December 2002 - General Strike

The Venezuelan opposition began a general strike against President Hugo Chavez on 02 December 2002. The aim was to intensify street protests in an attempt to force the president to bring forward elections. The opposition decided - to the surprise of many observers - to continue extending its strike day-by-day. In mid-December, the strikers shut down a large portion of the country's oil industry, drastically reducing the production of Venezuelan oil and its delivery to internal and external markets. President Chávez declared the strikers' demands unconstitutional and enlisted the help of the military to maintain production. By mid-December government efforts to free the country's oil industry from the clutches the national strike had provoked protests from petroleum workers and Venezuela's merchant marines. President Chavez fired 16,000 of the striking workers and had replaced them with workers loyal to his government.

On 13 December 2002 The White House said that it wanted Venezuelan President Hugo Chavez to call early elections to end the political crisis that had paralyzed the country's vital oil industry. White House spokesman Ari Fleischer said the United States was convinced that early elections are the only peaceful and politically-viable way out of Venezuela's political crisis. "The United States believes that this is the best course to preserve peace in Venezuela, a society that had been wracked on an increasingly-daily basis with violence. And the president believes that the solution to issues that could potentially involve violence is to defuse the violence and focus on democracy."

Diplomats from the United States, Brazil, Chile, Mexico, Spain, and Portugal, the so-called "friends of Venezuela," pressed for a solution, based on proposals set forth by former US President Jimmy Carter on 21 January 2003. Under the Carter plan, there would either be a recall referendum in August 2003, or a change to the constitution that would allow for early elections.

By February 2003, after nearly two-months, the opposition strike in Venezuela began showing signs of weakening, but the divide between those who oppose and those who support President Hugo Chavez remained wide. The general strike that shut down almost all commerce in Venezuela since 02 December 2002 was starting to come undone. Little by little, merchants are opening their doors, or expanding hours of operation, if they were already open. Owners of shopping centers, theaters and other popular destinations say they expect to open soon.

The strike cost Venezuela more than $4 billion, and the economy was expected to show a 25-percent contraction this year as a result. The nation's currency, the Bolivar, lost nearly 30-percent of its value. Oil production in this, the world's fifth-largest producer, fell as low as 200,000 barrels-a-day in January 2003. By the end of January, the government managed to move production back up to about 1,000,000 barrels-a-day, but that was still only about a third of what used to be produced.

Since January 2003, President Chávez had expanded his administration's control over the economy by banning foreign-currency trading and imposing price controls on a number of products. Chávez had also been pressuring the Venezuela's central bank to reduce interest rates, and had indicated that he would like to restructure external debt under more favorable terms.

Although the general work stoppage ended on February 3, 2003 in non-oil sectors, there had been no resolution of the strike in Venezuela's oil sector, after six months. As of May 2003, Venezuelan crude oil production was widely believed -- by striking workers and independent analysts -- to be around 2.6 million barrels per day.

The opposition umbrella group, known as the Democratic Coordinator, long insisted the country could not endure the controversial leadership of populist President Hugo Chavez until August 2003, when his six-year term reached the three-year mark. They accused the president, among other things, of seeking to impose an authoritarian regime, of repeatedly violating the constitution and of destroying the economy. Despite staging a devastating, two-month long strike and business stoppage, which paralyzed the country's vital oil industry, in a bid to force the president to resign or hold an early vote, the opposition was eventually forced to give in.

After months of talks among Venezuelan government, the opposition, and diplomatic representation led by the "Group of Friends," which includes Brazil, Chile, Mexico, Portugal, Spain and the United States, the Organization of American States (OAS) and the Carter Center, relevant parties were unable to reach an agreement to stage a referendum in 2003.