US embassy cables: Venezuela 'a source of serious concern for Cuba'

*


* guardian.co.uk, Thursday 9 December 2010 13.12 GMT
* Article history

Tuesday, 09 February 2010, 18:49
C O N F I D E N T I A L SECTION 01 OF 04 HAVANA 000084
SENSITIVE
SIPDIS
STATE FOR WHA/CCA
EO 12958 DECL: 02/08/2020
TAGS ECON, EFIN, PREL, PGOV, CU
SUBJECT: KEY TRADING PARTNERS SEE NO BIG ECONOMIC REFORMS
IN 2010, AGREE CUBA'S FATE HINGES ON VENEZUELA
REF: A. 09 HAVANA 631 (GOC TELLS CUBANS TO FEND FOR THEMSELVES) B. 09 HAVANA 322 (...ANOTHER SPECIAL PERIOD?) C. 09 HAVANA 763 (NATIONAL ASSEMBLY SESSION)
HAVANA 00000084 001.2 OF 004
Classified By: Principal Officer Jonathan Farrar for reasons 1.4 (b) an d (d).

1. (C) SUMMARY: There is little prospect of economic reform in 2010 despite an economic crisis that is expected to get even worse for Cuba in the next few years, according to key commercial specialists, economic officers and Cuba-watchers in Havana. Promised structural reforms remain on hold while the Cuban government wrings its hands in indecision, fearful of the political consequences of these long-overdue changes. The one potentially significant reform implemented in 2009, the leasing of idle land, has not been effective. The Cuban government (GOC) could be forced to speed up reforms in the event of a significant reduction of assistance from an increasingly unstable Venezuela. Otherwise, the GOC will continue to prioritize military-led control and aim for a slow, measured pace of reform focused on agriculture and import substitution. The Cuban people have grown accustomed to tough times and will respond to future government belt tightening with similar endurance. END SUMMARY.

2. (SBU) Pol/Econ Counselor hosted a breakfast with commercial and economic counselors from six of Cuba's seven largest trading partners, including China, Spain, Canada, (the U.S.), Brazil and Italy, plus key creditors France and Japan. These countries also represent most of the foreign companies investing in Cuba, with the notable exception of Venezuelan state-owned enterprises.

DIPLOMATS ARE MOSTLY PESSIMISTIC

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3. (C) The global financial crisis and the inability to service foreign debt will make the dire situation in Cuba even worse in 2010, according to EU diplomats. Brazil was a bit more optimistic noting that Cuba can still withstand more economic hardship. All diplomats agreed that Cuba could survive this year without substantial policy changes, but the financial situation could become fatal within 2-3 years. Italy said GOC contacts had suggested Cuba would become insolvent as early as 2011.

TRADE AND INVESTMENT: NO ROOM FOR IMPORT REDUCTIONS

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4. (C) The GOC has responded to the crisis with calls to further reduce imports and increase domestic production. However, Spain argued there is little more room for Cuba to reduce its imports after a 37% reduction in 2009 as the increasing majority are now basic necessities like food and animal feed. (Note: press reports February 9 that Cuba has cut rice imports from Vietnam, its largest supplier, by 11 percent for 2010. End Note.) Exports and other sources of foreign currency (tourism and remittances) are unlikely to increase substantially without a dramatic global turnaround, access to U.S. markets or an opening to U.S. tourists. Two-way trade with China alone in 2009 fell by close to $1 billion. Regarding increasing production, the only significant reform in the last five years, the leasing of idle land to improve agricultural production, has little chance of succeeding as implemented. The diplomats noted that many of the Cubans that were granted land have no farming experience, and the few farmers with experience have limited access to capital, tools and markets.

STILL DEFAULTING ON TRADE PARTNERS

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5. (C) Payment problems continue for all countries. Despite once again restructuring all of its official debt in 2009, Japan has yet to see any payments. Even China admitted to having problems getting paid on time and complained about

HAVANA 00000084 002.2 OF 004

Cuban requests to extend credit terms from one to four years. When France and Canada responded with "welcome to the club", China suggested Canada help secure payment from a Cuban joint venture that includes Canadian firm Sherritt International which is now reportedly receiving its share of profits.

AN UNWELCOMING ENVIRONMENT FOR FOREIGN INVESTORS

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6. (C) Foreign investors have been treated poorly in Cuba and new investors will demand additional protections and guarantees, according to the French. The Chinese complained that the GOC's insistence on keeping majority control of all joint ventures makes no sense. "No matter whether a foreign business invests $10 million or $100 million, the GOC's investment will always add up to 51%," China's commercial counselor said in visible exasperation. He noted a joint venture to produce high-yield rice that produced a good first harvest but was not sustainable at the GOC-mandated prices. Brazilian investors are taking a longer term view on returns, however, noting some success in raising capital for the refurbishment of the port at Mariel.

MAJOR REFORMS ON HOLD

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7. (C) Despite the grave analysis, none of our contacts foresee meaningful economic reform in 2010. Immediate reform is neither necessary nor politically advisable since it has the potential of being too politically "destabilizing," said the Brazilian. Even reforms openly supported in the official press late last year (Ref A), such as the ending of the food ration system, are now on hold due to the initial negative public reaction. Any discussions around Chinese-style reforms, particularly regarding foreign investment, have been difficult and "a real headache" according to the Chinese. The French said the GOC will not act until its face is up against the wall and it runs out of options, which is not yet the case in spite of all the challenges. One cited example of the GOC's hesitancy is that all proposals for micro-credit programs coveted by the Ministry of Foreign Investment require the Council of State's approval. To date, only one small project by the Spanish has been approved with little success.

AS VENEZUELA GOES

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8. (C) The Spanish see future reforms determined by two factors: 1) foreign pressure that is outside of the regime's control; and 2) domestic pressure developed after a consensus is reached through internal discussions. All our colleagues agreed that Venezuela is the most important and "increasingly complicated" foreign variable. Without Venezuelan support, the GOC would have to enact significant reforms similar to those that enabled the regime to survive through the Special Period of the early 1990s (Ref B), according to the Spanish. The view from the French is that Venezuela "es en flames" and a source of serious concern for Cuba.

THE DOMESTIC DEBATE CONTINUES

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9. (C) If reform is driven by domestic factors it will be slow and hesitant. Unlike former president Fidel Castro, Raul Castro needs the "support of the machine" to make changes, according to the Canadians. Raul Castro's National Assembly speech in December (Ref C) made it clear that the GOC is in no hurry to reform, argued the Italians. The Spanish noted that the consensus-building process likely explains the numerous official press stories and letters to the editor in support of some sort of economic reforms, without the accompanying government measures. Even though this limited but noteworthy public debate is almost always framed in socialist and revolutionary rhetoric, many of the articles are highly critical of current policies and propose market-oriented reforms. The simple fact that space still

HAVANA 00000084 003.2 OF 004

exists (and appears to be growing) within Cuba for this form of public dissent indicates that the GOC has not completely given up on bigger reforms.

SLOW, MEASURED AND MILITARY-STYLE REFORMS

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10. (C) In lieu of structural reforms, the GOC will continue to take small steps to increase domestic production and reduce imports, focusing on lifting agricultural production from its current lamentable state. The GOC has started on a slow and steady path, according to the Canadians. "Unless (or until) the situation becomes unstable, the government is not going to walk any faster." An example of step-by-step reform is the pilot suburban agriculture project taking place in the third largest city in Cuba. A Reuters reporter told us that he witnessed the GOC clearing land and providing resources to private, collective and state farmers working around the city of Camaguey. As an incentive, the GOC will permit farmers to sell a bit more of the production directly to consumers. The goal is to encourage idle workers to return to farms close to the city and produce enough food to feed the surrounding areas. The focus on local production will also cut down on costs associated with state-run (and thoroughly corrupt and inefficient) transportation and storage. If successful, the GOC will replicate this project in other cities.

11. (C) Even limited reforms could open up private sector opportunities (e.g. permitting cooperatives to operate barber shops, restaurants or retail stores), but in general the military will continue to expand its influence in core economic activities. According to the French, the Cuban leadership believes it can transfer the successes of military state companies that control a good part of the tourism industry to the rest of the economy. Many of our contacts agreed that the military is generally better regarded in Cuba than the political institutions, and reportedly intervened directly in the operation of flour mills earlier this year after bread had disappeared from markets. The Italians noted that the Agriculture Ministry is in the hands of the general most faithful to Raul Castro in Ulises Rosales del Toro. The French argued that the military is seizing all core economic activities of the state. The Cuban economy is increasingly run by military engineers that are capable of running the day-to-day business activities, but do not have the vision to enact reforms or lead the country out of the economic mess of centralized state planning.

12. (C) As a result, several of our colleagues commented that leadership of the Cuban economy is more centralized this year. A side effect of such control is that the economic ministries are restricting access. The French complained that the running of the GOC's finances has shifted from the Central Bank to the Ministry of Economy and Planning and, with that shift, the French no longer have any access to officials or information. A Reuters reporter said that unlike in past years he was not granted any officials meetings on a recent trip to eastern Cuba despite several requests. All agreed that decision-making circles are small and increasingly isolated.

RELATIONS WITH THE UNITED STATES

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13. (C) Many officials in the GOC have reconciled themselves to the inevitability of better relations with the United States, said the Brazilians. The Cubans involved in the Mariel Port project have said that the project is in preparation for the day when U.S. - Cuba economic relations normalize. While the French see the window for improving relations as closed after the GOC could not bring itself to take the necessary steps, the Brazilians argued that mixed signals from the Cuban regime are a reflection of dissent in the power circles about whether to move ahead. Some in the GOC objected to the U.S. role in Honduras and Haiti and decided that better relations were not worth the risk.

HAVANA 00000084 004.2 OF 004

(Comment: the "U.S. role" according to the official Cuban press was to support the coup in Honduras and a military occupation in Haiti. End Comment.)

THE CUBAN PEOPLE WILL SURVIVE

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14. (C) In the short term, the GOC will require even more belt tightening from the Cuban people. The Italians and French explained that Cuba cut imports before increasing production, which simply means there are fewer products available for Cubans. The GOC has been clear in its public statements that 2010 will be just as difficult as 2009 and further savings (i.e. cuts) will be necessary. Everyone agreed that the Cuban people could withstand more hardship, although the Italians questioned whether further economic tightening would end up weakening and delegitimizing the GOC further.

COMMENT

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15. (C) Despite how badly Cuba needs them, significant economic reforms are unlikely in 2010, especially with the continued delay of a policy-revising Communist Party Congress (Ref C). The GOC's direction and leadership remains muddled and unclear, in great measure because its leaders are paralyzed by fear that reforms will loosen the tight grip on power that they have held for over 50 years. Faced with political uncertainty regarding future Cuban leadership and relations with the United States, the Cuban people are more likely to endure a slow erosion of state-subsidies than a much-needed radical restructuring. .FARRAR

US embassy cables: Vatican woos Cuba to isolate Chávez


* guardian.co.uk, Friday 10 December 2010 21.30 GMT
* Article history

Wednesday, 22 April 2009, 16:27
C O N F I D E N T I A L VATICAN 000059
EO 12958 DECL: 4/22/2029
TAGS PREL, PGOV, KIRF, VT, CU, VE, BL
SUBJECT: (C) VATICAN HOPES FOR BETTER U.S.-CUBA TIES, IN PART TO REIN
IN CHAVEZ AND HIS ACOLYTES
REF: A. A) CARACAS 486 B. B) CARACAS 443 C. C) VATICAN 36 D. D) VATICAN 12
CLASSIFIED BY: Julieta Valls Noyes, CDA, EXEC, State. REASON: 1.4 (b), (d)

1. (C) Summary: The Holy See welcomes President Obama's new outreach to Cuba and hopes for further steps soon, perhaps to include prison visits for the wives of the Cuban Five. Better U.S.-Cuba ties would deprive Hugo Chavez of one of his favorite screeds and could help restrain him in the region, according to a Vatican official. This is highly desirable for the Vatican, which is very concerned about the deterioration of Church-state relations in Venezuela. To avoid similar downward spirals elsewhere, the Vatican said Church leaders elsewhere in Latin America are reaching out to leftist governments. The recent attack on a Cardinal's home in Bolivia may have been intended to derail such quiet rapprochement. End Summary.

Cuba: Great News. What Will You Do Next?

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2. (C) CDA and Acting DCM on April 22 called on the Holy See's official in charge of relations with Caribbean and Andean countries, Msgr. Angelo Accattino, to review recent developments in the region. As he had done previously (ref c), Accattino warmly welcomed recent White House policy decisions on Cuba and reviewed with interest the White House Fact Sheet on "Reaching Out to the Cuban People" which CDA gave him. Accattino also noted favorably Raul Castro's comments that Cuba was prepared to talk to the U.S. about all topics - although "after all, he has no other options anymore." CDA said Castro would need to reciprocate the moves from Washington with more than words - he needed to take action on political prisoners or reduce the cost of receiving remittances in Cuba.

3. (C) Accattino said the Vatican considered intriguing the possibility of a swap of political prisoners in Cuba for the "Cuban Five" in jail in the U.S. ADCM protested that their circumstances were not parallel, as the Cuban Five were convicted spies and the prisoners in Cuba were dissidents. Accattino quickly agreed but said discussions that led to the release of the dissidents were worth pursuing regardless. The Holy See was also following the Supreme Court appeal by the Cuban Five, to see how that might affect relations between the U.S. and Cuba. As an interim measure, Accattino suggested that the U.S. allow a jail visit by the wives of two of the five Cuban spies. CDA again noted that the U.S. had taken the first step, now the Cuban government needed to reciprocate in a concrete way.

Venezuela: Chavez is Worried. So is the Church.

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4. (C) The Cuba debate, Accattino said, had cast a long shadow at the recent Summit of the Americas. Venezuela's Hugo Chavez was clearly rattled by the thought that the U.S. and Cuba could enter into a dialogue that excluded him, and this motivated his "little scene" at the Summit. "Chavez is not dumb," and he was playing to the other hemispheric leaders with his bombastic approach to President Obama. The Holy See believes that the U.S. and Cuba should pursue a dialogue both for its own sake and/and in order to reduce the influence of Chavez and break up his cabal in Latin America, Accattino said.

5. (C) The situation for civil society in Venezuela is getting worse every day, according to Accattino. The asylum request by Maracaibo Mayor Manuel Rosales in Peru was only the latest sign of the narrowing political space in Venezuela. (Asked for updates on the whereabouts or situation of the Venezuelan asylum seeker Nixon Moreno from the Nunciature in Caracas, however, Accattino answered a bit evasively.) The real concern, Accattino said, is that Venezuela is turning into Cuba, while Cuba may be ready to open up.

6. (C) Church-state relations are also deteriorating daily in Venezuela, Accattino said. The Venezuelan Catholic Conference of Bishops (CEV) did not check in with Rome before taking actions or making statements like its highly critical April 6 communique (ref A). The Holy See agreed with the CEV conclusions, and would defend them -- even when it believed "a less confrontational approach would be more effective."

Bolivia: No More Venezuelas, Let's Talk. But Who Attacked Our Cardinal?

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7. (C) Turning to the recent dynamite attack against the residence of Cardinal Terrazas on April 15 in Bolivia, Accattino said it had worried the Holy See greatly. There was property damage, but thankfully no-one was hurt. It could easily have been worse. The Vatican is reserving judgment, pending the government's investigation, on who was behind the attack. It could have been radicals inside the government who want to derail the recent rapprochement between the Church and the state. The extreme right also could have been responsible - trying to make it seem like the government did it - for the same reason. Accattino said the Holy See considers either explanation equally plausible at this point. Meanwhile, it will keep talking to the government, because it has no choice.

Comment: Looking Out for the Church First

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8. (C) The Holy See has consistently maintained that improving U.S.-Cuba ties would greatly reduce the appeal of Hugo Chavez. It is so alarmed by the continued downward spiral in its own relations with Chavez, in fact, that Accattino said Church leaders in Latin American countries with leftist governments are rethinking their approach. Many episcopal (bishops) conferences in the region had in the past been willing to criticize excesses of these governments in an effort to protect civil society. They may be pulling back from that activism and advocacy in the short term, in order to protect their longer-term ability to minister to the Catholic faithful without interference. That attitude is what is behind the Church's moves to improve relations with the Morales government in Bolivia. It may also explain Accattino's ever-so-mild tone of criticism when discussing CEV decisions in Caracas. As for Accattino's polite unwillingness to discuss the Nixon Moreno case, that may also be telling, given his considerable interest in the topic last time we spoke (ref c). End Comment.

NOYES

WikiLeaks cables: Oil giants squeeze Chávez as Venezuela struggles

American diplomats say president is now desperate to attract foreign partners after nationalisation frightened many away



* Rory Carroll in Caracas
* guardian.co.uk, Thursday 9 December 2010 13.24 GMT
* Article history

An oil rig west of Caracas, Venezuela

[B]WikiLeaks cables reveal that all is not well at Venezuela's state-owned oil company PDVSA. Photograph: Ana Maria Otero/AP[/B]

Venezuela's tottering economy is forcing Hugo Chávez to make deals with foreign corporations to save his socialist revolution from going broke.

The Venezuelan president has courted European, American and Asian companies in behind-the-scenes negotiations that highlight a severe financial crunch in his government.

Venezuela's state-owned oil company, PDVSA, is the engine of the economy but buckled when given an ultimatum by its Italian counterpart and has scrambled to attract foreign partners, according to confidential US embassy cables released by WikiLeaks.

[B] The memos depict an unfolding economic fiasco and suggest some of Chávez's key allies – Argentina, Brazil and Cuba – are gravely concerned at Venezuela's direction. "President Chávez, for his part, is acutely aware of the impact the country's general economic trajectory has had on his popularity," says one cable.[/B]
[B]
With a recession, underfunded infrastructure and 30% inflation, Venezuela's economic woes are no secret. But the government has insisted PDVSA, the country's golden goose, is thriving and capable of funding Chávez's vision of "21st century socialism".[/B]

Chávez took over the company and declared it a revolutionary instrument after defeating a management-led strike in 2003. He nationalised and expropriated swaths of the oil industry and said PDVSA would fill the slack left by departing foreign companies, declaring a triumph for sovereignty and socialism.

[B] Analysts have suspected all is not well, citing corruption, broken rigs and unpaid suppliers, but the foreign oil companies still in Venezuela stay largely silent lest they anger the government and find themselves locked out of the western hemisphere's biggest energy reserves.

However, in separate private conversations with the ambassador, Patrick Duddy, industry figures detailed the parlous state of the industry. A senior manager from Chevron estimated the state oil company's output at 2.1m to 2.3m barrels per day, well below official declarations of 3.3m.[/B]

Chevron was funnelling profits to the US and no longer investing in Venezuela, the manager said. An executive at oil exploration company Baker Hughes Inc said the firm had a similar strategy and "received a congratulatory message from BHI corporate headquarters for not growing the business (and increasing its risk exposure)".

[B]A director of Mitsubishi in Venezuela was quoted as saying Chávez's executives were struggling to attract investment. "[The businessman] stated that privately, senior PDVSA leadership is extremely upset with the failure of international companies to register bids. He added that Mitsubishi sent a letter to PDVSA explaining why the conditions offered by Venezuela were insufficient and what would need to be changed to make a bid commercially viable."

Italy's ambassador to Caracas, Luigi Maccotta, told his US counterpart that Italian oil company ENI squeezed PDVSA over an Orinoco belt deal in January this year knowing it had no one else to turn to.[/B]

The Italians delayed the signing by two days to reinforce the Venezuelan government's "need for ENI". Paolo Scaroni, the company's CEO, then faced down Venezuela's oil minister, Rafael Ramirez, over changes to terms and conditions.

"Thirty minutes before the ceremony was supposed to begin Scaroni told Ramirez: 'Take it or leave it, I can get on my plane and move on.' Ramirez apparently used that half an hour to convince President Chávez to accept all of ENI's proposed changes or risk losing the deal," according to the US cable. The Italians said they would not pay PDVSA a standard signing bonus because the company already owed them $1bn.

Venezuela's oil minister, who is the head of PDVSA, travelled to Moscow and Beijing hoping for solidarity deals with allies, only to find the Russians and Chinese as profit-minded as western companies.

Venezuela's oil travails, combined with rolling power blackouts, decaying infrastructure and expropriations, have worried its other friends. Jorge Taiana, Argentina's foreign minister, told a US envoy that Cristina Kirchner's government did not agree with Chávez's assault on the private sector. "Taiana said [former president] Péron had already gone through a nationalisation phase in the 1940s and the country had learned its lesson."

In a separate cable Marco Aurélio Garcia, a foreign policy adviser to the Brazilian president, Luiz Inácio Lula da Silva, was quoted telling the US ambassador that Venezuela had "deep domestic economic problems, particularly with regard to energy supply".

The head of the US interests section in Havana reported that the Castro government, which depends heavily on Venezuelan financial support, was fretting about its benefactor's economic health. "The view from the French is that Venezuela 'es en flames' and a source of serious concern for Cuba."

Chávez has brushed off claims of meltdown as capitalist propaganda, saying Venezuela's economy will emerge stronger than ever from current difficulties. The government is studying a draft law to facilitate further oil industry nationalisations to deepen the revolution.

Gianni di Giovanni, spokesman for ENI, said: "The facts and the conclusions reported in the WikiLeaks cable on Venezuela are false and without any grounds. The meeting between the Energy Minister of Venezuela Rafael Ramirez and ENI CEO Paolo Scaroni as well as the respective requests mentioned have never taken place."

http://www.guardian.co.uk/world/2011/mar/10/venezuela-caracas-gang-warfare-murder
Drugs, murder and redemption: the gangs of Caracas

Last year 14,000 people were murdered in Venezuela, three times more than Iraq. Why? Gang warfare. Rory Carroll reports on how one group is trying to escape the cycle of violence

Rory Carroll
guardian.co.uk, Thursday 10 March 2011 22.34 GMT

Caracas: Venezuela's most violent city. Sean Smith reports from a hospital in the Venezuelan capital

Warning: Contains distressing images Link to this video

It started one humid afternoon when a seven-year-old boy flicked something out of a schoolbus window at a teenager on García de Sena street. Some say it was a piece of popcorn, others a rolled up piece of paper. Whatever it was, the older boy took umbrage. He strode to the window and slapped the child, sending him home crying to El Cementerio, a few blocks up the hill.

The mother, aunts and sisters stomped down the hill and confronted the teenager, jabbed him, prompting his own female relatives to jab back. Insults flew. That night, shots were fired into El Cementerio. The neighbourhood did not see who was shooting but returned fire. And so began another war.

Eight months and multiple ambushes later seven youths from El Cementerio are dead, as are an uncertain number of their rivals down the hill. Richard Nuñez, the soft-spoken leader of the Cementerio youths, lifts his T-shirt to show fresh scars on his belly, back and right arm. "They got me when I was riding past the police station, shot me right up." He survived, but wonders if he will be as lucky the next time. "Things are pretty hot. This isn't over."

Over. A hopeful word. As if the violence has a destination, an end point. This is Venezuela, where more than 14,000 people were murdered last year, according to human rights groups. That is about three times bloodier than Iraq, which has a similar population. The government does not publish full statistics but says the official murder rate is 48 per 100,000 people, more than double South America's average. Some estimate the rate in Caracas to be as high as 140 per 100,000, making it one of the world's deadliest capitals. Hospital emergency wards overflow, especially at weekends, with bleeding, punctured casualties. Corpses stack up in morgues while grief-stricken relatives gather outside, noses cupped against the smell.

What makes this corner of South America, once best known for oil and beauty queens, a Hobbesian lottery? The short answer is gangs. Young men with guns drop bodies as they battle over turf and drugs in winding, rubbish-strewn streets. The catch-all description for them is malandros, supposedly feral thugs and ne'er-do-wells perpetually at war with themselves and the rest of society. They inhabit, Venezuelans tell you, the land "up there": hillside barrios. Malandros flit across television screens and newspapers as cadavers or hooded suspects paraded by police. Either way they are anonymous cyphers who do not speak, leaving their motivations, their world, incomprehensible to outsiders. A war over a piece of popcorn?

This is the story of one gang. Of its rise and fall and resurrection in a dusty, sun-baked slum, and of the reasons it does what it does. Some of the plots and characters make US crime dramas seem tame. There is the hitman who became a minister's bodyguard. The straight-A student suspected of black magic because no one can kill him. The mugger who found love while dodging police. The prison cannibal who found God. And the aristocratic rum merchant who proved an unlikely saviour. The narrative tilts between decay and hope, corruption and redemption.

Fifty years ago El Consejo was a sleepy farming village of 2,000 people ringed by sugar cane plantations. Today it is home to 50,000 people, none of whom farm, and whose brick-and-tin homes cling to steep slopes. It is a community marooned without jobs and proper housing by dysfunctional oil booms that stunted industry and agriculture.

Caracas is 60km east, at the end of a potholed motorway, but El Consejo feels like a ramshackle extension of it. Tucked into its concrete mazes, unmarked on most maps, is the two-block neighbourhood of El Cementerio, so named because it abuts a graveyard. Here, says Jimin Perez, a former police officer, is where you don't want to stop and ask directions. "The kids stick a gun in your face and steal your things. Then the adults dismantle your car for parts. If you make it out and go back with the police, no one has seen anything."

This is the fiefdom of the cemetery gang: two narrow roads lined with bleached houses from which eyes appraise all who enter and leave. Everybody knows each other, and many are related. Most men are gone – absconded, dead, jailed – leaving wives and widows as matriarchs to raise broods alone. The nearest school, Manuel Cipriano Perez, is so overcrowded its 1,117 students are rotated in two shifts. Often there is no electricity or air conditioning, so pupils slump in the tropical heat. The computer room is locked and empty. "Children don't have many recreation options," says Damaris Costa, the director. "They throw stones at their own school."

A five-minute walk down the hill from El Cementerio brings you to identical-looking streets, but this is the territory of Los Pelucos (The Wigs), the other gang in the "popcorn war". Walk 10 minutes west and you are in the territory of the 5 de Julio (Fifth of July) gang. It too is at war with El Cementerio but over a motorbike stolen in 2008. Bubbling under these disputes is competition to sell drugs, mostly cannabis and cocaine, to outsiders.


Richard Nuñez, leader of El Cementerio gang, shows the scar where he was shot. Richard Nuñez, leader of El Cementerio gang, shows the scar where he was shot. Photograph: Sean Smith for the Guardian

Wedged in by bigger rivals, El Cementerio has responded with tough leaders, none more so than Darwin Ospino, aka Pata Piche, or Rotten Foot. The nickname is ironic. Fastidious about deodorant and aftershave, Ospino is the neighbourhood's closest thing to a metrosexual. His fame, however, rests on reputedly having killed 26 people, a number that happens to match his current age. His first gun was a 765 revolver. "It felt like a trophy," he says, perched on his bed, freshly showered. "The first time I used it? A party. A gang showed up, made some trouble . . ." Ospino's voice trails off. He does not care to dwell on the details.

Alberto Vollmer, who owns a rum company that rehabilitates local gangsters, is more open. "Darwin was the hitman. He started at 16 and is still a legend around here. He's respected even by his enemies." Some stories are particularly chilling – dragging people from homes and families and shooting them in the face, killing a woman's husband, then killing her second husband after she remarried – but Ospino's manner is courteous and quiet, even diffident. "My papa abandoned us when I was small," he says, when prompted. Ambitions for the future? "Stay alive and be a good father." He has two young children but is separated from the mother.

Ospino apparently stopped killing in 2003 when, en masse, the Cementerio gang, exhausted from ever-present danger and stress, joined the rehab programme run by Vollmer's Santa Teresa rum company. Ospino, who inspired such fear that victims' relatives never pressed charges, was hired as a bodyguard by a government minister, Jesse Chacón. All went well for five years until he was accused of another killing, which he denies. Until the case is heard a court has confined Ospino to the Santa Teresa hacienda, which he patrols on a motorbike. "If he goes to prison he's a dead man, he's got too many enemies," says Vollmer.

Venezuela has no capital punishment but prison is often a death sentence. On average more than 420 inmates die violently each year, according to the Prison Observatory, a watchdog group. A system designed for 14,000 holds 38,000, most of them on remand. Guards control, at most, the perimeter, leaving inmates to fend for themselves. A September riot in Tocoron jail, which serves El Consejo, officially left 16 dead but families say the true figure is higher. Images recorded on mobile phones show bodies, some decapitated and dismembered, being piled onto a pickup truck.

Outsiders are denied access but in a phone interview one Tocoron inmate, Luis Viña, related atrocities from his 16 years at different prisons. Speaking machine-gun fast between gulps of air, exhilarated by contact with the outside world, the convicted rapist and murderer's litany of horrors included beheading a rival and eating his brains: "He was making problems for me." Viña is not insane: it was an effective message to others not to mess with the cannibal. He has been forsaken by his family but not Jesus, he says. "With God's help I have recovered my values."

When Ospino led about three dozen footsoldiers in 2003 into the rehab programme, which is called Alcatraz, the Cementerio gang briefly disappeared. Instead of robbing and getting high, members went camping, took training courses and grappled with rugby – an idea of Vollmer's to make them equal through learning an alien sport. After graduating, many found jobs as security guards, bottlers and cooks on the hacienda. "You could see their faces physically change," says Vollmer, a Venezuelan anglophile of German descent. "At first the muscles were really tense, and gradually they relaxed."

Alcatraz is a success story: local murder rates fell, attracting interest from the government and Harvard academics. Graduates such as Juan Silva, 30, a former drug addict, turned their lives around. Watching him at home playing with his three young children, dog and cats while his wife makes lunch, it is difficult to imagine him killing. But he did. "When I think back to that bus driver, it hurts. I think of him as a father and a husband, a human being. I cut his throat with a bottle. It was almost an obligation in the gang to show you were hard, to earn respect. I was 15, maybe 16."

One day, aged 19, Silva mugged a bus passenger for her jewellery. He fled on foot and caught another bus, conscious of a police patrol ahead. Seated behind him was a pretty girl. "I wanted to say something cute to her but the only thing I could think of was: 'Will you hide my revolver?'" he recalls. The girl smiled and hid it in her purse. Love was born. The couple dated, married and Yainna, now 27, laughs at the memory. "What can I say? I liked him." Evangelical Christians, they pray every day. When not bottling at the rum factory, Silva coaches football and at night studies mechanics.

You hear a similar story from Williams Duran, 30, a wiry, cheerful bundle of energy. "I was a drug addict and thief for so long I robbed everything. But now I'm straight, have a job as a cook, a wife, two kids. I've even got furniture and a bank account."

It would be nice to end the story there but the Cemetery gang, along with other groups that entered rehab, has revived. Shops and houses have barred windows and fresh bulletholes, and kidnappings plague the area. Luis Yuraima, the 20-year-old son of a shopkeeper, has just been rescued after four days in the hands of the Pelucos, who demanded an $83,000 (£52,000) ransom. How was he treated? Without a word he pulls off his T-shirt: purple slashes and puncture wounds cover his back. Johnny Brito, owner of the La Estación cafe, is downbeat about the future. "Some guys get rehabilitated, great, but there's always a new generation behind them," he says.

When Ospino and others entered the hacienda, the vacuum in El Cementerio did not last long. A new leader, José Daniel Nuñez, aka Kibiri, emerged. It was not out of choice but necessity, says his brother, Richard. "Others were coming into our neighbourhood, threatening people. We had to defend ourselves." Kibiri, by common consent, is exceptionally bright. Top of his class, articulate, wily, he is also, depending how you look at it, incredibly lucky or unlucky. Seven years ago, aged 15, he was ambushed and shot 14 times. He survived and hobbled out of hospital, one-eyed, ostensibly reborn. He entered the rehab programme and befriended those who had shot him. Then he killed them. "One at a time," says Richard.

Kibiri was expelled by Alcatraz, caught by police and jailed. Inside, somebody stabbed him 13 times. Again, he survived. "People think he's made a pact with the devil, that he's immortal," says Jimin Perez, the former police officer who now runs the Alcatraz project. Belief in santería, a voodoo-tinged African-Caribbean import, is widespread, especially among gangsters who pray to santos malandros, holy thugs, for success and survival.

Who else, after all, can they turn to? According to the police many of the gangsters' mothers deal drugs. The head of the neighbourhood association allegedly is the main supplier, with a sideline renting revolvers. The state is largely absent save for the police, and their reputation for brutality and corruption rivals that of the gangs. "We learned that the police are more criminal than the criminals," says the ever-blunt Vollmer. "They outsource crimes to the gangs."

Asked about cops, a group of El Cementerio teenagers stop kicking a deflated football to volunteer anecdotes. They sell you 50 bullets for 400 bolivares ($48), says Carlos Noguera, a topless, chubby 15-year-old. He knows about bullets: more than 30 mangled the features of his older brother, a casualty of the popcorn war. If police catch you with drugs or guns they let you go for 100 bolivares, says Juan Carlos Nuñez, also 15. If you're clean they plant stuff so you still have to pay, says his older brother, Richard. Police accidentally shot dead the Nuñez boys' grandmother while chasing a suspect through their home.

Perez, the grizzled former cop, does not deny any of it and has his own stories, including that of two officers who raped a woman in a park. A request to interview the police chief for Aragua state, which includes El Consejo, was declined on the grounds he did not know the Guardian's "political leanings". Even the likes of Inspector Enrique Aray, a dedicated, honest cop who patrols slums in east Caracas, admits ignorance about gangs. "We don't have good information," he says, peering from his Jeep at shadowy figures who flit across his headlights on a rainy, gloomy night. Later, when two shots crack in the distance, he smiles apologetically. "A .38. It's normal here."

With Darwin Ospino confined to the rum hacienda, and Kibiri in jail awaiting trial for murder, the Cementerio gang's fate hangs in the balance. The popcorn war's origins are petty but if the gang does not prevail, or at least keep fighting, it will forfeit clout, and with it drug sales, to rivals. Kibiri's natural successor is Richard. Smart like his brother, and physically similar, the 18-year-old must decide between taking the crown or breaking with family tradition and pursuing a legitimate career. "He is softer, more gentle," says his mother, Yelitza. A tough matriarch, it's not clear she means it as a compliment.

"I've been in shoot-outs but haven't killed anyone," says Richard, seated in a barely furnished living room. On top of a closet, peeking from folded jeans, is a revolver. He acknowledges it, shrugs. "I won't kill. That's not me." He sighs and rubs the bullet scar on his belly. "This life, always afraid, looking around the corner, over your shoulder . . . it's not good."

Richard has a fantasy that one day the father he has not seen in two years will drop by, share an empanada and take him out to a movie. "We'd just sit there, watching it, with a Coke." His thousand-watt smile lights at the thought. He knows it won't happen. His father lives just one hour away but rival gangs would spot him entering and leaving and assume he was delivering bullets or drugs. "They'd kill him."

Against the odds, Richard has stayed in school and is on the verge of graduating. He is thinking, he says, of becoming a mechanic. A crumbling home on a dusty hill in Venezuela, and a young life that must choose between two paths. One filled with danger, good money, prestige and the chance to "defend" the community. The other filled with long hours, a minimum wage and a lesser but still real chance of getting killed just because some kid flicked a possible piece of popcorn. Which would you choose?

This is nothing new, Caracas has been considered a violent city since I could remember. And it appears as if it has gotten worse. I use to also hear the same thing said about, Panama City, Panama although in the last few decades there has been no media coverage to indicate neither improvement nor deterioration.

Nevertheless, it appears as if there is a steady trend towards an increase in violence among many cities throughout Latin American and I just wonder why? And please don't tell me it has to do with poverty, although poverty may be a possible reason, I will never agree poverty is a determining factor. People don't all of a sudden commit or turn to crime because of poverty.

Lack of opportunity and no education may also be factors, but I don't think that if one does not go to school, one will commit a crime, although there is a close correlation between education and prison population. My grand parents were illiterate farmers, educated only up until the 6th grade, yet were very honest hard working people. Therefore, a lack of education is not necesarily a good argument.

Highly educated people have been the worse culprit and committed crimes beyond comprehension. Such is the recent case of Bernie Madoff, the Savings and Loan scandal of the 1980s, the not long ago Enron scandals, are just but a few examples of sucessful prosperous people, who were priviledged, went to school, had access to opportunity, but resorted to crime. And to make matters worse, with a few rare exceptions, most got away with serving just minimal sentences. "This is in the great tradition of American justice: steal a bag of potato chips or smoke a reefer and you'll be locked up for a dozen years; steal $80,000,000 through a clever stock manipulation scam and they fine you $60,000 and hire you as a consultant."

San Juan, Pto Rico is part of the US and as American citizens have every opportunity for progress, yet the crime rate has been on an upswing, better described as soaring for decades. Sto Domingo considered poor by many standards is much more prosperous then a just a few decades ago, but we have also seen violent crimes increase. The same can be said for Bogota, Managua, Tegucigalpa, Mexico City, San Jose, Bs As, Pto Prince and others just to name a few.

What is going on in Latin American simply puzzles me, particularly Caracas and please let us not accuse Hugo Chavez. He would be an easy scape goat for blame. To the contrary, prior to his election as president, Chavez is precisely a byproduct of the deteriorating social conditions found in the oil rich nation of Venezuela .

I am somewhat of a believer in a conspiracy theory. Is this purposedly created to provoke destabilization in the governments of Latin America to maybe help ease the take over by some future emerging super power, not necessarily the USA. All things are possible, but one thing for sure, our present world wide tendency for crime and violence, has never ever been seen before, at least not in the gran scale dimensions we are witnessing today. This is not exactly a normal phenomena and should be watched closely and carefully. It will require further study and analysis and eventually we will get to the bottom of things, hopefully before it is too late.

Venezuela’s presidential campaign
Mano a mano

The opposition has got its act together at last. Will that be enough to topple a convalescent and vulnerable Hugo Chávez?

Feb 11th 2012 | CARACAS | from the print edition

FOR the moment, Henrique Capriles has reason to be confident. The governor of Miranda state is the front-runner in the Democratic Unity (MUD) coalition’s primary, due on February 12th. According to Datanálisis, a pollster, he leads Pablo Pérez, his closest rival, by 62% to 16%, though the margin of error is high and turnout could have a big effect on the results.

Assuming Mr Capriles (pictured) wins, however, he will not get such an easy run from his next rival, Hugo Chávez, seeking a third six-year term as Venezuela’s president. Mr Chávez underwent surgery for cancer last June. But he says he is “cured” and has already nominated himself as the candidate of his United Socialist Party (PSUV). “I wish him a long life,” Mr Capriles said recently, “because I want him to see the changes in Venezuela with his own eyes.”



In 2006, the previous time Mr Chávez ran for re-election, the opposition was in disarray. Its bevy of anti-Chávez parties was still tainted by association with a coup attempt in 2002. They could agree on little save their distaste for the government, and had unwisely boycotted the 2005 legislative elections, leaving them with no lawmakers. Moreover, the opposition parties were dominated by media, business and trade-union leaders and by pressure groups, rather than by politicians. They chose their presidential candidate, Manuel Rosales, via back-room consensus instead of a primary. Mr Chávez trounced him.

They have learned from their mistakes. In 2008 a dozen opposition parties formed the MUD, an alliance modelled on the Concertación coalition that ousted Augusto Pinochet’s dictatorship in Chile. Two years later they fielded a joint slate of legislative candidates, which narrowly won the popular vote and took 67 of 165 congressional seats in mid-term elections. The forthcoming MUD primary is open to all Venezuelans registered to vote. “There’s a new generation of leaders,” says Alonso Moleiro, a political analyst. “They are totally committed to the electoral road to power, and to co-existing with chavismo.”

By publishing a detailed platform, the MUD has also insulated itself from the charge that it stands only for removing Mr Chávez. Its plan aims to reverse the president’s blurring of the distinctions between the executive, the PSUV and the state as a whole. It would restore the central bank’s autonomy; relieve the state oil company, PDVSA, of its role as a welfare agency; abolish the president’s personal militia; move control of social-welfare schemes to the ministries; and put the army at the service of the state instead of Mr Chávez’s “socialist revolution”. However, it takes a gradualist approach to restoring confiscated property, undoing currency controls and abolishing unconstitutional laws.

Five of the six of the original primary contenders supported the platform. The two early front-runners were Mr Pérez, the governor of Zulia state, and Mr Capriles. Although both have won the support of parties with diverse ideologies, Mr Pérez is broadly seen as representing the centre-left and Mr Capriles the centre-right.

Mr Pérez says his social-democratic views will appeal to disgruntled former chavistas. His darker skin may help persuade them that he is a man of the people. But despite a wealthy background, Mr Capriles has also run as a moderate, focusing on education and social issues. And he has implicitly accused Mr Pérez, who is backed by the two dominant parties of the pre-Chávez era, of representing the machine politics that alienated voters and made Mr Chávez’s rise possible. Mr Capriles all but secured the nomination when the third-placed Leopoldo López withdrew from the race last month to run his campaign.

Mr Capriles has reason to be optimistic about his chances in the October general election. At 39, he has already been a mayor, a governor and the vice-president of congress. And Mr Chávez has never looked so weak, politically or physically. Venezuela has South America’s highest rates of both inflation and murder. Basic goods and housing are scarce. His illness will probably hinder his campaign, undermining his image of invincibility.

Yet the challenger will still face an uphill battle. Mr Capriles cannot match the charisma of Mr Chávez, who remains Venezuela’s most popular politician. The president has freely spent public money in past campaigns, and has packed the electoral authority with supporters, letting him flout campaign rules and perhaps even tweak the result. “If you don’t have witnesses [at polling stations],” Mr Capriles warns, “you can be absolutely sure your votes will be stolen.” Mr Capriles has just a few days left before the hard part begins.