Calderon and Chavez Trade Barbs over Economics

Two of Latin America's most influential leaders — Mexico's Felipe Calderon and Venezuela's Hugo Chavez — had a public spat this week. Calderon's presidency faces major challenges, including price increases for basic foods. Chavez, however, is steadily consolidating power in pursuit of 21st Century socialism.

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DEBBIE ELLIOTT, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Debbie Elliott.

Two of Latin America's most visible leaders publicly feuded this past week. Venezuela's President Hugo Chavez called Felipe Calderon the little gentleman after the Mexican president criticized Chavez's economic policies. The spat goes to the core of the leaders' very different ideologies.

Chavez is moving ahead with his plan to implement what he calls 21st century socialism and won new power from his Congress to rule by decree. Calderon is a free market fan.

For more, I spoke with NPR's Juan Forero, who's been in Caracas, and NPR's Lourdes Garcia Navarro in Mexico City.

And Juan, we'll start with you. Tell us more about Chavez's new powers and his moves lately to nationalize more businesses.

JUAN FORERO: Well, the decree powers give Chavez 18 months to pass laws by decree. That means that the National Assembly does not need to vote on any of the laws. That's unusual to a lot of people because, you know, the National Assembly is completely in Chavez's hands. All 167 members are allied with the president. But the president wants to move fast and this will allow him to do it. It appears that most of the 40 to 60 laws that are expected to be passed will be in the economic sphere.

The government talks in very general terms about what they want to do. They say that they want to transform the state to make it more efficient, to permit public participation in decision making, and they want to invest more in science and technology. But perhaps what's garnering the most headlines is the relationship with foreign firms, and they want to create a framework to govern nationalizations. The nationalizations have aroused great interest because Chavez says the government will take control of telecommunications and utilities in the next few weeks, and there's a lot of American investment in those companies.

ELLIOTT: Now, how far is Chavez going to go with this new power and where's the opposition?

FORERO: Chavez remains very popular because he's funneled billions in oil revenues straight to the people and the opposition has been weakened to the point where they have little influence. They launched a coup in 2002 and then a strike later that year that devastated the economy. And Chavez used those errors to his advantage. He painted the opposition as pawns of the evil Bush administration, and that has worked. And the opposition continued to stumble. In 2005, they boycotted congressional elections. That's why everyone in the National Assembly is an ally of the Chavez administration.

ELLIOTT: Let's get Lourdes Garcia-Navarro in on the conversation now. As Chavez has been trying to position himself as the heir to Fidel Castro, in Mexico you've got President Felipe Calderon, a conservative free market champion, and recently, there were words between the two leaders. Lourdes, can you tell us a little more about that flap?

LOURDES GARCIA-NAVARRO: Yeah. Things were bound to head in this direction. You couldn't have two men who are more ideologically different. Still, Calderon began his term, it has to be said, by saying that he wanted rapprochement with Caracas after years of frosty relations. You have to remember, former President Vicente Fox and Chavez at one point withdrew their respective ambassadors from each other's countries. So this isn't a new tension. But on Calderon's recent trip to Europe to drum up investment for Mexico, he said that Mexico is a safer place to invest than Venezuela, for example, because Mexico is not going to nationalize industries.

And while that did set off a firestorm in Caracas - Chavez said that Mexican policies are what are sending people north and why Mexico is so poor, etc. - it will be interesting to see how this proceeds. The United States would certainly like to see more robust repudiation of Chavez coming from within Latin America and I think it remains to be seen whether Calderon will do the U.S.'s bidding on this.

ELLIOTT: Now, Calderon himself has been making a lot of news. He was just inaugurated in December after a bitter election battle. What he has been doing? How has he been trying to assert his authority?

GARCIA-NAVARRO: Well, Calderon immediately tried to assert his authority by tackling the drug gangs. This is a really big issue here. He's taking a page out of Columbia's book by using extraditions to the U.S. He's using the military to move into areas with the local and state authorities have been either ineffective, cowed or corrupt. This is a man, as you said, who came to power after a bitterly contested election and a very slim margin of victory. So fighting drug crime, which soared under his predecessor, is something that he's doing to try and stamp his authority immediately.

ELLIOTT: There is a big section of the Mexican electorate that is still unhappy with Calderon. And they were out protesting again this week, protesting the high price of corn and their food staple, tortillas. How serious a challenge is this to President Calderon?

GARCIA-NAVARRO: It's quite a serious challenge. You've got to understand that Mexicans eat up to two pounds of tortillas a day. When workers take a break at lunch they go to the tortillaria and buy half a kilo or a pound for their mid-day meal. It's a staple. So when prices go up, it really affects people. Fifty percent of Mexicans live on less than $4 a day. Spending 75 cents for two pounds of tortillas, which is where prices stand right now, is a lot of money.

I went to talk to people waiting in line at a tortilla shop yesterday and they were all blaming the government. It's the easiest target. And the left, which lost the presidential elections, has been using this issue to great advantage, saying it shows Calderon's callousness and indifference to the working classes. The union staged a march in Mexico City this week. They say this wouldn't have happened if Mexico wasn't importing about a quarter of its corn from the United States. They blame the North America Free Trade Agreement, or NAFTA, for destroying the Mexican countryside. Under NAFTA, it has to be said, Mexico shed about thirty percent of its farm jobs. So it's highlighted a lot of issues here that people feel very strongly about, and it is really causing some problems with Calderon and his opposition is flexing its muscles over this issue.

ELLIOTT: NPR's Lourdes Garcia Navarro and Juan Forero. Thank you both.

FORERO: Thanks.

GARCIA-NAVARRO: You're welcome.

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