Syndicated News from Venezuela
Sun, 08 Dec 2013 15:08:53 GMT
Sun, 08 Dec 2013 18:30:46 GMT
Will Venezuela Follow Iran's Footsteps?Motley FoolVenezuela has around the same population as Saudi Arabia at around 30 million people, and 35 billion more barrels of proven oil reserves at around 300 billion barrels versus Saudi Arabia's 265 billion barrels. Unlike Saudi Arabia, where oil can be ...and more »
Sun, 08 Dec 2013 05:15:19 GMT
Sat, 07 Dec 2013 11:33:20 GMT
High stakes in Venezuela's municipal electionsBBC NewsThe stakes will be high for both the government and the opposition in Venezuela's municipal elections on Sunday. According to David Smilde, a senior fellow at the Washington Office on Latin America, the results of the vote for mayors and town ...
Sun, 08 Dec 2013 02:49:31 GMT
Sat, 07 Dec 2013 15:28:43 GMT
Venezuela elections a test for Maduro, oppositionUSA TODAYCARACAS, Venezuela ? Venezuelan President Nicolas Maduro says that winning Sunday's municipal elections is essential for continuing the country's socialist revolution and honoring the legacy of the late Hugo Chávez. For opposition leader Henrique ...
Sun, 08 Dec 2013 01:43:20 GMT
Sat, 07 Dec 2013 05:11:55 GMT
Venezuela's President Tightens Grip on MediaABC NewsAs Gov. Henrique Capriles campaigned for president of Venezuela last April, he couldn't venture more than a few steps without being hounded by dozens of sharp-elbowed cameramen and photographers. Nearly eight months later, the visibly thinner and ...
Sun, 08 Dec 2013 05:28:36 GMT
Sun, 08 Dec 2013 11:17:49 GMT
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Results 1 - 10 of Headlines for Venezuela
Monday, July 21st, 2003
: RCN Administrator
1150 GMT â€“ FRANCE: France has launched an investigation into the July 20
bomb attack on a tax office in Nice that injured 16 people. No one has
claimed responsibility for the attack, in which two bombs exploded. However,
Corsican separatists, who called off a cease-fire during the week of July
14, are suspects in a similar attack on the same office six months ago.
1145 GMT â€“ SOLOMON ISLANDS: The first contingent of Australian soldiers
slated to go to the Solomon Islands left aboard the naval frigate HMAS
Manoora on July 21. Defense Minister Sen. Robert Hill said that no timetable
has been set for the soldiers' return from the island. The rest of the
2,000-member force is expected on the island on July 24. Australian Prime
Minister John Howard decided to send the troops in hopes of containing the
island and keeping it from degenerating into a "lawless haven for
terrorists, drug runners and money launderers."
1129 GMT â€“ IRAN: Iran armed its elite Revolutionary Guard with the Shahab-3
missile during a military inauguration ceremony July 20 as Iran's supreme
leader Ayatollah Ali Khamenei looked on, state-run Iranian television
reported. The Shahad-3 has a range of 810 miles and can strike targets in
Iraq, Israel, Turkey, Saudi Arabia, Afghanistan and Pakistan. However, U.S.
intelligence agencies have said that although the missile is suspected of
having this ability, Iran has not yet developed a completely reliable
1127 GMT â€“ VENEZUELA: Venezuelan army commander Gen. Jorge Luis Garcia
Carneiro told Caracas television station Globovision on July 20 that it's
not likely a presidential recall referendum can be held in 2003 because "the
new National Electoral Council (CNE) still has to be named, the required
signatures have to be collected, the Permanent Electoral Registry (of
voters) has to be purged, election material has to be printed and the
personnel that will participate in the electoral process has to be trained."
1122 GMT â€“ RUSSIA: Six Russian servicemen and three rebels were killed and
eight were wounded overnight on July 20 in a firefight near the village of
Dyshne-Vedeno, Interfax reported, citing sources inside the headquarters of
the Combined Federal Force in the Northern Caucasus. The incident occurred
when Russian forces intercepted the rebels, who reportedly were planning to
take over the village.
1118 GMT â€“ CHINA: British Prime Minister Tony Blair arrived in China on July
21 to meet with Chinese officials, including President Hu Jintao and former
President Jiang Zemin. Blair, accompanied by British businessmen, opened a
new British Chamber of Commerce in Beijing, as well as discussed North
Korea's nuclear ambitions, postwar Iraq and trade relations between Britain
and China. This is the third leg in Blair's Asia tour, with the first two
being in Japan and South Korea.
1115 GMT â€“ IRAQ: One U.S soldier from the 1st Armored Division and an Iraqi
interpreter were killed July 21 after being ambushed with grenades and
small-arms fire just north of Baghdad, Cpl. Todd Pruden said. Pruden did not
elaborate on the incident. To date, 152 U.S. soldiers have died in combat
since the war in Iraq started March 20.
1110 GMT â€“ LIBERIA: A 41-member contingent of U.S. Marines from the Fleet
Anti-Terrorism Team in Rota, Spain, is expected to arrive July 21 in
Monrovia, Liberia, European Command spokesman Maj. Bill Bigelow said. The
team is expected to reinforce security around the U.S Embassy. Currently,
there are 20 U.S. troops in the country -- sent to assess the situation and
the possible need for a U.S.-led peacekeeping force. The United States and
African leaders still are pressing Liberian President Charles Taylor to step
down and go into exile in hopes of ending the civil war.
1103 GMT â€“ MEXICO: Mexican counterterrorism investigators found information
on how to manufacture chemical weapons and other militant-oriented
information in a safe house used by Spaniards and Mexicans suspected of
having ties with the Basque militant group ETA, Reuters reports. Six Spanish
citizens and three Mexicans were arrested across Mexico on July 18, and a
seventh Spaniard was arrested in northern Spain. Police forces
simultaneously raided suspected safe houses in the Pacific coast resort of
Puerto Escondido, Cancun on the Yucatan Peninsula, Monterrey in northern
Mexico, Puebla and Mexico City. All of the cities have easy and frequent
international air connections to multiple destinations in Europe and the
Geopolitical Diary: Monday, July 21, 2003
Four U.S. soldiers were killed in action over the weekend -- including two
members of the 101st Airborne Division who were killed in an ambush west of
Mosul that left another soldier injured. Sunday's ambush occurred near Tall
Afar. The interesting thing about these attacks is that both took place
outside the "Sunni Triangle" north and west of Baghdad, where attacks have
been focused. The guerrillas appear to be expanding their operations
deliberately, trying to unnerve U.S. troops and force their commanders to
expand the combat arena -- and thereby stretch their resources even more.
What is unclear is whether these were special operations at long distances
by the Iraqis, or whether they indicated a sustained move into these
regions -- and the answers to these questions will be critical.
U.S. officials have decided to raise an Iraqi army, designated as an Iraqi
"civil defense corps." Paul Bremer, the U.S. administrator in Iraq, said the
force "will be made up of Iraqis who will be under American military command
to help us basically with the armed part of the work we're doing." If they
do nothing but help interpret both language and culture to the American
troops, they will be beneficial. If they are not expected to engage in
combat operations on their own, they can be spun up fairly rapidly."
The corps poses two challenges. The first is finding anyone willing to serve
in it. There will be two classes of people volunteering: One class consists
of criminals and down-and-outers who see a chance to come out on top in the
new Iraqi order, with not much to lose if it fails; then there will be the
people that Bremer wants: people rooted in the community with families --
people who in addition to serving in the force can also influence their
communities. This is not an impossible idea by any means, but it does depend
on one thing: being able to protect their families. The men will be safer on
patrol with U.S. forces, but their families will not. If the United States
can't protect them, the whole project fails. And protecting the families of
troops always has been one of the nightmares of guerrilla warfare.
The second problem will be security. This force will be a treasure trove of
intelligence for the Baathists. If we were Baath commanders, our men would
be standing in line to join up. Getting close up and personal with U.S.
troops would provide tactical and operational intelligence. In Vietnam, the
Viet Cong made it a point to place people in the Army of Vietnam (ARVN)
slots where liaison with the Americans was heavy. It is unclear how you do a
background check in Iraq, and we'd love to see the polygraphs. Keeping the
force clean is going to be a nightmare -- that is, if Bremer plans to put up
recruitment posters all over the country to create a force that "looks like
Iraq," in former U.S. President Bill Clinton's old phrase. If, on the other
hand, the bulk of the forces are to be raised from the Shiite regions --
where deals are being made -- and from the Kurdish regions, the security
concerns might be less. Of course, the Kurds will engage in smuggling and
the Shiites will report to Tehran, but they will be motivated to stop the
Baath guerrillas, which is the item on the agenda.
If this is the case, then what is happening is that the United States will
recruit non-Sunni forces to share the burden of occupying the Sunni regions.
As we have argued in the past, this is the only way to do it. It does not
create a pro-American faction inside the Sunni regions, but it does increase
the force available to engage and defeat the Baathists. Both the Kurds and
Shiites have the interest to carry out the mission, but both will have to be
induced to do so with political arrangements. In the case of the Shiites,
those arrangements will be costly.
Since the idea of a general recruitment from the population strikes us as
self-defeating, we suspect that this proposal is the cover for the creation
of a combined U.S.-Shiite force for occupying Sunni areas. Whether we are
right in this will be visible when the recruitment starts. Pay no attention
to the first media reports on this, which will be staged carefully to show
the diversity and motivation of the force. After the cameras leave, we will
take a careful look at the force and see how many of their families live in
the "Sunni Triangle."Results Page:
Tuesday, February 4th, 2003
: RCN Administrator
Venezuelan President Hugo Chavez announced Feb. 4 that he has appointed army Capt. Edgar Hernandez Behrens to lead the government’s currency administration commission. Hernandez, a Chavez loyalist who helped the president stage a failed coup in 1992, had served as president of the Banfoandes regional development bank. Chavez noted Feb. 4 that the government was finalizing details of the commission, and that currency and foreign exchange controls will take effect Feb. 6.
Chavez appears to have discarded an exchange control scheme drafted by the Finance Ministry and Central Bank in favor of a proposal developed by a group of "presidential economic advisers." This proposal advocates direct government control over the allocation of foreign exchange quotas to all people and companies in Venezuela. Under this proposal, a committee that includes Hernandez and three of Chavez’s closest economic advisers would decide which persons and companies could acquire U.S. dollars.
Chavez already has reserved the ultimate power to allocate foreign exchange quotas for the armed forces and all defense- and security-related international transactions, including new borrowing and imports. However, by adopting a centralized exchange control mechanism that also encompasses all private individuals and corporations in Venezuela, Chavez would amass even greater power over the economy.
Theoretically, under the kind of exchange control regime proposed by regime advisers, every person and corporation in Venezuela would be required to take their requests for dollars to the commission, which would review and approve or deny all petitions. The commission easily could show preference for individuals loyal to the regime while rejecting requests from people or groups associated with the opposition.
Some details of the regime proposal have emerged. Citing government officials, Venezuelan daily El Universal reported Feb. 5 that the country might set an exchange rate of 1,653 bolivars to the dollar. A $9,000-a-year limit on exchange for travel abroad is expected, as well as a $1,000 limit on credit card purchases. Exporters who receive dollars will have to sell them to the exchange commission.
Chavez warned in a Jan. 31 speech that there would be no loopholes allowing Venezuela’s "oligarchs" to take more dollars out of the country. Private investors have taken an estimated $35 billion out of the country since Chavez became president in January 1999, according to Ricardo Hausmann, a former Venezuelan planning minister and chief economist at the Inter-American Development Bank in Washington.
However, with a government commission overseeing legitimate foreign exchange transactions in Venezuela, it’s likely that the industrialists, merchants and media owners who took part in the two-month strike against Chavez would be denied the foreign exchange they need to import essential inputs and pay their foreign creditors. Chavez said Feb. 4 that the commission’s orders will be "not one dollar to the coup plotters. Bolivars are for the people," El Nacional reported.
This effectively could put the companies owned by these individuals out of business, or force them to seek dollars on the black market at substantially higher prices and risk possible criminal charges for violating the government’s exchange control regime.
It is not clear if foreign corporations operating in Venezuela also would confront political obstacles in securing sufficient dollars to pay their foreign debts, finance imports and remit profits and dividends to parent firms in other countries. However, Chavez could use the commission to reward firms from countries that he regards as friendly and punish those from countries he views as hostile to his regime.
If this happens, companies from the United States, Spain and Brazil likely will have difficulty obtaining all of the dollars they need to conduct normal business operations in Venezuela. Although Chavez frequently professes friendship with the United States, he recently has been openly critical of efforts by both the U.S. and Spanish governments to mediate a peaceful outcome to the political crisis in Venezuela. Chavez also was infuriated in January by Brazilian President Luiz Inacio "Lula" da Silva’s refusal to expand the recently created "Friends of Venezuela" group to include pro-Chavez countries such as Cuba and China.
On the other hand, companies from France, China, the Caribbean and Middle Eastern nations such as Iran and Libya likely would not have much easier access to dollars under a system of controlled foreign currency allocations.
The economic advisers who urged Chavez to implement a tightly controlled foreign exchange regime -- Adina Bastidas, Jorge Giordani and Gaston Parra Luzardo -- will have seats on the currency control commission, El Nacional confirmed Feb. 5.
Bastidas was vice president of Venezuela from January 2001 until January 2002 -- a period in which she led a team that drafted 47 controversial laws approved by presidential decree, sparking the first one-day national strike against his regime on Dec. 10, 2001. Corporate lawyers in Venezuela, the United States and Europe agree that many of these laws increase the government’s direct control over economic activities, and weaken contractual and property rights in Venezuela.
Giordani served as planning minister from early 1999 until mid-2002, a period in which the economy contracted despite the highest oil export revenues in the country’s history. In April 2002, Chavez appointed Parra Luzardo to be president of Petroleos de Venezuela, sparking national protests that culminated in a short-lived military rebellion that toppled Chavez from power in April 2002. Parra Luzardo resigned from PDVSA’s presidency on April 12.
These three advisers share two major traits. First, they are lifelong opponents of free market economic policies and strong supporters of broad government intervention in the economy. Second, they, like Hernandez, are inclined to defer to Chavez’s wishes.
A politicization of the exchange control system could have negative consequences for an already weakened economy. More than 70 percent of Venezuela’s industrial and commercial enterprises took part in the two-month strike against Chavez that might have cost the country up to $16 billion, according to estimates by some Caracas-based economists.
If weakened companies are denied dollars, it could expedite their collapse. The immediate result would be a deeper economic contraction combined with higher unemployment. This would directly impact the poorer segments of the populace, the heart of Chavez’s popular political support. Venezuela’s Central Bank warned recently that the economy could contract up to 20 percent in 2003, although private economists anticipate a contraction of 25 percent or more for the full year.
Moreover, centralizing control of all dollar allocations would not stop the bolivar’s devaluation, and would have little or no effect in terms of controlling a huge outbreak of corruption associated with the government’s exchange control regime.
Based on Venezuela’s own history with exchange control regimes in the 1980s and 90s, the economy’s real exchange rate would be set daily in the black market. In effect, an active black market already has developed in which dollars are trading at a rate of about 2,500 bolivars -- compared with the proposed fixed exchange rate of less than 1,800 bolivars to the dollar that the Chavez regime reportedly is considering.
Differentials of this magnitude between the official exchange rate and the black market rate will encourage individuals and corporations who acquire foreign exchange allocations from the government to engage in speculative exchange trading. Most of this speculative trading is likely to occur in offshore financial and casino centers like Aruba and Curacao, where international drug trafficking and money laundering organizations have been very active for more than 30 years.
As a result, the imminent introduction of a government exchange control regime in Venezuela is likely to herald the large-scale return to the country of major criminal enterprises engaged in drug trafficking and money laundering. As in the 1980s and 1990s, these international criminal groups again likely would take advantage of the new exchange control regime -- and the more active currency black market that results -- to move billions of dollars in dirty money through the country.
Thursday, January 2nd, 2003
: RCN Administrator
Despite record-high global oil prices throughout the year, the Venezuelan economy contracted about 10 percent in 2002. The blame lies with the country’s persistent political turmoil, including a military rebellion in April and a national strike in December that shut down operations of state-run Petroleos de Venezuela
However, the economic crisis likely will grow even worse in the first quarter of 2003, as the government runs out of cash to pay its employees, creditors and debts, according to senior government officials, opposition leaders and private economists in Caracas.
Planning Minister Felipe Perez acknowledged Jan. 2 that the government’s $24 billion budget for 2003 would have to be "revised" during January to reflect the fiscal losses accruing from PDVSA’s work stoppage. The government will have to slash its $24 billion budget by at least 20 percent to avoid financial insolvency, according to Central University economics professor
However, with new polls showing that President Hugo Chavez is losing substantial support among poor Venezuelans, who represent the base of his political support, the government likely will try to keep budget cuts to a minimum. At the same time, it probably will resort to devaluing the currency, issuing Venezuelan debt paper, deferring payments of external and internal debts and possibly seeking financial assistance from the International Monetary Fund and other multilateral entities.
Still it is unlikely that the IMF will aid Venezuela’s government without substantial economic reforms, which Chavez would be unwilling to make. Venezuelan banks -- already holding $12 billion of domestic government debt -- in turn will be unwilling to absorb more government debt, even at exorbitantly high
interest rates, while the combined work stoppages in the private sector and PDVSA last.
This will leave the Chavez government with three main options for dealing with its fiscal deficit: cutbacks, currency devaluation and deferment of debt payments. However, these options will make a bad economic situation much worse and further cut into Chavez’s
popularity among the poor.
According to private and government economists in Caracas, the combined work stoppage at PDVSA and the strike by approximately 80 percent of the country’s private sector cost the economy more than $10 billion in total losses during December. This is equivalent to slightly more than 8 percent of the country’s $124
billion gross domestic product.
As the national strike continues in January 2003, the economy’s losses will grow and the government’s fiscal deficit will widen as tax revenues collapse. Under normal conditions, Venezuela’s government derives about a third of its annual budget from non-oil-tax revenues, including value-added taxes and income taxes. Oil-tax revenue and royalty payments account for 30 percent of the annual budget, while borrowing represents another 30 percent.
However, PDVSA currently is not generating any tax revenues or royalty payments for the government. In addition, value-added tax revenues plunged more than 80 percent in December -- traditionally a strong sales month in Venezuela. Tax experts in Caracas predict that many large industrial groups likely will report heavy losses for December and, as a result, will pay little or no income tax for the 2002 period.
Meanwhile, the effects of the ongoing strike will be reflected in a steep rise in unemployment during the first quarter of 2003. Fedeindustria, traditionally a pro-government advocate of small-and medium-sized businesses, warned Jan. 2 that more than 25,000
enterprises will go out of business during the first half of 2003 due to the cumulative effects of last year’s economic recession.
Also, private economists in Caracas predict that many large industrial enterprises that granted their workers collective vacations from mid-December to Jan. 6 or Jan. 14 likely will not reopen later this month. Some companies reportedly intend to continue their strike against the Chavez regime, while others will remain closed either because it’s cheaper or they are already bankrupt.
This means that Venezuela’s unemployment rate, estimated at 17 percent to 20 percent by different sources in Caracas, likely will climb by several percentage points as hundreds of thousands of retail and manufacturing workers are laid off from their jobs.
It’s likely that the Chavez regime will heap the blame for the economy’s crisis on private business groups and PDVSA’s striking managers. The president has portrayed PDVSA strikers as traitors, and throughout his four-year regime he has consistently blamed the country’s wealthy elites for the woes of Venezuela’s poor.
However, a late December 2002 survey by Alfredo Keller, an independent Caracas-based pollster, suggests that Chavez has lost substantial credibility and popularity among poor voters. Keller’s survey, which focused exclusively on poor Venezuelans who identified themselves as members of Chavez’s Fifth Republic Movement (MVR) party, found that 85 percent believe that unemployment, poverty and the cost of living have worsened under the Chavez regime, and personal security has collapsed.
The poll also found that 67 percent of the MVR’s poor members feel new general elections should be held as soon as possible. Nevertheless, 28 percent of those surveyed refuse to consider new elections, and instead are willing to take up arms to defend their revolution. Chavez is counting on such sentiment, plus his senior military commanders, to keep him in power.
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Sunday, November 17th, 2002
: RCN Administrator
With new opinion polls showing that Venezuelan President Hugo Chavez would lose by a landslide any popular referendum on his continued stay in office, the government has set in motion a plan to force a violent confrontation with political foes, according to Stratfor sources in Caracas. The objective reportedly is to use the excuse of street violence between supporters and opponents of the regime in order to decree a state of exception and unleash military firepower to crush the opposition.
A state of exception would suspend all civil and political liberties indefinitely, and would enable the government to arrest anyone viewed as a threat to democracy and the rule of law. A state of exception also would end the internationally mediated negotiations currently under way between the Chavez regime and the political opposition over the timing of a popular referendum on whether Chavez should resign.
New opinion polls by market research firms Datanalisis and Datos indicate that more than 72 percent of the populace, including at least two-thirds of the country’s poorest citizens, would vote against Chavez.
A bloody confrontation could come as soon as Nov. 19, when opposition leaders -- including some 200 city mayors and seven state governors -- will lead a march to protest the government’s weekend takeover of the Caracas Metropolitan Police (PMC), by army and National Guard soldiers commanded by loyalist officers based at Fort Tiuna. The march will start at Plaza Altamira in eastern Caracas and will terminate at the National Assembly building.
However, armed confrontations between civilians on both sides of the political spectrum likely will break out many blocks before the termination point. It also is possible that loyalist army and National Guard officers will order their troops to quell the march by force, although it is not clear whether all soldiers currently deployed throughout Caracas would obey orders to fire on civilian protesters.
Nevertheless, after a week of steadily escalating violence that was instigated mainly by pro-Chavez street militias, many Caracas residents have concluded that major violence could erupt within hours. Schools in Caracas closed early Nov. 18; Stratfor also received eyewitness reports of panic buying in supermarkets and neighborhood grocery stores as city residents stocked up on food and beverages.
Also, groups of anti-Chavez civilians blocked major highways throughout the city on Nov. 18, a small bomb destroyed three vehicles outside the main offices of the Globovision television network, and a massive explosion at a fireworks warehouse in downtown Caracas killed and injured several people.
Wednesday, August 21st, 2002
: RCN Administrator
The Venezuelan Supreme Court’s Aug. 14 vote to drop military rebellion charges against four senior armed forces officers has dealt President Hugo Chavez a potentially devastating political blow. The high court’s absolution of the officers -- and the text of the decision, which blames the government for coup-related violence in April -- means that Chavez likely will face an impeachment fight after annual judicial vacations in mid-September.
Chavez’s position is in more danger now than it was last April, when he was briefly removed from power after an anti-Chavez protest ended in gunfire that killed 19 and wounded nearly 150. Although Chavez still controls the military, and his political opponents remain disorganized and lack any truly unifying leaders, the recent decision of the 11 justices shows that Chavez has lost control of a Supreme Court whose 20 members were originally chosen on the basis of their political pliability.
The high court’s newfound independence is mainly being stoked by former Interior and Justice Minister Luis Miquilena, who has emerged since April as the president’s most dangerous political foe due to his influence over the Supreme Court, National Assembly, and the National Electoral Council, where he has many supporters.
It is also likely that the military would withdraw its tenuous support for his regime if Chavez were impeached because of several current lawsuits against him. A lack of military backing would make it impossible for Chavez to ignore a Supreme Court impeachment vote.
In one case, the Supreme Court is hearing a suit against Chavez that claims Venezuela’s oil supply agreement with Cuba, signed in October 2000 by Chavez and Cuban leader Fidel Castro, is illegal and unconstitutional. Critics of the deal contend that it was never debated and approved by the National Assembly, as is required by all three official versions of the 1999 constitution that Chavez helped rewrite after he was elected. A majority of the court’s members likely will vote that the oil supply deal is unconstitutional due to the absence of an assembly vote, which is grounds for impeachment.
Also, the Supreme Court likely will hear a case charging that Spain’s Banco Bilbao Vizcaya Argentaria contributed $1.5 million to Chavez’s election campaign in 1998 and 1999. Chavez has publicly denied ever receiving funds from the bank.
However, senior bank executives as well as Miquilena and the Electoral Council all have recently certified that Chavez did receive the money in question. Since Chavez’s campaign never reported the contribution to the Electoral Council, as required by law, he is also at risk of being impeached for accepting illegal campaign contributions.
The Supreme Court is hearing another suit that alleges the president and other senior government officials conspired to violate the human rights of the protesters killed and injured during the April 11-13 violence. Based on congressional testimony, videotape and eyewitness reports, most if not all of the shooting was instigated by supporters of the Chavez regime and sharpshooters that STRATFOR sources on site identified last May as members of the president’s security detail.
The recent decision to excuse the four officers indicates that the Supreme Court will take a much stronger stance against Chavez in the lawsuits as well. The court’s independence is not a sign that it is now autonomous, but is instead a reflection of the multiple enmities Chavez has created among former supporters like Miquilena and others who have now joined the opposition’s drive to remove him. The court’s members originally were appointed as a result of political negotiations between Chavez, Miquilena and others.
A potentially complicating factor for Chavez is the fact that two of those killed during the violence in April were citizens of Spain, and their families could charge the president and other senior Venezuelan government officials with human rights violations, according to recent news reports from Madrid.
To counter the very real threat the Supreme Court represents to his regime’s survival, Chavez has launched a pre-emptive political and diplomatic offensive aimed at neutralizing the court and buying more time to reinforce his government’s shaky foundation.
Chavez announced Aug. 19 that he would ask a special commission of "constitutional experts" to reform the constitution to make it a "more perfect" charter for the country, Reuters reported. Moreover, Chavez endorsed the ruling Fifth Republic Movement Party’s announcement of a National Assembly "investigation" of the Supreme Court’s members to determine if they forged the professional credentials they used to win their judicial appointments to the court.
Over the past two weeks, Chavez and senior ruling party leaders also have been making repeated public calls for the Venezuelan people who support the president to take the streets in defense of his so-called "Bolivarian Revolution" and repudiation of the Supreme Court.
A small number of pro-Chavez demonstrators -- estimated at no more than 3,000 people -- engaged in sporadic violent demonstrations in downtown Caracas during the first three weeks of August, when the Supreme Court rejected two writs of indictment against the four military officers and then voted to approve a third writ urging their acquittal. However, the huge crowds that turned out for Chavez two and three years ago have disappeared -- if not permanently, at least for now.
Internationally, Chavez sent Foreign Minister Roy Chaderton to Washington, D.C., this week for meetings with senior Bush administration officials at the State Department. Chaderton was mending fences in an effort to secure a face-to-face meeting between Chavez and U.S. President George W. Bush. Although Chavez is unlikely to receive an invitation to visit the White House anytime soon, the State Department did announce that Assistant Secretary of State Otto Reich would visit Caracas in the near future. No dates were specified.
There also are troubling indications that Chavez and some of his supporters are prepared to use violence if the government’s political and diplomatic offensive fails to stop the Supreme Court from impeaching him.
For example, on Aug. 2 units of the Caracas Metropolitan Police were ambushed and pinned down for hours by heavily armed gunmen in western Caracas. Subsequently, a new group calling itself the Carapaica Revolutionary Movement held a clandestine press conference to take credit for the engagement and declare its willingness to shed blood in defense of the Bolivarian Revolution.
The Carapica Movement denied any links to the Chavez regime, but military sources in Caracas told STRATFOR that the group consisted of about 40 former armed forces officials who were financed, equipped and controlled through the Interior and Justice Ministry’s political police.
However, a more troubling indicator of the Chavez regime’s potentially violent response to head off the president’s impeachment came from German Bula, Colombia’s ambassador to Venezuela, who said Aug. 18 that preparations are underway in Venezuela to provoke a cross-border incident with Colombia. Bula said the objective was to distract public attention in Venezuela from the country’s growing domestic political difficulties, but he declined to say more when pressed by Venezuelan reporters.
The Chavez regime did not respond to Bula’s explosive remarks, which also have received very scant coverage in the Venezuelan news media. However, military sources in Caracas told STRATFOR Aug. 21 that the Colombian ambassador’s allegations appear accurate, and that if any incident does occur it likely will involve Venezuelan army units based in Tachira state across the border from the Colombian department of Norte de Santander, where Colombian rebel and paramilitary groups are very active.
The alleged scheme is so fraught with potential domestic and international risks for the Chavez regime that it sounds harebrained. However, Chavez’s recent public threats against the Supreme Court, and speeches calling for a popular uprising against the court, suggest that he is getting more desperate as the country’s economic crisis worsens, his popular support evaporates and Miquilena maneuvers to secure a Supreme Court impeachment vote.
In fact, military sources in Caracas said the apparent objective of any deliberately triggered cross-border incident would not be to start a war with Colombia, but rather to distract the armed forces and keep factions within them from scheming to topple Chavez.
Since Colombia has historically been perceived as one of the greatest potential threats to Venezuela’s national security, according to the defense doctrine taught in the armed forces’ military academy, the Chavez government may be gambling that a cross-border incident sometime in the next few weeks would divert public, political and military attention away from toppling Chavez and buy more time to neutralize the threat posed by the Supreme Court.
Thursday, August 15th, 2002
: RCN Administrator
The Venezuelan Supreme Court’s decision Aug. 14 to acquit four senior military officers of charges that they led a coup against President Hugo Chavez in April represents a major setback for Chavez. There is a clear indication in his loss of support by the Supreme Court that Chavez may be vulnerable to indictment and impeachment charges. Any attempt to convene a new constitutional assembly would bring Chavez increased tensions domestically and internationally.
Venezuela’s Supreme Court voted 11-8 Aug.14 to acquit four senior military officers of charges that they led a coup against President Hugo Chavez on April 11-13, 2002. The acquittal vote was the third time in three weeks that a majority of the high court refused to indict the officers; two previous writs of indictment also were rejected.
The court’s vote to acquit the four officers was a major political setback for Chavez, who has been insisting since last April that he was the victim of a civil-military coup in which he could have been assassinated. By voting to acquit the officers, the Supreme Court in effect rejected Chavez’s claim that he was the victim of a planned coup attempt and raised doubts about the government’s efforts to seek the indictment of more than three-dozen other officers on similar charges of military rebellion. So far the senior military command has not issued a statement in response to the Supreme Court’s decision.
The vote also may have opened a legal door for Chavez’s political opponents to intensify their strategy of seeking his impeachment and removal from the presidency on corruption or other criminal charges. Chavez and the ruling MVR leadership carefully chose the high court’s 20 members more than two years ago in negotiations with other political parties where more emphasis was placed on their pliability than their legal qualifications, according to sources in Caracas.
However, in the past three weeks, at least 11 of the court’s members defied the Chavez regime’s will three times, giving a clear indication that Chavez has lost control of the highest level of Venezuela’s judicial system. Moreover, the political division within the Supreme Court also indicates that Chavez is increasingly vulnerable to indictment and impeachment.
This explains why senior MVR leaders warned only hours before the Supreme Court’s vote that Chavez might invoke his constitutional powers to convene a new constitutional assembly. However, Chavez critics warn this would be tantamount to a self-coup, since the effect of such an action would be to abolish the National Assembly, Supreme Court and other government institutions.
Chavez claims he has the full support of the people and the military in confronting the Supreme Court and other so-called "enemies" of his Bolivarian Revolution. However, recent violent pro-Chavez protests in downtown Caracas, near Miraflores presidential palace and the Supreme Court building, attracted only a few hundred supporters. Moreover, the past few days have marked the first time that National Guardsmen have used tear gas on pro-Chavez protesters. They have gassed anti-Chavez protesters repeatedly in the past.
If Chavez does convene a new constitutional assembly in the near future, the likely result would be even greater domestic and international political tensions for Venezuela. He likely would confront international opposition from the Bush administration and Organization of American States, while at home he risks upsetting his tenuous control over the armed forces.
However, if Chavez concludes that the risk of his being impeached and forced out of the presidency is too great, he may seek to prolong his hold on power by convening a new constitutional assembly.
Sunday, August 4th, 2002
: RCN Administrator
State-owned oil monopoly Petroleos de Venezuela did not resume oil shipments to Cuba Aug. 1, despite recent statements by PDVSA President Ali Rodriguez that a deal had been worked out with the Cuban government. Shipments of 53,000 barrels per day were stopped April 11 when Venezuelan President Hugo Chavez was ousted briefly in a failed military rebellion.
Caracas daily El Universal reported that PDVSA currently does not have the additional volumes of crude oil it needs to resume shipments to Cuba before Sept. 1, which implies that all of the countryâ€™s oil exports through the end of August have been committed to other clients.
However, sources in the company said Rodriguez actually may have been forced to postpone the first oil shipment to Cuba by at least a month because of growing internal opposition from middle- and upper-level PDVSA managers to selling any more oil to Cuba until it pays its current debt in full. Rodriguez reportedly is under strong pressure from Chavez to resume oil shipments to Cuba promptly, but many PDVSA managers adamantly oppose the idea as administratively and financially unsound.
For instance, Edgar Paredes, PDVSA executive director for Refining, Supply and Commerce, warned in a recent letter to company Vice President Jorge Kamkoff that the supply-renewal agreement with Cuba would deepen the financial disadvantages PDVSA is already forced to absorb.
In the letter, a copy of which was published Aug.n2 by Caracas daily El Nacional, Paredes states that Cubaâ€™s national oil company, Cupet, has "demonstrated it does not have the capacity to pay its debts punctually." Paredes added that the National Bank of Cuba is "not a trustworthy guarantor" of the obligations Cupet acquired with PDVSA, and cautions that the deal worked out between Cuba and the Chavez government to resume oil shipments would increase Cubaâ€™s existing debt to PDVSA between 20 percent and 45 percent.
Cupet reportedly owes PDVSA $142 million for oil shipments it has already received. However, sources in Caracas told STRATFOR that Cubaâ€™s real debt to Venezuela could be substantially higher, saying that Cupet has been paying off its debts with Cuban government bonds that PDVSA then discounts at Venezuelaâ€™s Central Bank. These sources said the Central Bank could be holding up to $450 million in Cuban bonds that are literally worthless in the worldâ€™s financial markets.
Paredes said in his letter that he would carry out the orders he had received to renew oil shipments, but he warned that PDVSA would be hurt financially. Separately, El Universal reported that the Chavez regimeâ€™s decision to resume oil shipments to Cuba has infuriated many PDVSA managers who participated in the protests last March and April that nearly shut down Venezuelaâ€™s oil production after Chavez tried to impose an inexperienced political appointee as president of the company.
Thursday, August 1st, 2002
: RCN Administrator
Armed civilians loyal to Venezuelan President Hugo Chavez opened fire Aug. 2 against Metropolitan Police (PM) officials on Sucre Avenue in western Caracas, Union Radio reported. The snipers also fired at an PM helicopter from rooftops in the low-income neighborhood of 23 de Enero near the Miraflores presidential palace, as sections of Caracas experienced a second day of violent street disturbances by hundreds of Chavez supporters who attacked PM patrols and anyone who looked like a journalist.
The violence erupted late July 31 after the country’s 20-member Supreme Court rejected a writ from one of its members urging the indictment of four senior military officers on charges of leading an armed coup against the Chavez regime April 11-13. Eight justices voted to indict the officers, but the other 12 abstained. The high court then ordered Judge Alejandro Angulo Fontiveros, who voted to indict, to produce a new writ.
The Supreme Court’s decision left open the likelihood that the majority of the court will accept the legal case against the four officers when the new writ is submitted for review next week. However, Chavez loyalists interpreted the court’s decision as a result of pressures by political opposition leaders, including former Interior and Justice Minister Luis Miquilena. Miquilena at one time was Chavez’s most important and experienced political ally in the government but is now one of the president’s greatest foes.
After the judicial decision was announced July 31, about 100 members of the Bolivarian Circles -- armed gangs loyal to Chavez -- who had been camped outside the Supreme Court building for days reacted with violence, forcing PM units to suppress the group with tear gas and water cannons. The protests and violence continued sporadically throughout daylight hours on Aug. 1 but were controlled by police security forces. However, the violence escalated sharply early Aug. 2 when a handful of snipers near the presidential palace began firing at PM patrols.
Preliminary eyewitness reports from the scene of the shooting said that at least five people had suffered gunshot wounds, according to Union Radio. The reports indicated that several of the snipers appeared armed with heavy-caliber automatic weapons like the FAL 7.62 mm assault rifle, which is the Venezuelan military’s standard issue infantry weapon. Hundreds of FAL rifles disappeared from military and National Guard arsenals after two failed military coups in February and November 1992, and most have never been recovered.
PM officials said the snipers are believed to be members of a group called the Tupamaros that has existed in the low-income area for at least a decade. Alleged members of this group told the Caracas daily El Nacional earlier this year that they are not members of any Bolivarian Circles, but they identify strongly with Chavez’s "Bolivarian revolution" and were prepared to defend it -- violently, if necessary. However, Tupamaros leaders promptly denied the assertion and said they would only act as part of a larger national popular movement to defend the revolution.
Iris Valera, a National Assembly deputy from Tachira state with a reputation as a firebrand pro-Chavez loyalist, denied her Fifth Republic Movement party was using pressure tactics to intimidate the Supreme Court. However, she also warned that "popular movements" would launch a nationwide campaign of "civil resistance and violence" if the Supreme Court does not indict the four military officers. She also called Miquilena "a political Mafioso."
Government officials denied that the Chavez regime was orchestrating the street violence. Vice President Jose Vicente Rangel personally visited a blockade set up by armed civilian groups to persuade them to call off the protest. Additionally, Libertador Municipality Mayor Freddy Bernal, who has been identified as a key leader of the armed components of the Bolivarian Circles, told Union Radio that police patrols had been reinforced in the areas of western Caracas where shooting and scattered incidents of looting had been reported.
The western part of the city is where most of the poorest residents live and also is the source of a substantial Chavez popular following. It’s possible that the Chavez regime may be telling the truth when denying orchestrating the recent violence in western Caracas. However, if the government is being truthful, then the events of the past 48 hours would suggest that social tensions among the poor -- including many Chavez supporters -- could be nearing a boiling point that the government may be unable to control.
Right now these Chavez regime supporters are focusing their anger at the four military officers and the Supreme Court, who may symbolize politically what many of them perceive as an effort by rich elite groups to end the Bolivarian revolution that promised the poor a better standard of living. However, the anger and frustration felt by many poor Venezuelans is being fueled mainly by the economy’s deterioration. As the reality of the economy’s deterioration bites down even more painfully on the poor, the Chavez regime may be unable to control the resulting turmoil.
Wednesday, July 24th, 2002
: RCN Administrator
Three months after a brief military rebellion nearly toppled his government, Venezuelan President Hugo Chavez has succeeded in neutralizing his opponents within the National Armed Forces (FAN). Meanwhile, the anti-Chavez civilian political opposition is disarticulated and in need of unifying charismatic leaders. As a result, Chavez is unlikely to be forcibly ousted from the presidency this year by another military coup.
With the traditional August summer holidays set to begin in less than a week, Venezuela also will not likely experience more large-scale street protests over the next four to eight weeks. However, the country’s crisis is far from over. Political tensions have only slightly subsided, the economy’s slowdown is just starting to be felt by the general population and the struggle to force Chavez’s resignation now has moved from the country’s streets and military garrisons to the Supreme Court and National Assembly.
Although Chavez has toned down his confrontational rhetoric and launched a charm offensive to improve his government’s badly frayed relations with the Bush administration, he still faces multiple lawsuits before the Supreme Court seeking his impeachment based on accusations of corruption and mental instability. Moreover, Chavez’s onetime key political ally -- former Interior and Justice Minister Luis Miquilena -- last week launched a new political organization called the Solidarity Party.
Miquilena called for a constitutional amendment to shorten the president’s term in office and urged Venezuelans to "take and hold the streets" in order to compel the Supreme Court and National Assembly to get rid of Chavez legally and constitutionally, according to news reports in Caracas.
Meanwhile, a recent political report prepared for the ruling Fifth Republic Movement (MVR) party warns that Miquilena’s new organization is conspiring with the opposition Democratic Action party to launch a series of street protests, government work slowdowns and strikes in September aimed at forcing Chavez’s resignation. The MVR’s report also says that Chavez faces growing pressure from efforts in the Supreme Court and National Assembly to secure his impeachment.
Chavez’s MVR party still commands a slight majority in the National Assembly, while Attorney General Isaias Rodriguez is working assiduously to block the multiple lawsuits before the Supreme Court. However, there are many visible cracks in the Chavez government’s internal unity.
For example, while the Energy Ministry is claiming that Venezuela will not raise oil production in the second semester 2002 -- and will shortly resume oil shipments to Cuba that were interrupted on April 11 -- Finance Minister Tobias Nobrega said recently that the government would hike oil output by some 400,000 barrels per day to cover a fiscal deficit estimated at more than 8 percent of GDP.
Also, high-level sources in the executive committee of state-owned oil monopoly Petroleos de Venezuela (PDVSA) warned that Cuba will not receive any more Venezuelan crude oil until it pays about $150 million owed for oil already received by the island, Caracas daily El Nacional reported. If Chavez attempts to force PDVSA to resume oil shipments to Cuba before Fidel Castro’s regime pays its past-due debts, it is possible that the president could face renewed dissent within PDVSA that could encourage opposition forces to launch more street protests.
When Chavez last engaged in a confrontation with PDVSA’s top managers, the result was a production slowdown that briefly affected exports and encouraged large-scale protests. This climaxed April 11, 2002, in a deadly government-ordered crackdown against the protesters that triggered the military’s brief uprising and removal of Chavez, who retook power only a few days later.
Recent polls show that Chavez still retains the support of between 25 percent and 30 percent of Venezuela’s adult population. However, the polls also show that the bounce in popularity that Chavez enjoyed after resuming his position already has evaporated, and that two-thirds of the population perceive unemployment, inflation and personal insecurity as the country’s top three problems.
In the meantime, Venezuela’s currency has depreciated rapidly, inflation is climbing and more than 15 percent of the workforce is unemployed, according to estimates by private economists in Caracas. Moreover, the latest U.N. Human Development Index reports that 23 percent of Venezuela’s population survives on less than one dollar a day, and 20 percent are chronically malnourished.
Also, Venezuelan economist Gustavo Garcia warned on July 24 that real income per capita likely would drop by 7 percent this year, meaning that the average Venezuelan’s annual income, measured in constant terms, will have regressed to 1961 levels by the end of this year.
The economy’s accelerating decline is fast becoming the greatest threat to Chavez’s position. Planning Minister Felipe Perez said recently that the government "promises an economic bonanza" during the second half of 2002, but he did not specify where the resources to fund this promised bonanza would be obtained.
Barring a sharp spike in oil prices, the Chavez government likely will not have the fiscal resources to inject more liquidity into the economy except by devaluing its currency or printing more bolivars. However, this would only fuel inflationary pressures, which would offset quickly any potential fiscal benefits derived from devaluation or printing more money.
According to private economists in Caracas, a surge in private investment also is unlikely, since investors have lost confidence in Venezuela due to the Chavez government’s less than business-friendly policies and growing domestic perceptions that the rule of law and property-rights protections have been eroded by the government.
Although capital flight has slowed significantly since the first quarter 2002, these economist claim this is because Venezuelans who could transfer the bulk of their savings abroad have done so already. Ricardo Hausmann, a former planning minister who is now a professor at Harvard University, said recently that Venezuelans have over $80 billion deposited outside their country.
Sources at the Central Bank and private Caracas-based economic forecasting firm VenEconomy agree that the economy will contract between 5 percent and 6 percent in 2002, but they disagree on how rapidly inflation will rise this year. While Central Bank economists predict inflation of at least 25 percent, VenEconomy projects that prices will rise on average between 35 percent and 40 percent in 2002.
As the economy continues to weaken and unemployment climbs in an inflationary environment, poor Venezuelans who still support Chavez could turn against him for failing to deliver on his pledge to improve living standards. In fact, many from this demographic have already crossed over to the opposition. Observers at a July 11 anti-Chavez march, which attracted an estimated 700,000 people, said that for the first time since such protest marches started last December, at least a third of the demonstrators were visibly poor Venezuelans.
If Chavez’s remaining popular support continues to erode in the coming months, it is also likely that his remaining political and military support will also vanish. This would leave Chavez in the same position former President Carlos Andres Perez faced a decade ago.
Perez survived two coup attempts in 1992, including one led by Chavez, but in early 1993 he was impeached on corruption charges and forced to resign after his popularity dropped to only 5 percent. If Chavez’s popularity sinks that low, it is likely that he also will lose the presidency, as the political and judicial institutions he still controls turn against him as they did against Perez.
Thursday, July 11th, 2002
: RCN Administrator
Basking in the success of a massive opposition march, Venezuela’s largest labor group threatened to call a general strike to oust President Hugo Chavez.
Carlos Ortega, head of the 1 million-member Venezuelan Workers Confederation, said Thursday’s march by an estimated 600,000 people proved that Venezuelans want Chavez to abandon the presidency.
Ortega told thousands of protesters holding a vigil outside a Caracas military base that his organization, which includes thousands of state workers, could call an indefinite strike. He refused to say when a decision would be made.
A previous general strike led to an opposition march April 11 in which 18 people were killed, many allegedly by pro-Chavez gunmen. The bloodshed prompted generals to oust the leftist Chavez on April 12. Chavez was restored to power April 14 after an interim government abolished the constitution.
Venezuela’s main opposition parties demand Chavez leave power well before the 2007 end of his term. They have brought court cases alleging corruption are organizing a referendum on his rule and are demanding justice for the April 11 victims.
"We are on a war footing," Ortega said.
Many Venezuelans believe the country is hopelessly divided and ungovernable under Chavez, who has built a cult of personality among the poor. They say he has accumulated too much power by railroading through constitutional changes and appointing military commanders to important government posts.
They also say he has alienated the United States by cozying up to Cuba and Iraq, has mismanaged the country’s oil industry, and has created a virtual private militia of neighborhood committees that intimidate dissenters. Meanwhile, the country is mired in recession.
Hundreds of thousands of Venezuelans â€” laborers and business executives, leftist and conservative parties â€” marched Thursday to remember the victims of April 11. Caracas police chief Emigdio Delgado estimated the crowd at 600,000 people.
It was a powerful show of strength against Chavez, whose power base is the 80 percent of Venezuelans who live in poverty.
After the march, government and opposition leaders accused each other of trying to provoke chaos â€” underscoring the political divide that grips this South American nation and global oil exporter.
Luis Francheschi, head of the National Assembly’s labor committee, accused Ortega of sabotaging government-sponsored reconciliation talks.
"The government is the country’s biggest employer. A strike of this magnitude can only be intended to collapse the government," Francheschi said.
"The government is completely certain of its stability," said Interior Minister Diosdado Cabello. "We have no doubts about our popular support."
Thursday’s march followed a peacemaking mission this week by former U.S. President Jimmy Carter. Carter’s efforts were rebuffed by Chavez’s opposition, including Ortega. But Carter did convince Chavez to accept an international role in mediating Venezuela’s crisis.
Opponents insist Chavez, a former paratrooper who staged a failed 1992 coup and was elected in 1998, must be replaced. They are organizing a referendum that will seek to shorten his term.
The government and the opposition accuse each other of provoking the April violence. Investigations into who committed the slayings have stalled.
Chavez told a military ceremony in the central city of Maracay that April 11 "was a dark day in our history when a privileged minority plotted to overthrow the constitutional government and install tyranny."