[NYTr] Chavez champions welfare over profits Date: Tue, 20 Nov 2007 22:48:02 -0600 (CST) Via NY Transfer News Collective * All the News that Doesn't Fit The Financial Times - Nov 20, 2007 http://www.ft.com/cms/s/0/7c766bae-970a-11dc-b2da-0000779fd2ac.html ChC!vez champions welfare over profits By Benedict Mander Amid rows of softly humming sewing machines, with women calmly chatting among themselves as they go about their work, Margarita Morales picks up one of the bright red T-shirts from the production line. "We're making these for people to wear at pro-government rallies," she says cheerfully, revealing a room stacked with T-shirts emblazoned with slogans such as "With ChC!vez, the people rule" and with images of Marxist revolutionary Che Guevara, as well as piles of military uniforms. This small Venezuela Advances factory in Catia, a poor district in the west of Caracas, is one of Venezuela's showcase co-operatives, at the frontline of President Hugo ChC!vez's "Bolivarian revolution". Measures to promote such outposts of a 'socialist economy' are one of the central planks of the changes Mr ChC!vez hopes to introduce to the constitution, expected to be approved in a referendum on December 2. But not everyone is so optimistic about the prospects for the co-operatives. "So far there isn't a single example of a successful co-operative that I'm aware of," says JosC) Luis Betancourt, the president of FedecC!maras, Venezuela's leading business association. Despite the government having spent well over $1bn on grants and loans over the past few years, and billions more on social programmes designed to train workers in how to set up and run co-operatives, the results have so far been disappointing. Although according to official statistics there were over 180,000 co-operatives at the end of 2006 - more than any other country - Gonzalo GualdrC3n, the president of the government commission on co-operatives, says that in fact there are fewer than 80,000. Some census figures suggest there are fewer still. While many co-operatives never got off the ground, due to misuse of government funds, others simply pocketed the money and ran, a situation that even Mr GualdrC3n acknowledges. Supporters of the scheme say the biggest challenge is a deeply embedded culture of "capitalist individualism". But the new constitution plans to broaden the scope of economic activity beyond private enterprise by protecting co-operative and community-based enterprises. Among the measures to be introduced in the new constitution are ill-defined new varieties of property, so that in addition to private property there will also be public, social, collective and mixed forms of property. Businesses worry that private property rights will be weakened and that expropriation will rise. "There is no room for private companies in this reform project," says Mr Betancourt. But Mr ChC!vez says the changes will promote a new economic model that prioritises social welfare over self-interest and profits, and worker solidarity over exploitation. At the Venezuela Advances co-operative, workers had left early to attend a government-funded adult literacy programme. The co-operative is part of the Fabricio Ojeda 'Nucleus for Endogenous Development', an attempt to put Mr Chavez's '21st-century socialism' into action that also includes health clinics, subsidised food stores and development programmes. Even so, many doubt whether co-operatives can compete with capitalist enterprises without more restrictions on the private sector, as some government advisers say is necessary. Although the co-operatives receive generous grants and loans and are exempt from all taxes, those that are successful are often dependent on government support. In the case of Venezuela Advances, last year two-thirds of production was bought up by PDVSA, the state-owned oil company. "While the emphasis is not on competitiveness, they must be competent and efficient, and that way they will be productive," says Mr GualdrC3n. A deeper threat is posed by the preponderance of oil in Venezuela's economy, which has thwarted attempts to diversify and industrialise the economy. "Under ChC!vez the economy has become more dependent on oil, and non-oil exports have been falling. There is nothing in the constitutional reform that promises to alter this trend," says Francisco RodrC-guez, chief economist for Venezuela's national assembly until 2004, who is now critical of the government. "There is no indication that the government even thinks that de-industrialisation is a problem." "The feeling I get is that a large number of the co-operatives have failed," says Steve Ellner, a political scientist at the Oriente University in Venezuela who has studied the co-operatives. "The ones that are functioning are not resounding successes ... But they have transformed the lives of those belonging to them." * ================================================================= NY Transfer News Collective * A Service of Blythe Systems Since 1985 - Information for the Rest of Us Our main website: http://www.blythe.org List Archives: http://blythe-systems.com/pipermail/nytr/ Subscribe: http://blythe-systems.com/mailman/listinfo/nytr =================================================================