Under President Hugo Chavez Venezuela has been undergoing major changes including moves to establish state control of the petroleum, power and telecom sectors and indications of similar moves in both steel and banking. Regional neighbors such as Argentina have raised concern over these actions and despite close and long standing ties; US-Venezuelan relations have been strained in recent years. So today we are very pleased to be joined by Venezuela's Ambassador to the United States, Bernardo Alvarez Herrera to discuss with us his thoughts on the evolution of his country's policies and prospects for improved relations between our two countries and in the hemisphere. Ambassador Alvarez has served in Washington since January 2003. Previously he held a number of senior positions in Caracas including Vice Minister of Hydrocarbons at the Ministry of Energy and Mines, Deputy to the National Congress, Vice Chairman of its Armed Forces Committee, Chairman of Energy and Mines Committee and Chief of The Research and Development division at the Venezuelan Institute of Foreign Trade. Ambassador Alvarez has also served as principle coordinator in Venezuela's cooperation agreement on energy with the United States and head of the Venezuelan delegation to OPEC's Ministerial conferences and has also taught at the Universidad Central de Venezuela and the Superior School of the Venezuelan Air Force. So without further ado please join me in welcoming ambassador Alvarez Thank you and forgive us for the delay. But we had a great meeting with the Mayor and a Board of Supervisors and we start you know more people came into the office and so it was very difficult to to be on time but anyway we are here. I would leave with the Staff of the Council reading version of main ideas that I am going to share with you. And because I think it might be important that you have written document that you can read and see. I will basically refer to what we see as a new reality in Venezuela, the new reality in the hemisphere which is a in our opinion the only way to understand the need for a new relationship between the US and Venezuela and the US and the hemisphere. Last December President Chavez was reelected. In 2006 in 2005 but basically in 2006 we have major elections in Latin America. We had elections in 2005 in Bolivia; we had elections in Ecuador in 2006, Mexican elections, elections in Peru, elections in Columbia, elections in Nicaragua. And taking into account that there are diversities and particularities but its clear that progressive politics in the sense of social justice as priority a new role for the state, the need for a new arrangement in the relationship between private and public, the new ideas about regional integration, the role of the International Financial Institution with Lateral institutions, all of that and the need to review and discuss that is a reality. So I think this is a huge development. And I am raising that because three years ago we were alone and for many people President Chavez and the situation in Venezuela was an accident. And people thought let's wait because at the end we will have Venezuela back in the normal relationship which according to them was the famous Washington Consensus. And this is not the reality anymore. Again there are differences among our countries. We still have to solve many problem, discuss many things, but it's clear that that famous consensus did not does not exist any more. And when you don't have a consensus you start discussing alternative because in the 90s, with the Washington Consensus, the idea was we have found, finally, a way for Latin America. Representative democracy, free trade people were accepting that private capital should prevail, that there should be a process of privatizations etc. But the reality is the reality today is completely different. And people now agree that Chavez is not an accident, he is a President who was re elected for another six years with huge popular support and you have and we have I always refer what is happening in Bolivia and with all respects of course to the particularities and the- our Bolivian brothers but don't forget it in the case of Bolivia, a native Bolivian was elected the president of Bolivia. And yes as a matter of an example I will urge you to think that you go to sleep and you wake up and you have a native Mexican being President of Mexico. I am just telling you trying to tell you the significance of that change in the case of Bolivia. Ecuador, you have a new President 40 years old, that he has asked his people support for a National Constitutional Assembly that will change the constitution and will promote a radical change of society and he was voted by 80 percent of the people from Ecuador, okay. So this is something that we have to look at seriously. It's a challenge but it's a reality. So I think that it will give you it take us to the need to discuss the kind of politics we have had in hemisphere, the kind of institution we have had in hemisphere and a kind of future we will have in the hemisphere, including what is the kind of relationship - what kind of relationship we should have with the United States. Not of course talking necessarily to the people and the society of the United State because we have an everyday relationship. But also the relationship we will have with the government of the United States and the so called inter American system that I think is changing. And if there are real changes you have to change the institutional frame also if you want to adjust the frame to the reality. Let me just refer to the famous consensus, the famous Washington Consensus. And again I would like you to think on the one hand in 94' when you have the meeting in Miami for the Summit of the Americas and all Latin American governments were signing with the US they charter the summit during the summit of the America, which was basically to sign the Washington Consensus. And if you look at the reality right now, the world has changed, Latin America has changed and the US has changed. But the problem is if you go and talk in Washington with the people and the think tanks, that are the most influential think tanks in setting the policy in Washington, I have the feeling that they think that they are still dealing with the same old consensus. They don't realize that that consensus first never existed because it might be a consensus among elites, but what is clear, if you see the new governments of Latin America and the new leaders, is that that consensus does not exist anymore. President Bush visited Latin America recently. I think that we have to look very carefully to that visit to understand that even in the case of the administration they are trying to find ways out of this reality. For the first time that was not mentioned, they did not mention any political issue in Latin America. And people were surprised, because for the first time they were talking our same music and going back to the hemisphere and talking about social justice, poverty alleviation. I talked to my good friends, some friends in the State Department and I told them that I was I was surprised and I think it was a good thing to try to change the language. But we think and we hope that this is not only a tactical move but is also the willingness to review, to reshape, to discuss a new vision for Latin America. So some people have a pessimistic view because of though all these New Leftist governments are coming to Latin America. And they say, look we are going back to the past, to the populism. But all the people and particularly a growing sector of our societies of the DCM Franchise people and social organizations are looking at those events in Latin America with a very positive approach. And let me tell you that I have found in this country that even some people get inspired about what is going on in our countries. Because what is very important, is for the first time we are promoting radical change in the society peacefully and with democracy, because even in the Leftist thinking of Latin America, yes, some years ago any radical change was impossible because radical change meant that you have to go through non democratic means, because it was impossible to do it within democracy. And I think that the experience of Venezuela and other countries in South America is telling you that alternative models of development are possible and you can really think and and of major changes in society that are directed to get the social, economic and political balance that any democracy should try to achieve. Because what happen is, during those years of the famous consensus poverty grow, asymmetries were very big, social exclusion because what happen is we have tried this neo liberal model and it didn't work. It simply didn't work. And at the end we have of course probably sectors or society which are very sophisticated, modern; but at the same time huge percentage of of our population completely excluded. Let me give you an example. When we came to government in 1980 we were of course we knew that - well, we have to go through a process of elections because we wanted to call for a new Constitution, so we have to go and tell people to support us, asking for a National Constitutional Assembly, then we have to elective the representatives to the National Constitutional Assembly and we wanted to have the majority of course. Then we have to go back to people and tell them to support their Constitutional Project etc. And then we start reviewing elections and the electoral system in the country. And we found that almost three million Venezuelans did not have identity card ID's. So what happen is there were three million people inexistent and if you have been involved in politics and in election, you know the importance of registering people, getting people to vote, particularly people that will benefit from your vision for society. And what happen is we start having and putting together a lot of social programs and we realize that those people that were benefiting from our programs, they were not registered. But you know why, because he did not have ID's. So let me tell you don't you think that this is exclusion. The very, very exclusive people are those that they don't have even the right to identity. We put together a mission called "The Mission Identity", and we brought the machines to the barrios and register the people in the barrios. Because of course the problem was people did not want to go to the central offices because they were crowded and nobody wanted to and there was a lot of corruptions, so you have to pay to get your papers whatever, so we have a massive process and we were able to give identities document to more than two million people. But what happened is also we had a huge immigrant population in Venezuela. More then 50 percent of Venezuelans live in people live in the Venezuela right now today are foreigner, at least in second generation, is huge. There are some data that probably 20 percent or 25 percent of population live in Venezuela are from Colombia. But those people Colombian people having lived in Venezuela for 20 years 50 years. So, we start saying, well, what do we do with that? I and so we decided, well, we have the principle in the constitution that we accept double nationality. If those people have been living in our country for 15 20 years, it often doesn't make sense to keep them in a very illegal kind of situation. So, we gave them the Venezuela nationality. And they kept their Columbian nationality, because part of the problem was they didn't want to lose their Columbian nationality. So we have, those guys have now two nationalities. I - some time when I participate in debate here, discussing immigration issues, I will present what we have done in Venezuela. So, I don't know, I want to respect debate in this country but for us we will give nationality to everybody because it is a reality. And at the end it helps a lot because do you have an idea of the corruptions and the involving these people without legality and many things. But this is just to tell you the level of exclusion we had in a country that by the way was considered an exceptional case because in the 80s and 90s case when people were discussing the this is the process, the political crisis in Latin America, Venezuela was always presented as an exceptional case. Two party system, negotiation political negotiation, very much in the same idea of the US Democracy of the Republicans and Democrats and basically accepted consider as a country accepting all the rules of the inter American hemisphere and particularly in all these neo liberal recipe for development. And but the people sometimes forget that the day that Venezuela signed the agreement with the International Monetary Fund was exactly the same day that transportation tariff were increased in Venezuela and there was spontaneous unrest in Venezuela - in all country and estimated - of people that were killed goes from 700 to 3000 by our own military, because a state of emergency was declared. The same day that we were signing all these kinds of economic policies that was imposed in a way by day International Financial Organization in this - particularly the International Monetary Fund. So the other important thing and you refereed that in the presentation is the issue of natural resources. And that is a key issue for us because what happen is, a rich like Venezuela we were losing the fiscal income coming from oil. There was a clear imbalance before we came into government. Let me tell you that part of the collapse of the old political regime is very much related to that situation. The idea was its much more important to exploit the natural resources, you have to privilege investment, you have to open and you have to produce as much as possible. Of course in order to attract capital, there was a competition for capital among producers. What happened is countries have started lowering their conditions, particularly royalties and income taxes regarding oil, because they wanted to attract investment. At the end of the story you have investment, there was over production, prices were very low and there was not fiscal income for host governments, meaning that you companies were making probably a good business but governments were broken. So what happened if you talk to Venezuelan governments, even people following the neo liberal agenda, they say I don't know what to do, I don't have money and of course I have the agenda for growth - economic growth but at the same time, I have problem with my unions, I have problem with the militaries, I need money for infrastructure, I have already privatized that so I can not privatize any thing else. And it was a real crisis because the idea was an economic model that exaggerated and in a way forgot that in politics you have to have a balance. And this is why what you see the what is happening now, there is a real attempt to rebalance the situation. Particularly in in respect to for example natural resources and what the governments get from natural resources. Finally we were elected and we started a process of recovering sovereignty over our natural resources. That was a painful process because there was international reaction, national reaction and but finally we were able to puzzle out we were able to negotiate with companies from all over the world. It was a surprise, people said they will never talk to you they are talking to us. We have service service contract with 35 companies, we negotiated with 33 of them and only two were now through a process of arbitration us any of the business. And we have recovered full control of our natural resources particularly what we have in the Orinoco Faha which is the huge, the most important reserve of oil and gas outside the Middle East. Now we have old players, we have new players with the new control we have, for example we have talked to the Argentinean government the Uruguayan government and we say to the Uruguayan government why don't you have come into Venezuela and produce some oil with us. And there are conditions and you use that oil to supply your refineries in Uruguay and we will help you with your refineries. The same we have done with with Argentina and with many other countries. Again in Bolivia, part of the problem in Bolivia was precisely the issue of natural resources. Bolivians were getting nothing for the task. And they have gone through a process of nationalization and I think they have done good negotiation and of course at the end what is important is not only the consumers or the companies participating or the bank financing the projects, but the people in a country. It is a basic logic. Imagine that you have your own private business. You cannot do a business that is going to you will make profit, your consumers will make profit but people that live where you have your business are suffering, despair and they don't have anything because sooner or later, you will have a very strong reaction. One of the bad thing about this consensus is in the past business people, companies, they have to have a different relationship with governments and with people because they knew that they have to negotiate with them that a sense of equilibrium was necessary. But when you have a consensus, when there is no alternative, so you say well let me take everything. And that is part of the problem we have had in our countries and this is why the presence of public interest, strong governments and to a certain extent, a government that also participate is some important economic activities is important. We are moving to a different model. We want to have a mixed economy. We want to have a real process of participation of people. We think that if you want to empower the if you want to fight poverty we have to empower the poor. And of course when we empower the poor you are touching some interest because its not only giving them some programs that will help them but giving them the responsibilities and transfer decisions to them in a way that is reflects democracy also. Regarding democracy, the moral of consensus was we need to have representative democracy. We agreed with representative democracy but we think it's not enough. And one of the things because we had had representative democracy in the past, and it was not enough because at the end special interest, people with money, media and they are controlling to an important extend the rules of the game. We respect this country and the system of this country but I always and I will do that from my heart I cannot understand how can you talk about democracy, while at the same time if you want to be elected Senator in this country you need to have million dollars. Who has the opportunity to collect few million dollars to just think of running for office? I know so many very touchingly nice people in this country, most Democrats and Republicans, and I told them why don't you run for office, you will be a great oh no, forget, I don't have the money. And I don't think I would have the ability to collect the money. So I respect the way you do things here. But sometime I I think that you also have to just think about it whether this is a way of doing that. In our Countries, unfortunately campaigns became very expensive and at the end, it was amazing because I was in the Venezuelan Congress and we started seeing the Venezuelan Congress full of people representing economic interest. And we say well we don't have any problem that they have representation. And by the way they were elected in the parties, in the popular parties. But they have, I mean, if the parties either want to have the money or the media for campaigning they have to give those seats to these people. That's okay, but so we are discussing democracy, we have to discuss democracy. So we think that the only way to move ahead in a different project is to try to give as much participation as possible to the people, to society. We say, as much representative democracy as it is necessary but as much direct- direct or participatory democracy as it is possible. In the past people thought, be careful because if people starts participating that will bring about instability. So we have to have always limited democracies, controlled democracies. We don't think that this is valid anymore and I will give you the example of those processes of change in our countries. I will want to I would like to end up and then open for questions summarizing two, three aspects that I think are important. First the need for a new vision, and including also a new vision from us regarding the US because of course we have to first start looking at what we have done wrong and not to blame not to blame foreign governments or or players or whatever for our own problems. Of course there is influence from outside but first we have to discuss what we have done wrong. We have we need an effort to think, to reframe the debate about development, democracy, poverty alleviation, injustice, peace in the hemisphere. Because we are going to be neighbors forever. You cannot leave that part of the world, you cannot move to Europe, and we are going to stay here. We have our symmetries; we have to look at these symmetries and try to manage them. I'll give you one, that this takes me you through the second final point regarding energy crisis. The US has 33 percent of population of the Americas. And the US consumes 71 percent of the energy in the Americas, 65 percent of the population in the Americas, the rest; consume only 29 percent of the energy. This is an imbalance. Any new vision has to understand the needs of the people, the need so of the countries, the needs also of the US. Regarding again the energy crisis, we want to engage in a real debate about that. But of course the debate should go beyond the idea that you need energy independence in the US is good, any country should look for levels of energy independence. As you know, in the case of the US, this is a dream; unless you want to reduce your consumption. Are you ready to reduce your consumption? Pardon. Are you ready to review your civilization model? Because what happen is that if you offer other countries in the hemisphere in the world, that they will follow your model and then they will be happy and affluent and democratic and whatever. With the same level of consumption of energy and the model you have in the US we will need six additional planet of natural resources. So then we have two options. One, we are lying; you will never be like us. Well, secondly, we have to sit down and to have a global view of that. We think that we have - because energy in a way related different kind of alternative for world politics. I will go into keep ourselves fighting for access to reserves and then there will be a geopolitical problem, now you have been justifying wars for interventions because you are guaranteeing your supplies of energy. What happen with countries that they don't have access at all? And they need basic energy, not to drive as you be, but probably to have a refrigerator that's an example. So in a way, energy bring us to the to a real discussion about the development how the wealth is how is the distribution of wealth, how are the imbalances, the asymmetries in the world and the need if you want to go to a in a world of peace to work together. And third, I think in the case of Venezuela, we are the second trading partner of the US outside in the hemisphere outside Canada. We as you know we give you we are first supplier of products to the US. Today with prices that what we have again, we have said that in the US again and again and again, there is a refining problem. We have done a lot, we are doing a lot, upgrading our refineries here in this country, building new refinery capacity in Venezuela, but probably it's not enough, there is no new refining capacity being built in the US in the past 30 years. So there is also a problem you know, it's a very complex problem that we have to work together. But I think and Venezuela is supplying your product as important, probably much more important politically speaking, and for the US people than the energy and trade is baseball Venezuela now has a lot of players. That by the way is a real connection, no matter how different, how many difference we have politically, I mean when you see what we have in common including baseball that tells you how close Venezuela and the people of the US are. And so this is a context, there are changes in Venezuelan, changes in Latin America, and changes here in the US. This is a complex situation, but we want to present an opportunity of a real dialogue. And politics is complex it's a complex matter. Sometime we need time to discuss. But what we think is a great opportunity is a great opportunity to start reviewing our views and understanding that unless that we adjust our vision, we won't to see what is really happening. And I think that fortunately that we hope that this Cold War mentality, the policies of the Cold War, the personalities of the Cold War, that unfortunately after September 11 came back to prominent positions regarding the inter American affairs, will be over and there will be really an engaging dialogue that will start to accept that the models of the past does not work, they wont work anymore and we need to be with courage and trying understand and face the new realities. Thank you very much.
