The Devil's Excrement

For the last few years, when people wanted to know what was happening in Venezuela they turned to Globovision. Today, I was watching Globovision in the office when a relative who works downtown called me on the phone to talk about how he was trapped in a war zone. Huh? What are you talking about?

He then proceeded to describe how the bank where he works, was closed as police and the National Guard where gassing the people demonstrating, how there was shooting and burning of vehicles. Something along these lines:

What was going on? The opposition protesting the gag law? Chavistas celebrating the first day of the gag law? No such luck, it was a protest by street vendors who on Tuesday night the police removed those posts which had no permit to spend the night. The riots left one dead and twenty five injured according to the only post on the Globovision site, which did not show one picture. Reuters/CNN did talk about it, they have no local broadcasting.  Union Radio had better coverage on the Internet, but you do not need a permit to post on the Internet. Thus, Globovision appears to be exercising some self-restraint as it barely talked about it.

The amazing thing is that the same Mayor Bernal that appeared today on TV calling the buhoneros anarquists, is the same one that ruined the downtown area allowing them to set up shop where ever they wanted, in another populist era. Except now it is difficult to even walk around downtown with all the street vendors. And they decided to protest and got mad when they were mistreated by the police. And that is the problem when you control all of the Government, you can longer blame the other Mayors, when they don’t exist. You have to govern, take charge. So you blame extreme left groups like Bandera Roja or whatever Alianza al Bravo pueblo stands for. Bandera Roja laughs at the charges and ABP says how stupid it is to kick this people out right before Christmas, after six years of neglecting the problem and allowing them to proliferate. These people used to be Chavez’ supporters, these were his constituency. No more.

But how do you explain that to a foreigner: Extreme left Bandera Roja party being charged by the Chavistas for inciting the riots. Aren’t the Chavistas the extreme left? Well, this blog has been trying to explain things for over two years and it is not that easy. You see, when there was nobody in the Venezuelan guerillas in 1983, the same Gabriel Puerta that says today his party Bandera Roja was not inciting the riots, was the buddy of current foreign Minister Ali Rodriguez up in the mountains. Go figure!

But it really bothers me how low key Globovision was today on these riots. The street vendors were repressed, they became extremely violent, they burned buses, motorcycles, and they attacked the cops, the National Guard. This was big news. But you see, Article 29 of the newly enacted “gag”, “muzzle”,”content” or media law says:

Those that provide radio or TV service can be suspended “for up to 72 hours when they broadcast messages that….apologize for or incite alterations of public order”. If it happens again you may lose your license for five years. These were “alterarions of public order”, showing too many may have been construed as inciting more, thus Globovision’s silence.  As simple as that.

Apparently, people are having problems making comments (me too!), it is salon.com related.

The need for pension reform is critical for the finances of the country. I already addressed this issue in part in September in a post entitled “The untouchable pensions”. But let me start at the beginning:

The Venezuelan Government employs an inordinate amount of workers. There are somewhere around 1.8 to 2 million public workers in the both the central and regional Governments and this does not include PDVSA or the universities, who are treated separately. Clearly in a country of 25 million people where half the population is under eighteen this is a remarkable number. As an indication, the central Government in Japan has 800,000 employees, a country with 125 million people and a much older profile than Venezuela’s.

Civil service regulations only apply to the central Government. The military, universities, the Central Bank and municipalities all have autonomy for their own regulations. If you are a civil servant, you may retire at almost full salary after age 60 or 30 years of service. Moreover, your salary receives full inflation and merit adjustment based on increases approved for active workers. This is all funded from the institutions budget. Its impact was not felt until the 90’s when many of these institutions, Ministries and the like began to have three decades in existence. The Minister can also give pensions by “grace” something which is done regularly whenever they want to get rid of someone in a position from which she or he can not be fired.

Then there are other institutions, all of which have separate regulations, some of which allow retirement as early as with fifteen years of service.  As an example, a General retires with full salary and his salary will be adjusted to that of a fully active General every time the military receive a salary increase. The same with positions such as the President of the Central Bank. The pension of a retired President of the Central Bank is equal to the basic salary of the current President of that Institution. Same with someone who retires as a member of the Board of the Central Bank. There are dozens of these people around since many are appointed near retirement or even afterwards and their periods are only three years. Note that this makes these positions quite to retired people as any appointment to an important position implies an increase in their pension the day they leave.

Another interesting case is the universities. You can retire after 25 years of service and if the University paid your graduate work, those years count too. Thus, many retire as early as 45 years of age. Moreover, if you die, your full pension is transferred over to your widow. I know of cases where someone was hired at 21 years of age, worked thirty five years for the University, died at 70 after remarrying to a younger woman who is now sixty and entitled to his pension. If she lives to be eighty years old, the University acquired a responsibility for 103 years when it hired that young professor so many years ago. In fact, this is a close relative. No country can foot the bill for such a system.

Remarkably, PDVSA is an exception to all of this. The system is complicated to explain in detail, but basically, it has a pension paid by the company, which is seldom adjusted up and a voluntary contribution plan. I heard recently a former President of one pf PDVSA’s affiliates who retire in 1980 that is PDVSA pension is Bs. 300,000 or $120 a month. Thus, PDVSA paid and pays well, but its pensions are actually quite crummy.

Recently, I saw a study that in five institutions, PDVSA, the military, the Central Bank and two others I don’t remember, pensions take up 4% of GDP, up from 1% when Chavez became President.

Clearly, this is unsustainable. In 1998, then Minister of Planning Teodoro Petkoff, now Editor of Tal Cual brokered an agreement between the unions, companies and the Government to start pension funds in which workers would contribute part of their income. After a transition period of ten years, in which new contributions would fund the retirement of the older workers with current rules, people, would retire later only with whatever they contributed to the fund and the investment gains it gained, a la Chile.

The regulations for pensions would be strict requiring either 60 years of age or 35 years of service, I would have made it stricter with 65 years of age or 35 years of service for everyone in the country. Such a fund, would not only alleviate an important funding problem the Government has with its generous pensions, but would also provide a huge pool of savings which could be used by the Government itself to finance its activities. These funds would buy Government paper, competing with banks and forcing banks to lend more than they do rather than investing in Government paper as their main source of income.

The pension reform was actually approved in 1998 and Chavez stopped it. Basically, the law allowed for the private or public management of the funds with workers having a choice and being able to transfer them from one to the other. Chavez and his Government objected giving it to private managers, even if heavily regulated. Chavez promised a review of the law in six months, then six more and hen the final six. This was four years ago. Nothing has been done since on such an important matter. Why? Simple, the commission appointed by Chavez was full of the same academics who would lose their easy pensions after only twenty five years at the universities. In fact, one of them even argued he was resigning from the Government to be able to complete his twenty five years. Such principles!

Sadly, it took nine years to approve a bill that would have been critical to the restructuring of the country, but it took only months for Chavez to stop it. The bill had almost all of the elements required. It should be revived and implemented. If not, the financial health of the country is in peril, to the detriment of the poor, since it is the  Government who is funding these excessive pensions and perks.

The need for pension reform is critical for the finances of the country. I already addressed this issue in part in September in a post entitled “The untouchable pensions”. But let me start at the beginning:

The Venezuelan Government employs an inordinate amount of workers. There are somewhere around 1.8 to 2 million public workers in the both the central and regional Governments and this does not include PDVSA or the universities, who are treated separately. Clearly in a country of 25 million people where half the population is under eighteen this is a remarkable number. As an indication, the central Government in Japan has 800,000 employees, a country with 125 million people and a much older profile than Venezuela’s.

Civil service regulations only apply to the central Government. The military, universities, the Central Bank and municipalities all have autonomy for their own regulations. If you are a civil servant, you may retire at almost full salary after age 60 or 30 years of service. Moreover, your salary receives full inflation and merit adjustment based on increases approved for active workers. This is all funded from the institutions budget. Its impact was not felt until the 90’s when many of these institutions, Ministries and the like began to have three decades in existence. The Minister can also give pensions by “grace” something which is done regularly whenever they want to get rid of someone in a position from which she or he can not be fired.

Then there are other institutions, all of which have separate regulations, some of which allow retirement as early as with fifteen years of service.  As an example, a General retires with full salary and his salary will be adjusted to that of a fully active General every time the military receive a salary increase. The same with positions such as the President of the Central Bank. The pension of a retired President of the Central Bank is equal to the basic salary of the current President of that Institution. Same with someone who retires as a member of the Board of the Central Bank. There are dozens of these people around since many are appointed near retirement or even afterwards and their periods are only three years. Note that this makes these positions quite to retired people as any appointment to an important position implies an increase in their pension the day they leave.

Another interesting case is the universities. You can retire after 25 years of service and if the University paid your graduate work, those years count too. Thus, many retire as early as 45 years of age. Moreover, if you die, your full pension is transferred over to your widow. I know of cases where someone was hired at 21 years of age, worked thirty five years for the University, died at 70 after remarrying to a younger woman who is now sixty and entitled to his pension. If she lives to be eighty years old, the University acquired a responsibility for 103 years when it hired that young professor so many years ago. In fact, this is a close relative. No country can foot the bill for such a system.

Remarkably, PDVSA is an exception to all of this. The system is complicated to explain in detail, but basically, it has a pension paid by the company, which is seldom adjusted up and a voluntary contribution plan. I heard recently a former President of one pf PDVSA’s affiliates who retire in 1980 that is PDVSA pension is Bs. 300,000 or $120 a month. Thus, PDVSA paid and pays well, but its pensions are actually quite crummy.

Recently, I saw a study that in five institutions, PDVSA, the military, the Central Bank and two others I don’t remember, pensions take up 4% of GDP, up from 1% when Chavez became President.

Clearly, this is unsustainable. In 1998, then Minister of Planning Teodoro Petkoff, now Editor of Tal Cual brokered an agreement between the unions, companies and the Government to start pension funds in which workers would contribute part of their income. After a transition period of ten years, in which new contributions would fund the retirement of the older workers with current rules, people, would retire later only with whatever they contributed to the fund and the investment gains it gained, a la Chile.

The regulations for pensions would be strict requiring either 60 years of age or 35 years of service, I would have made it stricter with 65 years of age or 35 years of service for everyone in the country. Such a fund, would not only alleviate an important funding problem the Government has with its generous pensions, but would also provide a huge pool of savings which could be used by the Government itself to finance its activities. These funds would buy Government paper, competing with banks and forcing banks to lend more than they do rather than investing in Government paper as their main source of income.

The pension reform was actually approved in 1998 and Chavez stopped it. Basically, the law allowed for the private or public management of the funds with workers having a choice and being able to transfer them from one to the other. Chavez and his Government objected giving it to private managers, even if heavily regulated. Chavez promised a review of the law in six months, then six more and hen the final six. This was four years ago. Nothing has been done since on such an important matter. Why? Simple, the commission appointed by Chavez was full of the same academics who would lose their easy pensions after only twenty five years at the universities. In fact, one of them even argued he was resigning from the Government to be able to complete his twenty five years. Such principles!

Sadly, it took nine years to approve a bill that would have been critical to the restructuring of the country, but it took only months for Chavez to stop it. The bill had almost all of the elements required. It should be revived and implemented. If not, the financial health of the country is in peril, to the detriment of the poor, since it is the  Government who is funding these excessive pensions and perks.

The need for pension reform is critical for the finances of the country. I already addressed this issue in part in September in a post entitled “The untouchable pensions”. But let me start at the beginning:

The Venezuelan Government employs an inordinate amount of workers. There are somewhere around 1.8 to 2 million public workers in the both the central and regional Governments and this does not include PDVSA or the universities, who are treated separately. Clearly in a country of 25 million people where half the population is under eighteen this is a remarkable number. As an indication, the central Government in Japan has 800,000 employees, a country with 125 million people and a much older profile than Venezuela’s.

Civil service regulations only apply to the central Government. The military, universities, the Central Bank and municipalities all have autonomy for their own regulations. If you are a civil servant, you may retire at almost full salary after age 60 or 30 years of service. Moreover, your salary receives full inflation and merit adjustment based on increases approved for active workers. This is all funded from the institutions budget. Its impact was not felt until the 90’s when many of these institutions, Ministries and the like began to have three decades in existence. The Minister can also give pensions by “grace” something which is done regularly whenever they want to get rid of someone in a position from which she or he can not be fired.

Then there are other institutions, all of which have separate regulations, some of which allow retirement as early as with fifteen years of service.  As an example, a General retires with full salary and his salary will be adjusted to that of a fully active General every time the military receive a salary increase. The same with positions such as the President of the Central Bank. The pension of a retired President of the Central Bank is equal to the basic salary of the current President of that Institution. Same with someone who retires as a member of the Board of the Central Bank. There are dozens of these people around since many are appointed near retirement or even afterwards and their periods are only three years. Note that this makes these positions quite to retired people as any appointment to an important position implies an increase in their pension the day they leave.

Another interesting case is the universities. You can retire after 25 years of service and if the University paid your graduate work, those years count too. Thus, many retire as early as 45 years of age. Moreover, if you die, your full pension is transferred over to your widow. I know of cases where someone was hired at 21 years of age, worked thirty five years for the University, died at 70 after remarrying to a younger woman who is now sixty and entitled to his pension. If she lives to be eighty years old, the University acquired a responsibility for 103 years when it hired that young professor so many years ago. In fact, this is a close relative. No country can foot the bill for such a system.

Remarkably, PDVSA is an exception to all of this. The system is complicated to explain in detail, but basically, it has a pension paid by the company, which is seldom adjusted up and a voluntary contribution plan. I heard recently a former President of one pf PDVSA’s affiliates who retire in 1980 that is PDVSA pension is Bs. 300,000 or $120 a month. Thus, PDVSA paid and pays well, but its pensions are actually quite crummy.

Recently, I saw a study that in five institutions, PDVSA, the military, the Central Bank and two others I don’t remember, pensions take up 4% of GDP, up from 1% when Chavez became President.

Clearly, this is unsustainable. In 1998, then Minister of Planning Teodoro Petkoff, now Editor of Tal Cual brokered an agreement between the unions, companies and the Government to start pension funds in which workers would contribute part of their income. After a transition period of ten years, in which new contributions would fund the retirement of the older workers with current rules, people, would retire later only with whatever they contributed to the fund and the investment gains it gained, a la Chile.

The regulations for pensions would be strict requiring either 60 years of age or 35 years of service, I would have made it stricter with 65 years of age or 35 years of service for everyone in the country. Such a fund, would not only alleviate an important funding problem the Government has with its generous pensions, but would also provide a huge pool of savings which could be used by the Government itself to finance its activities. These funds would buy Government paper, competing with banks and forcing banks to lend more than they do rather than investing in Government paper as their main source of income.

The pension reform was actually approved in 1998 and Chavez stopped it. Basically, the law allowed for the private or public management of the funds with workers having a choice and being able to transfer them from one to the other. Chavez and his Government objected giving it to private managers, even if heavily regulated. Chavez promised a review of the law in six months, then six more and hen the final six. This was four years ago. Nothing has been done since on such an important matter. Why? Simple, the commission appointed by Chavez was full of the same academics who would lose their easy pensions after only twenty five years at the universities. In fact, one of them even argued he was resigning from the Government to be able to complete his twenty five years. Such principles!

Sadly, it took nine years to approve a bill that would have been critical to the restructuring of the country, but it took only months for Chavez to stop it. The bill had almost all of the elements required. It should be revived and implemented. If not, the financial health of the country is in peril, to the detriment of the poor, since it is the  Government who is funding these excessive pensions and perks.

There is also the case of Merentes’ fomer Vice-Minister and Director of Public Credit Jesus Bermudez in hir prior service in Finance, who was detained in Miami for having US$ 40,000 in cash, which the newspaper considerrs it “abusive” on the part of the US authorities because that is not illegal. Well, it may not be illegal to have the money, but it is illegal not to declare it!

What the article does not say, is that the money was found under the pilot’s seat, in Bermudez’ recently acquired private plane, which can actually fly all the way to Miami regularly. I guess those public sevice salaries have really improved under the revolution, since Bermudez spent almsot five of the six years Chavez has been in power working there. Such a clean revolution!

This article from Elizabeth Araujo in today’s Tal Cual should be called History Backwards or the History that never was, but beautifully makes the point of what is so wrong about what is happening in Venezuela

Rewriting History by Elizabeth Araujo

I saw on TV Lazaro Forero and Henry Vivas shooting against the crowd on April 11th. 2002.

 Remember Venevision showing the video that went around the world and served as a key piece in Judge Anabel Rodriguez qualifying without delay the charges against these police Captains for homicide. I just can not forget that afternoon when then Governor Mendoza, desperate, called on his cell phone one of his Mayors and asked him to invite the barrios so that they would come down with stones, guns and sticks in order to defend the counter revolution, and that night general Rosendo, in a cheap CIA trick, addressed the nation to inform that given the events of the day they had asked the President to reign, which eh had accepted.

I remember how William Lara and Diosdado Cabello stood, unarmed, in Avenida Urdaneta, challenging the coupsters and none of those cowards dared touch them; as certain as Jose Vicente Rangel swore the next day to El Nacional, that he would not recognize the fascist Government and he would be taken dead from his home, before surrendering.

That we know. It is them, civil society, that marches destroying on its path the kiosks and ornaments at the squares. I have seen Julio Borges burping with a beer in his hand, Pompeyo laughing at the Editors, recommending to them that they stick their media in their pockets, Gerardo Blyde changing at will the internal regulations of the National Assembly to approve bills ordered by Bush and I am sure that opposition youngsters go at night to the barrios to spread the garbage in the streets and make Freddy Bernal’s management impossible.

What can you do with the people that invented the Fort Mara fire, the secret meetings with FARC, that places people in the 23 de Enero buildings and shoots against the Metropolitan Police to blame the pacifist NGO the Tupamaros. Those that send criminals to hit Deputy Rafael Marin with an iron beam and then say Lina Ron sent them; that disguise themselves in Mision Robinson t shirts and destroy the Columbus statue, that incite their own to invade farms and buildings and then accuse them of being Chavistas, that hit militants of the process in Bolivar square or insult TV reporters to tell the world that in Venezuela there is no freedom of speech. These are the facts that we have to preserve in the memory of the new generations so that they know their reality and don’t back down to the mediatic inventions in their insistence for confusing the most important facts of this nascent revolution.

This article from Elizabeth Araujo in today’s Tal Cual should be called History Backwards or the History that never was, but beautifully makes the point of what is so wrong about what is happening in Venezuela

Rewriting History by Elizabeth Araujo

I saw on TV Lazaro Forero and Henry Vivas shooting against the crowd on April 11th. 2002.

 Remember Venevision showing the video that went around the world and served as a key piece in Judge Anabel Rodriguez qualifying without delay the charges against these police Captains for homicide. I just can not forget that afternoon when then Governor Mendoza, desperate, called on his cell phone one of his Mayors and asked him to invite the barrios so that they would come down with stones, guns and sticks in order to defend the counter revolution, and that night general Rosendo, in a cheap CIA trick, addressed the nation to inform that given the events of the day they had asked the President to reign, which eh had accepted.

I remember how William Lara and Diosdado Cabello stood, unarmed, in Avenida Urdaneta, challenging the coupsters and none of those cowards dared touch them; as certain as Jose Vicente Rangel swore the next day to El Nacional, that he would not recognize the fascist Government and he would be taken dead from his home, before surrendering.

That we know. It is them, civil society, that marches destroying on its path the kiosks and ornaments at the squares. I have seen Julio Borges burping with a beer in his hand, Pompeyo laughing at the Editors, recommending to them that they stick their media in their pockets, Gerardo Blyde changing at will the internal regulations of the National Assembly to approve bills ordered by Bush and I am sure that opposition youngsters go at night to the barrios to spread the garbage in the streets and make Freddy Bernal’s management impossible.

What can you do with the people that invented the Fort Mara fire, the secret meetings with FARC, that places people in the 23 de Enero buildings and shoots against the Metropolitan Police to blame the pacifist NGO the Tupamaros. Those that send criminals to hit Deputy Rafael Marin with an iron beam and then say Lina Ron sent them; that disguise themselves in Mision Robinson t shirts and destroy the Columbus statue, that incite their own to invade farms and buildings and then accuse them of being Chavistas, that hit militants of the process in Bolivar square or insult TV reporters to tell the world that in Venezuela there is no freedom of speech. These are the facts that we have to preserve in the memory of the new generations so that they know their reality and don’t back down to the mediatic inventions in their insistence for confusing the most important facts of this nascent revolution.

This article from Elizabeth Araujo in today’s Tal Cual should be called History Backwards or the History that never was, but beautifully makes the point of what is so wrong about what is happening in Venezuela

Rewriting History by Elizabeth Araujo

I saw on TV Lazaro Forero and Henry Vivas shooting against the crowd on April 11th. 2002.

 Remember Venevision showing the video that went around the world and served as a key piece in Judge Anabel Rodriguez qualifying without delay the charges against these police Captains for homicide. I just can not forget that afternoon when then Governor Mendoza, desperate, called on his cell phone one of his Mayors and asked him to invite the barrios so that they would come down with stones, guns and sticks in order to defend the counter revolution, and that night general Rosendo, in a cheap CIA trick, addressed the nation to inform that given the events of the day they had asked the President to reign, which eh had accepted.

I remember how William Lara and Diosdado Cabello stood, unarmed, in Avenida Urdaneta, challenging the coupsters and none of those cowards dared touch them; as certain as Jose Vicente Rangel swore the next day to El Nacional, that he would not recognize the fascist Government and he would be taken dead from his home, before surrendering.

That we know. It is them, civil society, that marches destroying on its path the kiosks and ornaments at the squares. I have seen Julio Borges burping with a beer in his hand, Pompeyo laughing at the Editors, recommending to them that they stick their media in their pockets, Gerardo Blyde changing at will the internal regulations of the National Assembly to approve bills ordered by Bush and I am sure that opposition youngsters go at night to the barrios to spread the garbage in the streets and make Freddy Bernal’s management impossible.

What can you do with the people that invented the Fort Mara fire, the secret meetings with FARC, that places people in the 23 de Enero buildings and shoots against the Metropolitan Police to blame the pacifist NGO the Tupamaros. Those that send criminals to hit Deputy Rafael Marin with an iron beam and then say Lina Ron sent them; that disguise themselves in Mision Robinson t shirts and destroy the Columbus statue, that incite their own to invade farms and buildings and then accuse them of being Chavistas, that hit militants of the process in Bolivar square or insult TV reporters to tell the world that in Venezuela there is no freedom of speech. These are the facts that we have to preserve in the memory of the new generations so that they know their reality and don’t back down to the mediatic inventions in their insistence for confusing the most important facts of this nascent revolution.

The return of Nelson Merentes to the Ministry of Finance demonstrates clearly the empty words of the Chavez revolution. While opposition members are indicted for minor infractions, such as removing road signs illegally, Chavez appoints again to that position one of the few Venezuelans that has been found guilty of violating the anti-corruption law called the “Law for the protection of the public assets”. Indeed Merentes was found guilty of numerous violations of that law by the pro-Chávez National Assembly when it investigated the “missing” funds (somewhere between 2 and 6 billion US$) of the macroeconomic stabilization fund (FIEM). But of course, you need a Prosecutor to accuse and the current one will never accuse one of his own, with so many easy targets in the opposition to harass.

Interestingly enough, Merentes was also part of the first accusations by the then pro-Chavez press against a Chavista figure when he was accused in 1999 of using funds from the technology and science fund of Universidad Central de Venezuela to buy jewels for his employees. The now Minister of Finance defended the actions as being parts of the “perks” of working for that fund. I love revolutionary logic!