Tuesday, December 30, 2003

Raspando la olla
Brother, can you spare a billion?

Tuesday 30, December 2003

The title refers to a Venezuelan saying, of scratching the pan to try to get one very last crumb. As the end of the year is approaching, everyday it looks more and more that Chavez is trying to use the Year End political pseudo-lull to push a few initiatives and get some extra cents for any future political contest he might have to undertake (if forced, of course). So far he is succeeding, since the opposition is strangely silent on two rather, by any standard, questionable moves.

Last Saturday I wrote on the PDVSA refineries sales. Besides Ledesma I have not read much outrage. Does the opposition knows something that we do not know? Meanwhile with all due cynicism Chavez in his weekly perorata says:

"How much is the refinery worth? $1 billion or $1.2 billion? I do not know. We will know when the appraisal is ready. By depositing this money in a bank, we may have bigger earnings from U.S. dollar-denominated interests."

"What returns are we obtaining from the refinery? Nothing. They [former Pdvsa managers] made this business there (in Germany) and spent millions and millions of dollars, supposedly to supply the refinery with Venezuelan oil, to open markets for oil refining and sales in Germany. But this refinery does not process Venezuelan oil. It is in the other side of the world, and buys crude oil from Saudi Arabia, the Middle East or Russia."

1) Clearly Chavez demonstrates his lack of investment savvy. Anyone that has looked at interests paid by US banks lately knows that owning a refinery can only pay higher dividends these days...

2) But this is not the point, Chavez is justifying himself to his electoral base that only knows the interests rates paid by Venezuelan banks, floating between 10 and 20% with an inflation of between 20 and 30%. Since they believe whatever he says and do not know better, Chavez is covering his back exploiting once again the gullibility of his political base.

As for the commercial validity of the argument, I have addressed it already Saturday.

The other item is more complex: yet again a naked attempt at grabbing control of the Venezuelan Central Bank (whose directorate he named by the way, but who have shown a sense of responsibility and independence that the caudillo cannot tolerate, in particular if he needs cash). I quote from El Universal:

The President on Sunday demanded the Central Bank of Venezuela (BCV) to give his administration $1 billion from the country's international reserves to fund agriculture projects.

During his weekly radio and TV show "Alo, Presidente! Chavez challenged BCV directors and officials by reminding them that he implemented a "cleansing" process in the state-run oil conglomerate Petroleos de Venezuela, S.A. (Pdvsa) because the oil corporation's directors were antagonistic to Chavez.

"In the Central Bank there is still a neo-liberal current, just as there was in Pdvsa. Several months ago, when I started addressing this issue [requesting $1 billion for investment in agriculture], they [BCV staff] claimed they were going to halt BCV activities and launch a strike... I am fine with that. If you go on strike, I am going to order an intervention [in BCV] similar to that in Pdvsa!"

He insisted in urging BCV directors to cooperate with the financing of agriculture activities in Venezuela, claiming that "BCV has an obligation to support the Constitution."

"This is not a threat. I am only fulfilling my obligation. I am telling you: If two weeks of January elapse and we have no answer from BCV, I am going to appeal to the Supreme Court of Justice" he warned.

"BCV is supposed to manage (Venezuela's) revenues, mostly from oil sales. BCV is autonomous, but it is not actually autonomous. The rules governing BCV are dictated by transnational powers contrary to the interests of the country," Chavez said, suggesting that BCV blindly obeys orders from the International Monetary Fund (IMF).

I really do not need to comment on this, words speak by themselves.

I will just add for a more complete information of the reader that the president of the BCV has shown all desire to collaborate "according" to the established laws. In particular it has offered financing schemes for the agriculture using private banking backed by the Central Bank. But stating that as an institution the BCV was forced to keep some reserves that could not be used by the administration as petty cash. This really is what irritates Chavez, in particular when the currency exchange control is coming under more and more criticism from the Central Bank who contemplates a very painful devaluation if the governmental policies continue. They are doing their job, but Chavez can only accept that any branch of the state do HIS job. Meanwhile one of the directors of the BCV has declared that he had no problem to go to court to settle the differences between Chavez views and the law, which I am sure must have made Chavez cringe.

All of this is just a show to create an excuse to intervene one of the very few institutions that still eludes Chavez's control. The strong words, and lies, used by Chavez are for all to read, and weep.

Meanwhile, where the heck is the opposition?

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