- The Washington Times - Tuesday, February 11, 2003

Venezuelan President Hugo Chavez on Thursday instituted new currency-exchange controls that will severely hurt many Venezuelan businessmen, and could paralyze the whole country economically. Under a new fixed exchange rate, the dollar which on the black market is worth about 2,500 Venezuelan bolivars will sell for 1,596 bolivars and be bought for 1,600 bolivars. Mr. Chavez appointed Capt. Edgar Hernandez Behrens, who helped him stage a bloody but failed coup in 1992, head of the exchange agency. Mr. Chavez said the agency's "orders will be: not one dollar to coup mongers." He cloaked his financial retaliation against his opposition in a populist tone: "Bolivars are for the people."
However, while bolivars may indeed be "for the people," the dollar is the currency for much of Venezuela's global business dealings. Since 60 percent of Venezuela's raw materials and most of its food is imported, Mr. Chavez's decision to block dollar sales to the opposition will cripple Venezuela's economy. Also, newspapers may not be able to publish, because all newsprint is imported in Venezuela.
Last weekend, as a two-month national strike was called off in all sectors except the state oil industry, Venezuelans mobilized in huge numbers to sign various initiatives seeking to end or shorten Mr. Chavez's term in office. Opposition forces said 4.4 million Venezuelans signed the proposals, but that figure hasn't been confirmed. More importantly, the government said referendums aren't constitutionally binding until half of a president's six-year term is up, which in Mr. Chavez's case would be in August. Press reports described the crowds participating in the "great signing" as massive.
The opposition has been facing off with Chavista paramilitary troops, with fatal consequences. The paramilitary groups which, according their leader Guillermo Garcia Ponce, have over 2 million members are defended by Mr. Chavez as the guardians of his Bolivarian Revolution and funded by the Chavez administration. They are the single most worrisome element of the Chavez administration, which announced in March the president's decision to allocate $150 million to the groups. In early April, officers fired on a peaceful anti-Chavez protest, killing or wounding more than 250 people. They also ambushed media outlets covering the protests.
The ambush is but one example of Mr. Chavez's attempts to suppress free speech. On Thursday, his administration began "administrative procedures" against media outlets for airing reports unflattering to the government. And his rhetoric has been alarming: "The world should not be surprised if we start closing TV stations in Venezuela shortly," he said in late January. "This is a country at war." Also, journalists have reportedly received verbatim transcripts of their cell-phone conversations with opposition members.
Venezuela's neighbors are rightly concerned about escalating unrest, since car bombings in recent weeks in Colombia's Arauca region, which borders Venezuela, killed 12 persons and injured more than two dozen others. Colombian Defense Minister Martha Lucia Ramirez signalled Colombia's frustration with Venezuela's tacit refuge of militants: "The Colombian guerrilla has unfortunately been moving with certain freedom on this border [with Venezuela] and we know of kidnapped people taken…to the Venezuelan side and later they've been brought back here." Another Latin American diplomat said Venezuela is "a fount of instability" for the region. "I don't see how this situation can be sustainable until the end of the year, and, seeing that, the Venezuelan people are arming themselves," he said. "Chavez empowers these people."
As for the Bush administration, it has handled relations with Mr. Chavez carefully and met with some success although Mr. Chavez's potential for exporting instability in the region remains worrisome. One of the results of the negotiations that the United States helped broker, along with five other nations, between Mr. Chavez and the opposition is that Mr. Chavez has agreed to hold a binding referendum after August. More, however, must be done. The mediators of that uneasy truce, known as the Group of Friends, must press Mr. Chavez to keep his pledge and abide by the Venezuelan constitution, which he, in effect, drafted himself. Also, the Group of Friends must voice concern over Mr. Chavez's violations of democratic practices, such as his crackdown on the press.
The Venezuelan opposition, meanwhile, would be wise in voicing a message beyond "Chavez out." Mr. Chavez is, after all, Venezuela's native son, born of tremendous frustration with the politics of privilege.

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