sfgate.com STEPHEN IXER, Associated Press Writer Monday, January 20, 2003

(01-20) 10:59 PST CARACAS, Venezuela (AP) --

Supporters of President Hugo Chavez clashed with opposition marchers outside Caracas on Monday, and one person was killed when shots were fired into the crowd.

The confrontation began when Chavez's supporters tossed bottles and rocks at the marchers in the town of Charallave, Miranda state governor Enrique Mendoza said. He said rioters set fire to vehicles and a stage that had been set up for opposition speakers.

Police were trying to keep the two sides apart when gunfire erupted. It wasn't clear who fired the shots, though Mendoza said police fired back.

A 29-year-old man was killed and 12 were wounded by gunfire, said Lt. Col. Guido Bolivar, an officer of the Miranda state fire department. The rest were hurt by flying objects, Bolivar said.

It wasn't known if the wounded were hit in the initial hail of gunfire or by police.

The violence heightened tensions surrounding a 50-day-old opposition strike intended to oust Chavez. Six people have died in protests since the strike started Dec. 2.

The unrest coincided with a visit from former President Jimmy Carter, who was trying to jump-start negotiations between the government and opposition.

Carter, who won the Nobel Peace Prize in October, was to meet with Chavez and attend negotiations sponsored the Organization of American States. Carter's Atlanta-based Carter Center is also sponsoring talks. He arrived in Venezuela on Wednesday for a fishing trip.

In his weekly television call-in show Sunday, Chavez warned that the government may walk out of negotiations with strike leaders. He accused them of using unconstitutional means to seek his ouster.

"We are carefully evaluating the possibility that our representatives will leave the (negotiating) table," Chavez said. "We don't talk with terrorists."

Political parties, business leaders and labor unions called the general strike to pressure Chavez to resign or call early elections. Election authorities agreed to organize a Feb. 2 referendum after accepting an opposition petition.

Chavez says opponents must wait until August, midway through his six-year term, for a possible recall referendum. A Supreme Court ruling on the matter is pending.

The strike has caused severe shortages in gasoline and foods such as flour, milk, bottled water and soft drinks.

Production is down to 800,000 barrels a day, according to the government, though opposition leaders put the figure at 600,000 barrels. Venezuela is the world's fifth-largest petroleum-exporting nation and produced 3 million barrels a day before the strike.

The president of Venezuela's oil monopoly urged workers to return to work Monday.

"I urge you as citizens, appealing to whatever reserves of rationality there may be, to stop these activities, stop this campaign that affects the whole country," Ali Rodriguez, president of Petroleos de Venezuela S.A, said in an interview on state television station Venezolana de Television.

"The objectives you have set are unreachable," said Rodriguez, a chief Chavez ally.

Chavez has fired more than 1,000 white-collar workers at PDVSA. He has the support of Venezuela's military and has sent troops to seize striking oil tankers, keep strikers out of oil installations and commandeer gasoline delivery trucks.

Chavez's opponents say his leftist policies have driven the country toward economic ruin. They also say his autocratic style erodes democratic institutions.

www.forbes.com Reuters, 01.20.03, 1:32 PM ET

CARACAS, Venezuela, Jan 20 (Reuters) - Venezuela's bolivar currency slipped 2.2 percent against the U.S. dollar on the interbank market Monday as an opposition strike against President Hugo Chavez entered its eighth week with no solution in sight.

The interbank bolivar rate <VEB=><VEB2=> closed at an average of 1,815 bolivars to the dollar Monday, 40 bolivars down from Friday's interbank end-day average of 1,775 bolivars.

Traders said demand for the U.S. greenback continued to be high as companies sought to protect their savings on the 50th day of the grueling strike which has slashed oil output and exports in the world's No. 5 petroleum exporter.

Strike leaders are demanding that left-winger Chavez, who was elected in 1998 and survived a coup in April, resign and hold early elections. He has vowed to beat the strike.

The Central Bank, which last week suspended its previous system of daily dollar auctions, Monday offered between $60 million and $70 million through its foreign exchange desk, but this was not enough to cover total demand, traders added.

"Corporate demand was pretty strong, clients were seeking to put everything they could into dollars so as not to lose their investments," one trader said.

Measured by the Central Bank, the bolivar has lost 20.2 percent of its value against the dollar since the start of the year up until Friday.

The official Central Bank reference rate <VEBFIX=> had closed at 1.755/1.758.50 bolivars to the dollar Friday, 41.25 down from Thursday's close.

Since the strike started Dec. 2 up until Friday, the bolivar has lost 24.7 percent of its value against the U.S. currency.

Nobel Peace Prize Winner and former U.S. President Jimmy Carter Monday joined Organization of American States Secretary General Cesar Gaviria in trying to salvage faltering peace talks between Chavez's government and its foes.

The talks are hanging in the blanace after the populist president said at the weekend his government was considering pulling out of the OAS-brokered negotiations.

Chavez condemns leaders of the strike as "terrorists and fascists" trying to overthrow him, and says he will not negotiate with them.

abcnews.go.com — By Patrick Markey

CARACAS, Venezuela (Reuters) - Nobel Peace Prize winner Jimmy Carter tried on Monday to salvage faltering peace talks between Venezuelan President Hugo Chavez and foes staging a seven-week-old strike to bring down the leftist leader.

Former U.S. president Carter, on his second visit to Caracas in less than a year, planned to hold meetings with Chavez and the opposition, who have been locked in a political standoff since April when the Venezuelan leader survived a short-lived coup.

"There is always hope for a resolution and I hope that will be soon," Carter told reporters as he arrived in Caracas to meet with Organization of American States head Cesar Gaviria, who brokered the peace talks.

Carter, who carries out international peace work through his Atlanta-based Carter Center, has been in Venezuela for about a week on a fishing trip.

Negotiations between Chavez and his foes were thrown into doubt at the weekend after the populist leader threatened to quit the talks even as the international community stepped up support for OAS mediation.

The talks have been stalled over the timing of elections and how to end the opposition strike that has cut oil output and severely disrupted fuel and food supplies in the world's fifth largest petroleum exporter.

Chavez, who was elected in 1998 six years after leading a botched coup, has dismissed his foes as "fascist terrorists" plotting to overthrow him. But his critics, who say Chavez has wielded power like a corrupt, inept dictator, have vowed to keep up the strike until he steps down. Chavez rejects their calls for immediate elections.

The strike deadlock has raised international concern over global oil supplies at a time when energy markets are already jittery over a possible U.S.-led war against Iraq. Venezuela usually supplies about one sixth of U.S. oil imports.

Oil prices crept higher Monday after Washington said time was running out for Baghdad to prove its compliance with United Nations disarmament resolutions. Benchmark Brent crude oil prices were up 21 cents at $30.57 a barrel. U.S. crude oil prices closed Friday at a fresh two-year high of $34 a barrel.

OVERSEAS FRIENDS

Oil supply fears have intensified diplomatic efforts to end the Venezuelan crisis. The United States, Brazil and other governments have agreed to form a group of six nations to lend weight to mediation efforts by OAS chief Gaviria.

United Nations Secretary-General Kofi Annan plans to send an envoy to Venezuela to take part in the initiative, which also includes Spain, Portugal, Chile and Mexico.

But Chavez cast doubt on the plan by threatening to pull out of OAS talks and insisting that other countries, such as Russia, Cuba and France, also be included.

Hoping to build pressure on Chavez, opposition leaders are planning to hold a nonbinding referendum on his rule on Feb. 2. The Supreme Court has yet to decide on the legality of that poll. Chavez insists a binding referendum can only be held after Aug. 19, halfway through his current term.

The Venezuelan leader said on Sunday he was restarting the strike-bound oil industry, which accounts for about half of the government's revenues. He has fired 2,000 employees from state oil firm PDVSA and ordered troops to take control of production installations and refineries.

"We are winning the oil war," Chavez said.

But rebel oil executives said production was still at about only 650,000 barrels per day -- about half of the government estimates. Venezuela produced about 3 million barrels per day before the strike in November.

The president has also ordered troops to raid factories, banks and schools joining the strike, as well as food and drink manufacturers he accuses of hoarding supplies. National Guard troops sparked opposition outrage and international concern on Friday after they broke into a local bottling affiliate of Cola-Cola Co. to take away crates of drinks.

sg.biz.yahoo.com Monday January 20, 10:43 PM

CARACAS (Dow Jones)--The planned restart over the weekend of the 335,000 barrels per day La Isla refinery at Curacao has failed due to technical glitches, a refinery spokeswoman said Monday.

"We have tried to restart several units, but technical problems have forced us to delay plans to bring the plant back on line," the spokeswoman said. She added that due to the technical problems certain parts of the units have to be flown in from abroad. She couldn't say by how long the planned startup has been delayed. The plant was scheduled to be back at full capacity within two weeks.

An attempt to restart a crude distillation unit that didn't suffer from technical problems will be made later Monday, she said.

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AdultsStorage facilities have been drawn down sufficiently enough to restart the processing of around 200,000 b/d of gasoline. The plant was forced to shut down after an oil strike hit production and exports of Venezuela's state-owned oil monopoly Petroleos de Venezuela SA (E.PVZ) and storage facilities were full.

The production and exporting of around 200,000 b/d of gasoline are crucial for the gasoline supply in Venezuela, hit by an oil strike which entered its eighth week Monday. The La Isla refinery is leased by PdVSA.

The Venezuelan government still depends mostly on gasoline imports to fight a gasoline shortage. Only its 200,000 b/d Puerto La Cruz refinery is functioning. It's producing around 75,000 b/d.

By Fred Pals, Dow Jones Newswires; 58212-5641339; fred.palsdowjones.com;

www.globeandmail.com By VLADIMIR TORRES

Monday, January 20, 2003 – Page A13

It was easier during the Cold War. You chose a side; all that was needed to understand any crisis or conflict anywhere was to figure out which side was your side -- and the arguments to support that position were already at hand. Old habits die hard, and so in this era of sound bites, whoever says anything that vaguely resembles what seems to be your position must be supported.

Case in point: Venezuela. The world's fifth-largest oil producer is in the seventh week of a crippling national strike, led by business and union leaders who want to force President Hugo Chavez to call new elections. Outside the country, "progressive left" thinkers and media have made Mr. Chavez a newfound champion. Their analysis is oversimplified, to say the least.

Mr. Chavez was democratically elected with an overwhelming majority in 1998. This mandate allowed him -- through several referendums -- to dissolve Congress, create a Constitutional Assembly that drafted the current constitution, and to be elected once again -- as first president of the newly christened "Bolivarian Republic of Venezuela."

But democratic legitimacy demands consistently playing by the rules. And once re-elected, Mr. Chavez revealed his true nature: the former paratrooper head of the failed military coup d'état of 1992. Soon showing a total disregard for democratic institutions, he moved to gain a stronghold on the country's legislative and judicial systems, and to involve the military in a myriad of civilian affairs, even selling food at cost on the streets.

The President has systematically harassed the media, intimidated his opposition, and alienated critical sectors of Venezuelan society, such as the Church, businesses, the middle class, civilian organizations and NGOs -- those who now march in the streets calling for his ouster. His violent speeches are loaded with diatribes against "them." Anyone who is not a loyal supporter is accused of being a fascist, sometimes in scatological terms. (Despite his claims, Mr. Chavez's "little blue book," as he calls the constitution, does allow for civil disobedience; Article 350 should grant the general strike legitimacy.)

Mr. Chavez likes to paint the strike as a "class confrontation." That's debatable. The President still draws his core support from among the millions of Venezuelans who live in poverty. But now that more than 60 per cent of the population finds itself in that bracket, and the impoverished middle classes make up for most of the rest, his poor-versus-rich scenario makes little sense.

Venezuela used to have one of the highest crime rates in the hemisphere. Now that problem is compounded by the activities of Mr. Chavez's "Bolivarian Circles." These armed bands -- responsible among other things for vandalism against media facilities -- are organized and financed through government agencies. Although inspired by Cuba's "Committees of Defence of the Revolution," they are, in fact, nothing but fascist-like intimidation squads that operate with total impunity.

Ever since the events of April, 2002, when Mr. Chavez was ousted from office for 48 hours, the government has claimed that all opposition is right-wing and antidemocratic. This overlooks the fact that it was only thanks to the deeply rooted democratic sentiments of the vast majority of Venezuelans that Mr. Chavez was reinstated. In fact, those opposing Mr. Chavez include business and labour groups, and social movements spanning political parties and classes. Clearly, it is a genuine democratic movement.

Then there is the oil issue. When Venezuela nationalized its oil industry in 1975, a strong core of Venezuelan managers, engineers and technical personnel -- employees of the foreign oil companies, trained locally and abroad -- took over key positions. Ever since, the industry has prided itself on making promotions and appointments right up to the board of directors based on merit. Not even the most corrupt of the pre-Chavez administrations dared to interfere with that sacred rule. After all, Petroleos de Venezuela (PDVSA), a world-class corporation, is Venezuela's main provider.

But Mr. Chavez, determined to take control of the industry, has been appointing his supporters to key positions. Now, facing the strike, he has decided to "cleanse" PDVSA. The government has already fired 2,000 employees and plans to run the industry with a few unskilled non-striking workers, the military, and technical personnel brought in from other countries. Mr. Chavez calls this "true nationalization."

To supporting such actions, the government argues that the current management wants to "privatize" the company to preserve its privileges. "Privatize" refers to the joint ventures and alternative deals -- already in place or planned -- that enable PDVSA to continue to be a world leader in the oil industry beyond crude oil extraction. "Privileges" refers to the fact that oil-sector wages are above those of most public servants (which makes sense if one considers their technical expertise and the need to prevent a brain drain).

Despite all this, leftists continue to defend Mr. Chavez, and cite his stance in many international forums, where he has come out against neoliberalism, free trade and globalization. What does that mean? He hasn't defined "Bolivarianism"; he improvises as he goes along, and has plunged Venezuela's economy into a deep hole.

Last year, the inflation rate was more than 30 per cent and the GDP was decreasing by about 10 per cent. That was before the strike.

Why do progressives outside Venezuela continue to support Mr. Chavez? It's a nice illusion to believe that with Lula (Luiz Inacio "Lula" da Silva) as President in Brazil, Lucio Gutierrez in Ecuador and Mr. Chavez in Venezuela, the winds of social change are blowing in South America.

But Mr. Chavez is nothing more than another megalomaniac colonel.

Vladimir Torres, a Venezuelan-Canadian, works as an interpreter and Latin America current affairs analyst.