VIO News Blog

April 16, 2009

Venezuela Investigates Corruption, Post Finds it Threatening

Today, a Washington Post editorial asserts that Venezuela’s democracy is being threatened. The post claims that while the U.S. media has focused its attention on Cuba, Chavez has stepped up attacks against the opposition in Venezuela. It is important to note that several members of the opposition are being investigated on corruption charges, and that charges against these leaders will have to be proven in a court of law. Furthermore, the cases referred to by the Post were filed by prosecutors, not President Chavez.

Jose Pertierra, a lawyer representing the Venezuelan government, has said that the Chavez administration will soon repeat its demand for the U.S. to extradite Luis Posada Carriles, a Venezuelan citizen wanted in the 1976 bombing in Cuba, AP reports.

On Wednesday, more stories circulated on the new appointment of Jacqueline Farias as administrator of Caracas. In “Chavez’s Caracas Mayor Takes Post, Weakens Opposition,” Bloomberg appears to support opposition allegations that this is a political attack against the opposition. The article also quotes opposition-aligned Caracas Mayor Antonio Ledezma as stating, “This is making a mockery of the sovereign will of the people of Caracas.” He alleges that the government is trying to subordinate his authority, however lawmaker Jose Albornoz denied that the new law is politically motivated and stated that it will help improve basic services in the city, like trash collection.

Finally, Empresas Polar plans to invest $350 million in Venezuela, Bloomberg reports, despite recent government oversight at one of it’s rice plants.

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March 13, 2009

Venezuelan Law Guarantees Essential Public Services

Another drug-related arrest was made in Venezuela yesterday, according to the AP. A U.S. man was detained in Monagas state for “cooperating in the crime of drug trafficking,” the Attorney General’s office said in a statement.

Venezuela’s National Assembly voted yesterday to modify the Law on Decentralization to allow federal jurisdiction over the maintenance and management of the country’s airports and highways. The BBC reports that, in debates on the issue, one lawmaker said the measure would “guarantee essential public services.”

The Economist wrongly reports that a Cargill rice factory in Venezuela was “seized.” This has not occurred, despite the fact that President Chavez made the suggestion last week in a speech. The Law on Food Security stipulates that a certain proportion of agricultural goods in Venezuela must be subject to the price controls that rein in the cost of basic foodstuffs, and producers that do not follow the law have come under scrutiny. The Economist does not report that government officials have been in talks with Polar and other food distributors to ensure that they comply.

In international news, sources report that Brazilian President Lula da Silva will discuss Venezuela at a meeting with President Obama in Washington tomorrow. The AP reports that da Silva said “I’m going to ask that the U.S. take a different view of Latin America. We’re a democratic, peaceful continent, and the U.S. has to look at the region in a productive, developmental way, and not just think about drug trafficking or organized crime.” In addition to U.S.-Latin American relations, other top issues on the leaders’ agenda are biofuels, the global financial crisis.

Oil futures rose to $48 per barrel yesterday ahead of an OPEC meeting this weekend. Venezuela and China will build a joint refinery this year in Guangdong province that Bloomberg says will “reinforce their energy ties.”

Finally, Venezuela and Mexico signed a cooperation agreement on music education yesterday. Mexican students will visit Venezuelan Youth and Child Orchestras in the coming months. Mexico’s education minister said “the promotion of music in Mexico is part of a plan to improve education and culture as a way to prevent crimes.”

March 5, 2009

Venezuela Questions US Efforts to Prevent Drug Use

Five days after a U.S. report criticized Venezuela’s counternarcotics efforts, the AFP reports that Venezuela’s Attorney General Luisa Ortega requested a visiting team from the US Congress’ Government Accountability Office to allow her “the possibility of carrying out a review in the United States to see if it is fully complying with efforts to prevent drug use.” Contrary to the findings of the U.S. report, Venezuela has made significant strides in the fight against drugs; Venezuela now has the fourth largest number of cocaine seizures in the world. In 2008, Venezuelan authorities destroyed over 220 illicit landing strips used by suspected drug runners.

Bloomberg reports that the Venezuelan government will be expropriating a rice processing plant owned by U.S. based Cargill but stated that Chavez did not say whether Cargill would receive compensation. However, in reality, President Chavez stated that any expropriation would be fairly assessed and paid. The Venezuelan government made it abundantly clear that other Cargill plants would be unaffected. Meanwhile, Empresas Polar, the largest domestic food producer in the country, has called for talks with the government regarding allegations that the company was skirting price controls and purposefully falling short of production capacity.

Finally, McClatchy reports that Cuba’s influence in Venezuela is growing, with Cuban experts now helping the Venezuelan government to improve public education. Friendly relations between Venezuela and Cuba are nothing new. The two countries already cooperate in energy, healthcare, agriculture, as well as facilitating the adult literacy program by which Venezuela achieved the UN Millennium Development Goal of full literacy in 2004.

March 4, 2009

Venezuelan Government Announces Cabinet and Ministry Changes

Reuters reported yesterday that President Hugo Chavez reshuffled his cabinet and merged the housing ministry and social protection ministry into other ministries, to reduce government spending in the backdrop of continued low oil prices. The Wall Street Journal posted a statement by the Venezuelan government which said that “These structural movements…are aimed at boosting the dynamics for making the state’s administration more efficient for the construction of the collective welfare and interest.”

The President of Venezuela’s state oil company, Rafael Ramirez, said that PDVSA will cut costs by 40% in order to strengthen the company’s economic position as it deals with low oil prices and the impact of the global financial crisis. AP reports that the company will renegotiate contracts with oil services firms in order to lower costs.

The Wall Street Journal falsely reports that “for years, Mr. Chávez has been battling private food manufacturers and farmers for periodic shortages of foods ranging from chickens to coffee.” However, the Venezuelan government has mainly accused food processors and distributors, not farmers, of hoarding food and averting price controls. The article also erroneously states that “last weekend, Mr. Chávez announced the Venezuelan government would take over the country’s rice mills.” President Chavez merely stated that private rice processors who flout price controls and follow through with their threat to paralyze production could face expropriation.

An article in the Toronto Globe and Mail argues that President Chavez is reversing course on resource nationalism by inviting oil companies to participate in the development of the oil-rich Orinoco. However, the Venezuelan government has been soliciting bids from foreign oil companies for the development of the Orinoco fields since the summer of 2008, when oil prices had skyrocketed. The Chavez government has always welcomed partnerships in oil exploration and production, provided that Venezuela remains a majority stakeholder and that agreements respect the country’s sovereignty.

Finally, the Latin America Herald Tribune reports on Venezuela’s reaction to a statement made by Colombia’s Minister of Defense, Juan Manuel Santos. On Sunday, Mr. Santos defended Colombia’s cross-border raid on guerrillas in Ecuador earlier last year, terming it a “right to legitimate defense.” Venezuela’s Foreign Ministry said that Santos’ statement represents “a threat to the stability and sovereignty of the countries of the region,” and that the “arrogant attitude of Minister Santos is abominable.”

March 3, 2009

Venezuelan Government Steps up Rice Plant Inspections

Bloomberg reports that the Venezuelan government is stepping up inspections of privately-owned rice processing plants that are accused of failing to abide by price controls and not producing at full capacity. Reporting from the Arroz Mary processing plant, Business Week quotes army Colonel Carlos Osorio saying, “We aren’t expropriating” the plant or confiscating its rice, instead the government is ensuring that companies distribute the necessary amounts of rice.

The AP reports that PDVSA, Venezuela’s state oil company, announced on Monday that it will begin to settle its outstanding debts with around 6,000 contractors and suppliers, after a “review and analysis of debt.” Rafael Ramirez, president of PDVSA, stated that due to the drop in oil prices, the company will be “reviewing five-year contracts because the prices [that PDVSA pays contractors] can’t remain the same and that should be understood.”

Finally, on Monday, Venezuelan authorities found the wreckage of a small plane in the Andes which had disappeared over the weekend. Unfortunately, none of the 7 passengers survived the accident.

March 2, 2009

Venezuela has taken Unprecedented Steps to Boost Agricultural Productivity

On Thursday, the representative of the United Nations Food and Agriculture Organization in Venezuela, Francisco Arias Milla, said that “there is a group of countries, including Venezuela, that is better prepared to confront this crisis and whatever other crisis that may come,” adding that “this is due to the institutionalization of food security in the region.” The Chavez government has taken unprecedented steps to boost agricultural productivity in Venezuela, resulting in the country’s corn production increasing by 205%, rice by 94%, sugar by 13%, and milk by 11% over the last decade, according to figures provided by the Ministry of Agriculture.

President Chavez on Saturday rejected a U.S. State Department report that alleges that drug trafficking is soaring in Venezuela, the AP reports. The report, which covers global anti-drug efforts in 2008, was prepared during the final months of the Bush presidency, but was approved and presented by the Clinton State Department. “Is there really a new government in the United States, or is Bush still in charge?” Chavez told supporters in a poor Caracas neighborhood. Although not reflected in the State Department report, Venezuela’s anti-drug efforts have been widely documented. Venezuela is now the country with the fourth largest seizures of cocaine in the world, and in 2008, Venezuelan authorities destroyed over 220 illicit landing strips used by suspected drug runners.

The AFP reports that President Chavez stated he will be attending the April 17-19th Summit of the Americas to “defend the integration of the Caribbean and Latin America and demand that the empire Obama leads lift its blockade of Cuba, abide by UN resolutions and condemns Israel.” Chavez said he was unconcerned with whether he would meet Obama there or not.

Bloomberg reports that on Saturday, President Chavez ordered troops to occupy some rice processing facilities in the country due to their failure to market rice at the regulated price set by the government. The seizure of Arroz Primor rice mill, owned by Empresas Polar SA, will last three months according to El Nacional. Chavez said that rice processors have been buying crops from local farmers but have refused to sell white rice at the controlled price. Instead, they have added colors and artificial flavors to evade these controls. “They’ve refused 100 times to process the typical rice that Venezuelans eat,” Chavez said yesterday during his “Alo Presidente” program on state television. “I’m tired of it and if they don’t take me seriously I’ll expropriate the plants and turn them into social property from private property.”  Chavez also announced that if the companies processing rice followed through with their threat to paralyze production, they could end up facing nationalization.

An article in the Miami Herald, argues that Venezuela faces many problems which are only growing. The article discusses the current financial crisis and the impact of continued low oil prices on government expenditures and debt payments. While Venezuela’s Finance Minister Ali Rodriguez has acknowledged the difficult economic outlook, it should be noted that Venezuela has over $70 billion in reserves which can help buffer the economy in the event of a protracted global economic crisis.

Meanwhile, the Wall Street Journal argues that the collapse of a Venezuelan bank owned by R. Allen Stanford is causing concern that the economy could be threatened if other banks in the country also experience massive capital flight. However, there is no evidence that the failure of Stanford’s bank (that represents only a small proportion of total deposits in Venezuela) has generated uncertainty in the Venezuelan banking system as a whole, and the speculation is largely based on rumors. The Venezuelan government has guaranteed the deposits of Stanford Bank and says it will sell the bank.

Finally, on Friday, President Chavez said Venezuela should bring to justice those responsible in the brutal repression of the Caracazo riots that took place in major urban centers throughout the country 20 years ago. Chavez blamed the government in power at the time and said Venezuela “should make greater efforts to search for justice.” It is believed that anywhere from a few hundred to a few thousand people were killed in the riots. “I’m asking them to review the whole thing.” President Chavez also urged the U.S. to extradite former president Carlos Andres Perez in order for him to be brought to justice for his role in the repression.

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