Monday, July 17, 2006

Reinventing Venezuela with Socialism

A farmer cuts an organic cacao's fruit at his farm in Venezuela. Venezuela's cacao export industry dwindled after the 1920s when the South American country discovered massive oil reserves. But now an association of small farmers (helped by the Government) is aiming to revive Venezuela's chocolate tradition by expanding sales of organically grown cacao.

Before I present this AP article on the growing socialistic programs in place in Venezuela helping the poor, I wanted to contrast that with this Miami Herald piece about the parallel trend of growing riches there. Check what the (always right-wing) Ven-US Chamber of Commerce President is quoted as saying: "You can see the sense of prosperity flowing through all levels of society." Socialism is nothing to be scared of. It simply means identifying problems and seeing what the State can do to make them better - through participation in planning and implementing innovative programs like these.

July 17, 2006

Wifredo Rodriguez owns a shoe factory near Caracas, Venezuela, that
was rebuilt with government loans under a program that is fostering
President Hugo Chavez's push toward so-called 21st-Century socialism.
(FERNANDO LLANO/Associated Press)

CARACAS, Venezuela -- A landslide all but wiped out Wilfredo
Rodriguez's small shoemaking business last year, entitling him to a
government loan -- money he says he never would've found elsewhere.

It came with strings -- his workers get limited co-ownership, and he
must make mandatory donations to local projects. But the factory is
thriving. Its 14 workers produce 1,200 pairs of shoes per month, and
it has begun selling sandals to Cuba.

Cooperatives and comanaged social production companies, such as
Rodriguez's factory, are the backbone of the new 21st-Century
socialism that President Hugo Chavez is trying to create.

Venezuela's leader is fond of saying he's inventing a new sort of
economy that won't just forever alter Venezuelan society, but also
will serve as an egalitarian model for the world.

In little more than seven years, the nation's oil wealth and Chavez's
personality have transformed Venezuela's economy into a unique mix of
public and private enterprise.

Billions of dollars are diverted annually to social spending;
cooperatives jointly owned and operated by workers are favored for
government loans and contracts; and new government-owned companies
challenge private sector heavyweights, producing everything from
tractors to laptop computers for poor people.

Banking regulations require a third of all loans to go to small
businesses, low-income mortgages and government-favored sectors at
below-market rates.

Economists say the experiment -- to subordinate private enterprise to
broader social aims -- has become a powerful symbol in Latin America,
where U.S.-backed free-market policies of the 1980s and '90s caused

"I think we are seeing something innovative. Venezuela is aspiring to
represent an alternative way of organizing," said Laura Enriquez, a
Latin America expert at the University of California-Berkeley. She
said Chavez has succeeded by posing a challenge to U.S.-backed
economic theories.

Chavez has repeatedly expressed admiration for the communist China of
Mao Tse-tung, the leftist dictatorships of Gen. Juan Velasco in Peru
and Gen. Omar Torrijos in Panama, and Libya under Moammar Qaddafi
whose economy was similarly oil-based and included government

But he also has emphasized that Venezuela isn't modeling itself on
failed examples of the past, such as the Soviet-style command

Under Chavez's plan, the government also helps pay stipends to
workers in farming and industrial cooperatives.

Official statistics reveal positive signs: 9.4% economic growth last
year -- South America's highest -- and a poverty level that's
declined from 48% in 1997 to 37%. Last year, Venezuelans' per capita
income was $4,900 compared with $42,000 for Americans.

But others say they don't believe Chavez is creating the conditions
for long-term growth. The economy remains dominated by oil; capital
flight continues, and nearly half the workforce is estimated to
remain in the informal economy in dead-end jobs, including street
vendors and laborers.

Copyright C 2006 Detroit Free Press Inc.


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