VIO News Blog

March 24, 2009

Venezuelan Economy Adjusts to Oil Prices

After President Chavez on Saturday announced a series of economic measures to adjust for lowered oil prices, the Associated Press reports that on Monday several analysts warned that the steps would not be enough to tackle the more serious economic problems of inflation and slowed growth. Reuters quotes a Morgan Stanley analyst as saying that, after several years of record economic growth, Venezuela’s economy will likely contract by 4% this year.  However, with over $70 billion in foreign currency reserves, Venezuela is sticking to its plan to invest $20 billion in non-oil sector development projects this year.

Meanwhile, Bloomberg reports that Venezuela’s Bolivar strengthened on Monday in the parallel market after Chavez ruled out a currency devaluation.

The AFP reports that President Chavez denied rumors of a rift between Raul Castro and himself, and described such talk as “a little campaign.” The rumor of such a rift was promoted by former Mexican foreign minister, Jorge Castaneda, who later signaled that he has absolutely no evidence to back up his claim.

Honduran president Manuel Zelaya has proposed that the nation’s charter be re-drafted in order to adapt to the “substantial and significant changes” that have occurred since the adoption of the current constitution in 1982. Zelaya wants voters to decide by June 24th whether a constitutional assembly should be convoked. The move would follow in the footsteps of other countries in the region such as Venezuela, Bolivia, and Ecuador.

In an op-ed distributed by the Jewish Telegraph Agency, Angelo Rivero Santos, the charge d’affaires of the Venezuelan embassy in Washington, responds to allegations of anti-Semitism directed at the government of Venezuela.   Rivero states that “Venezuela’s Jewish community is an integral and essential part of our country’s singularly diverse society.” Given President Chavez’s efforts to fight racism and discrimination,  accusations of anti-Semitism have been “especially painful for the government of Venezuela.”  But Rivero signals that these accusations have been made primarily by organizations based outside of Venezuela and that an organization representing Venezuelan Jews has rejected the claims and expressed disappointment at not having been consulted beforehand.

Finally in an interview by Fareed Zakaria, President Lula da Silva of Brazil was questioned about why his government does not speak out against how Hugo Chavez has “destroyed democracy in Venezuela.” Da Silva responded by stating that “…no one can say that there is no democracy in Venezuela. He (Chavez) has been through five, six elections. I’ve only had two.”  There have in fact been fourteen national elections in Venezuela since Chavez first came to power in 1998, all of which have been characterized as free and fair by independent electoral monitoring groups.

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February 12, 2009

Chavez Supporters Encourage Voter Turnout in Referendum

Encouraging voter turnout is the top focus of campaigning among Chavez supporters, according the BBC today. One volunteers said: “Many claim victory too early and don’t actually go out to vote. …Our job is to mobilise people and show them the importance of this referendum for our revolution.” While pro-Chavez campaigners go door-to-door, the BBC reports that the “no” campaign has relied on TV commercials on private channels, emails, text messages, and distributing pamphlets in the street.

President Chavez spoke of an attempted coup yesterday, but stressed that “The country must remain calm. It has a government that is alert and a good guardian and capable of stopping this outrage.” Bloomberg reports that Chavez said some soldiers were arrested and weapons seized.

The Washington Post and Wall Street Journal report on municipal politics in Caracas. Both report on claims made by the city’s municipal mayor, Antonio Ledezma, whom the Journal points out is “a member of the [pre-Chavez] political elite” and had the same job 17 years ago, back when mayors were presidential appointees. Ledezma accuses the Chavez government of funding citizen groups to intimidate the opposition, a position he used to justify firing several thousand city workers others say were legitimate.

A number of false claims about the Chavez government have been made in the lead-up to the national referendum on Sunday, the worst perhaps being allegations of anti-Semitism that were spread again today by the Washington Post. An editorial wrongly states that the Chavez government has found a “new enemy” in the country’s Jewish community, when in fact concrete steps have been taken to clarify and improve relations with Jews. The Post conveniently forgets that Chavez recently signed a declaration against anti-Semitism and twice arranged meetings with Jewish leaders. Not long ago, he said the country’s Jewish community “is a big part of the Venezuelan family.”

Also ahead of Sunday’s referendum, USA Today offers a laundry list of problems in Venezuela, trumping up fears of an economic crisis that certainly is not unique to that country. Meanwhile, a Washington Times opinion piece weighs in with characteristic inaccuracy, claiming that Venezuela will become a dictatorship if the majority of voters approve the amendment to allow holders of public office to run for reelection more than once. It also claims fraud will occur, though all electoral observers agree that it never has under Chavez. Regular free and fair elections will continue to occur regardless of the referendum result.

January 15, 2009

Venezuela’s National Assembly Votes in Favor of Referendum

Lawmakers in Venezuela’s National Assembly voted 156 to 6 in favor of holding a national referendum on the issue of term limits. AFP reports that one lawmaker explained he supported the amendment “so that all legally able citizens can run for election and the people can choose from them without limitations of any kind.”

AFP reports that President Chavez said his intention is not to remain in office indefinitely. He said: “What we have here is a national independence project that still needs more work to consolidate. It’s not consolidated yet.” The referendum will likely occur on February 15th.

The AP and AFP report that Venezuela’s Foreign Ministry announced yesterday a formal break in diplomatic ties with Israel, citing “inhumane persecution of the Palestinian people.” A statement quoted by AFP says: “Israel has systematically ignored United Nations (ceasefire) calls, repeatedly and unashamedly violating approved resolutions…and placing itself increasingly outside international law.” Bolivian President Evo Morales also cut ties with Israel, saying its attacks “seriously threatened world peace.”

A contradictory report from the New York Times states that Venezuela is “quietly courting” foreign firms to help exploit the Orinoco Belt oil projects nationalized in 2007. Bidding by private investors like Chevron, Shell, Total, and BP is presented as a something Chavez was forced to do after oil prices crashed, but in fact, the article states that it began when oil prices were high. Several foreign firms have remained on throughout the nationalization. To bring the Orinico Belt oil projects under the rubric of national control established in 1976, Venezuela’s PDVSA is simply purchasing the majority of shares.

Finally, in international relations, a letter in the International Herald Tribune asks Obama to take “a new approach to Chavez,” for “many Latin Americans see him as the symbolic voice for those who Washington has all too often ignored.” The letter states that Venezuela should at least be treated as a “legitimate business partner.”

January 12, 2009

Venezuela Sends Heating Oil to US, Medicine to Gaza

“No, it was never suspended,” President Chavez said Saturday in reference to Venezuela’s home heating oil assistance program in the U.S. through Citgo. The aid effort is in its fourth year, and has grown to reach about a quarter of a million poor families. The AP reports that the Venezuelan leader finally weighed in to counter those who claimed the aid was being cut off, saying, “they built this analysis on a lie.”

Another issue in the media refuted by officials over the weekend was that of oil industry layoffs. The AP reports that anti-Chavez labor unionists had claimed that Venezuela’s PDVSA dismissed 4,000 contract workers due to output cuts, but on Friday, the company’s vice president dismissed the rumors. Also in economic news, the AP states that oil output cuts mandated by OPEC are contributing to slowed economic growth in Venezuela, but fails to mention that the longer term intent of those cuts is to adjust to lowered demand and move toward more stable prices. Venezuela’s gross domestic product grew by 8.4 percent in 2007 and 4.8 percent in 2008. Finance Minister Ali Rodriguez indicated last week that the government is developing new measures to address economic downturn, but will not devalue the currency or impose new taxes.

Venezuela is sending 12.5 metric tons of medicine to the Gaza strip via Egypt, according to the latest AP report. “It is the least we can do,” President Chavez said yesterday. The AP states that Chavez “has forged strong ties with numerous Arab nations,” forgetting that Venezuela’s ties with the Middle East go back at least to the 1960s when OPEC was formed.

Chavez spoke yesterday of suspicions that a U.S. Embassy official attended a meeting of opposition leaders in Puerto Rico, sources report. “If this is proven,” he said, the diplomat would be expelled. In his televised address, Chavez recalled the U.S. backing enjoyed by Venezuela’s last dictatorship, which ended in 1958, and the U.S. role in negotiating a subsequent failed power-sharing pact between two political parties.

Finally, in other international news, the Financial Times proclaims: “Washington’s clout in Latin America is waning.” This refers chiefly to the economy, and the rising importance of other nations such as China and Russia. The Times calls it a tough “battle for influence.” Similarly, the Los Angeles Times reports on Venezuela’s strengthened economic and military ties with China.

December 10, 2008

Ingrid Betancourt Lauds Chavez’s “Peaceful Revolution”

In Caracas yesterday, Colombia’s Ingrid Betancourt called President Chavez “a great democrat… who has conducted a peaceful revolution in Venezuela.” According to El Universal, she said she always trusted Chavez and flatly rejected allegations by U.S. and Colombian leaders that he ever had “clandestine or sinful liaisons with the FARC.”

Today is the 60th anniversary of the UN’s Universal Declaration of Human Rights. The AP reports that three former presidents of the Czech Republic, Poland, and South Africa wrote an open letter claiming that “dissent and different thinking” are not tolerated in Venezuela. This is proven wrong by a quick glance at the main headlines in the Caracas newspaper El Universal today, which read: “Chavez demanded to stop his attempt at reelection”; “Provea accuses the government of not guaranteeing the right to life”; “Students distribute flyers against constitutional amendment.”

AFP reports that Venezuela’s National Assembly is beginning to debate a constitutional amendment on presidential term limits. It needs two-thirds approval by lawmakers before being put to a popular vote. According to AFP, anti-Chavez lawmakers contend that a vote on term limits has already been held. However, last year’s referendum differed in that it asked citizens to vote on a package of 69 different reforms, many of which were widely debated, such as the issue of banning discrimination based on sexual orientation.

The Washington Post reports on responses to recession in Latin America. It cites a source that says Venezuela needs oil prices of $95 per barrel to remain stable economically, which is false. Prices have already fluctuated wildly over the last decade, and were as low as $23 when high rates of social spending began in 2003. Venezuela’s 2009 budget is based on estimated oil prices of $60 per barrel. The Post claims Venezuela will “undermine” poor countries by advocating for production cuts in OPEC to increase the value of oil. However, Venezuela’s push to stabilize oil prices in OPEC is accompanied by a very thorough and effective program to reduce the burden of high energy costs in Central America and the Caribbean. The program is called Petrocaribe.

Also in regional news, a new report on poverty in Latin America was released this week by ECLAC. It places Venezuela in the category of “medium-low poverty rates” (less than 32%). IPS reports that Venezuela is also noted for having perhaps the smallest income gap between the rich and the poor, showing progress on reducing inequality in a region known for being the most unequal in the world.

October 29, 2008

Venezuela to Launch “Simon Bolivar” Satellite

Venezuela and China will jointly launch a telecommunications satellite today, the BBC reports. The satellite, named “Simon Bolivar” for the independence leader, is the result of a $400 million accord signed four years ago. The BBC mentions rumors that Venezuela would use the satellite for intelligence purposes. The Chavez government has said, though, that it will be shared with other Latin American countries to provide people in remote areas with TV, radio and internet access and also to expand social programs through tele-education and tele-medicine.

Venezuelan President Hugo Chavez was in Ecuador’s Amazonian region yesterday, where Latin American leaders met to discuss the economy. Chavez advocated production cuts within OPEC to stabilize the price of oil, according to the AFP. AFP also reports that the financial crisis “hangs over” the annual Ibero-American Summit, which begins today in El Salvador. The summit focuses on youth and development.

A column by a former Bush administration official in the New York Post makes the false and damaging claim that Venezuela would make an atomic bomb. Without citing evidence, the op-ed denies that Venezuela’s nuclear energy program is meant for peaceful purposes, as has been consistently indicated by Venezuelan leaders and independent analysts. Empty threats about collaboration with Iran are trumped up, yet the op-ed blatantly ignores the fact that Venezuela plans to work with France — a world leader in the production of nuclear power for peaceful purposes.

Finally, Venezuela is helping Cuba triple its capacity to refine oil. According to Reuters, “Venezuela is revitalizing Cuba’s downstream operations and plans to use the island as a bridge to supply the Caribbean with crude and derivatives with preferential financing.” This is done through the program called “Petrocaribe.”

October 28, 2008

Venezuela Joins Latin American Nations to Urge Reform of International Financial System

Latin American leaders met in Brazil yesterday to discuss the economy, urging reform to the international financial system. Representatives were present from eleven countries and included Venezuela’s foreign minister, finance minister, and central bank president. The AP reports that Brazil’s foreign minister (pictured at right) said, “There’s a consensus that integration will help to mitigate the effects of the international crisis.”

According to Reuters, the value of Venezuela’s currency has reached a one-year low. The BBC looks at oil prices and considers the possibility of economic woes for Venezuela, and like many articles in recent days, trumps up the threat of a bust. The BBC also points out, thought, that “not all analysts paint a bleak picture.” The Houston Chronicle meanwhile reports that Latin America’s economic growth in 2009 will likely suffer due to downturn in the US, but that the region is better prepared to deal with crises today than it has been in the past.

Finally, the jury in the “suitcasegate” trial in Florida continues deliberating today, according to the Miami Herald. Allegations of corruption in the Chavez government have been at the heart of the trial, though they are unrelated to the charges faced by defendant Franklin Duran, who is accused by the U.S. government of acting as an unregistered foreign agent. Venezuelan officials and independent analysts alike see the trial as politically motivated

October 22, 2008

Venezuelan Poll Shows 75 Percent Approval for Chavez

Venezuelan Finance Minister Ali Rodriguez presented the 2009 budget to the National Assembly yesterday. The AP reports that it is based on an estimated 15 percent inflation for next year and oil prices of $60 per barrel. Official state spending will see a 22 percent increase, because the budget allows for less discretionary use of oil profits. Some 12 percent of funds will go to Venezuela’s renowned social programs that are helping to raise the standard of living.

The Financial Times reports that the success of those social programs has contributed to approval ratings of 75 percent for the Venezuelan leader, according to a new poll. The Times deems Venezuela more vulnerable to a drop in oil prices than other OPEC countries, though. About half of state expenditures come from oil.

According to a column in the Financial Times, the declining influence of the International Monetary Fund (IMF) has seen the rise of initiatives like Venezuela’s Bank of the South, which “heralds the emergence of a new wave of alternative institutional structures, not dominated by western powers.” It also notes that Venezuela distributed four times as much aid in South America than the U.S. did last year, which allegedly “drove Americans crazy.”

The Miami Herald reports today that testimony has finished in the trial of Florida-based Venezuelan business men accused of acting as unregistered foreign agents. The trial has become an airing of allegations of corruption in the Chavez government, despite the fact that this has little to do with the question of whether or not the accused men were indeed unregistered foreign agents. Some experts have suggested that the trial is politically motivated and designed to discredit the Venezuelan government. The Herald also reports on a small rally in protest of high crime rates in Venezuela, and takes a cursory view of the student movements there.

In regional news, Bolivia will hold a referendum on a new constitution on January 25, 2009, just as Venezuelans were given the chance to vote on a new charter in 1999. Finally, the U.S. and Colombia are alleging that the FARC have ties to Hezbollah. A Los Angeles Times article mentions U.S. Treasury sanctions against Venezuelan officials that are accused of having helped Hezbollah despite a lack of evidence.

October 16, 2008

Venezuela Budgets for $60 Oil and Maintains Subsidies for Poor Countries

Oil is the theme of much of today’s news on Venezuela. According to the AP, the national budget for 2009 will be based on estimated oil prices of $60 per barrel, far higher than the rate of $35 per barrel used to determine the 2008 budget. This provides greater government accountability by boosting official spending and leaving less “excess cash” at the discretion of the executive.

A Miami Herald opinion piece claims that economists “agree” that Venezuela will be harder hit by the global financial crisis than any other country. This is, however, untrue; analysts quoted recently in the Financial Times, Bloomberg, and Reuters have all said that Venezuela is well insulated. Reuters reported that Venezuela “will likely emerge unscathed from the current global financial contagion even if tumbling crude prices force the oil-dependent OPEC nation to scale back spending.” AFP reports that Venezuela’s stock market has seen a drop in value of less than one percent, while percentage losses are in the teens for Brazil and Argentina, which are among Latin America’s largest economies.

President Chavez addressed concerns about the price of oil in a speech yesterday and said that Venezuela will maintain programs that provide 300,000 barrels of subsidized oil a day to poor countries in the region. He responded to rumors, saying: “Many want the oil price to continue to drop to see us fall, but Venezuela isn’t going to go under… Although no country can say that it won’t be affected by this economic disorder, the threat that some sectors want this to create in this country isn’t going to materialize.” Reuters reports that after the US government’s recent announcement that it will intervene in major private banks, Chavez said, “Bush is to the left of me now.”

A Washington Post article suggests President Chavez is “ratcheting up his quarrel with Washington” ahead of local elections in Venezuela. The Post presents Chavez’s concerns about US interference in Venezuela as fear-mongering and a tactic to garner support. Little mention is made of the US-backed coup against Chavez in 2002. Former Venezuelan Ambassador to the US, Bernardo Alvarez points out that “United States participation in right-wing destabilization efforts are not new. They are historic.”

October 15, 2008

Venezuela an Oasis of Calm in Troubled Financial Times

Yesterday, tear gas was thrown at the headquarters of Nuevo Pais, a Caracas newspaper whose editor promoted the assassination of President Chavez. The AP reports that a “radical pro-government militia” called La Piedrita took responsibility for the act. Though it is unclear in the article, the group is not affiliated with the government and has been publicly condemned by prominent officials in the Chavez administration. On Monday of this week, the minister of justice and minister of information spoke out against La Piedrita and called their violent tactics “political childishness,” for which they were praised by Reporters Without Borders.

Also in Venezuela, Reuters reports that some 6,500 relatives of incarcerated people held a protest on Tuesday to demand better conditions in jails. Prison violence in Venezuela is widespread, and last year produced 500 deaths. The government promised reforms to the system this year. The challenges are considerable, but some small steps have already been made, such as bringing the famous music education program, “El Sistema” into jails to help rehabilitate the incarcerated.

Developments came yesterday in the “suitcasegate” trial in which Florida-based Venezuelan businessmen are accused by the US government of acting as unregistered foreign agents. The Miami Herald reports that the lawyer for the sole defendant in the case, Franklin Durán, was finally allowed to introduce evidence that “he says could create reasonable doubt about the government’s case.” The lawyer contends that the charges were “calculated to smear both Mr. Durán and the Venezuelan government.” So far, judges have refused to consider the political context of the allegations.

Finally, The Financial Times calls the Caracas stock market an “oasis of calm” amid the global financial crisis. As in most countries, Venezuela’s banks have felt the effects of the crisis, but “the system as a whole is reckoned to be solvent.”

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