Venezuela News Summary #75

Venezuela News Summary #75 (February 26th- March 3rd, 2009)

I. Venezuela Solid Despite Global Crisis, Says Finance Minister
Venezuelan Finance Minister Alí Rodríguez announced last week that
Venezuela is in a strong position to weather the global financial
crisis for at least three years if oil prices remain at their current
level. Rodríguez said Venezuela's bi-national investment funds with
China and Iran, its more than $40 billion in international reserves,
and the nearly $60 billion already earmarked for projects through its
National Development Fund will help the country sustain its growth in
coming years. He reiterated the government's commitment to continuing
it's extensive public works and social programs, saying quote, "The
socialist policies of the national government do not depend on the
price of oil." Rodríguez suggested possible adjustments such as the
devaluation of Venezuela's currency and an increase in domestic
gasoline prices, but said such changes would have to be considered with
great caution. Rodríguez said a key component of the government's
economic policy in coming years will be to increase national food
production, with necessary public-private sector collaboration.
Venezuela's greatest vulnerability will be volatile oil prices, which
sank from last July's peak of $150 down to an average of less than $40
this year. Oil accounts for more than 90% of Venezuela's exports, and
the government's 2009 budget is based on an estimated $60 average price
per barrel of oil. To stabilize the price of oil, Rodríguez affirmed
that Venezuela will propose an OPEC supply reduction, at their meeting
this month in Vienna. If the idea is accepted, it will be the third
OPEC supply reduction in the last six months. http://www.venezuelanalysis.com/news/4249

II. Venezuelan Government Takes Control of Rice Plants that Evade Regulated Prices
As of last Saturday, the Venezuelan government has temporarily taken
over the administration of a rice processing plant in Guárico state,
that is owned by Venezuela's largest food producer, Polar. Inspections
by the National Institute in Defense of People's Access to Goods and
Services last week, revealed that the plant was operating at half its
capacity, and adding artificial flavoring to 90% of its rice in order
to evade government price controls, which only apply to essential,
unenhanced food items. In a press conference this Monday at the Plant,
Director of the National Institute, Eduardo Samán announced that the
workers had begun processing 100% unmodified rice at the plant,
disproving the claims of Polar executives that state intervention would
paralyze production. Government officials will administer the plant for
up to 90 days and hold discussions with private owners and the workers
to resolve the problems in production. The government plans to inspect
two large rice processing plants in the Venezuelan state of Portugesa
this week. On his weekly presidential talk show Sunday, Venezuelan
President Hugo Chávez warned that if rice processors attempt to
shutdown their plants to protest the state's intervention, we will,
quote, "expropriate all of their plants, and convert them from private
property into social property." The Venezuelan constitution guarantees
indemnity in the case of expropriation. The government implemented
price controls on a basket of essential food items more than five years
ago and built a network of state-owned food producers and distributors
to sell food at regulated or subsidized prices. In the last two years,
it has adjusted prices to be in line with inflation without permitting
excessive profit margins through price speculation. The Chávez
administration has invested heavily in agricultural production to
diversify Venezuela's oil-dependent economy. The government has also
nationalized or purchased a controlling share of several strategic
sectors of the economy over the past two years, including electricity,
steel, cement, and oil. http://www.venezuelanalysis.com/news/4256

III. Venezuela Re-Takes Course Toward Socialism With Inauguration of Water Pump and Commune
On his weekly presidential talk show Aló Presidente, last Sunday,
Venezuelan President Hugo Chávez unveiled a new state-owned industrial
water pump and pipeline in Aragua state that will improve agricultural
irrigation and allow the restoration of one of Venezuela's largest
fresh water lakes.

According to Chavez, the pump will transfer up
to 3,000 liters of water per second from the Taiguaiguay Lagoon through
a 6 kilometer pipeline to farmlands in the Tucutunemo Valley. This will
allow the restoration of the water level in nearby Lake Valencia, which
has suffered from insufficient sewage treatment in nearby cities and
irrigation based on what Chavez called quote, "the irrational
exploitation of the capitalist development model." To stimulate an
alternative model of farming in the Tucutunemo Valley, the Ministry of
Agriculture distributed $700,000 worth of Argentine tractors, plows,
seeders, and fertilizers to local farming cooperatives. Chávez said his
government would install and equip "socialist agrarian communes" in the
valley, based on new economic structures outlined in agrarian laws
passed by the Chávez government last year. The Venezuelan president
said these initiatives mark the beginning of a new era, in which
Venezuela's "Bolivarian Revolution" will be strengthened. Chavez also
called for Venezuelans to be alert to the ways the private media
manipulates information about the government's projects. http://www.venezuelanalysis.com/news/4259

IV. U.N. Food and Agriculture Organization Says Venezuela Prepared for World Food Crisis
Last week, Francisco Arias Milla, representative in Venezuela of the
United Nations Food and Agriculture Organization, said the Venezuelan
government's investment in domestic food production and regional food
security will strengthen its ability to withstand the worsening global
food crisis. Arias highlighted numerous Venezuelan policies which have
increased food access to vulnerable sectors of society, such as
Venezuela's subsidized food market, Mercal, its growing system of
public cafeterias, and the state-run Food Distribution company, PDVAL,
which sells food at regulated prices. Arias also praised the increase
of state investment in the agricultural sector, efforts to organize
producers, the expansion of citizen access to arable land through land
reform, and the promotion of family farms under the administration of
President Hugo Chávez. Venezuelan agricultural production rose by 3%
last year, bringing the total increase in agricultural production to
24% since Chávez took office a decade ago. The FAO predicts the world
food crisis will only worsen over the next two years. http://www.venezuelanalysis.com/news/4254

V. Venezuela Rejects "Interventionist" U.S. State Department Human Rights Report
Last week, Venezuela's Foreign Relations Ministry called Washington's
recent global human rights report "false, interventionist, and of
malicious intent." Last Wednesday, the U.S. State department issued the
lengthy report, which evaluates civil, political, and worker rights in
more than 200 countries. It includes allegations against Venezuela such
as the quote, "erosion of both democratic and human rights, with
potentially severe consequences." The report denounced inhumane prison
conditions, extra-judicial executions by police officers, and claimed
that Venezuelan pro-government media have promoted anti-Semitism.
Venezuela's Foreign Affairs Ministry, called the report, quote
"baseless and an expression of anti-Venezuelan opinions of those who…
refuse to accept that Venezuela is in charge of its own destiny." The
ministry also questioned the legitimacy of the report, from which the
U.S.'s own human rights record was omitted. They said, quote, "the
country with the darkest record of violations and assaults on human
dignity in contemporary history pretends to set itself up as the judge
of other states, without any legitimacy or mandate." Speaking before
the National Assembly last Thursday, Venezuelan Foreign Minister
Nicolás Maduro called on the U.S. to cease its attacks on Venezuela,
and emphasized the need for a "mulit-polar" world. In the weeks leading
up to the election of U.S. President Barack Obama, Venezuelan President
Hugo Chávez had repeatedly expressed his desire to renew and improve
diplomatic relations with the United States. Relations soured after the
U.S. supported a coup against Chávez in April 2002, and froze last
September after the governments of Venezuela and Bolivia denounced the
involvement of U.S. officials in plots to overthrow their
democratically elected governments. http://www.venezuelanalysis.com/news/4251

VI. Venezuela and Bolivia to Collaborate on Natural Gas Plant
Bolivian President Evo Morales announced last week that Venezuela will
assist Bolivia in the construction of a liquid gas separation plant in
the Chaco region of Bolivia's southeastern Tarija province. The new gas
plant is part of Bolivia's planned industrialization of its domestic
hydrocarbon industry, which may also include petro-chemical production.
Bolivia and Venezuela created the joint venture, Petroandina, last year
to develop oil and natural gas production in Bolivia. The company is
part of an economic cooperation initiative called the Bolivarian
Alternative for the Americas (ALBA), which proposes "People's Trade
Agreements" as an alternative to the free trade promoted by the United
States. ALBA was initiated by Venezuela and Cuba. Other member
countries now include Bolivia, Nicaragua, Honduras, and Dominica, with
Ecuador as an associate. http://www.venezuelanalysis.com/news/4250