ECONOMIC ASPECT OF OPPOSITION CONSENSUS PLAN

C O N F I D E N T I A L CARACAS 002592

SIPDIS


STATE FOR WHA/AND
NSC FOR CBARTON
TREASURY FOR OASIA-GIANLUCA SIGNORELLI
HQ USSOUTHCOM FOR POLAD

E.O. 12958: DECL: 8/12/2014
TAGS: ECON EFIN PGOV VE
SUBJECT: ECONOMIC ASPECT OF OPPOSITION CONSENSUS PLAN

REF: CARACAS 2248

Classified By: ECONOMIC COUNSELOR RICHARD M. SANDERS FOR REASON 1.5 D

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SUMMARY
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1. (SBU) The Plan Consenso Pais ("National Consensus Plan"),
launched June 9 by the Coordinadora Democratica, has a very
strong economic focus. However, while long on optimism, it
is short on details. For example, while it emphasizes job
creation, it provides no specific method to create jobs; it
calls for increased investment, but doesn't indicate where
the investment would come from. Some of the creators of the
Plan are very hopeful about its influence, while other
contacts express doubts. END SUMMARY.

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WHAT'S THE PLAN?
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2. (SBU) The Coordinadora Democratica (CD) released on June 9
the Plan Consenso Pais (see ref),a document which purports
to guide the administration that would be put in place should
President Hugo Chavez be revoked (and not win the subsequent
presidential election). Its economic portion gets strong
emphasis (second only to recommending dialogue as a means to
reach agreement on any issue),stating that "the axis upon
which the program of reconciliation and reconstruction turns
is the massive creation of productive, stable and well-paid
jobs."


3. (SBU) It goes on to stress eleven areas: the importance of
legal and economic certainty to stimulate investment;
obtaining financing; modifying the national debt profile;
combining public spending with private investment to
reactivate the economy; designing a realistic and democratic
job policy; starting a job creation offensive in
construction, industry, agriculture and tourism; improving
the electric sector; making telecom a factor in development
and economic diversification; making science and technology
(read: research and development) an integral part of
development; job training; and making petroleum and petroleum
products areas of high-impact investment. The Plan notably
lacks mention of certain politically sensitive subjects: it
never raises the idea of privatization, and, though private
investment is mentioned frequently, it never addresses the
role of foreign investment per se.

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PLAN CREATORS THINK POSITIVELY
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4. (C) Vicente Davila, head of the CD's Economic and Finance
Commission, told econoff that jobs emphasis was considered
central from the beginning. He said that most of the CD
leadership, being politicians, think of the government as the
primary job provider, but Davila, a businessman, was able to
steer the document to stress the importance of the private
sector. Efrain Velazquez, an economic consultant and one of
the main architects of the Plan, said in a separate
conversation that many of those jobs would come from oil -
maintenance, field evaluation, trying to recover lost
production - and that many of the new oil jobs would be
filled by PDVSA employees fired after the general strike.


5. (C) Velazquez believes the most important aspect of the
Plan is to "send a message" that Venezuela is a good place
for investment. He stated that there will be foreign
investment in oil in the near future, even with a change of
government, but that investment would not increase in any
other sectors until they can show results: a better overall
political-economic climate. He asserted that a new President
would get very little support from other parts of the GOV,
such as National Assembly and the courts, and therefore must
focus on what is possible through the executive branch only.
However, since Chavez has strengthened executive authority,
much is possible. He thought the short-term portions of the
Plan can be implemented within 100 days, with a dual emphasis
on recovery of oil production and keeping fiscal spending at
around 28% of GDP.

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OTHERS AREN'T SO SURE
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6. (C) Hugo Faria, an economics professor of strongly
conservative bent at the prestigious Institute for Higher
Business Studies (IESA),criticized the Plan, calling it "a
wish list to Santa Claus." He pointed out to econoff that it
is long on generalities but makes no mention of taxes or
tariffs, for example. (Note: those changes would require
legislative action, hence Velazquez's statements may explain
the omission.) He called the Plan "Chavismo without Chavez,"
as they are essentially the same, just as Chavez has recycled
economic policies from prior administrations. Faria also
questioned how much support the plan really has among big
business in Venezuela, since many have them have figured out
how to profit in the current, distorted environment.


7. (C) Miguel Angel Santos, chief economist of the
US-Venezuela Chamber of Commerce (VENAMCHAM) who was
consulted on some points of the Plan, said it only represents
what could be reached by consensus, and that the oil portion
is especially vague as a result. He added that the Plan may
never be implemented because the CD team that created it will
not necessarily be part of any foreseeable new
administration. Each of the potential candidates seems to
have his own economic team working on the details of policy.

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THE FUTURE OF THE PLAN
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8. (C) Davila said that the plan so far is just a framework,
and that more details would be coming out in the near future,
in time for a presidential campaign. He called this the
beginning of an actual campaign platform. Davila added that
much of the new portion would focus on the oil industry, but
also on positions to be created by state governments when the
federal government disbursed funds that are allocated to them
by the Constitution, but have been withheld by the current
administration. He estimated this amount at about USD 2
billion.

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COMMENT
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9. (C) The Plan, while painting an optimistic view of the
Venezuelan economic future, consciously avoids discussing
steps and procedures to turn its aims into reality. Its
chief political benefit thus far has been to allow the
opposition in time for the referendum that it at least has a
"plan" for what would follow a revocation. The opposition is
wise in staying away from discussion of the future of state
oil company PDVSA and the role of foreign oil companies,
since Chavez would doubtless paint any such program as a
sell-out of national interests (even as his government does
its own deals with the multinationals). We expect that this
issue will remain fudged in a subsequent Presidential
campaign if it is held, but it will inevitably be at the top
of economic concerns of a new government, should it come to
power.
Shapiro


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