www.vheadline.com Posted: Wednesday, February 26, 2003 By: Gustavo Coronel

VHeadline.com commentarist Gustavo Coronel writes: Ten years ago my wife and I decided to move away from too large and unpleasant Caracas into a small rural community. For some time I had believed that living in the country did not have to be equal to misery and backwardness. A citizen living in the countryside did not have to become a peasant. I was sure we could live graciously, with most of the urban amenities plus fresh air, a pool, plenty of fruits and flowers.

We started looking for a suitable place and found it, some 20 kilometers west of Valencia, the most beautiful city in Venezuela (in my opinion). We found a modest, very middle class development called Sabana del Medio, selling lots of 2-10 acres. We chose a beautiful lot of 3 acres and paid some $5,000 for it. It was fallow but had a nice gravel road all the way to the entrance. Its northern boundary was a small river carrying water all year long, a valuable asset.

To build the house we hired a local team of carpenter, plumber and bricklayer under the supervision of a "maestro", one of these men who "know" how to build a house without being an engineer. My wife knew what house she wanted and the "maestro" obeyed faithfully. Every week we would drive from Caracas to the site to pay our team, to supervise the work done and to plan the future work. For us, this was a wonderful experience, not only because of the pleasure of seeing the house become a reality but also because of the high quality and decency of the workers. Money was used judiciously and our local supplier of materials never failed to deliver in time.

After many weeks the house was finished, together with another, smaller house for the keeper and a very nice 70,000 liter pool. To celebrate, we had an open house and invited our workers and families and some other friends from the nearby village. We also installed a dish for TV which allowed us to see even some soap operas in Chinese.

Today some $80,000 later, the house has matured. We planted more than 600 fruit and ornamental trees which have been  giving us plenty of flowers and fruit: oranges, tangerines, grapefruit, lemons and limes, mangoes, avocados, loquats, soursops, passion fruit, plums of diverse types, as well as some other exotic fruits I do not how to call in english. The Araguaneyes (Tabebuia), the national tree of Venezuela offer us their yellow golden flowers. The majestic Samanes (pithecellobium) give us shadow and the bucares (erythrinas) and Acacias (delonix) give happiness to our eyes. We had found and created our small paradise and we had proven that we could live in the countryside as citizens, connected to the world. The community grew rapidly until more than 200 houses were built, trees growing, lawns manicured. We were proud of our community and lived in harmony with the adjacent village of Barrera.

20 months ago this paradise suffered a setback. The cattle lands to the north of the community, across the river were invaded by hundreds of squatters, led and protected by the government. Within a very short time the lands became huge slums. Hundreds of shacks were erected overnight. Illegal connections were established with the public water mains and the electrical power lines. Crime in the area increased exponentially. The cattle became the target of squatters for dinner. What had been an orderly rural landscape became a chaotic scene.

At the same time we received letters from the Institute of Land, managed by Adan Chavez, the President's older brother, challenging our ownership to the land. We had to spend time and considerable money in legal fees to prove what we already knew, that we were the owners of our property.

Today, however, we are being encroached upon by misery and squatters. Our properties are now worth next to nothing. For one year I have tried to sell my  property but no one has even bothered to take a look. Ten years of solid and perseverant improvements are going down the drain.

Today we hear a lot about social justice. I am all for it. I believe that the concept should apply to all citizens. Social justice should convert slums into communities and not communities into slums. Social justice should guarantee citizens the free enjoyment of property honestly obtained. Social justice should guarantee our right to dream.

We are now almost at the end of our dream in Sabana del Medio. For my wife and I there is no time to start all over again. But we will find some other dream to fall in love with.

As Willie Nelson sings, we are: "On the road again..."

For those with the proper baggage the road is always a source of wonders ... I always love to see what is around the bend...

 Gustavo Coronel is the founder and president of Agrupacion Pro Calidad de Vida (The Pro-Quality of Life Alliance), a Caracas-based organization devoted to fighting corruption and the promotion of civic education in Latin America, primarily Venezuela. A member of the first board of directors (1975-1979) of Petroleos de Venezuela (PDVSA), following nationalization of Venezuela's oil industry, Coronel has worked in the oil industry for 28 years in the United States, Holland, Indonesia, Algiers and in Venezuela. He is a Distinguished alumnus of the University of Tulsa (USA) where he was a Trustee from 1987 to 1999. Coronel led the Hydrocarbons Division of the Inter-American Development Bank (IADB) in Washington DC for 5 years. The author of three books and many articles on Venezuela ("Curbing Corruption in Venezuela." Journal of Democracy, Vol. 7, No. 3, July, 1996, pp. 157-163), he is a fellow of Harvard University and a member of the Harvard faculty from 1981 to 1983.  In 1998, he was presidential election campaign manager for Henrique Salas Romer and now lives in retirement on the Caribbean island of Margarita where he runs a leading Hotel-Resort.  You may contact Gustavo Coronel at email ppcvicep@telcel.net.ve

www.forbes.com Reuters, 02.26.03, 11:28 AM ET

NEW YORK, Feb 26 (Reuters) - Merrill Lynch on Wednesday cut its recommendation on Venezuelan sovereign bonds to underweight from neutral, predicting more political and financial trouble to come as the country's economy contracts. Opponents of left-leaning President Hugo Chavez recently staged a two-month national strike aimed at forcing him from office. While Chavez has survived the work stoppage, just as he did a short-lived coup in April, Merrill expects the economy of the oil-producing nation to contract by about 12 percent this year, following a 9 percent slump in 2002, . "While the government has managed to reign over PDVSA (Petroleos de Venezuela, the state oil company) and crude production will likely exceed 2 million barrels per day on average for the year, the severity of the political crisis suggests bonds should be re-priced lower as the non-oil economy succumbs to the effect of capital controls, price caps, lack of financing and deteriorated domestic demand," Merrill said in a research note. Prior to the strike, which started in December, PDVSA, the world's fifth-largest oil exporter, had produced about 3.1 million barrels per day of crude oil. Chavez was elected in 1998 after 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. As the opposition to Chavez has mounted, Venezuelan bonds have been punished with losses of 6.4 percent so far this year while the market as a whole has risen 4.568 percent in total returns measured by JP Morgan's Emerging Markets Bond Index Plus. "While our base-case scenario does not yet include an external debt default, we believe risks are increasing rapidly as the non-oil economy collapses," Merrill said. The confrontation between the government and the opposition could lead to further violence, state takeover of companies and a state of emergency under which some constitutional rights could be curtailed, Merrill noted. "We do not expect however that Venezuelan bonds would enter into a downward spiral unless the government is unable to maintain oil production above 2 million barrels per day on average for 2003," Merrill said. On Tuesday, two bombs tore into the Spanish and Colombian diplomatic missions in Caracas, wounding five people less than 48 hours after the president accused the two nations of meddling in Venezuela's political crisis.

asia.reuters.com Fri February 21, 2003 10:14 AM ET By Silene Ramirez

CARACAS, Venezuela (Reuters) - At Isabel's beauty salon in downtown Caracas you can get more than a bikini wax, manicure or hair cut. You can now also dabble in the country's burgeoning black market.

Wedged next to a shuttered foreign currency exchange house, Isabel's is one of the newest additions to Venezuela's not-so-secret underworld of dollar traders looking to make quick cash off newly imposed draconian currency controls.

Embattled President Hugo Chavez unceremoniously shut currency markets last month, starving the nation of precious dollars in a bid to shield government foreign reserves from a swelling economic crisis.

"Hey mister, you looking for dollars?" one beauty salon worker, clips and brushes peeking from her uniform pockets, whispers to Jose Dos Santos, who is just outside.

Breaking his worried gaze from the darkened windows of the currency exchange next door, Dos Santos blurts out a confused but determined, "Yes, miss. I am."

"I'm leaving tomorrow to live in Portugal and what am I going to do with bolivars over there?" he said.

Dos Santos, his graying chest hair peeking out of the top of his light blue dress shirt, might as well be the poster-boy for Venezuela's disillusioned immigrant population. He arrived here on the eve of the country's oil boom in the 1960s and opened a small grocery store.

"I've sold everything, my family has sold everything, we're leaving this country," he explained.

ECONOMIC MELTDOWN

The currency controls, which value the crippled bolivar currency at an artificially strong 1,600 per U.S. greenback, are among the latest attempts by Chavez to stem fallout from a devastating economic crisis in the world's No. 5 oil exporter.

Latin America's fourth-largest economy shrank a whopping 8.9 percent last year, and striking oil workers bent on choking off the government's financial lifeline -- petroleum revenues -- will likely exacerbate the contraction this year.

The two-month shutdown was meant to buckle the populist president and force him to call early elections. But Chavez, who says he has the support of Venezuela's poor majority, seems dead-set on sticking around.

After surviving an April coup, Chavez jokes he will stay in power until 2021 -- well past the remaining three years of his elected term. Street clashes between allies and enemies of the charismatic president have left seven dead and scores injured since December.

Beyond threatening a government takeover of factories, Chavez has announced price controls that had forced retailers like Dos Santos to sell everything from tomatoes to kitchen soap at government-set levels.

So, Dos Santos wants out. And there are plenty of places like Isabel's willing to help him.

About an hour after his chat with the beauty parlor attendant, a casually dressed gentleman arrived at the salon. After exchanging a few whispers with the hairdresser, the gentleman asked "How much you want to buy?"

"I bought about $2,000 at 2,200 bolivars a dollar," Dos Santos said after the transaction. It valued the bolivar nearly 40 percent below the government's official rate.

NEXT ARGENTINA?

The head of the government's new currency control board, retired army Capt. Edgar Hernandez, recently admitted the black market is "difficult to avoid and difficult to control."

Some officials have said that the government could introduce a dual control system that would permit a parallel market orientated toward industry. But Chavez has refused.

"Leave a dollar free, floating around so the conspirators can slip in there? The dollar's value will rise and undermine the other controls. No, this must be an integrated system," Chavez said during his weekly Sunday television broadcast.

"Conspirators" against Chavez's self-styled "revolution" are already at work -- at least in the currency markets. Some are exploring the Internet as an option, eyeing schemes in countries like Argentina, which introduced currency controls at the start of 2002 after a devastating debt meltdown.

One idea would copy the model of an Argentine online music retailer, allowing paying patrons access to a virtual plaza for buying dollars. Venezuela has already adopted a lower-tech Argentine invention -- the so-called "Arbolito," or the currency seller who hawks his wares on street corners.

"We sell and buy gold," shouts out a middle-aged man in a Caracas plaza. With a sheepish look, he furtively hands over a scrap of paper to a potential client that offers to trade in dollars.

"How much?" asks the client who is looking to sell $500.

The question hangs in the air for a second until the seller leads his customer to a hidden location in the center of Caracas, where gold traders operate a few yards from the National Assembly.

So begins the trade.

"She wants to sell $500, how much?"

"1,700 bolivars," answers the trader.

The client respond quickly: "So low? The newspapers tout the price at 2,200 to 2,500 (bolivars)."

The customer leaves looking for a better price. She later sold the dollars to a friend for 2,000 bolivars to the dollar.

She should have gone to Isabel's.

www.vheadline.com Posted: Thursday, February 20, 2003 By: Roy S. Carson

Accion Democratica (AD) deputy Henry Ramos Allup says that the Chavez Frias government plans further detentions over the next several days after last night's successful capture by DISIP security agents of rebel Fedecamaras president Carlos Fernandez.  Confederation of Trade Unions (CTV) president Carlos Ortega is next on the list along with leading opposition dissidents including rebel PDVSA executive Juan Fernandez, CTV secretary general Manuel Cova, Globovision's Alberto Federico Ravell and Guillermo Zuloaga, El National editor Miguel Henrique Otero, shadowy Coca Cola billionaire Gustavo Cisneros, Venevision's Víctor Ferreres, Televen's Omar and RCTV's Marcel Granier and Eladio Lares.

The list does not contain the names of any National Assembly (AN) deputy since all parliamentary representatives enjoy immunity from arrest while holding office.  Ramos Allup says that opposition deputies are on a general alert because "the government's action is a ferocious reaction and they will not be caught up in legalities ... the g overnment prefers to shoot first and investigate afterwards."

Rebel PDVSA leader Juan Fernandez is making a renewed call for Venezuelans to take to the streets in protest for "however long it takes to overthrow the Chavez Frias regime" insisting that the current government is leading Venezuela back to the Dark Ages.

Opposition rhetoric set aside, security and law enforcement agencies have been piling up damning evidence against Venezuela's anti-constitutional opposition which has been less than guarded in their open defiance of law & order and the 1999 Constitution.  Government lawyers have begun a series of legal actions against the perpetrators which evidences the overwhelming fact of the current government's adherence to democratic procedures despite wild propagandist accusations of dictatorship and a drift in to a totalitarian communist state.

Opposition propagandists have kept up a constant barrage of blatant lies against the democratically-elected government of Venezuela, insisting a return to the status quo enjoyed by a minority corrupt elite during the last 40+ years under the guise of Venezuelan democracy.

In the latest thrust, Militares Democraticos -- a propaganda organization in support of rebel ex-military officers congregated in Plaza Altamira -- have claimed that Venezuela is being used as an Al Qaeda terrorist base and that the 37-year-old man arrested in London a week ago with a hand grenade in his luggage had obtained Venezuelan nationality as a terrorist cover ID.  What Militares Democraticos had forgotten (or neglected) to mention in their internationally disseminated propaganda was the fact that the ID and passport had been issued under special instructions from then President Carlos Andres Perez (CAP) just months before he was impeached and imprisoned on multi-$ million corruption charges.

www.vheadline.com Posted: Wednesday, February 19, 2003 By: Robert Rudnicki

According to Currency Administration Commission (Cadavi) president Edgar Hernandez, once Venezuela resumes the sale of foreign currency it will be initially only done through state-owned banks. "The objective is to open currency operations as quickly as possible."

• The two banks that will initially make foreign currency one again available are Banco Industrial (BIV) and Banfoandes.

This follows the signing of agreements with the two banks and Hernandez says similar agreements are expected to be signed with privately-owned banks some time next week.

Trading is expected to resume this week, with the bolivar pegged to the US dollar at Bs.1,600.00 / Bs.1,596.00. To obtain large amounts of foreign currency businesses will have to apply to Cadavi and application processing times are expected to be around three to four days.