Archive for June 11th, 2004

IDB, IVA and exchange control

June 11, 2004

Rumors published yesterday in some newspapers claim the government is thinking in reducing the amount of the Value Added Tax (IVA) and eliminating the criminal tax on bank transactions (IDB). These would turn out to be brilliant electoral strategies on the part of the government as would be eliminating the corrupt exchange control. I doubt the government has the conviction to carry them through or the ability to execute them on time.

Political Police searches offices of Venevision

June 11, 2004

The Political Police have initiated a procedure against Venevision one of the main private channels in Venezuela. I imagined that before the referendum a lot of the private media will be investigated on phony charges. I’ve never understood the stupidity of these measures taken by authoritarian governments, if what the media says are lies, you only have to tell the truth and wait. If they are saying the truth and it scares you, you have bigger problems than the media itself. This types of measures just proof how desperate and isolated the government is.

Voting Machines and Fraud in Recall Vote

June 11, 2004

Faithful readers of this site know the imprecisions of The New York Times designated writer for Latin America Juan Forero. His latest piece about the voting machines that the CNE wants to impose in the election in order to facilitate cheating in the upcoming referendum, is a refreshing reminder that sometimes the truth comes out even through biases eyes. Perhaps is the influence of co-writer John Schwartz, but it is worth reading. A quote:

“But the electoral council has opposed an audit, saying that as an autonomous body it would tally the votes and ensure there is no fraud. Some pro-Chávez members of the council, in fact, have suggested that the O.A.S. does not need to monitor the election, or that its role should be restricted.”


Glitches and tampering with voting machines has been seen before in Latin America, where there is a long history of stolen elections.

The government of then-President Alberto K. Fujimori stole the 2000 Peruvian presidential election. Days before, the O.A.S. examined the software used in the machines and found technical problems that would permit manipulation.

The Fujimori government, though, refused to make corrections, and the O.A.S. abandoned the country before the election. The government was later accused of fraud in the election. Mr. Fujimori resigned soon after.

Mr. Rubin said it is crucial to ensure that the companies chosen to supply machines and software be experienced and have a proven track record, particularly in an election as important as Venezuela’s.

Will the chavistas suffer a similar fate? We shall see.

Implied Exchange Rate Sharply down

June 11, 2004

Don’t fully understand this, but this come from a report from a Venezuelan stockbrockerage firm: “The CANTV ADR implied FX rate fell sharply to Bs. 2.600 (see chart). The precipitous decline is attributed to various factors, including US bond sales to pay for Bolivar leverage, a more expeditious CADIVI and the decline in International Reserves. “