Chávez feeds the poor as economy starves

At the Mercal food store in Caricuao, a poor district on the dust-blown outskirts of Caracas, the range of goods is limited. Shelves are half-empty. An army sergeant loiters at the end of the checkout, ready to bag your ration of beans, flour and sugar.

Unpromising as it may seem, the government store in the capital is the model to be replicated across Venezuela under a plan fathered by populist President Hugo Chávez and overseen by the military. The plan's goal: to feed Venezuela's growing number of poor and to counter shortages from the private sector. "Prices are cheaper than elsewhere, and for those of us with low incomes, any difference is important," says Viviana Trillo, a Caricuao housewife. "I thank President Chávez for this."

Paradoxically, the food security programme is being prioritised just as the Chávez government is blocking dollar sales to businesses, including soft commodity importers and food processors, curtailing supplies.

Currency trading was suspended in January during the strike at Petróleos de Venezuela, the state oil company that is the government's main source of export revenue. Four months later, international reserves have recovered and oil exports have resumed.

But Cadivi, the foreign exchange control agency, has yet to disburse any dollars and business leaders are convinced that Mr Chávez intends to bring the business sector - which fiercely opposes his government - to its knees.

"This a specific retaliation against all those seen as not being in favour of the regime," says Rafael Alfonzo, president of Cavidea, the food industry chamber.

The non-functional currency controls are not only affecting domestic companies, many of which are closing and laying off employees. Multinationals with subsidiaries in Venezuela, such as Cargill, the US agricultural conglomerate, say they will be forced to shut down operations within the next few weeks unless hard currency is made available.

"A lot of US companies thought that this would be a temporary situation and they got money from their home offices to maintain market share," says Antonio Herrera, vice-president of the Venezuelan-American Chamber of Commerce.

"But now they are being told: 'no longer', so they are exhausting inventories," Mr Herrera says. "This is an economic atrocity against the Venezuelan people."

Venezuela's economy appears to be spiralling downwards. Central bank figures due this week are expected to show that the economy shrank 15-25 per cent in the first quarter after a 9 per cent contraction last year. Inflation is forecast to top 50 per cent this year.

Hugo Chavez - Venezuela

Fidel Castro - Cuba

Thanks, Hugo! President of Venezuela deserves free-market award***It's time to nominate Venezuela's populist President Hugo Chávez to the ''Milton Friedman Award'' for his indefatigable work to advance the cause of free-market policies and political harmony in the developing world.

I'm not kidding. No other head of state has done so much in such a short time to wreck his country's economy, and to discourage his neighbors from engaging in the kind of finger-waving populism that has brought about massive capital flight and record poverty levels in Venezuela.

If it weren't for the disastrous performance of Chávez's ''peaceful revolution,'' Brazil's new leftist President Luiz Inácio Lula da Silva would have probably launched the anti-free market policies he had championed for the past three decades, several foreign diplomats and politicians told me during a recent trip to Brazil. And Ecuador and Argentina probably would have followed suit.***

Steve Forbes: Backyard Trouble [Full Text] There's another foreign policy problem brewing, this time in our own hemisphere--an attempt to make Venezuela a second Cuba. Strongman Hugo Chávez, who led an unsuccessful coup attempt in 1992, was elected president in 1998 in a popular vote of revulsion against the embedded corruption of the existing political elites. Since then, Chávez has been doing everything he can to turn his "presidency" into a dictatorship like Fidel Castro's. He used his initial popularity to gut constitutional checks on his power. Regime opponents now face arrest and even outright murder. Chávez is setting up vigilante committees in neighborhoods to inform on people. These committees also serve as an armed militia to back Chávez.

Venezuela has been a democracy since 1958, when a courageous leader, Rómulo Betancourt established representative government following a dictatorship. In the early 1960s Betancourt beat back Castro's efforts to overthrow Venezuela's democracy. Now Chávez wants to turn back the clock. He's cozied up to terrorist groups around the world, including those waging a murderous guerrilla war in neighboring Colombia.

Venezuelans of all classes and occupations have taken to the streets to protest Chávez's actions. He was thrown out briefly in a coup last year, but the coup collapsed when it became clear that the old corrupt elites were going to return to their money-grabbing ways and would take their time restoring democracy. Chávez's smile, however, was soon wiped off his face as spontaneous protests continued. There was a general strike a few months ago, the effects of which sharply reduced Venezuela's oil production. But Chávez has clung to power.

Whether Chávez's rule should continue is supposed to be the subject of a referendum in August, but this Castro wannabe has made it clear he won't leave office voluntarily. He will either try to postpone the election or use his armed thugs to rig the results.

The U.S. has reacted gingerly lest Chávez play the anti-U.S. card--always an option in Latin America--to shore up his sagging popularity. The U.S. should make clear that a clean August vote must take place--that Chávez must not be allowed to set up a virtual dictatorship, even if that means oil prices go up because we embargo Venezuela's oil exports. When Venezuelans see that we're serious about Chávez, perhaps their army will do what it should have done a long time ago--send Chávez to Havana on a permanent vacation--and then promptly return to the barracks.

Cuba Exports City Farming 'Revolution' to Venezuela - Has U.N. Blessing *** CARACAS, Venezuela (Reuters) - In a conference room at Venezuela's military academy, a group of soldiers listen attentively to a pair of Cuban instructors. The subject being taught is not revolutionary guerrilla warfare as once practiced by Fidel Castro, but the "organoponic farming revolution," communist Cuba's latest export to its closest South American ally, Venezuela. "Organoponic gardening," a system of concentrated, organic urban vegetable cultivation, is taking root in central Caracas, amid the piles of garbage, bands of homeless beggars and tens of thousands of vehicles belching out polluting gas fumes.

Inspired by Cuba's system of urban market gardens, which has been operating for several years, left-wing President Hugo Chavez has ordered the creation of similar intensive city plots across Venezuela in a bid to develop food self-sufficiency in the world's No. 5 oil exporter. "Let's sow our cities with organic, hydroponic mini-gardens," said the populist former paratrooper, who survived a brief coup a year ago and toughed out a crippling opposition strike in December and January. Inside Fuerte Tiuna military headquarters, soldiers of the crack Ayala armored battalion supervised by Cuban instructors have swapped their rifles for shovels and hoes to tend neat rows of lettuce, tomatoes, carrots, coriander and parsley.

Since his election in late 1998, Chavez has drafted the armed forces to serve his self-styled "revolution" in a range of social projects, from providing medical services to running low-cost food markets for the poor. Besides the military vegetable patch in Fuerte Tiuna, the government has also planted a 1.2 acre (half-hectare) plot in Caracas' downtown Bellas Artes district. The market garden, denominated "Bolivar 1" in honor of Venezuela's independence hero Simon Bolivar, is being run by an agricultural cooperative set up in a nearby poor neighborhood.

PUBLIC SKEPTICISM The sight of sprouting vegetables nestling in concrete-lined earth beds behind wire fences in central Caracas causes many passers-by to stare. "This might be all right to provide for a family but not to feed a country," scoffed Diego Di Coccio, a 40-year-old unemployed businessman. "They should use the money to unblock the drains," said chemical technician Hector Gonzalez, pointing to the piles of rubbish in the streets around. Skeptics question why resource-rich Venezuela should need urban vegetable gardens when it has hundreds of thousands of acres of fertile farming land, much not in use. ***

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As Venezuela Slides, the Poor Stand By Their Man *** "If there is more unemployment, more poverty, more crime, why are the poor still with Chávez?" asked Ana María Sanjuán, a sociologist at the Central University. "The reason is simple. Chávez is the only one who has addressed the poor, the one who gives a hope to the poor about a possible inclusion." Beyond his direct apeals to the poor, analysts note, Mr. Chávez has also carefully directed his assistance programs, like the one benefiting Mr. Montilla.

Taken as a whole, these programs fail to form a broad, coherent public policy, said Luis Pedro España, a poverty expert and director of the Institute of Economic and Social Studies at Andrés Bello Catholic University in Caracas. But they go a long way toward explaining Mr. Chávez's enduring popularity as the economy shrinks. The programs - ranging from new homes to subsidized food markets to mobile clinics - are welcomed in long-neglected barrios, deftly spread, and then their importance inflated, Mr. España said. "The government does not really have a social policy," he said. "What they have is social theater."

………….. The programs have the feel of old-style patronage. With them, Mr. Chávez has managed to erase doubt among followers by taking up the populist script in a way that has not been seen in Latin America in recent years, spending hours with crowds of followers. In Caricuao, a poor neighborhood of Soviet-style apartment blocks in southwest Caracas, his aides led a hunched group of elderly women from the crowd and provided them seating under a white tent, just feet from the president, who was there to inaugurate the first of what will be 100 markets across the city. Afterward, they expressed everlasting loyalty.

"He does not care if you are rich or poor," explained Irda de Belandria, 66. "His heart is so pure." But for the neighborhood, the affection for Mr. Chávez may outlast the material effect of the markets, which offer only a modest assortment of goods like canned products, powdered milk and sugar. Even the actual opening was unclear. The president left, and military officers shut the metal gates over the storefront. One woman asked when it would reopen. "I do not know," a military official said. "They told us tomorrow, maybe."***

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