Satan's Poop Inc. Paila Master: Venezuela

Nothing new in Interpol's report that we did not know about Hugo Chavez' support for the FARC guerrillas

Fri, 16 May 2008 00:04:20 GMT

The non-event happened today and Interpol told us that the documents that the material turned over by Colombian authorities that was found in the camp of guerrilla leader Raul Reyes were not manipulated. You can download the whole report here. Of course, even before the report came out Venezuela's Minister of Defense was saying the documents handed over by the Colombian authorities had no credibility and the Venezuelan "people" would know how to evaluate them. A strange statement given that this was a technical evaluation which according to the Interpol Director Venezuelan authorities did not even want to receive ahead of time.

Chavez at least waited until the report came out and used his customary diplomatic and polite language to call the Head of Interpol a clown, a bandit, not noble (?), a tramp and shameless.The PSF's began coming out of the woodwork with the Venezuelan Information Office immediately issuing a report discrediting the Interpol report and urging Americans to write their Congressmen, while pro-Chavez computer experts paraded on VTV to explain that it was impossible to do the checks that the Interpol claimed to have done. The level of stupidity should increase in the upcoming days as idiotic arguments are used to discredit the material obtained from the computers found at Reyes' camp.

Idiotic, because what is it after all that is being discussed? That Chavez sympathizes and backs the FARC guerrilla movement? Do we really need more proof of this or have people forgotten the eulogy Chavez dedicated to Raul Reyes the day he found out he had been killed and the outrage that it caused in the Venezuelan President who mobilize troops and got himself involved in a conflict between Ecuador and Colombia where he played no role? Chavez actually called Reyes, the second in command of the cruel guerrilla group, "a good revolutionary hero". Reyes was a man accused of hundreds of murders, cocaine trafficking, rape, sexual abuse. kidnappings, extortion and was found guilty in absentia in dozens of murders and kidnappings. In fact, he was sought by Interpol, the same organization that today presented its report at the request of the Colombian Government.

But do we really need more evidence to prove what is out there for everyone to see? Why do the Colombians need to create thousands of new documents to prove that Hugo Chavez backs the FARC? In fact, you can simply look through official Venezuelan Government pictures and find this jewel for example:

On the right is then Minister of Foreign Relations Jose Vicente Rangel, who at some point was Venezuela's Minister of Defense and also Vice-President. The picture was taken at the Foreign Ministry (called the Casa Amarilla). Notice the man on the left with the badly fitting suit? It happens to be none other than the good revolutionary Raul Reyes officially being greeted by the then Foreign Minister. Do serious law abiding Governments do that? Meet a known criminal, extortionist, drug trafficker, murderer and bomber with pomp and ceremony?

And now that you ask, how did Reyes get to Caracas? How was he contacted? Why was he there?

Of course, the imbeciles may argue that Rangel is not Chavez, but he was the Foreign Minister, later Minister of Defense and Vice President. But in any case, no matter what they may argue, there is this other very public picture and visit by Ivan Marquez to the Miraflores Presidential Palace, with big boss Hugo Chavez himself:

Once again, a known murdered, extortionist, kidnapper, drug trafficker being sougth internationally is received by Chavez at his own residence as if he were a dignitary. Once again, how did Marquez get there, how did Chavez contact him, why wasn't he detained?

Or I could remind you of the parody when the Venezuelan Government denied the FARC's Foreign Minister was in Venezuela, was registered in Venezuela and later it turned out he even had Venezuelan papers and none other than current Minister Rodriguez Chacin met him at the Simon Bolivar International Airport when he first arrived.

There is also the now infamous video of Rodriguez Chacin telling the guerrilla members that turned over the Colombian hostages that "keep it up we support you". Can it be any clearer than that?

So, do the Colombian authorities need to invent some 600 Gigabytes of material? There are over 200 thousand images for God's sake! Almost 40,000 documents!

Because in the end what has been reiterated is that Chavez sympathizes with the FARc and has been trying to support them. But there is really no proof that anything came to fruition. Would the Colombians make up so much stuff and not include more damming proof that offers of assistance and the desire to work together?

Seems far-fetched to me.

What these images and the papers prove is that Chavez and his Government walk on the wrong side of the law, on the wrong side of terrorism and that they are willing to help these movements if it matches its political goals.

However, the FARC papers also reveal that the guerrilla leaders do not like Chavez style. The papers have evaluations of the trends in Latin America and despite the success of Chavez of holding on to power, they express their concerns over his "Caudillo" style, which proves to me that while the FARC want to use Chavez for their own goals, they do not trust him and their interests are not aligned as Chavez has designs over Colombia too for his Bolivarian revolution.

So all we really have is more evidence of what we already knew: That the Chavez Government openly supports a bloody guerrilla movement and has been in constant contact with it, ignoring international law and acting as the outlaw Government that it has always been.

Not much new there!

The bizarre virtual world of the Chavez Government

Thu, 15 May 2008 13:13:41 GMT

The outrageous statements and accusations by Chavez and his buddies against the world may be considered ¨political¨in nature in nature, but they are getting weirder and weirder.

But how do you explain outright lies or hailing projects that simply do not exist?

Such was the case this week when Chavez signed the Sidor nationalization Bill into law and began talking about the area of Matanzas, where Sidor is, as the "City of Steel". Chavez began talking about a new plant being built to make "specialty" steels and high tech pipes, that will turn the whole area into this apparently virtual City of Steel.

Because as reporters scrambled to find out about the project, it turns out that there is no such project in Matanzas, Ciudad Piar, Puerto Ordaz or Bolivar state. Not even in the planning stage.

Such is the virtual and ever increasing isolated world that Chavez lives in. He still believes he eradicated illiteracy, poverty and soon inflation. All in his own peculiar world, where he is always right and the Hitlerian ghosts of imperialism hover over him.

A country that needs no diplomats

Tue, 13 May 2008 02:17:10 GMT

On Sunday’s El Nacional, the newspaper had a study showing that Venezuela’s diplomatic service has become totally unprofessional and no position since 2005 has been filled considering the credentials, trajectory and qualifications of the candidates. Instead, Venezuela’s diplomatic corps has become a way station for former military and Cabinet members who have no role to play within the Chavez administration but to whom Chavez owes some debt for services and favors rendered.

Today, former Foreign Minister, President of PDVSA and the last man to quit the Venezuelan guerrilla Ali Rodriguez said that academic qualifications and experience are no indicators of the abilities and capabilities necessary to become a diplomat and do a good job, blasting the article.

And he is right…

Because no professional diplomat would be able to carry his job under he guidance of Hugo Chavez. What can anyone trained in the art and science of diplomacy say to his or her host country after Chavez managed yesterday to blast Colombian President Uribe, King Juan Carlos of Spain and Germany’s Chancellor Angela Merkel. This without his usual potshots at George Bush and the US Government.

But Chavez managed to blast Alvaro Uribe, calling him a liar, dangerous and irresponsible, because of his Government’s release of new documents found in the computers at the guerilla camp in Ecuador attacked by the Colombian Government. This is the same man that Chavez made peace with at the Dominican Republic less than two months ago after distancing themselves when Uribe stopped Chavez negotiating with the guerrilla group FARC. Just to make sure his diplomatic message was understood, Chavez said Colombia was trying to incite a continental war, prodded by the US Government.

Not that Uribe had not noticed that something was amiss in the to country’s diplomatic relations, as Foreign Minister Maduro, who is a bus driver by training, had failed to name a new Venezuelan Ambassador to Colombia since the supposed “rapprochement” of President Chavez and Uribe.

I guess if there is no Ambassador, there is no training needed, but once again Chavez send relations between the two countries into a black hole that is simply unnecessary, unless you are afraid of the conclusion s reached by Interpol on the content of Raul Reyes’ computer next Thursday and are simply preparing the way to deny the undeniable.

It would be equally difficult for any diplomat to try to defend Chavez’ charge that Germany’s Chancellor Merkel represents the same right wing that supported Hitler and fascism, suggesting he may confront her at the upcoming summit and even telling her she would send her to…except that she is a woman. Merkel’s crime was simply to dare say that Hugo Chavez does not speak for Latin America. Chavez’ words could not have been more undiplomatic, as anyone with the most basic knowledge of Germany’s history would realize how sensitive Germans are to that period of their history. Which German diplomats replied to reiterating that Chavez does not represent Latin America.

And maybe because Chavez previews the damage which will be created by the upcoming Interpol report, Chavez took advantage to take a shot at Spanish King Juan Carlos, reminding everyone of the episode in which the King told Chavez to shut up, saying the King believes he is superior and does not understand what is going on in Latin America. This elicited an immediate response from Spanish Prime Minister Zapatero who sent Chavez a clear message that reminded the Venezuelan President that he has to respect Spanish institutions as part of the relations between the two countries.

And there were reactions elsewhere, as both Peru’s President Alan Garcia and Mexico’s Felipe Calderon felt the need to intervene defending Colombia and Merkel and pointing out that such negative statements by Chavez do nothing but impede integration. Calderon even noted Merkel’s origin’s, which sent a clear message to the Venezuelan President that he had no clue about what he was talking about when he referred to Merkel as fascist or a follower of Hitler.

Thus, Venezuela truly does not require professional diplomats who would be incapable of defending the country and its President. Thus, Chavez has fewer and fewer friends as a consequence of his own irresponsible and idiotic words, which have increased isolated him from the international community.

However, one cannot help but be concerned by the ever-increasing strident and irresponsible tone by Hugo Chavez. Is he getting ready to distance himself from the world when Interpol ratifies what we already know about his relationship with guerrilla group FARC? Or is he one step ahead preparing himself to be isolated as the final days of the Enabling Bill arrive and he issues a hemorrhage of decrees legislating what Venezuelan rejected in the December referendum?

In either case, stormy days are ahead for Venezuela both internally and internationally and there is noting any trained and professional diplomat could have done to stop it.

Memories of China

Mon, 12 May 2008 01:01:54 GMT

Took a gizillion pictures in China, here are two which show the spectacular views and the people of China

Three weeks in which the country seemed to be running in place

Sun, 11 May 2008 00:37:50 GMT

Returning to Venezuela after three weeks of traveling, I find that very little has changed since I left. The scandals, stupidity and headlines seem to be variations of the same theme. After all, how much proof do we need that Chavez and his cronies are simply involved in an ideological project with no content and whose only objective is control of the country without benefiting the population in the name of socialism?

The headlines from abroad tells us that the data contained in Reyes' computer proves that Chavez had a close relationship with the FARC. Is there a surprise there? Only the imbecile cheerleaders of the revolution still try to claim the data is false. One really does not need much proof to know how tight Chavez was and is with the FARC. Have people forgotten the FARC's Foreign Minister Rodrigo Granda? Granda lived in Venezuela under a different name in total opulence, using papers provided to him by the Chavez Government. He even registered to vote! And when he first came to Venezuela he was provided full VIP protocol service at the airport, ordered by none other than the current Minister of the Interior. If Huguito disagreed with this actions, why was Chacin, who also had a second identity a turbulent past and a few million dollars under his name when he left the Ministry, brought back to the position last year?

And it was Chacin that was caught live during the hstage handover calling the FARC guerrillas "comrades" and telling them to keep it up, "we support your fight". And Chavez did all but cry when he found out that Raul Reues had been killed, calling him a hero and the like.

And then of course, people seem to have forgotten that General Gonzalez Gonzalez fall out of favor with Chavez came about when he told Chavez about the FARC camps within the borders of Venezuela and Chavez did nothing. Did we really need to know more?

The material found in Reyes' camp simply confirms the details and it has provided data that has led to arrests and captures, so it is absolutely idiotic to even suggest the data was faked by the CIA. If you argue that, you have to suggest that the presence of FARC leader Ivan Marquez at the Miraflores Palace, a man wanted internationally for murder, drug trafficking and terrorists acts, was also a CIA plot, which would then imply Chavez is CIA, as absurd a suggestion as saying FARC has not helped the FARC and has no ties to them.

Meanwhile, the members of the Electoral Board CNE, none of which are lawyers, do not even consult with their legal counsel to rule 4-1 that all decisions by the comptroller finding wrongdoing by an Government official, bans them from running in the regional elections. What a great tool! A person appointed by you single handedly decides there are crimes without a court mediating in the process and bans anyone the Government from running. Never mind that the Constitution says otherwise. But who gives a damn about the Constitution anyway. Mugabe would be proud of them, he never thought of doing something like that!

And then there is Hugo going to Court against his former wife claiming that he is not given the proper rights to be with his daughter. Never mind that he does not pay the alimony established by the Court or that he has had more important things to do on significant days for the same daughter, he has to make the point that his ex-wife can not oppose him. After all, which Court will rule against Chavez in a country where women are always favored in these cases? He is after all, the archetypical irresponsible Venezuelan father.

And as Chavez decreed the nationalization of Sidor, a majority of the country went dark in a clear indication of the inability of the Government to even sustain functioning institutions. But did Chavez get the message? No way, he is not a thinking person just a rabid ideologue.

And the Government sold US$ 4 billion to lower the parallel swap rate, which moved down a bit, but the country's bonds moved even more as foreign investors are wary of Venezuela's risk, even with oil at US$ 120. It makes no sense for the country's bonds to yield close to 11% for the long term issues or even more ridiculous, the 2010 issue which yields close to 9%. Public employees got a 30% minimum salary increase which will cost in the words of the Minister of Planning only 3 percentage points of inflation. Sure, this money will have no impact on the swap exchange rate as more money flows into the economy. But Minister El Troudi is no economist, as it should be, given the disregard for economic principles by the revolution.

And it was no surprise what happened at Venezuela's largest University, Universidad Central. There were four candidates, only one pro-Government, the winner got about 2,000 votes, while the Chavista candidate, who was born a revolutionary under the name Lenin, got 531 votes, down from about 600 when Minister Merentes ran in 2002. Incredible from a University that cheered Chavez' victory in 1998.

And Chavez and his Minister of Defense denounced the secessionist movements that want Zulia state to split from Venezuela much like Santa Cruz voted last Sunday. Except that no one has been able to find what the proposal is, who is making it and who supports it. It must be an ultrasecret CIA movement.

Which shows that not much canged in the last three weeks in Venezuela...which is unusual when I travel...

A superficial overview of modern China

Fri, 09 May 2008 01:03:35 GMT

While I like to limit the subject matter of my posts in this blog to Venezuela, on very special occasions I digress, but this post is likely to be one of the biggest departure from the focus of this blog. I just spent three remarkable weeks traveling through China and somehow I feel not only the need to put together my thoughts, but it also seems fitting to tell you about it in view of the large differences between what is going on in Venezuela and what is happening in China from both a political, social and economic point of view.

I visited China twenty-two years ago in 1986 when I went to a conference and I wanted to go back and see the changes that I have read so much about. I have actually followed quite closely a lot of what is happening there, but even then nothing prepared me for what I saw and I am still trying to understand and digest it all. Three weeks barely gives you time to understand a country as complex as China, which is undergoing such a massive transformation in all aspects of its life, but I will try to give you my own biased and superficial description of what I saw in that fascinating country.

China is certainly a quirky country, full of contradictions and contrasts. I visited some major cities like Beijing, Shanghai, Xian, but also visited what may be a tiny city there, the picturesque town of Guilin in the south, as well as numerous towns and cities along the Yangtze river, where I spent four days, including Fulin, Fengdu, Yichang and Chongqing, the last one having a population in its metropolitan area of 32 million people, more than all of Venezuela. Thus, I saw the remarkable metropolis that Shanghai has become, the elegant beauty of Beijing, but I also saw life in rural areas and the transformation caused by the gigantic Three Gorges Dam, which will be completed later this year.

I barely recognized Beijing or Xian, the two cities I visited in 1986. The transformation has been simply staggering. If it were not for the historical monuments, such as Tian An Me or the Forbidden Palace, it would have been hard to say I had been there earlier.

The forces unleashed by Den Xiao Ping on the Chinese economy are remarkable. From what I understood, there are two features that dominate the new China: the conversion to a market economy and the decision to give regions a lot of independence in what they can do and their planning. While certain issues are still decided in Beijing, provinces and municipalities function essentially independently, raising funds through real state "sales" (land is owned by the Government, so they are truly selling only 70 year leases) and taxes and using the money for their own local infrastructure projects.

What is most impacting is how rational and pragmatic the process is. Local authorities hire the best and are not second-guessed by the central Government. The orders are to be fairly pragmatic and empty of ideology. Simply put the people should improve their lives. And market polices dominate the how it is done, as simple as that. Wealth is seeing as something good in the belief that it will trickle down. Differences between top and bottom do remain huge.

The "best" rule through a complex process by which only the best and brightest are able to go to the University (11% of those eligible are accepted in a very competitive system for university posts) and the Communist party attracts the best from those that graduate. But beyond that, the Chinese also have an incredible work ethic. Students have hours that would seem absurd anywhere in the West, starting classes early in the morning and ending late at night. At river town Yichang, the best school in the city starts at 7 AM and ends at 10 PM, as students stay to do their homework. Similarly, students make sure they do their weekend homework early, so as to be able to attend the "special" classes, special activities and training required if you want to get ahead.

While one hears about the large-scale projects taking place in China, what impressed me the most is how infrastructure, both roads and housing has been the priority everywhere in the belief that good infrastructure leads to economic prosperity. It was clearly impressive to see the effort in relocating 1.2 million people along the Yangtze riverbanks, but it was more impressive to see the roads everywhere, the huge high rises, the airports, the power plants, which were everywhere. If in the peak of the housing boom in Spain the crane was jokingly said to have become the national tree, then in China I saw forests of them.

Of course a lot of this infrastructure building is only possible because labor is very cheap, allowing architects and designers to create projects that would be prohibitively expensive anywhere else. We did see housing built in the late eighties and early nineties that looked poorly built, already aging and with problems. But overall quality seems to be improving. Curiously, when you get or buy an apartment, you get no plumbing, air conditioner, appliances, toilets and even wiring. This leads to huge high rises with hundreds of exterior air conditioners, which create rain in the summer as they drip.

But there was also cleanliness and a level go hygiene that was not present 22 years ago. There has been a very direct campaign at the grassroots level to improve habits. The cities are clean, sadly, cleaner than Venezuela now. Running water is everywhere, which was not the case 20 years ago. I am not sure how it was done, other than I heard subsidies in which the Government would help pay certain expenses for improving hoes, but they were always shared with homeowners.

The economy is incredibly free. The Government controls certain things, but is always looking to liberate them. State owned companies go public almost daily, giving managers the mandate to make running them more open and always with profit in mind. The financial system seems a little bit obscure in how it functions, but even in that area the Government is opening up to foreign competition.

There seems to be corruption at the Government level, but there are also examples that while the Government is allowing some officials to make some money, there is a limit to excesses. One of the Shanghai officials that successfully led to the renovation of certain parts of the city is in jail for 16 years, he was just too obvious.

The scale of developments is simply beyond anything I ever expected and I have been a China believer for some time. But it is one thing to read about it an another to see it. How do you explain Shanghai going from 20 to 2,000 skyscrapers in 20 years? Or Beijing going from 85,000 cars in 1986 when I was last there to 3.5 million today? Or that sometime in the next four years China's per capita income will exceed Venezuela's, but they do not depend on oil? Or China's GDP exceeding that of the US before 2030?

Those are massive changes and they have been achieved in a period of time unparalleled by anyone in history.

More importantly, China has now a modern infrastructure, something that the US or Europeans countries can't boast they have. I thought of that as I crossed Frankfurt's airport, full of long and somewhat dreary corridors and compared them to Beijingss brand new incredible airport or Shanghais new airport terminals. Even small cities have brand new pretty airports that would put Maiquetia to shame.

Family life is very special. The old live for the young and the one-child policies have emphasized that even more. The whole of family life is centered upon improving the kid's life, sacrificing everything along the way. People express their love for the young in ways the West does not do. Basically, the sacrifices and efforts end only at death and go as far as leaving apart from the kids. Nothing is too small to guarantee the future of the kids. The children from the one-child only era, have become in their own words "Little Emperors", pampered to death, but at the same time subjected to incredible pressures to succeed.

In my way, China is still divided in two by class and family. By class, because despite the remarkable progress, 60% of the population remains rural and largely poor, while the rest is prosperous and lives in the cities. Similarly, there is a division by age, the young have accepted and embraced the changes and the challenges, while the old still may have misgivings. Life for the old was simple and most things used to be guaranteed. The system was unfair, but everyone understood it. Now too many things are changing, individual imitative is the key, but the fear of uncertainty permeates their thinking.

But neither group questions what is happening. For the old, the great leap forward and the Cultural Revolution were policies they backed and they simply failed. For the young, they were events to be understood and analyzed, but neither group wants to see it from a critical point of view. Both Mao and Ping have an almost deity status, together with Dr. Sun Yat Sen, the founder of the Chinese Republic in 1919. No matter how much I asked, I found little criticism of either of them.

A prosperous and enterprising 74 year old lady living in a town in the Yangtze, who is doing today much better than twenty years ago (she has a new apartment and three stores), skirted gracefully my question as to who her preferred leader was by saying that all of them, whether Mao or Ping, made positive contributions and tried different things for the "people" and while some failed, other succeeded in making things better and that is what is important. I got similar answers everywhere as I tried to get some criticism of Mao, but failed to so.

Of course, the Chinese people have been repressed and controlled in the way they think for a long time and what they have today is simple a continuation of those policies. The state controls the media and all of the news flow. There is guidelines and censorship. Most Chinese only heard of the killing of ethnic Han Chinese in Tibet, but have heard nothing of the killings in reaction to that. Most of them have heard the Government's story that Tibet has always been part of China, ignoring 700 years of independence up to 1951. Thus, what is big news in the West seems irrelevant and puzzling to most Chinese.

Because in the end the Chinese are extremely nationalistic and proud. To them the Olympics is something, which is not only a priority, but it should have taken place in China long ago, to show the progress their country has made. They feel they were short changed in earlier picks for Olympic cities. Any interference with that has to be politically motivated.

Curiously, the Chinese seem to feel more sympathetic to the US than to Europeans, as the former have never occupied China and even helped the country in the war with the Japanese. The Japanese clearly do not occupy a very favorable status for most Chinese. I learned early in my trip that any praise for anything Japanese would be met with a negative or at least skeptical reaction and I even used it as bait when it seemed obvious that I would extract some sort of reaction.

I did try to probe on freedom of speech issues everywhere and was always met with the same response: "Yes, we have some limitations, but things are improving all the time". It may be true, but the Government still exerts total control over the media.

Twenty years ago, sex was taboo and public displays of affections were a no, no. Today the young enjoy levels of freedom and openness unheard of before. They joke of an MBA meaning Married But Available and people live together before marrying in the big cities, even if mothers to dominate the kids lives, having they marry before a certain age and demanding prior approval of the perspective partners. Mothers seem to be truly overbearing in China, even after the recent changes.

Freedom of speech limitations are always scary, but there were less scary than twenty years ago. It is illegal to have satellite dishes that receive foreign signals, but some have them. The Internet is indeed censored and you can read the English paper and know it was written by the Government. But the Chinese know more about the world than they used to do and books and magazines are not censored the way they used to be.

Movement is also freer. When I was there in 1986, I could not go everywhere, neither could the Chinese. Today we both can roam essentially everywhere, the magnitude of internal Chinese tourism is staggering and migrations to the cities is such that an estimated 170 million people have move to the cities in the last two decades. How is that for scale?

I was actually more bothered by the issues of sexism, racism and classism more than others. Women are not only discriminated against but even the one-child policies today, give a remarkable strong preference to males over females. Similarly, there is a strong deference and preference paid to the rich and Government officials everywhere. The latter live in special compounds and have all sorts of privileges.

Racism is also present and there are clear policies to deal with it despite words to the contrary. Tibet may be part of China, but the new Tibetan railroad is being used to "export" Han Chinese to the area to dominate the Tibetan population, while the natural resources are used to develop the rest of China.

Finally there is the environment. It can get very bad. Chongqing was absolutely awful! Beijing was not better, except that it rained hard while I was there clearing the air significantly, I can honestly say that I did not see blue skies in the three weeks I was there and was bothered by pollution in at least two cities. The Government seems to be talking a lot about the environment but doing very little. It was on this issue that I heard the most criticism of all, including the negative possible effects of the Three Gorge Dam, which leads me to think that the Government itself may be promoting these protests as an excuse to attack these issues and have the population rally around protecting the environment.

But all in all, it was a very positive impression that I got from China, their slope is positive for most basic issues, including human rights. Here is a Government using all of its resources to improve the well being of its people, while at the same time maximizing foreign investment to help it improve the impact even further. It is a revolution, but based on the individual, rather than the collective (They tried that and failed!) It is a belief that the entrepreneurship of the individual will overwhelm state policies to the point that economic sectors that are liberalized become a free for all as there are no anti-monopoly rules except in sectors still under control by the Government. I never saw so many cell phone stores in my life!

It is indeed a belief in Deng Tsiao Ping's famous "To be rich is glorious" that will expand and trickle down to the people. Combine that with decades of Government domination with very hard working people and you get an incredible miracle.

At times I worried that those same forces could be turned around and the whole process be reversed in the presence of an external threat. That certainly seems like a real possibility, but at the same time, the young have now lived for twenty years under this new system and have seen the improvements. I am not sure they can be turned off from on day to the next unless the threat was real.

In fact, if I were a Chinese Government official, I would worry about how these young people will react the day things slow down, or if the environment continues to deteriorate or more political freedom is not given to them. In the end, the Government has to continue on the positive slope on all fronts for people to be happy. Media control may one day allow the Government to turn the people in the face of an external threat. But in the long run, it will be internal development that will determine how the Chinese future plays out.
Right now, it looks very good.

Lights out!

Wed, 30 Apr 2008 03:23:28 GMT

Today's blackout may simply be showing the dark future awaiting us...

Miguel from the Yangtze River

What could you do with 5 billion dollars?

Mon, 28 Apr 2008 13:44:26 GMT

You can't help but be awed by the growth of China in the last three decades. I was here twenty-two years ago and the changes are simply staggering. You hear and read mostly about the great modern infrastructure projects of China, such as the building of a whole city of modern skyscrapers in the Pudong region of Shanghai, which now has more tall buildings that New York, or the Three Gorge Dam project, where I am today. But the basic infrastructure is what has impressed me more.

In small towns like Guilin in the South, right north of Vietnam, or in Yichang along the Yangtze River, cities you may have never heard of, the highways, schools, buildings and airports have nothing to envy the best and now old infrastructure of Venezuela. In fact, it is us that should envy that infrastructure, each and every one of the airports, for example, was as modern as the Maiquetia airport. And secondary highways near the small cities I mentioned are in better shape and better maintained that Venezuela's main highway, the Autopista Regional del Centro.

All of this infrastructure requires planning and money. What is perhaps most interesting about the planning part is that in many cases, these highways were the first things to go in, even before housing was built. Of course, by now the Chinese have lots of experience in large scale planning such as the relocating of 1.4 million inhabitants along the Yangtze River or moving a few million people from the old residential areas of Shanghai to new housing.

Which leads me to the initial question of this post: What could you do with US$ 5 billion in Venezuela, if you spent it in infrastructure projects. The question comes up, because that is precisely the amount President Chavez will be spending on buying out the cement companies and steel company Sidor. It is not a moot question, the nationalization of these well functioning companies is being done at the expense of using the funds in new infrastructure to benefit the population, rather than power grabbing, ideological projects with no added value to the "people".

Let's take for example housing. Chavez has been in power nine years and in not one of them has he been able to match the lowest number achieved by the Caldera II administration in any year, despite the much lower income of those lean years.

A small apartment 80 squared meters is sold on Venezuela for Bs. 60 million. This is roughly US$ 28,000 at the official rate of exchange, which is the only one the Government recognizes. Thus, with US$ 5 billion, if you spent it all on housing, you could build 185,000 apartments, which is probably an underestimate, given that the Government would not have to buy the land to build them and I am likely overestimating the cost, since my assumptions give you a cost per square meter 350 dollars per squared meter, which is high for low income housing. But in any case, the Chavez administration has yet to exceed half that number in any given year.

Or take hospitals. I don't know what a hospital costs, but I know somebody building a hotel In Caracas told me that each room costs US$ 4,500 per square meter, including all costs. So, suppose we build a 200-bed hospital with 6x4 meter two bedroom rooms. This means that you have to spend some US$ 21.6 million for the rooms. Since it is a hospital and you need equipment like surgery rooms, MRI and the like, I will throw in another US$ 20 million for the rest of the infrastructure or US$ 41.6 million per 200 bed hospital. Which means you could build at least 120 200 bed hospitals with this money. Quite a few for a Government that can't even maintain the existing ones, let alone having built a single one in nine years. (Even failed Presidential candidate Rosales has built a couple)

I am on a boat in the Yangtze, there is actually an Internet connection, but it is less than modem speed, so I don't know how much it would cost to build a mile of highway, but maybe some reader can enlighten us.

In any case, the point is that you could do so much with US$ 5 billion for the people. The Chinese with all the quirks of their system that I am still trying to digest have proven it over and over, as I see town after town that has been built from scratch along the shores of this magnificent river. But they have also understood the power of free enterprise and markets and how when you combine the two, everything investment gets magnified for the benefit of the people.

Just the opposite of what Chavez believes in.

But in the end it takes more than money to get things done. You need money, but also management capability and the ability to dream, not dream fantasies of power and grand epic gestures, but real concrete accomplishments for the people.

As I saw the Three Gorges Dam this morning, a US$ 25 billion project, I was reminded that Venezuela has the Guri dam, the fourth largest dam in the world, finished 38 years ago. Guri was conceived, designed and completely built by year 22^nd. of the now much maligned and despised Fourth Republic. At the rate we are going, one day that Republic's revindication will be absolute.

To wed or not to wed: Chávez marital dilemma

Sun, 27 Apr 2008 00:46:09 GMT

Chávez has a dilemma: he needs a wife.

Naomi Campbell or Pilar Córdoba won't do because he needs a Venezuelan wife.

By Venezuelan, I mean really Venezuelan, someone that was born in Venezuela, speaks Venezuelan and looks Venezuelan. She also has to be at least thirty years old and cannot have a second nationality.

It is not me who is saying this, it is the Venezuelan Constitution.

No, the Constitution does not say anything about the President's wife, but it does say something about who can be the President of Venezuela.

That's right: Chávez needs a wife to propose her as the candidate for the Presidency of Venezuela in 2013. That would fix all his problems with the Constitutional Reform.

A wife as a President and him behind her, using all his power as usual, right?

Well, not quite.

The solution is not so straightforward.

The problem for Chávez is that Venezuelan wives end up being .....VENEZUELAN WIVES!

I sure know, I've got one!

Before you stop reading arguing that I am a misogynist and that I shouldn't use this blog to settle my domestic affairs, let me tell you that I think that Venezuelan women are wonderful, intelligent, competent human beings but they cannot help it: they are genetically programmed to be Venezuelan women.

When you start dating them, they answer "whatever you want, sweetheart" to any question that you may have, they are soft, gentle, understanding and sooo beautiful. They move their long hair, make you little eyes and give you a million dollar smile that takes you to flirting paradise. Then, once they get married, the genetic switch is activated and they transform themselves into "cuaimas" (see translation here)

The problem with cuaimas is that they cannot be tamed. Quite the opposite, they tame you! And if you are not happy with it, they send you to hell and leave you forever. They may or may not have a career, may or may not have kids, may or may not have money, they don't care: cuaimas have very short tempers and a mind of their own.

So that's Chávez dilemma: nobody knows how a Venezuelan wife will behave when put in a Presidential seat, but giving the normal behavior of any Venezuelan wife, he surely knows that's not a very promising situation for him.

He may end up serving her coffee in the Alo Presidenta.

So, he'd better settle for one of his brothers, or his mom.

....Although his mom also happens to be a Venezuelan wife.

Jorge Arena
Most Distinguished Returning Ghost
and PTG (Proud Tomato Grower).

Chavez according to Caballero (Bruni's post)

Mon, 21 Apr 2008 17:10:13 GMT

Hugo Chavez is not a communist, nor a socialist or a Muslim, as he once said. But he is all that at the same time if it guarantees him to stay in power forever

the above citation is due to manuel Caballero in an excellent interview by Mori Ponsowy that appeared in March in the argentinean La Nacion. I have seldom read anything that condensates so well my own perception of Hugo Chavez.

Here's the translated interview and here's my post. Enjoy.

CARACAS .- Manuel Caballero is one of the most known and respected historians of Venezuela. National Journalism Award (1979), National History Prize (1994) and Simon Bolivar Prize Biennale (2001), his fame, however, is not due to his academic work, but is rather due to his continuing work as an essayist and opinion journalist . Always controversial, his articles generate debate not only about historical issues, but also about the most pressing contemporary issues. Since 1965, he has been collaborator of newspapers such as El Nacional, El Diario de Caracas and, currently, El Universal. Despite his long militancy in the left, the lucidity of his analysis, the iconoclasm of his ideas, and his fervent opposition to the paternalism of the state has become a required Sunday reading for all sectors.

Author of more than 50 books, his writings combine historical erudition and a witty pen. He is famous for his sense of humour and his mordacity. Our appointment is at nine o'clock, but he suggests that it may be earlier. "At eight I have already written my article, read all the newspapers, and when my wife lived, I had given her her first beating," he says, laughing at his own joke.

He lives alone in a small apartment that, like many in Caracas, overlooks the Avila mountain. In the bright and colorful living room where he receives La NaciÃƒÂ³n there is a table full of ornaments where live together a high Simon Bolivar in wood, with all Mafalda's characters. He points to us other Argentines characters on the table: three small plastic dolls, representing Evita, Peron and Gardel.

Caballero militated for eighteen years in the Communist Party, was arrested during the dictatorship, and was a founder and a member of the Movimiento al Socialism party until it decided to support Chavez. "I told them explicitly that if they were going to devote themselves to lick the ass of the military, they could count me out". Since 1958, when Perez Jimenez felt, I have criticized every single ruler", says Caballero, that prides himself on not having ever worked for any government. "That's what gives me the authority to oppose now. I even told Ramon J. Velasquez, whom I admire, when he assumed the presidency, that I was not only in opposition, but that I wanted him to make a bad government so that we Venezuelans remove from our heads the idea that everything should come from the State. "

When asked about his political militancy, he replies that first and foremost he is antimilitarist. "If being antimilitarist is to be left, as I was always taught, I am on the left; if it means to be from the right, I am on the right, if it means being in the center, I will be in the center. But, one thing is for sure, in each case I am in the extreme: extreme left, extreme right or extreme center."

-- Is there a socialist government in Venezuela?

- This government is not socialist nor on the facts or in its approach. Hugo Chavez is not a communist, nor a socialist or a Muslim, as he once said. But he is all that at the same time if it guarantees him to stay in power forever. Chavez is a chavista and what he loves about Fidel Castro are not things that Fidel did or failed to do in Cuba, but the fact that he has been almost half a century in power.

-- Why do you claim that Chavez is not a socialist?

- I am tempted to respond by saying that I refer to the proofs. But I will be more friendly. The problem with the word "socialism" is the emotional and mythic charge that it carries. With the same word have been designated very different doctrines and practice policies. Socialist was Stalin, like Hitler, who was a national-socialist, and socialist was Pol Pot, on the other hand, Willy Brandt was also a socialist. The political practice of Chavez resembles the fascism of Mussolini and his Latin American version which was Peron, with the difference that Peron was supported by the organised working class, while the fundamental support for Chavez are the marginal class.

-- Do you find other similarities between Chavez and Peron?

- As Peron, and perhaps more than him, Chavez is the largest demagogue in the history of Latin America. There is a confessed liking by Chavez of Peron. When he was in full election campaign, when he was nationalizing a group of argentineans, he ended his speech by saying "Viva el General Peron!" In the Paseo Vargas he made erect a statue of Evita alongside the "Che" Guevara. Another big similarity is the use of democratic mechanisms to combat democracy.

-- Do you think that is why Chavez has much sympathy in Argentina?

- I would not say that the Argentine people support Chavez, but the Argentine government does. Unfortunately, we live in a world in which Christian charity has prevailed for thousands of years and appreciation for the alms manifests itself in a lot of people who prefer to reach out their hands to receive, instead of making it callous by hard work. Over there there are eight hundred thousand dollars roaming that are not little thing: the one who is willing to receive them is willing to be grateful.

-- What are the greatest achievements of the current government?

- I owe three things to the government of Hugo Chavez. First, having taught me that political parties, as individuals, are capable of suicide. Second, having me shown that the people can be wrong. And thirdly, giving me the evidence of how unable to govern are the military. This is not the first government that shows these things, but it is the first to combine all three simultaneously.

-- Do you think it will be possible to export the Bolivarian revolution to the rest of Latin America?

- Lenin, who created a special organization to export the revolution and who had the support of a nation of two hundred million people did not suceed in that quest, nor Mao, with more than one billion Chinese people as enthusiastic supporters, and neither Fidel, despite how well he succeeded in exploiting his romantic image of a guerrilla leader. Do you think that that could be achieved by such a politically and ideologically inconsistent character as Chavez?

- Reading about the country, I am surprised at getting versions that are diametrically opposed on the same fact, depending on who is consulted. How can we know the truth in today's Venezuela?

- One of the most pernicious things that are due to this government is an absolute division of the society, as it had never existed in our country. The social hatred is well known, both as the geographical distribution of the facts and consciences. Here, now, you are absolutely right because you are my friend, or you are not right because you are my enemy, rather than you are my friend because you are right. All this makes it very difficult to know where is the truth. However, sometimes the myths can be undone by studying the same official discourse. At one point, the president said that he was going to launch a campaign to eradicate illiteracy, and that it was a shame that 10% of adults did not know how to read or write. That single sentence contains a contradiction: if it is the only government that has been involved in literacy how is it that the remaining 90% of the population can read and write? On another occasion he said: "I have never supported or support the FARC. If I support the FARC, the Venezuelan people would be entitled to throw me out of here."

-- Why Venezuela became involved in the recent Colombian-Ecuadorian conflict?

- The intrusion by the Venezuelan government has two and only two explanations: the first is the alliance between the Colombian bandits of the FARC and the Venezuelan government, and the second is the search for an external enemy to allow Chavez, on the one hand, to redo his virginity in a matter of popularity through an ultranationalist speech and, on the other, to compact the Venezuelan armed forces behind him.

-- Can the offensive by the Venezuelan Goverment be interpreted as an attempt to avoid the American meddling in Latin America?

- Contrary to what the Chavista propaganda would like us to believe, it is the Venezuelan meddling in the conflict which could lead to a more open and active interference of the US. There is no Venezuelan national interest to justify interfering in the matter, except Chavez's personal interest of provoking an intervention that could allow him to stay in power forever using the same alibi as Fidel did.

-- Do you think that, with regard to Venezuela, the resolution of the border crisis is a final one?

- Neither this crisis, nor any other similar crisis arising in the future will have a real and definitive solution while Chavez remains in power. His policy remains focused on the exploitation of nationalism and the militarization of the Venezuelan society.

-- Has the situation of the marginalized classes improved with Chavez?

- Yes, it is undeniable. But those are the social sectors most likely to accept and prefer the bestowal. Due to their status, they do not think what may happen next week because their big problem is what they are going to eat this evening. Chavez has used the bestowal as a policy, especially at times of elections. But the hard alms lasts what the alms lasts. Chavez has been governing for ten years, and some people are starting saying that they would rather collect a salary at the end of the month than continue receiving alms. It is a matter of dignity.

-- Do you think that the balance of the Bolivarian revolution may have something positive in the sense that it woke up the middle class to participate in politics?

- I believe that the only legacy of the Bolivarian revolution is the independence of Venezuela, but I suppose that you did not refer to our Independence Revolution. It is that this can not be called neither "revolution" nor "Bolivarian"! That "Bolivarian" is a sovereign stupidity. Bolivar was not even a Democrat: was an aristocrat of the eighteenth century, a son of the Enlightenment. Therefore the "Bolivarian socialism" is almost an oxymoron, like saying "white blackness."

-- And "revolution"?

-- But is that Chavez has not even nationalized a grocer's shop (a bodega) in the llano! Here the basic industries had already been nationalized, and without blood.

-- Are there political prisoners in Venezuela?

-- Of course! One example: there are three commissioners of the Metropolitan Police that have been prisoners for three years, they have not been able to judge them because they have not found how to do it. And about the impartiality of judges I will give you just one example: last year, at the opening ceremony of the judicial year, all the judges began to shout "Uh, ah, Chavez no se va!" That had been one of the slogans of the campaign by itself. What independence of the judiciary is that?

-- Considering that Chavez's opposition is ranging from the extreme left to extreme right, what chance of success do you think it may have in the regional elections in November?

- The opposition has committed many errors. Perhaps the most serious was to be drifted along by radical groups flying the promise that Chavez could be overthrown. Just now the opposition is learning that that is not the way to get rid of ChÃƒÂ¡vez. Leon Blum said that politics is a game where not all hits are collected, but where all mistakes are paid double. We are paying the mistake of having elected Chavez. The worst plague that can fall to a people is to have a military government. I would not know when we will finish paying because I am convinced that Chavez is not going to leave power unless it is by force, but that does not mean necessarily through a military coup. We have to accept the idea that the fight is tough and possibly long, that we screwed up very deep and that when he goes away he will leave us a country in ruins and, if that were not enough, ungovernable.

Errors, Lies and Manipulations on education in the times of Chavez and his brother

Wed, 16 Apr 2008 12:17:50 GMT

What an interview with Chavez’ brother Adan! (Don't miss the picture and the pointed finger in the article, it tells you the whole story in some sense). It sounds like something out of The Onion or Saturday Night Life. You have to love the “errors”, “lies” and “excuses” of the revolution. Some highlights:

Q: How do you justify the numbers saying that the number of enrolled students went down by 2.5 million from 2006?

A.Ch. I don’t know where you got that number that it decreased by 2.5 million.

Q: In 05-06 there are 10.2 million students and in 2007 it went down to 7.6 million.

A.Ch. That is an error, in 05-06, without missions; there were 7.4 million students. The years after that there were 7.6 million.

Q: So, there is a contradiction with the total of 10.2 million?

A.Ch. It is an error. If we have to correct it we will. (Why don’t they?)

Q: Ten years ago the registration reached in first grade 657,448 kids, in one decade that number ahs not been reached. Moreover, there are 232 thousand kids between 6 and 7 who are excluded.

A.Ch. We have increased coverage for that age. We are attacking the social causes, without looking for justifications (??). We don’t hide that half the kids in middle level education are out of the system. But before only 23 out of one hundred were in. The deterioration is such that you can’t fix it in 5 or ten years.

(My comment: if registration doubled on a relative scale, how come the total absolute number has never been topped? Moreover, since they did nothing for five years, it is no surprise it “deteriorated”, but ten years ago, Physics and Mathematics was taught at 90% of public high schools, today they have no teachers in over half n these areas and the students are passed automatically, so don’t give me that BS)

Q: The literacy target has been questioned. You said there was 4% illiteracy in the country that means there are 930,000 illiterate people in the country.

A.Ch. When a country is declared free of illiteracy it does not mean it has 0%; Unesco recognizes that a country with 4% literacy is free of illiteracy.

Q: In 2005 you said you had taught 1.5 million people to read, how come now there are 900 thousand illiterate persons in Venezuela.

A. Ch. There was an error (Another one!) When the mission was started we announced that there were two million. We taught 1.5 million to read. Let us assume (Why?) that we made an error in calculation at that time.

Q: You always said it was 1.5 million On the other hand Unesco never declared Venezuela a country free of illiteracy, the letter only recognizes the effort.

A. Ch. There is a letter published by the General Secretary of Unesco, where some achievement is recognized. Unesco recognizes a country with less than 4% illiteracy to be free of it. We have less than 4%, because we have not stopped. We don’t hide anything…I reiterate Unesco recognizes that a country with 4% illiteracy is free of it.
There you have it, he implicitly recognizes the old lie that Unesco never “certified” Venezuela as free of illiteracy, which was mentioned by Chavez and by PSUV’s candidate to Metropolitan Mayor Aristobulo Isturiz. This was “certified” in the blogging world by Alek and Sydney and in the academic world by Francisco Rodriguez.

But the striking thins is how Adan Chavez lies throughout the interview, attributes things to errors in the past, rather than the outright robolutionary exaggerations they were. He takes the numbers too lightly and really never gives a straight answer. He also fails to recognize that things at the high school level are even worse than when Chavez got to power.

It is a truly a farcical interview. The attitude seems to be: The revolution is always right, even when it is wrong. Except that Mr. Chavez knows there are few achievements in the educational front because the revolution had no educational plan ten years ago and today’s plan is simply ideological not educational.

It is just lies, errors and manipulations. What else is new?

Time to dissapear, back on May 8th. or so

Wed, 16 Apr 2008 01:46:35 GMT

I will be traveling on my annual vacation. I will be gone to three weeks to the other side of the planet. Bruni and Spinoza and even my distinguished blogger Jorge Arena will provide some ghost coverage as needed and once in a while I may even try to contribute. Hope the country holds together in my absence, funny things seem to happen when I travel...

Is Chavez a CIA agent? Or...

Wed, 16 Apr 2008 00:26:05 GMT

While we have become accustomed to the most bizarre and outrageous behavior and statements from Chavez Government officials, it was truly amazing to watch former General Prosecutor Isaias Rodriguez come on TV and start blaming the US Government, the “Empire”, for all of the country’s problems.

With his characteristic cynical straight face, the man who is most responsible for the wholesale violation of the laws and the Constitutions for the last seven years, violating his mandate, said, once again with a very straight face, that shortages, the Maletagate affair and now the testimony of his one time favorite star witness, are all part of a softer, more subtle coup against the Government of Hugo Chavez by the US Government and the CIA.

On the way he included electric shortages, Chavez’ relations with the FARC, the diplomatic crisis with Colombia and the ExxonMobil lawsuit, as part of this incredibly successful “slow” coup against the Venezuelan Government.

Which leads me to conclude that Hugo Chavez must then indeed be a CIA agent. Because it was Hugo Chavez who involved Venezuela unnecessarily in the conflict between Ecuador and Colombia, a conflict that had little to do with him, but led him to unilaterally mobilize the Venezuelan Armed Forces to the Colombia/Venezuela border, almost creating a needless military conflict. (Which may have been the end of Hugo Chavez as President anyway).

And it was also Chavez who declared his allegiance to the FARC, asking that they be considered a belligerent force and not a criminal guerrilla group, as well as saying that dead guerrilla leader Raul Reyes was a great and dear fighter. So, once again one onlyhahs to look at Chavez as the culprit for this case.

As for ExxonMobil, it was Chavez decision to expropriate ExxonMobil’s share of the Cerro Negro project which led to the suit, given the refusal of the Venezuelan Government to pay more than book value and in violation of the legally bound contract signed by the partners, PDVSA and Venezuela, when the projects were started. And I guess Isaias will once again blame the CIA and the US Government when Venezuela loses the case in arbitration and is force to pay an obnoxious amount, which could have been much better, used in improving the lot of the Venezuelan people.

And shortages whether electric or food are simply a direct consequence of…

You guessed it:

The stupid and ignorant policies of none other than super agent Hugo Chavez whose economic ideas are not socialist, but go back to the failed economic policies implemented in Latin America in the 60’s which led to so much poverty and the sub continent falling behind the world in economic development under the guidance of populist and ignorant autocrats similar to Hugo Chavez (Curiosuly many were agents of the Empire!). Thus, Chavez must be an agent of the Empire.

And then there is the laughable charge of the suitcase full of cash, found in PDVSA plane, filled with Chavistas of Venezuelan origin or Argentinean buddies who represent the business links to shady and non-transparent deals between the two Governments. We all recall how Isaias himself, at the time General Prosecutor, stated publicly that the crime was committed in Argentina and he had nothing to investigate, as if Venezuela did not have strict exchange controls which make it a crime, punished by prison, to carry more than US$ 10,000 in cash outside the country. Even today, there is no investigation in Venezuela of the Maletagate affair making a mockery of the case.

And, of course, there is the related case in Miami in which some people who have mysteriously made millions of dollars in deals with the Chavez Government were taped trying to convince the Maletagate main character, Guido Antonini, to say where he got the cash.

And then we come to Isaias’ star witness. The star witness of a case the former General Prosecutor manipulated to steer evidence away from the Government and towards the opposition. The case he claimed to have solved so many times only to go and show up with a charlatan like Giovanni Vasquez, who claimed to be many things and at many places, none of which were ever true. Despite this ,as Prosecutor, Rodriguez never removed the cases against some of the accused and jailed innocent people even after it was shown that his star witness, not the CIA’s, was a compulsive liar.

But no new avenue of investigation was opened after Vasquez was shown to be a liar, continuing the long miscarriage of justice where Rodriguez did accuse any moving body in the opposition of one thing or another.

But as you can see, Hugo Chavez seems to be at the center of the whole conspiracy. Isaias forgot the lack of accomplishments of the Government in education, housing, eliminating poverty, how crime has increased, all the money given to other countries by Super CIA agent Chavez himself, high inflation and the like.

Which can only lead us to the conclusion that Chavez is an agent of the Empire, unless, of course…

The CIA has discovered a stupidity virus and inoculated all of these guys with it…

I still have to explore this possibility.

How to get rich if you have contacts within the exchange control office CADIVI

Mon, 14 Apr 2008 02:51:45 GMT

Because there is no transparency, it is not possible to look at the details of transactions within the exchange control office CADIVI. Lately new journal Sexto Poder has been somehow getting information from within and has been reporting some amazing ripoffs in CADIVI. This week they showed how a request denied twice by previous CADIVI administrations, because they did not qualify at all, was magically approved when the new President of CADIVI was appointed.

But the case I liked the most because it is so easy to understand is the one above from a company called Henglobal. Henglobal apparently operates from within the La Carlota military base in Caracas and while normal companies have to wait over 100 days for approval.

But not Henglobal. Their requests for residential intercom systems are approved in seven days and they submit from 10 to 15 a month. Besides this anomaly, notice that these intercom systems, which typically cost about US$ 25,000 for a large building in Caracas, are approved for US$ 965,000. Thus, the owners get this amount at Bs.2.15, but most of it is profit because it only costs US$ 25,000. Assume ten a month, twelve months every year and this gives the company a tidy profit of around US$ 112 million.

In previous exchange control systems in Venezuela there were independent verifying companies that would check prices with international sources before approval. No such thing was done this time around. Thus, the pretty robolution finds ways to steal everywhere, which explains in part how come the large windfall the country has enjoyed has not produced the minimum results you would expect.

There are dozens of stories like the one above, this one is just the simplest scam you can find. More as they show them.

Country drifts as Governemnt goes into bizarro overdrive

Sun, 13 Apr 2008 01:52:11 GMT

You have probably noticed I have not written much lately, I could say I was busy with the young baseball season or the orchid exhibit this week, but reality is that there has been so much going on making this country truly bizarre. Meanwhile, the so called opposition was nowhere to be seen as they seem more concerned with their November campaigns than with remembering those that died on April 11th. 2002, whose killers remain at large and 19 deaths and hundreds of injured have disappeared under the veil of Chavista injustice. And Chavismo has no shame in celebrating today (Do they know how to count?) as the Day of Dignity because Hugo Chavez happened to return to power 4 years and 364 days ago.

Only NGO Vive commemorated such a dark day properly, showing up with 19 coffins in front of the Prosecutors office asking for the Justice that has not been achieved, while Chavismo in its usual immorality was at Puente El Llaguno, where former Minister of Defense Garcia Carneiro used the occasion for politics attacking retired General Raul Baduell, calling him a "traitor hero" for his role that day and his later defection from the Chavista ranks.

Meanwhile the man in charge of all the injustice and the fraud to the country's Constitution, former Prosecutor Isaias Rodriguez, was trying to deflect the accusations against him from his former star witness in the infamous Anderson case. Given their track record, I don't believe Rodriguez or star witness Giovanny Vazquez, as they both have shown to have a vivid and shameless memory to manipulate the truth according to obscure and amoral purposes. (The word amoral has come up a few times in the last few days with some friends in different discussions. What is going on here can no longer be labeled as immorality, amorality represents a better definition of the lack of scruples, ethics and morals that has taken over Venezuela in the last few days)

And we go from one amazing act or statement to the next. Perhaps none reflects as well the ability of the Government to be bizarre, that Chavez' statements that the country needs to be ready to greet the "hundreds of thousands of refugees" that will come to Venezuela to flee from the misery and the poverty created by George Bush in the US. I mean, where does he think he live? Has his isolation increased so much? Has he seen the garbage, lack of sewage, poverty, misery, malnutrition and crime that permeates Venezuela from one end to the other, with little change since he became President more than nine years ago? Has he noticed the exodus in the opposite direction at all?

But rather than spend money in solving these same problems, Chavez spends his days not only spending money at random, but destroying institutions. He is nationalizing Sidor just because and on Friday, they added seamless pipe factory Tavsa to it, just because its plant is on the same land as Sidor. What's another billion here or there for his whims?

And they even think those that will be expropriated may want to stay as their partners as if their track record at destruction and mismanagement was not there for all to see. Rumors have it that CANTV has not paid all salaries to their workers, only months after being nationalized. Billing problems, dialing problems and ADSL problems that did not exist befiore, have begun to surface as the number of workers in the company has jumped, much like those in PDVSA that has gone form 40,000 employees pre-strike to 77,000 five years later, despite lower production, huge accounts payable increases and profitability that is only due to a five fold increase in oil prices.

Meanwhile, some bureaucrat in the Land Institute decides to upgrade the land in Valled Del Turbio to class I (the most fertile) and sugar producing farms in full production are militarized and the Government wants to take them over just to guarantee further sugar shortages in the future. (Funny, one of the farms threatened was one given to some farmers by the Chavez Government, now they want to take it back. I guess they found a succesful case and wanted to get rid of it, it sets a bad example)

And to end it all, I find out that the new school program that has created so much controversy that Chavez withdrew the proposal, removes computers from the curriculum as a subject matter other than it should be used in an unspecified and diffuse manner in all courses.

And the opposition? I don't know, I have not seen them talking about any of these topics, maybe they care about human rights or economic well being as little as the Chavez Government. Instead, rather than devote a little time to criticizing any of the actions above by the Government, they seem to be running for office all over the place. I do hope they have a plan, other than getting elected.

Thus the country drifts into this sort of bizarro vaporous oblivion of nonsense under the leadership of Hugo Chavez who has gone into this nationalization rampage which is accompanied by frequent and long nationwide TV addresses. Today he did not create much goodwill by interrupting the NY Mets game just as Venezuelan superstar Johan Santana was pitching, which is certainly not going to endear him with the Venezuelan baseball fan population.(Even if he lost)

But such is the isolation of Chavez today that he no longer cares about what used to be "his favorite team from his youth", a lie he was caught on when someone realized he was no longer a kid when the expansion team the Mets was created.

But Chavez has lost his old touch with the common people and his popularity drifts down daily as he acts in grandiose fashion to attempt to prop it up. He forgets that his best moments have been precisely when he has set aside his grandiose economic and political projects and focused on the problems facing the people.

But the country drifts into a nutty economic model and nobody seems to care or say much, as everyone seems to go about their daily lives.

And I worry...

If it is Wednesday it must be Chavez' day to nationalize steel

Thu, 10 Apr 2008 02:49:02 GMT

Today the Vice-President Ramon Carrizales said exactly the opposite he stated yesterday and the Government announced that steel company Sidor would be “renationalized” and taken over by the Venezuelan Government from Argentina’s Ternium. Ternium is composed of a Mexican, Argentinean and Venezuelan steel producers, which found the synergies or joining forces and important factor in their success. Sidor was privatized in 1998 after decades of losses and an investment of more than 15 billions dollars.

Chavez had so far resisted nationalizing Ternium so as not to offend his Argentinean friends the Kirchners. Last year Nestor Kirchner sent a high level and personal emissary to negotiate prices for Sidor’ steel prices in Venezuela when Chavez first threatened to nationalize the company who apparently thwarted the effort.

But last night Huguito seemed to have a temper tantrum when Sidor’s board refused to accept the demands of the steel union, SUTISS, which has been creating trouble for the Government for the last two weeks.

What are another two and half to three billion for a rich autocrat like Chavez? Thus, Chavez added to what is now a remarkable US$ 21 billion in payments which the country will have to make in the next couple of years when you combine the heavy crude projects, cement companies and now Sidor. Given that Government assets including Fonden, Bandes and international reserves are estimated at US$ 57 billion, the numbers are no longer as comfortable as they used to look which may explain the fact that Venezuela has the highest risk of any emerging market at this time.

Of course, since they can no longer argue that Sidor is charging prices that are too high, this time around the arguments are that Sidor was “exploiting” its workers, submitting them to a form of “semi-slavery” and while the company has not violated the law, its behavior is “anti-ethical” and “inhuman”

This “inhuman” behavior included accepting the unions demand that all of the workers belonging to contracting companies be hired as regular workers, which increased the payroll by 600 people, a salary increase of 130% which has to be added to those announced by the Government every year in May and is thus much, much larger than anything the “human” Government of Hugo Chavez has ever granted any workers.

A Sidor worker would make after this increase, more than a Full Professor from a Venezuelan University or ten times the minimum salary. But you know, most of those intellectuals are oligarchs anyway, while a majority of Sidor’s workers Chavez believes are in his favor. They will, only if they need him.

We have yet to hear from Chavez Kirchner’s friends, who much like the French before the Lafarge nationalization, believed that they were immune to Chavez’ tantrums and antics. Chavez will have to give something up in return to Kirchner’s friends to be forgiven. But politicians in Argentina are not likely to be convinced and this may turn out to be the end of Venezuela’s Mercosur application.

And then there is the complete freeze out by Venezuela’s corporate sector, which now will absolutely refuse to make any investments. Why bother if you don’t know who will be next?

And that as the talk of the town today as people wondered whether it would be Polar, Sivensa and all or someone in the banking sector.

The amazing thing was that the opposition’s ignorance on economic matters made them stay on the sidelines as none of the “leading” opposition politicians seemed to be comfortable enough to even dare criticize the Government for its recent takeover announcements.

But to me the math is very simple: Every dollar spent in taking over perfectly functioning companies is a dollar away from helping hospitals in a country with a decaying heath infrastructure, or from helping someone avoid malnutrition, or from creating a job in a country with 50% informal sector employment or buying equipment to fight crime in a country with 100,000 homicides since Chavez became President.

It should not be that hard to figure which all in all represents a tribute to the mediocrity of our politicians both Government and opposition.

What is strong is the looting by Teodoro Petkoff in Tal Cual

Thu, 10 Apr 2008 00:45:09 GMT

I must say that when the Electricidad de Caracas bond was sold in what was clearly a blatant corruption scam, I was appalled that a US$ 100 million scam could go unnoticed like that. In some sense it is part of the climate of fear created by Chavez and his hoodlums in which many segments of the media are afraid to speak up for fear of retaliation. But I have been extremely happy to see others reporting the case. From Reuters, to Reporte Diario de La Economia to Ana Julia Jatar, the story is coming out and even though I do not expect this amoral Government to investigate anything, the record is there for all to see.

Today, Teodoro Petkoff covered the issue and it was clear that he had all of the data. But I would like to note one part of his Editorial that may go unnoticed: There is no reason for the Government to create this second part of the foreign exchange market using bonds other than to insure that some people will make so much money just in case Chavez disappears from the Venezuelan political scene anytime soon. Thus, if we saw corruption before, you ain't thing anything yet! It is also interesting that Petkoff uses names, naming a person that had been acting in the structured note market/scam and now magically appears as an adviser to the Minister of Finance on these matters.

I wonder now where all of the cheerleaders of Chavismo are. They used to come and say so and so was corrupt and now that Venezuela has the most corrupt, unethical and immoral Government in its history they are quiet but still supporting what may be the most aberrant and corrupt Government in the country's history.

And as Petkoff suggests, either Hugo Chavez knows exactly what is going on or he is an bumbling and incompetent fool. And by now, it is not the latter...

What is strong is the looting by Teodoro Petkoff in Tal Cual

The looting of the country is frankly reaching apocalyptic levels. What happened with the Electricidad de Caracas bonds reaches new levels on matters of illegal enrichment. The operation is as follows: Electricidad de Caracas, now in the hands of the State, announces the issuing of a public debt bond. Amount: 650 million dollars, ten years maturity and with interest of 8.5%. The buyer will acquire them with a premium at a price of 105%, that is, for each one thousand dollars in face value he will pay 1,050. While denominated in dollars the bond will be paid in Bolivars at the official exchange rate of Bs. F. 2.15 per dollar. Up to here the procedure follows that steps in the placements of other securities which insure dollars at the official rate of exchange, later sold in the parallel market and the profit is split between those that distribute it and those that share it. But in the case of the electrical bonds, the buyer will have to forcefully sell his bonds to an unidentified buyer, who will pay in dollars. The repurchase price fluctuates between Bs.F. 3.42 per dollar to bs. F. 3.6 per dollar, because the “repurchase “ price is with a discount at 62.7% and 66%. That is, for each one thousand dollars of the bond the holder will receive 627 or 660 dollars, according to the discount.

But here is where the “kikirigüiki”* is, the average price of the Venezuelan bonds in the secondary market is of 83% over its face value. Thus the repurchasers, still anonymous but we can presume who they are, will make between 170 and 200 dollars for each 1,000 of the bonds “repurchased” with the discounts mentioned earlier.

You bought at 62 or 66 and you sold at 83. The full issue (650 million dollars) would produce “earnings” between 110 and 132 million dollars.

Is this what they nationalized Electricidad de Caracas for? To transform it into a “corporate agent” of thefts to the Nation and enrichment of the Government officials and financial operators of the regimen? We are no longer going to ask if the President knows about this or if this is being done behind his back. Because it is not only impossible that he does not know of the enormous frauds that are talking place with the placement of public debt bonds, but we can presume that having been convinced by Moris Beracha that the mechanism to be sued to get rid of, without leaving a trace, the structured notes, which incurred in a patrimonial loss to the nation over US$ 3 billion, he is taking his time to personally monitor the development of the operations.

And we have yet to establish a dual exchange rate. When that happens, the orgy of corruption that will fall upon us will leave as only chicken thieves the famous operators of Recadi. The moral decomposition of this regime is touching bottom, the bottom of the pan that they are scraping given the perspective that Chavez has an expiration date.

*kikiriguiki, slang for shenanigan

Planning in the revolution

Wed, 09 Apr 2008 22:47:47 GMT

Ramon Carrizales, Vice-president of Venezuela April 9th. 2008: "The nationalization of steel company SIDOR is not in the plans of the State"

Ramón Carrizales, April 10th. 2008, less than 24 hours later: "Venezuela will renationalize steel company SIDOR"

This is what is called long term planning under the revolution

Chavez shows off new cement technology

Wed, 09 Apr 2008 04:41:24 GMT

Chavez showing off the new technology he invented that he will use to improve the productivity of the Cemex, Holcim and Lafarge plants. He claims not only will the plants be more productive, but he will be able to give jobs to all men in Venezuela and about one third of those in Colombia to move around with this hi tech system 8 million Tons of cement a year. He may be right...

The almost next to last look at the cement nationalization story

Tue, 08 Apr 2008 04:46:44 GMT

I thought I had cemented the whole issue of the nationalization of the cement industry, but the level of improvisation and ignorance is so high that I have to revisit the issue maybe for the last time.

First, as I mentioned in the earlier post, President Chavez said yesterday that he was only going to nationalize those cement companies that used to be owned by the Government and were privatized. Except that oops, that leeaves no company to be nationalized, as none of the three companies in foreign hands was ever owned by the Government. The only company that was ever in Government hands was Cementos Andinos, which was nationalized last year. So, Government officials had to backtrack a little today, without clarifying that Chavez never knew what he was talking about,

Then, the President’s ignorance was matched by that of the Minister of Energy and Mines and the man now in charge of food, oil, cement and what have you, Rafael Ramirez. Ramirez said that the Government would like to have a “minimum” of 60% of the cement companies, which is as nonsensical as they come.

First of all, I doubt that any of the foreign companies that control these cement companies in Venezuela would like to remain as partners with a Government with little experience with the cement industry, but Ramirez seems to ignore a small part of the equation: The Law, in this case the Capital Markets Law.

You see, in order to protect minority shareholders, the Venezuelan Capital Markets Law establishes that the entity trying to take control of a public company, in this case the Government, has to tender for 100% of the shares of the company. Thus, it is not up to Ramirez, Chavez or the Government to decided they want a minimum of 60% or not, they have to tender for all the shares and the people will decide whether they hand them over or not, you can’t force them.If only 52% tender, tough luck, it's the law.

But of course, nobody wants to be partners with companies of a “social” nature, managed by an incompetent Government and Cemex and Lafarge (the owners of the two public companies) are likely to tender their 80%+ stakes in their companies and most other minority shareholders are likely to do the same.

The problem is that Rafael Ramirez in his ignorance wants to make grandiose nationalistic statements that collide with Venezuelan legislation, but he does not now better, he just has a limited experience with PDVSA and his failed policies of the last years. So, you can’t ask for much more.

Al of these statements are so confusing and contradictory, that in any other country if the Government were a private company, it would be fined by regulatory authorities for misleading and confusing statements that hinder the ability of investors to make rational decisions and may have induced some to lose money in the process.

But ignorance rules in Venezuela since 1998 and such matters, as the rights of investors or citizens for that matter are simply irrelevant.

The revolution is above it all, including knowledge and people’s rights.

If the revolution is not working, try lying…

Tue, 08 Apr 2008 00:49:21 GMT

---Minister of Planning El Troudi said today that the slower inflation in March is a result of the Government’s inflation policies, saying the Government’s economic policies “shield” us from international inflation.

This is what I call high quality BS or BS of the highest quality. Under the “old” inflation index used for 50 years, inflation in the month of March went actually up from 2.38% to 2.5% in March, but under the new and improved INPC, there was a drop from 2.1% to 1.7%, which still is a high inflation rate of 22.7% and well ABOVE the inflation of all Latin American countries. In fact, I would not be surprised if it is double that rate,

---Recently the PDVAL supermarkets, the new chain of supermarkets created by PDVSA, introduced its own brand of rice, oil and black beans under the brand name “Sabana”.

It had to be done, when it was discovered that the packages of those particular products carried the “brand name” Made in the USA. These products were actually imported from the Evil Empire by PDVSA and everything was repackaged so that the “people” did not get nauseated.

---Yesterday, the President said that he would only nationalize those cement companies that had originally been privatized and used to be owned by the Government, leading many to believe that Cemex, Fabrica Nacional de Cementos and Consolidada de Cementos would escape nationalization.

It turns out that these companies had been owned by the Government only in Chavez’ mind. The only company that was at one time Government owned and then private was Cementos Andinos, which was nationalized last year. The other three were created by Venezuelans and owned by Venezuelans since their inception in the first half of the XXth. Century. They were sold to Cemex, Lafarge and Holcin by the Mendoza, Delfino and Boulton families who created them and controlled them. All three were majority owned by these families and traded at some point in the Caracas Stock Exchange. Later today, the issue was clarified, as usual Chavez had made it all up, they will all be nationalized.

Chavez´new decision making tool: Managemeny by hearsay

Sat, 05 Apr 2008 23:32:41 GMT

We have gone from Government by witticism a la Chavez to management by hearsay now. According to Chavez, one of the reasons for nationalizing the cement industry is that cement here is so expensive, that somebody told Chavez that they import it from Europe because it is cheaper. Moreover Chavez says that Venezuelan cement companies export cement to make more money.

Both statements are not only false, but reveal an incredible ignorance about cement and the Venezuelan cement industry. But nobody around him dares tell Chavez how wrong he is.

To begin with, Venezuela imports no relevant amount of cement. Maybe some sacks or trucks get across the border with Colombia, but the amount is basically negligible compared to what Venezuela produces, uses and exports. So, if Chavez actually believed this person, the decision is based on a lie, as simple as that, and demonstrates the level of ignorance being used in making such important decisions.

The world cement industry has become incredibly efficient as essentially three companies, the same ones that are present in Venezuela, compete with each other. They are Lafarge, Holcin and Cemex. All of them have plants all over the place, which allow them to shift cement as it is needed in different parts of the world. Essentially, what these companies have done is smooth out economic cycles by having plants that can shift their sales geographically as needs change.

In fact, that is precisely what did in the Venezuelan cement industry, forcing the owners to sell. The industry used to be owned by Venezuelans who concentrated their business here. When there was a downturn here, they could shift part of their exports abroad, but international competition was tough and they did not have the muscle or economies of scales to compete. During the downturn, plants would not operate at capacity because they were able to export only part of their excess capacity. That (and some bad management)is how the Vencemos plant, for example, ended in the hands of Cemex, in one of those cycles the company went almost belly up, the owners sold a piece to Cemex with an option in the future to get back part of their shares and they lost the whole thing.

The problem is that transportation is a huge part of the cost of cement. Companies in Venezuela exert regional influence essentially using price. Cemex, for example, has a huge plant in Pertigalete right on the water, which allows it to send cement by sea to the coast of Venezuela, dominating that region. Other companies have plants in various regions, but essentially each plant has to supply its own region, it can’t compete outside the region because transportation costs kill you. (Anyone that has ever tried to lift a sack of Portland cement should understand well what I am talking about)

The beauty of the Pertigalete plant in Anzoátegui is that the mine is right on the water and there is a deep port there. Thus, not only can Cemex dominate the coastal region, but when local consumption drops, it can just export the cement by sea to its other markets in the region. In fact, most people do not even know that Cemex Venezuela comprises cement plants in Venezuela, Panama and the Dominican Republic, allowing the company to dominate the Caribbean region.

While Chavez charges that the cement companies “export” the cement and that is why he can’t build houses that is also a lie. Most of the cement produced in Venezuela has been used locally and it was only in the years with few construction projects that cement was exported. For example, last year, Venezuela produced 7.53 million Tons of cement, of which only 729,000 Tons were exported. The previous year the country produced more 7.7 million Tons, of which 2 million Tons were exported, basically because there was no demand here. Production went down last year 150,000 Tons for the simple reason that the construction market cooled off elsewhere and there were no international buyers. Plants simply produced less.

Thus, knowledge is not being used to make decisions in this country, which is costing us a lot of money. We now have a new decision making tool: Management by hearsay.

It was also hearsay that drove Chavez to buy a dairy company recently. Someone told him the company had 37% of the milk production market, so he ordered his underlings to buy it at any price, despite the fact the company only produces 10% of the milk in the country. None of his yes men has been capable of telling him the truth and we see ads claiming the Government will certainly increase the 37% to 60% soon just to please the autocrat. Amazing!

Thus, Venezuela will spend US$ 2-2.5 billion to buy perfectly working cement plants, which are run efficiently, rather than spending it on hospitals, infrastructure and the like. These companies will supply the country with cement, but as downturns come and go, it will be unable to compete with the monsters we are buying the companies from and the operations will lose money. Additionally, as the companies are run with a “social” purpose in mind, they will become inefficient, there will be little technological investment and maintenance and the companies will certainly go in the hole. We have already seen that in CANTV and Electricidad de Caracas and it has not been even a year since they were taken over by Chavez. (The recent EDC bond, for example, was issued in such a way that it was costly for the company and was made up simply to make some people very rich)

So, we will tag alone and unfortunately this governing by hearsay will one day explode all at once when there is no money to run any of these projects. Nothing new in this, Carlos Andres Perez did it in the 70’s with disastrous results. When oil prices dropped in the early 80’s the currency crashed and there was no money for the people, as the companies had to be kept running.

Of course, Chavez, whether in or out of Government at that time, will say he left it all functioning well and it is the Empire that is behind the whole thing. And the cheerleaders of the revolution will still believe it.

It is almost hopeless.

Hugo Chavez nationalizes Venezuela's cement industry...at any cost

Fri, 04 Apr 2008 02:45:11 GMT

Hugo Chavez just nationalized Venezuela's cement industry, he asked the companies to "send him the bill" or something like that. "Let it cost, what it may cost". Chavez said.

I guess he just felt like it, it's called Government by witticism..God help this poor country...

(Thanks Daniel!)

A correction, a concern and a challenge...

Fri, 04 Apr 2008 00:53:41 GMT

Correction: I did make a mistake last night. The “profit” from the sale of the bond is not US$ 131.95 million, but “only” US$ 107.9 million, I used the full face value of the bond, US$ 650 million, rather than the value they sell it for 20% of 83% x 650 million. The numbers changed by today, as they were not able to place it all, so that the profit went down to around US$ 101 million. I am not sure they were able to place it this way; I had to change gears to something else. Thanks to RP for asking the right question and making me realize my mistake.

Concern: While I try to limit my blog to Venezuelan affairs, I can’t help but see ourselves in the mirror of what is happening in Zimbabwe, where opposition offices have been raided by Mugabe’s police and at least two journalists have been detained, including the reporter for the New York Times. The reporter is being held for violating the “journalism” law and it looks like the opposition victory may not be recognized. Another sad day in Zimbabwe due to the actions of Robert Mugabe who our own President has called his “friend”. Will the Venezuelan Government stand up for democracy in Zimbabwe?

Challenge: The Venezuelan Ambassador to the US “warned” that country of the consequences of classifying Venezuela as a terrorist country based on the evidence of the Reyes computer. The warning came in the form of the commercial consequences such as loss of jobs, oil and exports for the US. Jeez, how unrevolutionary from Ambassador Alvarez who represents a Government for whom ideology and their so called "principles" are certainly more important than dirty capitalistic concepts such as commerce and the like. In fact, wouldn't an embargo accelerate the revolutionary "endogenous" development of the country?

But I wonder who will suffer more and challenge the Ambassador to tell us who will lose more: The US with less oil, fewer jobs and less commerce or the Venezuelans and their Government when we can no longer export oil to the US, all visas will be void, all accounts of financial institution will be closed, CITGO may be seized, Alvarez will be expelled, US companies will have to leave Venezuela and Government officials will be tried for terrorism in the US and The Hague.

Just a thought...