www.forbes.com Reuters, 02.13.03, 5:47 PM ET CARACAS, Venezuela, Feb 13 (Reuters) - Venezuelan state oil firm Petroleos de Venezuela (PDVSA) will withdraw $1.1 billion from the government's FIEM rainy-day savings fund to finance investment after a two-month opposition strike slashed its revenues, government representatives said Thursday. The government introduced the request Wednesday into the National Assembly and the measure could be approved next week, said government deputy Angel Emiro Vera, vice president of the assembly's finance commission. "We have to approve it in the next week," Vera told Reuters by telephone. Vera said PDVSA holds about $2.44 billion in the FIEM, which had total deposits of $2.58 billion on Feb. 11, according to the Central Bank. The proposed withdrawal would account for 42.5 percent of the total in the FIEM, created in the 1990s to hold state savings for use when oil revenues were scarce. Assembly member Ricardo Sanguino, also part of the finance commission, said the withdrawal was justified because the funds would be used for investment. The state oil firm, the economic engine of the world's No. 5 petroleum exporter, has been battered by the strike by thousands of its employees. The stoppage began by opposition leaders in December slashed the oil exports that account for half of the government's revenues. In December, the assembly approved a reform in the FIEM law which allowed PDVSA swifter access to its savings in the fund. Before the strike, aimed at pressuring Chavez into early elections, PDVSA produced 3.1 million barrels a day (bpd) of crude. But output has been cut to around 2 million bpd after workers walked out, according the government. Rebel oil workers, more than 11,000 of whom have been fired by Chavez for striking, say production is closer to 1.4 million barrels per day despite government efforts to restart the sector with troops and replacement crews. PDVSA is in the middle of a restructuring, which is part of the government's counter measures against the strike. PDVSA has been forced to import huge volumes of gasoline to offset severe domestic fuel shortages caused by the strike, which has paralyzed most of the nation's refineries. At the start of December, the firm invoked "force majeure" to avoid legal action in case it could not complete its contractual obligations due to the sharp slide in its production and revenues.

www.alertnet.org 13 Feb 2003 22:09

(Recasts with Gaviria comments, oil figures) By Phil Stewart

CARACAS, Venezuela, Feb 13 (Reuters) - After three months of tortured talks, the chief mediator in Venezuela warned on Thursday of a long, deadly road ahead if friends and foes of President Hugo Chavez fail to strike a deal quickly.

Organization of American States chief Cesar Gaviria said he would push for a nonviolence pact aimed at defusing the explosive divide in the world's fifth largest oil exporter.

At least seven people have been killed and scores injured in street clashes since December, as negotiations drag on.

"We are working with the wording to see if we can put out a declaration against violence, and the confrontational rhetoric, the hateful (rhetoric) that has prevailed in the country," said Gaviria, at a forum on the country's deep political crisis.

"Venezuela's recovery will be very long, very traumatic and also very difficult to bring to a good ending" without a deal soon, Gaviria said, warning "many more lives" could be lost.

Opponents of Chavez, who charge that his so-called peaceful revolution is a mask for Cuba-style communism, have demanded that he step down and agree to elections.

Chavez has refused and has accused his opponents of supporting a coup that briefly ousted him last year. He has hardened his stance in talks and has slowly eroded a 10-week-old oil strike aimed at forcing him from power by bankrupting the state.

The populist president, whose term ends in 2007, has fired more than 11,000 employees of the state oil firm PDVSA.

Negotiations to end the crisis began in November and are being brokered by Gaviria and backed by the United States, Brazil and four other nations.

OIL FLOW CUT

The flow of oil from Venezuela to the United States, which had been about 13 percent of all U.S. oil imports, has slowed dramatically during the strike. The stoppage has further jolted world oil prices, already reeling from war worries in Iraq.

Chavez said this week production was at about 2 million barrels per day (bpd) compared with pre-strike levels of 3.1 million bpd. The government on Thursday pegged exports at about half normal levels, or 1.3 to 1.5 million bpd.

Rebel oil workers put the output lower, at a modest 1.4 million bpd, and say exports are at about 1 million bpd.

Still, with oil exports limping along, and more than $11 billion in foreign currency reserves, analysts say Chavez can hold on for months even if the standoff deepens.

Chavez introduced sweeping price controls on Wednesday on everything from tomatoes to funeral services to shield the poor majority from spiraling inflation.

Opposition leaders warned that the new controls would further damage shopkeepers, many of whom shuttered their businesses for nearly two months as part of a general strike abandoned earlier in February. Capping wholesale prices will also hurt industry and farmers, already mired in recession.

"Is the desire to make everyone self-destruct? What this could do is shut down the country's productive sector," said Rafael Alfonzo, an opposition negotiator and business leader.

Chavez suspended foreign exchange trading on Jan. 22 before announcing controls to shore up international reserves and the bolivar currency. Trading was still closed on Thursday, leaving businesses starved of the much-needed U.S. currency in a nation that imports more than 60 percent of its goods.

www.forbes.com Reuters, 02.15.03, 5:27 PM ET By Phil Stewart CARACAS, Venezuela (Reuters) - A hard-sought accord on early elections in Venezuela will likely further divide the crisis-wrenched nation, unless grass-roots allies and enemies of President Hugo Chavez are somehow drawn into dialogue, U.S. Ambassador Charles Shapiro said Saturday. Shapiro suggested Venezuela look to South Africa's efforts nearly a decade ago to forge civil consensus as white minority rule crumbled. The same technique could be used in Venezuela to tear down what he described as a wall of silence polarizing society. "In South Africa ... there was so much violence in the country that it threatened to derail the agreement. So, informal committees were set up" nationwide, Shapiro said. "What happens here (in Venezuela) is that society is so polarized. Somebody said there's an invisible Berlin Wall running through Caracas, and that's true. People aren't talking," he told Reuters in an interview. At least seven people have been killed and scores injured in street clashes since December, as opposition leaders and Chavez wrestle over the timing of elections. Chavez says his foes must wait until at least August for a vote, when the constitution would allow for one, despite a grueling opposition oil-strike designed to make him step down immediately. "Elections divide people. Elections don't bring people together ... Either you're on this side or you're on that side," Shapiro said. Chavez, a former paratrooper, says he has the support of the nation's overwhelming poor majority. He was briefly overthrown in coup last year, and brands his foes "terrorists" and "fascists" bent on destroying his self-styled revolution. Opponents say Chavez's social agenda is a mask for Cuban-style communism, and blame him for a reeling recession in the world's fifth largest oil exporter. The economic contraction, which reached almost 9 percent last year, has been deepened by an opposition strike that shut businesses and banks in December and is still strangling the oil sector. After three months of tortuous talks, an agreement still appears distant. Shapiro has been shuttling between meetings with all sides of the conflict. He and a visiting delegation of U.S. lawmakers met Saturday with Venezuelan congressmen allied and opposed to Chavez's government. He stressed that meetings beyond the formal negotiating table may be equally important in resolving the crisis. "Where you have a society that is so polarized, just a formal agreement at a table -- it's important, and obviously you can't solve problems without that -- but (there is) the idea that there could be agreements, talk and understanding at the community level," he said.

www.detnews.com Saturday, February 15, 2003 By Fabiola Sanchez / Associated Press

CARACAS, Venezuela -- A general strike and lingering recession have taken a heavy toll on the Venezuelan economy, which shrank nearly 17 percent in the final quarter of last year, according to figures released by the central bank on Friday. The nation's oil sector, which accounts for about a third of gross domestic product, contracted by nearly 26 percent in the fourth quarter as thousands of workers walked off their jobs while the government of President Hugo Chavez worked to restore production. Overall, the economy fell 16.7 percent in the fourth quarter and 8.9 percent for the entire year, according to a statement from the central bank. Most of the contraction in the economy was due to reduced oil production, a combination of Venezuela's adherence to lower production quotas established by the Organization of Petroleum Exporting Countries, followed by the general strike, which began Dec. 2. Venezuela is the world's fifth-leading oil exporter and is a leading supplier to the United States. The reduced production was one factor in higher U.S. gasoline and heating oil prices this winter. The general strike ended Feb. 4 in all areas except the oil industry. Chavez's opponents -- a mix of unions, business interests and conservative and leftist political parties -- called for the nationwide work stoppage to press for early elections. The government has restored oil output up to about half of pre-strike levels of 3.2 million barrels per day. Production fell as low as 200,000 barrels per day in December. Meanwhile, Central Bank director Domingo Maza said the government would lift a ban on dollar sales at the end of the month. The freeze was imposed during the strike to protect Venezuela's foreign reserves, which were reduced by panic dollar buying. Maza cited continued delays in establishing regulations for a new currency control system. Under the new rules, requests for foreign currencies could take three to four days to process, said Edgar Hernandez, the president of Venezuela's new currency exchange controls committee. Government officials had previously indicated that requests to buy or sell U.S. dollars and other currencies would take roughly 45 days. Chavez has said businesses that participated in the work stoppage will be denied dollars under the new policy. Business chambers, importers and hospitals warn the suspension of currency sales and bureaucracy in the new system will soon lead to shortages because they need efficient access to dollars to import goods. Venezuela imports more than 60 percent of its food, medicines and finished goods. On the Net: Government economic statistics, www.foronacional.gov.ve

"España puede hacer muchísimo más por Venezuela" afirmó el vocero del partido Nacionalista Vasco ante la Ministro Ana de Palacio

En el habitual turno de control al gobierno los miércoles en el Congreso de los Diputados, se produjo el careo habitual entre gobierno y oposición. En esta oportunidad y ante las numerosas peticiones recibidas en Euzkadi y en Madrid en relación con la cada vez peor situación que se vive en Venezuela, el portavoz del Grupo Vasco, Iñaki Anasagasti, nacido en Venezuela, le formuló a la ministra de Asuntos Exteriores del gobierno español, la siguiente pregunta:

       ¿Con qué criterio trabaja el gobierno en relación con la crisis que vive Venezuela?.

       Y ésta fue la respuesta de la ministra, Ana de Palacio:

En lo que se refiere a la crisis de Venezuela, el Gobierno trabaja en dos ámbitos; por una parte en cooperar en la solución de la crisis y, por otra, en atender a los españoles allí residentes que pueden verse afectados. España apoya resueltamente al secretario general de la OEA, señor Gaviria, y el trabajo de la mesa de negociaciones y acuerdos que se creó el 8 de noviembre pasado y que aglutina a la Coordinadora Democrática. En esa mesa y sobre la base, entre otras, de la Resolución 833 de la OEA se establece la necesidad de encontrar una salida constitucional, democrática, pacífica y electoral que España respalda. España tiene el honor, la responsabilidad y el compromiso de participar activamente en el grupo de Países Amigos de Venezuela, presidido por el secretario general de la OEA, para buscar esa salida de la crisis junto con Brasil, Chile, Estados Unidos, Méjico y Portugal. En ese grupo Brasil ha sido designado como coordinador. Ha habido dos reuniones, una en Washington, en la que hemos participado los ministros, y otra a nivel de vicecancilleres, en la que ha participado el secretario de Estado de Cooperación señor Cortés.

Respecto de la comunidad de españoles en Venezuela, que cuenta con 100.000 residentes y que está aumentando por la nueva ley de nacionalidad, España mantiene el más estrecho contacto con el Consulado de Venezuela al que se ha desplazado recientemente el director general de asuntos Consulares y Protección de los Españoles en el Extranjero para conocer la situación de la comunidad española.

La señora PRESIDENTA: Muchas gracias, señora ministra.

Señor Anasagasti.

El señor ANASAGASTI OLABEAGA: Muchas gracias, señora presidenta. Señora ministra, usted conoce mejor que nadie que la situación en Venezuela se deteriora día a día y el clima es casi de guerra civil. Lo que usted ha comentando sobre el secretario general de la OEA es muy importante, pero lleva mucho tiempo en reuniones, en viajes y la situación se deteriora cada vez más. Existe un peligro real de enfrentamiento civil en Venezuela. Dentro de muy poco el Poder Judicial va a ser controlado. Hay un control de cambios que va a dañar a la economía de una manera sustancial. El presidente insulta todos los días a sus ciudadanos. Hay un proyecto de ley de contenidos políticos que va a atacar directamente la libertad de expresión en ese país. Nos parece muy bien que España participe en el grupo de Países Amigos de Venezuela, nos parece correcto, pero nos da la impresión de que ese grupo se está convirtiendo casi en aquel comité de no intervención del año 1936 respecto a la situación política española porque no está haciendo nada concreto. Después de 62 días de huelga la situación es cada vez peor, por lo que tenemos una seria preocupación. Nosotros entendemos lógicamente el derecho a la no injerencia, como esgrime el presidente Chavez, pero como suele decir a menudo el portavoz del Partido Popular en la Comisión de Asuntos Exteriores, señor Arístegui, hay una cosa que se llama la presión diplomática y España no está teniendo suficiente presión diplomática. España en sus relaciones con América Latina sigue teniendo un criterio retórico: acudir a la toma de posesión de los presidentes o a una cumbre de jefes de Estado una vez al año, pero en una situación real en la que España puede hacer muchísimo, sobre todo con esa presión diplomática, no está haciendo lo suficiente. Ayer usted dijo algo que a nosotros nos parece muy inquietante, que los medios de comunicación en Venezuela tienen que tener una autocontención. Yo prefiero más una libertad peligrosa que una esclavitud tranquila. La libertad de expresión es libertad de expresión, en Venezuela, en España o en cualquier otro lugar. Por tanto nos gustaría, señora ministra, que tuviera un papel muchísimo más beligerante del que está teniendo. España tiene muchísimo más que hacer, independientemente de que se salvaguarde que sea un país soberano

La señora PRESIDENTA: Muchas gracias, señor Anasagasti.

Señora ministra.

La señora MINISTRA DE ASUNTOS EXTERIORES (Palacio Vallelersundi): Gracias, señora presidenta. Comparto con el señor Anasagasti su intranquilidad. Papel beligerante no, activo por supuesto. Mis palabras fueron, al hilo de las que había dicho el Alto Comisionado para los Derechos Humanos, para puntualizar que para mí no estaba en el mismo nivel la responsabilidad porque el derecho a la libre expresión y a libre opinión formaba parte de los derechos humanos. Me remito a las cintas que seguro que están grabadas. Hay que poner las cosas en su contexto.

Mayor información: Jose Mari Etxeberria, Asuntos Internacionales PNV etxebarria@eaj-pnv.com