Venezuela Headlines #98 – New Laws from National Assembly, US-Venezuelan Tiff

U.S. Nominee Ambassador Palmer “Cannot Enter the Country” says Venezuela’s Chavez - US Proposed Multi-Faceted Campaign to Counter Venezuelan President, Wikileaks Cables Show - Venezuela Accelerates Public Housing Projects in Wake of Floods - Venezuelan Government Plans to Increase Agricultural Productivity after Floods -Venezuelan National Assembly Passes Law Making Banking a “Public Service” - Venezuela's National Assembly Passes Enabling Law for Chavez - Inflation Down, Unemployment Up in Venezuela 

All news from Venezuelanalysis.com 

I. U.S. Nominee Ambassador Palmer “Cannot Enter the Country” says Venezuela’s Chavez 
This week, Venezuelan Foreign Affairs Minister Nicolás Maduro reiterated his country´s rejection of proposed U.S. ambassador Larry Palmer. The move was the latest in an ongoing diplomatic dispute between the two countries that began earlier this year. On Monday, Venezuelan authorities presented the U.S. Embassy in Caracas with a formal note of protest regarding Palmer´s candidacy and officially withdrew a diplomatic agreement required for U.S. diplomats to serve in Venezuela. In response, U.S. State Department spokesperson David Crowley warned of quote, “consequences” for bi-lateral relations if Venezuela insists on refusing Palmer´s designation. The argument is over public statements made by Larry Palmer surrounding his June nomination to the ambassadorship by the Obama Administration. In a written letter to the U.S. Senate Palmer suggested that the Venezuelan Armed Forces had quote, “morale and equipment problems”, saying the U.S. government could take advantage of such difficulties, and accused officials within the Chavez administration of having quote “clear” links to Colombian insurgent groups deemed “terrorists” by the U.S. State Department. Palmer also committed himself to quote “safeguard American economic interests and investments,” if chosen to be ambassador. Though Venezuela has made it clear that Palmer would not be allowed to serve as a top U.S. envoy, the U.S. Assistant Secretary of State said recently that if the U.S. Senate approves Palmer´s nomination, he will be sent to Caracas. A final yes or no vote on Palmer´s nomination by the U.S senate is expected in the coming days. An approval could heighten already difficult relations.http://venezuelanalysis.com/news/5886 

II. US Proposed Multi-Faceted Campaign to Counter Venezuelan President, Wikileaks Cables Show 
A secret US diplomatic cable posted earlier this month on Wikileaks revealed discussions of a detailed plan to use diplomatic, military, and economic power to counter Venezuelan President Hugo Chavez’s influence in Latin America. In the 2007 cable titled, “A Southern Cone perspective on countering Chavez and reasserting US leadership,” US Ambassador to Chile Craig Kelly advocates increased intelligence activity, funding to civil society groups, high-level diplomatic visits, and expanded military aid to countries in the region. Ambassador Kelly also highlights Brazil’s quote “openness to the global community” and “mature engagement with both its neighbors and the US,” as well as Chile’s desire to “integrate more fully into the global economy,” as examples that should be fostered and promoted as alternatives to Venezuela’s “Bolivarian Revolution.” Kelly highlights the need to engage actively with civil society and to win over quote “complex” countries like Argentina by helping them “regain access to international markets”. He also added that the US should encourage the quote “NGO community and local civil society groups… to put Chavez on the defensive.” And that a media effort should be launched to emphasize “corporate citizenship.” Mr. Kelly served as ambassador to Chile from 2004 and 2007, and he is currently the Principal Deputy Assistant Secretary of State. http://venezuelanalysis.com/news/5861 

III. Venezuela Accelerates Public Housing Projects in Wake of Floods 
Last weekend, the Venezuelan government approved new funds for a surge in public housing projects for people displace by recent floods. It also announced the nationalization of two companies that produce construction materials to support the building production. Within the special housing plan, the National Assembly allocated $ 270 million dollars to build over 9,000 homes for flood victims in Caracas. It also approved an additional $15 million for the Commerce Ministry to buy basic items for the thousands of families currently living in shelters as a result of the floods. 
Meanwhile, President Hugo Chavez has been on a flurry of visits to shelters and emergency housing construction to assure flood victims that the government will fulfill its promise to build them new homes. The flooding began in November and ended last week after killing 35, displacing as many as 130,000, and causing damage to hundreds of roadways, as well as 46,000 hectares of agricultural land across 11 states. http://venezuelanalysis.com/news/5883 

IV. Venezuelan Government Plans to Increase Agricultural Productivity after Floods 
More than 1500 small farmers from the area south of Lake Maracaibo will be the beneficiaries of a new government plan to recover underutilized farms and rebuild the agricultural productivity of the region after heavy rains destroyed their harvests, displacing thousands of residents. Officials report that as much as 40% of the country’s plantain crop has been damaged as a result of climatic conditions and some 10% of milk and meat production in the area south of Lake Maracaibo has also been lost. http://venezuelanalysis.com/news/5869 

V. Venezuelan National Assembly Passes Law Making Banking a “Public Service” 
Last week, Venezuela’s National Assembly approved new legislation requiring banks in Venezuela to contribute more to social programs, housing construction efforts, and other social needs while making government intervention easier when banks fail to comply with national priorities. The Law of Banking Sector Institutions is one of a dozen pro-Revolution laws being passed by the current National Assembly before the incoming assembly – and its growing anti-Chavez minority – begins legislating early next year. The new law protects bank customers’ assets in the event of irregularities on the part of owners, makes it illegal to arbitrarily change banking hours, and stipulates that when making decisions, the Superintendent of Banking Institutions take into account the best interest of bank customers – and not only stockholders, as was the case previously. According to opposition legislator Juan José Molina, the new banking law is quote an “attack on economic liberty, on the constitutional right that citizens have to compete freely, to commercial incentives.” Supporters of the law believe it will protect the consumer and safeguard against rampant speculation. 
This week, a new university law, urban property legislation, and controls on internationally-financed NGOs are expected to be approved. Last week, Venezuela’s outgoing National Assembly passed the banking law, media and internet regulations, as well as a People’s Power Law of Communes. http://venezuelanalysis.com/news/5880 

VI. Venezuela’s National Assembly Passes Enabling Law for Chavez 
Among the most controversial new laws. Late last week, Venezuela’s National Assembly approved a bill that will grant President Hugo Chavez the power to pass laws by presidential decree for 18 months. The step was taken to bring quick relief to 130,000 flood victims and to further engrain 21st Century Socialism in the nation’s legal structure. Decrees made by the president through the Enabling Law must fit within the framework of the 1999 Constitution. The Supreme Court must approve some decrees. Venezuelan citizens may revoke the decree if 5% of voters request a referendum. The National Assembly may also modify or rescind the decree. The president signed the final version of the law before a crowd of supporters from the United Socialist Party of Venezuela, which holds a super majority in the current National Assembly. Chavez said last week that he already had a package of 20 law-decrees ready to be enacted. Among them are an increase in the value-added tax to raise money for flood relief, agricultural loans aimed at recuperating food production, and reconstruction of flood-affected rural areas. Nevertheless, Legislator Pastora Molina said that the government was capable of managing all of the major issues at hand without passing the Enabling Law. Molina argued that President Chavez planned to use his new powers to advance his campaign for a third presidential term in 2012. The National Assembly previously granted Chavez decree powers in 1999, 2001, and 2007. We will bring you more on the recent National Assembly laws in an upcoming podcast dedicated entirely to the new legislation. http://venezuelanalysis.com/news/5879 

VII. Inflation Down, Unemployment Up in Venezuela 
Lastly, according to monthly statistics from the Venezuelan National Institute of Statistics. From September to October unemployment rose half a point, while inflation in November was down. Inflation in November was 1.5%, and accumulated inflation so far this year is nearly 25%, slightly higher than the equivalent figure from last year. However, November is the fifth month in a row with inflation under 2%, which the Venezuelan Central Bank said “represents an optimistic sign.” http://venezuelanalysis.com/news/5849