Mérida, June 8, 2021 (venezuelanalysis.com) – A government-led consultation over the proposed Law on Special Economic Zones has sparked fierce debate amidst Chavista sectors.
The regional consultation meetings, which are largely being held between government authorities, supporters and local business owners, come as the law continues its progress through the National Assembly (AN). It is expected to be approved in July with the backing of both government and rightwing deputies.
“We are receiving proposals and we will offer advances about the development of this law in about a month when the process of open debate ends,” Jesús Farías, president of the AN’s Economy, Finance and National Development Commission and one of the main backers of the legislation, explained last week.
The law reportedly looks to create “pockets” of economic development to attract “private and foreign investment.” It uses incentives including tax breaks and favorable access to natural resources to achieve this. Deputies from the ruling United Socialist Party (PSUV), including Farías, argue that it will “break the [US-imposed] blockade” and “innovate in the construction of socio-political relations.” The bill has been described as a “daughter” of 2020’s equally contentious Anti-Blockade Law.
Nonetheless, “tragic” economic conditions created by Washington’s blockade have been identified as part of the reason why a number of Special Economic Zones (SEZs) created in 2014 failed, President Nicolás Maduro has stressed. The eight already existing SEZ’s in Falcón, Lara, Cojedes, Táchira and Miranda states were created months before the country entered a seven-year ongoing economic recession which has reduced the gross domestic product (GDP) by at least 63%, according to official figures.
Speaking in Mérida state in a meeting with 160 business owners, Farías argued that the new SEZs will allow “job creation, substantial wage increases and the strengthening of state finances” last week. He went on to claim that the SEZs are “synonymous with development, diversification, production increases, and national industrialization.”
In the oil-rich Zulia State, PSUV Governor Omar Prieto was one of the first to submit a proposal for the creation of three SEZs after consulting with 260 local companies. Meetings have also been reported in the border states of Táchira, Sucre and La Guaira, where 150 five-star hotel owners are reportedly backing the creation of an SEZ.
Despite strong government backing, the proposed law has drawn fierce criticism from a range of Venezuelan leftwing and grassroots organizations.
Communist Party (PCV) Deputy Oscar Figuera, who was the only to oppose the bill in its first reading, described the proposed law as a “slap in the face of our people’s sovereign and independent development” on his Twitter account, as well as pointing out FEDECAMARAS’ (Chamber of Business and Commerce) and FEDEINDUSTRIA’s (Chamber of Industry) support of the project. Both guilds have applauded the “fiscal benefits” and “cheap labor” the law will promote.
Former general secretary of the Homeland for All Party and leading member of the Popular Revolutionary Alternative, Rafael Uzcátegui, likewise took aim at the proposed law, claiming that “the PSUV’s silence [in the debate] is proof of its shift to neoliberalism.”
Objection to the law has also come from influential Chavista intellectuals and economists. Award-winning writer Luis Britto Garcia criticized the proposed tax breaks for large foreign corporations, as well as the “ceding of national territory,” as “unconstitutional” while economist Pascualina Curcio expressed her “concern” over the inherent weakening of labor rights. “I am worried about the naivety of those who say that there will not be any deterioration in labor conditions in the SEZs, when this is precisely the aspect which will guarantee greater profits for capital,” she wrote.
Former constitutional deputy for the PSUV, María Alejandra Díaz, also voiced her rejection, pointing out Mexico’s recent decision to rollback SEZ creation. “They [SEZs in Mexico] only brought the pilfering of resources and the purchase of cheap land, but not a single investment was made. Is this the example which they [the government] is trying to sell us?” she asked.
Grassroots media outlet Tatuy TV added its voice to the debate, debunking the argument expressed by some PSUV deputies that SEZ creation was a concept proposed by former President Hugo Chávez in his last Homeland Plan.
“Don’t use Chávez to wash your hands of this proposal,” Tatuy TV wrote on Twitter. “Chávez had nothing to do with this project.” The collective likewise argued that SEZs should be opposed given they are “gross pockets of capitalist opening which jeopardize the liberating project of sovereignty and socialism.”
A range of other critics have pointed out that the new law may bring opportunities for greater state and private sector corruption, favor foreign investment over local economic progress, and will create two tiers of socio-economic development. Analysts have additionally questioned the SEZs’ impact given how the levying of secondary sanctions has driven away investment and trading with Venezuela.