In Venezuela's General Strike, the Pinch Becomes Pain

Juan Forero

December 10, 2002

EL HATILLO, Venezuela, Dec. 9 - Eight days into a grueling national strike against President Hugo Chávez, businesses like the sprawling Hannsi folk art market in El Hatillo, a colonial town outside Caracas, are feeling the pain.

During the lucrative Christmas season, as many as 700 people usually can be found filling its 3,000 square yards of space, browsing through pottery, intricately painted Indian masks, carefully woven hammocks and giant sculptures made from rare red woods. But today, the lights were dim, and the only people inside were the general manager, Javier Martín, and a couple of workmen.

The store, like hundreds of thousands of businesses across this country, has been shuttered since Dec. 2 as a growing opposition movement continues a national strike that is punishing both the country's left-leaning leader and the very businesses that are taking part.

"This is a maximum sacrifice," said Mr. Martín, explaining that, while he supports the strike, the loss of what might have been $60,000 in sales in one holiday season week means the store can stay closed only another week or two. "After that, I think we could suffer a complete collapse."

The costs are indeed high as businesses of all kinds - from restaurants to malls to banks to Venezuela's crucial oil industry - adhere to a strike intended to force Mr. Chávez into agreeing to an early election or resigning. The shutdown in the oil industry, which government opponents say has greatly reduced exports, is costing upward of $70 million a day, while economists say the internal economy may be contracting by $250 million daily.

Today, as the strike organizers extended the national walkout yet another day, those taking part received a big morale lift as private banks said they were closing, treasury and customs agents announced their participation and boat pilots on the Orinoco River halted their transport of aluminum and iron.

Gasoline in Caracas and other cities was increasingly scarce, many domestic flights were canceled, and alarmed shoppers stocked up in supermarkets. The Venezuelan subsidiary of the Ford Motor Company said operations that churned out 100 cars a day had been closed down since Wednesday for lack of supplies.

"What threatens us is a true national disaster," Ali Rodríguez, the president of the state oil company, said tonight in a nationally televised address.

What is happening here is a war of attrition, as businessmen hunker down and swallow tremendous losses while a defiant president struggles to operate the sprawling petroleum industry and to return some measure of normality to a battered economy.

But Mr. Chávez faces what political analysts have called a nearly impossible situation. He does not have the workers with know-how to staff oil installations, and an increasing number of people are announcing that they are joining the strike. The economy is already in a tailspin, with American economists predicting it could contract by more than 6 percent by the end of this year.

"This is a waiting game," said Ricardo Hausmann, an economist at Harvard and former planning minister in Venezuela. "It is expensive to hold out, but it is not clear that Chávez can hold out either. This happens in all wars. If you knew you were going to lose, you would not get into it."

Indeed, while Mr. Chávez has played down the strike - he has repeatedly mocked his opponents, asking, "What strike?" - those participating said they were more determined than ever to hold out until the government made major concessions. They contend that Mr. Chávez's left-leaning policies are taking the country to economic ruin.

"I do not want to close for another day, but we have to do it," said Flavio Fasano, who estimates that he has lost $6,000 by closing his dry cleaning stores for the strike. "We have to put up with this until the end. We are losing, but we have to think about the future."

In Washington, Ari Fleischer, the White House spokesman, expressed support for talks mediated by the Organization of American States. "We call on all sides to act responsibly, continue to support the dialogue process and reject violence," he said.

The two sides met today to discuss the possibility of an electoral way out of the crisis, a path the opposition wants in order to avoid having to wait until the next presidential election, in 2006.

Some businessmen were unable to hold out. Octavio Araujo, owner of the Mío Café, which does a brisk lunchtime service in central Caracas, said he reopened because creditors were demanding payments.

"We believe in the strike, and we stopped for four days, but we cannot continue because we have too many obligations," Mr. Araujo said.

Still, the strike itself has caused many businesses to remain closed simply because supplies are nowhere to be found. The strike has prompted a cascading effect across the economic chain.

"They don't have raw materials, they don't have this, and they don't have that," said Robert Bottome, editor of Veneconomía, a business newsletter. "You have food markets open, guaranteeing basics. But this 70 percent stoppage, plus the petroleum industry shutdown, means it could go on for a very long time."

Here in El Hatillo, at the Furniture House, the owner is prepared to ride out the strike to see Mr. Chávez back down.

Sitting surrounded by expensive cabinets, chairs and tables, the owner, Gloria Mugarra, acknowledged that two more weeks could severely affect her business. But she was prepared to keep her doors closed. "What can we do?" she asked. "We have to hold on or else we will never get rid of this man. This week we will see what happens."