Wednesday, January 31, 2007

Chavez advances

Some tidbits on the run.

Chavez is getting today his official "enabling law", which has even been enlarged in scope from the preliminary proposal. As of today no man in Venezuelan history will have had as much power, as much discretionary power that is, with the possible exception of Juan Vicente Gomez. now Chavez, for 18 months, will be able to emit decrees that will be laws and can only be overturned by a congressional vote, Something totally unrealistic since the National Assembly has been unbelievably bending over to court him. Then again they were all but appointed by him.

Meanwhile in Ecuador his sorcerer's apprentice sent his newly formed storm troopers to harass the Congress and force it to call for a constituent assembly. It is not useless to remember that Correa got LESS than 30% of the popular vote in the first round of last year vote, a round during which the present Congress was ALSO elected. So right now, for Correa to pretend that the 60% who voted for him on the second round have had a change of mind and the new Congress is not legitimate is rather disingenuous an definitely anti democratic. But that is OK, look at the picture published in EL Tiempo and on the right corner you will see a protester wearing a red shirt with Chavez picture on it. Needless to speculate as to whom is advising/financing this protest.

Meanwhile the US Congress, out of touch with reality as usual, be it GOP or DEM controlled, is announcing through Sander Levin that the free trade treaty with Colombia and Peru must be renegotiated in large sections. Bravo! Miraflores Palace must be cheering in front of such a lousy initiative that only will promote further anti US feeling in countries that are genuinely trying to play the free trade card. Sam Levin has given better arguments to trash the US than the Negroponte declarations of yesterday. Negroponte is certainly right in pointing out that Chavez is a threat to democracy, but Levin intitiatve is equally a threat for the fragile democracies of Colombia and Peru.

It is to be a good week for Chavez when even the Empire works with him.

-The end-

Tuesday, January 30, 2007

Viva Bogota!

The last time I was in Bogota was 30 years ago. My souvenir is of a gloomy city, cold and wet. A city where people did not seem particularly happy and where we were assigned a "special" taxi to ferry us around for security reasons.

This is a totally different city. This week end, for starters, the weather was beautiful, clear skies, cool. Bogota, under a few enlightened mayors and presidents that let them be, has become one of the nicest cities to live in Latin America. And still, with up to 9 million people according to whomever you talk to.

Granted, I am here for work so I only had Sunday to cruise around some. And tired from my trip I limited myself to the Quinta De Bolivar, the country residence where Bolivar spent his time when in Bogota during his grand dream of Gran Colombia. One thing must be said for Colombians, they seem to keep things Bolivarian more authentic than in Venezuela. The current Caracas house is probably a grandiose reconstruction and re-imagination of what the Bolivar house must have really been. In Bogota you can still imagine Bolivar coming back there, in spite of the throngs of people visiting.

I also loved the posters which narrate the Bolivar life. This is no bolibanana hogwash coming from Miraflores palace. See, in Colombia they say that the Gran Colombia floundered because Bolivar had lost his political touch and wanted to create a life long presidency. For all the democratic safeguards he tried to place to convince people, neither Santander nor Paez bought it. Like Chavez underlings, they had ambitions of their own and a lifelong Bolivar presidency did cross their path. Maybe Chavez in his grandiloquence to recreate some Inca cosmogony might have this in mind. After all, if he fails, if he is killed, he thinks he would rise to the pantheon of heroes as a new martyr, his face replacing the face of Che on T-shirts. But I bet that history will not be very nice with Chavez, that he will come across as the fascist he is. It seems to me that Uribe is the real builder, not Chavez, because Colombia is being built: you can breathe it in the air!

After the Quinta I did went all the way walking to the Plaza de Bolivar. In true wonderment. Imagine that, the city has built an "ecological road" which is a walkers street, clean, well kept, well swept. There are even some small flea markets who look like classy affairs when you compare them to Sabana Grande buhoneros who reek of urine smell when you must walk around there.

The Plaza de Bolivar is now more handsome than before. All for pedestrians, with children aplenty chasing flights of pigeons. Not a particularly successful architectural arrangement, it still has two very handsome, even striking, Church fronts that are very much worth seeing. The Plaza Bolivar in Caracas can still be visited once you have run the gauntlet of buhoneros, traffic, garbage, foul smell. But if you reach it you will find its pleasant tropical feel to Bogota austerity. However there is a big difference: the Plaza de Bolivar is for the people to enjoy, the Plaza Bolivar has every corner busy with some cheap political/propaganda stall. The Plaza Bolivar know belongs only to chavistas.

But the big surprise was "la 93". This area, roughly comparable to Chacao municipality, is infinitely better. And Chacao is the best Venezuela has to offer. Around the square (where children play and lovers litter the grass) there are nice cafes and terraces. People walk all around the neighborhood even as late as 10 PM (Chacao is limited walking around restaurants, for people seeking their cars to go home). But it gets better: walking in the neighborhood, not many high walled houses to be seen. In Bogota in fact many apartments on the first floor have no iron bars, a common feature in Venezuelan apartment buildings where iron bars go at least as high as the third floor, even if there is guard on the grounds.

IT is not that Bogota feels safe, but the truth is that it feels much safer than Caracas. Cops on foot are often seen and they ask people to pick up the garbage they drop (I saw it happen!). In Caracas, when you see a cop, he is either escorting someone on his motorbike, or directing traffic at some intersection. For the rest you are on your own.

Talking to Colombians is also very interesting. Taxi cabs will tell you where to find good bookstores, something that would not occur to me asking in Caracas. None of them seems to be a particular fan of Chavez. Talking to the business folks I even met some guy who dislikes Uribe but still voted for him because it was plain for all to see that quality of life was improving for all in Colombia. I have yet to meet the first Venezuelan who dislikes Chavez but still voted for him for his achievements. And I mean it! Overall I get the impression that most people in Colombia are not buying what Chavez is offering. I suspect the embassy diligently reports this which would explain why Chavez is not spending too much time on Colombia.

Anyway, to finish this post, I am amazed at the difference between Bogota and Caracas. Oh, there is certainly decay here in there in Bogota, but Caracas seems to be crumbling almost everywhere. I understand that Bogota has not the space problems of Caracas, but, is this an excuse for the garbage piling high and deep everywhere in Caracas? Why is Caracas now the crime capital of LatAm (and soon the world?) while Bogota manages to have again aimless tourists stream around once forbidden areas for them?

It is poignant, it even hurts me to see that Bogota (and Colombia) seem to be pulling themselves up in spite of all the real problems they are facing while Venezuela keeps sinking deeper everyday. Caracas has become absolutely unlivable, but Bogota is becoming again gentile, a least for some. Colombia seems to have a future, I have lost mine.

PS: (added later) The financial debate here is how to stop the reevaluation of the Colombian Peso. In Venezuela the government seems not to care that the Bolivar has fallen so low that now we need 2 Bolivares for one Colombian Peso. Times have changed.

-The end-

Monday, January 29, 2007

There is no escaping Chavez!

In this South American capital where your intrepid blogger is working, the news from Venezuela are never too far behind. In fact, my efforts at escaping the drudgery of Chavez hysterical are not rewarded as my hotel radio this morning belched the latest. It seems that foreign media now have discovered that Venezuela needs to be covered only on Sundays as the rest of the week will develop according to whatever announcement, or inanity, Chavez made during his Alo Presidente. So this morning I was shaken from a nice slow wake up at 6 AM by Chavez insulting Mexico's Calderon.

See, about a couple of weeks ago, Calderon said that all investors that did not like the nationalization tunes of Venezuela would be welcome in Mexico. Well, imagine that, Chavez is not pleased that Calderon is "bullying" investors and other countries, and went as far as saying that Calderon was following the path of Fox, "cachorro del imperio" (the Empire's puppy dog). I think that Chavez in fact was miffed because, well, you know, Calderon simply stated the obvious: investors are going to stampede out of Venezuela and he wants his share (like other more discreet but who certainly will seek to get some of the money that has stopped, or will stop flowing to Ecuador, Bolivia, Venezuela, Nicaragua and even Argentina up to a point.

Once when breakfast was over and I could turn up my notebook I sought a link, but did not find it. On the other hand I found some other gems.

The Miami Herald has an excellent summary of the evolution of the media in Venezuela, something that the well informed readers of this blog have known for a long time. The two first paragraphs are worth quoting (my emphasis):

On a typical night on Venezolana de Televisión, the government's principal TV channel, viewers can catch interviews of a Cabinet minister and a pro-government community leader as well as a late-night talkshow host taking rhetorical jabs at the opposition. In between, there's a constant barrage of pro-government ads, one of which proclaims VTV is ``the channel of all Venezuelans.''

For many Venezuelans, VTV, as it's known, is the preferred alternative to private channels they consider poisoned by political and business interests whose sole aim is to topple President Hugo Chávez. For others, VTV is propaganda, more befitting of the old Soviet Union than modern Latin America. For all, VTV may be the future.

The next gem is that apparently Chavez had to spend part of his Sunday show undoing his words from the previous Sunday show. Now, apparently we are told that the government is not after folks secondary homes and Humvee and yachts. Apparently someone must have told Chavez that the big Humvee that threaten us in Caracas narrow streets, or biggest and newest yachts docking the yacht clubs piers are owned by supporters of the regime. The opposition rich, you know, have long stopped renewing their fleet, preferring to stash money away, just in case, probably in Mexico for some.

El Universal reports some interesting gossip. Apparently Lula has warned Chavez not too weaken democratic institutions (seriously Lula, point to me a democratic institution left in Venezuela; it is kind of late, you know). And Kirchner would have told Chavez that nationalizations were "been there, done that, hated it" thing that he would be well advised to forget about.

-The end-

Sunday, January 28, 2007

Venezuela's MiniMe Empire

I do not know whether the Washington Post reads this blog or not, but today's editorial was pretty much described in this blog a few days ago (here and here). Nevertheless the editorial is so good as to Chavez trying to get his own little empire that it deserves full reposting below. Enjoy.

Venezuela's Satellites
A year of elections has left democracy and free markets flourishing in most of Latin America. Pity the exceptions.

Saturday, January 27, 2007, The Washington Post

A REMARKABLE year of democracy in Latin America has left the region generally stronger. Presidential elections were held in 11 countries in the past 13 months, and political moderates won seven of them, including those in the four largest countries: Brazil, Mexico, Colombia and Peru. Throughout most of the hemisphere, the elections reinforced a consensus that continued growth must depend on free markets and free trade but that governments should concentrate on narrowing the large gap between rich and poor.

The new year nevertheless has begun with attention focused on a handful of countries where democracy is dead, dying or in danger. Venezuelan President Hugo Chavez began his term this month with a flurry of authoritarianism, promising to cancel the license of the largest independent television station and seeking authority to rule by decree. He then rushed to attend the inaugurations of Nicaragua's Daniel Ortega and Ecuador's Rafael Correa, whom he hopes to convert into satellite leaders in a Venezuelan-led "socialist" bloc. Bolivia's Evo Morales and an ailing Fidel Castro are already in Mr. Chavez's orbit; thanks to Venezuela's petrodollars, Cuba's totalitarian system may survive Mr. Castro's demise.

Mr. Chavez's best chance may lie with Mr. Correa, who distanced himself from the Venezuelan and his policies to win the election, then swung back to his side on inauguration day. Mr. Correa denounced globalization and called the United States an "empire." More ominously, he adopted Mr. Chavez's political strategy, calling for a constituent assembly to bypass Congress and rewrite the constitution -- a step Mr. Chavez used to begin dismantling Venezuela's democracy seven years ago.

Mr. Morales's attempt to use the same tactics in Bolivia is foundering, but it is also pushing the country closer to another crisis. The Bolivian constituent assembly is deadlocked over voting rules; meanwhile, opposition governors in the relatively prosperous eastern lowlands are mobilizing masses against the president and his Venezuelan tutors. If he presses forward, Mr. Correa may encounter similar resistance.

Interestingly, Mr. Ortega is moving with considerably more caution, though he, too, has been showered with promises of Venezuelan aid and graced with an inaugural visit by Iranian President Mahmoud Ahmadinejad. Elected with just 38 percent of the vote, the former Marxist dictator has avoided anti-American rhetoric and promised not to tamper with the Central American Free Trade Agreement. His new finance minister told the Financial Times that socialism is not the government's program.

At 61, Mr. Ortega may understand something that Mr. Chavez, 52, and his would-be followers have yet to learn: Socialist economics are a recipe for impoverishment, while political power grabs tend to boomerang. The mini-bloc of Latin outliers poses little threat to the United States or the region's overall stability. But even as their neighbors consolidate democratic institutions and unprecedented prosperity, the people of Venezuela, Bolivia, Ecuador and Cuba may be headed for a miserable year.

Saturday, January 27, 2007

What Venezuelans voted for: an army of lackays

Among the many things one gets to observe travelling through the Empire (Tocqueville would have a field day again) is the ritual of the confirmation hearing. This time it was general Petraeus who was confirmed this morning by a 81 to 0 vote. Now, let's not be mislead by this number. It means that up to 19 senators did not like the general or the war he is about to lead but they are not going to make things worse by voting against him. Let's also see that the general named by Bush has got a bipartisan support even as the Senate is controlled by the Democrats since last month.

What does this say about US democracy? That no matter how partisan the situation is these days, on some essential matters the president is able to name a general but that general has to have excellent credentials, excellent enough to pass the scrutiny of 100 senators. Give and take of the highest quality, regardless of the morality of the Iraq war.

Now, what do we have in Venezuela? Well, the Venezuelan army might be buying Sukois from Russia but its main function is to hold food distribution schemes and serve the president for his pet services before they do serve the country. IF Colombia were to go to war with Venezuela it is all but certain that it would look forward an easy victory (posterior resistance is another matter, not for today's topic).

But we also have a president who decides on his own who becomes general, who gets promoted in general and who gets the coveted three suns that were given last to Eleazar Lopez Contreras, the last general to have seen real combat in history. But now we have a string of three mediocrities who have been battling cabbage and courtiers to gain the favors of Chavez, the latest one in date being Baduel who actually cried when Chavez announced publicly that he had gotten his third sun. That is, the emotion was in part, I hope, because Baduel knew he did not deserve the third sun of the Venezuelan army.

Now, more than ever Chavez is going to play with his army like he would play with his favorite toy. They will do his errands, and also his wars if he feels like it. And there will never be a confirmation hearing as of course the opposition can only be a treasonous entity that cannot be trusted on who distributes cabbages to the Venezuelan people.

-The end-

Wednesday, January 24, 2007

Bitter enemies but civil nevertheless

As it turned out my journey took me to the US from where I watched the aftermath of the State of the Union address. Now, I do not want to get into it but I cannot help commenting that in the background there was Nanci Pelosi applauding the arrival of George Bush to the podium. I also cannot help but notice that Bush was careful to stress the historical significance that a woman was occupying the House Speaker seat for the first time in US history, just at a time where another woman for the first time has a real chance to be elected US president two years from now.

It is of course useless for me to remind the enlightened reader the bitter rivalry observed these past years between Democrats and Republicans, made particularly tense as the Iraq toll war keeps escalating. I mean, there are real reasons for Nanci Pelosi to wish she had poisoned darts coming from her eyes to stab George Bush in the back while he was making his state of the Union address. As well as there were reasons for Cheney to wish that earth would open under the chair of the woman sitting to his left.

There was also a Democratic rebuttal delivered shortly after the Bush speech by a newly elected democratic senator from Virginia who used to be Republican until the Iraq war took a toll unacceptable for him. Nobody seems to have taken offense.

But all were for a brief moment playing the democratic rituals that exorcise once a year the biter rivalry in US politics, when all remember that a democracy is something that is fought for everyday, even after more than 200 years of the most successful constitution in history. You might want to say whatever you want about the US constitution but on duration and stability it is second to none. Actually, it is far ahead of anyone on that parameter.

A few days before I left Chavez did have his state of the union speech. A grotesque affair where all gold plated and banner clad he came to ramble for hours in front of a sycophantic audience that included no one from the opposition, even as a guest (I think that the church sent someone but even the media access was restricted to pro Chavez media). During this sorry exercise the enunciated piece of resistance was the confirmation that private property would be seized and that the glorious 1999 constitution that is supposed to be perfect and the best that Venezuela ever got would be EXTENSIVELY rewritten.

That is, during his state of the union speech Chavez ratified that he was no democrat and that whatever is left of viable opposition would be further controlled and repressed and impoverished.

How can chavistas sleep with such tremendous contradictions? Very simple: the boss ordered it and we all followed, a.k.a. fascism 101.

You know something: Chavez with all his tasteless jewelry and ridiculous military uniforms and more and more grotesque public displays is making someone as unpalatable as Bush look better than what he should.

-The end-

Tuesday, January 23, 2007

Travel Announcement

I will be traveling a lot these days and posting will be irregular, even less when I am charged 9.95 USD a day for WiFi internet where I am at right now. However I will write some and post as travels permit.

Alex will not be able to post much either as she is getting ready for a big milestone in her career. Thus you will have to rely on Miguel for regular news, which is as well since there is mostly financial news these days and who better than Miguel to cover those.

Keep coming back but not as often until early February when I will be again on regular schedule. And no, it is not a vacation, though next Sunday I hope to take interesting pictures of a South America city to compare it with Caracas.

-The end-

Saturday, January 20, 2007

The expansion of Chavez Empire has started: will someone stop him?

Friday night we were treated with some rather astounding videos from the Mercosur summit. First Chavez had a little séance of sorts when he visited the Rio Town hall. During an associated meeting he criticized the newspaper O Globo in the same way as he trashes Venezuelan papers he does not like. The hysterical crowd was acting exactly as in Venezuela when they want Chavez to close whichever media he is attacking that day, except that we only saw Che posters. Brazilians obviously might have a lush carnival but they have not reached the colorful chavista mass demonstrations that we are used to now. And they have as many proto-fascists as we have here in Venezuela.

Before looking into what that might mean, let’s look at the other scene.

At some point during the meeting Evo Morales, Bolivia’s president in some trouble at home and looking to refurbish his image, decided to attack Alvaro Uribe of Colombia. Why would Evo attack Uribe who is not even a neighbor? Does Evo has not enough problems already with Chile, Peru, Argentina and Brazil to seek yet another totally unnecessary enemy?

What Evo said was also particularly stupid and ignorant. He stated that the “social” models espoused by Cuba, Venezuela and Argentina had given the highest growth rates of these past 2-3 years. He did not add that Cuba was in zero and now with Venezuelan free oil it could do nothing but grow. He also did not dwell in that Venezuela and Argentina were coming out of horrendous recessions and thus had the extraordinary growth that one would expect. He could have pointed out that that growth is ONLY bringing them back to where they were before the recession struck them. He might have added that the jury is still out as how sustained the growth would be for these countries: Venezuela ‘s growth looks very iffy as it is based on oil prices, but there is a case to be made for Argentina. Morales did not enter into such sophistry, assuming he is able or willing to get into that kind of in depth study.

But what made things worse is that Evo attacked Uribe and Colombia saying that Colombia in spite of all the help it was getting from the US was not reaching the levels of growth of the above mentioned countries.

Uribe was not amused and in a rather unusual display of bad temper for such a reserved politician when he travels away from home, reprimanded Evo. He reminded him that trade in Colombia had gone up much more than under anyone else, that all the deficits were under control, that the currency was stable, and more. He could also have added that in the middle of a civil war Colombia managed to keep growing at a respectable rate that Bolivia could envy, and WITHOUT coming out form a major recession. (If you can manage portuguese, O Globo has a more juicier version than the sanitized Bloomberg version linked above).

In other words Colombia like Chile or Peru or Brazil are countries with real growth, based on work and production and not like Venezuela or Cuba based on high oil prices or Argentina based on recovery from the depth of an unjustified depression. Colombia growth is particularly solid as it has none of the energetic and mineral or even agricultural advantages of other LatAm country (think about the huge soy bean production possible in Brazil, a true green gold that Colombia cannot match). In other words, in spite of drugs and a never ending civil war Colombia has a much more equilibrated economy than Bolivia or Venezuela and a much better long term future than these countries (just as Chile does: this blogger thinks that Colombia is the next success story of LatAm if it manages to end its civil war and control drug traffic a little bit better, a big if perhaps, but a real potential).

This would have been already a rather embarrassing moment but Chavez made sure it would turn worse. He intervened to say that Uribe reply to Evo was “sobredimensionado”, a semi polite way to say that he thought Uribe exaggerated. Uribe replied and asked Chavez point blank why he thought that his reply was exaggerated. Chavez, as usual when directly confronted, dodged, saying lamely that they would discuss it later with a surprisingly weak voice. But the fact was for all to see that Chavez went to the rescue of his Bolivian lap dog and when confronted he backed down. Lula was observing and his face was inscrutable. You can see part of it in the CNN video as long as it is available.

Can we make sense of all of this? Certainly! But let’s go by parts.

What drives Chavez

He is sensing that his opportunity is now. The US even with a democratic Congress will be mired in Iraq and the Middle East for at least another full year, or maybe two since probably nothing much will be resolved during the 2008 campaign. Chavez has precious two years. In addition Chavez knows he has now 6 years ahead without any election on his rule (irregardless of a possible bought result) whereas Lula and Uribe will be gone in 4 years. Chavez knows that it is time to start doing whatever he can do to influence the Brazil and Colombian elections. That putting friendly rulers there will help him in becoming president for life in Venezuela.

In Brazil he needs to foster a left wing option to succeed Lula, with a more leftist ruler than Lula. That is why Chavez is more and more traveling to Brazil on his own, meeting with all sorts of leftist organizations such as the Sem Terra, or the Porto Alegre Forum crowds. That event in Rio where inconceivably he berated O Globo is one way to show the left how to attack the media, how to find enemies real or imaginary that allow the fragmented left to coalesce. The nutty left that is, but that is the one Chavez wants in office everywhere.

In Colombia Chavez got the rather unexpected victory of Correa in Ecuador who quickly aligned himself on Chavez, even faster than what Evo Morales did. There is no doubt that Correa campaign was financed by Chavez. But the party is not won for Chavez there. Correa only won a little bit more than a 20% in the first round and he is already suffering of the hubris that the 60% he got in the second round are actually his to do as he pleases with them, as unconditionally devoted to him as the 63% of Chavez. Ecuador has now a well established tradition of ousting presidents and if Correa might have forgotten it his political rivals have not and they are not the pushovers that Chavez found in 1999 Venezuela (and still as much “pushedover” these days).

Thus Chavez is probably seeking a low level confrontation between Colombia and Ecuador as a way to ensure that Correa takes hold in Ecuador. The well tested nationalist card, as in National-Socialism. That in turn could revive old Colombo-Venezuelan border contentions and maybe create enough trouble for Uribe and “justify” certain moves for Chavez. Uribe and Colombia are now trapped between two potential enemies as impenetrable jungles and oceans separate it from possible allies.

What happened at the Mercosur summit

Uribe did point out that the preceding day Evo Morales and himself had a very lengthy meeting where many things had been discussed. He asked Evo why he had not brought in private then what he was so tastelessly bringing in public. This already is a clear sign that they had set up a trap for Uribe. Chavez wants an all socialist Mercosur and Andean Community and South America association. After all Peru’s APRA is not officially on the right, it is in fact to the left of Toledo and a member in good standing of the International Socialist organization. Uribe is the lonely right wing government and Chavez is simply impatient with that (a case of “political cleansing” in the making?). It has to be one of his first objectives before he can unseat Uribe to isolate Colombia as much as possible from the rest of Latin America. Even O Globo sensed that when it reports that Chavez asked for "decontamiantion of Mercosur of Neoliberalism". Thus I am convinced that Morales did not speak of his own purpose. He had no reason or interest to do so. His words and timing could only serve Chavez.

I think that Chavez committed the error to go to the rescue of Morales. I suspect that he did not expect Uribe to turn so strongly on Morales (Uribe is intellectually superior to Morales or Chavez, no doubt there). But see, I am pretty sure that Uribe knew for a long time that something like that was coming and I am sure that he has been preparing himself for this for a long time. Uribe is not embarrassed of his U.S. relationship and he knows when the chips are down he will receive the support of Peru and Chile who are not going to jeopardize the commercial relationship with the US which is bringing them so much benefit, no matter what Chavez screams. In fact by standing up to Chavez Uribe has demonstrated clearly that it was time to stop Chavez abuses at these summits (O Globo reported that Lula had asked all his colleagues to limit their speeches to 13 minutes but Chavez talked 35 minutes anyway: just as in Venezuela, rules are not for Chavez).

Uribe has demonstrated that the best way to silence Chavez is to ask him in public a tough but fair question. Chavez demurred, backed down. It seems that Uribe has pierced the secret of Chavez, why Chavez avoids like the plague any serious press conference of the type that democratic leaders of the world must submit, where real answers are expected and not some tall tale that Chavez delivers until he narcotizes the audience and even the journalists. The day that Lula asks Chavez a tough question in public, that day Chavez is done for the international road show he leads. But Lula also knows that Chavez has a fat wallet that he is willing to share with people that suck up to him.

However this demonstration of Uribe is a side benefit of the day. What is really important here is that the attack on Uribe has started, and that might also mean that Chavez might have triggered the attack on him. Cards are going to drop now as people will start revealing what hey have been hiding in their sleeves. Or does anyone thinks that Uribe who has escaped uncounted real attacks and assassination attempts from the FARC will be browbeaten by a fake like Chavez who has yet to demonstrate that there has been a real assassination attempt against him? Not even on April 12 2002 was Chavez in the type of danger that Uribe lives with EVERY DAY.

This will play fast on many scenarios. Colombia and Peru will work hand in hand to weaken Correa. Ecuador is landlocked between the two and there is little that Venezuela can do for it if Colombia and Peru play their cards well. Another coup in Ecuador will have no consequences as the OAS is actively mined and discredited by Chavez. Correa will be soon put into a position to either rule for his people or for Chavez. If he opts for Chavez his days are probably counted. Correa could even turn against Chavez: Ecuador is the only dollarized country in LatAm and the people have paid a heavy price for it but are starting to enjoy the benefit with lower inflation, better budget control, an improving growth rate and an ease for international trade. Correa and Chavez have alluded to a new currency for LatAm and it remains to be seen if Ecuador will drop the dollar for a new currency. Will the natives supporting Pachacutik decide to drop their hard earned few dollars when Correa officials want to force them to trade them for a new currency that will follow the fate of the Venezuelan Bolivar? If Chavez wants Ecuador to drop the greenback he might find himself in front of an operation that will cost him much more than any gift giving he has been doing so far.

Evo Morales has made a mistake by getting a new gratuitous adversary. As his democratic credentials are going down the drain fast (did he have many democratic credentials to begin with?) he will be open now for criticism by many leaders that will not find it strange anymore to give an opinion of what is going on now in, say, Cochabamba where Morales is hypocritically trying to oust an elected governor through mob rule. Morales also told again to Lula at the summit that it had to pay higher prices for its gas. Morales is certainly right to cash as much money as he can for Bolivian gas but why would Argentina and Brazil look without sympathy on a federal settlement for Santa Cruz, the only really productive province of Bolivia. What would Argentina and Brazil gain from a Santa Cruz dominated and exploited by Morales? The prosperity of Santa Cruz is in fact vital for Argentina and Brazil!!! Santa Cruz is essential for the remote Mato Grosso and Salta regions, two areas that cannot be well serviced by Sao Paulo or Buenos Aires (look at your maps). Morales is playing a very dangerous game for the integrity of his country and a few Venezuelan soldiers will not be enough the day that Santa Cruz declares secession.

In other words today we crossed a new line in the complex geopolitical game that is taking place in South America, and the all but general bickering at the Mercosur summit is only the start. Chavez is now openly threatening the political stability of Colombia, Brazil, Peru. He is definitely a perturbing and direct agent in Bolivia and Ecuador. He could become one in Argentina and even Uruguay. Chile and Paraguay (for its inconsequence) are the only two countries that are out of reach. Yet the latest U.N. fiasco and insults to OAS secretary Insulza have brought home to Bachelet that for all her romantic notion of the Left she could land on Chavez menu anytime.

There are choices

South American countries can chose between keep cashing with Chavez (for a while) or decide to put a sanitary yellow band around Venezuela. It is not too difficult: you just need to shut up Chavez in public. Uribe showed how it is done, watch the video. But they must know all that Chavez will never stop until he has put everywhere regimes that are his close allies. He will not stop, there is nothing else that interests him. Look at what he does in Venezuela to silence the opposition once and for all. Do you think he is tightening the clamp in Venezuela so he can play nice with you guys? In fact what he wants to demonstrate is the democracy that you represent is useless and convince the people you rule to try a leftist willful dictatorship. Correa got it and he is already busily trying. You will see soon that the Venezuelan embassy has the biggest delegation in Quito even if there is little we can sell to each other.

But of course as usual and unfortunate the United States is the one with the biggest options here, and the most likely to ONCE AGAIN blunder its way through. To the Democratic Congress, before Iraq consumes you as it consumed Bush, make sure you pass the free trade treaty with Colombia and Peru, EVEN IF YOU REALLY THINK THAT YOU DO NOT GET A GOOD DEAL. The best counter measure to Chavez is a prosperous and stable Colombia, Peru and Chile. And no matter how much such a treaty might seem to cost to the U.S. today, trust me on that one, it will be infinitely cheaper than trying to rebuild LatAm after hurricane Hugo is done with it.

Dear U.S. Congress and White House, if you act for selfish interests, if you are not a little bit altruistic, the final result of all of this is that South America will end up as a Brazilian territory (the only possible winner in the long term out of Chavez follies). You will also get an immigration wave to the US that will make you look fondly to the days when you thought that a wall would stop Mexican immigrants. This might not be too bad if democracy prevails in Brazil. But it could be very bad if Brazil produces its own Chavez to challenge you. If you want this not to happen you have only one choice: create a Pacific area of prosperity with Canada, the U.S., Mexico, Central America, Colombia, Peru and Chile. In fact, Mexico's Calderon gave you a powerful clue when asking all spurned investors of Venezuela and Bolivia (and soon Ecuador) to come over to Mexico.

Once you do that, Dear Congress, once you realize that sacrifices for a few countries are a small price to pay, sooner or later the other countries will come just as Eastern Europe eventually came to Western Europe. Ask Germany and France how much they had to sacrifice to build the EU. Was it not worth it?

If you do not like that option, then get ready for war someday.

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Note: I could not find other videos for what happened at the Mercosur summit. I am sure that soon enough they will appear. But while I was looking through Youtube I found an interview of Moises Naim by Fareed Zakaria. I recommend it as Moises explains clearly what Chavez is all about today. A nice complement to help understanding what is written above.

Thursday, January 18, 2007

The Washington Post on closing RCTV

Is Juan Forero slowly going the anti Chavez way? About time I would say. In today noteworthy article he takes a good look at Chavez order to close RCTV. Forero indicates quite clearly that chavismo has a massive media offensive that now dwarves whatever the opposition can offer, and that the chavista media is nothing but propaganda; while reporting the words from RCTV that chavista government officials are invited on the stages of RCTV talk show but rarely dare to show up. In other words Forero discovers the real censorship in Venezuela, now more than the self censorship of Colombia or Mexico. The only thing that was left for Forero is to ask chavistas what is it in RCTV that so many of them still watch it? Is chavista TV so lousy? Is their remote control on the fritz and they are forced to watch RCTV? Soon we can hope that Mr. Forero discovers irony and start writing really good and interesting articles on Chavez and what he does to Venezuela.

-The end-

In Venezuela, the rich get the biggest subsidies

On occasion we start sensing that newspapers in Venezuela practice some form of self censorship. For example certain crucial news is reported in the back pages on not important days. This might be bad enough already, but there is neither follow up nor any echo from other papers or opinion makers. Something like a hot potato that must be acknowledged but none wants to deal with. One example was the publication on December 31 by El Nacional of an item where it was calculated that the government of revolutionary and social Venezuela actually saves the Venezuelan driver the fantastic number of 6 million of Bolivares (VBS)a year (2700 USD) by keeping the price of gas at a low 0.045 USD (not even a nickel!) a liter (or at not even 3 cents on the street dollar value). In other words a premium gallon of gas in Venezuela costs barely 15 cents of dollar and even less in Euros. And this measure benefits obscenely the rich.

Before I get into the details let me summarize the story in the graph below. This drawing is derived from the data presented by El Nacional (original in Spanish here). I just normalized it in percentage to make it clearer to understand (readers know how often I complain at how poorly data is presented in Venezuelan newspapers). It is important to note that the “gasoline subsidy” is not easy to calculate: 1) the government for reasons explained later has no interest in people knowing the truth, 2) the subsidy is as much the money paid by the government as it is what it fails to rake in taxes and revenue (1) and 3) even though Venezuela used to export gasoline (it has stopped recently) the price of that exported gas is not necessarily the one that would be set in the Venezuelan market. This being said, if we standardize the estimated gasoline subsidy as a 100% budget item we can proceed to compare these numbers to other budget items. For example, we can thus observe that the biggest ticket item in the Venezuelan budget, education, that is, all the bolivarian schools, mision Robinson and what not flagship social program, well, that budget is ONLY 70% of the "gasoline subsidy budget". In other words, if the Venezuelan driver paid its gas at production cost based on international oil prices, Chavez would dispose at least of enough money to DOUBLE the education budget (and let's imagine what that would do to the health budget!!!).

Historical perspective: gasoline as God's gift to Venezuelans

The problem is that under the ill called 4th Republic people got used to the idea that God gave oil to Venezuela so we could all drive big cars with cheap gas (I throw the first stone to AD without any contemplation). In fact, the official decomposition date of Venezuelan political system can be set on February 1989 when Caracas rioted because freshly reelected Carlos Andres Perez decided to increase gas price. He never recovered from that and today Chavez refuses to consider any gasoline increase because, well, he knows his power rests in large part on cheap gas, perhaps more than on any Mision or other social program (1). Even people who stand no chance to ever owning a car will tell you "I do not care if the state is paying to keep gas cheap, which is something they will not steal from us".

This entitlement to gas much, much cheaper than drinking water is definitely the worst populist legacy that Venezuela has had to suffer. Chavez will bankrupt the country before he dares to explain to us that gas should be paid at least at cost at the gas station. Governments have let this become an emotional issue in Venezuela and Chavez as the archetypal emotional leader will not dare face it down (at least not until he can control any insurrection, or takes cars away from people, whichever comes first).

The measure of the subsidy

Perhaps the numbers shown in the graph above might seem to you a little outlandish. But here in Yaracuy I have made my own personal calculation that hint that these numbers might be too close to reality for comfort. Even at my humble observer level I can see the folly of the whole scheme.

I fill up my tank once a week for 5000 VBS average. Let’s say that the subsidy for me is 5000 per tank-fill, that I should be paying 10 000 (which I could afford very easily). Now, let’s look at my coworkers that must take a bus to work because they cannot afford a car. They take public transportation, which is minibuses that, say, fill up their tank daily. If the price of gas were to double they would have to pay an extra 5000 VBS per day and charge it to a higher ticket price. If they make 10 trips a day and carry an average of 15 folks per trip (well below the reality even in small San Felipe) they will need to divide that extra 5000 by 150 passengers. Thus the ticket should increase by 34 VBS (5000 / 150). Each one of my coworkers makes two trips a day, 5 trips a day, plus two on week ends to go shopping. Thus their transportation budget would go up by 408 BSV (34*2*6).

In other words the government gives me EVERY WEEK 5000 BSV and it gives my less fortunate coworkers 408 BSV (and probably much less if the number of passengers carried by the “buseta” is higher). That is right, the subsidy I receive is at least ten times MORE than what the lower income folks who take the “buseta” receive. Does this make sense in the glorious socialist Bolivarian revolution? How can Chavez justify never dealing with such a spectacular injustice?

In fact, it is actually even worse. When I buy a car, be it a utility vehicle as this blogger owns since 2000 for work, or the flashy Audi that Jorge Rodriguez busted a few months ago, we would both get a hefty subsidy to replace it today since cars or car parts to be assembled here are imported with preferential dollars at 2150 VBS instead of the free rate in the street which ahs been above 3000 VSB for a year (above 4000 since Chavez opened his big CANTV mouth two weeks ago). That is, the more than 100 million that Rodriguez paid his now trashed Audi was subsidized by a third (30 million VSB, roughly 13 000 USD) courtesy of the currency control set up by Chavez. Rodriguez is now Vice President. You can make your own predictions.

The perversity of the subsidy

It is easy to guess why such subsidy has created a dependency in the Venezuelan population. Now it is OK for folks to pay more for drinking water than for gasoline. Now it is OK for the private sector to be the biggest beneficiary of that gasoline subsidy (think at the thousand of trucks owned by the Polar group and each receiving millions a year in cheap gas bonus!). The perversion and distortion of the price system in Venezuela is now so obvious, so deleterious that we do not know exactly what things really cost.

But it also works on moral and ethical grounds. For example why would you dare to complain about the lousy states of the roads or the insecurity on them when the government already gives you nearly free gasoline? How can you increase tolls on highways (they have been the same for now 5 years even though we have had an average inflation of 15%) if you do not increase gas price? Without gas taxes and toll booth how can you keep up roads, cops, security, towing, etc… The indirect costs for the private sector are actually considerable: expensive maintenance of truck fleets, insecurity of trucks fleets as highway robbery is more and more common.

And what about unrestrained importation of vehicles and soaring sales which have lead to chronic congestion of Caracas streets? People seem willing to accept the lack of efficient public transportation or wasting hours daily of one’s life in a traffic jam because, well, we have a new car, we can let it run as much as we can while we have the AC blasting and the radio on. We do not pay financially for the hours spent in traffic, only physically, and in materialistic Venezuela this seems to be what matters, that we do not pay financially.

Perhaps the worse consequence for this blogger is that ridiculous low gasoline prices affect the welfare of all of us. Intuitively I am sure that as long as gas price are so low, wages will remain low. Why? A basic tenet of economic performance is the price of energy. It used to be wood and human labor in the past. Today it is oil and nuclear plants. But it is the energy that moves the economy and the lowest cost source of energy is the one that will shape the general structure of a given economy. In Venezuela we do not pay for energy (electricity is also ridiculously cheap). Why would Venezuela pay its workers their human energy cost when they can have access to almost free gasoline? Venezuelan workers will have to settle for a 25 cent subsidy a week for their public transport for a long time, instead of receiving a real wage that would allow them to afford a 2 USD transport ticket as in most developed countries. You want to earn a lot, to have purchasing power? Start by paying for mechanical energy the real price, then your human energy will be worth something and you will be able to charge for it.

What should be done?

Some specialists are quite blunt: gas should go up to at least 300 VBS a liter. That is, three times the actual value (but not the export cost of about 1000!). And this only to make sure PDVSA sorts of covers its costs of oil extraction to make the gas and ship it to gas stations. Considering that I supposedly get 6 million VBS a year in subsidy, even if I start paying 15 000 a week for gas instead of 5000 I would still be getting 5.5 million subsidy!!!!! But the state might get enough already to double the housing budget and have less people nailing themselves on trees to attract the attention of bureaucrats in the vain hope that this will get them subsidized housing.

Personally I am willing to pay 1000 a liter, tomorrow, if Chavez finally comes to his senses and uses his political capital to start digging himself out of the hole he made. For once I would not mind if he were to say “We have to stop financing those rich escualidos!”. “We have to think about the environment!” “We must have drivers pay for the roads and the public transportation!”.

But we all know that Chavez would never do anything that could tarnish his image among the silly masses ready to believe any crap that comes from him. As long as I can afford a car I will be able to afford to drive it to the next corner if I feel like it, and may the hot house gases accumulate, courtesy of Chavez while Green Peace and assorted ecologists look at him in stupid stupor for what he preaches, never scanning for what he does. Anyway, I should not worry, soon the communist measures that Chavez is taking will make sure that only the apparatchicks of the regime will be the ones able to afford cars. Talk about elite creation...

--- --- --- --- --- --- --- --- ---

1) The basis of the calculation is that the average price of gas in Venezuela is 80 VBS but the government could sell it at 965 VBS (more than 10 times!!!!). So even rounding up or down the government starts by failing to rake 90% of the price of gas it manufactures through PDVSA. Enough revenue that could be used for countless social programs, even if you were to argue that higher gas would lead to lower consumption. That argument would be void from the start as it would allow again the government to have gas for sale again, as it is reported that gasoline exports to the US have dropped dramatically.

2) Chavez is on record in 1999 announcing that "under my government gasoline prices will not increase". I could not find in newspapers archives the exact quote that I clearly remember from these days as I already knew it was a huge mistake, but at least I found some articles from El Universal who show that Ali Rodriguez was planning to increase gas by 15% in 1999 and was overruled by Chavez. I also found interestingly a forgotten article where Bush and Chavez had lunch together in 1999, when Bush was still Texas Governor. Ironic, no?

Wednesday, January 17, 2007

Venezuela in 1968 and Venezuela today

I was forwarded a few days ago an article written in the Times magazine in 1968, during the electoral campaign that ended in the election of Rafael Caldera (hat tip Pedro). I think it is worth posting it completely. Too many people that are only too willing to believe the Chavez propaganda think that Venezuela was a wasteland before Chavez. If it is true that the case can be made that the two decades that preceded Chavez could be called "lost decades", reading this Times piece from the past shows to us that democracy was a much more joyful process, much more democratic than what it is today "n'en deplaise a certains". In 1968 an opposition candidate was allowed to run a good campaign and was allowed to win with the narrowest margin, but win nevertheless. Today the CNE makes sure that all possible hurdles are on the way for any opposition candidate, even when running for local towns councils.

But before you read the article posted below, I wanted to bring your attention to today's piece of the Wall Street Journal on Chavez, interestingly titled "Hugo and Mahmoud". As usually the WSJ remains the most clear headed US paper on what Chavez is all about. I will allow myself to quote two portions:
A week ago, he announced he would nationalize the country's electricity and telephone companies; he already controls the oil business. His goal here is to redistribute income but especially to shrink the private economy in order to reduce the space in which any political opposition can operate.
So you can see that it is not only this blog who thinks that all of Chavez moves are designed by him to keep power for ever and ever. The second quote is about the enablers in the US who are doing unforeseen damage to the future of their country by trying to make silly and irresponsible excuses to justify Chavez misdeeds. The two main culprits are Senator Dood and congressman Delahunt who should read the story of Esau and Jacob when they sell their ascendancy for a few barrels of oil.
All the while, Mr. Chavez has had American enablers who excused his growing repression, or blamed it on a reaction to U.S. policy. Foremost among them has been Mr. Dodd, who has defended Mr. Chavez as "democratically elected" despite his clear trend toward authoritarianism. In 2004, the circumstances surrounding a recall referendum were so anti-democratic that the European Union refused to act as an observer. Jimmy Carter nonetheless blessed the outcome amid heavy irregularities, and the U.S. State Department endorsed the process. Other politicians, such as Mr. Delahunt, embraced and flattered Mr. Chavez for his PR stunt of offering cut-rate oil to poor Americans.

Perhaps it's time these Americans paid attention to the kind of "socialism" and "revolution" that their support is helping Mr. Chavez to build in Venezuela.
And now for that piece of historical reporting that should send a few of us on the road to nostalgia. Do not miss the economic comments in relation to the times, when Venezuela was the most propsperous country in LatAm something which not only has ceased to be but is not improving under Chavez as our neighbours are making real progress while Chavez just distributes money around creating the illusion of progress.

By the way, that 1968 campaign found Chavez as a 14 year old lad who should have learned then the true value of democracy. He did not. Not as old as chavez I was still young enough to remember the effervescence and the tense moment when president Leoni sent a minister to visit Caldera and recognize his victory and offer him protection. This was the first time that it happened in Venezuela. I cannot imagine, for the life of me, the Cuban goons that surround Chavez come to offer protection to an opposition candidate and tell him or her that Chavez is packing his belongings at Miraflores.

TIME Magazine

Friday, Nov. 29, 1968
Continuismo v. Change

By day, Caracas resembles a collage of advertising posters. At night its plazas glitter and bustle with popular rallies. Next Sunday is election day, and Venezuelans are enjoying the campaign with the enthusiasm of a people liberated from dictatorial rule only ten years ago. No fewer than 28 parties are competing for congressional seats, and have festooned the capital with tigers, roosters, flying saucers and other party symbols. In one square, the chief opposition presidential candidate, Rafael Caldera, head of the Social Christian Party, has a huge calendar ticking off the days until el cambio, "the change." In riposte, the governing Acción De-mocrática party is flying two calendars charting the days "until the fourth defeat"—a reference to Caldera's three unsuccessful tries for the presidency.

Outgoing President Raúl Leoni has cut so many ribbons inaugurating public works during the campaign that opponents claim he keeps a pair of scissors in his pocket. Leoni cannot constitutionally succeed himself, but his appearances aid Acción Democrática's candidate. He is Gonzalo Barrios, 65, an adroit and tough politician who, as Interior Minister, put down Venezuela's Castroite rebels.

Generation Gap

Barrios can use all the help he can get. During Acción Democrática's ten years in power, it has fissioned three times, in each instance losing some of its younger and more radical supporters and some momentum for reform. Hoping to charge through that generation gap is Caldera, 52, a talented lawyer who has been trying for the presidency since 1947, and now has assembled the country's smoothest-functioning political machine. Also in the running are four splinter candidates, most notably Acción Democrática Dissident Luis Beltran Prieto and Miguel Angel Burelli, who has the support of three minor opposition parties.

The election turns largely on Caldera's cry for change and for more activist government as against Acción Democrática's slogan of continuismo, or more of the same. Undeniably, Venezuelans have never had it so good. During ten years in power, Acción Democrática has poured the country's ample oil revenues into schools, highways and public works. The economy is growing at an annual rate of 5.1%, and the benefits have spread through much of the population. Venezuela's per capita income, $745 a year, is the highest in Latin America. Unemployment is down to less than 7%, and the bolivar is one of the world's strongest currencies.

Whoever wins is unlikely to tinker drastically with such success. No less encouraging is the fact that the election has not been marred by riots, as in 1958, or terrorism, as in 1963. On a continent where military dictatorships are more the rule than the exception, Venezuela's military leaders took the unusual step of publicly promising to "respect and enforce respect for the verdict that emerges from the election."

Tuesday, January 16, 2007

Venezuela:144 out of 157

The Conservative Heritage Foundation has released its 2007 survey. As expected Venezuela ranks low in freedom for business. And we can expect the situation to worsen as the latest Chavez announcements were done AFTER the organization had finished compiling its data.

Now, one can say whatever one wants about the Heritage gang, but they sure like to look at objective ways on how to place their bucks and it looks like Venezuela is not the place where to invest. In fact Venezuela is the only country in the bottom of the list which still has some trappings of democracy. Some being the key operator here, and when we look at our neighbors in the list, well, we can even question that "some": we are within ten positions from such luminaries as Algeria, Central African Republic, Vietnam, Laos, Sierra Leone, Syria, Belarus, Angola, Iran, Republic of Congo and Burma. In fact Venezuela falls in the category of repressed economies which dumps it next to Chavez favorite pals, Zimbabwe, Cuba, Lybia and North Korea. The only difference is that we are at the top of that select group. Clearly, economic freedom goes well with individual liberty and progress as can be seen from the top 20 of the list which include Chile at position 11. Uruguay, another "socialist country" does manage an honorable third LatAm ranking at position 33. Clearly the "socialist label" in a government is not necessarily a scarlet letter for the Heritage foundation. In fact two "right wing" countries of LatAm are EL Salvador (29) and Colombia (73). The Heritage Foundation cannot be accused anymore to be a political measurement tool: Venezuela business environment sucks and it is plain for all to see even if the growth of Venezuelan economy is on paper spectacular.

From the summary page of the survey we can access the Venezuelan page and get this very nifty graphic which is rather easy to comment on (an their general overview on Venezuela is quite to the point, I mean, 141 days to open a new business!).

The only "freedom" where Venezuela reaches the world average is the fiscal one. That is, the tax burden is not too bad. Ask the top public officials in the Chavez administration who earn more than the CEO of private companies and do not pay too much taxes... No wonder taxes have not being going up as they are raking paychecks between 28 and 50 times the minimal wage of Venezuela. "¡Viva la revolución!".

Much, much more worrisome was the investment dismal score. No wonder the only investors of note in Venezuela were in the oil industry. After the Chavez new measures, well, they will be kicked out altogether. Will anyone come in to replace them?

The property rights index is another one that is sure to decrease next year, even if the government does pay out the CANTV share holders as promised.

Another index about to come down crashing is the already weak Labor Freedom. As the new laws such as LOCYMAT take hold, and as the labor code is revamped, it will become near impossible to fire a worker even if caught in lewd acts. Well, maybe in that case as drunkenness at work is not necessarily a sure way to get a worker fired...

In other words, the slight improvement shown by Venezuela in the past couple of years will become a new free fall where we are all but assured to have as our immediate neighbours Cuba, Zimbabwe, Lybia and North Korea. After Chavez rantings a week ago who in his right mind is going to come to build a new factory in Venezuela? Soon the government will be able to expropriate at will or force you to share management, property and benefits with the workers even though they will not even risk their severance and compensations even if they forced you to make unwise business decisions. Not to mention that there is talk to cap the maximum possible earnings while discussing a limit of business expenses that can be deducted.

There is something that these "stone age socialists" that preside over our fate fail to understand: people invest dirtectly in business only if their possible return is significantly above what they could get from putting their money in general stocks and funds. If I can place my hard earned savings at a Wall Street rate that could reach 10%, why would I place it in Venezuela for a lower rate, a lot of headaches, a 20% inflation and the distinct possibility to lose at least part of my captial?

Helloooooo Chile!!!!!!

-The end-

Monday, January 15, 2007

Drug traffic in Venezuela: an eye witness account?

Three articles for your reading pleasure (hat tip Alex).

The original in Spanish about that Colombian drug trafficker who claims to have had a good business association with Venezuelans for drug traffic. The translation as published in Megaresistencia (I did not do it, and they borrowed my flags for their web site, but I have nothing to do with them). Fascinating.

And for good measure the adventures of Andres Oppenheimer in India where he finds out that Indians are willing to accept from Chavez what they would not accept from their Indian leaders. Sobering.

-The end-

What Venezuelans voted for: a government of Soviets

The latest announcement of Chavez that he would redraw the map of Venezuelan internal divisions is perhaps the most dangerous proposal he has made so far. In light of the crucial importance of what is at stake, it would not be idle to speculate that nationalization of the CANTV phone company and its impact on foreign news, mostly busy with Iraq, ETA and how to make a quick buck on the stock markets, is a deliberate effort to distract the eye of the foreign observer (as well as the national observer who prefers to discuss an eventual reduction in pay check of National Assemblymen than the real power structure of the state). What Chavez wants is absolute control of the country for ever and the announcement to have the country governed through "juntas comunales" is one way to get it.

I had understood that as soon as I heard the news, and Miguel already started insisting on it. But I think we need to decry this as much as we can: if Chavez gets away with that, there will be no way anyone will be able to unseat him except through violence. To understand this it might be good to very briefly review some historical precedents, and then look at what is proposed in Venezuela


"All power to the Soviets", this historical slogan implied that workers would gather and decide on their own what would be the fate of the business they had taken over. Soon these Soviets became the revolutionary machinery, town administrative councils and eventually replaced parliaments and representative democracy. Indeed, the original soviets in their desire of being a true democracy squelched from the start real democracy: all could express but in public, no secret voting. Thus the enemies of a revolution could be identified early, and clearly.

The Soviet cockamamie idea that the best way to install democracy from the base is through some form of popular assembly has been taken over by all sorts of leftists regimes who all ended up in the utmoust naked dictatorship. None stopped for a second to reflect on why it only sort of worked once, in old Athens with limited citizenship (and perhaps some small Swiss canton, without allowing women to vote in either case).

In the Americas we have for example the "comites de defensa revolucionaria" who as the base organization of Cuban government is now not much more than your neighborhood spying agency. If you run afoul of your building member/representative, well, you are in trouble. But of course the original idea was to promote democracy, organize the neighborhood for defense against hoodlums, cleaning the streets, etc,… In fact the CDR is amazingly considered within Cuba as a NGO, though it examines the credentials of anyone who wants to exert public office. Anyway, short of ironies, we all know how it ended up.

Now what chavismo wants to create is the latest avatar of these disgraced models of society organization. We had the forerunner with the "circulos bolivarianos", but those did not prosper well, and now even that “bolivariano” label seems slightly annoying as the “popular” label is more “en vogue" in chavismo lexicon. All the ministries have been renamed "Ministry of the popular power for ______", for example.

The proposal at hand

Perhaps it is best to start by citing the new "minister of the popular power for popular participation and social development" (I am not making this up), issued from the Communist Party of Venezuela and who at 28 year old has not managed to finish some informatics studies. That is fine, he has the required ideology for a chavista ministry, who cares whether he has the capacity for it. This David Velasquez, when interviewed by El Nacional (by subscription, January 14) declared
If I reply as a communist [!?] I would say that what is sought is to transfer as much power and as much democracy to the organized communities, that the State apparatus would eventually be reduced to levels that it becomes unnecessary.
Translation into real terms: "we are going to get rid of all the public administration and institutions that form the current municipal and state system and replace it by modern Soviets where we will have the upper hand and where we exert the democracy of Chavez".

What is offered is the following, according to the few items that we have been able to gather so far (apparently it would be a constitutional violation to do that and there is already talk of calling a brand new constitutional assembly: it would require the modification of dozens of constitutional items!). Municipalities, today 335, will be reduced to a 100 or so. Right there we see the first contradiction: the new federal power will be even further distant from the people. Modern countries such as France do not think that they have “too many” municipalities. In fact France for about 60 million people has thousands of municipalities and nobody is complaining much. In fact, there are more than 36 000 “communes” which probably makes France the most "per capita" municipalities in the world.

In exchange for these municipalities Venezuelan will get “juntas/consejos comunales” who will be elected (we do not know how yet but the CNE will be involved one way or the other) by relatively small urban sections. Some of them will gather together to administrate the larger cities. How the executive will be handled in such system is totally unknown so far. What is clear is that the government will create an executive figure which will be very weak, if any. It seems to me that the objective of the government is to rather transform these already existing communal councils into bona fide “control” groups while all the previous municipalities functions will return to the central state. That is, the state would name the executive branch of the municipalities but these ones would be controlled by these councils. Unless I am wrong of course, but such is the vagueness of the propsoal (though the determination is not to be doubted) that this is the best I can come up so far. How they can claim that this is a progress in decentralization of administration totally escapes me.

What is even weirder is that Venezuela under the now much hated 4th Republic did not have mayors!!! Yes, that is right, municipalities were managed directly by municipal councils who every year elected a municipal president who exerted some of the functions of a mayor. Of course a system where no one is responsible for anything was bound to fail dramatically and that failure is the reason why the figure of the Mayor was created and given significant local power to start to be more effective at solving local problems. Chavismo seems to have forgotten that, as much as it forgot the quality of phone service when CANTV telephone company was state owned and sometimes you needed to wait for an hour until your phone had a dial tone.

But it gets better. Carlos Escarra, this born again communist who has decided to be more chavista than Chavez blithely declared for El Nacional (January 12)
That idea comes from the Commune of Paris [the 1871 failed insurrection of Paris, the first communist attempt in the world and to this day the only one conspired as a genuine popular revolution by many] the full community life, which is the sharing of possessions and services by a superior collective entity.
Amazing! Besides forgetting to put this insurrection in context, forgetting that they ended up eating rats, that hundred and thousands where summarily executed by the Commune, or from the Communards once it was crushed, that this bloody episode ensured 20 years of conservative government in France allowing for the creation of a colonial Empire, it shows that Escarra does not understand anything from history or proper ideological constructs. Socialism, communism, "bolivarian socialism" (I am not making that one up) are just vehicles through which he gets noticed by Chavez even if it will screw the country for decades.

Let’s imagine how it all works

Again, it is important to understand that the real obejctive here is to minimize the possibility that the opposition can ever create a counter leadership. Next a possibel mechanism on how this coudl be reached.

First you create small communal councils. Of course, because they take place among neighbors we can all vote in trust with raised hands. In other words in 80% (90% ?) of the cases few will dare to raise their hands and get identified as not favoring the regime, a stain that we all know remains forever in the lists of the regime (Must I remind folks the apartheid that the Tascon/Maisanta lists have installed in Venezuela?). Only in Chacao, Baruta and a few town halls where there are few public workers and many strident opposition will we get a few "juntas comunales" expressing themselves against Chavez. These ones will see soon the funds destined to these organizations dwindle. But they will probably be let alive to show for the exterior world.

The second step will be to destroy the executive power. This can be done by atomizing this power by letting these communal councils name the different bureaucrats. No more mayor to coordiante the whole thing. Eventually the mess that wil come can only be sorted by some form of state intervention (through Misiones, local delegates, financial officers, or even the local army barreacks!)

In the third step, once the potential opposition blocks are duly noticed, we “change” the municipal boundaries. For example, there is already open talk that "Caracas has too many municipalities". So Chacao, Baruta and El Hatillo are integrated with Libertador, Sucre and perhaps even satellite cities such as Guarenas or Charallave. The opposition few juntas comunales are drown in the mass of councils that make the large metro district of Caracas. And Juan Barreto, the new provisional mayor of this new “federal city” of 4 million people now gets to grab all the tax income of Chacao and Baruta to use it wherever he pleases to foster his chavista bases. It is call plain robbery in my book, but Barreto has stolen so much already that by this point he would not care (if he is not replaced before by some other crook even more eager to screw opposition types of possible and easily more efficient at that than hapless Barreto).

So there you will have, the councils of Chacao, screaming bloody hell for all to notice but totally ineffectual as they would be drowned in Caracas at large. The tax money of Chacao will be wasted and Chacao will have no motivation to remain the clean and organized district it is, buhoneros invading everything. The new mess of Chacao will be favorable to hide the mess of Libertador and Sucre that chavismo is totally unable (unwilling?) to solve. But all will look so democratic!!!!!

And of course governors at some point will be swept away. That way the very few chavistas who thought that they might have a political future, such as Diosdado Cabello, will see their career truncated or ended while Chavez keeps coasting from manipulated reelection to manipulated reelection since "there is no one else".


It is perfectly clear that this proposal has only one objective: for Chavez to get more control on the state, and to lower considerably the risk that a local successful opposition politician can get enough clout to challenge him as Rosales did.

UNDER NO CIRCUMSTANCE this change can be considered as a possible improvement of local administration, or more popular democracy. More than ever local events will depend on what the local chavista or the central ones decide. The local folks in too many districts are woefully unprepared to manage what is required for a modern city, even if it crumbles under garbage and lousy services. They will vote themselves for governmental appointee to direct them once they realize that are in over their head. Assuming that some indeed want to raise to the challenge. Running a town is not something open to people off the street!.

Finally, there is enough inner workings to the system to induce opposition people not to participate: in this structure they would be exposed and blocked in their career, progress, business, and what not. Not to mention that they would be highly ineffective since funds would be allocated at discretion by the government and pro Chavez districts would receive relatively more funds. Indeed, the local taxes could even be suppressed or sent directly to the national treasury so local councils will be at best receiving part of their local taxes. Right now for example Chacao is financially mostly independent from the government whereas Libertador is not. Thus Liberator could simply get the local taxes of Chacao to fund Libertador programs without even Chacao councils allowed to evaluate them. A new meaning for taxation without representation!

This is the moment of truth for the 37% of the opposition. This is the time to go and hit the streets and talk to chavistas to tell them that WE ALL LOSE UNDER THIS SYSTEM.

And democracy dies completely, as well as privacy, right to dissent, etc... Look at the Cuban CDR and dare to tell me that I am wrong, that it will not end like such a system.

Sunday, January 14, 2007

What Venezuelans voted for: a coward who is the bully of the school yard

Since it is Sunday and this blog is supposedly into lower intensity (though recent events justified a revival of sorts) I have found these couple of editorials from Veneconomy which are worth posting for your reading pleasure (forgive me a lame Sunday irony). The first one addresses, in English, the point that the Chavez alleged show of force of these past few days are in fact a mark of an inherent weakness of his rule. No government elected with 63% of the vote will rush into such sort of imposition when it has at least 1.5 solid years of easy governance ahead. That Chavez chose the hurried and bullying way is, and I agree 100% with Veneconomy, a sign that Chavez doubts his own skills, the ability of the people that accompany him or the stability of oil prices and Venezuelan revenues. That does not mean we are going get rid of Chavez anytime soon, it only means even more misery than expected in our future.

The second article, well, it is an excellent analysis that Alexandra Beech published in Veneconomy and that I suppose she was too modest to announce in here. So I obliged.

What's the President afraid of?

Paradoxically, when, on January 8, President Hugo Chavez made his announcements that will take Venezuela to a communist-style totalitarianism where all the power is concentrated in his hands, rather than strength and confidence, the Head of State demonstrated considerable weakness and a lack of faith in his own leadership.

On January 8, on the occasion of the swearing-in of his new cabinet, President Chavez announced the nationalization (i.e. passing over to the hands of the State) of all companies privatized to date, starting off this run of absolute control with CANTV.

But the President didn't stop there, he went even further in his eagerness for control and, on the pretext of "sovereignty, national security and strategic reasons", to which only he is privy, he will sweep up in the nationalizing boom all the telephone companies, the companies in the electricity sector (including La Electricidad de Caracas, an emblem of Venezuelan private enterprise since its beginnings in 1895), and the Orinoco Belt crude upgraders, which came into being as mixed enterprises with the participation of foreign partners. And perhaps the most disconcerting aspect of these announcements is that they are apparently going to nationalize the national gas companies founded under the Gaseous Hydrocarbons Law promoted by President Chavez and approved by Parliament in 1999. That same year, the Head of State also passed an Investment Promotion and Protection Law, which stipulates that no legislation or regulation passed subsequently would be able to alter the basic terms under which investments were made in Venezuela. The intention of this law was, precisely, to generate confidence and attract new investment to the country.

Now, suddenly and in one fell swoop, he is going to change all the rules of legal certainty on domestic and foreign investors who have built up productive companies that provide optimum services and jobs in the interests of taking over more and more power. Contrary to what it is intended to show, in VenEconomy's opinion, this reveals a singular lack of confidence in his leadership.

There is no logical reason whatsoever for undertaking this nationalizing race, bearing in mind that: a) the Constitution and the laws of the Republic fully define and demarcate the field of action of private companies; b) the agencies for correcting and sanctioning any departure from these laws are under his command; and c) any unregulated aspect can be corrected immediately in a National Assembly made up totally of members who support the regime. The only possible justification would be a total lack of confidence in his powers of conviction at some future date and his wanting to grab all the power now so as to avoid the danger of any type of opposition, from any source.

Note from the blogger: What can I add to this? Chavez waited for his opportunity until he coudl take our lunch money.