December 23, 2010 / 10:06 PM / 8 years ago

FACTBOX-Venezuela parliament pushes through host of new laws

Dec 23 (Reuters) - Venezuela’s outgoing parliament has pushed through a raft of new laws, including giving President Hugo Chavez decree powers for 18 months, outraging opponents who accuse him of ushering in Cuban-style Communism.

Here is some of the most important legislation that has been passed ahead of a new National Assembly being sworn in on Jan. 5 in South America’s top oil producer, plus other measures that Chavez could take using his fast-track decree powers.


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Most controversial so far has been the bill that gave Chavez the power to rule by decree for 18 months, allowing him to make decisions in a wide range of areas including housing, land, finances and security. Chavez had initially asked the National Assembly for the powers for one year — but parliament extended that to 18 months, with lawmakers saying they were heeding the calls of flood victims who demanded a longer term.

The law allows him to exclude opposition parties from the legislative process until mid-2012 — by which point analysts expect his re-election campaign to be well under way for the voting in December of that year.


Students have been taking to the streets of the capital Caracas in protest at the passage of this law, which gives the government greater control over the country’s universities — many of which have long been hotbeds of opposition to Chavez.

The students say the new legislation awards too much power to the government, aims to promote the president’s socialist ideology and will eventually lead to funding cuts.

The government says the bill was needed to make university admissions more egalitarian, and to provide greater involvement to grassroots groups in higher education decision-making.


One group of laws passed by the Assembly tightens rules governing content on the Internet and television, piling pressure on opposition TV station Globovision and making it easier for the government to pull the plug on websites that criticize public officials.

Under the new broadcasting law, electronic media may not transmit anything that “foments anxiety or disturbs public order,” “incites or promotes disobedience of the current legal order,” or “incites or promotes hatred or intolerance.”

Internet service providers that breach the regulations could be fined, while broadcast media outlets could face fines and the suspension or canceling of their licenses.

The government says it is simply bringing its media rules into line with international norms. But critics are concerned about the implications for free speech and news reporting.


One of the first new laws passed in the avalanche of legislation by the outgoing parliament makes it easier for Chavez personally to order the nationalization of banks he deems problematic. It also requires banks to give 5 percent of their profits each six months to grassroots community groups.

Previously, the role of ordering any state takeovers of banks had been the job of a banking watchdog.

Analysts say Chavez has been tightening the regulatory grip on banks, forcing them to assume responsibilities and pursue objectives that are usually the mandate of government. But they say that a total takeover of the sector is unlikely.

Ruling party lawmakers say the new rules will bring the sector into line with the government’s development plans and will protect consumers by strengthening already tough rules.

Chavez has warned private banks he will nationalize any of them that failed to offer enough mortgages.

U.S.-based economics think-tank IHS Global Insight said this month it saw a very high risk of further nationalizations and warned that transfers of public funds into government-owned banks was causing some liquidity issues in private banks.


Chavez has said he will increase Venezuela’s sales tax rate using his decree powers to raise cash for recovery efforts after floods that drove nearly 140,000 people from their homes and caused billions of dollars in damage. He said the government had not decided by how many percentage points it wanted to raise the tax from the current 12 percent but analysts are expecting an increase of several points. The move will please holders of Venezuelan debt, who welcome signs of fiscal soundness in the recession-hit economy.


The government may also be preparing further tax rises to be passed by decree, including reintroducing a bank transaction tax and a tax on imports. Other measures aimed at bolstering public finances could include a devaluation of the fixed rate bolivar currency. This move has been widely speculated on by economists and would be the second devaluation since January. Venezuela has multiple tiers to its exchange system and could adjust them in lots of ways to limit the political fallout.


A draft of a new gas sector law seen by Reuters would increase taxes and put any future production projects firmly in the hands of the Chavez government by insisting on the establishment of joint ventures with a majority participation by state oil company PDVSA. That would have implications for major energy companies exploring for gas, including Spain’s Repsol (REP.MC), Italy’s ENI (ENI.MI), Chevron (CVX.N) of the United States, and Russia’s Gazprom. (GAZP.MM) [ID:nN22112135]


A new law on “political sovereignty and national self-determination” prohibits foreign funding of political parties and non-governmental organizations that defend “political rights” and “monitor the performance of public bodies.” Many in the NGO sector fear it will be used to choke funding to human rights groups and others that have previously been openly critical of the Chavez government.

Foreigners invited to visit Venezuela by such NGOs could also be expelled if they “offend the institutions of state, top officials or attack the exercise of sovereignty.”


One bill stops lawmakers from voting against their political parties in the National Assembly, which critics said was an assault on the right of members of parliament to vote with consciences and properly represent their constituents.

The next Assembly will have 98 members from Chavez’s ruling Socialist Party and 65 from an opposition coalition that won about half the popular vote at a legislative poll in September. It also will have two members from a smaller party.


Another set of laws makes community organizations called communes some of the OPEC member’s strongest political institutions, administering infrastructure projects and running not-for-profit companies. Chavez denies the laws are ushering in communism, saying he supports private property and that the communes will fight poverty and extend democracy by giving people more say in running their neighborhoods.

The project draws funds away from elected local government officials, and in the long term Chavez hopes communes and similar groups will take on many of the functions performed by mayors and governors. Critics say this will centralize power.


Another new law allows the government to more easily seize urban property it deems underused. The president requested the law to speed up housing projects and deal with Venezuela’s 2 million home deficit — and the displacements caused by the floods have given the project an added impetus. Population growth means Venezuela needs to build 200,000 new properties a year if it is to reduce the shortage, but so far under Chavez a maximum of about 80,000 homes have been built annually. (Reporting by Daniel Wallis and Frank Jack Daniel in Caracas, Editing by Andrew Cawthorne and Bill Trott)

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