Friday, February 25, 2005

The fake crowds of the fake revolution in Venezuela This revolution is so fake that even the poster of their adoring crowds are sometimes faked. Below the picture of the poster being published in the papers as advertising for Governor  of Anzoategui Tarek William Saab, where he is shown surrounded by a crowd of admirers, supposedly on the celebration of the success of his first 100 days in office. Except that the picture is simply fake as shown in the three blowups, where one can see that the people in the picture "repeat" as the whole thing is simply acollage of the same people repeated in the picture. If he is so popular, why fake it? Oh, the fake revolution! 11:13:28 PM    comment []

Are you sleeping Mr. Prosecutor? by Teodoro Petkoff Ten days ago the sister of assasinated prosecutor Danilo Anderson denied knowing her brother had the property he was supposed to have had, including the two Jet Skis that she had supposedly admitted knowing about in what she said was her forged testimony which waseaked to the press. Well, yesterdy a video surfaced in which Anderson's sister is seen with a group of people taking the two Jet Skis away from the place where they had been stored. Today, Teodoro Petkoff takes the Prosecutor Isaias Rodriguez to task for allowing the case to be meddled with: Are you sleeping Mr. Prosecutor? by Teodoro Petkoff   In the decade of the sixties, poet Caupolicán Ovalles made famous a poem of his whose title asked President Betancourt: Are you sleep Mr. President? We could ask the same today to Isaias Rodriguez. (The Prosecutor). It must be difficult for him to get to sleep. Each day new evidence shows that some hairy hand wants to complicate the case of Danilo Anderson. A little while back his sister, Lourdes Suarez Anderson, categorically denied that she had had knowledge of the existence of two jet skis that her brother had acquired and that the testimony in which she supposedly recognized the existence of these aquatic vehicles were forged. Today, however, a video appeared where young Lourdes, together with a bunch of other people, takes the jet skis away from the place where they were being kept. That is, she did indeed know of their existence and the testimony, obviously was not forged. She did say what she later denied saying. Thus, the attempt to tangle up the matter, planting doubts over the authenticity of the testimony (which was leaked to the press) appears to have failed. At least the testimony with Lourdes Anderson’s statement was not forged, which lead us to believe that the other weren’t either. From whose arm, comes the hairy hand that wants to shuffle the cards again? 10:48:53 PM    comment []

Weil: Before and after the Vargas aid Weil on Vargas: Before and after the billions in aid: 8:04:24 PM    comment []

Oil Revenues Hide Chavez's Economic Ineptitude Venezuelan Vladimir Chelmisky in today's Wall Street Journal: Oil Revenues Hide Chavez's Economic Ineptitude By VLADIMIR CHELMINSKI February 25, 2005; Page A19 CARACAS -- After six tumultuous years in power, the claim by Venezuelan President Hugo Chavez that he is leading Venezuelans toward greater prosperity cannot be sustained. Any serious analysis of our economy shows a dramatic deterioration in Venezuelan well-being. A series of feel-good government programs only help ameliorate the negatives that would otherwise accrue to Chavez with his disastrous handling of the economy.   In 1998, the vast majority of Venezuelans were very poor and had no good reason to hope for a better future. For decades, the quality of life had been deteriorating. The democratic process seemed to function well only for the benefit of politicians and their friends. The political parties that had alternated in power since 1958, Social Democrats and Social Christians, were very much the same. Both offered socialism with political freedom. Their policies paid lip service to the poor but always proved counterproductive. Private property and contracts meant little in their laws. Two-thirds of willing workers could not find employment in the formal economy and The Heritage/Wall Street Journal Index of Economic Freedom classified Venezuela as "mostly repressed." The country needed dramatic change.   In that same year, presidential candidate Lieutenant Colonel Hugo Chavez swept the country's imagination with a good assessment of our problems, but wrongly naming economic liberalism as the cause of the misery. He promised a new state with new laws and sold hope to the poor. In December 1998 he won the presidency and for some time after his inauguration, he continued to gain popularity.   It is true that Mr. Chavez has expanded pension payments and implemented programs that did not exist before, like the 11 "missions" programs. Three of these programs are educational. "Misión Robinson" is designed to teach people to read. Participants receive a monthly stipend of 160,000 Bolivars (about $83) and in six months they may receive a sixth-grade diploma and can graduate to "Misión Ribas" where they have the same stipend and in six months may earn a high school diploma. In other words, an adult with no previous schooling can earn in just one year what normally takes 11 years.   There is no question that a monthly stipend is popular among the unemployed or those who earn very little but the quality of these diplomas is suspect. For the government, enrollment helps boost employment statistics since those studying do not count as unemployed. Another "mission" program provides Cuban doctors, to live and work full-time inside poor communities, ready to help with minor health problems at any time, free of any cost to patients. But as in education, the quality of this care is an unknown. If a medical doctor with a Harvard degree arrives in Venezuela , he cannot work until he revalidates it. But a Cuban doctor's credentials are taken for granted. Moreover, no one knows the cost of these doctors to the nation since they seem to be provided in exchange for Venezuelan oil to Cuba.   Yet another "mission" sells food staples at significant discounts from regulated prices. This is destroying the private sector at the retail, wholesale and industrial level.   Meanwhile the fundamentals in the economy are troubling. The central bank says the economy grew 17.3% last year, one of the highest rates in the world, but this was after a 9.2% economic contraction in 2003 and an 8.9% contraction in 2002. Despite exchange and price controls imposed to rein in inflation, in the past two years we have had an inflation rate only surpassed by Zimbabwe. In 2004 inflation was 19.2% and in 2003 it was 27.1%. The central government ran a deficit of 3.8% of gross domestic product in 2004, even with unusually high oil prices, fictitious central bank foreign-exchange profits and record tax collections.   The financial transaction tax of .5% is particularly damaging. Because most of the population is poor and does not use checks, the government says the tax won't affect them. This ignores the fact that business passes its cost onto consumers. In addition, there are consumer taxes which I estimate create a 22% mark-up on staples. Tax rules now stipulate that even the purchase of a cup of coffee requires the consumer to tell the vendor his tax identification number and address.   A main characteristic of our repressed economy is the imposition of exchange and price controls two years ago. We've seen this movie before. Venezuela had these controls from 1983 to 1989 and from 1994 to 1996. In both cases, corruption ballooned, and the economy sank. In the end, they had to be discarded amid scarcities and hyperinflation.   Another economically pernicious measure introduced by this government is property confiscation. Earlier this year, the country's most productive ranch, owned by the British company Vestay Group LTD since 1903, became the target of a potential confiscation with plans to partition it for "cooperatives." This may be popular with the poor but if the past is any guide, the newcomers will either starve or go back to where they came from. Meantime, the nation will have lost a major productive asset. Next we'll be wondering why there is not enough investment and job creation.   Mr. Chavez still has credibility among his disciples and his charisma may carry him for some time to come, despite rising crime, filthier cities, declining services, an expanding informal economy and more beggars in the street than ever before. His followers are so infatuated that they do not pay attention to the contradictions in his speech or his numerous promises never fulfilled. But when the price of oil comes down, the "missions" will be unsustainable and the bloom is sure to fall off the rose. 8:02:20 PM    comment []

The Economist: Is the United States' nightmare of “a second Cuba” coming true in Venezuela? Is the United States' nightmare of “a second Cuba” coming true in Venezuela? from The Economist EVER since he was first elected as Venezuela's president in 1998, Hugo Chávez has been fond of anti-American rhetoric. American officials long ignored this, preferring to watch what the Venezuelan did rather than what he said. Since Mr Chávez trounced his opponents in a recall referendum last August, not only has he turned up the volume of his “anti-imperialist” pronouncements, but some of his words are turning into deeds. As a result, some in Washington are starting to become alarmed about Mr Chávez and the wider regional implications of his leftist-nationalist “revolution”. Mr Chávez, a former army officer, recently declared himself to be a Fidelista, a follower, that is, of Cuba's communist president, Fidel Castro, his closest ally. He has ordered Venezuela's armed forces to draw up a new Cuban-style strategy in which the top priority has become preparing to fight a war of resistance against a hypothetical invasion by the United States, now seen as the principal adversary. To this end, Mr Chávez has recently ordered a doubling of the army's reserve, to more than 100,000 troops under his personal command. “Popular defence units” of 50 to 500 civilians are to be set up in workplaces and on farms. At the same time, the president is shopping for arms. In recent months, he has bought from Russia 40 Mi35 helicopters and 100,000 Kalashnikov rifles. He is negotiating for up to 24 Brazilian Super-Tucano ground-attack planes and four Spanish naval corvettes. The United States has protested to Russia over its arms sales, and wonders out loud what they are for. So do the armed forces in Colombia, the Americans' closest ally in the region, with which Venezuela shares a disputed border. The answer, say Venezuelan officials, is partly to replace outdated kit, and partly to do what both the United States and Colombia have been pressing for: to defend the border against incursions by Colombian leftist guerrillas, rightist paramilitaries and drug-traffickers. A senior Colombian official asks what will happen to the Venezuelan army's existing rifles. He fears that these, and perhaps some of the ammunition for the new Kalashnikovs, will find their way to the FARC guerrillas in their country, who are ideological soulmates of Mr Chávez. A second issue on which Venezuela's stance is changing is oil. The United States has long been the main market for Venezuela's oil exports. Now Mr Chávez is negotiating trade and investment deals with Russia, Brazil, Iran and China. The next step, some in Washington worry, will be that Venezuela will start diverting its oil from the United States to China. That is not an immediate possibility: China lacks refineries to process Venezuela's heavy crude. But it may happen in the medium term. Mr Chávez has signalled a desire to sell Citgo, a state-owned Venezuelan company that refines and retails the country's oil in the United States. Even so, Venezuela's foreign minister stressed this week that his country will “always be a reliable supplier to the United States”. A third controversy is Mr Chávez's tightening grip at home. Since the referendum, the opposition has all but disappeared as a coherent force. The chavista majority in the legislature has appointed an expanded—and avowedly “revolutionary”—supreme court, which in turn has named a new electoral authority, with a 4-1 pro-government majority. These developments have produced differing reactions across the Americas. In recent weeks, the United States has unleashed a barrage of criticism of Mr Chávez. Condoleezza Rice, the secretary of state, called his government a “negative force” in the region and some aspects of his rule “very deeply troubling”. For half a century, American policy in Latin America has been dominated by the desire to prevent a “second Cuba”. Some officials in Washington fear that is what is now emerging in Venezuela. They also worry that Venezuela may be soft on “narco-terrorism”, and trying to export its “revolution” to the rest of the region. As a result, they want to isolate Mr Chávez. But George Bush is finding it hard to persuade the rest of Latin America to do this. Last week, Colombia's president, Álvaro Uribe, met Mr Chávez, putting a diplomatic face on a bitter dispute following the abduction in Caracas and subsequent arrest in Colombia of a senior FARC leader. However temporary, this rapprochement, brokered in part by Mr Castro and backed by Brazil, Chile and Peru, ended up making the United States, rather than Venezuela, look isolated. One day later, Brazil's president, Luiz Inácio Lula da Silva, visited Caracas to seal a “strategic alliance”, signing two dozen trade and investment accords. Lula even praised Venezuelan democracy, to the dismay of the remnants of the opposition, which insists that the referendum was rigged. Should the region be worried, as America argues? The Colombian official, noting Mr Chávez's speeches about recreating the “greater Colombia” that in the 1820s briefly united the two countries under his hero, Simón Bolívar, is convinced that Venezuela, despite its repeated denials, is helping the FARC. Brazil, whose president represents a more moderate brand of leftism than Mr Chávez's, takes a more relaxed view. According to a senior Brazilian diplomat in Brasília, the referendum removed any doubts about Mr Chávez's democratic legitimacy. Brazil does not see any danger of an arms race—indeed, nobody objects to the mooted sale of Super-Tucanos. Some Brazilians see dealing with Venezuela as a way of reducing the risk of intervention by the United States, whose presence in Colombia they dislike. The diplomat notes that Brazil has sealed similar “strategic alliances” with Argentina and Peru. Brazil's dialogue with Venezuela has the blessing of Washington. The prevailing attitude in Latin America is that Mr Chávez has not yet crossed the line between democracy and authoritarianism—and that he is unlikely to do so unless he feels cornered by the United States. According to this view, Mr Chávez's “revolution”, paid for by oil wealth, would be hard to imitate elsewhere. So, it is argued, there is more to be gained by engaging Mr Chávez in a democratic South America than by isolating him. Certainly, Mr Chávez's intentions are sufficiently ambiguous to warrant close scrutiny by South America's democrats. The United States this week dismissed claims by Mr Chávez and Mr Castro that it is planning to assassinate the Venezuelan leader. Any attempt to execute “regime change” in Venezuela—such as the failed coup in 2002 which the United States did not condemn—would be rejected in the region as the ousting of an elected leader. But whatever the neighbours say, rising tension between the United States and Venezuela will be a dominant theme in the region for the foreseeable future. 7:59:18 PM    comment []