“Card for Living Well” Is Option for Consumers, not Rationing, Says Venezuelan Government

Mérida, September 8^th 2010 (Venezuelanalysis.com) – A new purchasing card to be issued by the Venezuelan government is meant to facilitate people’s access to affordable food and other essential goods at state-owned markets, and is not a rationing system, Venezuelan President Hugo Chavez said on Tuesday.

Chavez made the remarks while visiting a state-owned market in Caracas that was holding a large sale of school supplies at discounted prices. He was responding to widespread claims by the opposition that the card is an attempt to establish a food rationing system similar to Cuba’s, in which the state controls most of the economy and guarantees basic monthly provisions to every citizen by law.

Nora Bracho, a leader of the right wing opposition party Un Nuevo Tiempo (A New Era) who is also a candidate in the National Assembly elections to be held later this month, called the new card a “clone of the rationing cards of the Castro-Communist regime.” A similar message was disseminated throughout the privately-owned Venezuelan and international media since the card was announced last week.

According to the government, however, consumers will not be forced to use the cards, and the state-owned markets will continue to be open to the general public as well as cardholders.

“[The opposition] is going crazy, saying that the Card for Living Well is communism,” said Chavez, using the name he coined for the card. His government promotes “21^st Century Socialism,” a new form of socialism it says is distinct from those established by 20^th Century revolutions.

Humberto Ortega Díaz, the head of the public banking sector, compared the card to similar cards issued by privately owned companies for purchases at their stores. “Why can’t our Bicentenary network [of state-owned markets] use a card so that its customers have an instrument that facilitates their access to purchases?” he said.

In recent years, the state has gradually expanded its network of food producers, distributors, and markets, which sell food at either controlled or subsidized prices. These markets recently expanded their supply of products to include home appliances such as stoves and refrigerators.

The state has also increased its share of the banking sector. It has used its new state-owned banks to boost investment in national production, offer loans and credits at relatively low interest rates, and establish banking modules in poor neighborhoods. However, the private sector still accounts for the vast majority of banking, food, and the economy as a whole.  

Last week, the government announced the creation of the Card for Living Well. Consumers who have an account in one of the state-owned banks may choose to use the card to make purchases at state-owned markets.

Chavez explained that the card is named after the concept of “living well,” derived from the culture of the Aymara indigenous people. Bolivian President Evo Morales, who is Aymara, has promoted the concept as an alternative to the consumerism and environmentally destructive progress of modern capitalism.

The Card for Living Well is part of the Venezuelan government’s effort to eradicate consumerism and promote sensible, equitable consumption, Chavez said on Tuesday. “One must consume only what is really necessary, not what the rich want us to consume,” he said.

He said the card will be the size of a normal I.D. or credit card and bear the colors of the national flag.

Soon, the public banking sector plans to offer a similar card that people may use to finance personal tourist trips within Venezuela, “so that the people may know the beauty of our geography, a right that is for all the people and not just the bourgeoisie,” Chavez announced on Tuesday.  

The pilot projects for all of these services are being carried out in some of Venezuela’s most highly-organized communities, where groups of families have formed communal councils and these councils have united to form broader governance bodies called communes, based on the values of participatory democracy and economic solidarity.

To accelerate the expansion of communal banking in these communes, the government opened ten new branches of the Sovereign People’s Bank this week. These branches will offer loans, mortgages, savings, ATM, and other financial services to the public at large, rather than managing solely state funds. They will operate from the offices of banks that were nationalized in late 2009 and the first half of 2010.

The government plans to open a total of 40 new Sovereign People’s Bank offices by the end of this year, and 120 next year. It will also place communal banking terminals, which are mobile bank structures Venezuela is importing from Brazil, in local neighborhoods.

In 2009, the Venezuelan government completed the nationalization of the country’s third-largest bank, Bank of Venezuela, which now accounts for 13.1% of the total banking assets, 14.1% of total public deposits, and 11.6% of the total credit in the country. It also merged several smaller nationalized banks into a new state-owned Bicentenary Bank, which now accounts for slightly more than 20% of government credits. The public banking sector accounts for 25% to 30% of all banking in the country, according to recent announcements by Planning Minister Jorge Giordani.