***** The New York Times, March 11, 2004 Chávez Says U.S. Is Fueling His Enemies By JUAN FORERO
CARACAS, Venezuela, March 10 - Under United States pressure to allow a recall referendum against his rule, President Hugo Chávez has in recent days counterattacked, charging that the Bush administration is trying to oust him by aiding his adversaries, including those who briefly overthrew him in a 2002 coup.
Mr. Chávez has seized on the information in reams of United States government documents, made public by a pro-Chávez group in New York that show Washington is trying to strengthen political parties and other antigovernment groups that want to remove the populist firebrand through a recall.
Aid to opposition groups by the National Endowment for Democracy, a nonprofit agency financed by the United States Congress, is not new. Nor is the $1 million spent here last year excessively high for an organization that spends $40 million a year to finance hundreds of organizations in 81 countries.
But the unearthing of 2,000 pages of documents has provided details of how the Bush administration considers the rehabilitation of Venezuela's battered political parties the best way to counter a leader Washington views as erratic and authoritarian.
"The future of Venezuelan democracy depends on the rebuilding of healthy and responsive political parties that can effectively channel citizen demands," says one memo.
Mr. Chávez has lashed out in three recent speeches, telling Washington to "get its hands off Venezuela" and charging that the Bush administration is "financing this mad opposition." He has even gone so far as to threaten to cut off oil exports if Washington gets the "idea of trying to blockade Venezuela, or, even worse, of invading Venezuela." . . .
For the United States, which is dependent on Venezuelan oil supplies and has close economic ties to the country, the possibility that the referendum could be scrapped would be a serious blow to a carefully calibrated policy aimed at building feasible political alternatives to Mr. Chávez.
The endowment documents say that "strengthening political parties remains a critical part of any long-term solution" and that the "battered political party system is the only institution capable of restoring democracy by generating solidly democratic leaders and generating sound policies."
Endowment aid had fallen to $257,000 in 2000, as political parties and other beneficiaries in Venezuela were left crippled after Mr. Chávez's sweeping victories in elections. Assistance more than tripled to $877,000 in 2001 as political parties reorganized to counter the president. In 2002, aid rose again, to $1.1 million. . . .
The documents, obtained by a freelance reporter, Jeremy Bigwood, and posted on the Web site of the Venezuela Solidarity Committee, show that much of the aid benefits political parties and groups leading the recall effort. Those benefiting from assistance include Sumate, a group that has staged signature gatherings for a referendum. It received $53,400 last September.
Financing does not go directly to political parties. The endowment channeled nearly $350,000 to the international wings of the Republican and Democratic parties, the International Republican Institute, the National Democratic Institute for International Affairs, and the foreign policy arm of the A.F.L.-C.I.O., the American Center for International Labor Solidarity. Those organizations ran workshops and training sessions and offered advice to three political parties - Democratic Action, Copei and First Justice - as well as the Venezuelan Workers Confederation.
The leaders of all these organizations have been at the forefront of the anti-Chávez movement.
Mr. Chávez has been suspicious of the endowment's intentions since it was revealed soon after the coup that opposition groups had been receiving funding.
Though the State Department put $1 million in endowment aid on hold in the aftermath, an internal investigation found the groups carried out programs "adhering to U.S. laws and policies," and assistance resumed.
"The government believes it is unacceptable for the United States to be involved in the affairs of Venezuela," said Andres Izarra, a spokesman for the Venezuelan Embassy in Washington.
The Venezuelan parties and the workers confederation that are beneficiaries of aid are important components of the Democratic Coordinator, an anti-Chávez umbrella organization led by politicians, labor leaders, former managers at the state oil company and media executives.
Some groups that receive aid, like the Center for International Private Enterprise, which has ties to the United States Chamber of Commerce, do not hide their loathing of Mr. Chávez.
The enterprise, in explaining its role here, says the "current political crisis in Venezuela has been brought about by the deplorable performance of the Chávez government, which has demonstrated both militaristic and Marxist tendencies." The center received $203,000 last year.
Mr. Sabatini explained that the endowment has helped organizations that are not outwardly political like international private enterprise group, which is monitoring public spending, a journalists' group and conflict resolution organizations. When they conduct programs, it is not an opposition question, Mr. Sabatini said.
Assistance is open to groups allied with Mr. Chávez, he said, and even the governing party received technical assistance from the Republican and Democratic institutes. Independent groups like the N.E.D. have an obligation to support and give a lending hand, Mr. Sabatini said.
<http://www.nytimes.com/2004/03/11/international/americas/11VENE.html> *****
***** The New York Times, March 11, 2004 The Oil Company as Social Worker By BRIAN ELLSWORTH
CRUCERO DEL CARO, Venezuela - Siadys Bayuelo, 33, has spent four years urging local authorities to pipe potable water into her home in this dusty town in eastern Venezuela, sparing her the trouble of walking a mile every day to the nearest well.
Now, contractors are drilling wells around the region as part of a $140,000 project that will eventually pipe water into her three-room cinderblock house and hundreds of others nearby, easing a hardscrabble life. But rather than thanking the local government, Ms. Bayuelo says she is grateful to the state-run oil company, which has extensive but faceless operations in this gas-rich region.
"I'm so happy that we're finally going to have water in the house," she said recently while bathing her 1-year-old son from water drawn out of an old petroleum drum. "This is the first time the company has ever done anything for us."
All across this oil-rich and poverty-riddled country, the state oil giant, Petróleos de Venezuela, the country's economic engine, is embarking on a radical and wide-ranging social spending program that includes building homes, running literacy programs and developing agriculture. In all, the company, known worldwide as Pdvsa (pronounced peh-deh-VEH-sah), is increasing its social spending from less than $40 million in previous years to $1.7 billion this year, according to the company's 2004 budget: $616 million on various programs, $600 million on agricultural development and $500 million on low-income housing.
The new spending measures are transforming a state company long run like a private concern into President Hugo Chávez's primary vehicle for social change in the world's fifth-largest oil exporter.
"Pdvsa used to function as a transnational company only interested in maximizing oil sales," said Pdvsa's president, Alí Rodríguez. "Now, Pdvsa is working with other state institutions to reduce Venezuela's exceedingly high rate of poverty." According to Venezuelan research groups, more than 70 percent of the population lives below the poverty line. Social spending initiatives are crucial for the embattled President Chávez, who has recently faced violent opposition protests as electoral authorities announced setbacks in a recall referendum.
First elected in 1998 on promises to redistribute oil wealth, Mr. Chávez's rule has been characterized by deep polarization. His foes accuse him of ruining the economy; supporters say he is the first leader to represent the poor. While thousands of Mr. Chávez's adversaries have demonstrated against him and in favor of a recall vote, millions are set to benefit from programs that receive Pdvsa financing and other donations, from furniture to literacy videos.
Energy experts warn, however, that Pdvsa never fully recovered from the grueling anti-Chávez strike the company called in December 2002, which makes it hard for Pdvsa to justify such a large social investment budget. The energy experts estimate oil output at roughly 2.5 million barrels a day, though Pdvsa says it is producing more than 3 million.
They also say new social spending initiatives will soak up capital the company needs to shore up production, particularly after a decrease of more than 30 percent in the company's total investment budget last year, to $2.19 billion. Without at least $5 billion a year in oil investment, oil analysts say, Pdvsa will face production declines down the road.
"Pdvsa is now investing in activities that are outside of the realm of oil production at the expense of maintaining its productive capacity," said Ramón Espinasa, chief economist for Pdvsa until 1999 and now an economic analyst in Washington. "It shows that Pdvsa no longer operates within the logic of a corporation." And this, he said, will ultimately bankrupt the company.
Executives at the company did not respond to repeated requests for comment on such criticism, but government leaders have pointed to increased profits in 2003 as evidence of the company's financial health. . . .
Pdvsa, created in 1975 as part of the nationalization of Venezuela's oil industry, was for years considered as efficient as major oil companies like Exxon Mobil and ChevronTexaco, functioning as a corporate multinational with an elite cadre of oil professionals. But since the oil industry is both the lifeblood and the Achilles' heel of Venezuela, both Mr. Chávez and his adversaries realized it was impossible to control the country without controlling Pdvsa.
The company's corporate leadership, largely opposed to Mr. Chávez's vision for the oil industry, clashed with the president as the country's political divisions widened. There were two strikes at Pdvsa in 2002, ultimately failed attempts to force Mr. Chávez's ouster. In 2003, Mr. Chávez fired 18,000 workers accused of joining the second strike, cutting the company's work force in half and gutting its finance and planning departments.
During this period, Mr. Chávez replaced the former Pdvsa leadership with new executives supportive of his reform agenda, making it possible to open up Pdvsa to major social spending initiatives.
Here in the municipality of Anaco in the eastern state of Anzoátegui, the company is working with several state agencies on a $675,000 project to increase production of vegetables, meat and dairy products. In an orchard just outside the company's Anaco headquarters, local residents carefully weed and trim experimental patches of rice, tomato and lettuce under the blazing sun as part of a training program in sustainable agriculture.
"Pdvsa is teaching us to produce food in harmony with nature," said Kamal Saab, 40, who was outfitted in a straw hat and a blue Pdvsa jumpsuit and was standing in a patch of lettuce. "They're giving me the opportunity to learn about agriculture and start my own business." Mr. Saab, once a contractor who maintained oil drills, now receives a monthly stipend of roughly $85 to study soil properties and cultivation methods in an orchard he says was once reserved exclusively for company managers. When he finishes the course, Mr. Saab said, Pdvsa will help him acquire land where he can grow vegetables and raise pigs.
The programs are solidifying Mr. Chávez's support among the growing lower classes as he continues to face a potential recall vote this year. For Venezuelans like Ms. Bayuelo, whose modest house sits half a mile from a tower spitting out a flare of burning natural gas, finally benefiting from the country's oil revenue is a convincing reason to back him.
"I have to stick with whoever is looking out for me," Ms. Bayuelo said, glancing at the unused pipes that will soon bring water to her house. "Right now, the only one out there is President Chávez."
<http://www.nytimes.com/2004/03/11/business/worldbusiness/11pdvsa.html> ***** -- Yoshie
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