Venezuela Update

January 2007

 

 

 

 

Venezuela Has a Strong Economy

 

Venezuela’s economy is growing at a very fast pace. In the last two years, Venezuela’s growth rate has increased by 10 percent making it the highest in the region, following a 17.8 percent jump in 2004.[1]   Interestingly, the largest amount of growth is occurring in the non-petroleum sector.[2]

 

The United States International Trade Commission reported that since the end of 2005, Venezuela has risen from the U.S.’s third most important trading partner in Latin America to its second. BBC NEWS reported on December 29, 2006 that according to the Venezuelan-American chamber of commerce and industry (Venancham), trade has more than doubled in the last four years and now stands at around $47billion a year.  ”Within the last year alone the level of imports and exports between the US and Venezuela has risen by 15%,” said Venamcham chief Edmond Saade. Almost half of goods exported from Venezuela are destined for the US.[3] 

 

Since 2000 the Chavez administration has boosted government spending, increased subsidies for the less fortunate, and gradually raised the minimum wage[4].   Although the annual inflation rate in 2006 was 17 percent, the household poverty rate was reduced by nearly 9 percentage points from 42.8 percent in the first half of 1999 (when President Chavez took office) to 33.9 percent for the first half of 2006.   Moreover, it is important to note that in March 2006, 54% of Venezuelans believed that the Chavez administration had been very successful in improving their purchasing power.[5]

 

A 2006 poll carried out by the Chilean polling firm Latinobarometro shows that Venezuelans are far more likely than any other country in the region to rank their country’s economy as “good” or “very good”. Venezuela also tops the list among Latin-American countries when asked whether their personal finances are better today than last year.[6]

 

Venezuela Compensates Companies Fairly 

 

·         Venezuela respects the rights of shareholders

Like other governments in Latin America, the Venezuelan government is committed to natural resource nationalism, or the control of key industries whose record of privatization has led to diminished growth over the years.   Ricardo Sanguino, head of the National Assembly Finance Committee, stated that the nationalization plan will involve compensation rather than expropriation.  “Confiscation, expropriation are banned words in our dictionary,'' said Sanguino. “We will be tough but fair negotiators. There are legal mechanisms in the Constitution that give support to our plan.”[7]  Shareholder rights of any company affected would be respected. 

 

 

 

·         Workers demand nationalization to improve worker benefits

The telecommunications company Nacional Telefonos de Venezuela, known as CANTV, is 28.5% owned by the U.S. corporation Verizon Communications, Inc. Last year, President Chavez announced ­that CANTV, privatized in 1991, might be purchased by the state unless it fully complied with a court ruling and adjusted pension payments to current minimum-wage levels. CANTV retirees who have been blocking the streets of Caracas in protest since then cheered Chavez's decision to nationalize CANTV, saying they now have hopes of being paid what they are owed.  Chavez is "the one who guarantees us a future is the Venezuelan government," said Jose Chacon, a leader of the retirees. [8]

 

Private Media is Respected in Venezuela

 

·         Freedom of Expression and Free Speech are encouraged

Since President Hugo Chavez' election in 1998, the largely opposition-owned private media has gone on the offensive, criticizing the president and opposing his social, political, and economic policies.  Despite this, protection of civil liberties, including freedom of expression and the press, have been honored.

 

·         The private media moves from objective reporting to political advocacy

The private media has consistently attacked the Chavez administration in newspapers, radio stations, and television channels, so much so that their role has moved from objective reporting to political advocacy.  It has been so dramatic that several journalists have even noted, "the five main privately owned channels—Venevisión, Radio Caracas Televisión (RCTV), Globovisión, Televen and CMT—and nine out of the 10 major national newspapers, including El Universal, El Nacional, Tal Cual, El Impulso, El Nuevo País and El Mundo, have taken over the role of the traditional political parties."[9] 

 

·         Democratization of a public good: the case of RCTV

Recently, President Chavez announced that the broadcasting concession for television station Radio Caracas Television (RCTV), a division of the business group 1 Broadcasting Caracas, which expiries in May 2007, would not be renewed due largely to its lack of objectivity and inability to report the truth on issues of national importance.  “The airwaves are a public resource entrusted to broadcasters with the understanding that they will be used responsibly to serve the people”.[10]

 

In the days leading up to the coup in April 2002, RCTV and other private media stations openly encouraged Venezuelans to protest and take the streets to remove President Chavez.  In fact, “…a group of top media executives rolled up in their limousines for a meeting with Mr. Carmona [the transitional president], at the 19th-century Miraflores palace.... Also present were Miguel Henrique Otero, publisher of the El Nacional group of newspapers, Alberto Federico Ravell, chief executive of Globovision (Venezuela’s answer to CNN) and Marcel Granier of the RCTV channel. “We can’t guarantee you the loyalty of the army,” a presidential guard heard one of them tell Mr. Carmona, “but we can promise you the support of the media.[11]  And sure enough, when the tide began to change and the population rallied to bring back President Chavez and take back control of the Presidential Palace, RCTV broadcasted cartoons and reruns instead of reporting what was happening; a feat that no media outlet in the U.S. would ever get away with.  In essence, once the private media owners realized the coup would not succeed, Carmona's "media allies conspired to suppress all news of its difficulties."[12] 

 

On January 17, 2007 speaking in front of the Congressional Commission of Science, Technology, and Social Communications, a group of independent producers in Venezuela proposed to use the RCTV signal to enhance the artistic and cultural values of the nation and highlighted the importance of having public radio and public television free from corporate or political interference.

 

MEDIA BREAKDOWN IN VENEZUELA

RADIO: 

            AM: 214 stations

            FM: 495 stations

            Total: 709 Radio Stations

Out of those 709 radio stations:

 

State owned: 3 (YVKE MUNDIAL, RNV, and ACTIVA) Privately owned: 706

TELEVISION:

UHF: 64

VHF: 17

            Total: 81 Television Stations

Out of those 81 TV Stations:

 

State owned: 2 (Venezolana de Television and VIVE TV) Privately owned: 79

PRINT MEDIA:

            Regional Circulation: 106

            National Circulation: 12

            Total: 118 Newspaper Companies

 

All 118 Newspaper Companies are private

                                                                       Source: Venezuelan Ministry of Communications and Information, June 2006

 

Venezuela is a Reliable Source of Energy

 

Through CITGO, owned by Venezuela’s national oil company - Petróleos de Venezuela or PDVSA, Venezuela has been a reliable supplier of crude oil and refined products to the U.S. market throughout the years.  Currently, the fifth largest provider of hydrocarbons in the world, Venezuela has reserves of 78 billion barrels of crude oil, 235 billion barrels of heavy and extra-heavy crude oil, and 148 trillion cubic feet of natural gas.  Venezuela also has the largest reserves of hydrocarbons in the Western Hemisphere and ranks as the world’s eighth country with the largest gas reserves.

 

Although not widely reported on Venezuela was instrumental in ensuring extra cargoes of gasoline -- roughly totaling one million barrels -- to alleviate fuel shortages in the United States due to the catastrophe of hurricanes Katrina and Rita. As a neighbor and business partner, Venezuela provided immediate relief by increasing the market supply available to the United States which reduced the price of gasoline for the American consumer.

 

Venezuela initiated the CITGO heating oil program at a 40 percent discount, providing more than 100 million gallons to more than 400,000 low income households in 16 states. This program, initiated in 2005, has increased its outreach for the 2006-2007 winter season, and is operating in Alaska, Connecticut, Delaware, the District of Columbia, Indiana, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, Greater Philadelphia, Greater Pittsburgh, Rhode Island, Vermont, Virginia and Wisconsin. CITGO is also providing discounted oil directly to 163 Native American tribes in the states of Alaska, Maine, Minnesota and New York.

 

After having neglected relations with other Caribbean countries for many years, the Chavez government established the Petrocaribe alliance in 2005 to help the Caribbean achieve stronger economic growth by providing oil at market prices with very favorable financing terms. Currently, all Caribbean countries are members of PetroCaribe except Trinidad and Tobago.    

 

Venezuela’s Elections are Certified Free and Fair

 

·         NAACP finds that civic participation and democracy are alive and well in Venezuela

While monitoring Venezuela’s 2006 presidential elections the National Association for the Advancement of Colored People’s mission found that: “Civil society was very engaged in the electoral process as represented by the over 70 percent turnout of the electorate,” and that they “considered the voting machines exceptional because they made the electronic voting process as easy as simply selecting a candidate’s picture and party logo.”  The electoral results were deemed even more credible after “54 percent of the paper receipts were audited for accuracy along with the tallies from the machines.”[13]

 

Venezuelans have one of the most sophisticated and secure electoral processes in the world. Their electronic voting machines allow votes to be easily audited through a paper and electronic trail to ensure confidence and transparency in the electoral process. Moreover, the 1998, 2000, and 2006 presidential elections and the results of Venezuela’s 2004 referendum were certified as free and fair by international observers, including the organization of American States (OAS) and the U.S.-based Carter Center.[14]   “The State of Florida is not even doing that with a paper trail,” remarked Senator Bill Nelson of Florida, “so maybe Venezuela will teach Florida something.” [15]

 

Elections are administered by the National Electoral Council (CNE), an independent branch of government, separate from the Executive, Legislative and Judicial branches. The CNE has a Board of Directors made up of five Director positions: three from civil society organizations, one from the law faculties of Venezuela’s universities and the fifth from the Citizens’ Power.  

     

Venezuela is a Leader in the fight against Narco-Trafficking

 

Venezuela has been working with Colombia and the United States to combat drug trafficking and terrorism in South America.  This has been most notably done through Venezuela’s increase in border patrols along the Colombian border to intercept drugs and rebels. Colombian President Uribe has praised Chavez as a “champion for peace” for his help in battling terrorism, saying “I wish to give President Chavez my thanks publicly as a champion in this effort”[16].  Moreover, within the last 18th months Venezuela has been able to dismantle narco-trafficking networks and achieve a 70% increase of drugs’ seizure. Venezuela maintains 42 bilateral agreements with a variety of countries on cooperation in the fight against drugs and has recently purchased counter narcotics equipment such as helicopters to patrol the border with Colombia more effectively

 

Health Care is Guaranteed for All

 

·         Venezuela is improving the health of the majority

Venezuela has experienced a huge improvement in public access to health services and the new Constitution in 2000 became the first in Latin America to guarantee all citizens the fundamental right to basic health care. More than 60% of Venezuelans today receive some form of government-sponsored health care. This has led to plummeting infant and postnatal morality rates. Venezuela is on track to reach the UN Millennium Development health goals by 2015[17].

 

A Quality Education is a Right

 

In 2005 UNESCO applauded Venezuela for its work against illiteracy, acknowledging that it is one of the few countries in the region taking steps to combat the problem. A series of educational programs have taught more than 1.5 million adults to read in the past four years [18]. Venezuela has also implemented a massive follow-up program for its mass literacy campaign coined Mission Robinson 2, which will enable over a million people to complete their primary education.


[1] Center of Economic and Policy Research  January 9, 2007. <http://www.cepr.net/index.php?option= om_content&task=view&id=773&Itemid=45>

[2] “Venezuela: Latin America’s Economic Success Story”

[3] BBC News. “Venezuela-US trade under the microscope.” December 29, 2006.

[4] “Venezuelan economy posts sharp IQ growth” http://businessweek.com/ap/financianews/D8H02AH05.htm?campaign_id=apn_home_down&chan=d

[5] Consultores 21 March 2006 Poll <http://www.consultores21.com/indez.html>

[6] 2006 Latinobarometro Report <www.latinobarometro.org>

[7] “Venezuela to Pay Companies in Nationalization Plan” by Guillermo Parra-Bernal, Bloomberg News, January 10, 2007

[8] Associated Press. “Chavez says he is ready to transform Venezuela.” January 10, 2007.

[9] See "How Hate Media Incited the Coup Against The President: Venezuela’s Press Power," Maurice Lemoine, Le Monde Diplomatique, August 2002.

[10] The Prometheus Radio Project, http://prometheusradio.org/

[11] Coup and Counter-Coup from The Economist Global Agenda, April 16, 2002.

[12] Ibid.

[13] NAACP Report on Venezuela’s 2006 Elections <http://www.naacp.org/advocacy/international/venezuela/index40.html>

[14] “Venezuelan Ballot Gets Confidence Vote.” David Luhnow and Jose de Cordoba. The Wall Street Journal. August 20, 2004.

[15] Senate Foreign Relations Committee, Subcommittee on Western Hemisphere, Hearing on Venezuela, June 24, 2004.

[16] “Admiten Complot de oficiales Colombianosy Exiliados del 11A.” El Universal 18 December, 2005. http://www.eluniversal.com/2005/12/18/pol_art_18116B.shtml

[17] “Education, Health Care & Opportunity: Venezuela’s Revolution of Hope.” The Venezuela Information Office

[18] “Education, Health Care & Opportunity: Venezuela’s Revolution of Hope.” The Venezuela Information Office, UNESCO