mired in a political standoff that risks civil war.

Da Silva may have been elected with the votes of Brazilians disillusioned with what Latins describe as the “liberal” economic model of private ownership and free trade; but Brazil’s neighbors are vividly demonstrating how perilous it can be to depart from that model, in the absence of a coherent alternative.

For all the region’s current troubles, nothing approaches the chaos that now afflicts Venezuela. A national strike called by the opposition to Chavez entered its second month Wednesday, with no end in sight. Intended to force the President to resign or agree to early elections, the stoppage has succeeded only in crippling Venezuela’s oil-exporting industry, the world’s fifth largest, which supplies the United States with 15 percent of its imported oil and 10 percent of its gasoline.

World oil prices have risen above $31 a barrel, Venezuelans have had to wait in long lines to fuel their cars, and the government has lost some $1.5 billion in revenue -- and yet the gulf between Chavez and the more than 60 percent of the population that opposes him only grows deeper.

Sadly, neither side is committed to preserving Venezuela’s battered democracy. Chavez, a former coup plotter who was first elected in 1999, helped bring on the crisis with a series of constitutional rewrites and referendums that extended his term to 2007 and concentrated power in his hands; opponents, who include both business and labor leaders, talk of an electoral solution but clearly hope to force the President from office, either through street demonstrations or a military coup.

As the strike drags on, and the risk of violence increases, the crisis is exposing the weakness of institutions and leadership in the American hemisphere.

Last year the much-derided European Union managed to arrest the implosion of Macedonia, another polarized country, with an aggressive and well-coordinated intervention.

But in Venezuela the only help has come from the secretary-general of the Organization of American States, Cesar Gaviria, who has tried to broker a compromise but lacks the resources or the clout to do so on his own.

The Bush administration, distracted by Iraq, has conspicuously stumbled in trying to address Venezuela; other Latin-American nations that could play a role, including Brazil, have been largely passive.

There is not much tradition of collective action in the region, and history has given US intervention a mostly bad reputation. But Venezuelans are stalemated; if nothing is done, a country that is a vital oil supplier and has preserved a democracy through four decades may plunge into anarchy.

If the Bush administration will do nothing, perhaps da Silva can take the lead. The Washington Post

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Reuters, 01.06.03, 11:07 AM ET

NEW YORK, Jan 6 (Reuters) - Merrill Lynch cut its allocation of Venezuelan bonds to underweight from market weight in its model portfolio on Monday as a five-week-old strike by foes of President Hugo Chavez strangles the country's oil production, pummeling the economy.

The investment bank said in a research report that the opposition, which is demanding new elections or Chavez's resignation, and the president remain far away from a solution to the conflict, which keeps pressure on the fragile economy as businesses remain shut and the production of its top revenue source -- oil -- stifled.

Merrill said that no change at the presidential level until August appears to be the most likely scenario for now. Chavez says the constitution does not allow a binding referendum on his rule until August, which marks the halfway point of his current term due to last until 2007.

"In this scenario oil production and economic activity take time to recover and the economy suffers significantly," said Merrill Lynch.

"While our base case scenario does not include an external debt payment crisis, we have to acknowledge that risks are higher." Merrill said the strike has already cost Venezuela's fragile economy an estimated $2 billion to $3 billion. The investment bank said it expects Venezuela's gross domestic product to have contracted 9.2 percent in 2002, due partly to the strike.

The investment bank said it shifted the money from the Venezuela reduction to Ecuador, an oil producer that is benefiting from higher world crude prices.

Ecuador bonds got a boost on Friday when the incoming government of Lucio Gutierrez named respected economic consultant Mauricio Pozo as finance minister, an appointment seen by analysts as opening the doors for Ecuador to clinch a much-needed International Monetary Fund deal.

Tensions remain high in Venezuela following street clashes and shootings in the capital in the past few days, confrontations that left two dead and wounded dozens.

On Monday, Venezuela's share of the J.P. Morgan Emerging Market Bond Index Plus slid 0.75 percent on the day in midmorning New York trading, while Ecuador's portion leaped 4.34 percent in terms of daily returns.

6 January 2003

BERLIN - Germany's Foreign Office issued a warning Monday to citizens not to travel to Venezuela because of rioting there.

There have been lower-grade cautions in the past, but the advisory raised Berlin's official warning to the top level.

The Foreign Office said all Germans without pressing reason to be there should leave Venezuela. Berlin estimated about 8,000 German nationals were living in Venezuela, most of them long term and with dual citizenship.

By Brian Ellsworth Special to UPI From the Business & Economics Desk Published 1/2/2003 3:38 PM

CARACAS, Venezuela, Jan. 2 (UPI) -- The Venezuelan government and the political opposition have not been able to agree on almost anything in 2002. However, neither side seems to have any doubt that the opposition strike will have a crippling impact in 2003 on the economy of the world's fifth-largest petroleum producer.

The Venezuelan government is losing an estimated $35 million per day from the decline in petroleum revenue, which accounts for almost half of government finances. While it has been able to continue functioning during the first month of the strike, time may be running out.

The first month of the strike is expected to cause an additional reduction of 1.28 percent in 2002 gross domestic product, which declined by a staggering 6.6 percent in the first semester of the year.

"From a fiscal point of view, the government is against the wall," said Francisco Rodriguez, the head of the government economic analysis office. Rodriguez indicated Thursday that in order to continue meeting obligations, it will have to chose between defaulting on domestic debt or stopping payment of government workers' salaries.

Private sector analysts had a similar perspective.

"The extension of the protest beyond 45 days would make it impossible for the government to pay off its debts," says a report released by the currency exchange house Econoinvest. The report estimates that the government only has enough resources to pay debts until the end of January.

To make up for the losses in December, the government has dipped into its dollar reserves. Central Bank figures show that reserves have declined by $1 billion of a total of $15 billion. As a result, the local currency, the bolivar, has declined sharply against the dollar, slipping from Bs 1,263 on the dollar on December 16 to Bs 1,401 by the end of December.

Legislators are expected to announce changes in the proposed 2003 budget this week.

The strike leaders insist that Chávez must either resign or call early elections, both of which he refuses to do. The opposition hopes to shut down the country's refineries to restrict the supply of gasoline for local consumption. This would eventually restrict transportation prevent effective transport of food, increasing the pressure on Chavez. They also hoped that restricting petroleum exports could starve the government of cash, leaving few alternatives when reserves begin to dwindle. As part of the strike, opposition leaders are encouraging businesses and industries not to pay their taxes to further decrease government funds.

Although it has pinched government finances, the strike has far from paralyzed Venezuela. The shortage of gasoline caused mostly long lines and headaches, but no serious food shortages or public order disturbances. Many small businesses have opened their doors, and the informal economy has kept the streets filled with holiday shoppers.

The strike, combined with the possibility of U.S. military action in Iraq, has pushed the price of petroleum on the international market above $30 per barrel, 57 percent higher than the closing price last year.

The strike represents the culmination of the conflict between Chávez, a populist former left-wing leader who led a failed coup in 1992, and the country's political opposition who say he governs autocratically. A similar petroleum strike last April led to a coup that removed briefly removed Chavez after political violence left 19 people dead. Loyalist troops and supporters restored him to power two days later.

The opposition accuses Chavez of trying to create trying to turn Venezuela into a communist state, and is angered by his populist rhetoric and friendship with Cuban President Fidel Castro. They say the Chavez government has politicized the armed forces, taken over public institutions, and restricted free speech.

Nonetheless, Chavez swept in six consecutive elections starting in 1998. He currently has roughly 35 percent support of the population, which is one of the highest levels of support of any Latin American leader today. He still retains enormous support from Venezuela's poor, which make up 80 percent of the country's population.

The opposition spent most of the year blaming Chavez for the economic recession that began in 2002. Nonetheless, they acknowledge that the strike will cause enormous economic damages in the coming year. The government, for its part, has been put in the awkward position of trying to deny that the strike has affected the country, while simultaneously condemning it as "terrorism."

The opposition and the government maintain a media war over the functioning of the petroleum industry. According to government leaders, the country is producing 800 thousand barrels of crude oil per day, far below the 2.8 million barrels allowed by its quota mandated by the Organization of Petroleum Exporting Countries. However, strike leaders say the nation is only producing 150,000 barrels per day.

Government leaders have given varying estimates of actual production. Last week, PDVSA President Ali Rodriguez announced the country was producing 1.2 million barrels per day, but two days later corrected himself, saying the production was in fact only 800,000.

Sources in the United States indicate that U.S. crude reserves have fallen since the start of the strike. However, some say that both sides are manipulating information.

The government also says that refineries are functioning normally, while the opposition assures that they are almost completely shut down.

The government assures that the petroleum industry will be functioning normally by the end of February. During his a visit to Brazil to celebrate the inauguration of President Inacio Lula da Silva, Chavez asked the Brazilian government to send technicians and equipment to help restart petroleum operations.

The request comes a week after the Venezuelan government purchased 520,000 barrels of refined gasoline from Brazil. It was the first time in Venezuela's history that it had ever imported gasoline. It also purchased gasoline from neighboring Trinidad. However, gasoline purchases have been expensive, since the government buys gasoline on the international spot market at roughly $60 per barrel, and sells it at a subsidized rate of $11 per barrel on the domestic market.

Yo, al contrario de las voces agoreras de los profetas del desastre –no quiero señalar nombres, pero los siento muy cerca, casi al lado–, solo veo cosas buenas para este año que acaba de comenzar. Según el horóscopo chino, entramos en el año de la cabra. Ya se sabe que cuando pretende aludirse a la locura de alguien suele decirse: “está como una cabra”. La cabra produce leche y hay alguien importando leche, no sé si me explico. La cabra tiene cuerno y el cuerno simboliza el poder, pero el diablo se representa también con cachos. El que tenga entendimiento que entienda. Me perdonan lo críptico, pero así somos los profetas.

Ahora bien, si analizamos el 2003 desde el punto de vista de la numerología, tenemos que la suma del número es igual a 5. Pero 5 menos 1 que se va, son 4, día del golpe de febrero. Febrero es el mes 2, más 4 suman seis, menos 1 que se va, tenemos otra vez 5. Pero fíjense en el detalle de los dos ceros: los ceros no valen nada; luego, si quitamos los ceros, nos queda 23, al revés 32, que sumados dan 55, 5+5 = 10, pero como el cero nuevamente no vale nada nos queda otra vez 1, el que se va. Y por último, si multiplicamos los números del año, el resultado es 6, que es igual a cinco cuando el 1 se va. Conclusión: alguien como que se va, se va, se va, se va.

También podemos, para saber qué nos depara el 2003 a los venezolanos, recurrir a las profecías de Nostradamus. En la centuria XII, 52, puede leerse –en francés antiguo– la siguiente cuarteta: Ce qui est nè dans cetè sabane Ne regarde pas cete fleur Quelque choise que Dieux a doné Le peuple ce àrrêbaté Lo que traducido al español significa: El que nació en esta sabana Deja de mirar las flores Lo que Dios le ha dado El pueblo se lo arrebata.

La interpretación de esta cuarteta es muy clara: El que nació en esta sabana. Esta sabana es Venezuela, pero si se voltea la expresión “esta sabana” es “sabana esta”. Sin duda, Nostradamus alude a Sabaneta, lugar de nacimiento de Chávez. “... Deja de mirar las flores” se refiere, obviamente, al palacio de Miraflores.

Lo que “Dios le ha dado” puede ser el poder, pero puede referirse también a Diosdado, uno de los más cercanos colaboradores de Chávez, y que en abril le entregó el poder.

“... El pueblo se lo arrebata” es una expresión muy clara: alude a un proceso electoral. El significado de la frase es inequívoco: Chávez, que nació en Sabaneta, deja el palacio de Miraflores por decisión del pueblo.

Yo, por mi parte, no sabía que tenía inclinaciones proféticas, pero, el otro día, trasegando en el estacionamiento unos galones de gasolina que me consiguió Graterolacho, comencé a tener visiones y he aquí lo que vi: –El Presidente renuncia o lo sacan o pierde una elección o se enferma o alguien lo traiciona o alguna vaina.

–Un hombre relacionado con algo negro que sale de la tierra y que se procesa en refinerías, catire, de lentes, nacido bajo el signo de Cáncer y cuyo nombre comienza con J y su apellido con F, será presidente.

–Tarek dejará de ser “el poeta de la revolución” y pasa a ser conocido como “el poeta de la oposición”.

–Las colas de Caracas serán cosas del pasado.

La gente descubrirá lo sabroso que es andar sin carro. –Le agarraremos el gusto a cocinar con leña.

–Más de una maracuchita será bautizada el año que viene con nombres como “Nafta Catalítica Montiel” o “Marina Mercante Urdaneta”.

–Como compensación al Grupo Polar, cuando el paro termine, todos nos tomaremos una caja diaria de cerveza.

–Marta Colomina tendrá un programa de cocina.

–La reconciliación en Venezuela será de tal magnitud que Freddy Bernal se enamorará perdidamente de Nitu Pérez Osuna y Ernesto Villegas trabajará en Globovisión.

–La gente, entrenada en marchas, vigilias y cacerolazos, experta como se ha hecho en reconocer la demagogia, el oportunismo y la arbitrariedad, no se calará otro mal gobierno nunca más.

Y para todos, ¡un Próspero Gobierno Nuevo!

Laureano Márquez El Nacional 5 de Enero de 2003