In this issue:

'Friends of Venezuela' Attempt To Save the Disintegrating Nation

Chavez-Dominated Supreme Court Votes Down Referendum on Venezuelan Presidency

Ecuador's New President Imposes 'War Economy' To Please IMF

Bolivia Descends into Chaos with Coca Growers' Uprising

From Volume 2, Issue Number 4 of Electronic Intelligence Weekly, Published Jan. 27, 2003

Ibero-American News Digest

'Friends of Venezuela' Attempt To Save the Disintegrating Nation

During the Jan. 15 inauguration of Ecuador's new President Lucio Gutierrez, a "Friends of Venezuela" group was patched together on the sidelines, by Brazil, the United States, Mexico, Chile, Portugal, and Spain. (The U.S. was the only country that didn't send its head of state or high-level official to the inauguration—a fact which irritated many of the attendees. Because of this, its representative, a low-level White House official, couldn't participate with the other heads of state who met to set up the group.) The group was formed at the initiative of the Brazilian government and then backed by the United States, with the intent of assisting arrival at a peaceful resolution to Venezuela's internal crisis.

Venezuelan President Hugo Chavez immediately protested that the group was not broad enough, and demanded that Russia, China, France, Trinidad, and possibly Cuba be invited to join. But in a quick Jan. 17-18 trip to Brasilia, where he met with President Inacio Lula da Silva and Foreign Minister Celso Amorim, Chavez agreed, "for now," to accept the group's current membership. He objected to the presence of the U.S. and Spain, as both governments back early elections, but told his supporters upon returning to Venezuela that "we will give Lula and his government our vote of confidence to form this group to help Venezuela."

The foreign ministers of the six countries held their first meeting, behind closed doors, at the Organization of American States headquarters in Washington on Jan. 24.

Chavez-Dominated Supreme Court Votes Down Referendum on Venezuelan Presidency

A Venezuelan Supreme Court conveniently reduced to its members who are supporters of embattled President Hugo Chavez, voted Jan. 22 to block a Feb. 2 referendum on Chavez's Presidency. That referendum has been the focus of much of the anti-Chavez opposition's organizing, since 2 million signatures on a petition demanding such a referendum were delivered to the National Electoral Commission last November. The Supreme Court ruling specifically orders the Electoral Commission to "freeze" the holding of the referendum, and forbids it to organize any other elections. Chavez told a Newsweek interviewer on Jan. 16 that in any case, he would not resign, even if he lost a referendum.

Possibly in anticipation of the reaction to the Supreme Court ruling, pro-Chavez forces were bused into Caracas from around the country on Jan. 23 for a demonstration in support of the government. A half-million people participated (not an extraordinary number to be out on the streets these days in Venezuela). According to the international wire services, prominent throughout the march were the Chavez emblem of the red beret, and signs bearing Marxist guerrilla Che Guevara's face, and praising Castro's Cuba as the model for the "new Venezuela" under Chavez. One of the demands heard was for a nationwide boycott of Coca-Cola, whose visible CEO in Venezuela is the hated billionaire Gustavo Cisneros, whom Chavez is holding up as the "enemy image" who controls the opposition.

Only a week before, Chavez ordered the National Guard to raid a Coca-Cola subsidiary, alleging that the company was hoarding soft drinks. The way the raid was carried out as a major publicity stunt against Cisneros, was a transparent move to rev up Chavez's supporters. (Cisneros was key in putting Chavez in power originally, but now has thrown his power and influence behind the opposition.)

Before the Supreme Court ruling, former U.S. President Jimmy Carter was in Venezuela to do some last-minute "mediating." First he went on a fishing trip with oligarch Gustavo Cisneros, and afterwards, he met with Chavez. Although his latest peace proposal hasn't been fully publicized, it appears to offer shorter rule for Chavez in exchange for a postponement on the opposition's referendum until Aug. 19, which has been Chavez's position all along and something to which the Supreme Court ruling lends itself.

Ecuador's New President Imposes 'War Economy' To Please IMF

Ecuador's new President Lucio Gutierrez imposed a "war economy" as his first act in office, to seal a standby loan with the IMF. In a nationally broadcast speech Jan. 19, Gutierrez charged that his predecessor Gutavo Noboa had left him an economy "in chaos," which now required the imposition of severe austerity to deal with a fiscal deficit in the range of $2.2 billion. At Gutierrez's side was Finance Minister Mauricio Pozo, who explained that the government has decided to sign a standby agreement with the IMF, supposedly to get "up to" $500 million in financing. The "war economy" immediately entails an increase of more than 35% in the price of gasoline, and a freezing of public-sector wages for the rest of this year. Gutierrez had manically announced Jan. 17 that "the IMF believes in this government," and predicted that toward the end of the month, there might be "good news" that Ecuador had reached an agreement with the Fund.

The previous government had negotiated with the IMF for months for a $240-million IMF standby loan, but no agreement was reached due to internal resistance to austerity conditionalities. Now Gutierrez, an ally of Venezuela's Hugo Chavez, with the same Jacobin profile, raves that the IMF "trusts" him, as he embarks on a policy path that will guarantee mass upheaval.

Bolivia Descends into Chaos with Coca Growers' Uprising

At least 11 people, and possibly as many as 18, were killed in the first five days of the coca growers' uprising in Bolivia, which began Jan. 13, and continues with no sign of let-up. The Army and police have succeeded in clearing all blockades off the main inter-city highways at various points, but few dare use them, for fear of being attacked by the cocaleros, who were reported to be caucusing about other methods to close the highways (such as nails on the roads, etc.). The blockades have left more than 100,000 people in the Chapare region without gasoline, bread, and vegetables, just as an outbreak of dengue fever has hit.

Protests are becoming generalized, as people take to the streets against the Free Trade Accord of the Americas, and against the Sanchez de Losada government's economic policies generally. Barricades of garbage cans and burning tires thrown up by protesters closed streets in the city of Cochabamba; retired pensioners held a dramatic march to the capital; and on Jan. 23, indigenist terrorist Felipe Quispe announced that his peasant base would be joining the protest.

Bolivian military sources emphasize that the situation is very difficult and highly charged—but it was entirely predictable. The first 100 days of the Sanchez de Losada government are over, and so is the truce. When the Bush Administration refused to permit the government to prolong a pause in coca eradication, that gave the cocaleros the excuse they wanted to go into action. The sources emphasize that the underlying cause of the conflict is economic. The situation is now radicalized, and it is difficult to foresee how the conflict could be damped down, under the current free-trade privatization policies.

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