Venezuela News Summary #76

Venezuela News Summary #76 (March 4th- March 11th, 2009)

I. Venezuelan State Oil Company to Pay Debts, Reduce Spending on Contractors
Venezuela’s state oil company PDVSA announced last week that it will immediately pay off its debts to nearly all of its contractors, including nearly 6,000 private companies, coops, health care providers and small and medium-size businesses. PDVSA also announced plans to cut back on its contracting by as much as 40% to adjust to lower oil prices brought by the world economic crisis. However Energy Minister Rafael Ramirez promised they wouldn’t pull the plug on any of Venezuela’s social investments, and that both the social missions and the international cooperation initiatives such as PETROCARIBE, will be maintained. In line with the government’s development plan for the next four years, Ramírez said PDVSA will be moving forward with its investment of over $100 billion in nearly 100 social programs. In the meantime, Venezuela plans to propose a new reduction in oil production at this Sunday’s OPEC meeting, with the goal of stabilizing the price of oil at $70 per barrel. http://www.venezuelanalysis.com/news/4261

II. Venezuela Streamlines Government Ministries to Improve Efficiency
Last week, Venezuela’s President Hugo Chávez consolidated several state ministries and shuffled his cabinet to make things run smoother and more efficiently. The cabinet changes reflect Chávez’s latest policy plans in the wake of last month’s national referendum, in which Venezuelan voters approved a constitutional amendment that will allow Chávez to run for re-election for a third presidential term. Among the changes, Chávez merged the Housing Ministry and Infrastructure Ministry into a new Ministry of Public Works and Housing, to be headed up by long-time Chavez confidant, Diosdado Cabello. In another change, the Ministry of Science and Technology will now take on the responsibility of developing light industries, and the Ministry of Light Industries and Commerce will become simply, the Ministry of Commerce. Chávez eliminated the Ministry of Participation and Social Protection and parceled out its responsibilities to two other ministries. The task of promoting participation will now be added to the Communal Economy Ministry, which has been renamed the Ministry of Communes. María Cristina Iglesias, who ran the Labor Ministry during Chávez’s first presidential term, replaced Roberto Hernández as the minister of labor and social security. Pedro Morejón, the former minister of communal economy, will now head up the Ministry of Tourism. The Energy, Finance, Agriculture, Communication and Environment Ministers all remained in their posts. As did Vice President Ramón Carrizalez, although he will now take on the additional role of Defense Minister. http://www.venezuelanalysis.com/news/426

III. Venezuela Turns Women’s Affairs Ministry Into Full-Fledged Ministry
In honor of International Women’s Day Sunday, Venezuelan President Hugo Chávez announced that the Women’s Affairs Ministry, which was created last year as an extension of the National Women’s Institute, INAMUJER, will now have its own budget, and a central office. The name of the ministry will also be changed to include “gender equality.” Chavez suggested that the new ministry could perhaps be called, quote “the Ministry of Women and Gender Equality, since these are two distinct and complementary things.” Last year on International Women’s Day, Chávez named INAMUJER president, María León, to head up the new ministry with the goal of defending and extending women’s rights nation-wide. On the top of the agenda at the women’s ministry, this year, will be the promotion of women’s committees in the tens of thousands of local community councils across the nation. http://www.venezuelanalysis.com/news/4281

IV. Venezuela Calls Colombian Defense Minister’s Comments a “Threat to Stability”
Last week, Venezuela’s Foreign Relations Ministry strongly denounced declarations made by Colombian Defense Minister Juan Manuel Santos, in which Santos called last year’s Colombian attack against a guerrilla camp in Ecuadoran territory an act of, quote “legitimate defense.” The Foreign Relations Ministry said quote, “The Venezuelan government rejects [Santos’s] irresponsible declarations, which constitute a threat to the stability and sovereignty of the countries in the region.” One year ago, on March 1st, the Colombian military conducted a raid on Ecuadoran soil of an encampment of Colombia’s FARC guerrillas. The incursion ignited a regional diplomatic crisis during which Venezuela sent National Guard battalions to the Colombian border and temporarily suspended cross-border trade. A joint declaration signed by the regional heads of state, one week after the attack stated quote, “The territory of a state is sacred and may not be the object of military occupation or other forceful means used by another state, whatever the motive, even temporarily.” This week, Santos called last year’s attack a quote “well-executed operation by our heroes of the armed forces.” The Venezuelan National Assembly (AN) approved a resolution last week rejecting Santos’s statements and Ecuador has demanded that Santos be dismissed. http://www.venezuelanalysis.com/news/4265

V. Chávez Vows to Defend Venezuela’s Sovereignty if Colombia Violates Border
Meanwhile President Hugo Chavez threw in his two cents over the weekend, declaring that Santos’ statements were a quote “threat to peace in South America” and a violation of agreements that the two countries have signed. Chavez added that Venezuela will respond militarily to any violation of its border by a foreign nation. http://www.venezuelanalysis.com/news/4282

VI. Panama and Venezuela Boost Energy and Commercial Ties
Panama and Venezuela are set to enhance commercial ties after the visit of Panamanian President Martin Torrijos to Venezuela last week. In a meeting with Venezuelan President Hugo Chavez, Torrijos officially requested Panama’s entrance in to the Venezuelan regional energy initiative Petrocaribe. The agreement allows the current 18 member countries to receive discounted oil from Venezuela, with the remaining cost converted into a long-term, low interest loan that the member nations can also pay off with goods and services. Chavez and Torrijos also agreed to increase passenger air flights between the two nations. http://www.venezuelanalysis.com/news/4266

VII. Inter-American Human Rights Court Says Venezuela Did Not Violate TV Station’s Free Speech
The Inter-American Court of Human Rights announced its ruling last week that the Venezuelan government did not violate the right to freedom of expression, equality, or private property of the private television stations, RCTV and Globovisión. However, the court did decide that the Venezuela government should do more to prevent and punish acts of intimidation against journalists by third parties. RCTV and Globovision had brought the case against the Venezuela government to the court. Both private TV channels openly identify with Venezuela’s opposition to the government of President Hugo Chávez. The Inter-American Court of Human Rights is an autonomous institution of the Organization of American States that is in charge of applying and interpreting the American Convention on Human Rights. http://www.venezuelanalysis.com/news/4268

VIII. Brazil’s Lula to Discuss Venezuela in Talks with Obama
Last week Venezuelan President Hugo Chavez gave the “green light” to Brazilian President Luis Inacio Lula da Silva’s to “debate” over Venezuela with Barack Obama. The Brazilian president will be meeting with his US counterpart on Saturday. Chavez said Lula personally called him on the phone with the request because he was concerned about recent declarations on Venezuela from the Obama administration. Chavez accepted the offer, although he said quote “in principle we don’t need any intermediaries.” http://www.venezuelanalysis.com/news/4270

IX. Members of U.K. Parliament Praise Venezuelan Government
During a British parliamentary debate last week, about U.K.-Latin American relations, several parliament members supported Venezuela’s anti-poverty programs and nationalizations of strategic industries. They urged the British government to take a more constructive approach to relations with the South American nation. Some members agreed to continue to discuss the trade relationship between the EU and the Southern cone trade block, MERCOSUR, at an upcoming EU-South American ministerial meeting in May. http://www.venezuelanalysis.com/news/4272

X. Venezuela Expropriates Cargill Rice Plant that Evaded Price Controls
After a week of inspections of privately owned rice processing facilities, the Venezuelan government initiated expropriation procedures of a plant owned by the multi-national food company Cargill. The US-based food giant was found to be modifying its rice in order to evade price controls on basic food items. The investigation was carried out by Venezuela’s Institute in Defense of People’s Access to Goods and Services, INDEPABIS. Agriculture Minister Elías Jaua said the first step in the expropriation would be the temporary occupation of the plant in order to re-start the production of rice at the controlled price. The plant has been occupied as of last Thursday. The Chávez government’s investments in agricultural production over the past ten years have nearly doubled rice production, but this still falls short of demand. Venezuelans experienced widespread shortages of rice last year when the world food crisis set in and prices soared. Pledging to take stronger measures to guarantee food access to all citizens, last year Chávez passed the Law on Food Security which gave the Venezuelan president more power to expropriate property when not following government price regulations. After ordering the Cargill expropriation, Chávez told his ministers to begin inspections of flour, oil and toilet paper producers. He said the state, quote “will take decisive measures in favor of the people, against those who do not abide by the law.” http://www.venezuelanalysis.com/news/4267

XI. Venezuela’s Monthly Inflation and Unemployment Rates Drop
Monthly inflation in Venezuela nearly halved to just over 1% in February, an indication that last year’s high monthly inflation rate may be leveling off. The unemployment rate in January was just under 10%, a decrease from January 2008, but a typical seasonal increase since December. Food prices did not increase in February, a healthy sign after prices rose by more than a third during last year’s world food crisis. Meanwhile according to the National Institute of Statistics, in February rents rose by less than half a point, health care costs rose by almost 3%, and transportation costs rose by 2%. Venezuela has set a goal of 15% inflation for 2009.