www.washingtonpost.com Reuters Monday, January 13, 2003; Page A16

CARACAS, Venezuela, Jan. 12 -- Venezuelan troops fired tear gas today to disperse tens of thousands of protesters as President Hugo Chavez ordered a crackdown against a six-week-old opposition strike that is bleeding the economy.

Chavez warned opponents he would not let them disrupt schools, banks or food supplies with the strike, which has already crippled shipments by the world's No. 5 oil exporter.

"They want to break us economically. They are not going to do it. I swear it by God and my mother," Chavez said during his weekly television and radio show.

During his broadcast, Chavez signed a decree creating a special government commission to combat a tax rebellion announced by opposition leaders. By urging Venezuelans not to pay taxes, the strikers hope to cut government revenue already drained by the oil strike.

The president, elected in 1998, said the strike was costing the country tens of millions of dollars a day. Chavez, who has already fired 2,000 striking state oil employees, repeated threats to send troops to take over private factories and warehouses if they hoarded food supplies.

He also threatened to revoke the broadcasting licenses of private TV stations that criticize his rule. He described their hostile programming as "worse than an atomic bomb."

www.guardian.co.uk Monday January 13, 2003 3:50 AM

CARACAS, Venezuela (AP) - Soldiers lobbed tear gas at tens of thousands of Venezuelans marching on a park near a military base to demand the armed forces' support in the ongoing strike against President Hugo Chavez. Nineteen people were injured, including one photographer who was hit by rubber bullets.

Opposition protesters regrouped as the gas clouds lifted, shouting ``cowards'' at hundreds of soldiers facing them with armored personnel carriers. Troops also kept back dozens of Chavez supporters protesting nearby.

The first marchers to arrive at Los Proceres park, which is outside the Fort Tiuna military base, stomped down barbed wire blocking the entrance, but they did not try to break past security lines.

Hector Castillo, a photographer for the local newspaper El Mundo, was injured by rubber bullets that some soldiers fired into the air, Caracas Fire Chief Rodolfo Briceno said. Eighteen other people were treated for asphyxiation, he said.

The park is one of eight security zones in Caracas as decreed by Chavez. Protests are banned in those areas unless authorized by the defense ministry.

All of this show of force is absurd,'' said Henrique Capriles, the opposition mayor of an eastern Caracas district. People are tired of being assaulted and repressed.''

The military - purged of dissidents after a brief April coup - has supported Chavez during the strike, which has paralyzed the world's fifth-largest oil exporter but has not rattled the president's resolve to stay in power.

Troops have seized oil tankers, commandeered gasoline trucks and locked striking workers out of oil installations. Top commanders have professed their loyalty to the government.

Speaking in his weekly radio and television address on Sunday, Chavez dismissed opponents as ``fascists'' manipulated by the media.

He also dismissed Infrastructure Minister Eliecer Hurtado, a retired general, and replaced him with Diosdado Cabello, the current interior minister. Chavez did not explain the change or say who would head the interior ministry, which commands the federal and secret police forces.

Venezuela's main television stations are not broadcasting any commercials except opposition advertisements promoting the strike. Media owners say they have been pushed into this stance because Chavez incites followers to attack reporters.

Chavez threatened to revoke the broadcasting licenses of television and radio stations if they ``continue with their irrational insistence on destabilizing the country by supporting this fascist subversion.''

Venezuela's largest labor confederation, business chamber and opposition parties began the strike Dec. 2 to demand that Chavez resign and call early elections if he loses a nonbinding referendum on his rule.

The National Elections Council scheduled the referendum for Feb. 2 after accepting an opposition petition signed by 2 million people.

Chavez says the vote would be unconstitutional, and his supporters have challenged it in the Supreme Court. He was elected in 1998 and re-elected in 2000, and his term ends in 2007. Venezuela's constitution allows a recall referendum halfway through a president's term - August, in Chavez's case.

Opponents accuse the president of running roughshod over democratic institutions and wrecking the economy with leftist policies. The opposition has staged dozens of street marches, called for a tax boycott and held a two-day bank strike last week.

Chavez has threatened to order troops to seize food production plants that are participating in the strike and to fire or jail striking teachers and have soldiers take over their duties.

He already has fired 1,000 oil workers after some 30,000 of 40,000 workers joined the strike, which has caused fuel shortages and slowed oil exports to a trickle.

The strike is costing the country an estimated $70 million a day.

On Jan. 3, Chavez supporters and opponents clashed while police fired tear gas to keep the sides apart during an opposition march on Los Proceres. Two Chavez supporters died after being shot and at least 78 others were injured, five with gunshot wounds. It was unclear who fired on marchers.

Police also intervened Saturday when Chavez supporters blocked the route of a planned opposition march through the streets of Maracay, the military's nerve center, and on Margarita island off Venezuela's coast.

In Colombia, Venezuelan Foreign Minister Roy Chaderton dismissed the possibility that his country was heading toward civil war.

To have a civil war, two (sides) are needed, and the government doesn't want that,'' Chaderton told The Associated Press. We are not preparing ourselves for civil war but to preserve peace and reconciliation.''

The country's crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels. Exports are a fifth of the 2.5 million barrels a day the country usually produces.

The country's $100 billion economy shrank an estimated 8 percent in 2002, largely due to constant political instability. Inflation has surpassed 30 percent while unemployment reaches 17 percent.

Negotiations sponsored by the Organization of American States have produced few results.

www.thestar.com.my

CARACAS, Venezuela (AP) - President Hugo Chavez threatened to revoke the broadcasting licenses of Venezuela's main TV and radio stations, accusing them of supporting opposition efforts to overthrow him through a six-week-old strike.

Chavez said Sunday the stations were abusing their power by constantly broadcasting opposition advertisements promoting the strike, which has dried up oil revenue in the world's No. 5 oil exporter but hasn't rattled the president's resolve to stay in power.

Venezuela's main television stations have not broadcast any commercials during the strike except the opposition ads.

Media owners say they adopted that stance because Chavez incites his supporters to attack reporters.

"They are worse than an atomic bomb,'' Chavez said during his weekly radio and television show Sunday. "If they continue to use their licenses to try to break the country or oust the government, I would be obligated to revoke it.''

He spoke as tens of thousands of his opponents marched on Los Proceres park outside the Fort Tiuna military base in Caracas, seeking military support for the strike.

Troops lobbed tear gas at the protesters but they quickly regrouped, shouting "cowards'' at hundreds of soldiers facing them with armored personnel carriers.

Troops also kept back dozens of Chavez supporters protesting nearby.

The first marchers to arrive at Los Proceres park, which is outside the Fort Tiuna military base, stomped down barbed wire blocking the entrance, but they did not try to break past security lines.

Hector Castillo, a photographer for the local newspaper El Mundo, was injured by rubber bullets that some soldiers fired into the air, Caracas Fire Chief Rodolfo Briceno said. Eighteen other people were treated for tear-gas asphyxiation, he said.

The park is one of eight security zones in Caracas decreed by Chavez. Protests are banned in those areas unless authorized by the Defense Ministry.

The military - purged of dissidents after a brief April coup - has supported Chavez during the strike, with troops seizing oil tankers, commandeering gasoline trucks and locking striking workers out of oil installations.

Top commanders have professed their loyalty to the government.

In Colombia, Foreign Minister Roy Chaderton dismissed the possibility that Venezuela was heading toward civil war.

"To have a civil war, two (sides) are needed, and the government doesn't want that,'' Chaderton told The Associated Press.

"We are not preparing ourselves for civil war but to preserve peace and reconciliation.''

Venezuela's largest labor confederation, business chamber and opposition parties began the strike Dec. 2 to demand that Chavez resign or call early elections if he loses a nonbinding referendum on his rule.

The National Elections Council scheduled the referendum for Feb. 2 after accepting an opposition petition signed by 2 million people.

Chavez says the vote would be unconstitutional, and his supporters have challenged it in the Supreme Court.

He was elected in 1998 and re-elected in 2000, and his term ends in 2007. Venezuela's constitution allows a recall referendum halfway through a president's term - August, in Chavez's case.

Chaderton said the government would consider providing funds for the vote if the Supreme Court upheld it.

"An opposition that contributes ... to strangling the country's economy and calls for tax evasion ... is demanding funds for a vote. How curious,'' he said.

"But at an opportune time, after the judicial institutions make their decision, we will decide.''

Opponents accuse the president of running roughshod over democratic institutions and wrecking the economy with leftist policies.

The opposition has staged dozens of street marches, called for a tax boycott and held a two-day bank strike last week.

Chavez accuses opponents of trying to provoke a coup.

He has fought the strike by firing 1,000 workers from the state oil monopoly, where some 30,000 of 40,000 workers are off the job.

The strike, which is strongest in the oil industry, has caused fuel shortages and is costing the country an estimates US$70 million a day.

The country's crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels.

Exports are a fifth of the 2.5 million barrels a day the country usually produces.

In Vienna for a meeting of the Organization of Petroleum Exporting Countries, Oil Minister Rafael Ramirez vowed production would be 2.5 million barrels a day by mid-February. - AP

www.sfgate.com ALEXANDRA OLSON, Associated Press Writer Sunday, January 12, 2003

(01-12) 19:38 PST CARACAS, Venezuela (AP) --

Soldiers lobbed tear gas at tens of thousands of Venezuelans marching on a park near a military base to demand the armed forces' support in the ongoing strike against President Hugo Chavez. Nineteen people were injured, including one photographer who was hit by rubber bullets.

Opposition protesters regrouped as the gas clouds lifted, shouting "cowards" at hundreds of soldiers facing them with armored personnel carriers. Troops also kept back dozens of Chavez supporters protesting nearby.

The first marchers to arrive at Los Proceres park, which is outside the Fort Tiuna military base, stomped down barbed wire blocking the entrance, but they did not try to break past security lines.

Hector Castillo, a photographer for the local newspaper El Mundo, was injured by rubber bullets that some soldiers fired into the air, Caracas Fire Chief Rodolfo Briceno said. Eighteen other people were treated for asphyxiation, he said.

The park is one of eight security zones in Caracas as decreed by Chavez. Protests are banned in those areas unless authorized by the defense ministry.

"All of this show of force is absurd," said Henrique Capriles, the opposition mayor of an eastern Caracas district. "People are tired of being assaulted and repressed."

The military -- purged of dissidents after a brief April coup -- has supported Chavez during the strike, which has paralyzed the world's fifth-largest oil exporter but has not rattled the president's resolve to stay in power.

Troops have seized oil tankers, commandeered gasoline trucks and locked striking workers out of oil installations. Top commanders have professed their loyalty to the government.

Speaking in his weekly radio and television address on Sunday, Chavez dismissed opponents as "fascists" manipulated by the media.

He also dismissed Infrastructure Minister Eliecer Hurtado, a retired general, and replaced him with Diosdado Cabello, the current interior minister. Chavez did not explain the change or say who would head the interior ministry, which commands the federal and secret police forces.

Venezuela's main television stations are not broadcasting any commercials except opposition advertisements promoting the strike. Media owners say they have been pushed into this stance because Chavez incites followers to attack reporters.

Chavez threatened to revoke the broadcasting licenses of television and radio stations if they "continue with their irrational insistence on destabilizing the country by supporting this fascist subversion."

Venezuela's largest labor confederation, business chamber and opposition parties began the strike Dec. 2 to demand that Chavez resign and call early elections if he loses a nonbinding referendum on his rule.

The National Elections Council scheduled the referendum for Feb. 2 after accepting an opposition petition signed by 2 million people.

Chavez says the vote would be unconstitutional, and his supporters have challenged it in the Supreme Court. He was elected in 1998 and re-elected in 2000, and his term ends in 2007. Venezuela's constitution allows a recall referendum halfway through a president's term -- August, in Chavez's case.

Opponents accuse the president of running roughshod over democratic institutions and wrecking the economy with leftist policies. The opposition has staged dozens of street marches, called for a tax boycott and held a two-day bank strike last week.

Chavez has threatened to order troops to seize food production plants that are participating in the strike and to fire or jail striking teachers and have soldiers take over their duties.

He already has fired 1,000 oil workers after some 30,000 of 40,000 workers joined the strike, which has caused fuel shortages and slowed oil exports to a trickle.

The strike is costing the country an estimated $70 million a day.

On Jan. 3, Chavez supporters and opponents clashed while police fired tear gas to keep the sides apart during an opposition march on Los Proceres. Two Chavez supporters died after being shot and at least 78 others were injured, five with gunshot wounds. It was unclear who fired on marchers.

Police also intervened Saturday when Chavez supporters blocked the route of a planned opposition march through the streets of Maracay, the military's nerve center, and on Margarita island off Venezuela's coast.

In Colombia, Venezuelan Foreign Minister Roy Chaderton dismissed the possibility that his country was heading toward civil war.

"To have a civil war, two (sides) are needed, and the government doesn't want that," Chaderton told The Associated Press. "We are not preparing ourselves for civil war but to preserve peace and reconciliation."

The country's crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels. Exports are a fifth of the 2.5 million barrels a day the country usually produces.

The country's $100 billion economy shrank an estimated 8 percent in 2002, largely due to constant political instability. Inflation has surpassed 30 percent while unemployment reaches 17 percent.

Negotiations sponsored by the Organization of American States have produced few results.

www.forbes.com Reuters, 01.12.03, 7:23 PM ET By Hugh Bronstein

NEW YORK, Jan 12 (Reuters) - Latin American sovereign bonds were expected to trade flat this week while investors keep an eye on Venezuela, the market's wild card, where a six-week-old national strike has hobbled the world's No. 5 oil exporter.

As they have since the strike began on Dec. 2, investors are left guessing when the work stoppage will end and what fiscal wreckage will be left in its wake. The strikers are calling for fresh elections, hoping to put an end to the controversial presidency of Hugo Chavez.

Some analysts and investors on Sunday said the strike must be reaching a "breaking point," but Jim Barrineau, a vice president in emerging markets research at Alliance Capital Management, warned the market not to hold its breath.

"A negotiated agreement is probably still weeks away because I don't see where either side has room to compromise," he said. Venezuelan total returns have already dropped 7 percent in January while the market as a whole, as judged by JP Morgan's Emerging Markets Bond Index Plus, has risen 1.7 percent.

Barrineau said he expects the nation's bond prices to keep falling in the days to come. Other New York-based analysts were more optimistic.

"I think something is going to break in Venezuela over the next week or so," said Joe Portera, global fixed income director at MacKay Shields, a New York-based investment management company.

The United States on Friday said it supports forming a group of key regional nations who could nudge both sides to an electoral solution to end their bitter impasse. U.S. officials said they hoped to bolster talks brokered by the Organization of American States that have so far failed to reach an accord.

"I'm optimistic about the United States finally getting involved," Portera said. "We actually added a bit to our Venezuela bond holdings over the last week because we think things had gotten overdone in terms of selling."

As long as the situation does not worsen, Portera noted that the government appears to have enough reserves to keep paying its bond service on time.

Chavez, notorious on Wall Street for his failed economic policies and anti-capitalist rhetoric, was elected in 1998 vowing to wrest control from the country's corrupt elite and enact reforms to help the poor. But opposition has grown amid charges the president wants to establish a Cuban-style authoritarian state.

The country's constitution allows for a binding recall vote half way through a president's term, which in Chavez's case would be after August. Opposition leaders say that is too far away and they want to go ahead with a nonbinding referendum on Chavez's rule scheduled by electoral authorities for Feb 2.

But Chavez says the February poll would be unconstitutional and and that he will ignore its result, even if he loses. He says he will abide by the outcome of the later referendum.

Venezuelan troops fired tear gas on Sunday to force back tens of thousands of anti-government protesters in Caracas. Chavez threatened take over the country's banks, which last week held a 48-hour stoppage.

But the banks will reopen on Monday, continuing the restricted service hours they have adopted since the strike began on Dec 2. "The Venezuelan strike has played out in a way that has been more damaging than people expected," said David Roberts, senior international economist at Banc of America Securities.

"The pressures are so severe that the situation must be reaching a breaking point," he added.

BRAZIL SEEN STEADY TO HIGHER Investors will also keep an eye this week on Brazil, Latin America's biggest economy, where the new president, Luiz Inacio Lula da Silva, last week mapped out his strategy for reforming the country's public pension system.

"A few details are leaking out," Barrineau said. "It looks like it could be a pretty aggressive plan and that's one factor that could keep a good tone in the market."

Changes to the social security system could soothe worries about Brazil's $260 billion debt load.

Investors fled Brazilian bonds last summer when it started to appear likely that Lula, who had lost the previous three presidential elections, would win October's vote.

The former metal worker was notorious on Wall Street for suggesting years ago that the government default on its debt in order to redirect money toward the nation's poor.

But Brazilian total returns are up 6.88 percent so far this month as Lula's government has delivered market-friendly policy signals, including the pension reform effort.