www.austin360.com By ALEXANDRA OLSON Associated Press Writer

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.

abcnews.go.com

— CARACAS, Venezuela (Reuters) - Venezuela's Supreme Court on Wednesday ordered the suspension of a planned February nonbinding referendum on the rule of President Hugo Chavez, dealing a blow to opposition hopes to inflict a symbolic political defeat on the leftist leader.

Electoral authorities had set the referendum for Feb. 2, after the opposition had collected more than 2 million signatures to request the poll, which would have asked voters whether or not the populist president should resign.

But Chavez's government, which is battling a seven-week opposition strike, objected to the vote as unconstitutional and appealed to the Supreme Court to stop it from going ahead.

"This means that the referendum is frozen,' Romulo Rangel of the country's National Electoral Council, the official electoral authority, told reporters.

Chavez, who was voted into office in 1998 and is refusing opposition calls to step down and hold early elections, had said he would ignore the result of the nonbinding referendum, even if he lost by 90 percent.

A defeat in the poll would not have legally obliged Chavez to resign, but the opposition had been hoping it would show they could beat him in a vote.

Chavez has said they should wait until Aug. 19, halfway through his term, when the constitution allows for a binding referendum on his current mandate, which is scheduled to last until early 2007.

reuters.com Wed January 22, 2003 03:23 PM ET By Patrick Markey

CARACAS, Venezuela (Reuters) - Venezuela on Wednesday suspended foreign exchange trading in a desperate bid to stem capital flight and a slide in the bolivar as the government battled an opposition-led strike which has drained its oil-reliant economy.

The Central Bank said it would close the foreign exchange market for five trading days and prepare temporary currency exchange and transfer curbs to fend off the impact of the shutdown, which aims to force President Hugo Chavez to resign.

Finance Minister Tobias Nobrega said the government planned also to slash its 2003 budget by 10 percent or $2.2 billion, extend a temporary bank debit tax through 2003 and continue with a domestic public debt swap to counter the economic damage of the strike.

Venezuela's bolivar has tumbled more than 28 percent during the seven-week-old work stoppage and its international reserves have fallen. Oil output in the world's fifth-largest petroleum exporter has been slashed by the strike to a fraction of its normal levels.

Economists said foreign exchange controls would give the government some short-term breathing room, but the economy would suffer the longer the controls were maintained.

"This looks more like a knee-jerk reaction of theirs to the currency weakness," Jose Cerritelli, a Bear Stearns Andean economist, said. "But in the long term, people look to escape the controls by taking their money out."

A government source told Reuters on Tuesday that the cabinet was still not clear what currency measures it would introduce. But the government did not plan to devalue the bolivar for now, the source said.

The economic crunch has raised fears that Venezuela may default on its foreign debt later this year. But the Central Bank said the government would maintain the necessary operations to make those debt payments.

Chavez, a fiery populist who was elected in 1998 and survived a coup in April, has branded his foes as "terrorists" who are trying to topple him again through an economic coup and by draining hard currency from Venezuela. He has refused to quit and vows to defeat the strike.

Venezuela's Trade and Production Minister Ramon Rosales said the suspension of the exchange market aimed to halt what he called the "attack against our international reserves."

"The aim of this measure is to preserve our reserves which are the only guarantee of Venezuela's recovery after this oil sabotage," Rosales told Reuters.

FALLING RESERVES, BATTLE FOR OIL

Venezuela's international reserves have fallen to $11.05 billion, a drop of 7.5 percent so far this year. The government also has $2.85 billion in its FIEM rainy-day savings fund and insisted recently that hard currency levels were sufficient.

Rattled by political uncertainty, the bolivar currency has lost more than 24 percent of its value this year alone. The central bank reference rate for the bolivar closed Tuesday trading down 5.1 percent at 1,849.50/1,853 bolivars.

Opposition leaders hope their strike, which began on Dec. 2, will pressure former paratrooper Chavez to agree to early elections. They say that rather than deliver on promises to ease poverty, he has wielded power like a dictator and driven Venezuela toward economic ruin and Cuba-style communism.

The bitter stalemate has raised international concern after the strike drove world oil prices to two-year highs. It has also severely disrupted domestic fuel and food supplies, pushing Venezuela's already weak economy deeper into recession and stoking social unrest.

But negotiations to break the deadlock have been stalled over the timing of possible elections. Former U.S. President and Nobel Peace Prize winner Jimmy Carter on Tuesday proposed to the government and the opposition a blueprint for elections that would also end the strike.

The currency trading shutdown is the latest government measure to combat the effects of the strike, now in its 52nd day. Many private businesses are still closed and the fuel shortages have forced Venezuelans to wait for hours outside gasoline pumps.

Chavez, who led a botched coup six years before his victory at the polls, has fought back, sending troops to seize control of oil installations and refineries and importing food and gasoline to offset shortages.

Strike leaders claim the government has failed to break the stoppage. But in a first sign of a crack in the oil shutdown, some tanker pilots in the key western oil and shipping hub of Maracaibo went back to work this week.

www.miami.com Posted on Tue, Jan. 21, 2003 BY FRANCES ROBLES frobles@herald.com

CARACAS - Jimmy Carter arrived in Venezuela's capital Monday after enjoying a fishing trip with the president's archenemy to help referee a 50-day strike that has crippled industry and commerce.

Carter met with President Hugo Chávez one day after the Venezuelan leader criticized international negotiators who have been trying in vain to broker a negotiated solution to the strike that so far has cost $4 billion.

''I think there's always hope for a resolution,'' Carter said moments after his arrival. ``And I hope it will be soon.''

Opposition leaders refuse to lift the strike until the government agrees to early elections or at least a referendum on Chávez's rule.

Despite nearly three months of talks brokered by the Organization of American States, the opposition and the government have never been further apart. Carter entered a political arena so full of tension that some experts believe it is beyond the reach of the Nobel Prize-winning former U.S. president.

''Not even if Jesus Christ came to Caracas would it be enough to bring these sides together right now,'' said political analyst Miguel Diaz, with the Center for Strategic International Studies in Washington. ``I don't think many people expect much from Jimmy Carter. It's beyond him.''

Carter's visit was complicated by his choice of fishing partners. He arrived in the country Friday at the invitation of media magnate Gustavo Cisneros, who has publicly been accused of financing and plotting a coup that briefly ousted Chávez in April. Cisneros has denied any involvement.

Carter Center representatives said the former president would not make public statements about his visit until today, but opposition negotiators said he is widely expected to present a proposal today. In addition to Chávez, Carter met with OAS Secretary-General César Gaviria, opposition leaders Carlos Ortega and Carlos Fernández and representatives at the negotiation table.

''President Carter is coming at a very difficult time,'' said Gaviria, who has brokered talks here since November. ``Circumstances have changed a lot in the last few days. There's much more tension. But I think the table is the bridge between the government and the opposition. This is the place to find an accord.''

Six nations -- Brazil, Chile, Mexico, Portugal, Spain and the United States -- have formed an initiative called ''Friends of Venezuela'' to lend weight to the OAS-brokered talks. The first meeting will take place Friday in Washington to determine the structure of the group's talks.

The group was not days old before Chávez was publicly bashing it. He made a surprise trip to Brazil on Saturday to ask President Luiz Inácio Lula da Silva to expand the group to include more nations friendly to Chávez. Lula declined.

Days earlier, during a visit to the United Nations, Chávez publicly rebuked Gaviria, saying Gaviria was here only on the president's personal invitation. He later ordered a raid on Coca-Cola bottling plants here, saying that if private firms won't sell their goods, the military will.

economictimes.indiatimes.com INDRANI BAGCHI TIMES NEWS NETWORK[ THURSDAY, JANUARY 23, 2003 01:45:47 AM ]

When the Petroleos de Venezuela SA recruited Indian workers last month to break the strike in the South American country, the move was seen as a compliment to India's skills in a sector where it hardly has any locus standi.

However, the presence of these very same workers sparked off even bigger riots and threatened the safety of the Indian community in Venezuela, compelling the government here to ask the Mumbai-based company to recall the workers.

Hugo Chavez of Venezuela, ranged in a political stalemate with the opposition for the past eight weeks, has been on a single-point mission: to break the strike that has paralysed his country and played havoc with global oil prices.

Petroleos de Venezuela SA (PDVSA) is the state oil company that provides the government with nearly half of its $20bn budget. Chavez has used the strike to fire 2,000 dissident employees at the company. But, to break the impasse, PDVSA imported Indian workers to run the oil tankers.

In December, a Mumbai-based company that provides workers for oil rigs, sent six technicians to work on the Pilin Leon tanker near Maracaibo city, 600 km west of Caracas.

An enraged Venezuelan opposition threatened India with dire consequences, extending the threats to the Indians living in Venezuela. The situation snowballed into a crisis and it was not long before the Indian embassy in Caracas became the venue for riots and further demonstrations. 

On one occasion, opposition strikers hit an embassy car. On being told that it belonged to the Indian embassy, one of them smiled and said, "India deserved it."

A rattled ambassador, R Vishwanathan, like his other counterparts, dispatched his non-essential staff to Aruba. He also issued a press release in Spanish to assure the opposition that India did not intend to meddle in Venzuela's internal affairs. But this failed to placate the rioters.

Finally, a worried Indian government asked the Mumbai company to recall the workers. It also told the firm to refrain from sending any more workers to that politically-fractured nation. It's a lesson neither the Indian government nor Indian business will forget in a hurry. 

Of late, Indian corporates are seeing the flip side of doing business in a globalised world. Recently, the manging director of Polaris was caught in the maelstrom of Indonesian politics and extortionists.

The Venezuelan incident brought home another issue: that while operating across borders, Indian business houses need to be more aware of the political implications of their actions.

The ministry of external affairs says that it should be kept in the loop when it comes to these sensitive decisions. However, business representatives sing a different tune — South Block's inaccessibility.

India companies, notably Reliance Petroleum, have been buying crude from Venezuela since '00. Hugo Chavez, who is bent on establishing left-wing rule in Venezuela, was on the verge of visiting India last year.