Saturday, April 30, 2005

Castro, Chavez and the Caribbean hubris of PDVSA

These days with the visit of Secretary Rice through 4 LatAm countries, Chavez and Venezuela have been quite in the news. There is no need to report except to mention that Chavez was in all the agendas of each meeting.

While this was taking place, Chavez was in Cuba to press on his anti FTAA agenda by promoting his ALBA nonsense whose only members so far are Cuba and Venezuela, more than likely the most inefficient economies in the Americas (1). That no one has paid more than lip service to the ALBA speaks volumes. FTAA might be pure incarnate evil but ALBA is pure incarnate stupidity.

Indeed, when one sees the steps taken to promote ALBA one wonders what is going in the mind of these people. Let's look at Chavez visit in Cuba this week to see plenty of examples of delirium (tremens?) I am not talking about the insensate flattery of senile Castro who one never knows if he is making fun of his guest or if he is really complimenting him. I am talking of the decision to open a PDVSA trading office and a commercial agency of Venezuela once too often bankrupted Banco Industrial (2).

Tal Cual has quite a coverage of the economic interchanges between Venezuela and Cuba. (in Spanish here). But other coverage can be seen all around, even in US blogs demonstrating that the wanna-be oil blackmailer is drawing more and more attention (I am sure he is quite happy about it). This goes all the way up to the Wall Street Journal wondering almost aloud whether Chavez is buying Cuba or whether he is installing his little off shore fiscal paradise so he can cause mischief more at ease.

But for today's concern I will stick to the Tal Cual report where we read two pearls by oil Minister Ramirez who must think that we are gullible sheep. The first one is the admission that since the recall election shipping of oil to Cuba has doubled whereas as far as this writer knows oil consumption in the island has not doubled. Indeed now that El Supremo has the country by the balls he has no qualms in giving away oil as if it were his. Long gone are the days when public opinion was against the Cuban deals and some appearances had to be kept. Now who cares if Venezuelans like Castro or not!

The second is even better. My translation:

It is logical to serve from here [Cuba] all of the Caribbean Islands, which are small and dispersed, and serving them from Venezuela does not make much sense.

I kid you not.

So, in the ever present obligation to inform and enlighten, this blogger has drawn specially for Minister Ramirez the following chart, assuming that the oil ministry does not have access to a good Atlas.



In this chart, the blue lines show how the oil must be carried to Matanzas and the unfinished (and totally outdated) Cienfuegos Soviet white elephant of a refinery. The fuchsia lines are the return of the supposedly refined product, surely at the very high technological standard of world famous Cuban industrial quality. And the green lines are the distribution DIRECTLY from Venezuelan refineries. I think that anyone with a minimum of critical mind will realize that the statement quoted above is total Hog Wash, Cuba makes NO geographical sense (3). So what is the truth Minister Ramirez? Do you think we are cretins?

The answer is very simple. It is not enough for PDVSA to hide from the US S.E.C. It is not enough for PDVSA to bar the entrance to its building to anyone who is not duly accounted in the revolutionary lists. No, Caracas is just not safe enough to hide all the plundering made by the revolution of the oil money that indeed belongs to ALL Venezuelans and not only those who embrace Chavez. Thus the need to set up offices in Havana where the hand of justice cannot reach and all sorts of shady deals can be made under the benevolent eye of Castro, the biggest capo de mafia of them all.

And dear Minister, if you think that I am trying to sabotage you, to slander you, I will suggest that in addition to the links already quoted you read the following other links: 1, 2, 3, 4, 5, and I could add a few more if I were going to look into all the reports form CITGO misdeeds and what not. We are onto you, Minister. And, dear Minister Ramirez, if I may ask, what the hell do you do in your office everyday?


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1) FTAA is a free trade deal promoted by the US for all of the American continent. It is justly resisted as the economies of LatAm are weak and need time to adjust so as to be able to compete with the US economy in fair grounds. But if there is significant resistance there also a significant will from both sides to maintain conversations. Some countries are already quite involved in an FTAA deal: Colombia, Chile, Central America, with Ecuador and Peru very interested. Brazil has its own agenda as it would be expected for the biggest economy and market in South America. Lula is more of a hard bargainer than an obstacle as a big economy like Brazil can only benefit from access to a big market as the US. Whatever anti FTAA folks say, the bucks are in the US.

ALBA, Bolivarian Alternative Trade, is simply an ersatz deal which claims to create a free trade agreement where the US will not participate. And where state initiatives to "improve" the fate of the people would be the principal motor of development. One needs just to look to the Eastern Europe economic history under the soviets and how they stampeded to join the European Union to see how such deals work. Apparently Chavez and Castro are not aware that the Berlin Wall fell, and even less why.

2) The opening of the BIV agency in Havana is another sweet deal for Castro. Apparently it will count to start with 400 million dollars to "finance" imports to Cuba from Venezuelan companies. Since Cuba is one of the foremost deadbeats of the world, and that its debt to Venezuela for oil is already lost in space, it is safe to assume the BIV: 1) will pay Venezuelan pro Chavez business willing to export to Cuba, 2) will have a hard time to collect the money from Cuba and 3) will be diligent in paying the commissions wherever these need to be paid, far from any indiscreet and inquisitive mind wondering where the monies of the state go and last but not least 4) it will add yet a bigger burden of the permanent semi bankrupt state of the BIV, constantly subsidized by the Venezuelan governments (yes, Chavez is not the first one to use the BIV as a cash cow).

3) Just to nail the point. The Dominican Republic has almost TWICE the GDP of Cuba, its per capita is 6,300 USD while Cuba is a paltry estimated 3,000 USD and the Dominican Republic has a much more central position than Cuba to "serve" the Caribbean if Venezuela does not want to do it anymore. In other words Dominicans can buy even more cars than Venezuelan (with a 5,800 USD per capita), consume way more oil derivatives than Cuba, and are closer to anyone else around and could even help Haiti by hiring Haitians to run the PDVSA business there. Is Mr. Ramirez that stupid to think we are that stupid? How far can ideological blinders go?

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