CHAVEZ PROPOSES "SOCIALIST" CONSTITUTIONAL CHANGES

C O N F I D E N T I A L SECTION 01 OF 03 CARACAS 001635

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E.O. 12958: DECL: 08/16/2017
TAGS: PGOV PREL PHUM VE
SUBJECT: CHAVEZ PROPOSES "SOCIALIST" CONSTITUTIONAL CHANGES

REF: A. CARACAS 001611

B. CARACAS 001628

C. CARACAS 001389

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Classified By: POLITICAL COUNSELOR ROBERT DOWNES,
REASONS 1.4 (B) AND (D)


1. (C) Summary. After numerous delays (reftels),President
Chavez finally proposed significant "socialist" changes to
the 1999 Constitution in a lengthy August 15 speech at the
National Assembly. As expected, Chavez framed his
controversial proposals as giving more power to the people.
He also included a number of populist ideas to help ensure
that his package wins public support in a December referendum
and to distract from his controversial proposal to eliminate
presidential term limits and substantially weaken state and
local governments. Chavez' proposals would concentrate more
power with the executive at the expense of local governments,
further politicize the armed forces, and give the BRV greater
authority to regulate elections. In addition, they would
create new forms of collective property alongside private
property, give the state enhanced power to go after large
landowners and monopolies, and eliminate the Central Bank's
de jure autonomy. The 100 percent pro-Chavez National
Assembly will likely pass Chavez' proposal with few, if any,
changes in the next few months, and Chavez' firm grip on
national institutions and his well-financed electoral machine
make its passage in a referendum by the end of the year
almost certain. End Summary.

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The Roll-Out
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2. (SBU) President Chavez proposed changes to 33 articles of
Venezuela's 1999 Constitution in a nearly five-hour August 15
nighttime speech to the National Assembly, his cabinet and
other senior BRV officials, and members of the diplomatic
corps, including the Charge. Chavez also recognized his
special guests: the visiting Foreign Minister of Mali and a
small group of red-shirted "revolutionary" students. The
Venezuelan president stressed that he was re-elected in 2006
based on his pledge to build a "socialist" state, and the
constitution had to be modified accordingly. Noting that his
"revolution" is both peaceful and democratic, Chavez
nevertheless warned the opposition that "the revolution is
armed!" Chavez repeatedly urged the National Assembly to
debate and improve his "humble" proposals, but at other times
suggested that his ideas for change should be implemented "as
is" as soon as possible.


3. (SBU) As he did in the run-up to his presentation (Ref A),
Chavez claimed his changes would give more power to the
people and make Venezuela more democratic. In the middle of
his speech, Chavez stated that only socialism makes real
democracy possible, and democracy is impossible under
capitalism. He accused the United States of being a
dictatorship of the rich and trying to impose its
dictatorship on the rest of the world. The BRV audience
periodically burst into "revolutionary fervor," chanting
slogans such as "they'll (the opposition) never return" ("No
volveran"). Attendees had to wade through phalanxes of
red-shirted Chavez supporters, who controlled all points of
entry to the area around the National Assembly.


4. (SBU) After Chavez' speech, National Assembly President
Cilia Flores urged the NA deputies to work quickly to review
and pass the Venezuelan president's proposals. She also
asked the National Electoral Council (CNE) to be ready to
hold a national referendum before the end of the calendar
year. The National Assembly must review and pass
modifications to the constitution three times by a two-thirds
majority before they go to a public referendum. The National
Assembly is composed of only pro-Chavez deputies due to the
opposition boycott of the 2005 parliamentary elections.
Three small pro-Chavez parties, the Communist Party, Patria
Para Todos, and Podemos, have declined to join Chavez'
proposed United Socialist Party of Venezuela (PSUV) and could
potentially offer independent views on the proposals.

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Indefinite Re-Election
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5. (SBU) Late in his speech, Chavez vigorously defended his
proposal to eliminate presidential term limits and extend the
presidential term of office from six to seven years. He

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stressed that many other countries do not have executive term
limits and that re-election is not guaranteed but depends on
the support of the "sovereign people." He also noted that he
had announced his intention to do away with presidential term
limits during the 2006 presidential campaign, so it should
come as no surprise. BRV officials and legislators roundly
applauded Chavez' denial that he intends to "put himself on a
throne." Chavez did not suggest eliminating the two-term
limit for governors, mayors, and National Assembly deputies.

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New Geometry of Power: Centralization
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6. (SBU) Chavez spent considerable time explaining his "new
geometry of power," one of the five motors of his socialist
revolution. Chavez said Venezuela needs the new structure of
a socialist state and criticized existing state and local
bodies as vestiges of Spanish colonialism. In a rambling
discourse, Chavez attempted to explain his ideas for the
formation of new sub-national government entities: Special
Military Regions, Functional Districts, District Missions,
Federal Cities, Federal Territories, Federal Municipalities,
Federal Provinces, Maritime Regions, Communes, and Communal
Cities. He specifically said Caracas and its boroughs should
be made into a Federal District and renamed "Cuna de Bolivar
y Reina del Guaraira Repano." The common thread in all of
these new entities is that they would be led by persons
appointed by the President, not elected.

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Populist Proposals
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7. (SBU) The Venezuelan president proposed numerous populist
measures intended to generate greater public support for his
constitutional package. For example, Chavez proposed
creating a constitutional framework for the Bolivarian social
missions and reducing the work week from eight hours a day
and up to 44 hours a week to six hours a day and up to 36
hours a week (Ref B). He also argued that a Social Stability
fund should be set up for self-employed workers. Chavez
claimed that the reduction in the work week could create up
to 25 percent more jobs and that the state and workers would
sustain the Social Stability fund. Chavez' constitutional
changes would also incorporate elements of "communal power,"
such as community councils, workers councils, student
councils, and communal cities, into the revised constitution.


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New Forms of Property
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8. (SBU) Chavez stressed that private property would not be
affected by constitutional reform, explaining socialism often
failed because private property was eliminated all at once
and noting that forms of private property exist in Cuba. The
proposed constitutional changes would redefine property into
five different categories: social, public, collective, mixed
and private property (Ref B). Chavez subdivided social
property into direct and indirect categories, describing
indirect social property as belonging to the people, but run
by the State, and direct social property as controlled by the
people through Communal Councils or other community
organizations. Collective property belongs to cooperatives
and collectives, and mixed property is a joint enterprise or
mixed company that is partially owned by the government and
private industry.


9. (SBU) Chavez also proposed that the state reserve for
itself the right to develop the hydrocarbon and gas sectors,
and forbid all monopolies and large landed estates
(latifundios). The revised constitution would allow for the
state to take over any agriculture sector deemed necessary to
guarantee food security and permit the BRV to immediately
expropriate property before legal due process.

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No More Pretense of Central Bank Autonomy
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10. (SBU) Chavez also proposed eliminating any autonomy for
the Central Bank (BCV) and giving direct control of
Venezuela's international reserves to the President
(himself). While the 1999 Constitution protected Central
Bank autonomy, Chavez has had de facto control over BCV since

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2005 (Ref C). The revised constitution would state that the
monetary system should support the needs of the "socialist
state" and the good of the people over any other
consideration. The revised language states that the
president and the BCV would, in coordination, establish
monetary policy.

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Politicizing the Armed Forces
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11. (SBU) Criticizing what he called an outdated dependence
on U.S. military doctrine, the Venezuelan president also
proposed that the Bolivarian Armed Forces be "essentially
patriotic, popular, and anti-imperialist." He specified that
the Armed Forces would be composed of the Army, Navy, Air
Force, and the Territorial Guard (currently called National
Guard) and the "Popular Bolivarian Militia" (currently called
the Military Reserve). Chavez proposal would convert the
National Guard into "an essentially military body," parallel
to the traditional branches of the armed forces. Among other
responsibilities, the armed forces would apply defense
principles related to the "popular war of resistance," help
maintain "internal order," as well as participate in economic
development plans.

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Unannounced Changes
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12. (SBU) The Venezuelan president skipped over a number
proposed changes "to save time." Among the changes he did
not discuss is his proposal to give the BRV considerably more
authority to regulate elections and international support for
organizations with "political goals." Chavez proposes
reinstituting public financing of campaigns while at the same
time giving the BRV the authority to regulate campaign
contributions, the amount of advertising, use of public
spaces, and the length of electoral campaigns. All
organizations with "political goals" and candidates would be
prohibited from received contributions from all foreign
public and private entities.

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Comment
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13. (C) Chavez foreshadowed most of these concrete proposals
for constitutional change over the last several weeks. While
the proposed changes are not surprising, they are sweeping in
that they would concentrate even more power in the hands of
the Venezuelan president. Moreover, with no real checks on
his power from other branches of government, Chavez will be
able to implement these ideas as he sees fit. Nevertheless,
in trying to garner greater public support for his ideas,
including the elimination of presidential term limits, Chavez
is running the risk of making empty populist promises. The
BRV is likely to have a difficult time sustaining a 36-hour
work week and providing social benefits to the self-employed,
for example. Passage in parliament, however, is all but
assured, and the fractured, strategy-less opposition does not
appear to be in a real position to challenge Chavez'
formidable electoral machine.

FRENCH