VENEZUELA: Chavez to Further Strengthen Social Reforms

By Humberto Márquez Reprint | | Print |

Humberto Márquez

CARACAS, Aug 31 2004 (IPS) - The Venezuelan government is creating three new ministries to address economic and social development needs, in an attempt to translate President Hugo Chávez’s triumph in the Aug. 15 recall referendum and the current windfall oil profits into further advances and improvements for the poor.

Chávez announced the creation of ministries of housing and food, and of a third that he said "could be called the ministry of ‘the people’s power’," which will link the roughly 20 public agencies whose mission is to provide small loans and microcredits to individuals, companies and productive enterprises.

Chávez also called for "strict enforcement of the ‘Land Law’ against the latifundium," a measure that drew sharp attacks in late 2001 from the business and agribusiness communities, which joined the opposition’s call for a business shutdown and street marches that created the climate in which a short-lived coup d’etat removed the president for two days in April 2002.

The president also ordered the allotment of an additional 100 million dollars to 10 special plans – known as "missions" – that provide food aid and have greatly expanded health and educational coverage for the poor.

Last year, the government’s social programmes absorbed between 1.5 and 2.0 billion dollars, according to independent estimates (official figures have not been made available).

The "missions" have benefited millions of people from the lowest socioeconomic strata in oil-rich Venezuela, where more than half of the population of 25 million lives below the poverty line.

Chávez, who won the Aug. 15 recall referendum with 60 percent of the votes cast and will thus complete his term, which ends in January 2007, said the social programmes "must gradually become basic institutions of the new social state," thus forming part of a broad new social safety net.

"With respect to fiscal questions, we will follow an expansionist policy in terms of public investment, which will bolster and attract private investment," he added. "We will not follow the prescriptions of the International Monetary Fund, which order tight fiscal policies and cuts in social programmes."

In the past few years, Venezuela’s budget has averaged 26 billion dollars a year. Oil exports represent more than half of all fiscal revenues.

This year, several billion dollars in additional oil revenues have flowed into the state coffers because prices are 50 percent higher than the projections on which the budget was based.

Marino Alvarado, president of the local human rights group Provea, told IPS that "the main task in Venezuela, for both the government and the opposition, is fighting poverty."

Out of a total 12 million economically active people, 15.5 percent are unemployed, according to official figures, while one out of two work in the informal sector of the economy.

In addition, the 2001 census shows that in this country of 6.3 million households, there is a deficit of 1.6 million housing units, and 100,000 new homes are needed every year, due to population growth, said Alvaro Sucre, president of the Construction Chamber.

Housing and employment are overlapping issues, because construction absorbs abundant labour power, "but new resources are needed – some 2.0 billion dollars – besides the political will to create a (housing) ministry," said Sucre.

The question of food is one of the government’s major concerns. Among its numerous social programmes, it has created a network of shops that sell food at subsidised prices in poor neighbourhoods, as well as a network of community soup kitchens.

In Venezuela, the cost of the basic food items needed by a family of five exceeds the minimum salary, which stands at 168 dollars a month, and 12 percent of people over the age of 15 suffer a nutritional deficit.

In his frequent public appearances, the leftist Chávez often expresses his frustration that Venezuela must import staple products that it could be producing, like corn, beans, chicken or sugar.

Nationally produced food only covers 60 percent of the population’s minimum requirements of proteins and calories.

Land ownership is heavily concentrated in Venezuela, as in much of Latin America, in "latifundia", or great landed estates. According to the National Land Institute, which oversees the government’s land reform and redistribution efforts, 60 percent of arable property belongs to just two percent of landowners.

Under Chávez’s land law, punitive taxes are charged for estates over a certain size that have left land lying unproductive, after which the government can intervene and expropriate idle land.

In addition, the state is repossessing state land that was illegally occupied by large landholders, for redistribution to peasant farmers, mainly through the formation of cooperatives and collective farms, on the argument that this is the only way they can compete with large-scale agribusiness interests.

The distributed land remains in the hands of the state, which is to provide the new cooperatives with housing, health care, education and soft credits. By August 2003, 1,340,000 hectares had been handed over to just under 63,000 families.

The president recently stated that "Wherever there are latifundia, wherever land has been left unused, the hand of the state should arrive, through the Ministry of Agriculture and the Land Institute." He also plans to use the army to help carry out an inventory of unproductive rural property.

"We are not enemies of rural estates, we aren’t going to burn them or invade land," said the president, "but we have a constitution and a land law that must be respected, and the land must be for those who work it, for planting rice, corn and onions. We cannot have empty, unoccupied land."

José Luis Betancourt, president of the Stockbreeding Federation, which loudly opposed Chávez’s land law when it was passed in 2001, said the president "is repeating the recipe of three years ago, when we asked him to tone down his discourse. That law is a punitive instrument."

Hiram Gaviria, ex-president of the agriculture federation, who served as ambassador to France under Chávez but has now joined the opposition, said "the problems of agricultural productivity in Venezuela are due to the lack of policies of technical assistance and financing, not the concentration of land."

The government’s offensive to deepen its social reforms comes at a time when it is in a strong political position, now that Chávez’s mandate was reaffirmed in the unprecedented Aug. 15 referendum, in which he won nearly five million votes, 1.2 million more than he took in the 1998 elections.

The recall referendum left the Democratic Coordinator opposition alliance, and the Fedecámaras business association which leads the coalition, badly weakened.

After the April 2002 civilian-military coup, Pedro Carmona, the head of Fedecámaras at the time, was named de facto president, until Chávez was restored to power by loyal factions of the military and by immense crowds of his supporters.

Carmona’s successor, Carlos Fernández, led a two-month business lock-out and oil strike in late 2002-early 2003 that unsuccessfully demanded that Chávez step down.

Albis Muñoz, the current president of Fedecámaras and one of the members of the Democratic Coordinator’s campaign team for the referendum, which was held after the opposition collected the necessary number of signatures, complained of "fraud" during the Aug. 15 vote.

However, the international election observer teams of the Organisation of American States and former U.S. president Jimmy Carter’s Carter Centre said there was absolutely no sign of vote-rigging or other irregularities, and that any complaints of fraud were "unwarranted".

Chávez has invited the opposition to dialogue, on the condition that it recognise his victory in the referendum. His associates have begun holding meetings with business organisations that have marked their distance from Fedecámaras, like the powerful Venezuelan-American Chamber of Industry and Commerce, most of whose members are U.S. investors.