Venezuela News Summary #83

Venezuela News Summary #83 (May 9- May 19, 2009)

I. Venezuela Investigates Radio and Television Stations for Irresponsible Behavior
Last week, Venezuela’s National Telecommunications Commission, CONATEL, began inspections of all radio and television stations in the country. The inspections came two days after President Hugo Chávez vowed to put an end to the irresponsible behavior of one of Venezuela’s largest television stations, Globovision. Shortly after a brief earthquake rattled Caracas two weeks ago, Globovision director, Alberto Ravell reported unofficial information before authorities had made informed declarations about the situation. Ravell used the occasion to bash the government for not responding quickly enough. The National Assembly subsequently requested that CONATEL punish Globovision for the incident. The government has strongly criticized Globovision for distorting events in favor of the opposition surrounding the April 2002 coup d’etat. Globovision faces sanctions including the temporary suspension of its broadcasting license, but it is not in danger of losing its license. http://www.venezuelanalysis.com/news/4441

II. Venezuela Rejects Inter-American Human Rights Commission Report
A week and a half ago, the Venezuelan government rejected the annual report of the Inter-American Commission on Human Rights which categorized Venezuela as one of four countries in the hemisphere where human rights are particularly threatened. The Inter-American Commission is an institution of the Organization of American States, or OAS. In response, President Hugo Chávez said Venezuela will consider withdrawing from the OAS, and forming a separate regional organization with its allies. According to the report, Venezuela is quote, “a hostile environment for political dissent.” The reports says that Human rights activists have received threats from unknown individuals, and the government has openly expressed its suspicion of human rights organizations that receive funding from international sources that may be hostile to “21st Century Socialism.” The report also alleges that the government violated freedom of religion by forcibly searching a Jewish community center in Caracas for weapon stashes. It highlights the increased rates of homicide and violent deaths in jails as signs that citizen security is weakly enforced. In response to the report, the Venezuelan Foreign Ministry released a statement in which it “categorically rejects” the quote “inexact, malicious, and false character of [the report’s] affirmations,” which lack “transparency and objectivity.” The Ministry additionally recalled how the Inter-American Commission recognized the interim government that was installed during the two-day April 2002 coup d’etat, in which sectors of the military and the elite business class kidnapped President Chávez and dissolved the constitution. In the Statement, the foreign ministry declared that
Venezuela will continue to improve its human rights situation, quote, “independently of the manipulations and lies of the inter-American commission on human rights.” http://www.venezuelanalysis.com/news/4438

III. Venezuelan Police Discover Large Arms Cache
Venezuelan police arrested four men and confiscated a large stash of sophisticated weaponry that government officials speculate could have been part of an assassination plot against President Chávez. This discovery came on the heels of a wave of politically motivated violence that Chávez supporters suspect is part of a wider new campaign against the government. A week and a half ago, a 24-year-old member of the United Socialist Party of Venezuela, Junior Hermoso, was shot three times and killed while he was staffing a PSUV registration tent in Caracas. Omar Perez, from the PSUV youth organization said the murder could be classified as a hired political assassination because the method of murder is characteristic of such killings. The day prior, at least four people in Zulia state were injured when strangers in a car opened fire on them while they were carrying out a government vaccination campaign with the support of PSUV members. The same week, two trade unionists from two separate states were shot dead, and a drive by shooting occurred against a crowd of nearly a thousand oil workers who had assembled to watch the government takeover of various petroleum related companies. http://www.venezuelanalysis.com/news/4437

IV. Venezuelan Government Expropriates Petroleum Related Activities
The National Assembly passed a law two weeks ago assigning petroleum industry goods and services to the state. The law re-establishes government control over a range of activities that were previously contracted out to foreign multinationals, and transfers the corresponding contract workers to the state oil company PDVSA or its affiliates. Among those areas that were expropriated, are activities that are fundamental for producing petroleum, such as the boats used for transportation of staff and divers, the cranes that transport material, ship and pipe maintenance, and other industry used in the injection of water, steam, or gas to increase energy reserves, compress gas, or extract petroleum. Shortly after the passage of the law, the government expropriated 300 boats, 30 barges, 40 terminals and docks, 5 dams and a dozen workshops on Lake Maracaibo, where there are large crude oil reserves. Among the foreign companies to be affected is US-based Williams Company, and the Woodgroup consortium. In good news for the Venezuelan government, the price of oil rose to nearly $60 per barrel, the highest price since last November. http://www.venezuelanalysis.com/news/4434

V. ALBA Oil Ship Begins Operating in Venezuela
The Cuba-Venezuela made oil tanker, Sandino, began operations last week. It will transport oil to Caribbean nations and member countries of the Bolivarian Alternative for the Americas or ALBA. The ship was made by a mixed Cuban-Venezuelan company called ALBA Transport, which was created in January 2007 with the aim of increasing economic and social integration in Latin America and the Caribbean. Sandino is the second ship to arrive in Venezuela as part of such regional trade agreements. Both ships are able to transport up to nearly a half a million barrels of oil. Chavez said the new ship could help save up to a dollar per barrel of oil, or $50 million dollars per year in shipping costs. Since the government passed the May 7th law giving it control over a range of oil-related services, PDVSA now controls 90% of the crude oil activity in the area around oil-rich Lake Maracaibo in Zulia state. http://www.venezuelanalysis.com/newsbrief/4440

VI. Venezuela and Ternium Reach Final Compensation Agreement for SIDOR Steel Plant
Venezuela will compensate the Argentine-controlled steel company Ternium nearly $2 billion dollars for its 60% share of SIDOR, one of Latin America’s largest steel plants. The Venezuelan state nationalized SIDOR last year following a 16-month collective contract dispute between the company and its workforce. More than 70% of the workers had been pushed into non-unionized contract labor. Government authorities and representatives of the Steel Workers Union signed a collective contract shortly after the nationalization. Venezuela made an initial payment of $400 million dollars to Ternium two weeks ago. It will now make quarterly payments for six quarters, and pay the remaining balance in October of 2010. http://www.venezuelanalysis.com/news/4432

VII. Venezuelan Government Takes Temporary Control of Cargill Pasta Plant
Last Friday, the Venezuelan government took temporary control of a pasta factory owned by the U.S. company Cargill, located in the state of Vargas. Government officials said they had temporarily taken over the plant because Cargill hadn’t been producing the required amount of pasta at regulated prices. A resolution in early March said that 70% of manufactured pasta within a single company must be of the regulated type, that is, meeting minimum standards, without additional ingredients, and sold at the regulated price. Last year, Venezuelans experienced shortages in some foods as the world food crisis spread. President Hugo Chavez passed the Law on Food Security, which established prices and quotas for a dozen basic food products. The Vice Minister for food, Rafael Coronado, said the government will run the Cargill factory for 90 days, and make a new decision shortly on how to proceed. http://www.venezuelanalysis.com/news/4452

VIII. Finance Ministry Takes Custody of Industrial Bank, Nearly Finalizes Nationalization of Bank of Venezuela
Last Thursday, the Venezuelan Finance Ministry announced it would take custody of the state-owned Industrial Bank of Venezuela, BIV. A commission headed by Finance Ministry officials will be in charge of monitoring the Industrial Bank of Venezuela. Finance Minister Ali Rodriguez assured that the bank will continue operating “normally” and that all deposits are guaranteed. The BIV is three-quarter state-owned and holds the majority of the Venezuelan state’s domestic deposits. Meanwhile the Ministry also met with officials from the Spanish Santander banking group to finalize a compensation agreement for the Bank of Venezuela, which was nationalized last year. President Hugo Chavez announced last Thursday that a final compensation agreement should be reached with the Santander group within the next ten days. http://www.venezuelanalysis.com/news/4447

IX. Venezuelan Inflation Increases Slightly as Unemployment Drops
Monthly inflation in Venezuela rose just over a half a point to nearly 2% in April. The increase in April inflation reflected the government’s hike to 12% sales tax that month. The three-point sales tax increase was imposed to maintain the government’s social programs during the world economic downturn. Over the past twelve months, cumulative inflation in Venezuela was 25%. Meanwhile unemployment dropped more than two and a half points over the last two months to just over 7% in March. http://www.venezuelanalysis.com/news/4431

X. Polls Show Economic Optimism and Strong Support for Venezuelan President
And according to recent polls by Dataanalisis and the Social Investigation Group XXI, Venezuelan President Hugo Chávez’s approval rating remains above 60%. Both pollsters attributed Chávez’s popularity at least in part to his government’s continuance of the government’s social programs amidst the world economic crisis. More than half of those surveyed were optimistic about Venezuela’s economic future, despite the global financial meltdown. http://www.venezuelanalysis.com/news/4448

XI. Venezuela Increases Public Teacher Salaries by 30%
The Venezuelan government enacted a 30% salary increase and expanded a range of benefits for Venezuela’s approximately half a million active and retired public school teachers. The move came as a result of a collective contract agreement signed with teachers unions a week and a half ago. According to Education Minister Hector Navarro, Venezuela’s public school teachers now earn more than seven times what they were earning ten years ago, when President Hugo Chávez was first elected. The general secretary of the national teachers union, Luis Matos, said the salary increase exceeds the normal adjustments to inflation. The collective contract guarantees transportation vouchers and health benefits to active teachers, expands health benefits for retired teachers, and guarantees pre natal and post natal maternity leave. During last week’s ceremony, Matos and other union leaders said part of the coming plan to improve public education is to set up new schooling councils in local communities, through which communities and student associations can discuss the issues affecting local public schools. http://www.venezuelanalysis.com/news/4446

XII. Venezuela Uses Recovered Land to Plant Rice with Vietnamese Assistance
As part of Venezuela’s food sovereignty plan, and as a result of an agreement with Vietnam, Venezuela has increased its rice cultivation by farming land that was previously privately owned and unused. Last week, the newly created Marisela “socialist company” started planting rice on 60 acres of land that the government recently recovered from a large private estate in Apure. The Venezuelan government has worked with a team of Vietnamese agronomists to develop planting techniques and create rice seed hybrids appropriate to Venezuelan agricultural conditions. The rice seeds are plague-resistant and will be sold at up to 50% cheaper than other seeds. This is part of Venezuela’s National Seed Plan, which aims to strengthen national food production, sovereignty and security, and to develop local seed banks and new farming technology. Agriculture Minister Elias Jaua said the rice will be free of agro-toxins and the government expects to harvest five tons per hectare in September. Within four years, the government hopes to be cultivating rice on more than 120,000 acres of recovered land. http://www.venezuelanalysis.com/news/4449