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Edition: U.S. Article Comments (0) Save Email Print Reprints Most Popular Most Shared NEWSMAKER-Wounded Sen. Dodd guided Wall St reform to victory 1:00am EDT WRAPUP 1-BP stops flow of oil into Gulf of Mexico 1:00am EDT Gulf well test starts after cap repair: BP exec 15 Jul 2010 Tired Gay succumbs to Dix in 200 meters 03 Jul 2010 Bookies see European shares opening higher 1:05am EDT BP stops flow of oil into Gulf of Mexico | Video 1:21am EDT Wall Street reform clears Congress | Video 15 Jul 2010 Ancient ship unearthed at World Trade Center site 15 Jul 2010 No oil leaking in Gulf amid well test-BP exec 15 Jul 2010 Buffett warns Obama U.S. economy only halfway back 15 Jul 2010 Tired Gay succumbs to Dix in 200 meters 03 Jul 2010 Goldman to settle with SEC for $550 million | Video 15 Jul 2010 BP stops flow of oil into Gulf of Mexico | Video 1:21am EDT WRAPUP 1-BP stops flow of oil into Gulf of Mexico 1:00am EDT Muslims seek to add holidays on NY school calendar 12 Jul 2010 Wall Street reform clears Congress | Video 15 Jul 2010 Ancient ship unearthed at World Trade Center site 15 Jul 2010 Banks repossess US homes at record pace -RealtyTrac 15 Jul 2010 At least 21 killed in Iran suicide attacks | Video 3:24am EDT Sniffing insulin may help memory lost to Alzheimer's 15 Jul 2010 Chavez "communes" stoke Venezuela democracy debate Digg This Tweet This Share on LinkedIn Share on Facebook Factboxes FACTBOX-Key political risks to watch in Venezuela Thu, Jul 1 2010 FACTBOX-Risks to watch in Latin America in 2010 Thu, Jul 1 2010 FACTBOX-Key political risks to watch in Colombia Mon, Jun 21 2010 Related News Venezuela slum takes socialism beyond Chavez Tue, Jul 6 2010 REFILE-Chavez ratings up, food woes dent socialist message Wed, Jun 23 2010 Related Topics World » Venezuelan President Hugo Chavez gestures as he evaluates with the progress of ''Battalla Bolivar 200'' (Bolivar Battle 200) with members of his United Socialist Party of Venezuela (PSUV) in Caracas July 14, 2010. Credit: Reuters/Miraflores Palace/Handout By Pascal Fletcher CARACAS | Thu Jul 15, 2010 7:52pm EDT CARACAS (Reuters) - Tucked into forested hills in southwest Caracas, a red-brick housing complex for the poor is a testing ground for Venezuelan President Hugo Chavez's latest step to build socialism in the Latin American oil producer. The phalanx of simple five-storey apartment blocks, some still being built, anchors the "Cacique Tiuna Commune". This is one of a network of "socialist communes" that Chavez and his supporters want to extend across the nation in a political and legislative offensive to dismantle "bourgeois" capitalism. Not surprisingly in a country whose politics is as flammable as gasoline, the project enshrined in a package of "power to the people" laws is stoking a political firestorm. Fueling the political debate is the proximity of legislative elections on September 26. The government says the communes will help end poverty. But furious opponents, who already denounce Chavez as a repressive autocrat, say the initiative heralds outright communism in Venezuela and so violates its pluralist constitution. "A barrier is being crossed ... we're passing from Chavez's tropical socialism to open and glaring communism," says Emilio Grateron, mayor of Chacao, an opposition stronghold entrenched in a more wealthy eastern neighborhood of Caracas. Displaying colorful murals of Venezuela's 19th century independence hero Simon Bolivar, and one of Argentine guerrilla legend Ernesto "Che" Guevara, the 2,220-inhabitant Cacique Tiuna Commune is conceived as a showcase "socialist" community among the dirt-poor hilltop slums that hem in the capital. Chavez and the laws' promoters deny the communes project is a bid to railroad the country into Soviet- or Cuban-style Marxism. They say the legislation is compatible with the 1999 Constitution and follows socialist goals of ending decades of inequality in Venezuela and giving more say to the poor in the running of their own lives and that of the country. "We're headed for socialism here, I haven't deceived anyone," the combative Venezuelan leader told his ruling PSUV party in a meeting this week. He blasted local Roman Catholic bishops who have criticized the communes program, calling them "troglodytes" and "fascists". Chavez says the bishops and business "oligarchs", media tycoons and foreign "imperialists" who populate his full pantheon of ideological foes are misrepresenting the communes project as a pretext to destabilize his government. The former soldier survived a brief coup in 2002. Opponents say he is conjuring up fake threats to throw a smokescreen over his failure to turn around the deteriorating economy and put a brake on rampant violent crime. In the upcoming elections, opponents are expected to dent the National Assembly majority of Chavez's PSUV, which has been shaken by a scandal over the discovery of thousands of tonnes of rotten government-managed foodstuffs and polls showing weak public backing for more socialism and expropriations. Chavez is still popular in his 11th year of rule, but his support is under strain as the economy slumps. It contracted 5.8 percent in the first quarter of this year and inflation is persistently high at an annualized rate of 31 percent in June. FRESH ASSAULT ON PRIVATE PROPERTY? Chavez's searing leftist rhetoric and his investor-scalding track record of strategic oil, industry and mining nationalizations have made him an anti-capitalist and anti-U.S. standard bearer in Latin America and the world. The largely pro-Chavez National Assembly has initially approved the communes bill and some related laws. A second final approval is pending, and supporters say they hope this can happen before the elections. "We're talking about government by the people," said Ulises Daal, a pro-Chavez parliament deputy and one of the main promoters of the project. He says the legislative plan to set up self-sustaining, self-governing "socialist communes" builds on the existence of some 36,000 Chavez-inspired "communal councils" that already dot the country. Daal said 214 communes were already "under construction". Some have introduced barter markets and their own currencies. Grateron and other opposition mayors have launched a noisy counter-offensive. They say Chavez is trying to force through by law a shift to all-out socialism he failed to introduce in a 2007 constitutional referendum that he narrowly lost, the only nationwide ballot he has not won. Opponents single out the Communes Law's repeated references to "social" and "collective" ownership. "It's a clear orientation toward the reduction and disappearance of private property," said Noel Alvarez, president of the Fedecamaras private business group. However, the Communes Law text does say Venezuelans can "possess, use and enjoy individual and family property and patrimony", and Daal insisted that private property remained unaffected by the legislation and was guaranteed. IDEOLOGY, OR APATHY Neither ideological nor productive fervor were much visible at the Cacique Tiuna Commune, which boasts a plastics plant, a vegetable garden, a "socialist" carpentry shop and a plant nursery. During a visit last week, the plastics plant was idled, the irrigated garden was awaiting "refinancing" to start and at the carpentry shop only a handful of laborers worked under the stern gaze of a mural depicting the historic Indian chief Tiuna after which the commune is named. "The Comandante (Chavez) wants this to be a showcase community," said Yamilet Ramirez, the Commune's spokesperson. "The idea is that it should be self-supporting." But the Cacique Tiuna commune seemed some way off its intended goal as a self-sustaining, self-governing community. "People don't seem enthusiastic, they don't want to participate, I don't know why, since it's for them," said the head of the carpentry shop, Alexis Valdiviezo. He himself did not have an apartment in the commune but was brought in six months ago by the Basic Industry Ministry to oversee the creation of a "socialist" carpentry network. "I'm living in a hotel," said Valdiviezo, who said he had been promised an apartment in the commune by Chavez. But for many of the commune inhabitants, the apartments, built with a primary school, a state MERCAL grocery and a soon-to-be opened high school, represent a huge improvement on their previous slum accommodation in hilltop shanties. "We like it, of course ... this benefits all the people," said Ines Herrera, who works as a cleaner at the primary school. "There is a bit of apathy, but that's normal". "No one here is shouting about Marx or Lenin," said Ramirez. "FRONTIER OF CHAOS" In the same way that Venezuela's oil income has bankrolled Chavez's socio-political projects over the last few years, a host of government ministries and their budgets are clearly heavily engaged in supporting the emerging communes. A clause of the Communes Law stipulates that existing state governorships and municipal mayorships should make funds available to finance projects for the communes. This has led to worries by opposition mayors that the new structures will monopolize funds, accompanied by political discrimination. The Commune Ministry's own information sheet on the Cacique Tiuna community notes among its weaknesses: "There were commune members who hold an ideology opposed to the government". The legislation foresees each commune having its own parliament, elected in open assemblies, and a five-member council to ensure the execution of decisions taken. A Communal Bank, and communal justice system will also be created. Critics say the creation of these parallel systems alongside existing state and local structures will generate confusion. "It's the frontier of chaos," Grateron said. (Additional reporting by Patricia Rondon; Editing by Kieran Murray) World Add a Comment *We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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