Sunday, March 16, 2003

CRIME AND PUNISHMENT
Sunday 16, March 2003

I have already referred to the corrupt and inefficient judicial system in its past use by different governments to reach some of their ends, and Chavez who brought it to a higher level. But another consequence of this is the spectacular increase of street crime. I will put first some of the numbers (complete table from 1986 to present can be obtained from a table in Tal Cual , March 12, 2003; but you need to register to access earlier editions, and it is in Spanish).

Since I cannot make a nifty table in this format I will put the description year by year. The year, Total Murders TM, Murder Index in Venezuela per 100,000 people (MI), Caracas TM and Caracas Index per 100,000

1986 (first year cited, Lusinchi administration, 3 years before El Caracazo and 6 years before the Chavez coup)
TM 1501
MI 8
Caracas TM 335
Caracas MI 13

1992 (the year of Chavez coup)
TM 3366
MI 16
Caracas TM 1541
Caracas MI 68

1998 (Chavez elected in December)
TM 4550
MI 20
Caracas TM 1436
Caracas MI 63

2002
TM 9617
MI 42
Caracas TM 2436
Caracas MI 133

How to explain these terrible numbers and what does it mean to us?

THE WHY

The punitive system is based rather on revenge than punition or rehabilitation. Jails in Venezuela are notorious in taking in small time thieves and releasing them full blown murderers. The country has been cited several times over the last 20 years on that. Jails are truly rotten places where prisoners are accumulated without any regard as to sanity and safety, with the secret hope that a few will die through internecine warfare.

The judicial system is hopelessly slow as the judges are not interested in small crime which does not pay much. Add to that governments that do not want to build reasonably decent jails and you have petty thieves that get thrown in jail for month without trial and suddenly released, of course rather damaged goods.

Public outcry comes mainly from lower classes who see their children going in for minor delinquency, sins of youth, and coming back hardened criminals. Chavez was in part elected with the promise to treat prisoners a little bit better. Nothing has been done.

This might explain the doubling murder rate between 1986 and 1998 in Venezuela. But how to explain that under Chavez, the president of the poor, murder rate doubled in just four years in Venezuela, and reached a level TEN times higher in Caracas since 1986?

For one thing his refusal to let the Metropolitan Police have its way. In the past few months Chavez cronies have been more busy trying to take away the Caracas Metropolitan Police away from the Mayor rather than fight crime. They have claimed that by sending soldiers to protect the city people would be safer. They have been proven wrong, and it was to be expected as soldiers training do not include crime control which can only work if done integrated with the community. Show me an army that is able to listen to community concerns…

And this is of course compounded by a continuous economical deterioration which hits the lower classes harder than the higher classes, contributing mightily to crime increase.

What is worse is that this crime wave hits the poor the most since the bulk of murders come from street gangs fighting for the control of slum alleys. What else is new?

WHAT IT REALLY MEANS

The most affected are the lower classes, as mentioned above. Higher classes have limited their going out at night, and remain mostly within the confines of a few well delimited areas under the protection of the local police. However, even there the rise in robberies and other crimes is quite scary too. In San Felipe where the local governor has managed to maintain control of his state police, crime has not gone up as much. But industrial states such as Carabobo and Zulia have seen a spectacular increase in crime, linked to the economic deterioration.

What is much more worrisome is that a sense of lawlessness is slowly seeping into the people more likely to resort to crime. The laxity if the system is well known and the continuous examples of delinquents released is just becoming an incentive.

WHAT TO DO?

If you are middle class. Stay home. Leave only for work or necessary shopping. Drive with your windows up, doors locked, AC on. Only go out at night to visit friends, valet parking safe places. Get back home by midnight or come back next morning. Carry always some cash in your wallet to make the robber happy, and do not resist so as not to get shot.

If you are poor. May the force be with you.

Of all of Chavez failures this one seems the worse, to his own electorate. It is actually so bad that one sometimes wonders if it is not done on purpose so as to scare people and make them stay quiet at home. Surely, Chavez and his gang would not be that evil, wouldn’t they?
An editorial from this week El Universal

Impending Humanitarian Crisis
Sunday 16, March 2003

[This translation appeared this week end. I do not need to add any comment]

Venezuela faces an impending cataclysm -whose epicenter is politics- that may result in devastating consequences for both economy and society and that is threatening to bring about the conditions for a humanitarian crisis. Even though the government skillfully tries to blame the crisis on opposition groups, people know that after four years of misgovernment and the squandering of $110 billion, the resulting economic disaster itself has justified civil protests. In 1998-2002, more than 4,000 factories and 12,000 businesses closed their doors, leaving almost one million Venezuelans unemployed and two million and a half people impoverished. Only in 2002, the Venezuelan economy dropped by 9 percent, inflation rate amounted to 32 percent and the Venezuelan bolivar fell to 1,402 bolivars per U.S. dollar from 780 bolivars per U.S. dollar.

As if that were not enough, economists estimate that the economic package implemented by the government may cause the economy to shrink by 15-25 percent this year, depending on the pace of the Venezuelan state-run oil conglomerate Petróleos de Venezuela's (Pdvsa) dismantling. Besides, according to several economists, unemployment rate may hit 30 percent. This would be a very damaging unemployment rate in a country where 85 percent of jobs are created by the private sector, precisely the sector that the government is determined to crush by closing down the foreign exchange market during more than 40 days now. In addition, the inflation rate hit a seven-year record high in February, and is expected to exceed 50 percent this year.

This scenario is turning explosive, as no assistance program to mitigate the threatening social disaster for the poorest sectors and -why not- for the middle working and professional class has been designed. Anybody can see that Venezuela is sliding into a humanitarian crisis besieging the poorest people in every aspect, including environment and health. The fact that Venezuela finds itself in the middle of this social anomie precisely when the country faces another type of anomie -the institutional anomie, where the lack of transparency has reached paroxysm- should not surprise anyone. Amartya Sena, a Nobel laureate in Economics, proved empirically in his book Development as Freedom that all famines during the 20th century occurred amid regimes with insufficient freedom and controls, with weak mass media, inclined to abuse and the lack of accountability.

Monday, March 10, 2003

ECONOMIC PERFORMANCE
Monday 10, March 2003

Today I will be brief. I am going to present the numbers emitted by the Venezuelan Central Bank as reported by El Universal on March 8. Semi independent Central Banks have a way to make up numbers to favor one side. El Universal is not known for favoring Chavez economic policies. I think that this makes for a good balance.
After each year you can find the percent Variation in Gross National Product (%GNP) and the infaltion for the year (%I).

1998...%GNP + 0.2...%I 29.0
1999...%GNP - 6.1....%I 20.0
2000...%GNP + 3.2....%I 13.4
2001...%GNP + 2.8....%I 12.3
2002...%GNP - 8.9....%I 31.2

1998: the rise of Chavez in the polls coincides with a drop in the price of oil. This triggers a pre election recession that the now lame duck government of Caldera cannot fight efficiently.

1999: Chavez call for a constituent assembly with a further decline of the price of Venezuelan oil create what was considered as one of the worse economical crisis so far.

2000: Chavez marshalling of the OPEC since he came to office pays off. Oil prices rise. The approval of the constitution leaves many unknowns. Revamping of the judicial system. If the capital flight slows down some, none of the economical policies seem able to reverse the tie.

2001: Chavez picks up a fight with trade unions. His candidates lose many of the union elections. This does not contribute at all in quieting the atmosphere. Chavez manages to put many of his supporters in positions were independents would be better suited (High Court, some judicial appointees). Capital flight goes up again, to levels never seen. The year ends up with the first business/union strike ever seen, on December 10.

2002: The year starts with Chavez locking horn with business and refusing any revision to some of the laws. In February, veiled threats to the state oil company PDVSA increase tensions. Also in February Chavez floats the currency which loses 30% in a few days. When the PDVSA threats become reality in March, the result is another general strike and the 2 days overthrow of Chavez April 11. Since Chavez return no serious effort is made to quiet the tensions. This allows a reinvigorated opposition to launch the December 2 general strike.

2003: the country starts the year with over a 100% increase in the exchange rate against the dollar since February 2002. The inability to reach the oil returns of November brings the government to Currency Exchange Control on January 22. A further 15% drop in the GNP is predicted for this year if no political accord is reached soon. Accumulated inflation for the first two months pass the 7% mark for an expeced 50% for the year.

The question is how come Chavez administration manages to survive such a terrible management of the economical factors. Inflation and drop in GNP affect the poorer classes the most. Any normal government in a normal country would have resigned, or been thrown out.

Sunday, March 09, 2003

MARCH SCORE CARD
Sunday 9, March 2003

It has been more than 10 days since I posted last. I suppose that I was a little bit burnt out and really needed to take a break for a few days, to try to regain a sense of perspective and not lose too much objectivity. Objectivity, a commodity in very short supply these days.

Newspapers are abuzz with continuous violations of the rule of law by Chavez; or they think that Chavez is recovering the upper hand; or civil war is just around the corner. What is really going on is that nobody, on either side, really knows what is going on. Yes, goals are clear now, but it does not seem that either side as a clear idea on how to get there, nor are they able to evaluate their real strengths and weaknesses. To re-start the thread, I will give today a brief evaluation, score card fashion, of where we are now.

Chavez wins some.

The end of the strike was for Chavez a Pyrrhic victory. That is, the strike did not manage to dislodge him and thus he can claim a victory of sorts. Yet, he inherits an economical situation that borders chaos. But good soldier that he is, he is not wasting any time trying to capitalize on his perceived victory. The opposition being demoralized and bankrupt seems an easier target these days. So, with several compliant judges, sectors of the police and army that will do any of his bidding, Chavez has taken up a vengeful tone (see New York Times editorial of February). He has managed to jail briefly the leader of the business union, the less charismatic of the leaders of the opposition, and he has on the run a few other ones. And threats rain right and left.

Chavez has been able to simplify his message, and now he does not bother to convince the other side to regain some of his earlier support. Now is the time of “you are with me or you will die when I am through with the opposition”. A little bit too earlier to see if this will bring any success, but there are signs that a sector of the population is afraid enough to pretend to buckle under. After all, people need to eat and probably see no arm in faking support for a while. Venezuelan culture likes winners and will follow them no matter what. Albeit ditching them at the first sign of weakness. It is thus anyone’s guess if Chavez will be able to bring his numbers back up to the mid 30% in polls, the only way he would have a chance at surviving an eventual recall election. The real victory here for Chavez is that he has coalesced his troops better. No more dissent is heard, wishy-washy politicos have been chased, and the military seems at least safe. This might be due to fear perhaps, but at least it gives him a freer hand to attack the opposition.

Chavez loses some.

I will put in this field what might appear the big Chavez victory: total control of the state oil company, PDVSA. As I am writing it seems that the government has reached the incredible figure of more than 16 thousand fired. Out of 33 thousand, we are talking 50% of the personnel. There is no way that a company can take such a blow and run smoothly. Without independent audit there is no way to determine if the numbers offered by the government are true. From what can be gathered on the business pages, it seems that PDVSA is still far from generating adequate revenue. And “rumors” are growing stronger and stronger that people put in place by Chavez are generally incompetent and are operating what might be the biggest plunder of a state company in history. In other words, Chavez is about to turn a decently run state company into a wasteful patronage machine. Maybe that is not was he intending, but PDVSA is heading that way.

Other “rumors” with a clear likelihood are that the “new patriotic PDVSA” is over pumping oil in the easy fields risking severe damage to these wells. An oil well must be pumped at a certain rate to allow oil to fill back the emptied space. Failure to respect this can bring underground collapse (sinkholes) that can clog the well and render it useless. This is likely happening since some extensive oil fields are still not operating and yet exports have got back above the 60% pre-strike according even to striking employees. Chavez is killing the golden egg geese. When it is dead he will have no money to run his show.

Other losses are of course the opposition wins

The opposition wins some

The real victory of the opposition is to have uncovered Chavez. In Venezuela and outside it is clear that Chavez is a wanna-be dictator. The mystery is really how come he has not been able to finish up the job. There is not lack of trying, but these days becoming a dictator seems more difficult than in the 1960ies… These pesky media are in the way, for one. There are all sorts of international agreements that cannot just be ignored without consequences. The only allies left for Chavez are Fidel Castro, and some in the Arab world, allies that Chavez does not dare to call to the rescue this days. After all Chavez is the only democratically elected head of state to have visited Saddam Hussein since the Gulf War. This is not a good thing to have on your resume these days.

In South America, even the new leftist governments of Brazil and Ecuador are lukewarm to Chavez. Actually Lula Da Silva seems even to have changed his initial opinion toward Chavez. The example of the economic collapse of Venezuela is not a good way to gather friends. Or to reassure your opposition if you preside a left wing government.

It is difficult to overrate this victory. Newspapers in general were neutral or pro Chavez early in December. Now, most are at least mildly critical of Chavez when they are not downright calling him a quasi tyrant. Governments (US, Spain, Colombia) that in April got scalded by congratulating themselves a little too fast over Chavez ouster had become quite diffident. Now they are again taking position. This is not going to send the marines to Venezuela, but it does greatly complicate Chavez take over of the country. After all, the opposition only request is that fair elections take place. Now there are plenty of people willing to come and observe any electoral process that might take place in Venezuela this year. In order to make sure it is fair and that it will remove Chavez without much pain.

The opposition can claim another victory. The show of civism during these terrible two months of strike has become the stuff of what legends are made of. There is a sense that even if we did not kick out Chavez, we have at least shown our temple and moral fiber. If Chavez might be able to regain some ground, there is now a core opposition that will make his life difficult. That opposition barely existed a year ago. After El Firmazo, any election in the next few months is sure to be a defeat for Chavez. Only the extension gap in the vote count is in question.

The trick of course is to reach an election.

The opposition loses some

The strike was led by business who was willing to foot the bill. The bill is huge and the country is teetering on the verge of financial chaos. The economic collapse hurts more the opposition than Chavez who at least for the time being gets some money from oil and has no problem to pocket it for its own interests. He fails notably to pay the states the money that is their due creating significant hardship in the provinces. Of course this leaves the opposition with less economic muscle to oppose Chavez effectively.

Something more worrying is the rather dispirited state of the people. After two months of marches, hard ships, missed holidays, it is difficult to accept that no clear cut result did come from it. The realization that the country is in the hands of a rogue that has no qualms bankrupting it for his selfish interests is hard to accept. How can you deal with that? What sacrifices is one to be going to be called upon to kick the rascal out? The task of the Coordinadora Democratica (CD) is difficult. It needs to keep people motivated. It needs to bring them regularly to the streets to demonstrate that Chavez is not back on the saddle the way he would like people to think so. Most importantly, the CD must find a message. Obviously, it is not enough to demonstrate that your opponent is bad. You need to establish that you are better. A first step towards this has been taken.

Conclusion

The chess game continues.

The CD has started a process of reorganization and re-evaluation of strategies, creation of a message to nail down support. The goal now is to reach August and go for the recall election vote. The signatures are in. The observers are ready, even to help finance the election. 5 full months might seem long, but it is the price to pay if we want to avoid a civil war. The opposition hold the high ground, the good will from the exterior, and paid off the April mistakes. The opposition also has a group of people that is not afraid of violence and is only too willing to fight Chavez with violence. It needs to muzzle them if it is not to meet again the post April 2002 fate.

Chavez knows better. In spite of all the attacks and propaganda eventually the chickens are going to come back to roost. He will not be able to put all the blame of the economical collapse on the opposition. This only gives him some time while he finds a legal strategy to block the recall election. One bet is to create an atmosphere of violence that will make it impossible to hold elections. He knows that if he is going to have to face an election he needs more that 5 months to recover and organize. He has for him his lack of scruples, a large group of sycophants willing to go along, and a sizable chunk of the people that still believes in him.


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