On Venezuela, Hill described the street protests during the two-month general strike that crippled Venezuela's economy as, "for lack of a better term, democracy in action." The strike crippled oil exports in what had been the world's fifth-largest oil exporter. He said that following the strike, Chavez's "actions may portend a move toward greater authoritarianism. In my mind, that bears watching very carefully. I have directed my people to do that." Since the strike ended, Chavez has come under international criticism for cracking down on political opponents.
Chavez has accused the United States and other nations of conducting a smear campaign to discredit his government. He continues to have strong support among Venezuela's many poor people. Hill said he has not personally been in contact with Venezuela's military, but praised it as professional and said it has good relations with the U.S. military. "The Venezuela military did not go out in the street and kill its citizens, nor did they conduct a coup," he said. "I think that's an important aspect of what's going on."
The Bush administration long has been wary of Chavez, who has befriended Iraqi President Saddam Hussein, Cuban leader Fidel Castro and other U.S. adversaries. But after appearing too eager to support a failed coup attempt last April, the United States has been cautious in its criticism. It is following the leadership of the Organization of American States in seeking a peaceful resolution of Venezuela's political crisis. Hill created a stir in Venezuela last week when he said terrorist organizations were operating on the country's Margarita Island, as well as in border areas of Brazil, Argentina and Paraguay. Venezuela's foreign minister, Roy Chaderton, called on him to provide evidence. ***
The withdrawal will wipe out the federal government's balance within the FIEM, leaving the fund with $1.608 billion, of which $208 million is earmarked for state governments and the remainder for state oil company Petroleos de Venezuela SA(E.PVZ), according to the report.
Government officials couldn't be reached for confirmation. The FIEM is a rainy day fund that, in 2000 and 2001, absorbed half of Venezuela's oil revenues above budgeted levels. The account isn't expected to get any deposits until 2004 as a result of a new law.
Government income was severely affected by a two-month general strike against President Hugo Chavez's leadership that began Dec. 2, which all but shut down Venezuela's vital oil industry, among many other sectors. Opposition leaders are demanding Chavez agree to early elections, blaming his left-leaning policies for the country's deepening economic crisis. The economy contracted 8.9% in 2002, amid 17% unemployment and 32% annualized inflation sparked by a 46% devaluation of the bolivar. The currency lost a further 25% this year before currency sales were halted Jan. 21. [End] Chavez has said the problems are due to an "economic coup" led by his opponents. El Universal Website: www.eluniversal.com -By Jehan Senaratna, Dow Jones Newswires; 58212-564-1339; jehan.senaratna@dowjones.com