www.newsmax.com Tiana Perez, NewsMax.com

Editor's note: Tiana Perez, NewsMax's correspondent in Venezuela, will offer occasional dispatches on the turmoil in this crucial part of the world.

Chavez Accused of Terrorism, Crimes Against Humanity

Jan. 28: Spanish lawyer Luis Garcia Perulles has confirmed that a complaint has been filed at the National Spanish Council against president of Venezuela Hugo Chavez alleging crimes against humanity, violation of human rights and terrorism.

The action has come as a result of the death of José Antonio Gamallo, a Spanish citizen who was transported to Spain after having been seriously wounded during the protests that preceded the attempted coup on April 11, 2001.

The massive protest attended by more than 1 million people in the center of Caracas left a death toll of 17, leading to a trial and hearings at the National Assembly that lasted for more than one month. Lawyers representing the dead protesters did not accomplish more than a political discussion at the National Assembly despite having presented video proofs of Chavez backers and members of the government shooting at the peaceful crowd.

The hearings, which had as their high point the disclosure of recorded phone conversations by senior military officials between the president and members of the armed forces at Miraflores, the presidential palace, show that Chavez had ordered to unleash the “Plan Avila” on the morning before senior military officials asked him to resign.

The “Plan Avila” is a contingency plan designed to suppress civilians and foresees the seizure of the street by tanks and the armed forces. Gen. Rosendo, who was put in charge of the plan and one of the disclosers of this information at the National Assembly, considered the plan an unjustifiable atrocity toward the unarmed protesters and did not proceed to carry it on.

Following the inability of the Venezuelan judicial system to resolve the case, the lawyers representing Gamallo have taken the complaint to the international arena.

"The Venezuelan State is doing everything possible to obstruct the approval of judicial decisions,”[1] said Garcia, one of the lawyers, in reference to the proceedings caused by the events on April 11th.

He assured that the filing of the complaint accusing the government of terrorist activities before the Spanish judicial authorities was based on evidence about the redirection of funds to terrorist groups’ accounts. Garcia explained that his evidence included audiovisual material that would be evaluated by the assigned judge.

When consulted about the judicial proceedings that will be launched in Spain, Venezuelan Vice President José Vicente Rangel declared "this shows gross ignorance about what a state of law is. It is important to exhaust all national judicial resources before an international action is started. Secondly, I think it reveals a complete lack of imagination and sense of responsibility.”[2]

He charged that the ones who should be put on trial were those who sabottaged the oil industry, disrupted two months ago with the beginning of the general strike against President Chavez's rule.

PDVSA, the state oil company, remains occupied by military forces and is operating with 5,000 employees less, who had resigned and left their posts as a protest against an increased politization of the company. Meanwhile, oil exports have been restored to about one-third of usual daily production of 3.1 million barrels.

[1]: www.globovision.com, Jan. 28 [2]: El Universal, Jan. 28

www.asiamedia.ucla.edu CARACAS

Attacks on journalists and threats to shut TV channels reflect the polarisation of Venezuela, where private media outlets are openly involved in the political battle against President Hugo Chavez.

Media harassment is not entirely new in the South American country, having started in January last year with physical attacks on journalists and televised interventions by the president "imposed" on all TV channels, says Marcel Granier, president of Radio Caracas Television (RCTV).

RCTV is one of the private channels Mr Chavez refers to as "the four horsemen of the apocalypse" for their open support of an eight-week-old strike that has crippled the vital oil sector.

Mr Chavez said he would set up an "office of shame" to exhibit the lies he says form part of a media tyranny.

Mr Granier said such statements reflected "the permanent intimidation" of private media in Venezuela. "Hundreds of journalists, including 30 from RCTV, have been physically attacked and journalists feel threatened while carrying out their profession," he said.

In recent clashes between supporters and foes of the president, three journalist were shot at, and owed their lives to the fact they were wearing bulletproof jackets, Mr Granier said.

Mr Chavez has initiated legal procedures against RCTV and news channel Globovision, which Mr Granier believes could close the two stations. "Chavez is not a democrat, he is seeking confrontation," he said.

The two sides in the political conflict accuse each other of pushing the country to the brink of all-out violence, prompting the recently formed six-nation Group of Friends of Venezuela to urge the government and the opposition to find ways of easing the tension.

Mr Granier said he was willing to "lower the tone", adding however, that "the tone is set by the president".

One of his pet peeves is the president's often-used ability to impose "at the time that suits him" his live interventions on all television channels and 400 radio stations. In early April, Mr Chavez "appeared 33 times on our screens in the space of 48 hours", he said.

www.thescotsman.co.uk

JEREMY MCDERMOTT THERE has been no formal admission of surrender but Venezuela’s president seems to have beaten the seven-week-old strike aimed at toppling him.

The core of the strike by Venezuela’s opposition was always the oil industry, the country’s economic lifeblood. But with more than 3,000 striking oil workers sacked and production up to almost a million barrels of oil a day, opposition figures are privately admitting it is all over.

"It seems [the president] has won this round. We never thought he would be able to hold on for long," said an opposition politician. "But it’s not over, we will beat him in August."

It is in August that the president, Hugo Chavez, has agreed to hold a referendum on his rule. If he loses he has pledged to go quietly. In the meantime he is tightening his grip on the levers of power, economic, military and political.

He has become increasingly exuberant as the strike collapses and has promised to get the oil industry back on its feet in record time.

"The oil wells are working and we have already exceeded one million barrels a day in oil production and the recovery has been much faster than we hoped," the fiery left-wing president said. "By the end of January, or at the latest in the first week of February, we should be at roughly two million barrels a day."

The key elements in the opposition’s national strike were the oil industry and a call for businesses to close.

After seven weeks businesses face the choice of going bankrupt or of breaking the strike; the vast majority have done the latter. The shopping malls in the wealthier suburbs have begun to open, as have restaurants.

Government supporters scent victory.

"The corrupt oligarchy has been defeated. The rich minority have been shown that the will of the people cannot be stopped," said Lina Ron, an ardent Chavista.

The opposition is by no means a spent force and was able to obtain two million signatures calling for a referendum next month, but the request was thrown out on a technicality by the country’s supreme court.

In addition, the opposition can still mobilise people and persuade them onto the streets. Last weekend over a 100,000 people blockaded one of Caracas’s main highways calling for the removal of Mr Chavez, whom they accuse of wanting to set up a Cuban-style dictatorship.

But the Chavistas have been able to match opposition numbers, with the poor neighbourhoods coming out in support of their idol.

The country is polarised like never before, but the opposition has no leader whilst the charismatic Mr Chavez has already shown he will cling onto power with every ounce of his strength.

But the strike has cost Mr Chavez dearly. Support has shrunk from 60 per cent early last year to less than 30 per cent, and government finances, along with the economy, are in tatters with almost £3 billion in losses. The economy shrank by an estimated 8 per cent last year, whilst unemployment stands at 17 per cent and inflation at 30 per cent.

The president has seven months to get country on course, whilst continuing his "peaceful revolution" to redistribute Venezuela’s wealth in the favour of the poor before he faces the electorate.

www.guardian.co.uk Wednesday January 29, 2003 12:10 AM

CARACAS, Venezuela (AP) - President Hugo Chavez's government scored a victory in Venezuela's political crisis by producing more than 1 million barrels of oil Tuesday, frustrating a 2-month-old opposition drive to strangle the world's No. 5 oil exporter.

By raising production to a third of its normal rate, Chavez seized another advantage over his opponents - jump-starting Venezuela's oil industry while defeating calls for a February referendum on his rule.

But the 58-day-old strike has put Venezuela on the verge of economic collapse, caused long-term damage to oil infrastructure and forced Chavez to extend his ban Tuesday on U.S. dollar purchases to preserve foreign reserves.

Chavez surpassed the 1 million-barrel benchmark by focusing on newer oil fields where crude is easier to extract. But production may not reach 2 million barrels a day if the government doesn't revive older wells, said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.

They are going for the lowest hanging fruit on the tree, the easiest to grab,'' Silliere said. In a few weeks, it is going to be a struggle.''

Energy analysts warn that Venezuela has lost production capacity during the strike and that it could take months to restore it. Refining is curtailed, and Venezuela is purchasing its gasoline abroad.

Dissident executives at the state oil monopoly, Petroleos de Venezuela S.A., confirmed production surpassed 1 million barrels, compared to a low of 200,000 during the strike. Exports - normally about 2.5 million barrels a day - have reached 800,000, according to shipping agents.

Oil provides half of Venezuela's government revenue and 70 percent of export earnings.

Chavez has fired more than 5,000 striking workers at the state oil monopoly, which employed 40,000, eliminating dissent and trying to increase government control over the semiautonomous corporation.

State oil company executives warn the firings will make it even more difficult to reach full production.

Opposition leaders insist the oil strike will continue. But they are scaling back in other areas, worried about a public backlash over food, gasoline and medicine shortages. The government will impose limits on daily gasoline sales to reduce lines at service stations, said Luis Vierma, director of hydrocarbons at the Energy and Mines Ministry.

Opposition leaders insist the oil strike will continue. But they are scaling back in other areas, worried about a public backlash over food, gasoline and medicine shortages.

Most small businesses are open - either because they never joined the strike or because they couldn't sustain losses.

Factories, shopping malls, restaurants and schools may reopen next week, at least on a part-time basis, said Julio Brazon, president of the Consecomercio business chamber and a strike leader.

Citing political and economic turmoil, Venezuela's opposition called the strike Dec. 2 to force Chavez to call a nonbinding referendum on his rule in February. They delivered 2 million signatures demanding the vote.

Last week, Venezuela's Supreme Court postponed the referendum indefinitely, citing a technicality.

Chavez's foes are now gathering voter signatures to demand an amendment to reduce the president's six-year term to four years - allowing an early binding referendum on his rule.

A similar idea was floated last week by former President Jimmy Carter, whose Carter Center has joined the Organization of American States and United Nations in trying to broker an electoral solution.

Carter also proposed an alternative: Dropping the strike, and holding a binding referendum halfway into Chavez's term, or next August.

Venezuela's opposition - a coalition of labor, business, leftist and conservative political parties - has won international backing for early elections.

Over Chavez's objections, Spain, Portugal, the United States, Brazil, Mexico and Chile have formed a ``Friends of Venezuela'' initiative and are urging both sides to work quickly on the Carter proposals.

Recession, capital flight, stalled investment and strike damage led Santander Central Hispano investment bank to forecast a 40 percent collapse in economic activity the first quarter of 2003.

The finance ministry on Tuesday extended for another week a freeze on foreign currency sales to protect the bolivar, which has lost 25 percent of its value this year. The bolivar was trading at 2,300 to the dollar Tuesday in secondary markets between private parties, bankers said. It was 1,853 to the dollar before the freeze started.

``Chavez many have the initial advantage, but over the long term, he's going to have a much more difficult path,'' said Steve Johnson, senior policy analyst for Latin America at the Washington-based Heritage Foundation.

blogs.salon.com

I wanted to talk about the possible effects of exchange controls, people always think they are milder that they eventually end up being. Then I received this (in Spanish) from Roberto Rigobon, a Venezuelan who is a Professor at the Sloan School at MIT. He defintely can do it better and is more qualified.   What’s the big deal with foreign exchange controls? By Roberto Rigobon   MIT   I do not understand why we Venezuelans have to get so worked up about foreign exchange controls. After all, since when do they last more than three months?   It is customary for authorities to say:” In the past the controls were not implemented correctly, we- who know how to control- will do it well”. I understand that today’s authorities are different. But a great friend once told me something that is absolutely true: “Countries that impose capital controls always claim they are different, -but surprisingly, they look identical at the end-they all collapse in the same way”   Foreign exchange controls is only a reflection of the ignorance of the economic authorities to handle a situation that is escaping their hands. It is exactly what a scolded kid does when he throws a temper tantrum on the floor. Since when is this an act that deserves our minimal attention? The question is not if the exchange control will last, it is knowing what will happen during and after it.

Today the Venezuelan Government is desperate for financing, and its only alternative is the Central Bank and the domestic financial system. I know that the Central Bank law says that it is prohibited to lend to the Government, but this was not really designed to be followed. It will be one of a zillion laws that has been violated. And to be sincere, it is not as if the reputation of the Government will be drastically damaged for such an event-it has done worse things. Thus the Government will expropriate the savers and the Venezuelan Central Bank. The typical mechanism is: the Government goes into debt through the financial system-issuing bonds that banks are forced to purchase. Whether it is because the Central Bank increases legal reserves and allows them to use such instruments as part of reserves, or simply because they open a desk where you can discount them at a sufficiently juicy price. In this transaction two things occur: The implicit indebtedness of the Government increases so much, both in the Central Bank and in the banking system- and since the monetary base increases, in a country with free mobility of capital, there is capital flight and reserves fall. Let’s look at this in more detail. Forcing the banking system to accept Government bonds implies that savers have implicitly lent money to the Government. Of course, nobody sane would lend money to this Government if they knew what they were doing. In these circumstances, before depositing in the banking system, account holders would take their money out. Ah!! But that is what capital controls are good for-to stop savers, that do not want to lend the Government money and that have excess liquidity, from having any recourse. Unfortunately, for the Government, capital flight can only be stopped for a limited time-in general, very limited (three to six months maximum). What ends up happening is that Governments are forced to freeze bank accounts-which implies a massive devaluation and expropriation of the account holders. Now, expropriating account holders has never been a good idea. This has happened a few times in Latin America in 1989 and 2002 in Argentina, in 1990 in Brazil, in 2000 in Ecuador (To mention only a few) By the way, in each of these occasions (i) depositors lost between 60 and 70 percent of their savings, (ii) the Governments devalued the currency at least a factor of three (let’s see, today it is at Bs 1800 per US$, mmmmm....Bs. 5400 could be a good number, if history repeats), (iii) and even more important, each Government ended up leaving through the back door because the economy turned unmanageable-I don’t want to think what will happen in Venezuela where things are already unmanageable   Foreign exchange controls are not the problem, they are the symptom of the inability, of the ignorance, of the incredulity, and of the arrogance of those Governments that think they know more than savers. And certainly the savers do not have a graduate degree in economics, nor a Ph.D. from Chicago, but dummies they are not. Only someone with one neuron (which it obviously needs to breathe) will think that controls are an alternative for the Venezuelan situation. Thus, to the mono-neuronic economists that thought of this terrible idea, tighten your belts because what is coming is a stampede.