Identifier
Created
Classification
Origin
06CARACAS298
2006-02-06 19:15:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

CHAVEZ CELEBRATES SEVEN YEARS IN POWER, GOES FOR

Tags:  PGOV KDEM ECON ELAB SOCI VE 
pdf how-to read a cable
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RUEHTC/AMEMBASSY THE HAGUE PRIORITY 0796
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C O N F I D E N T I A L SECTION 01 OF 05 CARACAS 000298 

SIPDIS

SIPDIS

HQSOUTHCOM ALSO FOR POLAD
DEPT PASS TO AID/OTI RPORTER
FRC FT LAUDERDALE FOR CLAMBERT

E.O. 12958: DECL: 02/10/2016
TAGS: PGOV KDEM ECON ELAB SOCI VE
SUBJECT: CHAVEZ CELEBRATES SEVEN YEARS IN POWER, GOES FOR
FOURTEEN MORE

REF: 04 CARACAS 03928

Classified By: ACTING POLITICAL COUNSELOR MARK A. WELLS FOR 1.4 (D)

-------
Summary
--------

C O N F I D E N T I A L SECTION 01 OF 05 CARACAS 000298

SIPDIS

SIPDIS

HQSOUTHCOM ALSO FOR POLAD
DEPT PASS TO AID/OTI RPORTER
FRC FT LAUDERDALE FOR CLAMBERT

E.O. 12958: DECL: 02/10/2016
TAGS: PGOV KDEM ECON ELAB SOCI VE
SUBJECT: CHAVEZ CELEBRATES SEVEN YEARS IN POWER, GOES FOR
FOURTEEN MORE

REF: 04 CARACAS 03928

Classified By: ACTING POLITICAL COUNSELOR MARK A. WELLS FOR 1.4 (D)

--------------
Summary
--------------


1. (C) In a six-hour presentation celebrating his seventh
year in office on February 2, President Hugo Chavez enjoyed
musical performances, conferred several awards, summarized
his administration's accomplishments, announced the expulsion
of the US Naval Attache, warned the Embassy against future
interaction with Venezuelan military officials, and set the
course for now through 2021, the year he says he will step
down. The Cabinet, military high command, Supreme Court
justices, National Assembly Deputies, National Electoral
Council President Jorge Rodriguez, governors, many accredited
diplomats (we were not invited),and thousands of adoring
Chavez supporters attended the event. Afterward Chavez
attended a civil-military parade that looked reminiscent of
Soviet-era marches in Red Square. The atmosphere of both
events, and tone of Chavez' remarks indicates his government
will take on a more radical and authoritarian direction.
Yet, there were signs that he is concerned about the goal he
has set for himself to prove that he is just as, if not more,
popular now than seven years ago. End Summary.

--------------
7 years . . . por ahora
--------------


2. (SBU) On February 2, against the backdrop of a campaign
sign featuring President Hugo Chavez's picture and a caption
declaring "Seven Years. . . For Now," Chavez recounted the
history of his political movement and thanked all of his
supporters along the way. He described each phase of his
development in seven-year increments starting in 1971 when he
began military training. He characterized 1978-1992 as the
years of conceptualizing and developing his Bolivarian
revolution and 1992-1999 as his political offensive. He
described his first term (1999-2006) as laying the foundation

of the Bolivarian revolution. (Note: When Chavez was
captured during his failed 1992 coup, then-President Carlos
Andres Perez asked him to go on television to call off his
co-conspirators. During his statement, he used the phrase
"Por ahora," or "For Now" in English, to signal to his
followers that their movement was only temporarily thwarted
and would be revived. Chavez' remark was appreciated as a
defiant commitment to change then, and has been a constant
mantra of his movement ever since.)


3. (C) Next, Chavez declared 2006 the "Advance for Seven
More Years," which he specified would bring him to 2013 so no
one would think he was "disrespecting the law." The phrase
"por ahora" then appeared on the screen and Chavez launched
into his formulation to stay seven years beyond his
constitutionally-permitted time, until 2021. Thirty-five
years have passed since the birth of his Bolivarian
revolution, he calculated, and seven (stages) times seven
(years),plus one more (to round it off) would bring him to
50 years of his revolutionary battle. Afterward, he will
head for the Venezuelan interior "and hang his hammock."
(Note: Although the presidential terms are six years each,
Chavez added an extra year to stay consistent with his seven
theme. The current Constitution allows the President to be

CARACAS 00000298 002 OF 005


elected for only one more six-year term, therefore this
announcement reinforces the government's intention to modify
the Constitution to allow for multiple re-election.)

--------------
"I Watch You"
--------------


4. (SBU) Chavez's speech featured several warnings for and
accusations against the USG. Approximately 30 minutes into
his speech (and minutes after Post received notice by fax),
Chavez announced he was expelling the US Naval Attache for
espionage. He then threatened to expel the entire "US
military mission in Venezuela," if another US defense attache
is caught meeting or contacting a Venezuelan military
officer. The decision was announced, Chavez said, to show
that Venezuela was now free from the "imperialists." Several
times in the speech, Chavez reiterated a frequent claim that
the US is planning a "Panama-style" invasion to remove him.
As part of that plot, Chavez alleged that the Naval Attache
told one of his military contacts that they should find more
people in the Armed Forces to help reduce military support
for Chavez. He then said, in English, "Come Here, I Watch
You." Referring to USOAS Ambassador John Maisto's response to
the OAS electoral observation report, Chavez later accused
the USG of planning to subvert the December 3 presidential
election by encouraging the opposition to boycott at the last
minute, something he alleged occurred during the 2005
legislative election.

--------------
Other Anti-US Comments
--------------


5. (SBU) Chavez raised Citgo as another example of how his
government had freed the country of so-called U.S. imperial
dominance. He revived his claims that the previous
governments had used previous Citgo commercial deals to build
up the United States, instead of improving infrastructure and
Venezuelans' quality of life. According to Chavez, 2005 was
the first year the company was finally contributing to the
country's development. He mentioned the arrest of Cindy
Sheehan in the Capitol and repeated his call during the
January 29 closing of the World Social Forum for all
Venezuelan women to sign Sheehan's petition to end the war in
Iraq, and present that petition during a march to the Embassy
on March 8. He also saluted the elections of Bolivia's Evo
Morales and Chile's Michelle Bachelet, as well as increased
solidarity among the Caribbean, and South and Central
America, as proof that so-called US imperialism in the
hemisphere was on the wane. He exclaimed, "Together united,
we will not be defeated!"

--------------
What I've Done for You Lately
--------------


6. (SBU) As he did during his January 13 State of the Union
Address, Chavez listed the accomplishments of the last seven
years. He declared, once again, his administration's ability
to survive opposition plots, the interment of the Punto Fijo
period and the exchange of imperialist oppression for a
democracy based on popular participation as the main
political accomplishments. On the economic front, he cited
the "nationalization" of state-oil company PDVSA, the
"re-nationalization" of the gas sector, as well as, the

CARACAS 00000298 003 OF 005


implementation of an "endogenous" economic model (for
example, the formation of cooperatives),and the
redistribution of wealth. Socially, he heralded the
missions' success in reducing poverty and providing access to
education, medical services, and identification documents to
millions who previously had none.

--------------
Rumbo al Socialismo 21!
--------------


7. (SBU) Chavez used the occasion to announce several
ambitious plans for the election year, including the kick off
of Santa Ines II, the second edition of the election campaign
plan that helped him recruit enough votes to win the 2004
recall referendum. He ordered all government officials to
assist in organizing the program, which will consist of 10,
10-person patrols around each of the country's 10 million
voting centers. Each patrol member will be given a list of
10 voters to be responsible for visiting to find out if they
are a Chavez, opposition, or abstention supporter, if they
are registered, if they have a current cedula, and if the
electoral registry has their most recent address. He
congratulated the National Electoral Council (CNE) for its
honesty and transparency, endorsed its goal to incorporate 2
million additional voters in the electoral registry, and
reiterated his goal to obtain 10 million votes, although he
acknowledged this task would be difficult.


8. (SBU) In keeping with his election-year theme, Chavez
outlined several new social programs and initiatives. He
explained the initiatives would be partially funded by
additional (read: off-budget) revenue from National
Development Fund (Fonden) and the Central Bank. (Note: In
July 2005, the National Assembly amended the Central Bank Law
authorizing the one-time transfer of "excess" reserves of USD
6 billion to the Fonden.) He said USD 6 billion of Fonden
funds are already committed, and anticipates an additional
USD 6 billion to be deposited in Fonden this year as well as
an additional USD 4 billion in "excess international
reserves." Key announcements include:

-- Second Phase of Mobile Government: Following on last
year's initiative, there will be traveling cabinet meetings,
but this time targeting individual communities and parishes,
not merely states as before. Chavez said he would not attend
all, but would trade off with Vice President Rangel and
cabinet ministers. The first is set for February 6 in
Miranda State.

-- Revolutionary Democracy, or "Decisionmaking Subsystems":
A self-governance program based primarily on community
councils ("concejos comunales") that will be charged with
evaluating governors and mayors, and will develop, review,
and approve microcredits for neighborhood improvement
projects. According to a draft bill under discussion in the
National Assembly, the councils will fall under local
governments. Chavez told National Assembly President Nicolas
Maduro to change the law and make them independent.

-- Financing Subsystem: As part of the decisionmaking
subsystem, Chavez is creating the National Self-Governance
Fund (Fondo Nacional de AuTOGObierno) and expanding the
number of community banks. Only communities, not mayors or
governors, can solve some problems, said Chavez. Therefore,
he proposed to establish the fund with 2.2 trillion Bolivares

CARACAS 00000298 004 OF 005


(USD 1 billion),part of which the community councils,
through a convenio, will dispense for social development and
infrastructure projects. The councils will also run the
community banks, from which constituents can borrow money for
development projects. Unlike the Fund money, these loans
have to be repaid.

-- Minimum Wage Increase: For the third time in a year,
Chavez raised the minimum wage, this time by 15 percent to
465,750 Bolivars (USD 217),effective February 1. According
to Chavez, the percentage change outpaces the government's
inflation goal of 10 percent. Chavez promised to invest USD
1.4 billion in increases in public sector salaries and
adjustments to the public sector pay scale. Approximately
700,000 employees will benefit from this adjustment.
According to Chavez' calculations, for example, a "Level one"
employee's minimum salary would jump from USD 200 to USD 220.
The minimum salary for a "Level 26" employee, the highest
level, would jump from 917,000 Bolivars (USD 427) to
1,225,000 Bolivars (USD 570).

-- Social Security Benefits: Retirees who have denounced
irregularities or the denial of pension payments (2,600
people) will no longer have to wait for an investigation to
be completed to receive social security benefits, Chavez
announced. These benefits (still under investigation) will
costs USD 5.9 million a year. In addition, men over 60 and
woman over 55 years with only a few required contributions
remaining (more than 500,000 people),will have between six
months to a year to pay them to receive the benefit of Social
Security. For men over 60 and women over 55 who have paid
700 out of the required 750 contributions to receive benefits
(25,073 person),the government will pay up to 50
contributions (costing the government an estimated USD 55.8
million) to allow them to also receive Social Security
benefits.

-- Stipend for Housewives and Single Moms: Poor and working
class single mothers and housewives will receive a monthly
stipend of 372,000 Bolivars (USD 148) or 80 percent of the
new minimum wage until June. Chavez said he would extend the
benefit to the end of the year, if oil prices, tax collection
and the economy remain strong.

-- Decree of Labor Sovereignty: This contract, which declares
that employers will respect workers' human, labor, and
contract rights, will be a mandatory requirement for any
business seeking a government contract.

-- Elimination of the Bank Debit Tax (IDB): Targeted at
garnering middle class support, the tax, which applies a 0.5
percent tax on the withdrawal of funds from banks, was lifted
as of February 2. Initially applied in 2002 when the
government had a deficit, this tax has been widely criticized
as regressive and unnecessary given the current high budget
revenues. Immediately after the announcement, the crowd
broke out with the approving chant "Uh, Ah, Chavez no se va."
(Ooh, Ah, Chavez is not going!) According to the
President's calculation, this would reduce government revenue
by 2.7 trillion Bolivars (USD 1.3 billion),which equals one
percent of GDP. Still, he warned the tax may be revived if
economic conditions warrant.

-- Increase in Tax Collection: Chavez said he was
unconcerned about losing revenue through the IDB because
Seniat was increasing tax collection as part of the

CARACAS 00000298 005 OF 005


government's declared fight against corruption. He claimed
that Seniat collection increased was more than USD 325
million above its January goal.

-- More Missions: Chavez lauded the accomplishments of the
various education, health, and social welfare missions. For
example, he claimed government expenditure for education
(including Missions Robinson, Ribas, and Sucre, and the
Bolivarian schools) in the past seven years increased from
three to eight percent of GDP. He then announced expansion
of some existing missions and the start of new ones, such as
Barrio Adentro III to modernize hospitals; Mission Science to
advance scientific studies, which will begin next week; and
Mission Arbol (Mission Tree) which will start some time this
year. Chavez also planned to revive Plan Bolivar 2000, the
military-run public works program that stalled because of
high levels of corruption. This program was particularly
important because, according to Chavez, it would prevent
espionage by strengthening the military's bond with the
people.

-- Strengthening the Military: Chavez said Venezuela would
continue to build up its military equipment. He stressed
Venezuela does not want war, but will be prepared, if it
comes. To advance the teaching and implementation of the new
military doctrine unveiled in late 2004 (ref a),Chavez is
reinstating retired military officials. One of the retirees
is Alfredo Mueller Rojas, one of Chavez's ideological
mentors. He also declared his intention to increase the
reserves.

--------------
Fifth Reich (Uh, Republic) Movement March
--------------


9. (SBU) After the anniversary event, President Chavez went
to Fuerte Tiuna to preside over a civil-military parade and
the decoration of senior military officers. Some 3,600
social mission beneficiaries, dressed in red shirts, marched
in military formation past the reviewing stand and saluted
the President. They were followed by 2,400 Armed Forces
members walking in a formation reminiscent of the Soviet era.


--------------
Comment
--------------


10. (C) The atmosphere in which President Chavez celebrated
his seventh year in power was as important as what he said.
Chavez's public instructions to the legislature, his indirect
orders to the CNE, the ominous way in which his famous phrase
"Por Ahora" lingered during the speech, and his public threat
to the Embassy and our Venezuelan contacts suggest he is
becoming more radical and authoritarian. Many of his new
programs are targeted to attract the ni-ni group (those who
favor neither Chavez or the opposition) and the labor sector,
a group that has never been incorporated in the Bolivarian
revolution, while punishing his sworn enemies, the elite.
His new social programs, though few details were given, are
probably just a thinly veiled effort to transfer more cash to
his core constituency, the poor. His emphasis on community
groups is an attempt at bottom-up organizing, a concept that
has never taken root, despite seven years of revolution.

BROWNFIELD