www.zwire.com ASSOCIATED PRESS January 22, 2003

CELEBRATING: Supporters of President Hugo Chavez holding a copy of the national constitution celebrates the supreme court decision, outside of the National Electoral Council, CNE,in Caracas, Venezuela, Wednesday. (AP Photo) CARACAS, Venezuela (AP) - In a setback for opposition efforts to oust Hugo Chavez, the Supreme Court on Wednesday indefinitely postponed a nationwide referendum that would have asked Venezuelans whether the president should quit.

Coming just 11 days before the scheduled vote, the decision stunned the opposition the opposition that delivered 2 million signatures in November to demand the referendum and backed it up with a strike that has lasted 52 days. It was also to pay for the vote because Chavez's government refused to do so.

Amid fears of an economic collapse, the Central Bank on Wednesday suspended trading in foreign currencies to stop a run on the bolivar currency. The suspension means Venezuelans cannot buy foreign currencies for five business days. The government said it would continue to pay its foreign debts.

Opposition leaders reacted angrily to the court's decision, contending that Chavez's government was acting through the court to cling to power despite international pressure to find an electoral solution to end Venezuela's political crisis.

Government leaders rejected the claim, noting that the opposition has embraced past court decisions against Chavez, including a ruling clearing four high-ranking officers of rebellion charges in a brief April coup.

Justices ruled that no national vote, a referendum or election, can be held until it decides whether elections council member Leonardo Pizani, who helped organize the referendum, is eligible to serve on the panel.

Pizani had resigned from the council in 2000, only to rejoin last November. He insisted he could rejoin because Congress, by law, had failed to formally accept his resignation.

Pro-Chavez lawmakers filed suit arguing that Pizani's two-year absence from the council made his resignation legally binding.

"This goes beyond my appointment, this is about politics," Pizani said after the ruling.

Chavez opponents vowed to step up street protests, a stark contrast to hopes raised Tuesday by Nobel Peace Prize laureate Jimmy Carter, who presented both sides with electoral proposals to end the crisis.

"Today there is a dictatorship in Venezuela," said lawmaker Julio Borges, whose First Justice party led the petition drive in November calling for the referendum.

"The government doesn't care about the people's will," Borges said. "It only cares about staying in power."

Vice President Jose Vicente Rangel described the court decision as crucial. "I hope all sectors of the country will respect and adhere to it," he said.

Chavez was scheduled to address the nation late Wednesday.

The referendum wouldn't be binding, but opponents hoped that a poor showing would increase political pressure on Chavez to quit.

Chavez argued that Venezuela's constitution allows a binding referendum midway through his six-year term, or August. Opponents cited a constitutional clause that allows citizens to petition for referendums on "matters of national importance" at any time.

The strike has slashed oil production in the world's fifth-largest petroleum exporter by more than two-thirds, crippling an industry that provides half of government revenue and 70 percent of export revenue.

The decision to suspend trading in foreign currencies could strengthen the Venezuelan bolivar by limiting the amount of dollars that individuals and banks can buy. But they could also hurt businesses that depend on dollars to pay for imported goods. Venezuela's economy is highly dependent on imports, about 50 percent of food is imported.

Finance Minister Tobias Nobrega said he would announce a new foreign exchange policy next week, leading to speculation that the government would impose exchange controls.

Carter proposed two plans in Caracas on Tuesday.

The first calls for an end to the strike in exchange for a government pledge to amend Venezuela's constitution to shorten presidential and legislative terms of office and allow early elections.

The second plan calls for both sides to prepare for a binding referendum on Chavez's rule in August.

Diplomats from Brazil, Chile, Mexico, Portugal, Spain and the United States were to meet at the Organization of American States in Washington on Friday to discuss Carter's proposals. The six countries, called the "Friends of Venezuela," are trying to strengthen mediation efforts by OAS Secretary General Cesar Gaviria.

Chavez was elected in 1998 and re-elected in 2000 on promises to help the country's poor majority, but he has failed to remedy the nation's economic ills.

Opponents blame Chavez's leftist policies for an estimated 8 percent economic contraction in 2002. Chavez blames it on opposition attempts to destabilize the country.

seattlepi.nwsource.com Wednesday, January 22, 2003 · Last updated 8:27 p.m. PT By CHRISTOPHER TOOTHAKER ASSOCIATED PRESS WRITER   Finance Minister Tobias Nobrega poses after announcing in a televised address that a new foreign exchange policy will be revealed in five business days, at Miraflores palace in Caracas, Venezuela, Wednesday, Jan. 22, 2003. Venezuela's central bank suspended its foreign exchange trading for a week starting Wednesday to try to keep the country's currency, the bolivar, from further plummeting in the fallout of a 52-day-old strike that has crippled oil exports. (AP Photo/Juan Carlos Solorzano, Miraflores Press, HO)

CARACAS, Venezuela -- The government plans to impose foreign exchange controls to keep the Venezuelan currency from plummeting further amid a general strike that has crippled the economy.

President Hugo Chavez did not elaborate Wednesday on exactly what limits the government would impose on currency trade.

"We've made a decision that we didn't want to take," Chavez said. "But the situation is serious and there is a persistent speculative attack against the national currency."

The decision means that Venezuelans will be limited in the amount of foreign currencies they can buy per day. The decision is meant to stem a run on the bolivar, which has lost 25 percent of its value this year, atop a 46 percent decline in 2002.

Exchange controls will help protect the bolivar and the government's depleting foreign reserves. But it will hurt businesses that need dollars to pay for imported goods.

"This restriction is going to hurt businesses, which depend heavily on imports, especially industry," said Albis Munoz, vice president of the Fedecamaras business chamber.

Venezuela's economy largely relies on imports - about 50 percent of food is imported. Soft drink producers buy sugar abroad, newspapers import paper pulp and the automobile industry depends on foreign-made parts to keep assembly lines moving.

Ruling party member Rodrigo Cabezas, president of the legislature's finance committee, said any exchange controls would be temporary. The last time Venezuela imposed foreign exchange controls was in 1995 during an economic crisis. Those controls lasted two years.

Cabezas said a team of economists may fix a rate of 1,500 bolivars to the dollar. The fixed rate could go into effect next week. Before Chavez's announcement, the government had allowed the bolivar to float.

The bolivar reached a record low of 1,853 to the dollar Tuesday. Traders said the Central Bank has been injecting up to $70 million a day to protect the currency.

Business leaders, labor unions and opposition parties launched a strike on Dec. 2 to demand that Chavez resign or call early elections. The strike has slashed oil production by more than two-thirds.

www.sfgate.com ALEXANDRA OLSON, Associated Press Writer Wednesday, January 22, 2003

(01-22) 19:18 PST CARACAS, Venezuela (AP) --

In a setback for opposition efforts to oust Hugo Chavez, the Supreme Court on Wednesday indefinitely postponed a nationwide referendum that would have asked Venezuelans whether the president should quit.

Hours later, Chavez moved to bolster Venezuela's strike-damaged economy, saying he would impose foreign exchange controls to prevent Venezuela's currency from further plummeting. The Central Bank had suspended foreign currency trading earlier in the day.

The high court decision came just 11 days before the scheduled vote. The decision stunned the opposition the opposition that delivered 2 million signatures in November to demand the referendum and backed it up with a strike that has lasted 52 days. It was also to pay for the vote because Chavez's government refused to do so.

Opposition leaders reacted angrily to the court's decision, contending that Chavez's government was acting through the court to cling to power despite international pressure to find an electoral solution to end Venezuela's political crisis.

Government leaders rejected the claim, noting that the opposition has embraced past court decisions against Chavez -- including a ruling clearing four high-ranking officers of rebellion charges in a brief April coup.

Justices ruled that no national vote -- a referendum or election -- can be held until it decides whether elections council member Leonardo Pizani, who helped organize the referendum, is eligible to serve on the panel.

Pizani had resigned from the council in 2000, only to rejoin last November. He insisted he could rejoin because Congress, by law, had failed to formally accept his resignation.

Pro-Chavez lawmakers filed suit arguing that Pizani's two-year absence from the council made his resignation legally binding.

"This goes beyond my appointment, this is about politics," Pizani said after the ruling.

Chavez opponents vowed to step up street protests -- a stark contrast to hopes raised Tuesday by Nobel Peace Prize laureate Jimmy Carter, who presented both sides with electoral proposals to end the crisis.

"Today there is a dictatorship in Venezuela," said lawmaker Julio Borges, whose First Justice party led the petition drive in November calling for the referendum.

"The government doesn't care about the people's will," Borges said. "It only cares about staying in power."

Vice President Jose Vicente Rangel described the court decision as crucial. "I hope all sectors of the country will respect and adhere to it," he said.

The referendum wouldn't be binding, but opponents hoped that a poor showing would increase political pressure on Chavez to quit.

Chavez argued that Venezuela's constitution allows a binding referendum midway through his six-year term, or August. Opponents cited a constitutional clause that allows citizens to petition for referendums on "matters of national importance" at any time.

The strike has slashed oil production in the world's fifth-largest petroleum exporter by more than two-thirds -- crippling an industry that provides half of government revenue and 70 percent of export revenue.

Chavez, speaking during a military ceremony, said he would impose the new currency controls by early next week. The move will limit the amount of U.S. dollars or other currencies Venezuelans can accumulate. The move is aimed at protecting the bolivar currency, which has lost 25 percent of its value this year. Chavez did not provide further details on the new policy.

Though the move could strengthen the local currency, it could also increase costs for businesses that depend on dollars to pay for imported goods. Venezuela's economy is highly dependent on imports -- about 50 percent of food is imported.

Meanwhile, Carter proposed two plans in Caracas on Tuesday.

The first calls for an end to the strike in exchange for a government pledge to amend Venezuela's constitution to shorten presidential and legislative terms of office and allow early elections.

The second plan calls for both sides to prepare for a binding referendum on Chavez's rule in August.

Diplomats from Brazil, Chile, Mexico, Portugal, Spain and the United States were to meet at the Organization of American States in Washington on Friday to discuss Carter's proposals. The six countries, called the "Friends of Venezuela," are trying to strengthen mediation efforts by OAS Secretary General Cesar Gaviria.

Chavez was elected in 1998 and re-elected in 2000 on promises to help the country's poor majority, but he has failed to remedy the nation's economic ills.

Opponents blame Chavez's leftist policies for an estimated 8 percent economic contraction in 2002. Chavez blames it on opposition attempts to destabilize the country.

www.guardian.co.uk David Teather in New York Thursday January 23, 2003 The Guardian

Venezuela yesterday suspended foreign exchange trading in an effort to stem the exodus of capital and prevent its crippled currency, the bolivar, from falling further.

The central bank has closed the markets for five days amid the economic and political turmoil that has gripped the Latin American country for the past few months. The bolivar has declined by 25% so far this year after losing almost half its value during 2002.

Venezuela has been brought to a grinding halt by a seven-week old general strike aimed at forcing President Hugo Chavez into resigning or calling early elections.

US-owned multinational corporations including Microsoft and Ford have begun to close local offices and pull people out of the country as street protests have turned into often violent clashes between opponents and supporters of the president. One person died and more than 20 were injured on Monday.

The central bank has been trying to prop up the currency, and Venezuela's foreign reserves are falling fast, currently standing at just over $11bn.

The strike has caused oil production in Venezuela to dry up - before the stoppage, the country was the world's fifth largest oil exporter; the country has lost more than $2bn in sales. The state-owned oil industry provides 70% of export revenue and half the government's income.

There are growing food and fuel shortages and inflation is rampant.

Opposition leaders called the strike, accusing President Chavez of tilting the country into recession.

President Chavez has refused to bend to the demands and maintained that under the constitution a referendum on his leadership can not be held until August - the midpoint of his six-year term.

The central bank said it would announce a new currency policy next week, likely to impose restrictions on the amount of dollars that can be bought and the transfer of funds into foreign accounts.

Opposition and government negotiators are studying proposals from former US president Jimmy Carter to end the deadlock.

The Nobel peace prize winner put forward two plans earlier this week. The first would entail calling a general election and the second would call for a binding referendum on the presidency in August.

A group of six countries with close links to Venezuela, including Spain, the US and Brazil will also meet in Washington tomorrow to consider other means of ending the standoff.

www.guardian.co.uk Thursday January 23, 2003 1:10 AM

CARACAS, Venezuela (AP) - In a setback for opposition efforts to oust Hugo Chavez, the Supreme Court on Wednesday indefinitely postponed a nationwide referendum that would have asked Venezuelans whether the president should quit.

Hours later, President Hugo Chavez moved to bolster Venezuela's strike-damaged economy, saying he would impose foreign exchange controls to prevent Venezuela's currency from further plummeting. The Central Bank had suspended foreign currency trading earlier in the day.

The high court decision came just 11 days before the scheduled vote, the decision stunned the opposition the opposition that delivered 2 million signatures in November to demand the referendum and backed it up with a strike that has lasted 52 days. It was also to pay for the vote because Chavez's government refused to do so.

Opposition leaders reacted angrily to the court's decision, contending that Chavez's government was acting through the court to cling to power despite international pressure to find an electoral solution to end Venezuela's political crisis.

Government leaders rejected the claim, noting that the opposition has embraced past court decisions against Chavez - including a ruling clearing four high-ranking officers of rebellion charges in a brief April coup.

Justices ruled that no national vote - a referendum or election - can be held until it decides whether elections council member Leonardo Pizani, who helped organize the referendum, is eligible to serve on the panel.

Pizani had resigned from the council in 2000, only to rejoin last November. He insisted he could rejoin because Congress, by law, had failed to formally accept his resignation.

Pro-Chavez lawmakers filed suit arguing that Pizani's two-year absence from the council made his resignation legally binding.

``This goes beyond my appointment, this is about politics,'' Pizani said after the ruling.

Chavez opponents vowed to step up street protests - a stark contrast to hopes raised Tuesday by Nobel Peace Prize laureate Jimmy Carter, who presented both sides with electoral proposals to end the crisis.

``Today there is a dictatorship in Venezuela,'' said lawmaker Julio Borges, whose First Justice party led the petition drive in November calling for the referendum.

The government doesn't care about the people's will,'' Borges said. It only cares about staying in power.''

Vice President Jose Vicente Rangel described the court decision as crucial. ``I hope all sectors of the country will respect and adhere to it,'' he said.

The referendum wouldn't be binding, but opponents hoped that a poor showing would increase political pressure on Chavez to quit.

Chavez argued that Venezuela's constitution allows a binding referendum midway through his six-year term, or August. Opponents cited a constitutional clause that allows citizens to petition for referendums on ``matters of national importance'' at any time.

The strike has slashed oil production in the world's fifth-largest petroleum exporter by more than two-thirds - crippling an industry that provides half of government revenue and 70 percent of export revenue.

Chavez, speaking during a military ceremony, said he would impose the new currency controls by early next week. The move will limit the amount of U.S. dollars or other currencies Venezuelans can accumulate. The move is aimed at protecting the bolivar currency, which has lost 25 percent of its value this year. Chavez did not provide further details on the new policy.

Though the move could strengthen the local currency, it could also increase costs for businesses that depend on dollars to pay for imported goods. Venezuela's economy is highly dependent on imports - about 50 percent of food is imported.

Meanwhile, Carter proposed two plans in Caracas on Tuesday.

The first calls for an end to the strike in exchange for a government pledge to amend Venezuela's constitution to shorten presidential and legislative terms of office and allow early elections.

The second plan calls for both sides to prepare for a binding referendum on Chavez's rule in August.

Diplomats from Brazil, Chile, Mexico, Portugal, Spain and the United States were to meet at the Organization of American States in Washington on Friday to discuss Carter's proposals. The six countries, called the ``Friends of Venezuela,'' are trying to strengthen mediation efforts by OAS Secretary General Cesar Gaviria.

Chavez was elected in 1998 and re-elected in 2000 on promises to help the country's poor majority, but he has failed to remedy the nation's economic ills.

Opponents blame Chavez's leftist policies for an estimated 8 percent economic contraction in 2002. Chavez blames it on opposition attempts to destabilize the country.