Archive for April 26th, 2005

Why do our Governments ignore Chile’s success?

April 26, 2005

I have
always wondered why Latin American Governments, including ours, always talk
about neoliberals policies that have hurt our countries, when the reality is
that what they call neoliberal is nothing more than a few attempts to improve
economic conditions via macroeconomic adjustments without really getting down
to changing the way these countries really work. But I have always wondered why
most of these Government officials simply ignore Chile, probably the most successful
country economically in the last decade.

I was
reminded of all this by Gerver Torres’
in Sunday’s El Universal about that country. While the point of his
article was to ask if that was a socialist country, I would like to summarize
its highlights in terms of economic and social achievements.

To begin
with, Chile
has the lowest poverty levels of the region at 20%. Yes, still too high, but
the lowest in the region. Unemployment is 9% and salaries have increased in
real terms by 50% since 1990. Contrasts that with Venezuela’s numbers under Chavez
alone, poverty has increased and salaries have been reduced in real terms.

Chile has on of the highest investment rates
in the region at 23% of GDP and is the one that attracts the highest investment
per capita in the whole region.

that perverse tax on the poor in most of the region including Venezuela, is only 2.2% in Chile. Interest
rates are clearly low, helping the economy grow and the people imprve their
standard of living.

Chile also
has a very good social security system, which not only provides pensions for
its inhabitants, but provides a lot of the funds needed for investment in that
country, without the need for the Government to borrow internationally.

In terms
of economic freedom Chile
occupies today the 11th. position in the world. This for a country
that had horrible numbers only thirty years ago.

What is
hard to understand is why, with an example like that, our Governments look for
failed policies and ideologies that have repeatedly been tried without any
cases of success anywhere in the world.

simply chugs along, becoming more like a developed country under the
indifferent eyes of the Government and Government officials in the region. Why?


Contest of the week: What is Tascon doing in this picture?

April 26, 2005

This picture was taken by a photographer from El Nacional in February
of 2004. It shows Deputy Luis (alias Adolfo) Tascon leaving the
Electoral Board (CNE) carrying a box. What do you think he is doing?:

a) He was selling empanadas de cazon to the CNE Board.

b) He was carrying the dollar bills to buy the infamous list from a Sumate Executive.

c) He was carrying the copies of the opposition petition so that he
could create his list. The copies were made with the twenty
photocopiers he brought into the CNE on January 13th. as authorized by
the CNE President.

d) He was stealing some of the signatures from the opposition petition.

e) He was teaching english spelling to the reporters outside the CNE.

Some lose ends

April 26, 2005

–While the Venezuelan Government continues to say that
CITGO’s refineries in the
are losing money, Valero Energy will become the largest
refiner in the
its purchase
for US$ 6.9 billion of refiner Premcor., whose stock has
doubled in the last year. According to analysts these transactions are talking
place because refiners are “swimming in cash”. Meanwhile, the Venezuelan
Government dismisses this
in which a former executive says he resigned because it was hard to
“keep track of the company’s cash flow”. Maybe its hard to swim in cash
and keep track of it at the same time.  And in another article, it
is shown how Chavez
has named his cronies
to work at CITGO and they have no experience or even a clue
about the business. The problem is that rather than swimming in cash, CITGO appears
to be badly mismanaged at a time that it should be making huge profits. If oil
prices should drop, imagine what would happen! I wonder if this is why they call it “La Revolucion Bonita”. Or is
it because the children of revolutionary oil executives drive $200,000 cars?

–Japanese oil company Teikoku, said that the increase
in taxes for the marginal oil field projects would make it impossible to make a
profit from the fields it runs. The company said it would need to receive incentives
from the Venezuelan Government in order to continue the projects.

–On Chavez’s Sunday’s program Alo President, Chavez
said that among the evidence that the
is planning an invasion of
was the fact that a
woman was caught photographing a military installation. Chavez also said that “several
other Americans” were caught taking pictures of oil installations. The
Ambassador in
said that to their knowledge no American woman has been detained in
in recent months. He did say that a
woman enlisted in the military lost her purse in
where there are military installations. Her purse had a disposable camera. I
guess the invasion will be low tech.