WE AREN'T MAKING THIS UP: THE BRV'S BIZARRE POLICY

UNCLAS SECTION 01 OF 03 CARACAS 001831

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV ECON SOCI VE
SUBJECT: WE AREN'T MAKING THIS UP: THE BRV'S BIZARRE POLICY
HIGHLIGHTS


1. (SBU) Summary: Over the last month the BRV has proposed an
amalgamation of ambitious socialist and populist projects
that further expand the role of the state in society and
seemingly defy common sense. President Chavez has announced
his intention to construct socialist cities and islands,
reduce the work week, arbitrarily adjust central bank
policies, shift time zones, and change the official name of
Caracas to "Cradle of Bolivar and the Queen of Guaraira
Repano." While these arbitrary policy changes often seem
irrational and capricious, they strongly adhere to Chavez'
populist and nationalist ideology and allow attention to be
diverted away from more controversial policy changes. End
Summary.

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Moving toward a New Bolivarian Utopia
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2. (U) Chavez first announced his plans for a socialist city
in January 2007. During his August 26 "Alo Presidente"
television program he proposed naming the first one,
"Cariba," in honor of the aboriginal tribe that first
inhabited Caracas. Located just North of Caracas in a former
environmentally protected area bordering Vargas state, Cariba
will be the new home for families from the poorest barrios in
Caracas. The BRV plans on moving families from the
over-crowded and dangerous Catia Barrio into this 11,370
hectares block of land, setting a population goal of 100,000
inhabitants. The proposed city will purportedly have blocks
of 5-floor houses with 20 family units, communication
infrastructure, transport, trains, and possibly even cable
cars. Besides building in a former environmentally protected
zone, the government evicted 350 families who were previously
occupying this area. On July 22, Ramon Carrizalez, the
Minister of the People's Power for Housing and Habitat said
that there were 12 ministries and 16 autonomous institutions
working on this project, and the first 4,280 apartments
should be completed in 12 - 18 months.

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Chavez' Waterworld
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3. (U) On August 19, President Chavez rolled out plans for
installing artificial islands in Venezuela's Exclusive
Economic Zone (EEZ) to "protect the security and sovereignty
of its 760,000 square kilometers of national maritime space."
This ambitious plan calls for erecting platforms in the
middle of the ocean as small operation bases for boats that
gradually would become navigation networks with permanent
civil-military presence. These platforms would also serve as
bases for scientific research, submarines, and the
exploration of petroleum and minerals. Chavez neglected to
set a time frame for when the BRV would implement this plan,
but noted that his long term goal would be to create
inhabited island cities. The Dutch government, not
surprisingly, has already expressed concerns about the BRV's
unilateral intention to assert sovereignty in waters to which
they believe the Dutch Antilles have a claim.

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Time Changes and the Sun President
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4. (U) During this same August 26 "Alo Presidente," Chavez
announced that Venezuela would move its official time back a
half an hour at midnight on December 31, ostensibly to boost
the amount of natural sunlight intake during school hours.
Chavez said he would change the Law of Meteorology to reflect
Venezuela's new time grid, placing Venezuela four-and-a-half
hours behind Greenwich Mean Time (GMT) instead of the current
four hours. The Minister of Popular Power for Science and
Technology, Hector Nevarro argued that he sought "a more fair
distribution of the sunrise" and that more natural sunlight
would have a positive metabolic effect, making Venezuelans
even more productive at work and school. However, given the
increasingly perilous crime situation in Caracas, many
average Venezuelans worry more about having to walk or drive
home in the dark than increasing productivity. With this
move, Venezuela would be returning to its pre-1965 time zone
and become the fifth country in the world in between time
zones, joining Burma, Iran, India, and Afghanistan.

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Revolutionary Name Changes
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5. (U) In another attempt to leave a symbolic fingerprint on

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Venezuela, Article 18 of Chavez' "reformed" constitution
proposes changing the name of Caracas to the "Cuna de Bolivar
y la Reina de Guaraira Repano" (Cradle of Bolivar and the
Queen of Guaraira Repano). (Note: Guaraira Repano is the
name the native Caraquenos gave to the mountain range that
borders the northern edge of Caracas. End Note.) Name
changes are nothing new for Venezuelans, and besides changing
the country name in 1998, Chavez has added a star to the
national flag and modified the figure of the horse in the
national shield to run left instead of right. Much to the
confusion of visitors, the BRV has been constantly changing
the names of major parks, highways, and streets, providing
names that better reflect Chavez' personal world view. For
example, Caracas' Parque del Este's name has been changed
from Romulo Betancourt to Generalismo Francisco de Miranda,
and part of the principle highway in western Caracas, Avenue
Paez, has been changed to Avenue Tehran. Caraquenos have
largely coped with these increasing number of name changes by
simply ignoring them.

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Prohibition in Venezuela
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6. (U) During the April 2007 Semana Santa vacation, President
Chavez made a startling announcement affecting nearly all
Venezuelans when he outlawed the purchase and sale of alcohol
outside the hours of 10 AM and 5 PM from March 31 to April 4.
He also declared April 5, 6, and 8 completely dry. This
announcement was made the day before the vacation began,
catching bars, restaurants, discos, and even embassy
employees completely off guard. To his credit, Chavez'
reasoning for this decree was to reduce the number of drunk
driving accidents during Venezuelans' mass exodus from the
cities. Besides shutting down bars and discos during one of
the busiest times of the year, even Chavez' supporters
protested this decree and most Venezuelans responded by
stocking up and hoarding even more alcohol than usual.
Venezuelan pro-opposition newspaper "El Nacional" reported
that while traffic accidents were reduced from 2,847 in 2006
to 2,773, traffic fatalities increased from 94 to 121 over
the 2007 Easter week.

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Say Good-bye to Superman and Usnavy
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7. (U) On August 31, the National Electoral Council (CNE)
proposed a Civil Registration Law that would allow the
national registry to bar parents from giving their children
"names that expose them to ridicule, are extravagant,
difficult to pronounce, or leave doubts over the gender of
the child." The new law proposes creating a list of no less
than 100 traditional names for boys and girls that could be
offered to parents as a reference when they are registering
their child's birth. If approved by the National Assembly,
besides cracking down on actual Venezuelan names like
Superman and Usnavy, this bill would likely allow the
registry authorities to refuse names like Lizette, Diogenes,
Mizher, Leobardo, Ysmer, and Iroshima, coincidentally all
names of National Assembly representatives. (Note: On
September 13 the CNE withdrew this proposal. End Note.)

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Working Hard or Hardly Working
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8. (U) As part of President Chavez' constitutional reform,
and a sweetener for the masses, the Venezuelan work week
would be reduced from eight hours a day and a maximum of 44
hours per week, to six hours a day and a maximum of 36 hours
per week. Chavez stated logic is that a 25 percent reduction
in the number of hours worked would increase the number of
jobs by the same percentage. Unsurprisingly, most Venezuelan
economists have argued that instead of hiring new workers,
companies will pay overtime, doling out more money for
workers doing the same job. The likely unintended
consequence of this policy, therefore, is more inflation.
Economists estimate that labor costs would increase by 25 -
35 percent due to this change, and even loyal Chavista
business associations have argued that this should either
only affect large businesses or the BRV should help pay for
the cost. The Minister of the People's Power for Labor and
Social Security, Jose Ramon Rivero has said that the
reduction, should it come into affect, would not be automatic
and the goal is to reduce to six hours daily before 2010.

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Central Bank Becomes the People's Bank
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9. (U) During his September 2 "Alo Presidente" show, Chavez
suggested that the Venezuelan Central Bank (BCV) should stop
acting as an "oxygen tank" for private banks and instead
called on the BCV to help "farmers and peasants." On
September 5, the Central Bank, apparently following Chavez'
orders, announced that it would no longer allow overnight
lending to banks that lacked liquidity. This move took
banks, mainly small ones, by surprise and they were forced to
borrow from larger banks, driving the overnight rate very
quickly to 120 percent. The BCV apparently realized their
mistake and resumed lending money to banks, driving the rate
back down to 30 percent, however, still up from an average
daily rate of 8.7 percent. (Note: On September 12, the BCV
issued a circular stating that it would, starting today,
resume "liquidity injection operations" that had been
suspended on September 5. End Note.) During his September 2
speech Chavez said that he was having people study the BCV to
revise the procedures inherited from previous governments.

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Comment
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10. (SBU) While the above policies clearly illustrate the
arbitrary and capricious nature of Chavez' regime, these
changes adhere to his populist, paternalistic, and
nationalist ideology. Chavez' name changes and socialist
cities show his seemingly relentless desire to construct both
symbolic and physical manifestations of his reign. Besides
simply allowing him to brandish power, he justifies these
measures as a way to eradicate the vestiges of capitalism.
Although these policies occasionally seem to defy logic, they
allow Chavez to focus public attention on outlandish policies
and away from more controversial ones like his proposals to
eliminate presidential term limits and reduce the power of
local governments.

DUDDY