Venezuela Headlines #75

By Anonymous (not verified), 4 March, 2009
Michael Fox

Venezuelanalysis News Summary #75 (8min, 37sec, English)

Venezuela Solid Despite Global Crisis - Venezuelan Government Takes Over Rice Plants that Evade Regulated Prices - Venezuela Inaugurates Water Pump and Commune - U.N. Food and Agriculture Organization Says Venezuela Prepared for World Food Crisis - Venezuela Rejects U.S. Human Rights Report - Venezuela and Bolivia to Collaborate on Natural Gas Plant

I. Venezuela Solid Despite Global Crisis, Says Finance Minister
Venezuelan Finance Minister Alí Rodríguez announced last week that Venezuela is in a strong position to weather the global financial crisis for at least three years if oil prices remain at their current level. Rodríguez said Venezuela's bi-national investment funds with China and Iran, its more than $40 billion in international reserves, and the nearly $60 billion already earmarked for projects through its National Development Fund will help the country sustain its growth in coming years. He reiterated the government's commitment to continuing it's extensive public works and social programs, saying quote, "The socialist policies of the national government do not depend on the price of oil." Rodríguez suggested possible adjustments such as the devaluation of Venezuela's currency and an increase in domestic gasoline prices, but said such changes would have to be considered with great caution. Rodríguez said a key component of the government's economic policy in coming years will be to increase national food production, with necessary public-private sector collaboration. Venezuela's greatest vulnerability will be volatile oil prices, which sank from last July's peak of $150 down to an average of less than $40 this year. Oil accounts for more than 90% of Venezuela's exports, and the government's 2009 budget is based on an estimated $60 average price per barrel of oil. To stabilize the price of oil, Rodríguez affirmed that Venezuela will propose an OPEC supply reduction, at their meeting this month in Vienna. If the idea is accepted, it will be the third OPEC supply reduction in the last six months.

II. Venezuelan Government Takes Control of Rice Plants that Evade Regulated Prices
As of last Saturday, the Venezuelan government has temporarily taken over the administration of a rice processing plant in Guárico state, that is owned by Venezuela’s largest food producer, Polar. Inspections by the National Institute in Defense of People’s Access to Goods and Services last week, revealed that the plant was operating at half its capacity, and adding artificial flavoring to 90% of its rice in order to evade government price controls, which only apply to essential, unenhanced food items. In a press conference this Monday at the Plant, Director of the National Institute, Eduardo Samán announced that the workers had begun processing 100% unmodified rice at the plant, disproving the claims of Polar executives that state intervention would paralyze production. Government officials will administer the plant for up to 90 days and hold discussions with private owners and the workers to resolve the problems in production. The government plans to inspect two large rice processing plants in the Venezuelan state of Portugesa this week. On his weekly presidential talk show Sunday, Venezuelan President Hugo Chávez warned that if rice processers attempt to shutdown their plants to protest the state’s intervention, we will, quote, "expropriate all of their plants, and convert them from private property into social property.” The Venezuelan constitution guarantees indemnity in the case of expropriation. The government implemented price controls on a basket of essential food items more than five years ago and built a network of state-owned food producers and distributors to sell food at regulated or subsidized prices. In the last two years, it has adjusted prices to be in line with inflation without permitting excessive profit margins through price speculation. The Chávez administration has invested heavily in agricultural production to diversify Venezuela’s oil-dependent economy. The government has also nationalized or purchased a controlling share of several strategic sectors of the economy over the past two years, including electricity, steel, cement, and oil.

III. Venezuela Re-Takes Course Toward Socialism With Inauguration of Water Pump and Commune
On his weekly presidential talk show Aló Presidente, last Sunday, Venezuelan President Hugo Chávez unveiled a new state-owned industrial water pump and pipeline in Aragua state that will improve agricultural irrigation and allow the restoration of one of Venezuela’s largest fresh water lakes. According to Chavez, the pump will transfer up to 3,000 liters of water per second from the Taiguaiguay Lagoon through a 6 kilometer pipeline to farmlands in the Tucutunemo Valley. This will allow the restoration of the water level in nearby Lake Valencia, which has suffered from insufficient sewage treatment in nearby cities and irrigation based on what Chavez called quote, “the irrational exploitation of the capitalist development model.” To stimulate an alternative model of farming in the Tucutunemo Valley, the Ministry of Agriculture distributed $700,000 worth of Argentine tractors, plows, seeders, and fertilizers to local farming cooperatives. Chávez said his government would install and equip “socialist agrarian communes” in the valley, based on new economic structures outlined in agrarian laws passed by the Chávez government last year. The Venezuelan president said these initiatives mark the beginning of a new era, in which Venezuela’s “Bolivarian Revolution” will be strengthened. Chavez also called for Venezuelans to be alert to the ways the private media manipulates information about the government’s projects.

IV. U.N. Food and Agriculture Organization Says Venezuela Prepared for World Food Crisis
Last week, Francisco Arias Milla, representative in Venezuela of the United Nations Food and Agriculture Organization, said the Venezuelan government’s investment in domestic food production and regional food security will strengthen its ability to withstand the worsening global food crisis. Arias highlighted numerous Venezuelan policies which have increased food access to vulnerable sectors of society, such as
Venezuela’s subsidized food market, Mercal, its growing system of public cafeterias, and the state-run Food Distribution company, PDVAL, which sells food at regulated prices. Arias also praised the increase of state investment in the agricultural sector, efforts to organize producers, the expansion of citizen access to arable land through land reform, and the promotion of family farms under the administration of President Hugo Chávez. Venezuelan agricultural production rose by 3% last year, bringing the total increase in agricultural production to 24% since Chávez took office a decade ago. The FAO predicts the world food crisis will only worsen over the next two years.

V. Venezuela Rejects “Interventionist” U.S. State Department Human Rights Report
Last week, Venezuela's Foreign Relations Ministry called Washington's recent global human rights report "false, interventionist, and of malicious intent." Last Wednesday, the U.S. State department issued the lengthy report, which evaluates civil, political, and worker rights in more than 200 countries. It includes allegations against Venezuela such as the quote, "erosion of both democratic and human rights, with potentially severe consequences." The report denounced inhumane prison conditions, extra-judicial executions by police officers, and claimed that Venezuelan pro-government media have promoted anti-Semitism. Venezuela's Foreign Affairs Ministry, called the report, quote "baseless and an expression of anti-Venezuelan opinions of those who... refuse to accept that Venezuela is in charge of its own destiny." The ministry also questioned the legitimacy of the report, from which the U.S.'s own human rights record was omitted. They said, quote, "the country with the darkest record of violations and assaults on human dignity in contemporary history pretends to set itself up as the judge of other states, without any legitimacy or mandate." Speaking before the National Assembly last Thursday, Venezuelan Foreign Minister Nicolás Maduro called on the U.S. to cease its attacks on Venezuela, and emphasized the need for a "mulit-polar" world. In the weeks leading up to the election of U.S. President Barack Obama, Venezuelan President Hugo Chávez had repeatedly expressed his desire to renew and improve diplomatic relations with the United States. Relations soured after the U.S. supported a coup against Chávez in April 2002, and froze last September after the governments of Venezuela and Bolivia denounced the involvement of U.S. officials in plots to overthrow their democratically elected governments.

VI. Venezuela and Bolivia to Collaborate on Natural Gas Plant
Bolivian President Evo Morales announced last week that Venezuela will assist Bolivia in the construction of a liquid gas separation plant in the Chaco region of Bolivia’s southeastern Tarija province. The new gas plant is part of Bolivia’s planned industrialization of its domestic hydrocarbon industry, which may also include petro-chemical production. Bolivia and Venezuela created the joint venture, Petroandina, last year to develop oil and natural gas production in Bolivia. The company is part of an economic cooperation initiative called the Bolivarian Alternative for the Americas (ALBA), which proposes “People’s Trade Agreements” as an alternative to the free trade promoted by the United States. ALBA was initiated by Venezuela and Cuba. Other member countries now include Bolivia, Nicaragua, Honduras, and Dominica, with Ecuador as an associate.