Businessman's Strike in Venezuela:WSJ story

Randy Earnest earnest at tallynet.com
Thu Dec 6 04:54:16 PST 2001


The WSJ take, along with an AP report also in today's issue. With John, I'm also wondering about an Allende parallel. I'm not finding much detail about the laws Chavez has implemented; so far, it seems like he's only trying to assure national control over oil enterprises and the breakup of large, underutilized estates. In this connection, it's interesting, that some big foreign firms are saying they won't support the strike (see below).

Googling, I got the Heritage Foundation rating http://database.townhall.com/heritage/index/country.cfm?ID=157 I love this: "Venezuela's judicial system is in disarray. According to the U.S. Department of State, "The ANC [National Constitutional Assembly] issued a Judicial Emergency Decree to reform the largely discredited judiciary, which although legally independent is highly inefficient, corrupt, and subject to influence." As a result, Venezuela's property rights score is 1 point worse this year." A St. Petersburg Times article with more details http://www.sptimes.com/News/061201/Columns/Venezuela_tilts_furth.shtml

Randy Earnest

Americas An Unusual Coalition Presents Chavez With His Largest Political Challenge By MARC LIFSHER Staff Reporter of THE WALL STREET JOURNAL

CARACAS, Venezuela -- Leftist President Hugo Chávez may face the biggest challenge of his three-year rule when a newly energized opposition coalition, headed by the country's most important business organization, launches a nationwide, 12-hour work stoppage on Monday.

The unusual strike, organized and led by the Federation of Chambers of Commerce, a group representing most of the country's commercial and industrial firms, is backed by the million-member Venezuelan Workers Confederation. Even the nation's major newspapers will not publish on Monday.

The unorthodox banding together of labor and management is an effort to persuade Mr. Chávez to rewrite or junk outright a raft of new laws that critics contend will choke off foreign investment, threaten private property rights and stifle job creation. Mr. Chávez unilaterally handed down the measures last month using special powers granted him last year by his strong, pro-government majority in the National Assembly.

The most controversial of the new laws deals with hydrocarbons. It jacks up crude oil royalties paid to the government by as much as 80%, making them among the world's highest, and requires the government to hold a majority interest in all new joint ventures with foreign companies. A second statute creates a land reform institute with the power to seize large farm holdings deemed as not being put to their best use.

Venezuelan Union Will Join Strike Protesting New Economic Statutes (Dec. 4)

"This is an expression of the frustration of Venezuelan civil society," says Antonio Herrera-Vaillant, vice president of the Venezuelan-American Chamber of Commerce, which represents 1,200 companies doing business with the U.S., Venezuela's largest trading partner. Mr. Chávez, he says, "is attempting to introduce Marxist, socialist concepts at a time when these points of view and manners of doing things are in the past."

Mr. Chávez, a retired military officer imprisoned after leading an unsuccessful coup against the constitutional government in 1992, calls the new laws part of his "peaceful revolution" to transform a Venezuelan society long dominated by political and economic oligarchies. And though he and his ministers have indicated a desire to "dialogue" with opposition groups, and even held out the possibility of amending some of the new laws, Mr. Chávez has been adamantly opposed to major rewrites, especially of the land law. The law, he says, is needed to change a system that has left 60% of the country's farms and ranches in the control of 1% of the population.

Indeed, the confrontational president is viewing the planned strike, which has been called for 6 a.m. Monday in Caracas, as a contest of wills between his populist movement and the growing opposition ranks, whose members he regularly demeans as a "squalid" elite. The strike, says Tarik William Saab, a top legislator in Mr. Chávez's Fifth Republic Movement, is nothing more than a "destabilizing conspiracy campaign."

As a measure of his defiance, Mr. Chávez says he has invited hundreds of thousands of land-hungry peasants to demonstrate in Caracas in support of the land law, which he will formally unveil at a ceremony in western Venezuela on the same day as the strike. In a further show of strength, he has ordered supersonic fighter planes to fly over the capital on Monday in celebration of annual Air Force Day. Traditionally, the flyover is held over the city of Maracay, the Venezuelan Air Force headquarters.

The rise in social and political tension comes at a time of growing dissatisfaction with Mr. Chávez's rule. He came to power in December 1998 in a free, democratic election and has since revamped the nation's constitution and institutions with a series of plebiscites. Since then, Mr. Chávez's often harsh rhetoric has spawned fears that he might seek a more authoritarian path if he runs into significant opposition. In the meantime, his personal popularity, though still high, has fallen to 56% in July from a high of 75% in May 1999.

Analysts note that the work stoppage, if successful, would mark the first show of power by an incipient opposition and would signal a difficult next year in Venezuela. And political conflicts are likely to be exacerbated by a 25% drop in oil prices. Since oil export revenues account for about half of government spending, Mr. Chávez faces a large hole in his 2002 budget"

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Venezuelan Union Will Join Strike Protesting New Economic Statutes Associated Press

CARACAS, Venezuela -- Venezuela's largest confederation of trade unions decided Tuesday to join a one-day nationwide strike called by business leaders to protest a package of new economic laws both groups say will discourage private investment.

Also on Tuesday, the government signaled for the first time that it was willing to amend some of the most contentious laws, which President Hugo Chavez passed last month under special powers that allowed him to bypass Congress.

But Interior Minister Luis Miquilena said any proposed amendments would have to be submitted to Congress, the only institution with the authority to change laws already decreed by the president.

Fedecamaras, the country's largest business association, called the Dec. 10 strike because they wanted more say in the drafting of the laws, many of which the group contends could discourage investment by restricting free enterprise. Fedecamaras represents companies that generate 90% of the country's non-oil production.

The Confederation of Venezuelan Workers, or CTV, told its one million members to stay home Monday to support the strike. CTV General Director Pablo Castro said the union is protesting "an economic policy that alienates foreign and national private investment, and which not only fails to generate jobs but destroys employment."

The stoppage will include all national and local government employees and all workers from the key petroleum industry, said CTV President Carlos Ortega. State-owned oil company Petroleos de Venezuela SA has a contingency plan that protects oil exports for at least seven days during a strike.

Also Tuesday, Bloque de Prensa, an association of newspaper owners, announced that their member newspapers would not circulate on Monday in solidarity with the strike. The newspaper strike will include Venezuela's two largest national newspapers, El Universal and El Nacional, said Bloque de Prensa President David Natera Febres.

Miquilena, the interior minister, predicted the strike would be a failure. He said supermarkets, transportation companies and car manufactures such as Ford, General Motors and Toyota had assured him they would not participate in the stoppage.

Ford de Venezuela spokesman Ricardo Tinoco confirmed that his company would stay open on Monday because the U.S. car marker did not want to "interfere in the country's internal affairs." He said Ford workers were free to adhere to the strike.

Officials in General Motors and Toyota were not immediately available for comment.

One of the most contentious items of the legislation is a land reform law that Fedecamaras says gives the state too much discretion in determining whether idle private farmland should be confiscated.

The business group also opposes a new hydrocarbons law that imposes the world's highest royalty rates on companies exploring and exploiting state-owned oil fields.

The government, which insists it consulted a wide variety of groups and people in all 49 laws, argues that higher royalty rates in the hydrocarbons law will create a steadier revenue flow that will make budgeting easier. It also contends that the land reform law will allow the government to correct an unjust situation in which 1% of the population owns more than 60% of Venezuela's arable land.

The government has said workers would violate Venezuelan law if they joined Monday's strike. Mr. Chavez has dismissed the strike as political maneuver by a disgruntled "oligarchy" and has called for a series of protests to demonstrate that the poor majority are against the move

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