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Cablegate: School's Out for Summer: Venezuela's Brain Drain

VZCZCXRO9834
RR RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHNG
RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #1613/01 2261508
ZNR UUUUU ZZH
R 141508Z AUG 07
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC 9480
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEBAAA/DEPT OF ENERGY
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RHEHNSC/NSC WASHDC
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

UNCLAS SECTION 01 OF 04 CARACAS 001613

SIPDIS

SENSITIVE
SIPDIS

TREASURY FOR KLINGENSMITH, NGRANT, AND MMALLOY
COMMERCE FOR 4431/MAC/WH/MCAMERON
ENERGY FOR ALOCKWOOD
NSC FOR DTOMLINSON
HQ SOUTHCOM ALSO FOR POLAD

E.O. 12958: N/A
TAGS: ECON CVIS CASC SOCI VE
SUBJECT: SCHOOL'S OUT FOR SUMMER: VENEZUELA'S BRAIN DRAIN
CONTINUES

REF: A. CARACAS 531
B. CARACAS 1318

THIS MESSAGE IS SENSITIVE, BUT UNCLASSIFIED. PLEASE TREAT
ACCORDINGLY.

-------
SUMMARY
-------

1. (SBU) BRV radicalization in recent months and decreasing
economic and physical security continue to push more
Venezuelans to consider leaving their country (reftel A).
Recent nationwide polls parallel informal surveys and
anecdotal evidence which show that an increasing number of
Venezuelans are leaving the country or preparing their "plan
B." Some multinational firms are also packing their bags,
despite record profits from Venezuela's oil-fueled economic
boom. Post has not escaped this trend as locally engaged
staff depart and visa appointment requests have increased
dramatically. Our sense is that the number of departures,
while by no means an exodus, constitute a significant and
growing trend by Venezuela's educated, professional class.

--------------------------
SURVEY SAYS...I WANT TO GO
--------------------------

2. (SBU) A recent Datanalisis poll looked at the willingness
of Venezuelans to emigrate. According to the poll conducted
in June 2007, 35 percent of those surveyed said that they
would leave the country if the opportunity to do so presented
itself. This represents a slight increase over 2006, when
according to Datanalisis, 31 percent answered the question
positively, and a large increase over 1996 when only 19
percent affirmed a desire to leave Venezuela. (COMMENT:
Venezuela has long been a destination for immigration and,
unlike many of their Latin American neighbors, Venezuelans do
not have a history of emigrating from their country. END
COMMENT.)

Table 1: Of the Respondents Willing to Emigrate:

Class Percent Age Percent
A, B 27 15-24 41
C 41 25-35 33
D 36 35-45 28
E 33 45 19

Source: "El Nacional," June 24, 2007

3. (SBU) The sectors of Venezuelan society planning to leave
tend to be younger and middle class. (NOTE: Class A and B
represent the upper and upper-midle segments of Venezuelan
society, class C is considered middle class, D middler-lower
class and E lower class. End Note). Venezuela's elite are
both heavily invested in Venezuela and already live portions
of their lives outside of the country, studying abroad,
keeping funds offshore, and owning properties in the U.S. and
Europe. The poorer sectors of Venezuelan society, while
apparently more prone to leave than the richest, are likely
to have less access to the information and resources
necessary to emigrate. As people age and settle down,
leaving their home becomes more difficult and the inverse
relationship between desire to emigrate and age is evident in
the right-hand columns above.

-------
TESTIFY
-------

4. (SBU) The Venezuelan immigration website
www.mequieroir.com (I want to go) has experienced a 300
percent increase in hits since January 2007 and the site
contains information on immigrating to the United States,
Canada, Australia, and Europe. It also includes many
testimonials of happy immigrants, including Vilma from
Belgium: "there is a lot of personal security, good social
benefits, excellent public transport, and much peace and

CARACAS 00001613 002 OF 004


tranquillity," Vanessa from Barcelona: "the mentality here is
that you have to work hard to obtain what you desire," and
Nicolas in Toronto: "we earn in dollars, we are safe, there
isn't inflation. Why would I be regretful?" Like most
immigrants, these Venezuelans sought (and according to their
postings obtained) better lives; with safer streets, higher
incomes, and more opportunities. The contrast between their
adopted homelands and Venezuela is stark, with many referring
to the newfound security and sense of self-worth in a
meritocracy. Hardly any of the dozens of testimonials on the
page refer to the political situation in Venezuela or to
Chavez.

-------------------------------------------
WON'T SOMEONE PLEASE THINK OF THE CHILDREN?
-------------------------------------------

5. (SBU) Many of Econoff's contacts that are considering
leaving cite concerns for their childrens' future as a
primary motivation. Crime is rampant in Venezuela,
especially in Caracas. The mayor of the opposition-run
Chacao municipality (arguably the safest in Caracas) recently
estimated that murders had increased 400 percent over the
past twenty years. Reportedly fewer than four in one hundred
homicides are ever solved. In addition to the lack of
personal security, parents are increasingly worried about
their children's' education. One of the five motors of
Chavez' "21st Century Socialism" is the "moral y luces"
(morality and enlightenment) campaign, which focuses on
educating (or re-educating) the population with socialist
doctrine. Hugo Chavez' brother, Adan now runs the Education
Ministry. Rumors are rampant (and have been for years) that
new laws and pending constitutional changes will give the
state a much larger role in parenting; for example refusing
to issue passports or identification documents to children
under a certain age, or requiring State approval for children
to travel abroad.

6. (SBU/NF) While Caracas' international schools have seen
drops in enrollment over the past eight years, in meetings
with Econoff they claimed not to see much change between the
2005-2006 and 2006-2007 school years. A general trend
involves American families leaving the country (as U.S. firms
pull out, or draw down U.S. staff), but these departures have
thus far been made up for by an influx of new expats from
other parts of Latin America and Asia. In addition, a
director at Colegio Internacional de Caracas (CIC) (PROTECT
THROUGHOUT) confided to econoff that they had a number of
Venezuelan families who have enrolled their children after
having been "deported" from the United States. While all
families considered their time back in Caracas to be
temporary, so far none has been able to re-enter the United
States.

7. (SBU) University and high school teachers have confided to
Econoff their surprise at the number of students trying to
study abroad. One of Venezuela's leading bankers admitted to
Econoff that his daughter graduated recently from medical
school in Venezuela and that only five of the 118 people in
her graduating class were currently practicing medicine in
Venezuela. The consensus among many private high school and
university professors seems to be that, while a year abroad
during high school or university has been commonplace for
upper class Venezuelans for decades, many students are now
studying abroad and staying abroad.

------------
WHERE TO GO?
------------

8. (SBU) The United States, Canada, Australia, and European
countries including Spain, Portugal, and Italy remain the
favored destinations for Venezuelans (reftel). According to
the Venezuelan Consulate General in the Canary Islands,
website hits have risen from 8,000 a month in 2006 to over
25,000 monthly this year, reflecting the increase in
Venezuelans relocating there. The U.S. remains an important
destination for immigrants and a recent Reuters article
estimated that over 160,000 Venezuelans were living illegally

CARACAS 00001613 003 OF 004


in Florida. The article also noted the increase in asylum
applications as an example of this trend, with applications
up from 14 in FY 1998 to 1086 in FY 2006. In May of 2007
there were 290 pending asylum cases in the Miami district
office alone. The real estate chamber in Caracas estimates
that 15 percent of home sales in Florida are to Venezuelans.
(COMMENT: This seems incredibly high. END COMMENT.) On July
19 Century 21 hosted a sales event for condos in Miami at the
Eurobuilding Hotel here. A recent Wall Street Journal
article noted an influx of Venezuelans working in the oil
sands in Alberta and many of the international oil companies
operating in Venezuela are sending personnel abroad as they
draw down or pull out. During the week of July 23, India's
Kingfisher airlines advertised for Venezuelan pilots in local
papers.

9. (SBU/NF) According to the human resources consulting firm
Marsh and McLennan (PROTECT THROUGHOUT), skilled executives
are moving to Mexico, Costa Rica, Panama, and Colombia. The
Colombian border town of Cucuta has as many as 5,000
Venezuelans living there, supposedly including a number of
PDVSA executives commuting to Venezuela to work. As an
anecdote, Marsh's director in Venezuela noted that British
Petroleum used to occupy three floors in his building and now
only has half of a floor. Similarly, AIG has downsized its
Venezuelan staff and reportedly Coca Cola now runs its
Venezuelan operations from Colombia. Proctor and Gamble has
moved its Latin American headquarters to Chile and is also
reportedly drawing down staff, including moving many
Venezuelan personnel to offices in Chile, Colombia, and
Mexico. A manager in the large Venezuelan engineering firm
Inelectra recently confided to Econoff the company's plans
to relocate to Panama. The directors of Heidenreich Marine
and Essel Propack (marine logistics companies) recently
admitted to Conoff that they were closing up shop in
Venezuela.

---------------
SHORT ON TALENT
---------------

10. (SBU/NF) According to Marsh, Venezuelans are willing to
take lower salaries to get jobs abroad. Conversely, ex-pats
are now demanding increasingly high salaries and benefits to
come to Venezuela. Contacts claim that U.S. ex-pats now
demand bullet proof cars with bodyguards and insist on living
within a short commute of their childrens' private schools
(almost all of which are in the Valle Arriba neighborhood
where the Embassy and most post housing is located). This
may, in part explain the surge in rental costs experienced by
Post during the past few years (reftel B).

11. (SBU) This brain drain has led to a labor shortage among
professionals and executives. The help wanted section of the
daily "El Universal" has grown in recent years from four to
eight pages and many firms report problems finding competent
managers. One western executive recently commented to
econoff that given the high demand for highly-skilled
executives, he had to renegotiate contracts every three or
four months, increasing salaries and benefits to keep his
staff. The lack of western expats willing to come to
Venezuela has led firms to hire more Latin Americans,
especially Argentines and Brazilians who, according to one
human resources manager, "have a history of dealing with
these kinds of situations."

-------------
MOVING ON OUT
-------------

12. (SBU) Post's General Services Office (GSO) recently
surveyed international moving firms and found that pack outs
had more than doubled between summer 2006 and 2007. As of
July 11, 2007, one firm admitted that it had already
surpassed its total for 2006 and another estimated that they
would double 2006 numbers. Pack outs also rose significantly
from 2005 to 2006, growing a little over 25 percent based on
GSO's estimates.


CARACAS 00001613 004 OF 004


-------------
POST AFFECTED
-------------

13. (SBU) Post has not escaped this trend. According to the
human resources office, 17 locally engaged staff have
resigned to move abroad since July 2005, with plans to
immigrate to the United Sates (6), Australia (4), Canada (2),
France (2), Spain (2), and Argentina (1). In addition,
Econoff knows three other staff members planning to depart
later this summer. When queried, most LESs planning to leave
cited economic uncertainty and concerns about their
childrens' futures as their primary motivations. Post's
American-trained local doctor has confided to Econoff his
growing concern about the government's role in the health
sector and noted that many colleagues are leaving.

14. (SBU) The waiting time for an NIV interview continues to
grow, rising from 56 days in December 2006 to 107 days in
March, to 126 days for a visitor visa as of August 8.
Applicants calling for a tourist visa appointment on August 8
will not be able to obtain their visa until December. The
number of calls to the NIV appointment call center are
running between 30-35 percent above last year's numbers.
This has led to a notable rise in the number of Embassy
contacts seeking help to move up their visa appointments. In
addition, the number of "L" visa (inter-company transferee)
applicants going to work in the United States has risen by
over 25 percent over last year and there are significant
increases in the use of visa categories that permit
multi-year stays in the United States, such as student visas.
Officers have begun to pay special attention to these cases
as they fear many Venezuelans may merely be setting up shell
companies in the United States to legitimate their desire to
immigrate.

-------
COMMENT
-------

15. (SBU) The screws are tightening in the Bolivarian
Republic. The nationalizations of the national
telecommunications firm CANTV, Caracas' electrical utility
EDC, and the oil Strategic Associations (and subsequent
political firings) and plans to "revolutionize" education
that include teaching "socialist" ideology and eliminating
merit-based university entrance exams have had an effect on
the population's perception of Venezeula's future. The
political and economic space for professional Venezuelans
continues to shrink. The increase in visa and asylum
applicants, international pack outs, and LES departures
points to the growing trend here for Venezuelans, especially
middle and upper class professionals, to leave for greener
pastures. The flow of immigrants will continue to grow as
spaces here shrink, Venezuelans become accustomed to
immigrating, and support networks of Venezuelans already
abroad are established.

FRENCH

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