Venezuela Economy

ENGLISH EDITION/The artillery of ideas INTERNATIONAL Friday, December 6, 2013 | Nº 186 | Caracas | www.correodelorinoco.gob.ve
In a continuation of the national government’s push to end corruption and strengthen eco-
nomic growth, Venezuelan President Nicolas Maduro designated personnel to head two
new executive agencies that will work to protect the South American nation’s foreign ex-
change reserves. The National Center of Exterior Commerce and the Venezuela Corpora-
tion of Exterior Commerce were created by decree and officially inaugurated last Friday
during a cabinet meeting at the Miraflores presidential palace in Caracas. Page 2
2014 Year of growth
Venezuelan Finance
Minister Nelson Merentes
has predicted that 2014
will be a year of increased
growth and reduced
inflation, in part due to
the economic measures
being taken by President
Nicolas Maduro. Merentes
defended the government’s
approach to the economy,
arguing that the forcible
reduction of prices had
increased consumer
spending power and would
dent inflation. Pg. 4
Politics
Car sales regulated
to reduce price
distortions
President Maduro issued
a decree to stamp
out usury in the new
and used car markets. P.3
Security
Major achievements
in anti-drug fight
Venezuelan authorities
seized over 83 tons of illegal
substances in 2013, mainly
from Colombia. P.5
Social Justice
Food Houses bring
hope to communities
A program created
by President Chavez
to guarantee nutrition
has raised communal
spirit. P.6
Opinion
Eleazar Diaz Rangel:
The municipal elections page 8
Analysis
Is Venezuela in crisis?
A critical analysis page 7
Measures Continue in Venezuela
to Stabilize Economy
Chavez plan now law
On Tuesday, the revo-
lutionary majority in the
National Assembly ap-
proved the National Plan
for 2013- 2019, giving it the
status of a national law,
which was promulgated by
President Nicolas Maduro
on Wednesday.
The historic objectives
outlined in the document
are: to preserve national
independence, continue
building 21st century so-
cialism, transform Ven-
ezuela into a world power,
construct a “multi-centric
and pluri-polar world”, and
help save life on the planet
to ensure the survival of
humanity.
The National Plan, a gov-
ernment program drafted
by the late President Hugo
Chavez, was designed with
the participation of numer-
ous social movements that
answered the Chavez’s call
to join in debates around
the country.
The document became
Maduro’s platform for his
presidential campaign
earlier this year, and in
September, he brought it to
the National Assembly for
evaluation and voting as
required under article 236
of the Constitution.
Witnesses &
international
accompaniers will
observe municipal
elections
T/ AVN
The president of Venezue-
la’s National Electoral Coun-
cil (CNE), Tibisay Lucena,
announced this weekend
that 88,416 witnesses from
Venezuelan political parties
have been accredited in mu-
nicipal boards to participate
in the upcoming municipal
elections on December 8.
Meanwhile, 50 international
accompaniers will also take
part in the event.
In a press conference in the
CNE building, where the final
audit to guarantee the proper
functioning of the electronic
voting system was held, Lucena
indicated that the number of ac-
credited witnesses was a good
sign and she urged other poten-
tial witnesses to apply quickly so
they can be accredited in time.
The CNE president said the
electoral timeline is on sched-
ule and Wednesday, every vot-
ing center had the electoral
materials that are installed on
Friday and Saturday.
Regarding poll workers, Luce-
na reiterated that their partici-
pation in training days is impor-
tant given that this municipal
election has technical details
which must be learned.
Diplomatic representatives
accredited in Venezuela par-
ticipated in the final audit
and received a lesson into
the voting process from the
CNE’s director of technol-
ogy, Carlos Quintero.
Quintero explained that
the final audit was a simula-
tion of the entire voting pro-
cess, including the installa-
tion of voting booths, the act
of voting, the transmission
of results and the counting
of votes.
The elections are set to go
smoothly on Sunday, with
good voter turnout expected.
The artillery of ideas
2 Impact | Friday, December 6, 2013
T/ COI
P/ Presidential Press
I
n a continuation of the na-
tional government’s push to
end corruption and strengthen
economic growth, Venezuelan
President Nicolas Maduro des-
ignated personnel to head two
new executive agencies that
will work to protect the South
American nation’s foreign ex-
change reserves.
The National Center of Ex-
terior Commerce and the Ven-
ezuela Corporation of Exterior
Commerce were created by de-
cree and officially inaugurated
last Friday during a cabinet
meeting at the Miraflores presi-
dential palace in Caracas.
According to the head of
state, the first of the new bod-
ies will be charged with “or-
dering the administration of
foreign exchange in function
of development” and putting
an end to the abuse of the cur-
rent system which offers US
dollars at a preferential rate of
6.3 bolivars.
The existing agency in charge
of administering the allocation
of US dollars, the Foreign Ex-
change Commission (CADIVI)
as well as its sister office, SI-
CAD, will continue to operate
but will now be under the con-
trol of the National Center of
Exterior Commerce.
Alejandro Fleming, current
Commerce Minister and for-
mer Vice Minister for Foreign
Relations, has been designated
to head the new agency. Jose
Kahn, Rodolfo Marcos Torres,
Julio Viloria, and Victor Aul-
ar have also been appointed to
the National Center’s board of
directors.
Maduro called the creation
of the new agency part of “the
new stage of the economic rev-
olution” and explained that
among its duties will be main-
taining a registry of those
businesses and individuals
who require foreign exchange
as well as guaranteeing that
money solicited is being used
as it is intended.
The head of state also
stressed the need to streamline
the process of supplying dollars
to those who are carrying out
commercial activities relevant
to the nation’s social and eco-
nomic development.
“We have the obligation to
guarantee that our foreign ex-
change is being used in the cor-
rect manner, understanding
that it is a resource for the de-
velopment of our economy and
our country”, the Venezuelan
President commented.
Parallel to the National Cen-
ter, the new Venezuelan Corpo-
ration of Exterior Commerce
(CORPOEX) will focus on orga-
nizing the nation’s imports as
well as fomenting new sources
Venezuela: Two new state agencies
to regulate international commerce
of foreign exchange originating
from non-oil exports.
CORPOEX will be comprised
of various state companies
working in sectors as diverse
as agriculture and oil to home
appliances and vehicles. It will
have the legal right to engage
in importations either at the
behest of a third party or under
its own volition depending on
the needs of any particular na-
tional industry.
Ramon Gordilis, current
President of Venezuela’s Ex-
terior Commerce Bank (BAN-
COEX) has been appointed to
head the new institution and
will be joined by Owen Man-
rique, Felix Osorio, Alexander
Sarmiento, Jose Cabello, and
Jesus Guarco on the board of
directors.
“This is a corporation that is
going to direct a conglomerate
of very powerful state business-
es and which is going to create
alliances with specific private
firms”, Maduro said.
“The time has come for a
great productive, economic
revolution that can diver-
sify [our economy] and cre-
ate wealth for Venezuela. [It
must be] a great economic
revolution that will solidify
the new social system that
has been created during the
Revolution and that includes
the social missions and con-
solidates our democratic rev-
olution while creating a solid
base for a productive econo-
my”, he added.
PROTECTING THE MIDDLE CLASS
The two new state offices form
part of the Maduro administra-
tion’s recent fight against specu-
lation, price gouging and hoard-
ing in the OPEC member state.
Since early November, the
socialist government has taken
on the nation’s inefficient and
corrupt distribution chains
which have led to exorbitant
profit margins for middlemen
and wholesalers while dimin-
ishing the purchasing power of
ordinary citizens.
By forcing firms to remark
products at prices on par with
acquisition costs, Maduro has
been able to boast the first “low-
ering of prices in the economic
history of the country”.
While many of the policies
are directed at shielding the
economically vulnerable from
speculative attacks, the Ven-
ezuelan President has addition-
ally been aware of the need to
encourage entrepreneurship
and assist those working in
small businesses.
Although he is referred to as
“the working-class president”
for his roots as a bus driver and
union leader, the 51 year-old
has made clear his intentions to
strengthen the middle class.
“I want to become, and I al-
ready feel that I am, the president
who protects the middle class”,
Maduro asserted on Friday.
To this end, the head of the
United Socialist Party of Ven-
ezuela announced a series of
measures designed to assist
small and medium-sized busi-
ness owners who face usurious
rents on storefronts.
The rent control measure es-
tablishes a limit on leases “not
to exceed 250 bolivars ($39) per
square meter” and will be en-
forced through the Commerce
Ministry which will process
complaints related to inflated
tenancy contracts.
“We are going to take to the
streets to guarantee this for
our economic growth”, Ma-
duro said.
During his address, the first-
term president reiterated that
the government’s offensive
against speculation and mar-
ket distortions is directed at the
large firms that move the lion’s
share of imports in the country.
Local business, on the other
hand, need to be assisted and
provided with opportunities to
expand and create meaningful
employment for residents.
“We want to extend our hand,
to those suppliers who are hon-
est, with financing assistance
and with products to distrib-
ute in the country or which are
brought from the exterior with
the country’s dollars. This is
our objective: that in Venezu-
ela the small and medium-sized
businesses become solidified.
Here is our hand so that we work
together”, Maduro affirmed.
The artillery of ideas
Friday, December, 2013 | Politics 3
T/ COI
P/ Presidential Press
V
enezuelan President Nicolas
Maduro took his offensive
against speculation in the na-
tion’s economy to the automotive
sector last Monday, announcing
the creation of a new law that
seeks to stamp out usury in the
new and used car markets.
Referring to the measure
as a “healing” of the car in-
dustry, Maduro explained
that the new law would limit
the price of used vehicles and
provide incentives for greater
automobile production in the
South American nation.
The point, he informed, is to
“regularize and strengthen the
President Maduro decrees law to correct
distortions in automotive sector
production of vehicles in Vene-
zuela, lower the prices of new au-
tomobiles produced in Venezue-
la as well as those imported, and
lower the price of used cars”.
For years, Venezuela has suf-
fered from a shortage of new
automobiles and has endured
a rising trend of over-charging
for used vehicles owing to the
lack of oversight of the market,
high inflation, and low domes-
tic production.
“Venezuela is the only coun-
try in the world where a used
car costs more than a new car.
This is going to end. It’s a ques-
tion of hours. We’re going to
normalize and heal the produc-
tion of vehicles as well as their
distribution”, he said.
Among the measures to be
taken will be the overhauling of
the system of importation that
permits dealers to access US
dollars at a preferential rate.
This includes allowing indi-
vidual citizens who hold for-
eign currencies in Venezuelan
banks accounts the opportuni-
ty to apply for an importation li-
cense to acquire a new vehicle.
The Venezuelan President
also expressed his administra-
tion’s aim to dedicate greater at-
tention to domestic automotive
production in order to better
resolve the problems currently
afflicting the industry.
“We are going to control the
process from the factory gate to
the point of sale. The assembly
plants will report their produc-
tion as well as the inputs that
they need to the Commerce
Ministry”, Maduro said.
The head of state described
the new law as something that
will “favor the working and
middle classes” and re-iterated
the country’s need for a holistic
and concerted effort to boost
car manufacturing.
“Venezuela has a great ca-
pacity to manufacture ve-
hicles. We’re ready with the
investments that we’re mak-
ing so that we can duplicate
our production in the next 3
to 4 years. We’ll carry out the
actions that we need to follow
through in the production and
regulation of the entire pro-
cess”, he affirmed.
T/ COI
P/ Presidential Press
V
enezuelan President Ni-
colas Maduro visited the
Midwest state of Lara last
weekend and approved the dis-
bursement of 100 million boli-
vars for community projects
under the government’s urban
renewal program, Mission New
Barrio, Tricolor Barrio.
The money will be used to
fund initiatives proposed by
the residents of the three geo-
graphic zones, called corridors,
that have been devised by the
program in the capital area of
Barquisimeto.
“These corridors have be-
gun to work and are setting
the example. They are the
first to solicit resources with
which to immediately start
the projects”, Maduro said
during a live broadcast of an
assembly with activists and
community leaders.
Included in the projects will
be the construction of new
sports complexes, affordable
housing, and improvements
in water services for the vari-
ous sectors that comprise the
program’s three corridors in
the state.
On Saturday, President Ma-
duro made a call for the benefi-
ciaries of the mission’s financ-
ing to continue proposing new
President Maduro promotes
far-reaching urban renewal program
projects that can aid in improv-
ing security and employment
opportunities for citizens.
“We need peace to reign here.
There needs to be projects of
different scales and different
types: those that produce cloth-
ing, computers and anything
that has to do with production
in order to generate income”,
the head of state commented.
Mission New Barrio, Tri-
color Barrio was launched by
the Maduro administration in
early November with the in-
tention of transforming run-
down urban environments,
referred to as barrios in Span-
ish, into healthy and thriving
neighborhoods.
The program has been
linked to other initiatives of
the Venezuelan government
that have provided subsi-
dized housing to low income
residents and have strength-
ened political participation
through the nation’s grass-
roots community councils.
More than 50,000 families
will reportedly benefit from the
mission’s projects in the state
of Lara, while a host of other
projects have also been put into
motion. In the city of Carora, the
government inaugurated a lamb
and goat meat processing plant
that will expand production of
traditional foods in the area.
More than 113 million boli-
vars ($17.9 million) in addition
to a further $10 million have
been invested in the facility
which has been erected with
the assistance of Argentine
technology and expertise.
The leather that will be gen-
erated by the factory, officials
inform, will have the capacity
to supply a full 20 percent of the
raw materials needed for shoe
production in the country.
In downtown Barquisimeto, a
design for a new residential com-
plex that will carry the name of
former Venezuelan President
Hugo Chavez has been planned
to provide new homes for more
than 1,500 people.
The series of buildings, con-
structed on 4,300 square me-
ters, has been laid out with
the intention of promoting
communal living as well as
providing public spaces for
productive enterprises, cul-
ture and entertainment.
Later on Saturday, in the
Plains state of Barinas, Pres-
ident Maduro activated an
additional three corridors
of the New Barrio Mission
that encompass 66 neighbor-
hoods and more than 50,000
families.
“We’re going to see in 6
months how this entire zone
is going to become an urban
example with all necessary
services”, the commander-in-
chief noted.
“Visualize the kind of invest-
ments that can be made in the
community and let’s develop
that communal economy to its
maximum level”, he added.
While addressing the public
in Barinas, Maduro also made
a call for supporters of the
United Socialist Party of Ven-
ezuela to turn out en masse
for Sunday’s local elections in
which more than 300 mayoral
races will be decided.
“Next Sunday, we have mu-
nicipal elections and it’s very
important that we finish the job
for the new stage [of the revolu-
tion]. The mayors that will be
elected are those who are going
to be working together with the
Bolivarian government in the
coming years”, the Venezuelan
President affirmed.
The artillery of ideas
4 Economy | Friday, December 6, 2013
T/ Ewan Robertson
www.venezuelanalysis.com
T
he president of Venezuela’s
Central Bank (BCV) has re-
jected negative forecasts of Ven-
ezuela’s ability to meet foreign
currency obligations, arguing
that operational international
dollar reserves are “in normal
conditions”.
The comments come after
several financial press outlets
speculated as to whether Ven-
ezuela could have problems
meeting international and
internal foreign currency ob-
ligations, based on an alleged
shortage of dollars available to
the government.
Venezuela’s international
reserves have fallen 29% this
Venezuelan authorities reject
predictions of dollar shortage
year from US $29.9 billion
in January to US $21.2 bil-
lion currently, reports local
newspaper El Universal. The
reserves are made up of gold
deposits, bonds, and dollar
current accounts. When for-
mer President Hugo Chavez
came to power in 1999, inter-
national reserves were below
US $15 billion, according to
AVN news agency.
Further, Venezuela’s crude
oil price has fallen to a sixteen
month low, at US $93.98 per bar-
rel. State oil company PDVSA
states that a drop in the price of
a barrel of oil by $1 costs Ven-
ezuela about $700 million per
year. 95% of Venezuela’s foreign
currency earnings come from
oil sales.
“Oil prices in the low $90s
would leave Venezuela with
a current account deficit”,
Ben Ramsey, an economist at
JPMorgan Chase & Co. told
Bloomberg on Monday.
Other observers disagree
with such negative forecasts.
Washington-based economist
Mark Weisbrot recently point-
ed out that Venezuela has far
higher oil revenue than import
or debt repayment costs.
“How can a government with
more than $90 billion in oil
revenue end up with a balance-
of-payments crisis? Well, the
answer is: it can’t, and won’t”,
wrote Weisbrot.
Meanwhile, local business
groups accuse the government
of dipping into reserves to cov-
er foreign currency demand,
and complain that insufficient
dollars are being pumped into
the domestic economy.
Jorge Roig, the head of
business federation Fedeca-
maras, recently claimed that
the state has granted 54% less
dollars to the private sec-
tor this year compared with
2012. Official sources say that
2.6% more dollars have been
distributed to the economy
this year overall.
Since 2003 the Venezuelan
government has maintained
currency controls to avoid
capital flight, and allocated
dollars to companies for the
importation of goods neces-
sary for production and con-
sumption.
Critics blame insufficient
dollar allocations for the
shortages in some food and
consumer products the coun-
try has faced this year, as
well as inflation of 54% and a
black market dollar worth 10
times the official rate of 6.3
BsF to the dollar.
However the administra-
tion of Nicolas Maduro has
argued that product hoard-
ing, “grotesque” overpric-
ing and speculation on the
dollar as causes of economic
difficulties. Officials accuse
business groups aligned with
the conservative opposition
of waging an “economic war”
against the government.
This week Venezuelan Cen-
tral Bank’s (BCV) president
Eudomar Tovar assured the
public that the country’s “op-
erational” foreign currency
reserves are in “normal condi-
tions” and dismissed negative
forecasts on Venezuela’s inter-
national reserves.
The BCV president ex-
plained that the economy was
growing and the country was
fulfilling its debt obligations
as normal.
This year PDVSA estimates
it will have given the state a
total of US $47.3 billion for dis-
tribution in the economy. “That
is sufficient for the economy”,
said Tovar.
T/ Ewan Robertson
P/ Agencies
V
enezueltan Finance Min-
ister Nelson Merentes has
predicted that 2014 will
be a year of increased growth
and reduced inflation, in part
due to the economic measures
being taken by President Nico-
las Maduro.
The minister said Tuesday
that the Venezuelan Central
Bank (BCV) and the National
Institute of Statistics (INE)
Venezuelan Finance Minister:
2014 will Be year of growth
were analyzing the possible
effects of Maduro’s strategy
to deal with the country’s eco-
nomic difficulties.
This year Venezuela has
faced shortages in some basic
foodstuffs, annual inflation of
54% and a black market dollar
worth ten times the official
rate. The government says
that the situation is the result
of an “economic war” being
waged by business sectors
aligned with the conservative
opposition.
The opposition denies the
accusations, and blames the
government for the situation
instead.
The Maduro administration
has characterized its response to
these problems as an “economic
offensive”, which has included
cracking down on abuse of cur-
rency controls, forcibly reducing
“grotesque” overpricing in some
sectors, and ensuring that food
products reach supermarkets
rather than being hoarded or di-
verted as contraband.
“We are sure that this well-
directed offensive by Maduro
against the economic war,
where businesses had been
marking up prices irrationally
for nine months, will bear its
fruits in the economy”, said Me-
rentes on state channel VTV.
The finance minster added,
“We’re still going to end the
year with high inflation lev-
els but Venezuelans should be
aware that 2014 will be very dif-
ferent from 2013 for economic
development and job creation”.
The BCV predicts the economy
to grow by 2.5% by the end of
this year.
Merentes defended the govern-
ment’s approach to the economy,
arguing that the forcible reduc-
tion of prices had increased
consumer spending power and
would dent inflation.
The government is also look-
ing to strengthen the bolivar
currency to help maintain eco-
nomic stability and weaken the
value of the black market dollar.
Recent measures include
increasing interest rates on
savings accounts from 12.5
to 16% to encourage citizens
to hold more savings in boli-
vars. Further, from 2014 Ven-
ezuelans will be able to buy
government bonds in bolivars
or dollars.
Commenting on the latter
policy, Merentes said, “This
is important because they
[government bonds] have
good performance and are
zero risk. If something has
characterized Venezuela it
is the payment of her [finan-
cial] obligations, internal as
much as external, without
any difficulty”.
FINANCES IN GOOD SHAPE
The statements come after
some international financial
press outlets speculated as to
whether Venezuela would face a
liquidity crisis due to increased
demands for foreign currency
and a falling oil price. 95% of
the country’s foreign currency
earnings come from oil sales.
However Venezuelan au-
thorities and US economists
such as Mark Weisbrot have
dismissed this, pointing to the
country’s large current ac-
count surplus from oil income
and the high levels of reserves
and credits that the govern-
ment has at its disposal.
Further, the price of Venezu-
elan crude has risen over the
past three weeks and is cur-
rently sells at $94.69 per barrel,
below the government’s ideal
level of $100 per barrel, but well
above the price needed to main-
tain a current account surplus.
As such, in his interview Me-
rentes was upbeat about Ven-
ezuela’s future economic per-
formance. He mentioned that
extreme poverty was between
6 - 7% and unemployment 6 - 8%,
down from 17% and 15% respec-
tively when the Bolivarian gov-
ernment assumed power in 1999.
“We would like poverty to
be zero and unemployment to
decrease, and this can only be
achieved by increasing pro-
ductive capacity, social well-
being and inclusion”, the min-
ister said.
He also pledged that, “To
those who haven’t voted for our
project we say that we’re going
to favor those who still haven’t
been included, because we don’t
have any type of distinction”.
The artillery of ideas
Friday, December 6, 2013 | Security 5
T/ Tamara Pearson
www.venezuelanalysis.com
P/ Agencies
O
n Monday night a blackout
which affected the majority
of the country saw the national
government accuse the right-
wing of sabotage.
The blackout affected cen-
tral and western Venezuela,
where the largest cities are. It
began at 8pm and electricity
returned to Caracas at around
9.30pm, while it returned to
Merida at 2am.
Electricity minister Jesse
Chacon alleged that the black-
out was intentional. He said a
Venezuelan President blames
“opposition sabotage” for blackout
special commission was inves-
tigating the failure, which he
said originated in the substa-
tion La Arenosa, between Cara-
bobo and Aragua states, in the
central north of Venezuela.
Chacon said that authorities
had found a 3.3cm diameter
electrical conductor that had
split in one of the towers of the
national grid, causing a short
circuit. Chacon said such a
problem hadn’t occured before
in the thirty year life of the
electricity system.
President Nicolas Maduro
also alleged that the black-
out was intentional. He said
Venezuela’s intelligence agen-
cies “revealed that a series
of actions were planned” for
yesterday, “In three different
places they had organised dis-
turbances. Immediately after
the blackout, they went out
into the street to burn tires”.
He accused the rightwing of
“taking electricity away from
the people in order to provoke
a state of irritation and dis-
content with the government...
they are desperate because
they know they face a big defeat
on December 8th... they see the
polls and the support for us in
the street”.
President of the national as-
sembly, Diosdado Cabello also
said that the electricity black-
out “smelled of sabotage”.
Opposition governor, Hen-
rique Capriles alleged that
Monday night’s blackout is
“what the greater part of the
country experiences every-
day” and the opposition co-
alition, the MUD, said the
government’s accusations of
sabotage were “politically and
electorally motivated”.
Maduro also said the black-
out occurred in the same place
as the large blackout in Sep-
tember this year. At the time he
argued that the blackout was a
“rehearsal” for the December
8th municipal elections.
T/ Ryan Mallett-Outtrim
P/ Agencies
V
enezuelan security forces
have seized 83 tons of nar-
cotics and arrested 110
drug lords this year, according
to head of the National Anti-
Drug Office (ONA) Alejandro
Keleris Bucarito.
Keleris stated that the Ven-
ezuelan government remains
“committed” to stamping out
narcotics traffickers, and
pledged to deepen anti-drug ef-
forts in 2014.
“Thanks to intelligence work
and international cooperation
we have managed to destroy 141
narcotics laboratories over the
past five years, most of which
were located in border areas in
order to access raw materials”,
he stated last Thursday.
Keleris also affirmed that 43
laboratories were shut down
in 2013 alone and Venezuela
remains free of drug crops. Ac-
cording to the United Nations
Office on Drugs and Crime,
while Venezuela is not a major
drug producing country it is
used by international narcotics
traffickers as a transit route be-
tween the Andean region and
intercontinental markets.
The coca leaf, from which
cocaine is derived, is mostly
grown in countries like Co-
lombia, Peru and Bolivia. Ven-
ezuela’s geographic position
makes it a convenient step-
ping-stone for Andean narcot-
Venezuela seized a total
of 83 tons of narcotics in 2013
ics bound for North American
and European markets, ac-
cording to some analysts.
“We are confident that we
will continue making prog-
ress in this important work
to ensure that our country
is free from drug cultivation
and trafficking, although geo-
graphically we are the bridge
between the largest producing
country and the largest drug
consumer”, he stated.
Keleris credited joint efforts
between the armed forces, the
national and states govern-
ments and the public for Ven-
ezuela’s progress on tackling
drugs. Between 2006 and 2013
the heads of more than 100 nar-
cotics organizations have been
apprehended by Venezuelan au-
thorities, according to figures
from ONA.
Keleris also pointed to Ven-
ezuela’s appointment to head
the Union of South American
Nations’ (UNASUR) regional
council on anti-drug efforts
in October as evidence of in-
ternational recognition of
the country’s anti-narcotics
efforts. “The UNASUR mem-
ber countries unanimously
decided to appoint our coun-
try to pro tempore presidency
against the global drug prob-
lem in South America, which
is a demonstration of the ef-
forts we have made in this
area”, he stated.
However, he also called for
more public awareness of the
problem of drug trafficking.
“We should all join the fight...
against this scourge so that it
doesn’t affect our children, who
are the next generation”, he said.
Keleris made the announce-
ment the same day Venezu-
elan authorities charged four
more people in relation to a
record cocaine haul made by
French authorities in Sep-
tember. The three men and
one woman were charged for
allegedly cooperating with
an operation to smuggle a 1.3
ton shipment of cocaine onto
an Air France flight from Ca-
racas to Paris.
When 31 suitcases stuffed
with cocaine were discovered
by French authorities after the
plane landed in Paris’ Charles
De Gaulle Airport in Septem-
ber, French Interior Minister
Manuel Valls described the
haul as “the biggest seizure
of cocaine ever made in main-
land France”.
Venezuela has so far arrest-
ed 25 people in connection to
the case.
An Air France manager
and five military personnel
including a lieutenant colonel
who was responsible for secu-
rity at Maiquetia Internation-
al Airport are among those
facing charges.
French authorities also ar-
rested “several members of
a criminal organization”,
While acknowledging that the
two countries have been coop-
erating in relation to the case,
last month Keleris questioned
French handling of the bust.
During an interview with
private broadcaster Televen,
Keleris questioned the amount
of time taken for French au-
thorities to announce the dis-
covery of the haul, and how
the cocaine went undetected
by Air France.
“It is very strange”, Keleris
said.
Air France has pledged to
improve its own checks on
baggage “on departure from
certain sensitive destinations”
since the incident.
The artillery of ideas
6 Social Justice | Friday, December 6, 2013
T/ Mariana Serrano–AVN
P/ Agencies
A
humble house located on
the second street of the
La Cortada sector in Ca-
tia, Sucre parish [Caracas],
offers the country one of the
most important contributions
to the social sphere in Ven-
ezuela; the country in Latin
America with the third low-
est rate of poverty, achieved
through reducing hunger.
Although 18 people are living
in the house, 100 plates of food
are served daily at lunch. The
house number is 83, which is
barely enough to identify itself
in the middle of a row of homes
that line the street of the first al-
leyway in the area. The house
has been converted to guarantee
that one hundred people receive
a plate of “hot and very tasty”
food, prepared by the hands of
women of the house who com-
prise the Liendo family.
The alarm sounds at 4:00 in
the morning. Mrs Zaida Liendo
is up first and her colleagues
follow behind her: her daugh-
ters and granddaughters. Sea-
sonings, vegetables and meats
are chopped, and the assembled
food is a balanced diet with a
nutritional content equal to al-
most 50% of the caloric require-
ment of a person for a day. It’s
work that occupies at least sev-
en hours a day.
From Monday to Friday,
the women of the Liendo fam-
ily prepare an amount of food
equivalent to 100 plates of food
a day, for a total of 500 servings
per week and 2,000 per month.
“It’s not an easy job, there’s a
lot to do, and sometimes you’re
provoked to throw in the towel
because you have to know how
to deal with people, but we al-
ways keep going because we
help people who really need
it. Now I can help, but when I
had my eight children nobody
helped me”, said Mrs Zaida
Liendo, who is the owner and
proprietor of house number 83,
that was volunteered by her to
become one of the 6,000 food
houses of the country.
Last Friday, recognition
from the United Nations Food
and Agricultural Organisation
(FAO is its English abbrevia-
tion) reached the house of Mrs
Liendo. This year the same or-
ganization awarded Venezuela
for its fight against hunger. For
Mrs Liendo, having assumed
the responsibility to help with
her seasoning and dedication,
there’s a personal sense of sat-
isfaction and a commitment
to the leader of the Bolivarian
Revolution, Hugo Chavez.
“After my comandante died,
I felt a greater commitment to
this. Because he was a humani-
tarian, because he wouldn’t al-
low his people to starve, because
he, out of his heart would have
given me and my family one or
one hundred plates of food”, she
said with the same certainty
that her tears came with.
When she first opened the
doors of her home to feed those
most in need, there were about
150 people who came every af-
ternoon. Today, that number
has been reduced to one hun-
dred neighbors; mostly chil-
dren and the disabled.
“When we started in 2004
we had 150 people, but many
of them grew up; they began
to work and have already left,
others left after the tragedy of
the floods (in 2010) and now we
serve only 100 people”.
Mrs. Liendo considers the
work done by the national
government through the Food
Houses program (Casas de
Alimentación) to be compre-
hensive, and it has served as a
connection between the needy
and public institutions in order
to attend to chronic and struc-
tural problems.
As an example, she mentioned
the case of a boy who was fed
at the house who had recently
had a kidney operation. “The
mother of the boy, who also has
a few [other] kids, handed a re-
quest for help for the child to
the president of the Foundation
of the Strategic Foods Program
(Fundaproal) and they are look-
ing for ways to help her”.
Another specific case is that
of a man of advanced age who
lives alone, has no known fami-
ly, and recently suffered a para-
lyzing disability that made him
unable to work.
“Through the program and
the foundation he is going to get
a pension”, she said.
Mrs. Zaida said that these
contributions and solutions
stimulate her to continue writ-
ing her own history as owner
and proprietor of one of the food
houses that has allowed for re-
duced rates of extreme poverty,
poverty, child malnutrition and
hunger in the country.
According to a recent report
by the Economic Commission for
Latin America and the Caribbe-
an (ECLAC), in Venezuela’s case
between 2002 and 2010 poverty
decreased by 20.8 %; from 48.6 %
to 27.8 %, while extreme poverty
went from 22.2% to 10.7%, result-
ing in a decrease of 11.5%.
More than a plate of food: Food Houses
serve examples and hopes of life
She also argued that from
1999 to 2010 Venezuela experi-
enced the second highest reduc-
tion in poverty levels at 21.6%,
from 49.4 % to 27.8 %. The high-
est was Ecuador, which had a
reduction of 26.4 %, bringing
this indicator from 63.5 % to
37.1 % in the same period.
This data is consistent with
the figures published by the
Venezuelan National Insti-
tute of Statistics (INE), which
show that poverty declined
21.6% between 1998 and the
first half of 2011, from 49% to
27.4 %.
The INE reported this year
that the Bolivarian government
has reduced structural poverty
from 16.7% to 6.9 % as a result
of the fairer distribution of the
country’s wealth.
A PLATE OF FOOD: 941 CALORIES
The ideal daily caloric in-
take for a Venezuelan is be-
tween 2000 and 2500 calories.
Nonetheless, the average Ven-
ezuelan consumes around
3000 calories, eating three or
more meals per day.
Through the Food Houses
program, 50% of this is guaran-
teed, with an average of 941 cal-
ories being provided per plate
of food at lunchtime.
According to Douglas Trujil-
lo, Fundaproal nutritional coor-
dinator, the program provides a
free meal based on a nutritional
study of the population, which
also promotes the consumption
of local produce.
Trujillo stated that since the
program’s inception in 2004,
3,334,000 free meals have
been provided through 6000
homes that now exist across
the country.
Regarding the prioritization
of the consumption of foods lo-
cal to each region of the coun-
try, in 2014 a restructuring of
the menu will be achieved to
offer regionalized menus at the
food houses.
He explained that the idea is
“to promote food production in
these regions, for our consump-
tion, and make the meal we of-
fer closer to the food of the peo-
ple. All of this is in the context
of the objectives of the Second
National Plan [of the Nation,
2013 - 2019]”.
Trujillo noted that the food
program was devised by co-
mandante Hugo Chavez, and
now is also a form of social in-
clusion, productive activity and
social development for the en-
tire population.
“The food houses are going
to move on to be a program of
training and nutritional inclu-
sion, without losing their rai-
son d’être: to be homes of nutri-
tional care”, he said.
The artillery of ideas
Friday, December 6, 2013 | Analysis 7
T/ Ewa Sapiezynska & Hassan Akram
B
leak media reports about
the country’s polity and
economy are exagger-
ated.
Alvaro Vargas Llosa wants
us to believe that Venezuela
is an example of a “new Latin-
American dictatorship”. He
even goes so far as to claim
that President Nicolas Ma-
duro rigged last presidential
election (in spite of Venezue-
la’s electoral system that Jim-
my Carter called “the best in
the world”). Does the poetic
license of his father, Mario
Vargas Llosa, one of the great-
est Latin American novelists,
extend to Alvaro?
He is certainly not alone in
his opinions. The Washington
Post writes in its editorial last
week about the “sickening
spectacle” of “the unravelling
of Venezuela’s economy and
political system” and “the re-
gime’s self-destruction”. The
new scare-story from those
proclaiming disaster is about
the new powers granted to
Maduro by the National As-
sembly on November 21 in or-
der to fight corruption, specu-
lation and usury. For one year
the Venezuelan President will
be able to make some laws by
decree, which analysts in Mi-
ami have denounced as un-
democratic.
In fact, these Enabling Laws
are nothing new in Venezuela.
Similar powers were granted
to Hugo Chavez (during his
13 years in office they were
granted four times). Moreover
these decree-powers were
granted to Venezuelan presi-
dents before Chavez: in fact,
Enabling Laws were used six
times before he came to power
in 1999. It is a constitutional
authority granted by the
elected legislature and can
be overruled by that legisla-
ture. It is difficult to criticize
the objective of streamlining
administrative procedures on
an issue as important as cor-
ruption; declaring that such a
move puts democracy at risk
is clearly an exaggeration.
VENEZUELA’S STABLE
ECONOMY
Of course, the request of
decree powers on economic
issues is due to the recogni-
tion that Venezuela is facing
problems in this area. But
contrary to the myth peddled
by the media and many ana-
lysts, especially those close to
the US government, Venezu-
ela is not nearing economic
collapse. The economy, as has
always been the case, is largely
dominated by the extraction of
oil which the country uses to
purchase food and consumer
goods. The earnings from oil
exports are comfortably above
spending on imports, so Ven-
ezuela is not facing anything
like a debt crisis.
In fact in 2012 oil exports
brought in $94 billion, while
imports (at historically high
levels) were just $59.3 billion.
Today there are some $22 bil-
lion in reserves at the Venezu-
elan Central Bank. There is
also an account surplus that is
currently at 2.9 percent of GDP.
Given these very positive in-
dicators, US-based economist
Mark Weisbrot is quite certain
that Venezuela will not face
a future balance of payments
(debt) crisis. His confidence is
shared by US banking multi-
national Wells Fargo, which
recently produced a report de-
claring Venezuela one of the
emerging economies most pro-
tected against the possibility of
a financial crisis and by Bank of
America Merrill Lynch which
has recommended investors
purchase Venezuelan govern-
ment bonds.
POLITICAL ROOTS
OF ECONOMIC WOES
Although the economy does
not suffer from any balance
of payments or fiscal crisis,
Venezuela is facing significant
problems in the form of short-
ages of specific consumer goods
and lengthy queues for some of
what is available. But this is not
so much an economic problem
as a political one. Following the
death of immensely charismatic
Hugo Chavez (electorally one of
the world’s most popular politi-
cians), there followed a highly
polarizing election in which
Chavez’s chosen successor for-
mer Vice President Nicolas Ma-
duro was elected with a narrow
margin. As George Ciccariello-
Maher, Venezuela specialist at
the University of Drexel, told us
in a private conversation, “the
tensions and destabilization fol-
lowing the April elections result
from the fact that Venezuela’s
empresarios think they have
a chance to get rid of the new
government”. Specifically, the
Venezuelan business elite has
responded to the uncertainty
surrounding the new govern-
ment by taking money out of the
country (capital flight) and de-
liberately creating chaos.
Currently the government
earns Venezuela’s dollars
through oil exports and then
distributes them to importers
at a controlled rate in a system
not very different from that
applied during the “economic
miracle” in South Korea which
moved that country “from
third world to first” (Korean
capital controls were actually
much more stringent than Ven-
Is Venezuela in crisis?
ezuela’s). This system of foreign
exchange rationing should en-
sure that foreign currency is
used to satisfy the needs of or-
dinary citizens and develop the
country’s productive capacity.
The difficultly for Venezuela is
that business-people are using
the dollars that are allocated to
them for the purchase of vital
imports to engage in specula-
tive activities on the black mar-
ket, and to swell their foreign
bank accounts. And of course,
this means that essential goods
are not imported.
At the beginning of the year,
the government responded
to misuse of the foreign ex-
change which it provides by
partially reducing the levels of
dollars it makes available, but
this has had the effect of exac-
erbating shortages and driving
up the black market value of the
dollar. Prices have also shot up
in the last months because Ven-
ezuelan businesses have made
use of their oligopolistic control
over distribution networks to
massively increase prices,as
part of a campaign to reduce
the government’s popularity
in the run-up to the municipal
elections in December.
In response to the problem of
price increases, shortages, and
the dollar black market, Ma-
duro has now introduced a new
strict system of price controls.
The new measures place a 30
percent limit on mark-up levels.
Nevertheless, the problem will
not be resolved while the gov-
ernment relies on the private
sector to import and distribute
consumption goods, and this
private sector is committed to
a political conflict with the gov-
ernment despite their sizeable
profit margins. Bringing infla-
tion under control will require
complementing price controls
with measures to shrink the
black market (i.e. an overhaul
of the way the exchange rate is
managed to make it more flex-
ible along the lines of the Mo-
rales government’s approach in
Bolivia). Such measures would
reduce speculation and capital
flight, and thus push the pri-
vate sector into using dollars to
make necessary imports.
UPCOMING MUNICIPAL
ELECTIONS
Only five thousand people
participated in the protest
march against the government
called by the opposition leader
Henrique Capriles in Caracas
last Saturday, the first one
since the presidential election
in April. It is not a good sign
for the opposition that it is cur-
rently trying to portray the
upcoming municipal elections
as a “plebiscite” on Maduro’s
government. A poor showing
for Maduro’s supporters would
be used by the opposition to
claim that the government
lacks legitimacy. However, the
opposition suffered a great de-
feat in the state-governor elec-
tions last December winning
3 out of 23 governorships and
according to a poll by Hinter-
laces, the government alliance
is likely to win the majority of
municipalities once again. The
same source shows a rise in
Maduro’s popularity to 55 per-
cent after the latest economic
measures.
The achievements of the Bo-
livarian Revolution are consid-
erable. Poverty was reduced
by more than 50 percent in
the last decade and there have
been enormous improvements
in access to health and educa-
tion. The FAO (Food and Ag-
riculture Organization of the
United Nations) awarded the
government special recogni-
tion this year for its success
in reducing hunger among the
country’s poor. Nevertheless,
continued political success
will require bolstering support
among the middle classes and
this means streamlining the
economy, something that will
only be possible, if the govern-
ment is able to rein in the spec-
ulative and rentier elements of
the business elites.
A p0b||cat|oo oI the F0odac|oo 0orreo de| 0r|ooco º Editor-in-Chief £va 6o||oger º Graphic Design Pablo Valduciel L. - Aimara Aguilera - Audra Ramones
INTERNATIONAL Friday, December 6, 2013 | Nº 186 | Caracas | www.correodelorinoco.gob.ve
Opinion
T/ Eleazar Diaz R angel
I
n the context of nationwide mu-
nicipal elections to be held this
weekend, renowned editor and
journalist Eleazar Diaz Rangel
suggests that the real winner of
Sunday’s vote will be his coun-
try’s burgeoning democracy. In
this piece, the Director of Ven-
ezuelan daily Ultimas Noticias
discusses growing confidence
in the electoral system as well
as the shrinking likelihood that
extremists might successfully
disrupt both the voting process
and its results. Though he is of-
ten cautious in supporting either
side of the political debate, he also
expresses his open support for so-
cialist candidate Ernesto Villegas
in the race for the Metropolitan
District of Caracas.
TRANQUILITY: BY DIAZ RANGEL
The municipal elections set
for this Sunday, December 8th,
are likely to result in greater
peace and tranquility for Vene-
zuela and its people. In part, the
holidays are right around the
corner, with people cashing in
year-end bonuses and – thanks
to recent measures taken by
the national government – find-
ing more reasonable prices at
the cash register. More impor-
tantly, however, voters in each
of the over 300 municipalities up
for grabs have numerous local
reasons to conduct themselves
in a responsible manner. At the
same time, those who are con-
vinced that they cannot trust
the country’s electoral system
are likely to abstain from par-
ticipating at all.
In a survey carried out by Ulti-
mas Noticias, 2,454 readers were
asked what they expected of the
2013 municipal elections. Half of
the respondents affirmed that
political stability would result,
while an additional set of read-
ers said polarization would also
be reduced.
THE QUESTION
What do you expect will oc-
cur after the December 8th
election? Of the 2,454 read-
ers surveyed, 1,222 (49%) an-
swered that they expect “more
political stability” while only
640 (26%) responded that they
anticipate “more uncertainty”.
Another 386 respondents (15%)
said they were “indifferent” to
the results, while 204 (8%) af-
Venezuela: The municipal elections
firmed that “polarization will
be reduced”.
Simply put, some 57% of vot-
ers (49 + 8) are optimistic. These
people don’t believe that the op-
position will occupy mayor’s of-
fices – as has been threatened by
some – and they don’t believe it
will be necessary to use the state
security mechanisms created to
maintain the peace. These vot-
ers, a majority, are convinced
that the elections will take place
in all normality. In addition,
they are convinced that once the
results are announced, the coun-
try’s major political forces will
accept the outcomes. Though
some are expected to accept re-
luctantly, very few are expected
to subvert the established order,
reject the results, and or cause
disturbances. In cases where
such illegal conduct does take
place, police and military forces
are expected to react immedi-
ately, reestablishing order.
If we add the 15% of respon-
dents who expressed indiffer-
ence – people who are likely to
abstain from participating be-
fore, during, or after the vote
– the aforementioned optimists
(57%) are part of 72% of voters
who aren’t anti-anything. This
figure stands in stark contrast
to the 26% of people who said
they expect “greater uncertain-
ty”, which does not necessarily
mean they expect violence. In
conclusion, the vast majority of
Venezuelans are inclined to be-
lieve in, contribute to, and await
a peaceful post-election climate.
Naturally, a radical minority
exists and has always existed.
They seek shortcuts, and as
most Venezuelans spend the
week preparing for Sunday the
8th peacefully, these extremists
may very well attempt desperate
acts to disrupt the elections.
THE SPOTLIGHT
Of the hundreds of munici-
palities with mayoral elections
this Sunday, two stand out in
the national spotlight: the Met-
ropolitan District of Caracas
(the nation’s capital, with some
3.5 million inhabitants living in
5 separate municipalities) and
Maracaibo (capital of the oil-
rich state of Zulia). In both these
cases, the opposition looks to
reelect mayors with very little
to show of their time spent in of-
fice. Meanwhile, the candidates
of the ruling United Social-
ist Party of Venezuela (PSUV)
are new to the scene, bring a
fresh perspective, and express a
greater willingness to win and
get things done. The results, as
such, shouldn’t surprise any-
one. While the recent reductions
in prices may encourage voters
to choose PSUV candidates, the
unresolved shortages of basic
consumer goods may also lead
them to vote the other way.
SURPRISED
With respect to two other mu-
nicipal elections, one in the state
of Merida’s Libertador Munici-
pality and the other in Caracas’
Sucre Municipality, it’s surpris-
ing to see the similarities in
candidates’ priorities. In both
cases, the opponents’ platforms
seem to coincide on the need to
address three main problems,
pretty much in the same order:
garbage, insecurity, and street
vendors. In Merida’s Libertador,
as in Caracas’ Sucre, opposition
mayors have all but abandoned
their post, with garbage flooding
the streets, insecurity running
wild, and street vendors roam-
ing around with city permis-
sion. In the former, the opposi-
tion is running a new candidate
who promises to do better than
his departing ally. In the later,
right-wing Mayor Carlos Ocariz
promises to do more “this time”
to resolve people’s problems.
What has he done in five years?
RECOMMENDATIONS
Though I don’t usually make
recommendations in non-pres-
idential elections, this time
I’d like to make an exception.
For those readers who trust
in what I write, and who have
yet to decide how to vote in
the race for the Metropolitan
District of Caracas, I have a
name to share. I don’t name
him because he is a friend or
colleague. No, I name him be-
cause I sincerely believe he is
the best choice for the impor-
tant task. His name is Ernesto
Villegas, he is young, honest,
enterprising, and he has the
support of both the national
government and the adminis-
tration of Caracas’ most popu-
lated municipality, Libertador.
He is the only candidate capa-
ble of managing the multiple
needs of Caracas’ five munici-
pal administrations (Liber-
tador, Sucre, Chacao, Baruta,
and El Hatillo) and his plat-
form for the overall Metropoli-
tan District will substantially
improve Greater Caracas. I am
going to vote for him.
The municipal elections
set for Sunday, December
8th, are likely to result
in greater peace and
tranquility for Venezuela
and its people. The
holidays are right around
the corner, with people
cashing in year-end
bonuses and – thanks to
recent measures taken by
the government – finding
more reasonable prices at
the cash register.