FACTBOX-Venezuelan government pushes laws through

Dec 16 (BestGrowthStock) – 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.

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Take a look on Venezuela [ID:nVEDECREES]

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BANKS:

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.

SALES TAX:

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]

OTHER FISCAL MEASURES:

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.

MEDIA/INTERNET:

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.

COMMUNES:

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]

POLITICAL PARTY AND NGO FUNDING:

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.

URBAN PROPERTY LAW:

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.

UNIVERSITY LAW:

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)

FACTBOX-Venezuelan government pushes laws through