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Cablegate: An Overview of the Brv's 24 Missions

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UNCLAS SECTION 01 OF 05 CARACAS 003505

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV ECON VE
SUBJECT: AN OVERVIEW OF THE BRV'S 24 MISSIONS

REF: A. 05 CARACAS 3830

B. CARACAS 1067
C. CARACAS 1897
D. CARACAS 2489
E. CARACAS 1777

CARACAS 00003505 001.2 OF 005


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Summary
-------

1. (SBU) According to the Ministry of Finance, since 2003,
President Chavez has spent USD 12.9 billion to create 24
"missions" - government funded social programs - in a variety
of areas. The first missions focused on basic needs of the
poorest sectors of society. Chavez then took advantage of a
strong brand created around the term "mission" to expand into
other areas, such as subsidized food distribution, land
reform, and housing. The most popular missions (by number of
users) are Mercal, the subsidized food network, the education
missions (Robinson, Ribas) and Barrio Adentro, the primary
health care network. The efficacy of the missions, however,
remains questionable -- statistical information is
practically unavailable and recent studies have shed doubt on
official claims of success. Many of the activities of the
missions were previously accomplished through other
government programs. The missions remain an effective
political tool for Chavez, since they purport to bring
resources to marginalized populations. However, the BRV has
used them to mask real unemployment (mission participants
aren't factored in statistically), and facilitate transfer of
payments to the vast underclass. The practical effect has
been the creation of a population highly dependent on the
government for subsistence.

------------------------------
Best and worst of the missions
------------------------------

2. (SBU) President Chavez, since 2003, has created 24
"missions" (government-funded social programs) in a variety
of areas. Initially, the BRV created the missions as a
political response to the 2002-2003 governability crisis, and
focused on basic needs of the lowest income classes, (D and E
classes, which are 81 percent of the population according to
the consultancy Datanalysis) -- health care, literacy and
education. Riding on their high visibility and acceptance,
Chavez went on to create three more missions in 2004, four in
2005, and eight in 2006. There are no comprehensive or
understandable numbers, including from the BRV, on how many
people benefit from the missions or how much they cost.
However, Datanalysis reports that the mission with most
penetration is Mercal (a subsidized food-distribution
network), reaching 47 percent of Venezuelans. Of the
missions requiring continued, active participation, Robinson
and Ribas (literacy and education) and Vuelvan Caras (job
training) have the most membership. Barrio Adentro, the
health mission, and Identidad, a voter registry and
identification campaign, also enjoy significant popularity.
Some missions, such as Habitat (housing) and Cristo (poverty
reduction) have flopped, and new missions have been created
in their stead.

------------------------
The cost of the missions
------------------------

3. (SBU) According to the Ministry of Finance (MF), the
total amount spent on the missions since their inception in
2003 is USD 12.9 billion. In early 2006, the MF announced an
annual budget of USD 3.1 billion for the programs, but raised
spending to USD 6.9 billion months later. According to
Sintesis Financiera, an economic analysis firm, in 2006 the
missions accounted for 3.8 percent of GDP. According to the
Institute of Graduate Management Studies (IESA), a private
business school, in 2004 missions accounted for 2.5 percent
of GDP. Over half of the missions' funding comes from PDVSA,
and the rest from the National Development Fund (FONDEN), the
Community Councils Fund (Ref A), the Venezuela-Cuba bilateral
agreement, and the ministries directly.


CARACAS 00003505 002.2 OF 005


------------------------------
Impact on BRV labor statistics
------------------------------

4. (SBU) Because the BRV doesn't count mission participants
in as unemployed, the impact of the missions on the labor
force has been significant. According to Sintesis
Financiera, since the missions started, the economically
active population (15 years old and older) has increased by
1.29 million (4.4 percent of Venezuela's population), yet the
rise in net labor force was only 190,000 people (.02
percent). The remainder are considered "inactive" (unwilling
or unable to work). According to Sintesis, in 2004 the
National Statistics Institute (INE) changed its methodology
to designate mission participants as "inactive" versus
"unemployed," which led, in part, to a decrease in the
unemployment rate from 16.8 in 2003 to 9.7 percent in 2006.

--------------------------------------
Education missions: get paid to study!
--------------------------------------

5. (SBU) Five of the BRV's missions are related to
education. Mission Robinson I (2003), a literacy program,
and Robinson II (2003), a primary education program,
reportedly have more enrollees than any other mission. Both
benefit from an extensive Cuban advice and are based on Cuban
literacy campaigns. Participants receive a monthly
"scholarship" of USD 75-150. In 2003, the BRV spent USD 50
million to kick off Robinson I, and in October 2006, Chavez
claimed that Venezuela was "free of illiteracy" thanks to the
program. However, a recent academic study revealed that in
three years, Mission Robinson I had only taught 92,000 people
how to read, it employed over twice as many facilitators
relative to graduates (210,000), and it cost roughly USD 543
per head (twice the amount of the most expensive literacy
program in Latin America, Bolivia, at USD 199 per capita).
Most of the illiterate population is older, so factoring in
mortality rate would make the program even more expensive.
Furthermore, UNESCO claimed the illiteracy rate in Venezuela
is at seven percent, not four or below as the BRV claims.

6. (SBU) Another education mission, Mission Ribas (2003),
provides secondary (high school) education to adults along
with a monthly stipend. According to the Andres Bello
Catholic University (UCAB), only 30,000 of the 676,000
enrollees have finished the program, and the quality of the
instruction is questionable. In addition, Mission Sucre
(2003) seeks to guarantee placement in a college for those
"excluded" from the higher education system. To do this, the
mission's website explains that the Bolivarian University of
Venezuela will increase enrollment and use alternative
education methods. Most recently, in October 2006, Chavez
announced the creation of Mission Alma Mater, which plans to
finance and oversee the construction of 24 new universities
and 14 new technological institutes.

-----------------------
Food and Identity Cards
-----------------------

7. (SBU) Since its inception in 2003, the government-owned
and subsidized food chain, Mercal, has grown exponentially.
With annual costs of USD 166 million, it now holds nearly
half of the market share for food by volume (15-20 percent by
sales), and gives shoppers on average a 23 percent discount.
A Datanalysis poll said the mission had 92 percent public
approval rate, though a Ministry of Food Survey said 56
percent of users thought Mercal could improve. Regardless,
it ranks as the most popular BRV mission, even penetrating
into the upper-middle classes. CASA, Mercal's purchasing
arm, enjoys significant competitive advantages over
commercial counterparts, such as tax and customs duties
exemptions. Although Mercal continues to suffer from some
shortages and corruption, the program appears sustainable,
given the social importance and popularity of the stores, a
continued favorable price outlook for oil, and the BRV's
focus on food security. President Chavez has touted Mercal
as one of his main successes in delivering the "revolution"
to the people.

CARACAS 00003505 003.2 OF 005

8. (SBU) Mission Identity (2004) sets up booths around the
country for citizens (and foreign residents) to obtain
identity cards and register to vote. According to the BRV,
the program has reached over five million people. The total
cost of the mission is unknown, but PDVSA said that in 2004
it contributed USD 37 million to the program. Claims of
irregularities abound, including a rampant lack of control on
issuances. Copei, an opposition party, said in October that
of the most recent 2 million registered voters, 1.7 million
lacked addresses.

----------------------------------------
Health Care: Cuban doctors in the barrio
----------------------------------------

9. (SBU) Perhaps the most visible mission internationally is
Barrio Adentro (BA), a network of primary health care modules
staffed by over 20,000 Cuban medical personnel (Ref B).
Though founded in 2003, current statistics and financial
information are very difficult to obtain. The Minister of
Health in a 2004 press interview that BA's budget was USD 3
billion annually, and PDVSA recently stated that it has
invested USD 97 million in the last three years. Despite the
high cost of the program (salaries are well above Venezuelan
averages), Cuban doctors practicing without local licenses,
supply shortages, mismanagement of funds (at the municipal
level) and mediocre vaccination rates, those who use Barrio
Adentro, according to a Datanalysis poll, are highly
satisfied with it. (Note: this is probably due to the dismal
state of the existing health care system). The Ministry of
Health says BA has reached 65 percent of Venezuela's
population, while Sintesis Financiera estimates only 15
percent have used it.

10. (SBU) Mision Milagro, a spin-off mission that provides
free eye surgery for the poor, has reportedly treated over
10,000 patients (over 50 percent from other countries),
though the BRV says the number is 60,000. (See septel on
views from BA doctors). In some cases, the BRV pays to fly
patients from their home countries to Venezuela or Cuba,
increasing costs dramatically.

-------------------------------
Housing: History repeats itself
-------------------------------

11. (SBU) In view of a 1.68 million housing deficit in
Venezuela, housing is a hot topic among Chavez' lower-class
voter base. In 2003, the BRV launched Mission Habitat to
promote "endogenous housing development," which included the
Substitution of Shanty for House Program (SUVI), whereby
citizens were given construction materials to renovate their
own homes. Despite a USD 200 million investment in 2004, and
USD 500 million in 2005, the program has largely failed. In
2006 alone, Chavez promised the BRV would build 120,000
homes, but it has only built around 40,000 (using all BRV
resources and private contractors, not just the missions).
In November 2006, Chavez announced the creation of Mision
Villanueva (named after a Venezuelan architect) -- the
program, like Habitat, seeks to tear down shanties and
construct adequate homes in empty urban lots.

----------------------------------
Poverty reduction and job training
----------------------------------

12. (SBU) In 2003, Chavez launched Mission Cristo (Christ)
in order to eradicate poverty in Venezuela by 2010. However,
the initiative largely failed because he didn't designate an
entity to carry out the program. The second attempt came in
2006, with the creation of the Negra Hipolita Mission (Negra
Hipolita was Simon Bolivar's nanny). According to press
reports, the program costs USD 22 million and benefits over
200,000 homeless Venezuelans by providing shelters and
education. In addition, in 2006 Chavez launched Mission
Mothers of the Neighborhood, aimed at women in critical
poverty. This program costs USD 88 million and provides USD
23 million in credits. (Note: According to INE 39.7 pct of
the population is poor (of this 12.9 pct lives in extreme

CARACAS 00003505 004.2 OF 005


poverty). We do not believe this is credible and put the
figure at closer to 67 pct of the population living on less
than USD 2.30 per day. See Ref. A for a broader discussion
of the politics of poverty statistics in Venezuela. End
Note.)

13. (SBU) Mission Vuelvan Caras (About Face) was
inaugurated in 2004, and provides training on how to form a
cooperative or start an endogenous development project. In
March 2006, the then-Minister of Popular Economy said 700,000
people would join the program this year, yet in October 2006,
the current Minister said only 520,000 people had been
trained since 2005. The mission costs roughly USD 930
million, with PDVSA contributing USD 293 million. Graduates
of the program, called "lanceros" (spear-throwers), often
form rural cooperatives and work on property reclaimed under
the National Land Institute's reforms.

-------------------------
A mission for land reform
-------------------------

14. (SBU) In 2005, Chavez launched Mission Zamora I and II,
(named after a Venezuelan general), to "reorganize" land
ownership and relocate peasant cooperatives on "idle" land.
Chavez approved USD 37 million for Zamora II, the second
phase of the mission, for creation of 97 "fundos zamoranos"
(plots of land farmed by cooperatives). This mission falls
in line with Chavez' goal to "recover" 1.5 million hectares
of idle land to turn over to cooperatives (educated in
Mission Vuelvan Caras). The fundos, according to many
agricultural contacts (and a visit to one by EconOffs in
Cojedes State, Ref D), are unproductive and poverty-stricken,
largely due to lack of basic infrastructure or agricultural
expertise on the part of beneficiaries.

--------------------------------------------- -
Other missions: mining, trees, and light bulbs
--------------------------------------------- -

15. (SBU) During the last three years, Chavez has also
created a handful of less visible missions. In 2003, Chavez
allocated over USD 900,000 in financing for projects under
Mission Piar, an initiative to promote sustainable
development among mining communities. Despite this help,
independent miners are still poverty-stricken and tensions
remain high after a September 2006 shoot-out with the
military that resulted in the deaths of at least six miners.
Also in 2003, Chavez inaugurated Mission Miranda, which
registers, trains, and organizes military reservists. No
information is available on the funding of this mission.

16. (SBU) Mission Guaicaipuro (2003) promotes sustainable
development for indigenous communities, and includes Ministry
of Defense participation. Mision Arbol (Mission Tree),
created in 2006, is set to invest USD 23 million in parks and
forestry recovery. Mision Ciencia (Mission Science) funds
science and technology programs, and started accepting
project proposals in June 2006. Mission Culture, established
in 2005, seeks to "consolidate national identity" via a
foundation administered by the Ministry of Culture. On
November 17, Chavez launched his latest project, the Energy
Revolution Mission, a plan to replace 52 million regular
light bulbs with high-efficiency ones by the first trimester
of 2007.

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COMMENT
-------

17. (SBU) The missions are an integral component of Chavez'
popularity and strategy. Chavez himself admitted that the
missions helped him win the 2004 referendum, and opposition
candidate Manuel Rosales has vowed to keep them alive if he
wins the December 3 presidential election. A handful of
missions (such as Mercal and Identidad) appear to have
provided tangible, effective results to the public. However,
the remaining 22 are either ineffective, overly expensive, or
so opaque that it's hard to obtain reliable information on
them. In reality, they usurp regular government activity by

CARACAS 00003505 005.2 OF 005


creating structures outside ministry control, and undermine
instutionality by reporting directly to Chavez.

18. (SBU) The missions are a political tool above everything
else -- often justified by Chavez as a mechanism to transfer
payments to the poor. Since they act as an employment
substitute for many Venezuelans, the missions do almost
nothing to increase prospects for gainful employment. They
instead create a dependent class highly susceptible to the
whims of politicians and the price of oil. End Comment.

BROWNFIELD

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