The Devil's Excrement

The discussion at the Consejo Nacional Electoral (CNE) has turned now to those forms in which the handwriting is the same for each signature, but the signature itself is different. The issue is typical of how complicated the whole petition process has become and how every little nook and cranny is being searched in order to find an excuse to disqualify signatures.

According to the regulations created by this CNE, when a petition is turned in, the signatures would be checked in order to make sure the data for the person signing corresponds to the data in the electoral registry. A signature could be disqualified, if the data did not match, was not clear or legible or if there were smudges, overlaps or irregularities.

What both the opposition, in the case of the presidential recall, and the Chavistas, for the case of the recall of opposition Deputies did, was to have at each post one or two tables where the person at the table would fill out the form for old people, people who were unsure of their handwriting or anyone that asked for it. In the case if the “itinerant” petition forms, most were instructed to fill out the forms for the people to guarantee that it would be done properly. In both cases, itinerant or not, teams had witnesses from both sides of the political spectrum, so that the process was carefully monitored.

Well, now there is at least intent to question all of the signatures gathered in this fashion, which implies changing the rules in the middle of the game. The regulations were quite clear that the handwriting was only an important factor for the signature, and that the data had to match.

Two developments concern me at this point. First of all, one CNE Director says that people will have five days to go to the CNE and confirm they signed the recall petition. This is simply absurd, we are talking about hundreds of thousands of people having to go to the CNE to ratify they did something that nobody has a reason to question. Moreover, it affects precisely the group that would have the hardest time being able to mobilize to the CNE: the old and the poor. Additionally, the Chavistas have taken over the area surrounding the CNE.  The second source of concern is that now the CNE has decided, in a vote of three to two with the usual split between the two sides. to verify again the forms for the states from A to L, which had already been checked once.

Thus, as a member of the diplomatic core told an opposition politician “You Venezuelans are atypical; you have turned a simple gathering of signatures into the labyrinth of Crete”. Quite true, this is more complicated than any election and with these decisions, it is impossible for the CNE to decide anything by Friday’s deadline. In fact, this pushes things further into the future and the country further into an undesirable confrontation.

This is a translation of Today’s Editorial in Tal Cual by Teodoro Petkoff entitled “Rich Government, poor country”.  Since not everyone has access to that newspaper I thought I would translate it.

Rich Government, poor country by Teodoro Petkoff

The patron saint’s party that celebrated the twelve years of the attempted coup of February 4th. 1992 (4F) included, between roosters and midnight, an act that they attempted to do a slight of hand with: the new devaluation of the Bolivar. Up to February 4th. of this year, the US dollar cost Bs. 1600, hours later, it began costing Bs. 1920. A devaluation of 20%. The first victims of the adjustment are, naturally, the common citizens, especially the poorest, whose income, measured in terms of US dollars, has experienced a sharp drop.

The minimum salary of workers is today 247,104 bolivars. Up to 4F, that salary was equivalent at the rate of Bs. 1600, to 154 US dollars. After 4F, the minimum salary, which remains the same, is equivalent now to 129 US dollars. Together with the minimum salary, all other salaries, measured in US dollars, experimented a similar sharp drop. Divide your salary by 1,600 and then by 1,920 and you will discover how much less you make today than before 4F. But if you make that division by 3,000, which is in round numbers what one of those greenbacks from the north costs in the black market, then you will surely begin to cry.

For now, the minimum “black” salary comes to about 82 US dollars.

This number is closer to reality than the “official” rate, because under the conditions of an exchange control, it is the black market which sets the economic benchmarks. This revolution is getting pretty!

Of course, I am sure that there will be some that will point out that we make money in Bolivars and not in US dollars, but it so happens that in a country which imports 60% of all its goods, especially food, you will pay in more expensive US dollars. Thus, the prices of the supposedly controlled items (because in practice there is no control that has stopped the increases) have received an impulse in their flight all the way to Mars. The devaluation, of course, is gas for the flame of inflation. Last year’s was 27%. That of January 2004 reached 2.5%. If you extrapolate until December, without taking into account the devaluation, you would close the year at 36%.

It scares you to think how much the weight of the devaluation will add to this. This celebration of 4F is turning out really cool.

But for the Government it is not all bad news. It will now receive more Bolivars for each dollar and its fiscal problems will be alleviated and there will be more cash for electoral plans and the buying of votes, following the classic Creole model of populism. The devaluation makes the citizens poorer, it enriches the Government.

There has been a tax increment not established in any law. The Government now takes more money out of our pockets via the so-called “inflation tax”. Chávez is Robin Hood backwards, Hood Robin: he takes from the poor to give to the rich, especially, the most powerful of all, the Government itself.

Well, we have already celebrated half of what Chavez baptized as the “silver decade”, which was supposed to precede that of “gold”

But, the truth be said, “For now” (por ahora), what we have is five brown-colored years, of thick consistency and with disagreeable smell. Yes, made exactly of what you are thinking.

This is a translation of Today’s Editorial in Tal Cual by Teodoro Petkoff entitled “Rich Government, poor country”.  Since not everyone has access to that newspaper I thought I would translate it.

Rich Government, poor country by Teodoro Petkoff

The patron saint’s party that celebrated the twelve years of the attempted coup of February 4th. 1992 (4F) included, between roosters and midnight, an act that they attempted to do a slight of hand with: the new devaluation of the Bolivar. Up to February 4th. of this year, the US dollar cost Bs. 1600, hours later, it began costing Bs. 1920. A devaluation of 20%. The first victims of the adjustment are, naturally, the common citizens, especially the poorest, whose income, measured in terms of US dollars, has experienced a sharp drop.

The minimum salary of workers is today 247,104 bolivars. Up to 4F, that salary was equivalent at the rate of Bs. 1600, to 154 US dollars. After 4F, the minimum salary, which remains the same, is equivalent now to 129 US dollars. Together with the minimum salary, all other salaries, measured in US dollars, experimented a similar sharp drop. Divide your salary by 1,600 and then by 1,920 and you will discover how much less you make today than before 4F. But if you make that division by 3,000, which is in round numbers what one of those greenbacks from the north costs in the black market, then you will surely begin to cry.

For now, the minimum “black” salary comes to about 82 US dollars.

This number is closer to reality than the “official” rate, because under the conditions of an exchange control, it is the black market which sets the economic benchmarks. This revolution is getting pretty!

Of course, I am sure that there will be some that will point out that we make money in Bolivars and not in US dollars, but it so happens that in a country which imports 60% of all its goods, especially food, you will pay in more expensive US dollars. Thus, the prices of the supposedly controlled items (because in practice there is no control that has stopped the increases) have received an impulse in their flight all the way to Mars. The devaluation, of course, is gas for the flame of inflation. Last year’s was 27%. That of January 2004 reached 2.5%. If you extrapolate until December, without taking into account the devaluation, you would close the year at 36%.

It scares you to think how much the weight of the devaluation will add to this. This celebration of 4F is turning out really cool.

But for the Government it is not all bad news. It will now receive more Bolivars for each dollar and its fiscal problems will be alleviated and there will be more cash for electoral plans and the buying of votes, following the classic Creole model of populism. The devaluation makes the citizens poorer, it enriches the Government.

There has been a tax increment not established in any law. The Government now takes more money out of our pockets via the so-called “inflation tax”. Chávez is Robin Hood backwards, Hood Robin: he takes from the poor to give to the rich, especially, the most powerful of all, the Government itself.

Well, we have already celebrated half of what Chavez baptized as the “silver decade”, which was supposed to precede that of “gold”

But, the truth be said, “For now” (por ahora), what we have is five brown-colored years, of thick consistency and with disagreeable smell. Yes, made exactly of what you are thinking.

One can’t help but be concerned about the authoritarian and fascist tone of many statements made Government officials and high ranking military this weekend. From the statements by two Ministers saying that there will be no recall referendum against the President, to the abusive acts and statements by two Generals, the attitude is not that of a democratic Government and only helps to unnecessarily increase tension in a country that needs exactly the opposite.

A Deputy from the Acción Democrática party, Edgar Zambrano, denounced that he was having dinner last Friday with CNE Director Sobella Mejias when a group of National Guards hit him and handcuffed him and took him away in a National Guard wagon. The General denies that this ever took place, saying that he does not even know Zambrano. But then he proceeds to say that he was at the Restaurant and the guards accompanying him might have done something to Zambrano.

The General then goes on to question what Zambrano was doing having dinner with the CNE Director as if two people belonging to the same political party can not have dinner together (besides being of opposite sexes, which is not the General’s business anyway). Moreover, Zambrano has witnesses of what took place and turned in as evidence the pair of handcuffs used on him. The General said that you can get a pair of handcuffs anywhere.

The second outrageous act was the announcement in President Chavez’s Sunday program that an active General would be a candidate to the Governorship of Carabobo state. General Acosta Carles, the same burping General who committed abuse of power in December 2001, confiscating and selling private property for which he was promoted by President, actually said he was already the “de facto” Governor of that state.

The worst part is that President Chávez continues going around the country announcing his hand-picked candidates. This violates the law in many different ways: First of all, neither active military nor public office holders can be candidates by law (Violation #1). Nor can they be candidates until the day they register (Registration is not even open yet for the regional elections) (Violation #2). Despite this, Chavez uses Government sponsored TV programs to launch these illegal candidacies, which represents misuse of public funds (Violation #3), abuse of power (violation #4) and sponsoring illegal activities (Violation #5). But of course, since Chávez controls the Attorney General (who is also the Prosecutor in charge of upholding the law), the CNE, the National Assembly and the People’s Ombudsman, all of this happens with total impunity.

This is what an autocratic Government is all about. Violation of the laws, violation of the rights of people, abuse of power, total impunity by the military and Government officials, limits to the exercise of democracy. While I still cautiously believe that there will be a recall referendum, the fascist and arrogant behaviour of Government officials in the last few days, tells me that they are getting nervous. Edgy because they have realized the opposition has the necessary signatures to hold the recall vote. Nervous because they know they might lose the vote. Edgy because if they ever lose their stronghold on all stages of power, a revived judicial system will prosecute them for their abuses. They should be…

The Venezuelan Government devalued the currency today from Bs. 1600 to the US$ to Bs. 1920 to the US$. The move was not unexpected as the 2004 budget was calculated at exactly the new rate an average for the full year. Thus, it was only a question of when exactly the Government would implement it.

The decision will have its strongest impact on basic foodstuffs which were receiving foreign currency at the official rate as well as regulated products which, if not adjusted, will become scarce. The move will obviously add to inflation in 2004 as the parallel market exchange rate moved today from Bs. 3100 to Bs. 3200 as part of the devaluation had already been priced in last week when the foreign exchange control office CADIVI stopped the flow of foreign currency arguing that it was changing its already brand new information system.

As suggested here last Friday, this is likely to be a first step before the Government issues two bonds in US$ one to be swapped for local debt in the hands of the banks and the second one to be sold to local investors in Bolívars.

From a practical point of view, the measure will immediately have a positive impact on exporters and companies that maintain foreign currency positions. These positions are maintained in the books at the official exchange rate and will generate a one time gain for their holders. The opposite will be true for companies that have liabilities in US$, since they will have to generate Bolívars to cover their debt.

A quirky effect will occur in any Bolivar denominated mutual fund that has US$ instruments in its portfolio, it will generate a 20% gain in one day in those instruments. Some mutual funds I know have as much as 50% of their holdings in foreign currency instruments.

Additionally, the holders of CANTV ADR’s will lose as CADIVI had yet to approve the dividend paid by the company in December, so that in the end they will receive US$ 1.278 rather than expected US$ 1.535 per ADR.

The devaluation will have its strongest impact in the lower strata of the population, since food will likely record the highest increase of all items in the CPI and it represents the highest percentage of the budget of poor people. Of course, the Minister of Finance claims it will not have an impact on inflation because it had already been taken into account. What a cynic! Once again, the hidden tax which a devaluation represents is paid by those that can afford it the least.

Curiously, President Chávez did not announce the decision in his Sunday program, despite the fact that the official gazette with the decree had already been printed on Friday. Venezuela maybe the only country in the world where a devaluation is not announced by any Government official. Nobody wants to look bad?

The Venezuelan Government devalued the currency today from Bs. 1600 to the US$ to Bs. 1920 to the US$. The move was not unexpected as the 2004 budget was calculated at exactly the new rate an average for the full year. Thus, it was only a question of when exactly the Government would implement it.

The decision will have its strongest impact on basic foodstuffs which were receiving foreign currency at the official rate as well as regulated products which, if not adjusted, will become scarce. The move will obviously add to inflation in 2004 as the parallel market exchange rate moved today from Bs. 3100 to Bs. 3200 as part of the devaluation had already been priced in last week when the foreign exchange control office CADIVI stopped the flow of foreign currency arguing that it was changing its already brand new information system.

As suggested here last Friday, this is likely to be a first step before the Government issues two bonds in US$ one to be swapped for local debt in the hands of the banks and the second one to be sold to local investors in Bolívars.

From a practical point of view, the measure will immediately have a positive impact on exporters and companies that maintain foreign currency positions. These positions are maintained in the books at the official exchange rate and will generate a one time gain for their holders. The opposite will be true for companies that have liabilities in US$, since they will have to generate Bolívars to cover their debt.

A quirky effect will occur in any Bolivar denominated mutual fund that has US$ instruments in its portfolio, it will generate a 20% gain in one day in those instruments. Some mutual funds I know have as much as 50% of their holdings in foreign currency instruments.

Additionally, the holders of CANTV ADR’s will lose as CADIVI had yet to approve the dividend paid by the company in December, so that in the end they will receive US$ 1.278 rather than expected US$ 1.535 per ADR.

The devaluation will have its strongest impact in the lower strata of the population, since food will likely record the highest increase of all items in the CPI and it represents the highest percentage of the budget of poor people. Of course, the Minister of Finance claims it will not have an impact on inflation because it had already been taken into account. What a cynic! Once again, the hidden tax which a devaluation represents is paid by those that can afford it the least.

Curiously, President Chávez did not announce the decision in his Sunday program, despite the fact that the official gazette with the decree had already been printed on Friday. Venezuela maybe the only country in the world where a devaluation is not announced by any Government official. Nobody wants to look bad?

For years, Venezuela’s Instituto Venezolano de Investigaciones Cientificas (IVIC), has managed to stay above political fights, maintaining a meritocratic system. The system is not too different from what is used in high quality scientific institutions everywhere. To get tenure as a researcher, you need to publish, show originality, high impact work and the have the work recognized as your own.

This system has been in place for over forty years and IVIC has maintained a relatively high level of quality in research in the basic sciences. Despite its small size, roughly 120 researchers, IVIC publishes a large fraction of the country’s scientific output. Additionally, IVIC established the tradition of academic research in Venezuelan universities and groups of researchers from IVIC started important scientific institutions such as the oil research institute INTEVEP and the Fundacion Instituto de Ingenieria.

I worked at IVIC for quite a number of years. If anything, I thought that requirements for tenure should be tougher. My personal opinion was that if you were to be allowed to research on anything you wanted in a country like Venezuela, you better be very good, recognized internationally and a true scientific leader. Most people at IVIC were like that, but once in a while the system was a little lenient or there were strong differences between groups because someone was not allowed to stay or receive tenure. But in general, the system worked quite well.

Besides the 120 researchers, IVIC had professional research assistants called PAI’s and technicians TAI’s. PAI’s are professional in engineering or basic sciences who help out in the research, appear in publications, but are not the leaders of the research process, are not responsible for writing the publications, have no students and thus have fewer responsibilities those researchers. Any PAI that wants to become a researcher can do so, but in my time, few wanted to, given the additional responsibilities involved.

For the last few months, there have been discussions of changing the regulations that dictate how IVIC is run. Despite an extensive internal discussion, a “parallel” set of regulations has been brought directly to the Government and based on the article that appeared in yesterday’s El Universal it is clear to me what the intent of the Government is.

Under the excuse of “lack of participation” and adapting IVIC to the new Constitution, the legal adviser of the Ministry of Science says that IVIC’s paradigm needs to be changed. That it is not necessary to have a Ph.D. to be a researcher and that IVIC has a large number of professionals with Master’s degree that are researchers (Yeah! Yeah!). She says that IVIC has a very rigid structure for promotions and the scheme needs to be changed. She calls IVIC a country club in which nobody can enter.  Well, you can, you need a Ph.D., have to work very hard and do significant research.

What this is, is another example, of what is bad about this Government. This is populism at work; they want all of those PAI’s, none of which ever wanted to become researchers, to get all of the privileges without having all of the responsibilities. At the same time, they want to “take the power away” from the researchers. Some power, 14-16 hour days to attempt to remain competitive in their fields of expertise, $600 a month salaries, poor funding, lack of resources and even financing your trips to conferences with your own money.

The end result would be a blotted bureaucracy and a relaxation of academic requirements. The true researchers with potential will feel no pressure to produce, while the newly promoted researchers will know the “revolution” will defend them from tough evaluations. The best will be forced to emigrate to find environments where academic excellence is the priority. This simply means the slow death of IVIC as a world class scientific institute in a third world country. It was all a beautiful and wonderful dream while it lasted….

For years, Venezuela’s Instituto Venezolano de Investigaciones Cientificas (IVIC), has managed to stay above political fights, maintaining a meritocratic system. The system is not too different from what is used in high quality scientific institutions everywhere. To get tenure as a researcher, you need to publish, show originality, high impact work and the have the work recognized as your own.

This system has been in place for over forty years and IVIC has maintained a relatively high level of quality in research in the basic sciences. Despite its small size, roughly 120 researchers, IVIC publishes a large fraction of the country’s scientific output. Additionally, IVIC established the tradition of academic research in Venezuelan universities and groups of researchers from IVIC started important scientific institutions such as the oil research institute INTEVEP and the Fundacion Instituto de Ingenieria.

I worked at IVIC for quite a number of years. If anything, I thought that requirements for tenure should be tougher. My personal opinion was that if you were to be allowed to research on anything you wanted in a country like Venezuela, you better be very good, recognized internationally and a true scientific leader. Most people at IVIC were like that, but once in a while the system was a little lenient or there were strong differences between groups because someone was not allowed to stay or receive tenure. But in general, the system worked quite well.

Besides the 120 researchers, IVIC had professional research assistants called PAI’s and technicians TAI’s. PAI’s are professional in engineering or basic sciences who help out in the research, appear in publications, but are not the leaders of the research process, are not responsible for writing the publications, have no students and thus have fewer responsibilities those researchers. Any PAI that wants to become a researcher can do so, but in my time, few wanted to, given the additional responsibilities involved.

For the last few months, there have been discussions of changing the regulations that dictate how IVIC is run. Despite an extensive internal discussion, a “parallel” set of regulations has been brought directly to the Government and based on the article that appeared in yesterday’s El Universal it is clear to me what the intent of the Government is.

Under the excuse of “lack of participation” and adapting IVIC to the new Constitution, the legal adviser of the Ministry of Science says that IVIC’s paradigm needs to be changed. That it is not necessary to have a Ph.D. to be a researcher and that IVIC has a large number of professionals with Master’s degree that are researchers (Yeah! Yeah!). She says that IVIC has a very rigid structure for promotions and the scheme needs to be changed. She calls IVIC a country club in which nobody can enter.  Well, you can, you need a Ph.D., have to work very hard and do significant research.

What this is, is another example, of what is bad about this Government. This is populism at work; they want all of those PAI’s, none of which ever wanted to become researchers, to get all of the privileges without having all of the responsibilities. At the same time, they want to “take the power away” from the researchers. Some power, 14-16 hour days to attempt to remain competitive in their fields of expertise, $600 a month salaries, poor funding, lack of resources and even financing your trips to conferences with your own money.

The end result would be a blotted bureaucracy and a relaxation of academic requirements. The true researchers with potential will feel no pressure to produce, while the newly promoted researchers will know the “revolution” will defend them from tough evaluations. The best will be forced to emigrate to find environments where academic excellence is the priority. This simply means the slow death of IVIC as a world class scientific institute in a third world country. It was all a beautiful and wonderful dream while it lasted….