Did you hear that President Chavez is going to Rule by Decree for the next 18 months? The very idea evokes a picture of a not-too-distant South American past, one in which all-powerful executives live out their capricious whims and mete out brutal retribution against political enemies. It's all so dramatic and perverse and larger than life. Somewhere Andrew Lloyd Webber is already mapping out the musical score.
But it this case, it's just not true. Of course, if you've been reading the newspapers lately, you'd have a hard time figuring that out. The Miami Herald headline blares: "Chavez Granted Power to Rule by Decree." Time Magazine asks "Is Chavez Becoming Castro?" And those are the restrained ones. The right-wing rags have headlines like "A Dictatorship Rises," and "Hugo Chavez Kills Democracy." So you'd be forgiven for not getting the nuances in this storyline.
Here's what's actually happening: The Venezuelan assembly is poised to pass a law that will give the executive branch greater leeway to establish norms on a certain range of issues. Most of these involve guidelines for the president's own cabinet-level agencies. In other words, the Venezuelan version of the IRS will map out the country's tax structure; the Transportation department will devise its own strategic plan for public transit nationwide, etc. This represents a shift of certain powers from the legislative branch to the executive, to be sure, but on paper they don't seem to stray too far from the powers that the executive branch in the United States already has. Venezuelanaysis.com has a full listing of the ten issue areas that are affected.
It is important to note that this type of power-transfer is allowed under the Venezuelan constitution of 1999, which expressly permits the President to issue executive orders specifically within these issue areas. Of course, the constitution continues to guide the country's overall legal framework, which is to say that no "decree" can supercede constitutional law.
What's more, this "enabling law" is not new to the current constitution. Venezuela's previous constitution allowed for similar powers shifts to the executive, and you can be sure that past presidents took advantage of this authority on multiple occasions throughout the 70's, 80's and 90's. Here are a few examples:
� In 1974, Congress gave President Carlos Andres Perez the right to "rule by decree" on a number of economic matters, which he used to pass a slew of new regulations-instituting a minimum wage increase, freezing the market price of "necessary" goods, instating tax relief on agricultural activities, increasing government pensions, and even establishing new state institutions, including the National Institute of Housing and an Industrial Development Fund.
But Perez was a close ally of the US government, so there was little controversy from Washington.
� Ten years later, in May 1984, Congress again gave authority to the President, this time Jaime Lusinchi, to deal with the country's financial crisis by decree. He enacted a complicated exchange scheme, which was different for various sectors. For example, he extended a fixed exchange rate (4.3 bolivars to the dollar) for the payment of foreign debt and for Venezuelan students studying abroad; a second rate (6 bolivars to the dollar) for trade in the oil and iron industries; and a third (7.5 to 1) for the commercial and financial sectors. A fourth, "fluctuating dollar," constantly changing by market forces, was in use for everything else.
Nobody balked at all this, certainly not on the international scene. Lusinchi is remembered for hosting the first-ever visit of a Pope to Venezuela, and left office a few years later with what at the time was the highest approval ratings of an outgoing Venezuelan president.
� In 1993, interim President Ramon Jose Velasquez used these special "decree" powers to retool the country's debt and reform the financial system. Once again, nobody-well, nobody remembers much about Velasquez at all. He was sort of a historical footnote, serving only 8 months in office.
So why all the finger-wagging, hand-wringing and label-slinging this time around? In short: because it's Chavez. The Bush administration has long been on a campaign to brand him a despot. His influence throughout Latin America is seen as a threat to U.S. power in the region, and after failed attempts to overthrow him by force, sabotage the nation's economy, and finance opposition parties, the label game is the last arrow they have in their increasingly feeble anti-Chavez quiver.
For their part, the international press is all too eager to go along for the ride. You'll be shocked (shocked!) to hear that they often take the Bush Administration's analyses at face value, with little of the digging that would provide balance or context to the story.
But more than that, the Caracas-based correspondents for the big newspapers are hampered by their lack of familiarity with Venezuelan history. How many of them would know offhand that Velazquez "ruled by decree" ten years ago, much less be familiar with similar instances in the 80s or the 70s? And the Venezuelan elites they go to for context are not about to highlight this. They've got a government to undermine.
So for those itching to see a musical Chavez biopic in the works, it's going to be a little less "Evita" and a little more "1776."
www.BoRev.Net
I am a freelance writer with a special focus on Latin America. My blog, www.BoRev.net deals with Venezuela's Bolivarian Revolution and its portrayal in the U.S. press.
Eric Wingerter was until recently an employee of the Venezuela Information Office in Washington DC, a joint set up and financed by the Venezuelan government -through its embassy in DC- to spread propaganda and counteract press coverage adverse to Hugo Chavez. Further information about Wingerter's activities can be found with the Foreign Agent Registration Unit of the US Dept. of Justice or alternatively here:
Comment is flagged and has been reviewed by the editors -
Reason: Totally Irrelevant
Editor's Message: I don't have a horse in this race, but it seems that if a commenter is going to give background about the writer, it's fair for others to give background about the commenter. I note that the information reported is not disputed.
Rob Kall
Aleksander Boyd, a virulently anti-Chávez Venezuelan who resides in London. Recently the Mayor of London, Ken Livingston acused him "of being a supporter of terrorism against Venezuelan democracy."
In an article published in the "Latin American News Review," Boyd's name was briefly mentioned:
"Some of Boyd's statements verge on the diabolical. In one rather bizarre article, dated March 18, 2004, Boyd expresses his wish that he were Genghis Khan and that he could order his "hordes" to capture prominent Venezuelan political and judicial officials and "pour melted silver into their eyes." "I wish I could decapitate in public plazas [the pro-Chávez political activist] Lina Ron and [the pro-Chávez politician] Diosdado Cabello," Boyd states. "I wish I could torture for the rest of his remaining existence Vice President Jose Vicente Rangel," Boyd continues. "I wish I could fly over Caracas slums throwing the dead bodies of the criminals that have destroyed my country," Boyd goes on."
by
Phil Durst (0 articles, 0 quicklinks, 0 diaries, 5 comments)
on Monday, January 29, 2007 at 9:34:36 AM
Dear Editor, I have never denied having written such things, as a matter of fact the article from where the cited remarks derive can still be accessed on my website, the point remains though: Mr. Wingerter tries to pass as freelance journalist with an interest in Latin America, when in fact up until very recently he was a paid propagandist on Hugo Chavez's payroll, as publicly accessible documents from US Dept. of Justice's Foreign Agent Registration Unit reveal.
It is therefore disingenuous, to say the least, not to reveal such an obvious conflict of interest.
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Monday, January 29, 2007 at 2:03:18 PM
Sorry Mr. Wingerter, I was going to write a comment on the article but then got carried away...
As you very well mention, it is important to understand the history of Venezuela before trying to judge it. Like so many previous presidents, the idea of ruling by decree is to avoid unnecesary burocracy and loss of time. Contrary to many critics view, it is totally democratic, since the democratically elected National Assembly (Venezuelan Congress), has to first aprove it. Please remember that at the beginning of Chavez's first term, it was thanks to the "rule by decree" that foreign investment was allowed for the first time in the oil and gas sectors since 1975. Furthermore, president Chavez has again made it very clear how and for how long he intends to use this power.
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Phil Durst (0 articles, 0 quicklinks, 0 diaries, 5 comments)
on Monday, January 29, 2007 at 3:54:48 PM
Please remember that at the beginning of Chavez's first term, it was thanks to the "rule by decree" that foreign investment was allowed for the first time in the oil and gas sectors since 1975.
So one must guess by your comment then that "Apertura Petrolera" in the early 90ies is just a trick of imagination? You would be well advised in following Eric's advice and not let your senses be carried away...
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Tuesday, January 30, 2007 at 5:29:52 AM
The article in itself? I think you have succeeded in providing readers with a historical perspective that demonstrates beyond any doubts that Hugo Chavez is just more of the same, as some of us have been saying all along. What you would be hard pressed to do though is to draw parallelisms between Chavez's militarism and that of his democratic predecessors, or between his power-hoarding model as opposed to previous power-sharing models that characterized the duopoly AD-COPEI. Furthermore he has just announced an increase of gasoline prices, just as CAP did in 1989. Hence it is patently clear that the much touted XXI century socialism is nothing but hot air. As repented chavista Margarita Lopez Maya said recently: Chavez just does not know the meaning of dialogue and governing by consensus.
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Tuesday, January 30, 2007 at 5:23:23 AM
Before the 2001 law, private companies were working in Venezuela under "service agreements" but in reality they were extracting oil and selling it at market prices to pdvsa, that was paying for the "service" depending on international oil prices. This means that they were allocated illegal concessions by PDVSA, (who did not even have the authority to allocate them). PDVSA named it the "apertura petrolera." Obviously these contracts were illegal. The hydrocarbons law was then corrected so as to open a space to encourage private investment (foreign and national) and also to keep these fields and their operators within the law.
It is widly known, that the "apertura petrolera" was an attempt by the top excecutives of pdvsa to privatize the industry by cheating the ministry of energy and mines and the congress.
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Phil Durst (0 articles, 0 quicklinks, 0 diaries, 5 comments)
on Tuesday, January 30, 2007 at 1:40:45 PM
Before the 2001 law, private companies were working in Venezuela under "service agreements" but in reality they were extracting oil and selling it at market prices to pdvsa, that was paying for the "service" depending on international oil prices. This means that they were allocated illegal concessions by PDVSA, (who did not even have the authority to allocate them). PDVSA named it the "apertura petrolera." Obviously these contracts were illegal. The hydrocarbons law was then corrected so as to open a space to encourage private investment (foreign and national) and also to keep these fields and their operators within the law.
It is widly known, that the "apertura petrolera" was an attempt by the top excecutives of pdvsa to privatize the industry by cheating the ministry of energy and mines and the congress.
Care to provide evidence on the 'illegality' of contracts granted under Apertura Petrolera? Your arguments are so ludicrous it boggles the mind.
First you state that thanks to Chavez's rule by decree "foreign investment was allowed for the first time in the oil and gas sectors since 1975" which is not only a blatant lie but preposterous given the presence of foreign oil companies in the country after Apertura Petrolera that naturally invested large amounts of money in their projects.
Second, without providing any evidence, you invent that Apertura Petrolera was illegal, but the most interesting aspect of it all is your claim that Apertura Petrolera was an attempt by PDVSA to privatise the industry. On the one hand you seem to support the presence of foreign investment in the oil and gas sectors if its done by Chavez but as it was done by previous administrations is called 'privatisation'? WTF? Is it not true that up to 800.000 BPD are currently produced and sold to PDVSA by companies that set shop in Venezuela due to Apertura Petrolera? Is it not true that SENIAT's oil related income has seen an enormous surge due to increased taxes forced on foreign companies? Where would Chavez's revolution be if income was to depend solely on PDVSA's diminished production? Further, who brought the Chinese to Venezuela? Is it not true that they outbid the competition in Apertura Petrolera's process? Is it not true that Ramirez's supposed plan to increase production to 5,5 MBD by 2012 is but a carbon copy of what previous PDVSA administrations had in mind for 2005 and that Chavez arrested when he sacked 20.000 workers and managers? I mean do you really think that anyone with an iota of knowledge on Venezuelan oil and politics is going to believe such crap?
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Wednesday, January 31, 2007 at 5:26:06 AM
Well in fact I know that people in the oil industry believe it. All large oil corporations agreed to the migration. All of them agreed that the terms of the operating agreements were illegal when signed and therefore accepted the new rules. Only two companies didn't, which were European. And they didn't accept it, because both wanted to get out anyway, since their fields were not productive.
I work in the United States oil industry, and I can ensure you that all American corporations were very well aware in what they were risking when signing these contracts. It was a relatively high risk move, with incredible returns. They were hoping that future governments of Venezuela eventually open the oil market up, and they would have a strong foot in it.
About the nationalization, it is to the Venezuelans to decide what they want. PDVSA has been working fine as a national oil company, and still is despite the defamation campaign it is now suffering. The rumors about production reduction only increase oil prices, which in the end is good for them anyway. Personally I believe the majority of the oil industry should stay nationalized because of the strategic importance of oil and energy in general, but that a part should be opened up so as to attract foreign investment and technology. However, there has to be a clear set of rules, which I believe there are now.
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Phil Durst (0 articles, 0 quicklinks, 0 diaries, 5 comments)
on Wednesday, January 31, 2007 at 10:44:29 AM
Well in fact I know that people in the oil industry believe it.
Great argument mate, I happen to know people that think otherwise, so which is it? Where's the evidence that these contracts were illegal?
But it gets better...
All large oil corporations agreed to the migration. All of them agreed that the terms of the operating agreements were illegal when signed and therefore accepted the new rules.
All of them agreed to what? Care to show evidence from Chevron, Exxon et al 'agreeing' that contracts signed with PDVSA were illegal? For someone that purportedly works in the oil industry -what are you, bombero en una estacion de servicio?- you certainly have a very poor understanding on the reasons behind large corporations' strategic decisions. Apertura was not a high risk move, but a very public bidding process that made the rounds in the industry back in the days. Given the very high cost that extracting and refining heavy crude oil entails PDVSA came up with a rather neat plan in order to entice foreign oil companies and be able to compete with other countries on similar conditions. But hey what do I know, you're the expert right?
So the future possibility of market opening up was the reason companies decided to go to Venezuela so that the strong footing they had achieved would be diminished by competing conglomerates? How old are you 12? Further, please list the number of foreign firms willing to invest in Venezuela in the new XXI Century Socialism or death era.
PDVSA, you got that one right, had been working fine until the revolutionary rabble came about. Now no one knows how much it's producing, it has utterly failed to provide audited accounts since 2003, fatal accidents have increased exponentially, its output has decreased, exploration activities had been postponed for 4 years, it has lost for good its human capital and efficient management, production costs have increased... PDVSA is just a sorry shadow of her former self, all thanks to the brutish dictator and a claque of lackeys totally incapable of running such a complex business.
Not all is lost though, with such clever reasoning I am sure you can land a job at CITGO, you know, helping America's poor and that sort of thing...
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Wednesday, January 31, 2007 at 6:17:53 PM
You obviously have let your passion over your reasoning, which has made your comments totally absurd and offensive. Therefore, I was debating if replying at all. I decided to write something, however, in order to clarify some points you made.
First of all, all foreign companies indeed stayed in Venezuela under the new rules established by the constitution. There are only 2 exceptions, which are Total and ENI. Both, operated unproductive marginal fields and wanted out anyway. Please note, that even as the international press (which is obviously your main source of information) has strongly criticized Venezuela's move as illegal, no company has filed one arbitration suit against Venezuela. Eni is the only one that said it would, but in the end it hasn't. As I understand from your comments, you are an expert in large corporation's strategic decisions, you would therefore understand, that Eni had to publicly announce it would file a suit, so as to keep its shareholders happy.
About PDVSA's operations, it is well known what Venezuela's production is. If you look at non-politically influenced data, you can appreciate that the numbers reported by PDVSA are accurate, take for example the BP statistical review 2006. I hope you agree with me that the data released by the US Department of Energy through the EIA is not really objective.
Finally, it is all right if you do not agree with the Heating Oil program launched by Citgo. Again, as an expert in Large Corporation Strategy Decisions, you would know that it is great in the long term for a company to make millions of dollars of profits at the expense of freezing people in terms of its corporate image. This program was a humanitarian program, which in marketing terms had the additional advantage that no other company did anything similar. Please go to a poor neighborhood in the US and ask the people which is their preferred gas station. The image boost this gave to Citgo is unprecedented.
With this, I want to announce that I will restrain from answering to your comments again.
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Phil Durst (0 articles, 0 quicklinks, 0 diaries, 5 comments)
on Friday, February 2, 2007 at 10:54:35 AM
I see that you have failed to support your spurious allegations with evidence. So predictable of non-venezuelan 'experts' opining on things they haven't got the slighest clue about, while taking propagandists' opinions at face value. In closing, so great has the CITGO PR stunt of helping 'poor Americans' been that the company its changing its name to Petro Express...
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alekboyd (0 articles, 0 quicklinks, 0 diaries, 7 comments)
on Saturday, February 3, 2007 at 6:29:39 AM
Nice to read someone with a handle on reality and Chavez. I have been saying for ages to anyone who will listen that the real devil is Bush. Chavez is popular for a very good reason. He is a man of the people and for the people. His social programs have helped the poor. The elite rich hate him as a result. Keep telling it like it is please.
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MarcHolt (3 articles, 0 quicklinks, 0 diaries, 12 comments)
on Friday, February 2, 2007 at 8:18:21 AM
