www.sabcnews.com February 04, 2003, 07:45

Venezuela's government yesterday rejected a proposal to cut short the rule of President Hugo Chavez and delivered a fresh blow to the opposition campaign for early elections in the world's fifth biggest oil exporter.

Opposition leaders, who said they collected about four million signatures petitioning for a constitutional amendment to shorten Chavez's term, accused the government of stalling talks to end the bitter dispute over his rule.

Jose Vicente Rangel, the Vice President, said the government dismissed the opposition initiative and proposed instead a binding referendum after August on the president's rule. The amendment campaign marked a shift in strategy for opponents of Chavez after they scaled back a two-month strike that battered Venezuela's economy, but failed to unseat him. State oil workers at the heart of the strike have vowed to keep up their stoppage to press for a vote.

The fresh row signalled more political wrangling between the government and opposition, who have been locked in a stand-off since April when Chavez survived a short-lived military coup. Both the constitutional amendment and a binding referendum were put forward as options by Jimmy Carter, former US president and Nobel Peace prize winner, who is part of international efforts to broker an electoral deal.

In a statement Rangel said the government could not set a date for a referendum and also rejected Carter's proposal urging no reprisals for striking oil workers. Chavez has fired more than 5000 oil employees, accusing them of sabotage, and refused an amnesty.

A six-nation initiative led by the US and Brazil has also lent its weight to the talks led by the Organization of American States to hammer out an agreement on elections. - Reuters

www.dailytelegraph.co.uk

Venezuela's opposition yesterday formally conceded defeat in its attempt to oust President Hugo Chavez through a general strike.

In a last symbolic action, hundreds of thousands of signatures were collected for a petition against the government, but a jubilant Mr Chavez said: "They have the 'F' of failure on their foreheads."

The opposition insisted that the struggle was not over. Businesses were forced to re-open their doors or go bankrupt. Mr Chavez has agreed to hold a referendum on his continued presidency in August, but it is not yet clear whether the poll will actually take place.

The Left-wing president has vowed to accelerate his "peaceful revolution", designed to redistribute the country's wealth in favour of the 70 per cent of the population that live in poverty.

www.canada.com ALEXANDRA OLSON Canadian Press Monday, February 03, 2003

CARACAS (AP) - Workers in all sectors but the vital oil industry returned to their jobs Monday - abandoning a two-month general strike that devastated Venezuela's economy but failed to oust President Hugo Chavez.

As life began returning to normal in stores, factories and banks, the government made gains toward restoring oil production to pre-strike levels in a country that is a major supplier of crude to the United States and the world's fifth-largest petroleum exporter. The fear of bankruptcy and shortages of gasoline and other essentials prompted leaders to end the strike, which began Dec. 2, said Albis Munoz, vice-president of the country's biggest business chamber, Fedecamaras.

Chavez, elected in 1998 and re-elected in 2000, has vowed to defeat his opponents in the streets and at the ballot box. He said Sunday he will prosecute strike leaders for sabotaging the economy.

Venezuela's opposition still hopes to generate international pressure for new elections.

The United States, Brazil, Chile, Mexico, Spain and Portugal joined the Organization of American States in mediation efforts. Over Chavez's objections, they endorsed early elections.

After meetings here Friday, diplomats from the six countries said early polls were the best way to restore stability.

The opposition, meanwhile, organized a massive signature drive Sunday for early elections - the strike's original goal. Organizers claimed four million people signed the petitions, a claim that could not be verified.

Strike leaders are a mix of conservatives, business associations, labour unions and civic groups. Their often conflicting petitions reflected their various agendas.

One called for a constitutional amendment declaring Chavez's term over. Another would cut his term from six years to four, allowing elections this year. A third would create a constituent assembly to rewrite the constitution and call general elections.

Yet another option: A binding referendum halfway into Chavez's term, or in August, as permitted by the constitution. That idea was supported recently by former U.S. president Jimmy Carter.

Chavez says he prefers the August option - a referendum he could win because the opposition, while condemning political and economic unrest, has yet to present an alternative to his populist "revolution" for the poor.

While Manuel Cova, secretary general of the Venezuela Workers Confederation, claimed some sort of vote could be held as early as March, Venezuela has no one to organize a vote.

The Supreme Court ruled last month that the Chavez-dominated Congress must appoint a new board of directors for the National Elections Council. Without a council, no one can verify the signatures collected Sunday.

The strike reflected "the disorganization of the opposition," said Riordan Roett, director of Western Hemisphere studies at Johns Hopkins University.

"It was anti-Chavez but never pro-anything. What were they going to replace Chavez with?"

Lines disappeared at banks, traffic jams reappeared, and janitors swept the halls at Caracas' multistorey Sambil shopping mall Monday in anticipation of a Tuesday opening.

The strike "lasted too long and now we are paying the consequences," said Luis Lange, 24, manager of an electronics store.

Like Lange, hundreds of thousands of businessmen had counted on holiday sales to make up for last year's poor sales.

According to the Fedeindustria business chamber, the fallout from the strike and continuing recession will cost 200,000 jobs and close more than 20,000 small- and medium-sized businesses by August.

Chavez also fired more than 5,000 striking oil workers.

Lack of oil and tax income forced Chavez to cut 10 per cent from Venezuela's $25 billion US budget for 2003. Economists forecast the economy will shrink 25 per cent this year after an eight per cent contraction in 2002.

Venezuela's crude oil output rose to 1.2 million barrels per day Monday, compared with 1.1 million barrels over the weekend, according to dissident staff at the state owned monopoly Petroleos de Venezuela, S.A.

That is about a third of normal production, but Venezuela is expected to add 200,000 more barrels per day in the coming weeks, the staff's daily report said.

www.upi.com By Owain Johnson UPI Business Correspondent From the Business & Economics Desk Published 2/3/2003 6:19 PM

CARACAS, Venezuela, Feb. 3 (UPI) -- Venezuela's state-owned oil producer Petroleos de Venezuela SA, hard hit by the country's general strike, hopes to turn a crisis into an opportunity. Its president, former OPEC Secretary-General Ali Rodriguez, will take advantage of a walkout by top managers and administrative staff to restructure.

The general strike, which failed to force leftist President Hugo Chavez to resign, has begun to crumble But the 64-day protest is continuing in the oil sector, where most top PDVSA managers and administrative staff are observing the stoppage.

PDVSA is a major supplier of crude oil to the United States, where the company also operates 13,000 gas stations under its CITGO brand. Before the general strike began on Dec. 2, Venezuela was the world's fifth-largest oil producer.

The impact of the strike prompted PDVSA to declare force majeure in early December. The company has taken a tough line with strikers, dismissing about 5,300 of its 33,000 staff for failing to report to work.

Speaking at a breakfast for the international press on Friday, Rodriguez said further dismissals were likely and ruled out a blanket amnesty for strikers.

He said would carry out a major restructuring program over the next six months to reduce staff levels and simplify its complex organizational structure. PDVSA has 189 companies, many of which exist only on paper, and he said the company would evaluate these companies and identify its key assets.

The president did not rule out selling some assets to improve the company's financial position, which has been badly affected by the strike. He said announcements could be expected later in the year, after the review.

The company has already scaled down its planned investments and spending for 2003 from $8 billion to $6 billion. The cuts include a 40 percent reduction in spending and a 30 percent reduction in investment. Rodriguez was emphatic, however, that PDVSA's cash flow problems wouldn't affect its ability to make foreign debt repayments.

PDVSA hopes to be able to ease the force majeure declaration by the end of February, although Rodriguez said it would take a long time to recover from the strike completely. He said, however, that he was very pleased with the progress to date. "We have demonstrated a great capacity for recovery," he told reporters.

Rodriguez said PDVSA produced 1.5 million barrels per day of oil last week and would regularly produce 2 million bpd by mid-February. He estimated that production would reach 2.5 million within the first half of March, close to Venezuela's OPEC quota of 2.8 million bpd.

Joint ventures in the Faja del Orinoco with international oil producers such as France's TotalFinaElf and Norway's Statoil are expected to restart production this week, adding a further 330,000 barrels to Venezuela's total daily production levels.

The speed with which PDVSA restarted production is impressive, given the absence of most top managers and the shutdown of the company's information and communications systems.

Rodriguez has retained the loyalty of most ordinary workers, and PDVSA estimates that most contract workers have returned to work. The company might take on a small group of U.S. experts on short-term contracts to replace sacked managers and help restart operations.

The PDVSA president was a left-wing guerrilla in his youth and remains loyal to the ideals of Chavez's "social revolution." That philosophy is intended to address the enormous disparities of wealth in Venezuela, but opponents say it masks an authoritarian project to convert Venezuela into a socialist state.

Rodriguez believes that by slimming down the energy producer and reducing costs, he will be able to deliver greater value to PDVSA's only shareholder, the government. Income from oil exports generates about half of all government revenue.

"In cultural terms, we are beginning to see the real nationalization of PDVSA," Rodriguez said. "Venezuelans are going to realize they are the real owners of this company. PDVSA is just an instrument for maximizing the benefit of our natural resources."

Striking oil workers allege, however, that Rodriguez has filled PDVSA with government loyalists and under-qualified staff to replace strikers and keep the company running. They claim that laxer supervision has already led to more accidents and the new reorganization will mean a drastic cull in operations that will reduce its production capacity and potential for growth.

"We are seeing the destruction of PDVSA's very base, the exploration and production businesses that are now at only a third of their capacity," a recent statement by the strikers read. "They want to put an end to refining, supply and trading businesses, gas operations, the businesses of (petrochemical company) Pequiven and more importantly, the company's human and management capital."

www.vheadline.com Posted: Monday, February 03, 2003 - 6:46:13 PM By: David Coleman

Opposition spinmeisters are claiming a PR coup d'etat in claims that four million signatures have been collected, demanding the immediate resignation of President Hugo Chavez Frias.  Although the signature campaign, called "El Firmazo" ... was conducted under highly-irregular circumstances, Sunday, and must still to be counted and verified against the official voters' register, the anti-Chavez opposition is attempting to save face as hundreds of thousands of workers returned to their jobs today after a 2-month lockout which saw them deprived of their wages over the critical Christmas/New Year period.

Organizers said the 'El Firmazo' was to underscore the opposition's contention that Venezuela should press for a Constitutional Amendment to shorten Chavez' mandate and allow early elections ... but even they had to admit that arrangements were makeshift with Chavez supporters harassed away from roughly set-up voting booths centered mainly in opposition strongholds with accompanying fanfare.

A month's scheduled delay before there can be any clarity as to the voting tally in Sunday's pseudo-referendum, has not deterred the opposition from declaring early projections while an election's board still has to be appointed to retroactively supervise Sunday's event and even that faces legal challenges in the Supreme Tribunal of Justice (TSJ) and discussion in the National Assembly (AN).

Meanwhile the Organization of American States (OAS) is looking on askance as it continues an apparently futile attempt to reach an electoral settlement with the 6-nation "Group of Friends" from Brazil, Chile, Mexico, Portugal, Spain and the United States urging all parties to at least talk to one another.

With massive damage already caused to the nation's petroleum industry through sabotage and walk-outs, rebel Petroleos de Venezuela (PDVSA) ex-employees say they will continue their stoppage as international economists predict a 10-20% GDP contraction this year on top of about 50% inflation and an inevitable increase in unemployment.

PDVSA president, former OPEC General Secretary Ali Rodriguez Araque says that oil production has already been increased to 1.5 million barrels a day and that it will be close to normal 3.2 million per day by the end of February.  At the same time 5,600 ex-PDVSA rebels say oil output is cut to 1 million bpd and there isn't a ghost's chance of lifting production above 1.5 million.