Chavez’s Weekly Show Returns, Gas Price Rise Announced

Venezuelan President Hugo Chavez’s weekly program, Aló Presidente, returned yesterday after a five month break. During the program Chavez announced—among a wide range of other things—proposals for a gas price hike, a new tax on luxury goods, and the acceleration of the nationalization of the country's largest telecommunications company.

By Liza Figueroa-Clark - Venezuelanalysis.com
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Caracas, January 22, 2007 (venezuelanalysis.com)— Venezuelan President Hugo Chavez’s weekly program, Aló Presidente, returned yesterday after a five month break, and was the first since Chavez’ resounding victory in the December 2006 Presidential elections. During the program, which lasted almost 6 hours, Chavez announced—among a wide range of other things—proposals for a gas price hike, a new tax on luxury goods, and requested that the recently announced state takeover of the country’s main telecommunications company, CANTV, get underway as soon as possible.

Gas price hike

Chavez reminded people that in his eight years of government he had not touched the price of gas and pointed out that the main beneficiaries had been the middle and upper classes because, “the poor take the metro and the bus.” He added that it was an outrage to sell at the present price saying “it would be better to give it away.” Venezuelans have enjoyed a subsidized gas price which has remained at around 70 to 97 bolívares per liter (around 3 to 4 cents of a US dollar) for the last 9 years. PDVSA, Venezuela’s state oil firm, currently loses 80 bolívares (around 4 cents) on every liter sold on the domestic market, which amounts to nearly US$1 billion yearly, according to the Venezuelan daily El Universal.

Antonio Ledezma, the former Mayor of Caracas and leader of opposition party Alianza Bravo Pueblo (Brave People’s Alliance) rejected the announcement today, calling it a contradiction in Chavez’ discourse. Ledezma cited Chavez’ criticism of the 1989 gas price hike which led to mass rioting across the country, known as the Caracazo.

However, unlike the neoliberal measures adopted by the Carlos Andrés Pérez government of the time, which increased bus fares by over 50%, the current proposal to raise the price of gas will, according to Chavez, bypass the poor. Although he did not give an indication of what the new gas price would be, Chavez asked his Minister for Energy and Oil, Rafael Ramírez, to present proposals for the new price which would not affect transport, food, or inflation.

Luxury Tax

Chavez also stated that he would approve a new tax “on big capital, on big earnings,” although again, no figures were given, and instructed his recently designated Minister of Finance, Rodrigo Cabezas, to design the mechanism through which to tax the wealthy. The Venezuelan President, who said he wanted an Enabling Law on the matter, stated that those who own a yacht, a plane, a second home or lavish art collections should be taxed, and declared that the money collected would go towards funding the newly created Communal Councils, which will themselves decide how to spend the revenue on improving their communities.

CANTV nationalization

President Chavez also urged the new Minister for Telecommunications, Jesse Chacón, to speed up the process of nationalizing the telecommunications company CANTV. The re-nationalization of CANTV was one of a series of dramatic new measures announced by Chavez during his swearing-in ceremony earlier this month. Yesterday Chavez indicated that this would be one of the first laws to be drafted under the Enabling Law—likely to be granted by the National Assembly in coming days.

In justifying the state takeover of the private company, Chavez pointed out that “[CANTV] did not deliver on its promise,” adding that three quarters of the country still had no access to landlines. Chavez also said that the present owners of CANTV bought the company at a giveaway price. “CANTV was given away, the way other companies were. All that infrastructure that took years and years wasn’t paid for by those who bought it,” said Chavez.

He stated that the company ought to be nationalized even before negotiations take place and warned that the state would fix the sale price according to the law. Chavez instructed Chacón to get in touch with CANTV’s owners to make progress on the necessary procedures for naming the company’s new board of directors.

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