Tuesday, April 26, 2005

Why do our Governments ignore Chile's success? I have always wondered why Latin American Governments, including ours, always talk about neoliberals policies that have hurt our countries, when the reality is that what they call neoliberal is nothing more than a few attempts to improve economic conditions via macroeconomic adjustments without really getting down to changing the way these countries really work. But I have always wondered why most of these Government officials simply ignore Chile, probably the most successful country economically in the last decade. I was reminded of all this by Gerver Torres’ article in Sunday’s El Universal about that country. While the point of his article was to ask if that was a socialist country, I would like to summarize its highlights in terms of economic and social achievements. To begin with, Chile has the lowest poverty levels of the region at 20%. Yes, still too high, but the lowest in the region. Unemployment is 9% and salaries have increased in real terms by 50% since 1990. Contrasts that with Venezuela’s numbers under Chavez alone, poverty has increased and salaries have been reduced in real terms. Chile has on of the highest investment rates in the region at 23% of GDP and is the one that attracts the highest investment per capita in the whole region. Inflation, that perverse tax on the poor in most of the region including Venezuela, is only 2.2% in Chile. Interest rates are clearly low, helping the economy grow and the people imprve their standard of living. Chile also has a very good social security system, which not only provides pensions for its inhabitants, but provides a lot of the funds needed for investment in that country, without the need for the Government to borrow internationally. In terms of economic freedom Chile occupies today the 11th. position in the world. This for a country that had horrible numbers only thirty years ago. What is hard to understand is why, with an example like that, our Governments look for failed policies and ideologies that have repeatedly been tried without any cases of success anywhere in the world. Meanwhile, Chile simply chugs along, becoming more like a developed country under the indifferent eyes of the Government and Government officials in the region. Why? 10:42:20 PM    comment []

Contest of the week: What is Tascon doing in this picture? This picture was taken by a photographer from El Nacional in February of 2004. It shows Deputy Luis (alias Adolfo) Tascon leaving the Electoral Board (CNE) carrying a box. What do you think he is doing?: a) He was selling empanadas de cazon to the CNE Board. b) He was carrying the dollar bills to buy the infamous list from a Sumate Executive. c) He was carrying the copies of the opposition petition so that he could create his list. The copies were made with the twenty photocopiers he brought into the CNE on January 13th. as authorized by the CNE President. d) He was stealing some of the signatures from the opposition petition. e) He was teaching english spelling to the reporters outside the CNE. 7:15:25 PM    comment []

Some lose ends --While the Venezuelan Government continues to say that CITGO’s refineries in the US are losing money, Valero Energy will become the largest US refiner in the US with its purchase for US$ 6.9 billion of refiner Premcor., whose stock has doubled in the last year. According to analysts these transactions are talking place because refiners are “swimming in cash”. Meanwhile, the Venezuelan Government dismisses this report, in which a former executive says he resigned because it was hard to “keep track of the company’s cash flow”. Maybe its hard to swim in cash and keep track of it at the same time.  And in another article, it is shown how Chavez has named his cronies to work at CITGO and they have no experience or even a clue about the business. The problem is that rather than swimming in cash, CITGO appears to be badly mismanaged at a time that it should be making huge profits. If oil prices should drop, imagine what would happen! I wonder if this is why they call it “La Revolucion Bonita”. Or is it because the children of revolutionary oil executives drive $200,000 cars? --Japanese oil company Teikoku, said that the increase in taxes for the marginal oil field projects would make it impossible to make a profit from the fields it runs. The company said it would need to receive incentives from the Venezuelan Government in order to continue the projects. --On Chavez’s Sunday’s program Alo President, Chavez said that among the evidence that the US is planning an invasion of Venezuela was the fact that a US woman was caught photographing a military installation. Chavez also said that “several other Americans” were caught taking pictures of oil installations. The US Ambassador in Venezuela said that to their knowledge no American woman has been detained in Venezuela in recent months. He did say that a US woman enlisted in the military lost her purse in Maracay, where there are military installations. Her purse had a disposable camera. I guess the invasion will be low tech. 11:55:22 AM    comment []