May 27, 2006

Contraband trade booms at Venezuela’s Pirate City

By Magdalena Morales

CARACAS, Venezuela (Reuters) - The much-awaited film "The
Da Vinci Code" still had not opened in Venezuela when the
bootleg version went on sale in the crowded alleyways of Pirate
City, a bustling market in Venezuela's capital.

Even President Hugo Chavez admitted watching a cheap
knockoff of the Ron Howard-directed film.

"It was a low-quality copy, one of those pirated ones,"
Chavez said in a televised speech to the nation this week. "It
didn't work. It left me wanting to see it."

Small-time vendors selling pirated films and other
contraband are part of a burgeoning illegal trade in this South
American nation.

At Pirate City, a labyrinthine market in the heart of
Caracas just blocks from government offices, bootlegs of the
latest titles in video games, DVDs and CDs are sold at almost
200 stalls, helping to put Venezuela among the top 10 nations
in Latin America for selling pirated goods.

Across Latin America, intellectual property laws are weak.
U.S. businesses alone lose an estimated $3.4 billion a year due
to piracy in the region, according to the Hoover Institution at
California's Stanford University.

The International Intellectual Property Association cited
Venezuela last year for its lack of copyright protections and
estimated losses of more than $90 million to various
industries, mainly the music business, from piracy in 2004.

"As a result, the legitimate music industry in Venezuela
has almost disappeared," the organization said in a report.

In a country with more than 10 percent unemployment, Pirate
City employs thousands of people who have lost jobs in the
formal economy or who never were formally employed.

More than 40 percent of Venezuelans work outside the formal
economy. They are a pillar of Chavez's political base.


A self-proclaimed leftist revolutionary seeking re-election
in December, Chavez has used oil revenues to finance social
programs and forced international companies to pay more taxes.

"I'm a Chavista until death. We're all Chavistas," said
Doris Espinoza, 27, who can earn $465 a day selling pirated
DVDs to support her two children and her husband's eight.

Jose de La Rosa employs six workers at his two kiosks. He
says police officers, lawyers and judges shop there.

He admits the vendors' support for Chavez might help keep
them beyond the reach of the law. "It's possible that's why
they haven't touched these businesses," he said.

Legitimate business people say the pirate trade hurts their
enterprises. The manager at one Video Color Yamin store, part
of a local chain, said business is dropping steadily.

Films sell for about $23 at his store, compared with less
than a dollar at Pirate City.

Authorities say they want to fight piracy without stranding
thousands of street vendors who need the income.

"We propose to solve this serious problem, but without
running roughshod over people," said tax chief Jose Vielma.

"We must convince vendors that they can keep working, but
by selling legal products, thus earning money and protecting
the authors and our national artists," he said.