Identifier
Created
Classification
Origin
09CARACAS1599
2009-12-29 22:50:00
CONFIDENTIAL
Embassy Caracas
Cable title:  

CHAVEZ PROMOTES TRANSITION TO SOCIALIST ECONOMY, THREATENS

Tags:  ECON KIPR EINV ETRD EIND EINT ECIN CH VE 
pdf how-to read a cable
VZCZCXRO7527
RR RUEHAO RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS
RUEHTM
DE RUEHCV #1599 3632250
ZNY CCCCC ZZH
R 292250Z DEC 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 0206
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
C O N F I D E N T I A L CARACAS 001599 

SIPDIS
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR DRESTREPO
NSC FOR LROSSELLO
USDOC FOR 4332 MAC/ITA/WH/JLAO
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2019/12/28
TAGS: ECON KIPR EINV ETRD EIND EINT ECIN CH VE
SUBJECT: CHAVEZ PROMOTES TRANSITION TO SOCIALIST ECONOMY, THREATENS
FOREIGN AUTOMAKERS

CLASSIFIED BY: Richard Yoneoka, A/Economic Counselor, Embassy
Caracas, ECON; REASON: 1.4(B),(D)

C O N F I D E N T I A L CARACAS 001599

SIPDIS
HQ SOUTHCOM ALSO FOR POLAD
TREASURY FOR MKACZMAREK
NSC FOR DRESTREPO
NSC FOR LROSSELLO
USDOC FOR 4332 MAC/ITA/WH/JLAO
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2019/12/28
TAGS: ECON KIPR EINV ETRD EIND EINT ECIN CH VE
SUBJECT: CHAVEZ PROMOTES TRANSITION TO SOCIALIST ECONOMY, THREATENS
FOREIGN AUTOMAKERS

CLASSIFIED BY: Richard Yoneoka, A/Economic Counselor, Embassy
Caracas, ECON; REASON: 1.4(B),(D)


1. (SBU) On December 22, President Chavez inaugurated a chain of
government-run retail stores called the Corporation of Socialist
Markets (COMERSO). "We're going to defeat speculation. Private
individuals can still sell, but they'll have to compete with us and
with a people that is now fully aware," Chavez said. The COMERSO
chain would consist of 11 subsidiaries, including stores selling
household goods, socialist car dealerships, socialist pharmacies,
socialist hardware stores, and a network of socialist "areperas,"
or restaurants that serve a traditional Venezuelan food. The same
day, in another speech during the closing ceremonies of the Eighth
Venezuela-China Mixed Commission in Caracas, Chavez said that in
order to transition from capitalism to a socialist economy
Venezuela would have to plan everything from the primary sector to
the final consumer. "They'll see what's good. We'll show them
what a real market is all about, not those speculative,
money-grubbing markets, but a market for the people," Chavez said.





2. (SBU) On December 23, during a COMERSO car sale in the Plaza of
Caracas, the Venezuelan government (GBRV) sold an allotment of 300
cars, including vehicles manufactured under the mixed
Venezuela-Iranian company Veniran and Volkswagens imported
tariff-free from Argentina. Commerce Minister Eduardo Saman that
the GBRV had entered the automotive sector in order to combat the
capitalist speculation that allowed private car distributors to
earn profits of 400 percent. "If we don't pay a 40 percent tariff
for each vehicle, we can sell cars at a lower price too," an
unidentified spokesperson for the automotive industry told the
press.




3. (SBU) During the event, Chavez threatened Fiat, Ford Motor,
Toyota and General Motors, telling the automakers to transfer their
technology to local companies or be replaced by Chinese, Belarusian
and Russian manufacturers. Chavez also ordered Commerce Minister
Eduardo Saman to inspect a Toyota plant after it rejected a GBRV
request to manufacture "socialist" SUVs. "If Toyota doesn't want
to manufacture (what the GBRV orders),we'll tell them to
leave...This is our house...we will take them over, expropriate
them, pay them what it's worth, and then call the Chinese," Chavez
said.




4. (C) COMMENT: Based on Chavez's own comments, the inauguration
of COMERSO represents another step in Venezuela's transition to a
socialist economy. Chavez's statement that foreign automakers must
follow GBRV orders or leave the country reveals an increasing
hostility to private companies operating in Venezuela. It also
tracks with the recent nullification of two of Bayer's
pharmaceutical patents for an antibiotic. After Bayer protested
the local production of two generic copies of a Bayer drug, the
GBRV rejected Bayer's request for assistance and revoked Bayer's
intellectual property rights to the drug in question. These
examples suggest that the GBRV considers private sector companies
necessary in the short-term, but increasingly expendable as
Venezuela moves further down the path to a socialist economy. END
COMMENT.
DUDDY