Venezuela Strikers Declare Economic War on Chavez

CARACAS, Venezuela (Reuters) - Foes of Venezuelan President Hugo Chavez intensified their economic war of attrition against him on Thursday by adding a tax revolt to a month-old strike that is choking oil exports and government revenues.

Although the strike has caused severe gasoline shortages and demanded a heavy financial sacrifice from striking private businessmen, opposition leaders vowed no let up in 2003 in their drive to force Chavez to quit and hold early elections.

"The strike is deepening ... we're maintaining pressure on all fronts and increasing it," Timoteo Zambrano of the Coordinadora Democratica opposition coalition told Reuters.

But Chavez, who was elected in 1998 and survived a coup in April, has held firm so far against the shutdown strangling oil production and exports in the world's No. 5 petroleum exporter. He describes the strike as an attempt by traitors to topple him from the presidency.

His foes accuse him of ruining the economy with left-wing policies hostile to private business and say he is trying to drag the nation toward Cuba-style communism.

Another opposition leader, Antonio Ledezma, urged Venezuelans on Thursday to stop paying taxes as part of a civil disobedience campaign to press for early elections.

"We're announcing a tax-disobedience campaign, which means not paying taxes from now on," he told a news conference.

Chavez, who has used troops to try to break the 32-day-old oil strike, told reporters during a visit to Brazil that full oil operations would be restored "in a few weeks."

But oil strike leaders said that even if the shutdown was lifted, it would take at least four months to return to normal operations. "We're not taking a single step backwards," anti-Chavez oil executive Juan Fernandez said Thursday.

The disruption to Venezuelan oil sales, which supply more than 13 percent of U.S. oil imports, pushed oil prices up two percent on Thursday. U.S. crude futures rose 52 cents to $31.72 a barrel, about $2 shy of a two-year peak hit earlier this week.

Talks between the government and opposition, brokered by Organization of American States Secretary General Cesar Gaviria, have so far failed to produce an agreement on early elections. The negotiations were due to resume later Thursday.

Overall national support for the strike that started Dec 2 has showed some signs of fraying, especially in the commercial sector where some owners of small businesses and shops have reopened to try to recoup massive sales losses over Christmas.

But opposition leaders said most major private companies, big shopping malls and franchise owners were maintaining the shutdown along with the strategic oil industry.

Zambrano said the government would begin to really feel the full economic impact of the strike this month. "This government has no base with which to sustain itself, this country is ungovernable under this administration," he said.

"Its cash flow has been badly hit ... they won't have enough to pay the public sector unless they eat up their reserves," he said, adding "It's not possible for Chavez to rule without oil."

The disruption to oil sales, which account for half of government revenues and 80 percent of the country's total export revenues, has badly mauled an economy already shuddering under the effects of a severe recession.

The oil-reliant economy, battered by political turmoil, contracted sharply in 2002 and inflation ended the year at a five-year-high of 31.2 percent, the Central Bank said.

Economists say the oil industry strike has cost the government well over $1 billion in lost income. This means it may have to delay payments of public debt or public sector salaries.

"The government has its back against the wall from the fiscal point of view," Francisco Rodriguez, the top economic adviser to the National Assembly, told local radio.

Rebuffing the calls for early elections, Chavez has told his foes they must wait until August, halfway through his current mandate, when the constitution allows for a binding referendum on his rule. The opposition wants to hold a nonbinding referendum Feb 2.

Opposition negotiators are also demanding that the government reinstate sacked oil industry strikers as part of any overall electoral deal. But the government refuses.

The opposition has said it will step up street protests in January, including possible marches to military headquarters in Caracas and the presidential palace. A march to the palace in April ended with the fatal shootings of 19 people, triggering a short-lived coup that toppled Chavez for 48 hours.

Venezuela's opposition comes together to try ousting Chavez - but what next? *** CARACAS, Venezuela - Venezuela's diverse opposition has closed ranks for a formidable campaign to oust President Hugo Chavez. But its leaders have yet to consider what happens next or who would run as a candidate should Chavez step aside or agree to new elections. Take Enrique Mendoza, the folksy conservative governor of Miranda State who is considered a potential challenger. He's holed up in a hotel conference room juggling three cell phones, strategizing and nervously watching the television news amid a general strike that has brought Venezuela's economy to a virtual standstill. "Look at all of those people!" he says, popping out of his seat. He watches an attempt by Chavez supporters to break through an opposition roadblock: "That'll teach them to be respectful." His candidacy? His platform? "We can't talk about that until we know there will be elections," he says, reaching to answer another call.

A recent survey by the Caracas-based Datanalisis polling firm gives Mendoza 63 percent of the vote in a hypothetical race against Chavez. Pollsters interviewed 1,000 people in two major cities Nov. 11-19. The survey had a margin of error of 3 percentage points. Mendoza is an independent aligned with the new Justice First party, which has placed itself at the forefront of the anti-Chavez campaign. The party is popular among young, middle-class Venezuelans because its leaders are mostly under 40 and unassociated with corrupt governments of the past.

Another serious contender is Julio Borges, an Oxford-educated legislator and head of Justice First. He's the exact opposite of Chavez, a former army paratrooper from humble origins who spent two years in jail for leading a failed coup in 1992 before sweeping the 1998 election with tough talk against a corrupt political establishment. Borges, 33, won converts by personally leading a march through a band of rock-throwing Chavez supporters to deliver 2 million signatures demanding a referendum on the president's administration. *** Borges' party once drafted a proposal for an entire new constitution, based on decentralized government and more private participation in the economy. But such efforts have been sidelined by the push to oust Chavez.

There's also Carlos Ortega, the gruff president of the 1 million-member Venezuelan Workers Confederation who, as former head of the largest oil workers union, has dealt a serious blow to the Chavez government by leading a strike for higher pay. Ortega stunned fellow opposition leaders by announcing at a rally that the strike would begin Dec. 2. He also sent thousands on a march during an April strike to the presidential palace, which led to 19 people being killed by gunfire and a coup that briefly ousted Chavez. ***

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