US embassy cable - 04CARACAS2592

C O N F I D E N T I A L  CARACAS 002592 
 
SIPDIS 
 
 
STATE FOR WHA/AND 
NSC FOR CBARTON 
TREASURY FOR OASIA-GIANLUCA SIGNORELLI 
HQ USSOUTHCOM FOR POLAD 
 
E.O. 12958: DECL: 8/12/2014 
TAGS: ECON, EFIN, PGOV, VE 
SUBJECT: ECONOMIC ASPECT OF OPPOSITION CONSENSUS PLAN 
 
REF: CARACAS 2248 
 
Classified By: ECONOMIC COUNSELOR RICHARD M. SANDERS FOR REASON 1.5 D 
 
------- 
SUMMARY 
------- 
 
1. (SBU) The Plan Consenso Pais ("National Consensus Plan"), 
launched June 9 by the Coordinadora Democratica, has a very 
strong economic focus.  However, while long on optimism, it 
is short on details.  For example, while it emphasizes job 
creation, it provides no specific method to create jobs; it 
calls for increased investment, but doesn't indicate where 
the investment would come from.  Some of the creators of the 
Plan are very hopeful about its influence, while other 
contacts express doubts.  END SUMMARY. 
 
---------------- 
WHAT'S THE PLAN? 
---------------- 
 
2. (SBU) The Coordinadora Democratica (CD) released on June 9 
the Plan Consenso Pais (see ref), a document which purports 
to guide the administration that would be put in place should 
President Hugo Chavez be revoked (and not win the subsequent 
presidential election).  Its economic portion gets strong 
emphasis (second only to recommending dialogue as a means to 
reach agreement on any issue), stating that "the axis upon 
which the program of reconciliation and reconstruction turns 
is the massive creation of productive, stable and well-paid 
jobs." 
 
3. (SBU) It goes on to stress eleven areas: the importance of 
legal and economic certainty to stimulate investment; 
obtaining financing; modifying the national debt profile; 
combining public spending with private investment to 
reactivate the economy; designing a realistic and democratic 
job policy; starting a job creation offensive in 
construction, industry, agriculture and tourism; improving 
the electric sector; making telecom a factor in development 
and economic diversification; making science and technology 
(read: research and development) an integral part of 
development; job training; and making petroleum and petroleum 
products areas of high-impact investment.  The Plan notably 
lacks mention of certain politically sensitive subjects: it 
never raises the idea of privatization, and, though private 
investment is mentioned frequently, it never addresses the 
role of foreign investment per se. 
 
------------------------------ 
PLAN CREATORS THINK POSITIVELY 
------------------------------ 
 
4. (C) Vicente Davila, head of the CD's Economic and Finance 
Commission, told econoff that jobs emphasis was considered 
central from the beginning.  He said that most of the CD 
leadership, being politicians, think of the government as the 
primary job provider, but Davila, a businessman, was able to 
steer the document to stress the importance of the private 
sector.  Efrain Velazquez, an economic consultant and one of 
the main architects of the Plan, said in a separate 
conversation that many of those jobs would come from oil - 
maintenance, field evaluation, trying to recover lost 
production - and that many of the new oil jobs would be 
filled by PDVSA employees fired after the general strike. 
 
5. (C) Velazquez believes the most important aspect of the 
Plan is to "send a message" that Venezuela is a good place 
for investment.  He stated that there will be foreign 
investment in oil in the near future, even with a change of 
government, but that investment would not increase in any 
other sectors until they can show results: a better overall 
political-economic climate.  He asserted that a new President 
would get very little support from other parts of the GOV, 
such as National Assembly and the courts, and therefore must 
focus on what is possible through the executive branch only. 
However, since Chavez has strengthened executive authority, 
much is possible.  He thought the short-term portions of the 
Plan can be implemented within 100 days, with a dual emphasis 
on recovery of oil production and keeping fiscal spending at 
around 28% of GDP. 
 
--------------------- 
OTHERS AREN'T SO SURE 
--------------------- 
 
6. (C) Hugo Faria, an economics professor of strongly 
conservative bent at the prestigious Institute for Higher 
Business Studies (IESA), criticized the Plan, calling it "a 
wish list to Santa Claus."  He pointed out to econoff that it 
is long on generalities but makes no mention of taxes or 
tariffs, for example.  (Note: those changes would require 
legislative action, hence Velazquez's statements may explain 
the omission.)  He called the Plan "Chavismo without Chavez," 
as they are essentially the same, just as Chavez has recycled 
economic policies from prior administrations.  Faria also 
questioned how much support the plan really has among big 
business in Venezuela, since many have them have figured out 
how to profit in the current, distorted environment. 
 
7. (C) Miguel Angel Santos, chief economist of the 
US-Venezuela Chamber of Commerce (VENAMCHAM) who was 
consulted on some points of the Plan, said it only represents 
what could be reached by consensus, and that the oil portion 
is especially vague as a result.  He added that the Plan may 
never be implemented because the CD team that created it will 
not necessarily be part of any foreseeable new 
administration.  Each of the potential candidates seems to 
have his own economic team working on the details of policy. 
 
---------------------- 
THE FUTURE OF THE PLAN 
---------------------- 
 
8. (C) Davila said that the plan so far is just a framework, 
and that more details would be coming out in the near future, 
in time for a presidential campaign.  He called this the 
beginning of an actual campaign platform.  Davila added that 
much of the new portion would focus on the oil industry, but 
also on positions to be created by state governments when the 
federal government disbursed funds that are allocated to them 
by the Constitution, but have been withheld by the current 
administration.  He estimated this amount at about USD 2 
billion. 
 
------- 
COMMENT 
------- 
 
9. (C) The Plan, while painting an optimistic view of the 
Venezuelan economic future, consciously avoids discussing 
steps and procedures to turn its aims into reality.  Its 
chief political benefit thus far has been to allow the 
opposition in time for the referendum that it at least has a 
"plan" for what would follow a revocation.  The opposition is 
wise in staying away from discussion of the future of state 
oil company PDVSA and the role of foreign oil companies, 
since Chavez would doubtless paint any such program as a 
sell-out of national interests (even as his government does 
its own deals with the multinationals).  We expect that this 
issue will remain fudged in a subsequent Presidential 
campaign if it is held, but it will inevitably be at the top 
of economic concerns of a new government, should it come to 
power. 
Shapiro 
 
 
NNNN 
      2004CARACA02592 - CONFIDENTIAL