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FM AMEMBASSY CARACAS
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INFO EU MEMBER STATES COLLECTIVE
WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/WHITE HOUSE NATIONAL SECURITY COUNCIL WASHINGTON DC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 02 CARACAS 000043

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HQSOUTHCOM ALSO FOR POLAD
AMEMBASSY BERLIN PASS TO AMCONSUL DUSSELDORF
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AMEMBASSY ATHENS PASS TO AMCONSUL THESSALONIKI
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AMEMBASSY BRASILIA PASS TO AMCONSUL RECIFE

E.O. 12958: DECL: 2030/01/18
TAGS: PGOV KDEM ECON EINT VE
SUBJECT: Making Socialism Easier to Swallow

CLASSIFIED BY: Robin D. Meyer, Political Counselor, DOS, POL; REASON:
1.4(B), (D)

¶1. (C) Summary: President Chavez made socialism taste better with
the December 22 opening of a "socialist arepera" serving
Venezuelan-style tortillas at a fraction of their usual price.
The "Arepera Socialista" is planned to be the first of a chain of
Venezuelan government (GBRV) restaurants run by the Ministry of
Commerce. This restaurant is the GBRV's latest effort at setting
up alternatives to the private market, branding national symbols,
like the "arepa," as part of the Bolivarian Revolution, and
providing tangible benefits to its electoral base before the
September legislative elections. End Summary.



Socialism's Tangible - and Tasty -- Benefits



¶2. (U) President Chavez opened the "Arepera Socialista" with much
fanfare on December 22, advertising its low price and high quality
as symbolic of the benefits of his socialist revolution. (Note:
"Arepas" are a Venezualan-style thick cornmeal tortilla usually
used for a type of sandwich. End Note.) The restaurant, located
in a lower middle class neighborhood of Caracas, serves "arepas"
for about a fourth of their regular price. It is currently only
open during weekday mornings, although there are plans to extend
its hours, add coffee and fresh juice to its menu, and open two new
locations in working class neighborhoods.



¶3. (SBU) On a January 8 visit, EmbOffs witnessed a long line of
people waiting to get into the restaurant but surprisingly rapid
service. Inside, one wall was dominated by a quote in large red
lettering from Simon Bolivar: "The best system of government is
that which produces the greatest happiness." An employee managing
the line said the restaurant served 1,200 customers per day. One
man in line said he worked in the neighborhood and came every day
since the food was excellent and cheap.



Money is Secondary in Socialist Restaurants



¶4. (U) According to Minister of Commerce Eduardo Saman, people
can count on low prices at the "arepera socialista" because the
ingredients come from government-owned companies and other
products, such as boxed juices, come from government-owned
companies. Saman claimed the prices were sufficient to cover the
store's operating costs. He also announced on December 23 that a
chain of "Arepera Socialista" restaurants would be opened
throughout Venezuela as part of the Socialist Market Cooperatives
run by the Ministry of Commerce. Saman himself worked at the
restaurant on December 24; other Ministry of Commerce employees
were "volunteering" at the restaurant on the day of the Emboffs'
visit. About 30 people work at the restaurant.



¶4. (U) Besides the price, Saman highlighted another key difference
between socialist and capitalist "arepera": customers pay only
after eating, while "in fast food chains . . . they only think
about money." In the "Arepera Socialista," the cash register is in
a corner of the room and customers pay only after eating,
self-reporting how many of the "arepas" they ate.



Comment: Let Them Eat Arepas



¶5. (C) Facing high inflation, electricity and water rationing,
and failing public services, Chavez may see the "arepera
socialista" as a relatively quick and easy way to promote the

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benefits of "socialism" to his electoral base before the September
legislative elections. The challenge will be meeting demand
without raising the subsidized price or cutting quality.
CAULFIELD