abcnews.go.com The Associated Press CARACAS, Venezuela Jan. 22 —

Venezuela's Supreme Court suspended a Feb. 2 referendum on President Hugo Chavez's rule Wednesday until it can determine whether it is legal, a blow to opposition leaders hoping the vote would lead to his removal.

Chavez's allies had appealed to the court to rule the nonbinding referendum unconstitutional. The court on Wednesday ordered the National Elections Council to stop organizing the referendum until a final ruling on its legality is made, said Julio Montoya, a pro-Chavez lawyer in the case.

It was not clear when the final ruling would be made.

Tens of thousands of Chavez opponents fought through bullets and tear gas Nov. 4 to deliver a petition signed by 2 million people required for holding the vote. The elections council set the vote for Feb. 2.

The opposition then launched a general strike Dec. 2, demanding Chavez consent to the referendum and promise to abide by it. The strike has slashed production in the world's fifth-largest exporter by more than two-thirds.

Chavez says opponents must wait until a binding referendum, which the constitution allows midway through his six-year term, or August. But opponents cite a constitutional clause that allows citizens to petition for referendums on "matters of national importance" at any time.

Also Wednesday, Venezuela's central bank suspended its foreign exchange trading for a week 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.

Finance Minister Tobias Nobrega said a new foreign exchange policy will be revealed in five business days. He said the policy would involve "restrictions" to foreign exchange trade but did not elaborate.

"The government must adopt urgent measures to prevent our international reserves from further deteriorating," Nobrega said in a television address. The strike has "undoubtedly devastated the economy. The year 2003 begins with a very delicate fiscal and financial situation."

The announcement led to speculation that the government was planning to impose exchange controls to protect its depleting foreign reserves and halt the bolivar's slide, which has lost a quarter of its value this month.

"It sounds like exchange controls are on the way," said Miguel Octavio, executive director of local investment banker BBO Financial Services.

The suspension means that Venezuelans cannot buy foreign currencies for five business days. The government said it would continue to pay its foreign debts.

Exchange controls could help strengthen the 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.

The bolivar currency reached a record low of 1,853 to the dollar Tuesday. It has lost 25 percent of the its value since the beginning of the year, after losing 46 percent of its value in 2002. The depreciation has contributed to 30 percent inflation.

Traders said the Central Bank has been injecting up to $70 million a day to protect the currency. Venezuela's foreign reserves stood at $11.05 billion Monday, down from about $12.5 billion before the strike began. Venezuela also has about $2.9 billion in a rainy day fund that absorbs excess oil revenue.

Opposition and government negotiators are studying proposals made by former President Jimmy Carter to end the dispute over Chavez's rule.

The Nobel Peace Prize laureate proposed two plans Tuesday. The first entails general elections and an end to the strike. The second proposal calls for both sides to prepare for the August binding referendum.

The first plan would amend Venezuela's constitution to shorten presidential and legislative terms of office and stage early elections.

It calls for the opposition to end the strike and for the government, which has a congressional majority, to move quickly on changing the constitution. Amending the constitution requires the approval of congress and a popular referendum.

A so-called "Group of Friends of Venezuela," a forum of six countries the United States, Mexico, Brazil, Chile, Spain and Portugal has been formed to help end the standoff. Diplomats involved in the initiative will hold their first meeting at the Organization of American States in Washington on Friday.

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.forbes.com Reuters, 01.22.03, 2:38 PM ET

CARACAS, Venezuela (Reuters) - Venezuela's Supreme Court 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.

www.news.com.au From correspondents in Caracas, Venezuela January 23, 2003

VENEZUELA'S central bank has suspended its foreign exchange trading for a week in a bid to stop the country's currency further plummeting in the fallout from a 52-day-old strike that has crippled oil exports. Finance Minister Tobias Nobrega today said a new foreign exchange policy would be revealed in five business days.

He said the policy would involve "restrictions" to foreign exchange trade, but did not elaborate.

"The government must adopt urgent measures to prevent our international reserves from further deteriorating," Nobrega said in television address.

The strike had "undoubtedly devastated the economy", he added.

www.cnn.com Wednesday, January 22, 2003 Posted: 10:05 AM EST (1505 GMT)

CARACAS, Venezuela (AP) -- Rivals in Venezuela's bitter political standoff studied proposals made by former President Jimmy Carter to end the dispute that has dramatically cut oil production in the world' s No. 5 exporting country.

The Nobel Peace Prize laureate proposed two plans Tuesday. The first entails elections and the end to a 51-day-old national strike. The second proposal calls for both sides to prepare for a binding referendum on President Hugo Chavez's presidency in August, the midpoint of his six-year term.

Both supporters and foes of Chavez expressed doubt their opponents would respect a democratic solution to the bitter stalemate.

"As democrats we move along an electoral and peaceful path. They aren't democrats and they don't believe in this possibility," said strike leader Carlos Ortega, president of country's largest labor union.

Juan Barreto, a ruling party member, expressed doubt opposition leaders have "the capacity and patience to move forth" with the proposals.

The first plan would amend Venezuela's constitution to shorten presidential and legislative terms of office and stage early elections.

It calls for the opposition to end the strike and for the government, which has a congressional majority, to move quickly on changing the constitution. Amending the constitution requires the approval of congress and a popular referendum.

Carter said that if both sides agreed on the amendment proposal, there "would be no delays" in implementing it because international mediators would "guarantee the integrity of the agreement."

A so-called "Group of Friends of Venezuela," a forum of six countries including the United States, Mexico, Brazil, Chile, Spain and Portugal, has been formed to help end the standoff. Diplomats involved in the initiative will hold their first meeting at the Organization of American States in Washington on Friday.

'Nobody imagined the strike would last for 50 days'

The proposals, added Carter, have taken into account the basic demands of both sides but "difficult details" will have to be worked out in negotiations.

Members of a women's opposition protest shout slogans against the president in Caracas on Tuesday.

Before leaving Venezuela Tuesday, Carter was optimistic opponents would make concessions in order to end the political impasse and ongoing work stoppage.

"Nobody imagined the strike would last for 50 days and no one wants it to last for 70 or 100 days," he said.

The government has acknowledged the strike has reduced oil production and cost $4 billion so far.

Oil provides 70 percent of export earnings and a third of Venezuela's $100 billion gross domestic product. Output stands at about 660,000 barrels a day, compared to 3 million before the strike, according to strike leaders. The government claims production is at least 800,000 barrels a day.

A key point is the fate of workers at Venezuela's state owned oil monopoly. Some 30,000 of 40,000 workers are striking. Chavez has fired more than 1,000.

Carter said his proposal would have strikers return to work but allow the government to prosecute anyone accused of sabotaging the industry. Chavez accuses "fascist, coup-plotting" oil executives of using sabotage to prevent the government from jump-starting the oil industry.

Arguing that Venezuelans cannot wait until August to cast ballots given the deepening crisis and political upheaval, opposition leaders called the strike on Dec. 2 to force Chavez from power.

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.

Political unrest has contributed to 17 percent unemployment, 30 percent inflation and a weakening currency, which reached a record low of 1,853 to the dollar Tuesday.

www.bangkokpost.com

Nobel Peace Prize winner Jimmy Carter on Tuesday presented to Venezuelan President Hugo Chavez and his foes a plan for elections that seeks to end a crippling opposition strike in the world's fifth-largest oil exporter.

The blueprint unveiled by the former US president offered two options: one for an amendment to Venezuela's constitution that would trigger early elections and the other for a national referendum on Mr Chavez's rule on Aug 19.

Both options, which were received by government and opposition negotiators on Tuesday, foresee the lifting of the seven-week-old strike launched by opposition leaders to press the left-wing leader to resign and hold early elections.

The gruelling shutdown has slashed output and exports by South America's biggest oil producer, pushing the oil-reliant economy deeper into recession.

The bolivar currency tumbled 5.1% against the US dollar on Tuesday. Moody's Investors Service cut Venezuela's foreign currency debt ratings, sinking the country deeper into junk bond territory because of uncertainty over the strike.

A government source said the administration and Central Bank had approved a temporary closure of the foreign exchange market, as they studied exchange restrictions to stem capital flight.

The bolivar has shed more than 24% of its value against the dollar since the start of the year. But the source, who asked not to be named, said a devaluation was not being planned for the moment.

The 51-day-old oil industry strike showed signs of weakening on Tuesday when some oil tanker pilots in western Lake Maracaibo went back to work. Nevertheless, strike leaders said they were continuing the shutdown, which has pushed up world oil prices to two-year highs of more than $34 a barrel.

Mr Chavez, a populist who led an unsuccessful coup attempt in 1992, was first elected to the presidency in 1998 and survived a brief coup last year, has refused to resign and says he will try to break the strike.

Opposition leaders said they hoped Mr Carter's proposal, backed by international pressure, would give fresh impetus to faltering negotiations on ways to end the crisis, which is threatening to bankrupt Venezuela's oil-reliant economy.

``President Carter's weight and authority, combined with the international situation, could force the government to sit down and talk,'' opposition negotiator Alejandro Armas said.

More than two months of peace negotiations, brokered by the Organisation of American States Secretary-General Cesar Gaviria, have so far failed to produce a deal on elections, increasing uncertainty about Venezuela's economic and political future.

Raising fears of social unrest, the strike has led to shortages of petrol, cooking gas and some food items.

Mr Carter, who has made a career of trying to resolve world conflicts, travelled to Caracas to throw his weight behind international efforts to end the Venezuelan crisis. ``Both sides now want to reach an agreement to end the impasse,'' Mr Carter said before flying home.

One of the two options he presented proposes an amendment to the constitution that would allow the holding of early elections. Such an amendment must be proposed by 15% of the electorate and be approved in a national referendum.

The other option is for the country to wait until Aug 19, halfway through Mr Chavez's term, when the constitution allows for a binding referendum on the president's mandate, which is due to end in early 2007.

Mr Chavez told reporters after meeting Mr Carter he was willing to accept a constitutional amendment. ``I don't reject any of these possibilities, but the opposition must comply with the constitution,'' he said.

Mr Carter said both sides would have to agree on one of his alternatives.