Tuesday, June 02, 2009

Chavez, Venezuela, & Socialism

Devaluation ups stakes in Venezuela election year
By Frank Jack Daniel and Eyanir Chinea
CARACAS, Jan 9 (Reuters) - Venezuelans rushed to the shops on Saturday, fearful of price rises after a currency devaluation that will let President Hugo Chavez boost government spending ahead of an election but feeds opposition charges of economic mismanagement.
In a bid to jump-start the recession-hit economy of South America's top oil exporter, Chavez on Friday announced a dual system for the fixed rate bolivar.
It devalues the currency to 4.3 and 2.6 against the dollar, from a rate of 2.15 per dollar in place since 2005, giving the better rate for basic goods in an attempt to limit the impact of the measure on consumer prices.
The opposition seized on fears that prices for imported goods will double as shoppers formed lines of more than a hundred people outside some stores in the capital Caracas.
"It was a Black Friday, tinted red," said sales executive Diana Sevillana in reference to the crimson color of Chavez's socialist party. She stood in a line of 30 people outside an electrical goods store in a middle class neighborhood.
The socialist Chavez believes the state should have a weighty role in managing the economy. During his 11 years in office he has nationalized most heavy industry, and business and finance are tightly regulated.
The devaluation is politically risky but means every dollar of oil revenue puts more bolivars in government coffers. That allows Chavez to lavish cash on social projects and fund salary increases ahead of parliamentary elections in September.
Opponents were quick to criticize the socialist, who a year ago promised the global financial crisis would not touch "a hair" of Venezuela's economy. He announced the devaluation on Friday night during an important baseball game.
"By establishing the exchange rate at 4.3 bolivars per dollar, the quality of life for Venezuelans is automatically devalued since we now have half the money we had before," said Caracas Mayor Antonio Ledezma, a Chavez opponent.
Blackouts, Water Shortages
Opposition parties, emboldened by public dissatisfaction at frequent blackouts and water shortages and a 2.9 percent economic contraction in 2009, hope to strip Chavez of his legislative majority in September.
The devaluation is embarrassing for Chavez, who resisted calls from economists and many government allies to make the move last year when oil prices were at their lowest and elections a long way off.
"Venezuela's decision to devalue the Bolivar culminates an event that the market has been anticipating for a long time," said Walter Molano, an analyst at BCP Securities. "It helps alleviate the country's fiscal woes and puts it on a sounder macroeconomic footing."
The measure is a relief for state oil company PDVSA, which has struggled to pay service providers and meet requirements to fund social projects since crude prices dropped sharply last year. It also makes Venezuelan businesses more competitive.
Holders of Venezuela's foreign debt are also pleased, since the devaluation improves government finances and lessens the need to issue more bonds.
However, Chavez risks taking a blow to his popularity ratings, which are about 50 percent, as prices for many products inevitably will rise in the country of 28 million people, which relies on imports for much of its consumption.
Finance Minister Ali Rodriguez said the devaluation will add 3 percent to 5 percent to inflation, already the highest in the Americas at 25 percent last year.
"The popularity of the government is obviously going to be sharply and negatively affected," said economist Pedro Palma. "The inflationary impact of the measure diminishes the real income of people. People can consume less."
The new two-tiered exchange system offers the 2.6/dollar rate for goods deemed essential including food, medicine and industrial machinery. Other products, including cars and telephones, will be imported at the higher 4.3 rate.
Last month, BMO Capital Markets cut ratings on Colgate-Palmolive Co (CL.N), Avon Products Inc (AVP.N) and Kimberly-Clark Corp (KMB.N) to "market perform" saying a possible devaluation in Venezuela could hurt the U.S. consumer goods makers' profits.
Economist Pavel Gomez of the IESA economic school said the new system will increase opportunities for graft in a country that already is corruption-ridden.
"Multiple exchange schemes are incentives for corruption, more so if they are applied in the Venezuela way," he said. "Those who have good contacts can buy at 2.6 and sell at 4.3."
Chavez, whose popularity usually rises in correlation with public spending, also said on Friday that the Central Bank had transferred $7 billion of foreign reserves to a development fund used to finance investment projects.
(Additional reporting by Hugh Bronstein in Bogota, editing by Vicki Allen)
34 radio stations forced off air in VenezuelaBy Fabiola Sanchez (AP) – Aug 3, 2009
CARACAS, Venezuela — Radio hosts hung their heads as their FM station was forced off the airwaves along with 33 other broadcasters targeted by President Hugo Chavez's government in what critics say is a campaign to muzzle his foes.
For the first time in decades, CNB 102.3 FM fell silent over the weekend after Venezuela's telecommunications regulators revoked some of the 34 stations' licenses and refused to renew others.
But CNB challenged the government action within hours by starting to transmit programming over the Internet. Sportscaster Juan Carlos Rutilo told his online listeners: "Today freedom of expression is being restricted. ... Today you have one less option."
Media groups and human rights activists note more than 200 other stations are under investigation for allegedly not being properly licensed and accuse Venezuela's leftist leader of pursuing a widening crackdown to silence dissent.
In a similar step, one of Chavez's leftist allies, Ecuadorean President Rafael Correa, announced Monday that "many" radio and TV frequencies will revert to the state over what he called irregularities in their licenses. He gave no specifics.
A majority of the stations affected in Venezuela aired criticisms of the government, though they were not overtly anti-Chavez and much of their programming ranged from American rock to salsa and traditional Venezuelan music.
In the country's polarized media landscape, CNB took a relatively balanced approach by interviewing pro-Chavez lawmakers while also having opposition politicians among its talk show hosts.
Venezuela still has many private radio stations and newspapers that take a hard line against Chavez and strongly criticize the government through both news reports and commentary. But in the last decade, the government has built a growing coalition of state-run media outlets, and some TV channels once virulently anti-Chavez have toned down their criticism.
The only stridently anti-Chavez television channel that remains on the open airwaves, Globovision, is facing multiple investigations that could force it off the air.
Tensions ran high at Globovision's studios Monday as government supporters, riding motorcycles and waving the flags of a radical pro-Chavez party, tossed tear gas canisters at the station.
The channel said one guard suffered a burned hand when he tried to pick up one of the canisters, and a police officer posted outside was hit in the head by a hurled object and required stitches. Globovision broadcast video showing clouds of tear gas outside the building as employees ran for cover. Two workers were treated after inhaling tear gas.
Globovision's director, Alberto Federico Ravell, condemned the violence and urged Chavez to control his backers. He said some of some of the armed assailants threatened security guards.
Justice Minister Tareck El Aissami condemned "this violent action against a television channel" and said authorities were investigating.
The telecommunications agency's decision to act against the 34 radio stations set off an outcry from press freedom groups and rights activists, who contend Chavez is trying to gradually push aside critical voices.
Hundreds of Venezuelan protesters gathered outside the CNB radio station over the weekend to express their outrage.
"I feel the country that I knew, where I was raised, is slipping away," said Alix Villareal, a 43-year-old maid who cried alongside other demonstrators. "I'm sad because little by little they are taking away everything, and nobody does anything."
Public Works Minister Diosdado Cabello, who heads the telecommunications agency, announced the decision to force the 34 stations off the air Friday, and denied the government is trying to punish critics.
Cabello said the stations violated regulations by failing to update their registrations or allowing their licenses to expire. Others held licenses granted to a person who is now deceased, he said.
"The state is retaking control of concessions that were being used in an illegal manner during more than 30 and 40 years," Cabello said. "It's an act of justice."
Chavez has defended the decision to sideline the radio stations as part of a "struggle against the media war, against the lies of the bourgeoisie and the oligarchy" — terms he frequently uses for his opponents.
It remains unclear what will become of the radio frequencies that have been vacated. Chavez has suggested some could be handed over to create "popular radio in the hands of the people."
While some of the 34 stations are now transmitting over the Internet, most have simply shut down and are mulling their next move.
Five of the 10 stations owned by CNB president Nelson Belfort lost their licenses. The broadcaster's revenues are expected to tumble, putting the jobs of its 200 employees at risk, CNB vice president J.J. Bartolomeo said in an interview at the station's offices in Caracas.
The station "is looking at all the possible alternatives so the impact is reduced," he said.
Belfort, who also heads the Venezuelan Broadcasters Chamber, complained that the telecommunications agency didn't allow for due process. "We didn't have a right to defense," he said.
Jose Miguel Vivanco, the Americas director for Human Rights Watch, accused Chavez of leading "a frontal attack on freedom of expression," saying Venezuela's government is trying to stifle dissent.
Vivanco condemned a proposal now being discussed by Venezuelan lawmakers to punish yet-to-be-defined "media crimes" with up to four years in prison. In a statement last week, he called the proposal "a recipe for censorship."
Chavez accuses US of assassination plot
Big News Network.com
Wednesday 3rd June, 2009
President Hugo Chavez has alleged that US intelligence agencies have been planning his assassination. Mr Chavez said the supposed conspiracy had kept him from visiting El Salvador to attend the inauguration of leftist President Mauricio Funes in El Salvador on Monday. He said he cancelled because of information he had received that the intelligence organisations of the United States had been plotting with Cuban militant, Luis Posada Carriles, to murder him by firing rockets at his official plane. Posada is a former CIA employee and opponent of former Cuban president Fidel Castro. He has been accused of plotting the 1976 bombing of a Cuban plane off Barbados that killed 73 people on board. The Chavez administration in Venezuela has been trying to extradite Posada from the US, saying he had been living in Venezuela when the Barbados terror plot was carried out.
Venezuela Chavez says "Comrade" Obama more left-wingTue Jun 2, 2009
CARACAS (Reuters) - Venezuela's President Hugo Chavez said on Tuesday that he and Cuban ally Fidel Castro risk being more conservative than U.S. President Barack Obama as Washington prepares to take control of General Motors Corp.
During one of Chavez's customary lectures on the "curse" of capitalism and the bonanzas of socialism, the Venezuelan leader made reference to GM's bankruptcy filing, which is expected to give the U.S. government a 60 percent stake in the 100-year-old former symbol of American might.
"Hey, Obama has just nationalized nothing more and nothing less than General Motors. Comrade Obama! Fidel, careful or we are going to end up to his right," Chavez joked on a live television broadcast.
During a decade in government, Chavez has nationalized most of Venezuela's key economic sectors, including multibillion dollar oil projects, often via joint ventures with the private sector that give the state a 60 percent controlling stake.
Obama has vowed to quickly sell off General Motors once the auto giant is back on its feet, but the government will initially control the company after a $30 billion injection of taxpayer funds.
Chavez, a vehement critic of the U.S. "empire," has toned down his rhetoric since Obama took office in January and the two men shook hands during a summit in Trinidad and Tobago in April. (Reporting by Enrique Andres Pretel; Writing by Frank Jack Daniel, Editing by Jackie Frank)
Venezuela: ‘When the working class roars, capitalists tremble’by Federico Fuentes
Global Research, May 31, 2009
Addressing the 400-strong May 21 workshop with workers from the industrial heartland of Guayana, dedicated to the “socialist transformation of basic industry”, Venezuelan President Hugo Chavez noted with satisfaction the outcomes of discussions: “I can see, sense and feel the roar of the working class.”
“When the working class roars, the capitalists tremble”, he said.
Chavez announced plans to implement a series of radical measures, largely drawn from proposals coming from the workers’ discussion that day.
The workers greeted each of Chavez’s announcements with roars of approval, chanting “This is how you govern!”
Chavez said: “The proposals made have emerged from the depths of the working class. I did not come here to tell you what to do! It is you who are proposing this.”
Nationalisation and workers’ control
To the cheers of the workers, Chavez announced the nationalisation of six iron briquette, ceramics and steel companies, one after the other.
He said this started “a process of nationalisations” aimed at creating an integrated basic industry complex as part of building socialism.
Chavez also said it was necessary for there to be workers’ control along “the entire productive chain”. Plans for the industrial complex had to be “nourished with the ideas of the working class”.
Throughout the day, workers from local steel, aluminum and iron companies raised demands for greater worker participation in managing production, more nationalisations, and the need to sack corrupt and counterrevolutionary managers.
The workers were affiliated to the Socialist Workers’ Force (FST), which organises unionists in the United Socialist Party of Venezuela (PSUV — the mass revolutionary party led by Chavez).
Saying this new phase would have to be “assumed with responsibility”, Chavez called on the workers to wage an all-out struggle against the “mafias” rife in the management of state companies.
Chavez said he would approve a new law to allow workers to elect state company managers.
“Every factory should be a school, in order, as Che said, to create not only briquettes and sheets and steel and aluminium, but also, above all, new men and women, a new society, a socialist society”, he said.
Chavez also called for workers to organise an armed militia. Worker battalions in each factory should be equipped with weapons “in case anyone makes the mistake of messing with us”.
Post-referendum offensive
These moves are part of a push to deepen the Venezuelan revolution after the February 15 referendum that voted to remove restrictions on the number of terms public officials could stand for election.
At stake was the future of the revolution. Its central leader, Chavez, was unable to stand for re-election in 2012 under pre-existing regulation limiting a president to two terms.
The referendum initiative followed the November regional elections, in which the PSUV won a majority of governorships and mayoralties, yet lost some key states to the right-wing opposition. The opposition used newly won offices to launch an assault on grassroots organisations and the government’s pro-poor social programs.
The referendum was part of a counter-offensive to strengthen the organisation of the revolutionary forces and win another mandate for the revolution’s radical program.
As part of the campaign, around 100,000 “Yes committees” were organised in factories and communities across the country. The “Yes” campaign, which won nearly 55% or 6.3 million votes, was a decisive mandate to deepen the revolution.
The campaign raised the level of organisation among the revolution’s base — workers, students, peasants, the urban poor and other sectors.
After the referendum, Chavez called for the restructuring of the PSUV. The Yes committees were to be converted into “socialist committees” as grassroots units of the party.
Special emphasis was put on strengthening the social fronts.
In early May, Chavez reshuffled the PSUV regional vice-presidents, appointing those seen as his closest collaborators.
Attacks on capitalWith this momentum, the government gave clear signals of how it intended to fight the global economic crisis and falling oil prices.
Rather than a pact with the capitalist class, as some within the revolutionary movement had called for, Chavez launched an offensive — with state intervention into, and in some cases expropriation of, capitalist firms.
This followed previous nationalisations in oil, steel, telecommunications, electricity, and other industries. This is part of ensuring state ownership over strategic sectors of the economy, to direct such sectors towards social needs.
Rice-producing factories owned by Polar, Venezuela’s largest company, were temporarily taken over by the military in February after it was found the company was deliberately evading government-imposed price controls.
Under Venezuelan law, food companies are obliged to direct 70% of production towards selected products at a set price. This is to ensure enough affordable food is available to the poor.
Venezuelanalysis.com said on March 11: “During a recent surge in land reform measures, Venezuela’s National Institute of Lands (INTI) [took] public ownership of more than 5000 hectares of land claimed by wealthy families and multi-national corporations.”
INTI said it would review tens of thousands more hectares as part of its drive to ensure fertile land is directed towards food production for social needs, rather than corporate profits.
On May 7, the National Assembly passed a law ensuring state control over a range of activities connected to the oil industry, previously run by multinationals.
The next day, “the government expropriated 300 boats, 30 barges, 39 terminals and docks, 5 dams and 13 workshops on Lake Maracaibo, where there are large crude oil reserves”, a May 9 Venezuelanalysis.com article said.
On May 20, it nationalised a gas compression plant in the eastern state of Monagas under the same law.
Five days before, the government took over a pasta processing plant owned by US multinational Cargill after government inspectors found it was not producing price-regulated pasta as required.
Food vice minister Rafael Coronado said that after the 90-day intervention period, inspectors “together with the workers, the communal councils” would decide what to do with the company.
Revitalised working classOn April 30, announcing plans to expropriate the La Gaviota sardine processing plant, Chavez told a gathering of workers that “wherever you see a private company, a capitalist company that is exploiting the workers and is not complying with the laws, that is hoarding, denounce it, because the government is willing to intervene”.
La Gaviota had been shut for two and a half months by workers’ protests demanding the boss comply with the collective contract.
The same day, the government and workers took over the Cariaco sugar processing plant, the scene of similar protests.
Some of the companies Chavez said would be nationalised on May 21 have also faced industrial disputes.
Chavez had previously threatened to nationalise Ceramicas Carabobo if the bosses refused to come to an agreement with the workforce. Workers at Matesi had called for the company be nationalised due to the unwillingness of management to sign a fair collective contract.
Matesi and Tavsa were part of the previously state-owned steel production complex, Sidor, before being sold off separately in the 1990s to Techint, an Argentine company.
After a 15-month dispute over the signing of a collective contract, the government nationalised Sidor, which was majority owned by Techint, decrying the “colonialist mentality” of the bosses overseeing super-exploitative conditions.
However, in Matesi and Tavsa, negotiations over collective contracts continued. Inspired by the Sidor example, where a collective contract was signed after nationalisation, Matesi workers demanded their factory also be nationalised.
This increase in industrial militancy has resulted in a number of factory occupations. This includes the Tachira-based coffee processing plant Cafea, which was closed by its bosses.
Its workforce, together with unions and the local community, have occupied the plant and are demanding it be nationalised.
Venezuela: Stop Harassing TV StationVague Law Threatens Press Freedom
Human Rights Watch

May 21, 2009
(Washington, DC) - The Chávez government should immediately stop harassing a private television station that has been critical of the government and call off an unwarranted investigation into its conduct, Human Rights Watch said today.
In response to Globovisión's coverage of a May 4, 2009 earthquake, the National Telecommunications Commission (CONATEL) has opened an investigation into the station, citing quake coverage that "could generate alarm, fear, anxiety or panic in the population." Referring to the earthquake in a May 10 television and radio address, President Hugo Chávez publicly accused the private media of "inciting hate - even war," and warned them "not to make a mistake" because "they are playing with fire."
"The Chávez government is once again abusing its broad regulatory powers to harass its critics," said José Miguel Vivanco, Americas director at Human Rights Watch. "There is simply no justification for sanctioning a TV station for reporting on an earthquake."
On the morning of May 4, the privately owned Globovisión reported that an earthquake had struck near Caracas. After several unsuccessful attempts to obtain a response from the relevant government authorities, the broadcaster based its reporting about the magnitude and epicenter of the quake on information provided by the US Geological Survey. In the course of its coverage, Globovisión's director repeatedly urged viewers to stay calm and wait for official information from the government.
In response to Globovisión's coverage, the minister of interior and justice, Tarek El Aissami, said in an interview on state television that Globovisión's director "answers to the interests of the United States." In a news conference on May 16, Chávez warned, "We cannot allow the media to continue with their politics of terrorism."
CONATEL is investigating Globovisión for alleged infractions of the Law on Social Responsibility in Radio and Television, which was signed by Chávez government in 2004. Under the law, broadcast media can face suspension and ultimately revocation of their licenses for broadcasting material deemed to "promote, justify, or incite" war, breaches of public order, or crime.
As Human Rights Watch documented in its report, "A Decade Under Chávez", the broad and imprecise wording of the law, the severity of its penalties, and the fact that it is enforced by an executive branch agency all increase the broadcast media's vulnerability to arbitrary interference and pressure to engage in self-censorship. Venezuelan officials have repeatedly invoked these provisions in warnings issued to television stations at moments of political tension, and in circumstances in which their application would have been unjustified and hence an arbitrary interference in freedom of expression.
The Chávez government has also repeatedly abused its control of broadcasting frequencies to punish stations with overtly critical programming. In May 2007, for example, Radio Caracas Televisión (RCTV) lost its concession after Chávez announced at a nationally broadcast military ceremony the concession for RCTV would not be renewed because of its alleged support for an April 2002 coup. Neither this accusation nor an alleged breach of broadcasting standards was substantiated in a proceeding in which RCTV had an opportunity to present a defense. At the same time, the government renewed the concession of Venevisión, a rival channel that Chávez had also repeatedly accused of involvement in the coup but that had since cut its overtly anti-Chávez programming.
Globovisión, the only remaining channel on the public airwaves that continues to maintain an openly critical stance toward the Chávez government, is currently under investigation for two other instances in which it allegedly violated the Social Responsibility Law. In one instance, a guest commentator predicted that Chávez could "end up like Mussolini." In the second, Globovisión broadcast the victory speech of an opposition governor before the government had announced the election results.
"The threats by the Chávez government reveal the risk of abuse in such a vaguely worded law. As in the case of Globovisión, it can be used by the government at will to intimidate its critics," said Vivanco.