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 Monday, 27 January, 2003, 02:23 GMT
Chavez fights strike fallout
Venezuelans hold a dancing protest in Caracas
Protesters want Mr Chavez to resign or call early elections
Venezuela's President Hugo Chavez is planning to impose price controls on a number of products in response to an eight-week strike which has led to some severe food and fuel shortages.

Venezuelan President Hugo Chavez waves to the crowd in Brazil
Chavez received a warm welcome in Brazil despite protests at home
Mr Chavez, speaking at the World Social Forum in the Brazilian city of Porto Alegre, said he would introduce the controls along with a national distribution system for essential food and medicine.

He added that his government was considering implementing a Tobin tax, a special levy aimed at discouraging speculation by making currency trading more expensive.

The controls are expected to come into force on Wednesday, when currency trading resumes after a five-day suspension of foreign currency dealings designed to halt a flight of capital.

Mr Chavez spoke as tens of thousands of Venezuelans seeking his removal from power danced on one of the main roads in the capital, Caracas, on the second day of their marathon rally against him.

Dancing in the street

The rally had been called in protest against a court decision to block a referendum on President Chavez's rule, whom opponents say is dictatorial and incompetent at managing the economy.

Woman waits in queue for gasoline
The strike has harmed oil output
They want him to resign or call early elections.

But President Chavez refuses to step down, saying his opponents are being manipulated by Venezuela's wealthy elite.

On Sunday, protesters took part in a huge aerobics workout. Many of them had spent the night on the road, where a mass party had been held until the early hours.

This rally has so far been peaceful, but at least six people have been killed in clashes between Mr Chavez's supporters and opponents since the strike began in December.

Under pressure

The strike has almost paralysed Venezuela's oil industry.

But there have been signs that the government has made some headway in breaking the oil stoppage, with latest shipping data showing that oil exports have increased.

As the political crisis continues, Venezuela is coming under increasing pressure to reach a diplomatic solution.

On Friday, the six-nation Group of Friends agreed in Washington to send a high-level mission to Venezuela this week to try to find a compromise.

US Secretary of State Colin Powell told his colleagues from Brazil, Chile, Mexico, Portugal and Spain that Mr Chavez should either hold early elections or call a referendum on his leadership.

Correspondents say as Venezuela is a strategic supplier of fuel to the US, Washington is particularly keen to end the crisis.

But they say the latest demonstration shows that there is little immediate sign of a solution.

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See also:

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