Transfer law jeopardizes local governments in Venezuela

Upon the release in the Official Gazette of the Law on Community Management of Powers, Services and Other Rights, Venezuelan President Hugo Chávez speeds up the transition to a system where non-profit communal enterprises, administered in a collective manner by individuals, will take on funds and a long list of functions performed thus far by the national government, state governments and mayoralties.

Within 90 days and afterwards, "at the beginning of each year, the bodies of the national public power, states and municipalities shall submit to the Secretary's Office of the Government Federal Council an annual plan on transfer of management of services, activities, goods and resources."

The transfer list is a long one: maintenance of primary care services, schools, and sports and cultural facilities.

Add to this the manufacturing of materials and housing, community sports policies, management of social programs and industrial areas, collection of solid waste, community works, administration and provision of public services, supply of financial services, and food production and distribution, among others.

The new man

These functions will be handed over, primarily, to communal enterprises, where their members "have no rights or interest in the owner's equity" and apportionment of profits, mentioned in the law as "economic surplus," if any, "shall be made through social reinvestment to the benefit of the collectivity."

Further, in these companies, decision-making and election of the board of directors shall apply through "people's meetings, referendums and alternative ways of people's participation."

Communal enterprises may not enter into a partnership with "business associations or trading companies." In the event of winding-up, no goods may remain in the hands of a specific individual, but they shall be of social ownership.

vsalmeron@eluniversal.com

Translated by Conchita Delgado