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Viewing cable 09CARACAS1599, CHAVEZ PROMOTES TRANSITION TO SOCIALIST ECONOMY, THREATENS

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Reference ID Created Released Classification Origin
09CARACAS1599 2009-12-29 22:50 2011-06-26 00:00 CONFIDENTIAL Embassy Caracas
Appears in these articles:
http://www.mcclatchydc.com/2011/05/05/113760/wikileaks-us-venezuela-even-fought.html
VZCZCXRO7527
RR RUEHAO RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS
RUEHTM
DE RUEHCV #1599 3632250
ZNY CCCCC ZZH
R 292250Z DEC 09
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 0206
INFO WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
C O N F I D E N T I A L CARACAS 001599 
 
SIPDIS 
HQ SOUTHCOM ALSO FOR POLAD 
TREASURY FOR MKACZMAREK 
NSC FOR DRESTREPO 
NSC FOR LROSSELLO 
USDOC FOR 4332 MAC/ITA/WH/JLAO 
AMEMBASSY BRIDGETOWN PASS TO AMEMBASSY GRENADA 
AMEMBASSY OTTAWA PASS TO AMCONSUL QUEBEC 
AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE 
 
E.O. 12958: DECL: 2019/12/28 
TAGS: ECON KIPR EINV ETRD EIND EINT ECIN CH VE
SUBJECT: CHAVEZ PROMOTES TRANSITION TO SOCIALIST ECONOMY, THREATENS 
FOREIGN AUTOMAKERS 
 
CLASSIFIED BY: Richard Yoneoka, A/Economic Counselor, Embassy 
Caracas, ECON; REASON: 1.4(B), (D) 
 
1. (SBU) On December 22, President Chavez inaugurated a chain of 
government-run retail stores called the Corporation of Socialist 
Markets (COMERSO).  "We're going to defeat speculation.  Private 
individuals can still sell, but they'll have to compete with us and 
with a people that is now fully aware," Chavez said.  The COMERSO 
chain would consist of 11 subsidiaries, including stores selling 
household goods, socialist car dealerships, socialist pharmacies, 
socialist hardware stores, and a network of socialist "areperas," 
or restaurants that serve a traditional Venezuelan food.  The same 
day, in another speech during the closing ceremonies of the Eighth 
Venezuela-China Mixed Commission in Caracas, Chavez said that in 
order to transition from capitalism to a socialist economy 
Venezuela would have to plan everything from the primary sector to 
the final consumer.  "They'll see what's good.  We'll show them 
what a real market is all about, not those speculative, 
money-grubbing markets, but a market for the people," Chavez said. 
 
 
 
 
2. (SBU) On December 23, during a COMERSO car sale in the Plaza of 
Caracas, the Venezuelan government (GBRV) sold an allotment of 300 
cars, including vehicles manufactured under the mixed 
Venezuela-Iranian company Veniran and Volkswagens imported 
tariff-free from Argentina.  Commerce Minister Eduardo Saman that 
the GBRV had entered the automotive sector in order to combat the 
capitalist speculation that allowed private car distributors to 
earn profits of 400 percent.  "If we don't pay a 40 percent tariff 
for each vehicle, we can sell cars at a lower price too," an 
unidentified spokesperson for the automotive industry told the 
press. 
 
 
 
3. (SBU) During the event, Chavez threatened Fiat, Ford Motor, 
Toyota and General Motors, telling the automakers to transfer their 
technology to local companies or be replaced by Chinese, Belarusian 
and Russian manufacturers.  Chavez also ordered Commerce Minister 
Eduardo Saman to inspect a Toyota plant after it rejected a GBRV 
request to manufacture "socialist" SUVs.  "If Toyota doesn't want 
to manufacture (what the GBRV orders), we'll tell them to 
leave...This is our house...we will take them over, expropriate 
them, pay them what it's worth, and then call the Chinese," Chavez 
said. 
 
 
 
4. (C) COMMENT:  Based on Chavez's own comments, the inauguration 
of COMERSO represents another step in Venezuela's transition to a 
socialist economy.  Chavez's statement that foreign automakers must 
follow GBRV orders or leave the country reveals an increasing 
hostility to private companies operating in Venezuela.  It also 
tracks with the recent nullification of two of Bayer's 
pharmaceutical patents for an antibiotic.  After Bayer protested 
the local production of two generic copies of a Bayer drug, the 
GBRV rejected Bayer's request for assistance and revoked Bayer's 
intellectual property rights to the drug in question. These 
examples suggest that the GBRV considers private sector companies 
necessary in the short-term, but increasingly expendable as 
Venezuela moves further down the path to a socialist economy.  END 
COMMENT. 
DUDDY