December 16, 2010 / 5:53 PM / 9 years ago

FACTBOX-Venezuelan government pushes laws through

Dec 16 (Reuters) - The Venezuelan government is pushing through laws to entrench socialism in the South American nation both via parliament and decree powers President Hugo Chavez is taking.

Here is some of the most important legislation that the outgoing parliament is rushing through before a new National Assembly takes over on Jan. 5, plus other measures Chavez could take with his fast-track decree powers.


Take a look on Venezuela [ID:nVEDECREES]



This bill would make it easier for Chavez’s government to nationalize banks and would require them to give 5 percent of their profits to social groups. [ID:nN11201237]. The bill has already passed a first reading and is expected to be approved soon with some changes.

Ruling party lawmakers say the proposed rules aim to bring the sector in line with the government’s development plans and protect consumers by tightening already tough rules. The bill simplifies the procedure for taking over or closing failing banks, allowing the president to personally order such a move.

Last week, Chavez repeated a warning to private banks that he would nationalize any of them that failed to offer enough mortgages. [ID:nN07106700] IHS Global Insight, a U.S.-based economic analysis group, said on Tuesday it saw further nationalizations as a very high risk and warned that transfers of public funds into government-owned banks was causing some liquidity issues in private banks. Few analysts predict a total takeover of banking, but many expect Chavez to increase the state’s share of the sector.


Chavez says he will increase Venezuela’s sales tax rate using the decree powers to raise cash for recovery efforts after floods that made some 140,000 people homeless. He said flood damage will cost the country $10 billion. 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 by several points. The move will please holders of Venezuelan bonds, who welcome signs of fiscal soundness in the recession-hit economy of South America’s top oil exporter. [ID:nN13237472]


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 a variety of ways to limit the political fallout.


Two others bills would tighten rules 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 criticizing public officials. [ID:nN13206919]

Under the proposed telecommunications reform restricting the transmission of national TV networks via cable, Globovision broadcasts would be largely limited to two cities.

And a separate bill seeks to regulate the Internet, prohibiting content attacking “good customs,” disrespecting public officials or inciting violence against the president.

The government says it is simply trying to bring Internet rules in line with international norms. Many of Venezuela’s lively current affairs web-forums operate without a moderator or editor filtering out extremist or vulgar content. However, the vague wording of the bill worries free speech activists.

Under the telecommunications reform all Internet traffic would pass through a single, government-controlled access point, raising worries that surveillance and censorship will become easier. Lawmakers promoting the bill say it will make the Internet faster. It is not clear how the government will undo the Internet architecture already in place, or even whether it is technically possible.


One set of new laws aim to make community organizations called communes some of the OPEC member’s strongest political institutions, administering infrastructure projects and running not-for-profit companies. Chavez denies they 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, and in the long term the government hopes communes and similar groups will take on many of the functions mayors and governors now perform. Critics say this will centralize power. For a feature on communes click [ID:nN15235784]


Another controversial group of bills due to be approved soon will prohibit foreign funding of political parties and non-governmental organizations that defend “political rights.” Many in the NGO sector fear the law will be used to cut off funding to human rights groups and other organizations that have been critical of the government. Groups could also be fined if their foreign guests “offend” Venezuela institutions.


A law allowing the government to more easily seize urban property it deems under-used is being discussed in the Assembly. Chavez requested the law to speed up housing projects and deal with Venezuela’s 2 million home deficit. 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.


Students and university deans are up in arms over a law they say diminishes the independence of universities and will lead to funding cuts. The government says the law is needed to make university admissions more egalitarian. Venezuela’s student movement has taken to the streets to protest the bill, but marches are unlikely to swell over the holiday period. (Reporting by Frank Jack Daniel in Caracas; additional reporting by Daniel Wallis; editing by Mohammad Zargham)

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