CARACAS, (Reuters) – An avalanche of laws being written to regulate business and promote “Marxist trade” in Venezuela marks a new push by President Hugo Chavez to build a socialist economy in the shopping-mad oil-exporting nation.
Chavez, a close ally of Cuba’s communist leaders, has steadily increased the role of the state in Venezuela with a slew of nationalizations and tough controls on prices and foreign exchange.
Despite an economy weakened by lower oil income, Chavez has solid approval ratings and is now powering ahead with his plan to regulate and reduce the private sector in the OPEC country.
He plans to overhaul more than a dozen laws this year, with wide-ranging implications for the already tightly regulated business sector as well as labor relations and education.
“I ask you to speed up the debate and approval of revolutionary laws in all areas of national activity,” Chavez told legislators in July, asking them that by December: “there is not a single counter-revolutionary law left. Not one!”
Chavez has won several elections since his first in 1998, and has vast powers that detractors say are authoritarian. They say that more than socialism, he wants to control all aspects of life in one of the United State’s top oil suppliers.
He is in a rush to pass laws because he could lose his massive parliamentary majority in legislative elections next year. He is considering asking the parliament, dominated by his allies, to give him temporary powers to pass laws by decree, a mechanism he has used to rush through legislation in the past.
Legislators canceled their summer break, and key commissions will keep working through August.
Opposition parties boycotted the last legislative elections in 2005, giving Chavez a free hand to nationalize most of the oil industry and other key areas of the economy, and bolster the social spending that has won him the support of the poor.
Earlier this year he expropriated oil service companies and food mills and passed laws to reduce the powers of elected opposition officials. He has also lit a campaign against the media, closing 13 radio stations and threatening a TV channel.
The initiatives being discussed in the normally lethargic national assembly include a controversial overhaul of education, plans to cap company profits, new patent rules, limits on investment by foreign businesses, changes to property laws and labor legislation.
Analysts say the legal offensive represents a big push forward for the former lieutenant colonel’s “revolution.”
“Presidential re-election gave Chavez a legitimacy that allowed him to put his foot on the legislative accelerator,” said Claudia Curiel, a Venezuelan analyst. “We are now seeing the point of no return for the president’s project.”
Chavez started overhauling the law books in 1999 with a new constitution and he got a huge boost when he won a referendum vote earlier this year that allows him to stay in power as long as he keeps winning elections — perhaps for decades.
WORRYING FOR
BUSINESS
Venezuela has long been a stronghold of U.S. culture, and government officials admit it is not easy to turn its people away from the national pastimes of shopping in vast malls, watching baseball and eating in U.S. fast food joints.
Undaunted, Trade Minister Eduardo Saman in July announced a package of laws aimed at developing a “Marxist” trade system.
“It is a Marxist vision of trade and consumption,” the heavily bearded, softly spoken Saman said. “Don’t be scared when I speak of Marxism, we have to lose that fear, the same with socialism.”
Saman, a rising star on the left wing of Chavez’s cabinet, wants to cap “excessive” profits and is promoting an anti-monopolies law, limits on some imports and rules that tie foreign investments to technology transfers. He is also revising patents, especially for medicines.
Such proposals are a worry to businesses who enjoy healthy profit margins in Venezuela despite red tape, difficulties in moving profits overseas and the risk of expropriation.
“The government is totally on the attack. They are trying to improve market distortions with decrees, and I don’t doubt in good faith, but this is not the way to do it,” said Fernando Morgado, president of Venezuela’s main trade chamber.
Pro-Chavez legislators say the measures, expected to be approved over the next few months, are essential to steer Venezuela away from capitalism and to gradually reduce private enterprise in favour of publicly owned companies.
“We are trying to create an alternative dominant economic system that will be efficient, sustainable and socially profitable,” said legislator Ulises Daad, who heads the parliamentary group writing a new property law that will formalize alternatives to private property.
That initiative will likely allow certain state-owned property to be administered by community groups and has met resistance from free market activists, who launched a series of adverts claiming people could have their homes and businesses taken by the government.
Chavez brushes off the criticism, saying it comes from economic elites afraid to lose their privileges.
“Laws have been instruments made by the rich, the bourgeoise to finance their dominance over poor minorities. We are writing laws that upset the rich, to regulate and finish with capitalist speculation,” he said.
