www.forbes.com Reuters, 01.28.03, 12:42 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuela's opposition said Tuesday they were ready to spare education and food production from their 58-day-old anti-government strike as a goodwill gesture to help international efforts to solve the country's political crisis.

Although oil workers were maintaining their crippling stoppage in the world's No. 5 petroleum exporter, opposition leaders were rethinking their grueling campaign to try to force leftist President Hugo Chavez to hold early elections.

They are debating easing the strike in some non-oil areas to give hard-pressed private businessmen and consumers a breather after more than eight weeks of a protest that has triggered an economic crisis but failed to oust Chavez.

With the oil-reliant economy reeling from the impact of the strike, the government has chopped back budget spending and suspended currency trading to halt capital flight while it prepares to introduce foreign exchange controls next week.

Finance Minister Tobias Nobrega said late Monday the government was considering a single fixed exchange rate.

In recent weeks, support for the strike has slipped and many shops, restaurants and businesses have reopened.

Two days before the arrival in Caracas of a six-nation delegation which will lend its weight to peace efforts, opposition negotiators said they were prepared to halt the strike in the sensitive areas of education and food output.

"Our proposal is we should lift the strike in these two sectors as a gesture of goodwill," Timoteo Zambrano of the opposition Coordinadora Democratica group told local radio.

Besides slashing oil exports, the shutdown has also caused unprecedented shortages of gasoline and some food items. Despite complaints from parents, private schools and universities had also joined businesses in staying closed.

CHAVEZ TALKS TOUGH In a daily war of words with his foes, Chavez has used these disruptions to try to turn public opinion against the opposition. The outspoken former paratrooper, who survived a coup last year, has refused to negotiate with strike leaders he calls "terrorists, fascists and coup mongers".

Chavez has used troops to partially restore strike-hit oil production, which is still at around a third of normal levels.

Envoys from the United States, Brazil, Mexico, Chile, Spain and Portugal are due in Caracas Thursday to back ongoing efforts by Organization of American States (OAS) Secretary General Cesar Gaviria to broker a deal on elections.

The six-nation "group of friends" was formed to try to help break the deadlock in the Venezuelan crisis, which has pushed up oil prices at a time when the United States is considering a war on Iraq. Before the strike, the United States was receiving more than 13 percent of its oil imports from Venezuela.

Zambrano said the six-nation "friends group" had recommended lifting the strike in education and food production, arguing that disruption in these sensitive areas could inflame an already tense political and social situation.

Seven people have been killed in shootings and clashes between rival protesters since the strike began Dec. 2.

Rejecting calls for early elections, Chavez insists his foes must wait until Aug. 19, halfway through his current term. After that date, the constitution foresees a binding referendum on his rule, which is scheduled to last until early 2007.

Opposition leaders say the nation cannot wait until August. They are collecting signatures for a constitutional amendment to trigger early elections, an option proposed by former U.S. President Jimmy Carter, who is backing the peace talks.

BRACING FOR FOREX CONTROLS Following the government's announcement last week that it planned to introduce foreign exchange controls, local businessmen and consumers have been bracing for the expected impact of the measure on their costs and prices.

Finance Minister Nobrega late Monday extended the suspension of foreign exchange trading for another week. He said the government was still studying whether to introduce one exchange rate adjustable over time or a dual exchange rate.

Venezuela's bolivar has tumbled 28 percent since the strike started and it lost 46 percent of its value against the U.S. dollar during all last year. International reserves have also fallen and stood at $11.05 billion Jan. 24, not including $2.6 billion in a strategic rainy-day savings fund.

Chavez said Sunday the controls were necessary to protect the bolivar currency and international reserves against what he called an "economic coup" being attempted against him by businessmen opposed to his self-styled "revolution".

His foes accuse him of ruling like a dictator and of trying to drag the oil-rich nation toward Cuba-style communism. He portrays opponents as a rich, resentful elite defending their privileges against his efforts to implant social justice.

Private economists say foreign exchange controls, which were last introduced in Venezuela in 1994-96, may initially slow capital flight but will quickly be circumvented by a black market. They say the measures will also hike prices in a nation that imports most of its food and other consumer needs.

Opposition leaders say the planned controls will generate corruption and they fear the government will use the measure to punish striking firms by restricting their access to dollars.

www.forbes.com Reuters, 01.28.03, 12:42 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuela's opposition said Tuesday they were ready to spare education and food production from their 58-day-old anti-government strike as a goodwill gesture to help international efforts to solve the country's political crisis.

Although oil workers were maintaining their crippling stoppage in the world's No. 5 petroleum exporter, opposition leaders were rethinking their grueling campaign to try to force leftist President Hugo Chavez to hold early elections.

They are debating easing the strike in some non-oil areas to give hard-pressed private businessmen and consumers a breather after more than eight weeks of a protest that has triggered an economic crisis but failed to oust Chavez.

With the oil-reliant economy reeling from the impact of the strike, the government has chopped back budget spending and suspended currency trading to halt capital flight while it prepares to introduce foreign exchange controls next week.

Finance Minister Tobias Nobrega said late Monday the government was considering a single fixed exchange rate.

In recent weeks, support for the strike has slipped and many shops, restaurants and businesses have reopened.

Two days before the arrival in Caracas of a six-nation delegation which will lend its weight to peace efforts, opposition negotiators said they were prepared to halt the strike in the sensitive areas of education and food output.

"Our proposal is we should lift the strike in these two sectors as a gesture of goodwill," Timoteo Zambrano of the opposition Coordinadora Democratica group told local radio.

Besides slashing oil exports, the shutdown has also caused unprecedented shortages of gasoline and some food items. Despite complaints from parents, private schools and universities had also joined businesses in staying closed.

CHAVEZ TALKS TOUGH In a daily war of words with his foes, Chavez has used these disruptions to try to turn public opinion against the opposition. The outspoken former paratrooper, who survived a coup last year, has refused to negotiate with strike leaders he calls "terrorists, fascists and coup mongers".

Chavez has used troops to partially restore strike-hit oil production, which is still at around a third of normal levels.

Envoys from the United States, Brazil, Mexico, Chile, Spain and Portugal are due in Caracas Thursday to back ongoing efforts by Organization of American States (OAS) Secretary General Cesar Gaviria to broker a deal on elections.

The six-nation "group of friends" was formed to try to help break the deadlock in the Venezuelan crisis, which has pushed up oil prices at a time when the United States is considering a war on Iraq. Before the strike, the United States was receiving more than 13 percent of its oil imports from Venezuela.

Zambrano said the six-nation "friends group" had recommended lifting the strike in education and food production, arguing that disruption in these sensitive areas could inflame an already tense political and social situation.

Seven people have been killed in shootings and clashes between rival protesters since the strike began Dec. 2.

Rejecting calls for early elections, Chavez insists his foes must wait until Aug. 19, halfway through his current term. After that date, the constitution foresees a binding referendum on his rule, which is scheduled to last until early 2007.

Opposition leaders say the nation cannot wait until August. They are collecting signatures for a constitutional amendment to trigger early elections, an option proposed by former U.S. President Jimmy Carter, who is backing the peace talks.

BRACING FOR FOREX CONTROLS Following the government's announcement last week that it planned to introduce foreign exchange controls, local businessmen and consumers have been bracing for the expected impact of the measure on their costs and prices.

Finance Minister Nobrega late Monday extended the suspension of foreign exchange trading for another week. He said the government was still studying whether to introduce one exchange rate adjustable over time or a dual exchange rate.

Venezuela's bolivar has tumbled 28 percent since the strike started and it lost 46 percent of its value against the U.S. dollar during all last year. International reserves have also fallen and stood at $11.05 billion Jan. 24, not including $2.6 billion in a strategic rainy-day savings fund.

Chavez said Sunday the controls were necessary to protect the bolivar currency and international reserves against what he called an "economic coup" being attempted against him by businessmen opposed to his self-styled "revolution".

His foes accuse him of ruling like a dictator and of trying to drag the oil-rich nation toward Cuba-style communism. He portrays opponents as a rich, resentful elite defending their privileges against his efforts to implant social justice.

Private economists say foreign exchange controls, which were last introduced in Venezuela in 1994-96, may initially slow capital flight but will quickly be circumvented by a black market. They say the measures will also hike prices in a nation that imports most of its food and other consumer needs.

Opposition leaders say the planned controls will generate corruption and they fear the government will use the measure to punish striking firms by restricting their access to dollars.

www.forbes.com Reuters, 01.28.03, 12:42 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuela's opposition said Tuesday they were ready to spare education and food production from their 58-day-old anti-government strike as a goodwill gesture to help international efforts to solve the country's political crisis.

Although oil workers were maintaining their crippling stoppage in the world's No. 5 petroleum exporter, opposition leaders were rethinking their grueling campaign to try to force leftist President Hugo Chavez to hold early elections.

They are debating easing the strike in some non-oil areas to give hard-pressed private businessmen and consumers a breather after more than eight weeks of a protest that has triggered an economic crisis but failed to oust Chavez.

With the oil-reliant economy reeling from the impact of the strike, the government has chopped back budget spending and suspended currency trading to halt capital flight while it prepares to introduce foreign exchange controls next week.

Finance Minister Tobias Nobrega said late Monday the government was considering a single fixed exchange rate.

In recent weeks, support for the strike has slipped and many shops, restaurants and businesses have reopened.

Two days before the arrival in Caracas of a six-nation delegation which will lend its weight to peace efforts, opposition negotiators said they were prepared to halt the strike in the sensitive areas of education and food output.

"Our proposal is we should lift the strike in these two sectors as a gesture of goodwill," Timoteo Zambrano of the opposition Coordinadora Democratica group told local radio.

Besides slashing oil exports, the shutdown has also caused unprecedented shortages of gasoline and some food items. Despite complaints from parents, private schools and universities had also joined businesses in staying closed.

CHAVEZ TALKS TOUGH In a daily war of words with his foes, Chavez has used these disruptions to try to turn public opinion against the opposition. The outspoken former paratrooper, who survived a coup last year, has refused to negotiate with strike leaders he calls "terrorists, fascists and coup mongers".

Chavez has used troops to partially restore strike-hit oil production, which is still at around a third of normal levels.

Envoys from the United States, Brazil, Mexico, Chile, Spain and Portugal are due in Caracas Thursday to back ongoing efforts by Organization of American States (OAS) Secretary General Cesar Gaviria to broker a deal on elections.

The six-nation "group of friends" was formed to try to help break the deadlock in the Venezuelan crisis, which has pushed up oil prices at a time when the United States is considering a war on Iraq. Before the strike, the United States was receiving more than 13 percent of its oil imports from Venezuela.

Zambrano said the six-nation "friends group" had recommended lifting the strike in education and food production, arguing that disruption in these sensitive areas could inflame an already tense political and social situation.

Seven people have been killed in shootings and clashes between rival protesters since the strike began Dec. 2.

Rejecting calls for early elections, Chavez insists his foes must wait until Aug. 19, halfway through his current term. After that date, the constitution foresees a binding referendum on his rule, which is scheduled to last until early 2007.

Opposition leaders say the nation cannot wait until August. They are collecting signatures for a constitutional amendment to trigger early elections, an option proposed by former U.S. President Jimmy Carter, who is backing the peace talks.

BRACING FOR FOREX CONTROLS Following the government's announcement last week that it planned to introduce foreign exchange controls, local businessmen and consumers have been bracing for the expected impact of the measure on their costs and prices.

Finance Minister Nobrega late Monday extended the suspension of foreign exchange trading for another week. He said the government was still studying whether to introduce one exchange rate adjustable over time or a dual exchange rate.

Venezuela's bolivar has tumbled 28 percent since the strike started and it lost 46 percent of its value against the U.S. dollar during all last year. International reserves have also fallen and stood at $11.05 billion Jan. 24, not including $2.6 billion in a strategic rainy-day savings fund.

Chavez said Sunday the controls were necessary to protect the bolivar currency and international reserves against what he called an "economic coup" being attempted against him by businessmen opposed to his self-styled "revolution".

His foes accuse him of ruling like a dictator and of trying to drag the oil-rich nation toward Cuba-style communism. He portrays opponents as a rich, resentful elite defending their privileges against his efforts to implant social justice.

Private economists say foreign exchange controls, which were last introduced in Venezuela in 1994-96, may initially slow capital flight but will quickly be circumvented by a black market. They say the measures will also hike prices in a nation that imports most of its food and other consumer needs.

Opposition leaders say the planned controls will generate corruption and they fear the government will use the measure to punish striking firms by restricting their access to dollars.

www.austin360.com By FABIOLA SANCHEZ Associated Press Writer

CARACAS, Venezuela (AP)--Schools, restaurants and malls may reopen amid fears that a 57-day-old strike called to force President Hugo Chavez from office could backfire, business leaders said, as the government extended a freeze on foreign currency sales for another week to protect its battered currency.

Business representatives expressed concern Monday that discontent with food and fuel shortages caused by the strike could undermine its objective of removing Chavez from office.

Julio Brazon, president of the Consecomercio business chamber, which represents about 450,000 stores and retailers, said businesses need ``to recover earnings and avoid labor problems.'' He said shopping malls and franchises may be permitted to open part-time next week.

Carlos Avila, executive president of Subway de Venezuela, said fast food franchises were considering opening four days a week. Each of Subway's 76 branches in Venezuela have lost an average of $30,000 during the strike.

The National Association of Private Education, which represents 911 private schools, convoked assemblies this week to decide whether schools should open Feb. 3.

Strike organizers, who accuse Chavez of dragging this South American country into political and economic chaos, warned that easing the work stoppage would be counterproductive.

``If some sectors of the opposition, business sectors or political sectors, think they can save themselves from this regime by easing the strike, they are totally mistaken,'' labor boss Carlos Ortega said.

Strike leaders said the work stoppage in the oil industry, which provides half of government revenue, would continue.

``The protest by oil workers will continue because this is the path we are taking to find a solution to the crisis,'' dissident oil executive Juan Fernandez said at a press conference.

Crude output reached 966,000 barrels a day on Monday, according to striking executives at state oil monopoly Petroleos de Venezuela S.A., or PDVSA. Chavez claimed Sunday that daily production had surpassed 1 million barrels.

Oil production dropped as low as 150,000 barrels per day in December compared to pre-strike levels of 3.2 million barrels per day.

A waning strike could give Chavez the upper hand in negotiations with the opposition. Negotiations, mediated by the Organization of American States, have focused on whether to hold early presidential elections.

Meanwhile Tuesday, the Finance Ministry extended a freeze on foreign currency sales, first imposed last Wednesday, until Feb. 5. The suspension is designed to give the government more time to implement a new policy of foreign exchange controls, which will limit the amount of dollars and other foreign currencies Venezuelan can buy.

Exchange controls would stem the slide of Venezuela's bolivar currency, which has lost a quarter of its value this year. But they could hurt businesses that depend on dollars to buy imported goods.

The strike has cost Venezuela at least $4 billion so far. The economy could shrink by as much as 40 percent in the first quarter of 2003, the Santander Central Hispano investment bank has warned.

Chavez, a firebrand former paratrooper, was elected in 1998 and re-elected two years later. His term in office ends in 2007.

Government adversaries are now pinning hopes on amending the constitution to allow early elections. They must gather signatures from at least 15 percent of Venezuela's 12 million registered voters to call a referendum to cut the presidential term to four years.

Another option is waiting until August, when the constitution allows for a legally binding referendum on the president's rule.

Opposition parties are organizing a massive signature collection campaign on Feb. 2, the same day a nonbinding referendum on Chavez's presidency was supposed to be held. Citing a technicality, Venezuela's Supreme Court ruled last week balloting must be postponed indefinitely.

sg.biz.yahoo.com Tuesday January 28, 10:06 PM

CARACAS (Dow Jones)--Venezuela's automobile industry expects vehicle sales to plunge about 61% to roughly 50,000 units in 2003, from 128,623 in 2002, Ricardo Tinoco, the spokesman for Ford Motor Co.'s (F) local unit said Tuesday.

"Sales in January are almost nonexistent. February probably won't be much better. In fact, the whole first quarter will be absolutely off," Tinoco said, referring to the effects of an ongoing 58-day-old general strike which has severely affected the economy.

"If anything starts to happen, it will be in the second or third quarter," he added.

Select from the most reliable agencies  The automobile industry blames the predicted drop in sales on Venezuela's severe economic crisis combined with anticipated foreign exchange controls.

Gross domestic product is estimated by analysts to have contracted more than 8% last year, when vehicle sales were down about 41% from 216,977 units in 2001. Auto industry officials had predicted about a 50% drop for last year.

Given the strike virtually shut Venezuela's vital oil industry for more than a month, along with many other sectors, GDP is seen shrinking as much as 40% this quarter and up to 25% for the year.

Tinoco added the bolivar's ($1=VEB1853) steep devaluation has already had an affect on sales and will likely continue because imported vehicles and some 70% of parts for those assembled here have become more expensive.

After devaluing 46% in 2002, the bolivar lost about 25% against the dollar this year before the government halted sales of foreign exchange last week. The halt is to continue until the government implements measures expected sometime next month that could include a fixed rate for the bolivar and other restrictions.

Venezuela/Auto Sales -3: Ford Ops Still Shut On Strike

Because several of its local parts manufacturers are still on strike, Ford's production is still shut down, Tinoco said.

"We don't have an exact idea of when" production will resume, he said.

Although many businesses have reopened recently, strike leaders have said they won't officially call off the action until President Hugo Chavez agrees to early elections.

Chavez has said his detractors must avail themselves of constitutionally approved measures, such as an amendment shortening his term or a possible recall referendum in August, the midpoint of his term.

Chavez's critics blame his left-leaning policies for the country's deepening economic crisis, as the economy likely contracted about 8% last year amid unemployment of 17% and inflation of 31%.

Chavez, first elected in 1998 on promises to eradicate corruption and inequality, has blamed the recession on an "economic coup" by his opponents.

In 2002, General Motors Corp. (GM) led local vehicle sales with 38,044 units, followed by Toyota Motor Corp. (TM) and Ford with 20,934 and 17,971 vehicles, respectively.

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