Thursday, April 24, 2003

The New York Times

March 5, 2003
Hugo Chávez and the Limits of Democracy

WASHINGTON - For decades Venezuela was a backwater, uninteresting to the
outside world. It could not compete for international attention with
nearby countries where superpowers staged proxy wars, or where military
juntas "disappeared" thousands of opponents, or where the economy
regularly crashed. Venezuela was stable. Its oil fueled an economy that
enjoyed the world's highest growth rate from 1950 to 1980 and it boasted a
higher per-capita income than Spain from 1928 to 1984. Venezuela was one
of the longest-lived democracies in Latin America.

Venezuela is no longer boring. It has become a nightmare for its people
and a threat not just to its neighbors but to the United States and even
Europe. A strike in its oil industry has contributed to a rise in gasoline
prices at the worst possible time. Hasil Muhammad Rahaham-Alan, a
Venezuelan citizen, was detained last month at a London airport as he
arrived from Caracas carrying a hand grenade in his luggage. A week later,
President Hugo Chávez praised the arrest orders of two opposition leaders
who had been instrumental in organizing the strike, saying they "should
have been jailed a long time ago." Mr. Chávez has helped to create an
environment where stateless international networks whose business is
terror, guns or drugs feel at home.

Venezuela has also become a laboratory where the accepted wisdom of the
1990's is being tested - and often discredited. The first tenet to fall is
the belief that the United States has almost unlimited influence in South
America. As one of its main oil suppliers and a close neighbor has
careened out of control, America has been a conspicuously inconsequential

And it is not just the United States. The United Nations, agencies like
the Organization of American States and the International Monetary Fund,
or the international press - all have stood by and watched. In the 1990's
there was a hope that these institutions could prevent, or at least
contain, some of the ugly malignancies that lead nations to self-destruct.
Instead, the most influential foreign influence in Venezuela is from the
1960's: Fidel Castro. The marriage of convenience between Cuba and
Venezuela is rooted in the close personal relationship between the two
leaders, with Mr. Castro playing the role of mentor to his younger
Venezuelan admirer. Cuba desperately needs Venezuelan oil, while the
Chávez administration depends on Cuba's experience in staging, managing or
repressing political turmoil.

Another belief of the 1990's was that global economic forces would force
democratically elected leaders to pursue responsible economic policies.
Yet Mr. Chávez, a democratically elected president, has been willing to
tolerate international economic isolation - with disastrous results for
Venezuela's poor - in exchange for greater power at home.
The 21st century was not supposed to engender a Latin American president
with a red beret. Instead of obsessing about luring private capital, he
scares it away. Rather than strengthening ties with the United States, he
befriends Cuba. Such behavior was supposed to have been made obsolete by
the democratization, economic deregulation and globalization of the

Venezuela is an improbable country to have fallen into this political
abyss. It is vast, wealthy, relatively modern and cosmopolitan, with a
strong private sector and a homogeneous mixed-race population with little
history of conflict. Democracy was supposed to have prevented its decline
into a failed state. Yet once President Chávez gained control over the
government, his rule became exclusionary and profoundly undemocratic.
Under Mr. Chávez, Venezuela is a powerful reminder that elections are
necessary but not sufficient for democracy, and that even longstanding
democracies can unravel overnight. A government's legitimacy flows not
only from the ballot box but also from the way it conducts itself.
Accountability and institutional restraints and balances are needed.

The international community became adept at monitoring elections and
ensuring their legitimacy in the 1990's. The Venezuelan experience
illustrates the urgency of setting up equally effective mechanisms to
validate a government's practices.

The often stealthy transgressions of Mr. Chávez have unleashed a powerful
expression of what is perhaps the only trend of the 1990's still visible
in Venezuela: civil society. In today's Venezuela millions of once
politically indifferent citizens stage almost daily marches and rallies
larger than those that forced the early resignations of other
democratically presidents around the world.

This is not a traditional opposition movement. It is an inchoate network
of people from all social classes and walks of life, who are organized in
loosely coordinated units and who do not have any other ambition than to
stop a president who has made their country unlivable. Two out of three
Venezuelans living under the poverty line oppose President Chávez,
according to a Venezuelan survey released in January.

This amorphous movement is new to politics and vulnerable to manipulation
by traditional politicians and interest groups. For example, last year a
military faction took advantage of a huge but civil anti-Chávez march and
staged a coup that ousted the president for almost two days. By rejecting
the antidemocratic measures adopted by the would-be new president, the
leader of a business association, the movement helped bring about his
quick downfall.

Today the Venezuelan opposition consists of several factions, some of
which have participated in talks with the government. Yet it is a mistake
to equate these formal bodies with the widespread and largely leaderless,
self-organizing movement that has emerged in Venezuela. Many foreign
observers discount the opposition as mostly rich or middle class, a
coup-prone coalition of opportunistic politicians.

No doubt some protesters fit this ugly profile. Nor is there any doubt
that the Venezuelan opposition is clumsy and prone to blunders. Still, it
has helped millions of Venezuelans awaken to the fact that for too many
years they have been mere inhabitants of their own country. Now they
demand to be citizens, and feel they have the right to oust through
democratic means a president who has wrought havoc on their country.
It is a measure of Venezuela's toxic political climate that even though
the constitution allows for early elections, and even though President
Chávez has promised that he will abide by this provision, the great
majority of Venezuelans don't believe him. They are convinced that in
August, when the constitution contemplates a referendum on the president,
the government will resort to delaying tactics and dirty tricks. With
international attention elsewhere, Mr. Chávez will use his power to
forestall an election and ignore the constitution.

Venezuela's citizens have been heroically peaceful and civil in their
quest. All they ask is that they be given a chance to vote. The world
should do its best to ensure that they have that opportunity.

Moisés Naím, minister of trade and industry of Venezuela from 1989 to
1990, is editor of Foreign Policy magazine.
The New York Times

March 4, 2003
Maracaibo Oil Region a Crucial Battleground for Chávez as Venezuelan
Conflict Rages

MARACAIBO, Venezuela, Feb. 28 - In this sun-drenched city built on oil and
agriculture, government workers complain of missed paydays and stalled
projects. Beyond the high-rises and office towers, impoverished families
live in dank, crumbling shanties along bumpy dirt streets.

These scenes in the western state of Zulia make the billboard outside the
government-run oil company seem like a cruel taunt, particularly given
that Venezuela's journey to becoming the world's fifth-largest oil
exporter began here in 1914.

"Social Investment Fund," the sign proclaims. "Improving the Life of All

Complaints that the central government has exported not just oil from the
region, but increasingly its attendant profits as well, have turned many
residents against President Hugo Chávez, whom they have accused of
withholding $500 million from their state budget over the years.
Only one of the state's 21 mayors supports Mr. Chávez, while the governor,
Manuel Rosales, has easily rallied tens of thousands of people against

In Mr. Chávez's struggle to overcome the devastating effects of a
two-month nationwide opposition strike, Zulia, the country's most populous
state with 3.2 million residents, is a crucial battleground. Mr. Chávez
must not only boost oil production, but also his support in this state
whose people tend to vote as a bloc.

Two weeks ago, with the strike faltering, he set his sights on removing
Mr. Rosales, urging people to demand the kind of recall referendum that
his own critics have sought unsuccessfully against him.

Yet even among the poor, the very group that Mr. Chávez says benefits most
from his Bolivarian Revolution, disenchantment has grown.
"The economy is fatal, and since Chávez came to power it has gotten worse,
because there is no work," said Addis Atencia, who shares a compound of
five shanties with nearly three dozen adults and children. "In a country
that produces petroleum, how can you live like this?"

Zulianos consider themselves a breed apart, which is evident in their
accent, culture and temperament. The differences are a result of having
been cut off from the capital, Caracas, for years, and of frequent contact
with foreigners through the port here. For years before the bridge
spanning Lake Maracaibo was built in the 1960's, residents intent on going
to Caracas had to get a visa, since the ferry stopped first on the Dutch
island of Curaçao.

When Mr. Chavez introduced reforms, including one allowing squatters to
occupy fallow farmland, Zulianos reacted with a strike in September 2001.
For many the reforms were another insult after years of seeing no returns
on the revenue Zulia produced for the country.
"Zulia paralyzed the state and lit the fuse that led to a national
strike," said Tomás Guanipa Villalobos, the local leader of the Primero
Justicia political party. "Zulia has suffered the most under Chávez. The
money which was generated by oil was not invested into making Venezuela
truly productive."

Roads on the outskirts of Maracaibo are potholed, while signs heralding a
commuter rail station rise above empty lots where work has stopped. The
public hospital in the Veritas neighborhood looks rundown, paint flaking
from its walls and weeds blocking one entrance even as patients stream
into the building. A state medical supply store is shuttered.

Mr. Guanipa said that rather than tackle problems like those, Mr. Chávez
devoted most of a brief visit here last month to lambasting the governor
and the opposition as coup plotters.
"He said nothing about any program of investment to elevate Zulia," Mr.
Guanipa said. "He spent hours urging people to eliminate the enemy. It was
the politics of revenge, and that is very dangerous. It will get worse
unless we get out of this fast."

The government insists that production has improved among the oil rigs on
Lake Maracaibo, where soldiers patrol the lake and shores to prevent
sabotage. It estimates that production nationwide is now back up to 2.1
million barrels daily after being paralyzed by the strike. Venezuela
produced 3.1 million barrels a day before the strike.

Alexis Arellano, the coordinator of the oil company's Tía Juana district,
said he was now able to pump almost 800,000 barrels daily, despite having
dismissed 60 percent of his work force during the strike.
Combined with joint ventures that were not affected by the strike, he said
regional production hovered at a little more than one million barrels
"They said it was impossible to increase production," he said. "The people
who stayed with us see it as a personal challenge to keep on operating and
make the company grow."

But former executives dispute the government's figures and insist that
actual production is half of that claimed.
"If they are producing a million barrels a day with so many less people,
then they should have fired us," joked Tarciso Guerrero, who used to
manage the gas facilities. "They are only saying they reached a million to
show the country that everything is normal."

Outside the oil company's Miranda Building, lines of job applicants file
past a ragtag group of "Commando Reservists," Chávez supporters who have
guarded the area since December, a battered bus their headquarters and

The mood has been tense, especially after two people were injured this
week when unknown assailants tossed a grenade and fired a dozen shots
while the Chávez supporters slept by the sidewalk.
"We are defending these trenches because this institution is ours," said
one of the group, Leonardo Sencial. "Without this we are nothing. If they
try to take it away, we will take to the streets as the president said."

March 3, 2003
Venezuela's Inflation Reached 7.1% Last Month, a 7-Year High

CARACAS, Venezuela, March 2 - The Venezuelan monthly inflation rate rose to
a seven-year high in February on increased demand as price controls and
restrictions on dollar sales caused shortages.

Consumer prices rose 5.5 percent in February compared with a 2.9 percent
rise in January, the central bank said in its monthly report, which was
released over the weekend. February's inflation rate was the highest since
a reading of 7.1 percent in June 1996. The 12-month trailing inflation
rate approached 39 percent, the highest since 1997.

In February 2001, prices rose 1.8 percent.
"Controlling prices has had less impact than the authorities expected," a
central bank director, Armando León, said, as quoted in the newspaper El
Universal. "It's caused a fall in the supply of goods."

The government fixed maximum prices for some goods last month to stem
inflation. Producers say they cannot make a profit selling at the fixed
price and have reduced output. Rising prices threaten to further undermine
support for President Hugo Chávez, who is facing wide opposition and calls
for a referendum.

A two-month general strike aimed at ousting Mr. Chávez cut oil exports,
the source of much government revenue, leading to a 17 percent contraction
of the economy in the fourth quarter.

The government banned foreign currency trading in January and expects in
mid-March to begin selling dollars to importers of what the government
considers essential goods.

"We must have development from the inside and not be dependent on outside
forces," Mr. Chávez said in a televised speech.
Venezuela imports about 60 percent of its food, medicine, electronic goods
and clothing. Imports fell 29 percent last year, to $12.3 billion.

Meddle With Mr. Chavez [Editorial]

Saturday, March 1, 2003

U.S. OFFICIALS long sought to play down the danger that Venezuelan President
Hugo Chavez poses by pointing out that his acts rarely matched his words. Mr.
Chavez, who was elected president after promising a socialist revolution for
Venezuela's poor majority, might talk about confiscating property, supporting
leftist guerrillas in neighboring Colombia or admiring Fidel Castro and Saddam
Hussein, but in practice he mostly remained within democratic boundaries.

Yet now the gap between Mr. Chavez's inflammatory rhetoric and his actions is
narrowing. Having survived a strike by his opposition, Mr. Chavez has proclaimed
2003 the "year of the offensive"; so far he has taken steps to bring the economy
under state control, eliminate independent media and decapitate the opposition.
One of the strike's three top leaders has been arrested, while another has gone
into hiding. Even more disturbing have been the unexplained murder of three
dissident soldiers and an anti-Chavez protester and the explosion of bombs
outside the Colombian and Spanish embassies. Government officials have denied
responsibility, but these acts, too, followed Mr. Chavez's words: his labeling
of dissident officers as "traitors" and his attacks on Colombia and Spain for

Without more meddling, and soon, Venezuela will likely see the collapse of what
was once one of Latin America's richest economies and strongest democracies. Mr.
Chavez appears to have tired of his half-baked populism; now he seems prepared
to destroy what remains of civil society and the private sector. He placed
strict controls on foreign currency and has vowed to take away the licenses of
private television stations that supported the opposition. He fired 16,000
employees of Venezuela's state oil company -- the country's economic lifeline --
and moved to bring an institution long known for its professionalism under his
personal control. Independent economists are forecasting a catastrophic drop in
Venezuela's economic output this year; some foresee the virtual disappearance of
the private sector. That would bring Venezuela far closer to Cuba, which maybe
shouldn't be a surprise: Mr. Castro, who is Mr. Chavez's closest ally,
reportedly has dispatched thousands of officials to Venezuela.

Spain recently joined with the United States, Brazil, Chile, Mexico and Portugal
to support a negotiated political solution to the crisis through the mediation
of Cesar Gaviria, the secretary general of the Organization of American States
and a former president of Colombia. The opposition, which at times has supported
anti-democratic means of ousting Mr. Chavez, now endorses Mr. Gaviria's proposal
for a new presidential election or a referendum on Mr. Chavez's recall. The
current constitution would allow for a referendum to be held as early as August;
that may be the easiest and best way out. But Mr. Chavez knows he would very
likely lose a fair vote, and he will likely do everything possible to prevent
it. That's why it is essential that the Bush administration join with the "group
of friends" to insist that Mr. Chavez release his political prisoners, stop his
revolutionary "offensive" and commit to a decisive vote. It may be democracy's
last chance.
The New York Times

February 26, 2003
Venezuela's Lifeblood Ebbs Even as It Flows

CARACAS, Venezuela - Once more, tankers are setting sail loaded with crude
bound for the United States, while government planners busily rebuild and
reorganize the state-owned Petróleos de Venezuela, pondering how to
function with 40 percent fewer workers.
Oil, the lifeblood of Venezuela, is running again after a paralyzal, took on 25,000 barrels an hour.

But oil analysts and economists say the government's rosy picture hides a
painful truth about a 27-year-old company that was born when Venezuela
nationalized oil production and quickly became one of Latin America's more
highly regarded multinationals.

Petróleos de Venezuela has lost $4 billion in exports and nearly 16,000
workers, fired by the government for taking part in a walkout aimed at
debilitating President Hugo Chávez's left-leaning government. That
financial blow and the loss of workers with, on average, 17 years of
experience could permanently hobble the company, keeping it from assuming
its role as a leading world oil provider, analysts here and abroad say.
"It will not be the company it once was," said Mazhar al-Shereidah, an oil
economist in Caracas who helped write oil regulations for the Chávez
government. "For a country that depends on petroleum, now more than ever,
the challenges are too great. You have to pray for Venezuela."

The dire predictions, if true, would indeed be disastrous for this country
of 24 million, which depends on oil for half of government revenues and 80
percent of exports. It would also leave the United States - which has
counted on Venezuelan oil for decades - without one of its most reliable
suppliers as a possible war with oil-rich Iraq promises to batter energy

The obstacles are daunting after the strike, which started to fizzle in
February after two months. A lack of maintenance has caused sand to build
up in the gelatinous deposits and the pressure to drop, making some fields
worthless and threatening to cut production capacity by 300,000 or more
barrels a day. And perhaps most troubling is that no one knows what Mr.
Chávez's government has in store, though it has promised a wholesale
revamping of what was once the world's second-largest oil company.

Reports from international analysts are blistering. UBS Warburg predicts
that oil's contribution to gross domestic product will fall 22 percent in
2003, with Venezuela facing "a fiscal crisis of major proportions." Fitch
Ratings says Venezuela's "image as a reliable crude oil supplier has been
undermined" and will he hard to recover.

Analysts say the lack of technical expertise, combined with the financial
straits, means that Petróleos de Venezuela will be unable, in the short
term, to reach production levels of the prestrike days, when Venezuela was
the world's fifth-largest oil exporter. Most recent production has been in
fields that were easiest to restart, leading independent analysts to
predict that Venezuela will, at best, produce 2.3 million barrels daily by

"We believe the company's role in Venezuela society has been permanently
altered," a recent Deutsche Bank report said. Assuming average daily
production of 1.7 million barrels for 2003, the bank estimated that oil
revenue would reach only $14.1 billion, down nearly 50 percent from 2001.
The government is already preparing for the worst. The 2003 budget for the
oil company was cut by $2.7 billion, to about $6 billion, while the income
the government draws from oil is forecast by UBS Warburg to fall from
$11.5 billion in 2002 to as little as $5 billion in 2003. The drop will
make it especially difficult to raise the $5 billion the company would
have spent to keep production steady.

Alí Rodríguez, the former leftist guerrilla turned president of Petróleos
de Venezuela, does not gloss over the obstacles. But in an interview, Mr.
Rodríguez said the doomsday predictions originated with dissident
executives who hoped to undermine international confidence in the oil
company to weaken Mr. Chávez.

He predicted that through sharp budget and personnel cuts, the company
would reach 3.1 million barrels a day. And "with its resources," he said,
"it is perfectly possible that it will even surpass that level."
To be sure, the Petróleos de Venezuela now emerging will be a far
different company, in both its management and philosophy.

Gone will be the highly autonomous octopus that Mr. Rodríguez said
functioned with great independence from the state, controlling revenues
and influencing oil policies. The new company, taking advantage of some of
the world's largest oil deposits outside the Middle East, "must give
maximum contribution to the nonpetroleum sector, which is the majority of
the people," Mr. Rodríguez said.

Still, even inside the gleaming office tower in Caracas where the company
is based, the short-term outlook seems dismal as managers pore over
financial statements.
"There is no investment, so there is no doubt that the company at this
moment is very debilitated," Bernard Mommer, a close adviser to Mr.
Rodríguez who is helping guide the restructuring, said in an interview.
"Up ahead, we are going to have problems like how to recover the quality
of the company."

Venezuela will benefit little from the higher world oil prices projected
in coming months, since production capacity remains limited. By the time
Petróleos de Venezuela is producing close to three million barrels daily -
if it ever does - prices are likely to have stabilized, analysts say.
In the meantime, Mr. Rodríguez and his managers are busy splitting the
company into three divisions: a natural gas branch to develop the largest
deposits in Latin America, and companies in the east and west intended to
make obsolete the executive offices in Caracas, where antigovernment
activities percolated.

Venezuela may also unload foreign assets, like refineries in the United
States that operate under the Citgo chain, which is wholly owned by
Petróleos de Venezuela, and other installations in Europe and the

Publicly, officials deny the companies are for sale. But Mr. Mommer said
Citgo remained overly expensive while providing scant returns.
"The sophisticated part of our business, refining, that's not our
business," Mr. Mommer said. "Exploration and production, that is where the
big money is."

Such a sale would "dismember" the company, warned José Toro Hardy, an
influential former board member, because Citgo refineries are specially
outfitted to process Venezuela's particularly gummy brand of heavy crude.
"There are few refineries in the world that can refine" this crude, Mr.
Toro Hardy explained. "Without Citgo, Venezuela's heavy oil would lose

Oil analysts also warn that the company will be debilitated for years from
the loss of experienced workers. Executives, office workers, engineers and
highly trained technicians joined the walkout and, in some cases, damaged
computers and software and stole files to hinder reactivation efforts.
Mr. Chávez, who has referred to the employees as traitors and fascists,
has promised that they will not be rehired.

But already, oil analysts say, the shortage of experienced workers is
being felt in every corner of the company. In the patents and technology
department, which develops technology for exploration and refining, 800
were fired. The department that trains executives has lost hundreds, as
has the crucial commercialization department, which contracts with oil

"Even if you replace the bodies, you don't replace institutional
memories," said Larry Goldstein, president of the Petroleum Industry
Research Foundation, an industry-supported analysis group in New York.
"It's a hidden loss. You can't touch it or taste it, but it's there."
The New York Times

February 26, 2003
Explosions Rip Diplomatic Offices in Caracas

CARACAS, Venezuela, Feb. 25 - Powerful explosions outside two diplomatic
offices shattered windows and nerves early today, leaving four people
wounded and many others uncertain about the prospects for a peaceful
solution to the political crisis here.

One blast ripped the glass and steel facade of the Colombian Consulate
downtown, twisting a thick steel entry gate and ruining two of the
building's four floors. A second blast, outside the foreign aid office of
the Spanish Embassy in a residential area, knocked a gate off its hinges
and punched a hole through a wall. In both cases, people were wounded by
flying glass, authorities said.

The explosions, which the police said were extraordinarily large and which
neighbors said felt like earthquakes, came two days after President Hugo
Chávez publicly berated Spain and Colombia for interfering in Venezuela's
internal affairs. Mr. Chávez, who has outlasted an attempted coup and an
opposition strike, had been criticized for the arrest of an opposition
leader as well as for not assisting Colombia in its fight against leftist

The government denied any involvement in the blasts and ordered tighter
security for foreign missions and the diplomatic corps. The deputy foreign
minister, Arévalo Méndez, said the bombs were the work of a "sick and
confused mind that had nothing to do" with any criticisms Mr. Chávez might
have voiced against other nations.

"We repudiate this act of terrorism," Vice President José Vicente Rangel
said at an afternoon news conference. "The government rejects any
terrorist act, whatever it is, wherever it is, whoever the author. We
reject any form of terrorism, whether it is from the state or from

Diplomats from Colombia and Spain did not blame the government but did
urge thorough investigations, as did the United States.
The blasts, which occurred around 2:30 a.m. local time, also came one day
before the resumption of talks between the government and the opposition,
which only last week had agreed to tone down their accusations and reject
violence. But the arrest last week of Carlos Fernández, a business leader
who spearheaded the strike, had already increased skepticism over Mr.
Chávez's commitment to a peaceful resolution. "This defines a new stage in
the political situation in Venezuela, one in which there is greater chaos
and violence and a president who is becoming more entrenched," said
Michael Shifter, vice president for policy at the Inter-American Dialogue
in Washington. "It makes it very hard to see negotiations, given this

It is just as difficult to know who is responsible for the bombs. Leaflets
were found at the sites of both explosions, signed by an obscure group,
the Bolivarian Liberation Force, and the Simón Bolívar Coordinator, Urban
Militia. Juan Contreras, director of the Simón Bolívar Coordinator, told a
local newspaper that his group was a cultural association and said whoever
used its name was fighting "a dirty war."

Only two days ago, during his weekly television broadcast, Mr. Chávez had
lashed out at his critics, telling them to respect Venezuela's
sovereignty. He said some of the nations that were faulting him for
arresting the strike leader had supported the coup that failed to oust him
last April.
"Where do Spain and Colombia want this to get to?" he said during the
broadcast. "To break relations?"

A diplomat who is in close contact with the government and the opposition
said the bombs were out of character for Venezuela, where previous
explosions have been limited to grenades or pipe bombs left outside
television stations.

The jangle of thousands of shards of glass being swept away echoed through
the street outside the Colombian Consulate, where the entry gate was
twisted. The concussion from the blast smashed countless windows inside an
office building across the street, where dazed residents slowly picked
their way through small rooms.

"The strike had already paralyzed the country," said Alberto Buroz, the
president of an environmental engineering firm whose offices were the most
damaged in the building. "Now with the few clients we have left, how can
we attend to them? We have crossed the line. I don't know. I'd like to
understand what will be the end of this story. But that has not been
written yet."

Outside, Marta Lucía Varón stood by a banner held aloft by a group of her
countrymen from Colombia. They had come to the street in solidarity, she
said, as soon as they heard the news.

"This violence was created by the Chávez government," she said, despite
protests from several Chávez supporters near her. "We fled violence in
Colombia and chose Venezuela to make a living. And now we find this?" - Daily news and summary
Caracas, February 24, 2003

Several thousands of shot impacts and hundreds of shells were
found in the site where the bodies were found
(Photo: Fernado Sánchez)
Venezuela's internal security service allegedly linked to killing of
three soldiers and a protester


Three dissident soldiers and a protester found dead last weekend in
the outskirts of the Venezuelan capital of Caracas were killed at a
shooting ground where special forces of the Directorate for
Intelligence, Security, and Prevention (Disip) practice target

A series of circumstantial evidences have led authorities to believe
that officers of Disip -Venezuela's internal security service- may
be involved in the killings.

Witnesses at Plaza Altamira, where soldiers lived since they
declared in disobedience against President Hugo Chávez' government,
said the victims were kidnapped by commandos in two four-wheel drive
vehicles similar to those used by Disip officers.

As to the girl that survived to the slaughter, Roxana Caterina
Rivero, officials investigating the killings said that she was not
wounded in the head. The girl was hit in the head with a shotgun
stock, but she pretended she had been shot to avoid being killed.

Meanwhile, Liliana Ortega, Director of COFAVIC, a respected
Caracas-based nongovernmental organization that promotes and
protects human rights, said a thorough and responsible investigation
has to be conducted. "The State has to launch an independent and
detailed investigation leading to the conviction of the offenders."

According to Ortega, some hasty conclusions issued on the case are a
bad signal. She asked the government and authorities to determine if
the killings were politically motivated.

"So far there has been no result from inquiries concerning around 50
political crimes in the country. We reject the fact that authorities
investigating the facts are giving early opinion on the events. We
ask the Ombudsman's Office and the Public Prosecutor's Office to
step in and ensure the proper investigations -in accordance with
international treaties- are conducted."
The New York Times

February 23, 2003
Salons Dabble in Venezuelan Black Market

Filed at 5:58 p.m. ET
CARACAS, Venezuela (Reuters) - At Isabel's beauty salon in downtown
Caracas you can get more than a bikini wax, manicure or a 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.

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 majori 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.

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

One idea would copy the model of an Argentine online music retailer, which
allows 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 meters 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.
The New York Times

February 23, 2003
Venezuela's Chavez Tells World to Back Off

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez warned the
world to stop meddling in the affairs of his troubled South American
nation on Sunday, as police locked up a prominent strike leader on ``civil
rebellion'' charges.

The populist president accused the United States and Spain of siding with
his enemies, warned Colombia he might break off diplomatic relations, and
reprimanded the chief mediator in tortuous peace talks for stepping ``out
of line.''
``I ask all of the countries of this continent and of the world ... are
you going (to) stop this meddling?'' Chavez asked angrily, during his
state-sponsored television show 'Alo Presidente.' ``This is a sovereign

The tongue-lashing followed a recent flurry of diplomatic communiques
expressing concern over Carlos Fernandez, a strike leader and prominent
businessman who was yanked out of a Caracas steakhouse on Thursday at
gunpoint by police.

A judge placed the silver-haired executive under house arrest on Sunday to
await trial for charges of civil rebellion and criminal instigation, which
could land him up to 26 years in prison. He spearheaded a two-month
nationwide shutdown by oil workers and industry in a failed bid to force

``I've committed no crime, of any kind,'' Fernandez said defiantly from
his country home just outside Caracas.

Chavez carped that the same international worry by diplomats over
Fernandez wasn't shown when he was briefly ousted in a 48-hour coup last
year. He said some countries, including Spain and the United States,
applauded the putsch.

``It's worth remembering that the Spanish ambassador was here, in this
room, applauding the coup. So the Spanish government is going (to) keep
commenting?'' Chavez asked.
``We say the same thing to the government in Washington. Stop making
mistakes ... A spokesman comes out there saying he's worried. No! This is
a Venezuelan matter.''

Venezuela's crisis has drawn the international spotlight with leaders
afraid the world's No. 5 supplier of oil could slide into civil war as
Chavez allies and enemies face off.
Hailed by supporters as a champion of the poor, the
paratrooper-turned-president has pledged to crack down on enemies of his
self-styled ``revolution.'' Foes call him an ignorant dictator looking to
impose Cuban-style communism.

Chavez crushed an oil walkout by firing 13,000 dissident workers, and
laughed off the two-month-old strike which hurt the private sector and was
meekly abandoned in early February.
He won an arrest warrant for another strike leader, union boss Carlos
Ortega, and threatens to lock up a group of media moguls he dubs the
``Four Horsemen of the Apocalypse.''

The United States, Spain and four other countries have dispatched
diplomats to the negotiating table in a bid to defuse tensions fueling the
crisis. But the talks have so far proven fruitless, and Chavez on Sunday
seemed to push away members of the six-nation group.
Chavez reserved his most severe criticism for Cesar Gaviria, who is the
chief mediator in talks to end the political deadlock. Gaviria, a former
Colombian president, is the head of the Organization of American States.
``Mr. Gaviria, this is a sovereign nation, sir. You were president of a
country. Don't step out of line,'' Chavez said.

The maverick leader, whose fiery rhetoric inflames adversaries, also took
time on Sunday to include Colombia in his tirade. The neighboring nation's
foreign minister accused Chavez last week of meeting frequently with rebel
Chavez has always denied those allegations, and on Sunday criticized the
country for providing asylum for Venezuela's brief president during the
April coup -- Pedro Carmona.
``What do they want? For us to break offrelations? That we break off
ties?'' Chavez exclaimed.
``Over there in Colombia they had a party on the day of the coup ... They
applauded Carmona and they have Carmona over there in Bogota. He lives
over there, that fugitive.''

Venezuela's internal standoff has left at least seven dead and scores
injured in street violence since December. Police are also investigating
last week's killings of three dissident soldiers and an anti-Chavez
protester, which relatives of the victims blame on political persecution.

General Strike Leader Arrested in Venezuela
2 Others Sought as Chavez Targets Opponents
By Scott Wilson
Washington Post Foreign Service
Friday, February 21, 2003

BOGOTA, Colombia, Feb. 20 -- Venezuela's secret police have arrested a key
opposition leader and are searching for two others in an apparent crackdown by
President Hugo Chavez against leaders of a recent general strike designed to
force him from office.

Carlos Fernandez, head of Venezuela's largest business federation, was arrested
late Wednesday by about eight government agents outside an upscale restaurant in
eastern Caracas. Fernandez was taken to the headquarters of Venezuela's secret
police agency, the Directorate of Intelligence and Prevention Services.
Opposition leaders say he is being held on charges of treason, "civil rebellion"
and illegal assembly.

Government authorities are now searching for Carlos Ortega, the head of
Venezuela's largest labor federation, who with Fernandez was prominent in the
two-month strike that ended this month. Ortega called Fernandez's arrest a
"terrorist act" and said he would not turn himself in.

Government officials said a third arrest warrant had been issued for Juan
Fernandez, the former financial planning director at the state oil company,
Petroleos de Venezuela, who led the strike at the company. He was fired by
Chavez, along with about 13,000 other employees.

The new action appears to be part of a calculated retaliation by Chavez against
the opposition movement just as the oil-rich country is showing signs of
recovering from the crippling general strike. It also has complicated
negotiations to end a political crisis that has shaken Venezuela for more than a
year and raised the specter of fresh violence.
"These people should have been jailed a long time ago," Chavez said today at a
ceremony at the Foreign Ministry.

Authorities this week discovered the bodies of three dissident Venezuelan army
soldiers and an opposition activist in a killing characterized by international
human rights groups as politically motivated.
The arrest of Carlos Fernandez came a day after government and opposition
negotiators agreed to an eight-point declaration renouncing violence and
inflammatory rhetoric as they seek a deal on new elections. The document was the
first accord to emerge in three months of talks mediated by Cesar Gaviria,
secretary general of the Organization of American States, who called on the
government today to ensure that Fernandez receives an "independent, impartial"

Thousands of Chavez opponents demonstrated today in response to Fernandez's
arrest, many in front of the headquarters of Petroleos de Venezuela, where
thousands of employees continue their walkout.

Chavez, a populist firebrand elected in 1998 on a pledge to help Venezuela's
poor, survived a military-led coup last April that began with a strike in the
oil sector. But an opposition movement made up of labor and business groups,
leftist political parties, and middle- and upper-class civilians continued the
effort to drive him from office.

Opposition leaders called a general strike on Dec. 2 to force Chavez to resign
or move up presidential elections, scheduled for 2006, to this year. Chavez
weathered the strike by creating a system that maintained food and gasoline
supplies, but depleted the public treasury. The financially damaged private
sector lifted the protest on Feb. 3.

Although workers at the state oil company remain on strike, the government says
production has returned to more than half its pre-strike level of 3 million
barrels a day. The company accounts for half the government's revenue and 15
percent of U.S. oil imports.

Jose Miguel Vivanco, head of the Americas division of Human Rights Watch, said
Fernandez's arrest left him "extremely concerned by these retaliatory
operations." Opposition members said at least one of the charges against
Fernandez, civil rebellion, does not even appear in the criminal code.
"The risk here is that the government has decided to criminalize political
expression and the actions of the opposition," he said.

The OAS talks are scheduled to resume Wednesday, giving both sides time to plan
their next steps. Rafael Alfonzo, an opposition negotiator who represents
Fedecamaras, the business federation that Fernandez heads, said, "Obviously, we
must do something about this."

"Some [opposition] people complained when we signed the [nonviolence] agreement,
but we believed in it," Alfonzo said. "Now we have this demonstration on the
government's part that shows clearly that we do not have a democracy and
February 20, 2003
Nerves Frayed in Venezuela After Killings of Chávez Opponents

CARACAS, Venezuela, Feb. 19 - Venezuela was still reeling today after the
weekend killings of three dissident soldiers and a protester opposed to
President Hugo Chávez, and the police and grieving relatives split over
whether the killings were politically motivated.

According to police investigations, about 12 armed men kidnapped the four
victims on Saturday night as they were leaving a protest. They were bound
and gagged, and some were tortured before the gunmen executed them, the
police said.

The last two bodies, badly decomposed and showing signs of torture, were
found on Tuesday on the outskirts of Caracas.
The case has fueled opposition fears that Mr. Chávez may be leading the
country toward armed struggle by encouraging supporters to silence
dissenting voices, more than 10 months after narrowly surviving a coup led
by rebel officers.

The police tried to soothe frayed nerves today, saying the motive for the
killings appeared to be revenge, not politics. They cited reports of a
scuffle on Saturday between the soldiers and a fellow protester, Edgar
Leonardo Machado, who has become the lead suspect in the killings.

Family members of the victims criticized the investigations as corrupt.
They accused the police of trying to avert a scandal and said the four
dead were clearly killed for their protests against Mr. Chávez.
"They want to clear themselves politically, and they say it's about
revenge," said Miguel Pinto, whose 21-year-old brother, Felix Pinto, a
member of the country's air force, was one of the dead. "My brother had no
enemies. The only enemy we have here is Hugo Chávez."

Despite occasional violence in Venezuela's political standoff, there have
been no confirmed selective killings of Mr. Chávez's allies or enemies.
Still, street clashes have claimed at least seven lives and have left
scores wounded since December.

Mr. Chávez has styled his government on Cuban socialist ideals and the
nationalist fervor of Venezuela's 19th century revolutionary leader, Simón

After gaining power in 1998, he set up community networks called
Bolivarian Circles, which were meant to spread the word of his revolution.
But the opposition says Mr. Chavez's supporters take his calls to defend
the revolution literally. They brand the groups Circles of Terror, and
they have started their own armed groups to oppose them.

The political situation, with daily marches by supporters and opponents of
the president, is growing more tense as Mr. Chávez refuses to bend to
opposition calls to hold early elections. His term in office ends in 2007.
The police say that the testimony of a 14-year-old girl will be vital to
solving the killings. The girl is thought to be the girlfriend of Mr.
Pinto, and she was abducted along with the four but survived the shooting,
the police said. She has been hospitalized and was unable to give
investigators a formal statement.

The case is mired in controversy, especially since it appears to involve a
deadly Dec. 6 shooting at the Plaza Altamira, which was witnessed by two
of the victims.

Zaida Perozo, a protester whose body was found on Monday, was wounded
along with 20 others in the Plaza Altamira and had been considering
testifying against a suspect.
Relatives of those who were killed said they feared more attacks would
follow on opposition leaders.
"This is like a chess game," Mr. Pinto said. "First they go after the
pawns and then later for top leaders."
Venezuelan Soldiers Killed

February 19, 2003
Venezuelan Soldiers Killed

CARACAS, Venezuela, Feb. 18 (AP) - The bodies of three soldiers who had
called for "civil disobedience" against President Hugo Chávez's government
have been found with their hands tied and faces wrapped with tape,
forensic police officers said today.
No arrests had been made and authorities were still trying to determine a
motive behind the killings of the three soldiers, Erwin Argüello, Ángel
Salas and Félix Pinto.
The bodies were found in Guarenas, 18 miles from Caracas, said César
Hernández, chief of the forensics homicide division.

By Michael Rowan for el Universal 18 Feb 03

Last week's column 'Ten Times Wrong' noted the common mistakes of the
international news media about the Venezuela story and Chavez. This week's
column is devoted to ten questions the opposition needs to answer if it is to be
taken seriously by the world:

One, what is your government program? Be specific. Did you arrive at the
program democratically? Did you have a convention where elected delegates
nationally voted in favor of the program?

Two, what is your solution to poverty? Where are the details of the War
Against Poverty you plan to wage? How do you plan to provide the Tools for
Wealth - titles to housing, credit, training -- to the poor?

Three, what is your solution to systemic corruption? Do you plan to eradicate
the monopoly power and secrecy that has corrupted Venezuelan governments
from time immemorial? Specifically, how are you going to do that?

Four, how will you find a leader to win an election that stands for what you
want to do in the nation? Will you have a primary election? Will losers abide
by the decision of the majority?

Five, what are your plans for the oil industry? Do you believe in the expansion
or price strategy? Opening the business to Venezuelans and the world, or
closing the business for the state only? Using oil for wealth creation of the
nation {liberty}, or wealth distribution by the state {rents}?

Six, do you want an economy owned and operated by the state or the nation?
If the nation, what mechanisms will you use to 'nationalize' wealth creation,
liberty, and economic opportunity?

Seven, do you believe in inclusiveness or exclusiveness? If inclusiveness,
what are your plans to include Chavistas in political and economic alliances
for common cause?

Eight, what are your plans to build the nation? How are you going to attract
global and national partners for investment, job-creation, and diversification?

Nine, how do you plan to protect citizens against state despotism? What are
your specific, concrete plans for individual Bill of Rights, judicial reform,
independent prosecutors, and checks-and-balances in the executive,
legislative, and judicial powers?

Ten, are you a departure from the past or are you part of the past?
Systemically, the Fifth Republic [since 1998 by Chavez fiat!] is an
exaggerated extension of the deficiencies of the Fourth Republic [the ever
vilipended system pre Chavez!]. If you are different, how are you different?

Chavez is not what he appears to be to the world, true. But, dear opposition,
who are you?
The New York Times

February 18, 2003
Venezuela Says Oil Industry to Rebound Soon From Strike

BOGOTÁ, Colombia, Feb. 17 - The state-owned oil company in Venezuela,
though hobbled by a faltering 78-day strike by oil workers, could be
producing 2.8 million barrels per day within a month, Venezuela's quota as
set by the Organization of the Petroleum Exporting Countries, the
president of the company said today.

Reaching 2.8 million barrels per day would be a milestone for the
state-owned company, Petróleos de Venezuela, once the world's
second-largest oil company and a major supplier of petroleum to the United
States. The company used to produce 3.1 million barrels a day until an
antigovernment strike paralyzed production, devastating Venezuela's
economy and severely testing the leftist government of President Hugo

The announcement by Alí Rodríguez, president of the company, was quickly
challenged by dissident oil executives who on Dec. 2 led a walkout of
thousands of workers that continues to this day. The walkout was part of a
nationwide general action, but the strike in the other sectors fizzled out
earlier this month.

The government and the opposition agreed today to an eight-point
resolution to reduce tensions, the first development in three months of
talks guided by the Organization of American States, Reuters reported,
quoting a source close to the talks as saying, however, that a deal to end
the conflict seemed no closer.

The striking oil executives say that production stands at 1.4 million
barrels per day, and that reaching 2.8 million per day will take many more
months because Petróleos de Venezuela lacks the managers and technicians
to reactivate the industry quickly and properly. Mr. Chávez has fired
nearly 13,000 striking workers, many of them senior executives and highly
trained engineers.

"Without these people what will Pdvsa do?" José Toro Hardy, an oil analyst
and former company board member, said in a recent interview, using the
name by which the company is widely known. "Instead of producing 3.1
million, it could produce 1.5 to 1.8 million."

Indeed, oil analysts outside Venezuela say Petróleos de Venezuela would
probably never again be the same giant it once was because it has been so
hobbled by the loss of qualified workers, the damage to its reputation
caused by the strike and financial losses estimated at $3 billion.
But Mr. Chávez's government has touted its efforts to restart the oil
industry, saying the company is now producing more than two million
barrels each day as blue collar workers returned to their jobs. Today, Mr.
Rodríguez also announced that the company would soon be meeting domestic
demand for gasoline.

Mr. Rodríguez, and other managers at Petróleos de Venezuela, are going
through with a restructuring of the company that they say will see it
split in two. The plan is to cut jobs and streamline operations, which has
prompted speculation that the company's refineries in the United States
could be sold.

Today, Mr. Rodríguez denied that the government was considering selling
those refineries, operated by Citgo, but he did say that Petróleos de
Venezuela was reviewing all of its worldwide assets to determine if any
should be sold. "At the moment, we are in the process of a review of all
of Pdvsa's businesses, domestic and international," he said. "Once that
review has been completed, once we have a new business plan set out, which
is being drawn up, then we will make the decisions about businesses at
home and abroad."
By Michael Rowan for El Universal 11 Feb 03

Many in the world media have made ten fundamental mistakes about the
Venezuelan story. These are:

One, Chavez is waging a revolution against poverty. It's all talk. Poverty has
increased by 20% or more in the last four years, and precisely because of
Chavez' policies.

Two, Chavez is out to eliminate corruption. Just the opposite is the fact. The
systemic incentives for corruption -- monopoly and secrecy -- have
skyrocketed under Chavez. Immense amounts of public spending are not
accounted for. The president has openly pledged to punish political enemies
through the [currency] exchange system - a virtual announcement of planned

Three, Chavez is fighting an oligarchy. Truth is, Chavez is the oligarchy.
Read the dictionary definition of the term.

Four, Chavez is president of all the people of Venezuela. No, he does not
govern to unify Venezuela but to divide it with class warfare. There are
millions of people the president does not represent and who he wants to drive
out of the country.

Five, Chavez is a democrat. No he is not. He was democratically elected, just
as Hitler was. But at heart he is an autocrat like Castro.

Six, there was a coup on April 11th waged by terrorists. False. There was a
coup on April 12th waged by a few dozen idiots who hijacked a genuine and
spontaneous public outrage by millions of peaceful demonstrators.

Seven, the media are leading the effort to remove Chavez from office. In fact,
the media are following the effort by millions of Venezuelans to do so. The
messenger is not the message. Take away the media, and the opposition to
Chavez would not diminish by one iota.

Eight, Chavez is the victim of racism - a small group of rich white men want
to cashier the dark-skinned president. This assertion is the height of cynicism.
If only people of color were to vote in an election, Chavez would lose.

Nine, PDVSA will recover from the attack on knowledge, technology, finance
and organizational culture it has been developing for 25 years. No it will not.
The PDVSA of 2002 is gone, whether it can recover is doubtful.

Ten, Chavez is a leftist like Lula of Brazil or Gutierrez of Ecuador. No he is
not. Like Castro, the president is obsessed with accumulating power, not
using it for any purpose on the left, center or right.

International journalists must not take the words of the most calculating spin-
doctor in Latin America literally. Look into the facts to find the truth.
Oil Strikers Deserve Jail, Chavez Says

Associated Press
Monday, February 10, 2003

CARACAS, Venezuela, Feb. 9 -- President Hugo Chavez threatened today to jail the
thousands of oil workers fired for leading a two-month strike against him.
"Fired is nothing! Many of them should go to prison for sabotaging the
Venezuelan economy," Chavez said of the more than 9,000 workers dismissed from
the state oil company Petroleos de Venezuela SA.

Chavez's threats came one day after more than 100,000 Chavez opponents protested
in Caracas in support of the fired oil workers. Thousands more held a similar
protest today in the state of Carabobo, 66 miles west of the capital. A bicycle
protest also was organized in Caracas.

The nationwide strike was called Dec. 2 to demand Chavez's resignation or early
elections. But its leaders -- business groups, labor unions and leftist and
conservative politicians -- agreed to end the protest last week in all areas but
the crucial oil industry.

Chavez today called the strike an "oil coup" aimed at unseating him by
paralyzing the oil industry, which provides half the government's income. He
also has accused his opponents of waging an "economic coup" that he blames for
Venezuela's deteriorating economy.

The strike cost Venezuela more than $4 billion, the government estimates.
The New York Times
February 9, 2003
Venezuela's Oil Industry and the Strike

The strike has reduced Venezuela's oil capabilities.
Oil produced, total:
3.1 million barrels a day before the strike.
1.3 million now, say dissidents. The government says the figure is 1.9 million.

Oil exported:
2.7 million barrels a day before the strike, most to the U.S.
700,000 barrels now, according to Mines and Energy Ministry.

Work force:
33,000 full-time employees before the strike, and 37,000 contract workers, which fluctuated.
Unclear how many now, but 9,000 of the full-time workers have been fired.
Gasoline produced for home market:
250,000 barrels a day before strike.
150,000 barrels now, the Mines and Energy Ministry says.
Gross oil revenues:
2002 (estimated) $22.2 billion.
2003 (forecast) $14.3 billion, according to UBS Warburg.

The New York Times

February 9, 2003
Venezuelan Oilman: Rebel With a New Cause

ARACAS, Venezuela, Feb. 8 - He wears pastel-colored suits and wire-rimmed glasses. His thinning hair is neatly combed. Restrained and a little stiff, he speaks in the dry tones and jargon-filled language of a technocrat on such obscure topics as 1958 American oil regulations or 1930's energy policies in Venezuela.

In short, he looks and sounds every bit the oil executive he is - the president of one of the largest, most complicated and, these days, most embattled companies in the world, Petróleos de Venezuela.
But make no mistake, Alí Rodríguez still sees himself as a revolutionary. His boss, after all, is President Hugo Chávez, whose sharp tongue and efforts to remake Venezuelan society have left the country deeply divided and on the edge of economic collapse.

Though his résumé makes no mention of it, Mr. Rodríguez has leftist, some would say radical, credentials. For 20 years, he was a clandestine agitator and a fighter in a Cuban-inspired rebel movement, where he specialized in political proselytizing and making bombs, according to former guerrilla comrades.
"I am still a revolutionary, of course," said Mr. Rodríguez, 64, who remains a member of a party, Fatherland for All, on the left fringe of the government's coalition. "But it is under different conditions, in accordance with the realities of the day."

The irony of how the son of a humble Andean farmer became an idealistic guerrilla and, years later, rose to the upper echelon of a widely hailed company makes Mr. Rodríguez shake his head and smile. To be sure, he does not seem entirely comfortable poring through planning documents, but though he does not carry a rifle anymore, he still says he is fighting to shake up the system for the betterment of the poor.

Still, the reality is that today's rebels are his former oil executives. For more than two months they have been out in the streets protesting against Mr. Chávez and, by extension, Mr. Rodríguez's management of Petróleos de Venezuela S.A.

Indeed, thousands of Petróleos workers helped to topple Mr. Chávez for a few days in April, and then gave backbone to a national strike of several weeks that strangled oil exports to Venezuela's main customer, the United States.
Mr. Rodríguez may have once believed in hemispherewide revolution. But these days, as he looks out from his penthouse office, he sounds more like an unforgiving capitalist. He vows that the thousands of dissident workers who went on strike - and continue to strike - will never return to their jobs.
"Their movement seriously damaged the company and the country," Mr. Rodríguez said, his ire just slightly shaking his calm demeanor. "That is why I am indignant at what happened, because it makes our work so much harder. We have to reduce investments, and that means a loss of possibilities, a retreat for the country."

"There is no possibility of an amnesty whatsoever," he added.
Petróleos de Venezuela, once valued at $110 billion, is producing just half what it did before the strike, which ended in the non-oil sector last week after 63 days. Moribund oil fields are sanding up, losing the ability to produce oil; the company's reputation is in shambles; and the 9,000 workers Mr. Rodríguez has fired represent a loss of experience and skill.

Whether to take back striking workers is one of the critical decisions Mr. Rodríguez has made as he tries to guide Petróleos de Venezuela through venomous political waters into uncharted territory.
To his left are hard-liners in the governing party who believe Mr. Rodríguez was too lax in purging dissenters and too close to the global oil industry to be of much use to Mr. Chávez's reforms.
To his right are those who accuse him of allowing ideology to cloud logic, resulting in a scaled-down company that will generate far less wealth than before.

Those who know him see Mr. Rodríguez as independent, decisive and clear on how to reshape the company. He has a plan to break the company into eastern and western divisions, making the Caracas headquarters, where dissidents planned antigovernment walkouts, obsolete. He proposes reducing the company's scope, possibly selling off refineries and other assets overseas.

Mr. Rodríguez insisted that Venezuela would soon export as much petroleum as before the strike, about 2.7 million barrels a day, most to the United States. He suggested that as demand grows in the years to come, so would Venezuelan supply.

But the company he envisions would also conform more to Mr. Chávez's vision, to generate a steady stream of revenues for social programs. It would also continue forging ties with the Organization of the Petroleum Exporting Countries.
"I think that effectively, at least culturally, the true nationalization of petroleum is coming," Mr. Rodríguez said recently, though he emphasized that foreign companies would continue to operate here. The role of a company that controls such riches, he said in an interview, is to "incorporate that value of the natural resource for the maximum benefit."

But getting the company back to where it once was will be difficult - some say impossible - even for a longtime oilman who served as president and general secretary of OPEC before taking over the Venezuelan company last April.
"It is hard to see the company overcome this quantitative and qualitative setback," said Mazhar al-Shereidah, an oil economist who helped write oil regulations for the Chávez government. "He is not in charge of a healthy company. They are giving him a company, a body, that is in intensive care."
The company's 2003 budget is being cut by $2.7 billion, to about $6 billion, to offset the slide in revenue. Mr. Rodríguez acknowledges that investments that are crucial for exploration are being cut by 30 percent.

If he is strained by the Herculean task ahead, Mr. Rodríguez does not seem to show it. He has learned to be resilient.
"As I have said, everything you do as human beings, is a step forward," he explained. "You learn from the hard knocks, while someone who does not go through it might not find it so easy."
The hard knocks came in the 1950's when Mr. Rodríguez was a student agitator fighting against the strongman Marcos Pérez Jiménez. Even after Pérez Jiménez was overthrown in 1958, Mr. Rodríguez said he continued in the Venezuelan underground, pressing for change.

Accused of having detonated a fatal bomb blast, which he denies, Mr. Rodríguez fled into the mountains in 1964 and joined others intent on toppling the government. Former fellow fighters remembered Comandante Fausto, as he was known, as shrewd and tireless, excelling in combat and political work and spending his free time listening to classical music.

"He could move in any scenario," said Alberto Tirso, 61, a former comrade who now opposes the Chávez government. "He was a man of valor, very serene, a great reader. I remember he always carried four or five books in his knapsack."
But the revolution never caught on, and in 1979 Mr. Rodríguez was one of the last rebels to demobilize under a government amnesty. He became a lawyer and won a seat in the lower house of Congress where his interest in oil blossomed, leading to the chairmanship of the energy committee. When Mr. Chávez was elected president in 1998, he became minister of mines and energy.
"I have had the good fortune of being in different situations that have to do with petroleum," he said. "And now it is as an entrepreneur, a role I had never thought I would play in my life."

February 9, 2003
Venezuela's Oil Industry and the Strike
he strike has reduced Venezuela's oil capabilities.
Oil produced, total:
3.1 million barrels a day before the strike.
1.3 million now, say dissidents. The government says the figure is 1.9 million.

Oil exported:
2.7 million barrels a day before the strike, most to the U.S.
700,000 barrels now, according to Mines and Energy Ministry.

Work force:
33,000 full-time employees before the strike, and 37,000 contract workers, which fluctuated.
Unclear how many now, but 9,000 of the full-time workers have been fired.
Gasoline produced for home market:
250,000 barrels a day before strike.
150,000 barrels now, the Mines and Energy Ministry says.
Gross oil revenues:
2002 (estimated) $22.2 billion.
2003 (forecast) $14.3 billion, according to UBS Warburg.

By Michael Rowan for El Universal 11 Feb 03

Many in the world media have made ten fundamental mistakes about the
Venezuelan story. These are:

One, Chavez is waging a revolution against poverty. It's all talk. Poverty has
increased by 20% or more in the last four years, and precisely because of
Chavez' policies.

Two, Chavez is out to eliminate corruption. Just the opposite is the fact. The
systemic incentives for corruption -- monopoly and secrecy -- have
skyrocketed under Chavez. Immense amounts of public spending are not
accounted for. The president has openly pledged to punish political enemies
through the [currency] exchange system - a virtual announcement of planned

Three, Chavez is fighting an oligarchy. Truth is, Chavez is the oligarchy.
Read the dictionary definition of the term.

Four, Chavez is president of all the people of Venezuela. No, he does not
govern to unify Venezuela but to divide it with class warfare. There are
millions of people the president does not represent and who he wants to drive
out of the country.

Five, Chavez is a democrat. No he is not. He was democratically elected, just
as Hitler was. But at heart he is an autocrat like Castro.

Six, there was a coup on April 11th waged by terrorists. False. There was a
coup on April 12th waged by a few dozen idiots who hijacked a genuine and
spontaneous public outrage by millions of peaceful demonstrators.

Seven, the media are leading the effort to remove Chavez from office. In fact,
the media are following the effort by millions of Venezuelans to do so. The
messenger is not the message. Take away the media, and the opposition to
Chavez would not diminish by one iota.

Eight, Chavez is the victim of racism - a small group of rich white men want
to cashier the dark-skinned president. This assertion is the height of cynicism.
If only people of color were to vote in an election, Chavez would lose.

Nine, PDVSA will recover from the attack on knowledge, technology, finance
and organizational culture it has been developing for 25 years. No it will not.
The PDVSA of 2002 is gone, whether it can recover is doubtful.

Ten, Chavez is a leftist like Lula of Brazil or Gutierrez of Ecuador. No he is
not. Like Castro, the president is obsessed with accumulating power, not
using it for any purpose on the left, center or right.

International journalists must not take the words of the most calculating spin-
doctor in Latin America literally. Look into the facts to find the truth.
The New York Times
February 7, 2003
How Venezuelan Outlasted His Foes

CARACAS, Venezuela, Feb. 6 - When Venezuela's opposition movement started a national strike on Dec. 2, the objective seemed easily within reach. Its leaders portrayed President Hugo Chávez as rash and weak and predicted he would soon resign or call early elections under the pressure of a punishing walkout.
But through the two-month strike that strangled oil exports and generated the deepest recession in years, Mr. Chávez never wavered.

The military stayed by his side, ignoring calls to revolt. The state oil company, though nearly shuttered by thousands of striking workers, made enough of a comeback to keep the country afloat. Mr. Chávez insisted, even in his darkest hours, that the only settlement would be a referendum on his rule later this year, a proposal his adversaries rejected.

Now, the strike is over, the opposition is splintered, and Mr. Chávez is savoring victory over enemies whose tactics to unseat him have failed.
The president is not in a forgiving mood. He has opened investigations into the actions of the country's antigovernment television stations.

Today, his government imposed foreign-exchange controls intended to stabilize the currency, the bolívar, which has lost 30 percent of its value since the strike. But Mr. Chávez warned that the controls could be wielded as a weapon to cut access to dollars for opposition businessmen. "Not one dollar for coup-mongers," he said in a televised speech.

Earlier this week in a speech to supporters he signaled more retribution for his political enemies, telling them:
"The coup-mongering, fascist opposition had their turn with the bat and they have struck out three times. Now it's our turn to bat."
He called this the "year of the revolutionary offensive," and speaking in the third person, added: "Chávez is still here, tougher and stronger than ever."
Political analysts say the opposition's critical mistake was to underestimate Mr. Chávez, a pugnacious former army paratrooper, who through the years has often found a way to snatch victory from defeat.

Like a boxer using the rope-a-dope strategy, Mr. Chavez bounded and ducked, and though hit hard by a strike that paralyzed the country, continued standing as his opponents fell.

"The opposition pounded away, made little progress, and ultimately lost steam and became exhausted," said Michael Shifter, a Venezuela expert at the Washington-based Inter-American Dialogue, who has spoken to opposition leaders about their tactics. "They had Chavez, but were so lacking in organization, strategy, an idea of what to do."

Opposition leaders spent time characterizing Mr. Chávez as an unbalanced dictator while playing down his support as marginal compared to the throngs of Venezuelans who attended anti-government demonstrations. Meanwhile, the anti-Chávez news media, which forms a radical wing of the opposition, presented commentator after commentator who predicted he would be forced out by the sheer magnitude of anti-government sentiment.

The government instead hunkered down and, with each passing week, the strike weakened while the opposition appeared increasingly wobbly.
"If only the strike had focused solely on an electoral solution," lamented Felipe Mujica, president of an opposition party, Movement Toward Socialism. "The opposition thought that it would lead to Chavez's resignation and that was a mistake."

Carlos Fernández, president of the country's most influential business association, said: "I did not think the president would be so callous. I thought he would be a democrat and sit down at the table to resolve the problem."
Mr. Chávez adopted a simple strategy, minimizing the effects of the strike while using the military to take over oil installations. That allowed the government to reactivate the industry that is Venezuela's economic lifeblood, leading to a war of attrition the opposition could not win.

"Chávez does not negotiate; he pretends to negotiate, which is different, but he is really trying to buy time," said Alberto Garrido, a critic of the opposition's tactics who has written several books about Mr. Chávez. "For Chávez, politics is a continuation of war, a form of war."

Rafael Simon Jimenez, vice president of the National Assembly, called Mr. Chavez's strategy one of confrontation, where he did not give an inch and thus threw the opposition off kilter while reassuring supporters.
"The opposition made a terrible error by fighting Mr. Chavez on the turf where he rules," Mr. Jimenez said. "They have to get it out of their heads that they will take Chavez out from one day to the next."

The opposition is still trying to apply pressure, as its leaders push for a constitutional amendment to shorten Mr. Chávez's term. The government, though, has rejected the proposal, and political analysts say it is becoming more likely that the president's foes will end up settling for the referendum in August that Mr. Chávez had offered weeks ago.

Still, he is not out of danger, since polls suggest that 70 percent of the population opposes him. Those polls show that while he would win the highest number of votes against a field of candidates, he could easily lose, too, because opposition voters could coalesce around one candidate, as has happened in previous elections.

Although support for Mr. Chávez remains strong in the poor neighborhoods where most Venezuelans live, analysts and community leaders say residents in those districts could grow restless if he fails to deliver on his pledges. Already, the president will find it difficult to provide much assistance this year, since the economy is expected to shrink by 14 percent and oil earnings will plummet.
"We have not received what has been promised," said Juan Blanco, a pro-Chávez community leader. "The assistance we get is very small; we do not even feel it. I ask, what is the goal of the revolution - where are we headed?"