RAY SUAREZ: In much of Venezuela, workers have been striking for seven straight weeks. They've been demanding a referendum next month to determine the fate of President Hugo Chavez. They accuse him of authoritarian rule and of imposing a Cuban-style economy that's ruined the country. Among the strikers, the National Teachers Union.
NELSON GONZALEZ (Translated): We are here to say to President Chavez that if he wants to reopen the schools, if he wants peace and tranquility, he must call for elections because the Venezuelan people want to express their will.
RAY SUAREZ: The most damaging stoppage involves 30,000 managers and workers in the state-owned oil company known by its Spanish acronym PDVSA that's crippled exports for the source of 14 percent of American oil and helped send prices of crude to their highest level here in two years.
Chavez has derided the strikers as fascists and terrorists, declaring that a vote before August would violate the constitution. In his state of the nation speech today, Chavez defended his populist agenda; he calls it the Bolivarian Revolution named for the 19th century independence hero, Simon Bolivar.
PRESIDENT HUGO CHAVEZ: We are not going to give up one inch of terrain in respect to the principles of justice and equality, that guide the Bolivarian Revolution.
RAY SUAREZ: The standoff has battered Venezuela's currency, the Bolivar. On Wednesday, it hit an all time low against the dollar. Venezuelans are short on basic commodities like gasoline and food. In all, the standoff is costing Venezuela about $50 million a day in lost revenue.
At times, the ongoing protests have turned violent. Monday, pro and anti-Chavez demonstrators clashed in the Caracas streets before being disbursed by tear gas. There have been several attempts to mediate the crisis this week. Cesar Gaviria, head of the Organization of American States, leads a group called the Friends of Venezuela; it includes the presidents of Chile, Brazil and Mexico as well as White House representatives. Former President Carter will resume his mediation efforts in Caracas on Monday. The Bush administration has had a strained relationship with Chavez. In April, the U.S. appeared to welcome a short-lived coup against Chavez who regained power after just two days. This week, opposition leaders welcomed the efforts at mediation.
CARLOS ORTEGA (Translated): Any type of initiative to reinforce not only Gaviria but the Carter Center and the negotiating process, we must look upon favorably.
RAY SUAREZ: But Chavez has stood firm. Yesterday, after meeting U.N. Secretary-Gen. Kofi Annan, he said a referendum in the near future would be nearly impossible.
RAY SUAREZ: For more we get three perspectives.
Arturo Valenzuela is the director of the Center for Latin American Studies at Georgetown University. During the Clinton administration he was deputy assistant secretary of state for Latin American affairs, and then senior director for Latin America on the National Security Council.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, an organization which promotes debate on economic and social issues.
And Amy Jaffe is the senior energy adviser for the James A. Baker Institute for Public Policy at Rice University.
Mark Weisbrot, you're just back from Venezuela. Describe the situation on the ground. What is life like there day to day?
MARK WEISBROT: Well, I was there for about the third week of the strike. It was very different from what people think of here. For instance, if you walked into the western part of Caracas where most of the people live, the poor and working class people, there was no sign of a strike at all. The streets were crowded with holiday shoppers. The buses and trains were running, the businesses were open and people were, who had jobs, were working.
And so then, of course in the western side where the wealthier area is, it was very... there were much more closures of businesses and things like that, it was very quiet.
So it was very divided and it is not really what people think here at all as a strike. It's more of a lockout. Businesses have closed down. The Central Labor Federation has called for a general strike but it's mainly the oil workers who have struck, and that's only 30,000 workers or so out of a labor force of, you know, 15 million.
And so this is really-- it's not so much of a strike as a business lockout, and an attempt to really overthrow the government by extra legal means.
This is something that people don't realize here because it hasn't been shown -- the other side of the story. But the opposition has lost five elections since 1998, including referenda, the constitution was approved. This is a democratically elected government, and the opposition tried a military coup in April. And that failed.
And so now they're trying to get rid of the government by weakening and crippling the economy, which they have severely damaged, and forcing the president to resign under those circumstances.
RAY SUAREZ: Arturo Valenzuela is Mark Weisbrot's portrait of today's Venezuelan one that convinces you and also might it be a hint as to why Chavez is standing even after all this upset?
ARTURO VALENZUELA: Well, I think it understates the degree of polarization in the society. And it also tends to minimize Chavez's own responsibilities for some of the conflict in Venezuela.
Chavez, I think, has squandered the chance... it is true that he came into office as somebody responding to frustration over corruption, over the fact that standards of living had declined. And he was supported by a very strong segment of the society.
But then as leader, however, you know, he took on a series of confrontational-type policies; he's aggravated the situation in the country.
Now where I tend to agree with my colleague is that this is a situation where it would be a mistake to say that all of the blame is on the Chavez side or on the opposition side. I think that both sides really do have an enormous amount of responsibility, and the international community looks at the situation in Venezuela with great concern at this particular point. And one would hope that one would find a peaceful solution, an electoral solution to the outcome in Venezuela.
RAY SUAREZ: Amy Jaffe, when the oil industry first slowed down and the oil flow came down to a trickle, Chavez promised that he would restart the industry. Has he been successful in getting the oil flowing again?
AMY JAFFE: Well, you know, people tend to talk about the oil industry the way they think about the light switch in their home, but it takes a tremendous amount of professional knowledge and experience to run something as complicated as oil refineries, oil storage terminals, oil ports and the oil fields.
And he has not been successful. I don't think he will be successful. Really, the only option open to him is to try to come up with a way to find a compromise.
RAY SUAREZ: And are we starting to see the effects of the Venezuelan crisis here in the United States?
AMY JAFFE: Well, I think that every American that has to buy gasoline for their vehicle has already started to see the effect. I think over time we are going to also see the effect and in the cold weather in parts of the country because heating oil prices are likely to rise.
And we've seen a really fundamental effect here in this country. There are three major refineries in the United States that are actually owned by the government of Venezuela, and their normal operations have been greatly crippled by this crisis, just in terms of their ability to post letter of credit, to find feed stock and to continue operations.
RAY SUAREZ: Even if the situation with oil workers and managers in Venezuela is settled, is there a certain amount of lead time you would need to get that industry up and running again?
AMY JAFFE: Well, indeed, like I said, it is not like a light switch, so I think we are facing possibly several weeks, maybe months before the Venezuelan industry could be returned to normal.
And the other thing that the Venezuelans face is that we're seeing some damage to facilities through accidents or through improper operation by non-professionals.
So there is going to be quite a lead time to getting Venezuela back to the kinds of export rates that we saw prior to the crisis and, indeed, it's going to cost them a lot more money just to stay back in the same place, much less be able to expand or advance their industry.
RAY SUAREZ: Well, Mark Weisbrot, you painted a portrait of a general strike, which is really an oil industry strike.
MARK WEISBROT: That's right.
RAY SUAREZ: Is the crux of the argument who owns the oil of Venezuela and who gets to say so?
MARK WEISBROT: Well, it is a government-owned company but you do have a conflict of interest between the managers of the company who are leading the strike, who want to keep as much money and revenue as possible within the company; they want to privatize the company; they want to invest overseas.
And the government is looking at it more as a state-owned company where the purpose, of course, from a public finance point of view is for the company to provide revenue for the government, so as to finance things like health care and education and other things.
So it's a very strong...and of course you have foreign corporations that have contracts with the PDVSA like Exxon-Mobil and they have a stake as well and the United States government... and that's one of the reasons I think the United States government supported the military coup in April is they want to privatize. They want the company to produce more oil.
Prior to Chavez, this company planned to... and the managers would like to produce six million barrels of oil a day, which would bust the OPEC quotas. So you have a very big conflict between the interest of the management of the company and the rest of society.
And I think the United States is a real problem in this whole situation because we talk about compromise being necessary. And our government has really encouraged the extremism among the opposition.
So the opposition is led by people who are very extreme. They can have an election in six months and it would probably take that long to arrange one. Right. The constitution of Venezuela provides for a recall election for the president midway through his term, which is August. But they won't settle for that at all. They want a referendum in just a couple weeks, which would be impossible to arrange in any case.
So the United States has encouraged this extremism. They supported the coup in April. And I think until you see a change of position from the U.S. Government, it is going to be very hard to reach a solution.
Last month, 16 members of Congress wrote to President Bush and asked him simply to state, asked the administration to state that they would not have normal diplomatic relations with a coup-installed government and the administration has not even done that.
RAY SUAREZ: The American involvement -- do you agree with Mark Weisbrot that they've really been push pushing hard on this plebiscite, which has only an advisory status?
ARTURO VALENZUELA: The position of the U.S. government has not been to push for a plebiscite or something like that. There have been some missteps. And I agree that the way the United States handled the situation in April was a mistake.
The United States appeared to be supporting the coup. This contributed to a lack of credibility in terms of U.S. policy. It made it much more difficult for the United States to follow the situation in Venezuela afterwards, and to address the problems.
But U.S. policy in terms... with regard to Venezuela has been to support the OAS mediation process, not to support a particular position. Now the White House did make a mistake about two weeks ago in appearing to be supporting the opposition by saying that it called for early elections. There have been missteps. There have been miscalculations.
And my sense is, having been in the previous administration and not being part of this administration, my sense is that what is happening right here is not so much a deliberate policy on the part of the United States to encourage opposition, to - deliberate policy on the part of the United States who want to try to get the oil out of Venezuela -- but rather a series of missteps, a lack of continuity in policy, a lack of clarity in policy due to the fact that the United States is really concerned about other areas of the world and not necessarily about Latin America.
RAY SUAREZ: Well, Amy Jaffe, one of the other areas of the world they're concerned about is the Persian Gulf. If a war starts in Iraq, does Venezuela suddenly loom larger, and its troubles delivering the oil suddenly become more critical?
AMY JAFFE: Well, there's no question that when one goes to war, one wants to have the maximum fuel supply available in the market and also war time in the Middle East, of course, is going to have a psychological impact on the oil market.
But I do believe that if you look at the course of American history, that security considerations, internal political deliberations in the United States have always taken precedence over things like oil markets and oil market reaction.
So I would expect that the decisions about the Middle East would be made on the basis of simply on the Middle East.
RAY SUAREZ: Amy Jaffe, gentlemen, thanks a lot.