Photo: Guillermo Esteves, retreived

The year kicks off with the registration process for the future United Socialist Party of Venezuela (PSUV) with Cilia Flores heading the National Assembly (AN) and Rodrigo Cabezas is our finance minister. The nation’s budget is $53,5 billion. Thanks to the Enabling Law, which gave Chávez 18 months to legislate on the transformation of State institutions and the exercise of public administration at any level, he approved 59 regulations and announced the start of five engines (a paso de vencedores), as well as the Misión Villanueva and the train to Guarenas, neither was finished or operational despite the millions of dollars poured into them.

Birds of a feather

Jorge Rodríguez becomes vice president and general Rafael Orozco replaces Erika Farías as food minister, to solve Mercal’s frequent supply issues. The AN believed it would solve them with the Law on Speculation and Hoarding, with the Administration determined to expropriate “whatever was necessary” and with Communal Councils turned into informant networks: the blame had to fall on private businessmen. Although Agriculture and Lands Minister Elías Jaua justified shortages arguing a destabilizing campaign – ignoring price controls and the takeover of food-producing companies –, later he’d admit the situation was critical, explaining that it was caused by massive trafficking. The pharmaceutical industry also experienced shortages, there was no medication for diabetes or hypertension, antibiotics and others.

Power struggle

Luisa Estella Morales heads the TSJ and dismisses the accusations of nepotism against her for hiring one of her daughters as Legal Consultant, the other as a secretary and her son-in-law as a bodyguard. Cilia Flores would break all records in this regard in the AN, although the visible conflicts between the AN and the TSJ throughout the year weren’t caused by this, but rather by the Constitutional Chamber’s alleged “usurpation of functions.” Judge Maikel Moreno, accused by former justice Luis Velázquez Alvaray as a member of Los Enanos criminal gang, was removed from his post for releasing the men accused for the murder of lawyer Consuelo Ramírez Brandt, violating an injunction that was waiting for the TSJ’s ruling. General Müller Rojas notably distanced himself from chavismo because the Armed Forces were being politicized. Without consulting anyone, Chávez created the Law of the National Police. The Labour Ministry announced the creation of Workers’ Councils, strongly criticized by the International Labour Organization.

Nationalizations

The government bought electrical company Seneca and 82.14% of Electricidad de Caracas, formerly controlled by American capital. The impact on dollar exchange rate was noticeable, both the Caracas Stock Exchange and the companies’ shares plummeted. Country-risk went from 198 points to 240 in a few days. Then, PDVSA took over the Orinoco Oil Strip’s fields, after agreeing to create joint ventures with the State as the main shareholder, but promoting the development of oil socialism. Shortly afterward, CANTV, the main phone service provider in the country, was nationalized and the State increased its shares in Electricidad de Caracas to 92.98%. Exxon Mobil and Conoco Philips rejected a proposal to create a joint venture with PDVSA as main shareholder in the Orinoco Oil Strip, and initiated legal proceedings against the government.

Estamos contentos contigo, con todo

After 53 years on the air, Chávez revoked the broadcasting license of Radio Caracas Televisión (RCTV). In his words, he couldn’t tolerate media outlets “in the service of golpismo, against the people, against the nation, against national independence and against the Republic’s dignity.”

On May 28th, when we switched to channel 2, we were greeted by Televisora Venezolana Social (TVes). The protests caused by this decision were massive, opening the scene for a new generation of the student movement that would eventually become a part of the opposition’s political map. TSJ rejected every protective measure filed in favor of RCTV.

Reactions to the RCTV shutdown

The Inter American Commission on Human Rights (IACHR) filed a lawsuit before the Inter American Court of Human Rights against the Venezuelan government, because they verified the human rights violation against RCTV’s employees and journalists. Chávez removed Venezuela from the IACHR’s jurisdiction, which would be effective in 2013, while the Court’s ruling would come in 2015. The Eurochamber issued a resolution reminding Chávez of his obligation to respect and enforce respect for freedom of expression, opinion and press; the American Convention on Human Rights, the parliaments of Peru, Chile and Uruguay, and Mercosur also condemned the decision. RCTV didn’t recover its broadcast signal and much less the equipment confiscated with a TSJ precautionary measure.

A well-oiled plane

UNASUR was formally created and Chávez threatened Mercosur because Venezuela wasn’t still a full member. He travelled to Cuba, Argentina, Uruguay, Ecuador and Iran anyway; he went to Russia to arrange the purchase of more weapons, including five submarines, and he went to Nicaragua to drop $5.4 millions on socialist companies there, as well as donating tractor trucks and promising a refinery. In Belarus, he praised Lukashenko as a formidable leader. The briefcase that Antonini Wilson tried to smuggle into Argentina with nearly $800,000 in cash, allegedly for Kirchner’s campaign, was a major scandal.

Constitutional referendum

The National Assembly approves Chávez’s proposed reform on the ‘99 Constitution a year later, adding 33 articles written by the leader, to establish “a socialist State.” Luis Miquilena, Chávez’s Obi Wan Kenobi, harshly criticized the proposal, putting an end to his coaching. Chávez was defeated and accepted it, but claimed that the proposed reform was “still alive.“ There were rumors about military incarceration to accept the results and Chávez denied them, calling the opposition’s triumph a “shitty victory.”

Changing time

On December 9th, all Venezuelans had to set our clocks back by half an hour, to please another of Chávez’s whims: a new time zone, going from GMT -4:00 to GMT -4:30. Chávez justified this with health improvements, because we’d be waking up with natural light and all that. But CICPC director Marcos Chávez surpassed even that show of cynicism, by declaring that crime rates had dropped and blaming the media for spreading fear and tension while concealing the true figures.

Indicators

The international sphere favored the increase in oil prices, propping the government’s spending. The GDP grew by 8.4%, but so did public spending and imports, which represented 60% of the increase in the global offer and boosted inflation rates to 22.5%, the highest in Latin America in 2007. The minimum wage rose to Bs. 614,790 ($286 back then) and purchasing power was at 68%. The tax on financial transactions (ITF) was established. In moves just as alarming as expropriations, Chávez removed Venezuela from the International Monetary Fund and the World Bank. Ah! Throughout the year, the National Assembly approved 134 additional credits for the Executive Branch.

3 COMMENTS

  1. What a productive year for Chavez in systematically taking steps that would destroy Venezuela’s productive capacity and hollow out it’s assets. Massive oil revenues from sky high oil prices, along with a mountain of debt, could paper over much of this for awhile. But to anyone paying attention and wasn’t a rojo rojito the warnings and consequences were clear….although hard to imagine how disastrous these types of moves would be.

    Still, there was hope after the referendum defeat of Chavez. Glory to the brave students of that era. Sadly many of them are abroad now, taking their drive and courage and ingenuity with them.

  2. Remarkable flashback. I’d forgotten about the food and medicine shortages caused by speculation and horsing 10 years ago. Sounds familiar.

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