Archive for July, 2005

March not allowed to reach CNE

July 30, 2005

The opposition held a march
to go from the East of Caracas to the Electoral Board to present a
document demanding more transparency in the voting process. The
National Guard and the police surrounded the Electoral Board where they
built a barricade, threw tear gas and clashed with the protestors. The
march was not able to deliver the document to the CNE authorities. The
police would not even allow a delegation to reach the CNE. The General
that heads the metropolitan police offered to receive the documents,
but the leaders of the march refused to give it to him, demanding that
they be allowed to hand it in directly to the CNE. At the end of the
demonstration, one of the CNE Directors went over to get the document,
complaining about the show of force, but by the time she got there the
march had dissolved.

Once again, the basic rights of Venezuelans
are denied and excessive repression is used agaisnt peaceful civilians.
The “pretty” revolution strikes again, but it strikes its citizens and
their rights.

ABA observer sharply critical of judiciary in Sumate’s case.

July 28, 2005

The American Bar Association sent an observer to Caracas for the preelimianry hearing agaisnt the Suamte leaders. Alek has the complete excellent scoop on the report which is quite critical of the way the case is being handled. Some highlights:

“In the opinion of this observer, both that law as applied in this case
and the criminal proceedings to date fail to meet international

“First, as applied in a novel way in this case, the law is impermissibly vague.”

“Second, the ambiguities in the law should be resolved in a manner consistent with Venezuela’s international legal obligations.”

“Third, the case is brought before a Venezuelan judiciary that fails to meet international standards of judicial independence.”

“Fourth, certain aspects of the pretrial proceedings to date violate due process of law.”

Rule of Law: Gone too!

Reply to Isaias by Teodoro Petkoff

July 28, 2005

Yesterday I talked about the Editorial that threw the Attorney
General/Prosecutor into a rage. Today Tal Cual Editor Petkoff, a former
very good friend of  Prosecutor Isaias Rodriguez, gives him hell
for his attitude. Well deserved. Will Isaias also investigate whether
he can jail Teodoro?

Reply to Isaias
by Teodoro Petkoff

the poet Isaias had his fuses blown. He accused the Andean Commission
of Jurists, the Center for Justice and International Law (Cejil) and 83
jurists from nine countries of “improper interference “ in Venezuelan
matters, because they demanded respect for the constitutional rights of
lawyer Carlos Ayala Corao, President, by the way, of the Andean
Commission of Jurists, who has been charged by the Prosecutor’s Office.
He announced the opening of an investigation of daily El Universal to
find out if an editorial of that daily was a punishable offense and
eventually take the appropriate measures in the case. He also accuses
Tal Cual of being part of an international conspiracy, of “harassment”
against him, promoted according to guidelines of the new manual for
coups, elaborated by the CIA. Isaias, without any doubt, is delirious.

of all, it is surprising that the representative from a Government
characterized by its intromissions, whose President frequently gives
opinions about internal matters of other countries, without hiding its
links with political sectors of those countries, would complain abut
the “intromission by the alluded international organizations”. The
world of today, Isaias, is like that. Countries are more interdependent
than ever and no Government can believe it is sheltered from
international scrutiny. If the prosecutor behaved correctly, nobody
would demand anything.

the Prosecutor’s office, Isaías himself has said it, is a body which
you can have little trust in and it forces jurists from the Continent
to have a watchful eye given its actions.

second place, the announcement of the opening of an investigation
against El Universal already shows that those who are concerned with
the respect of the constitutional rights of Venezuelans on the part of
the Government, are quite correct in being worried. Isaias attempts to
place obstacles on the exercise of freedom of speech. He pretends to
charge El Universal with nothing but “a crime of opinion”. Isaias has
revealed to us his authentic vocation as a censor of the press.

In the third place, the reference to Tal Cual is frankly incomprehensible.

occupy ourselves with the Prosecutor’s office we don’t need to consult
any CIA manual, it is sufficient with the digital page of the Public
Ministry (MP) where Isaias places his considerations about the
organization he directs. It is the Prosecutor himself who has said that
the MP is full of “family” groups, of groups of “friends”, of people
permanently “on leave”, of “cattle rustlers”, of “despots” with those
below them and “disrespectful” of those above them. First he spoke of
“cliques that brake, delay, slow down, block” . Later he corrected
himself and qualified them as “ship nuts*”, which are impossible to
loosen up. The poet denounced that his underlings “lack the preparation
and do not have the technical knowledge in order to make decisions”.
How does he pretend when he says things as serious (and as true) of his
civil servants, that people abroad should not be concerned about the
administration of justice in our country? Isaias complains because El
Universal spoke of “justice on its knees”, but if we rely only on what
he says, it is truly not on its knees, but on the floor, like a rag.

* In Spanish this implies you are so “screwed” into your position, nobody can remove you

Another threat to freedom of the press

July 28, 2005

For the
last three years, I have been translating the Editorials of Tal Cual by
Petkoff, which have been extremely critical of the Government. I have
yet to hear a Government official complain about them. That is why it
truly remarkable to hear that the Government is opening a
penal investigation against El Universal for the Editorial below. For the last
two days the “Attorney General/Prosecutor” has been reacting viciously against the Editorial in El Universal
which I translate below. This is simply another sign of the intolerance and
fascist streak that runs through this Government.

Freedom of the Fress? Give me a

If the Attorney General could
take pride in what he has done in the last few years, maybe he could have complained
about being criticized harshly. But to suggest that the following Editorial
subjects his Office to public “scorn” is simply to ratify what most Venezuelans
both pro and against Chávez feel. There is no Justice and rule of law in Venezuela. There
have been hundreds of deaths and injured in political marches that remain
unexplained, there has been an increase in crime and police brutality that has
no counterpart in the number of cases prosecuted or convicted, there have been
over a thousand cases of “disappeared” people in rural states in the hands of
the police (mostly “pueblo”), there have been daily deaths in the country’ jails and we have yet
to hear about what is being done about any of it. Or what Mr. Rodriguez, responsible for Justice in Venezuela is doing about it.

corruption runs rampant in
the Chavez administration, not one case of courruption has been
prosecuted, while hundreds of
members of the opposition including human rights activist of
stature are harassed and prosecuted regularly. Meanwhile, people Chavez
has fired fo corruption, resurface in oether prominent Government
positions like the former Head of Fogade. And we will not forget the
cases, such as the death of his Prosecutor and close confidant Danilo
Anderson, whose wealth, lifestyle and behavior
have yet to be explained, after the Government rendered him the honors of a dead
patriot and Mr. Rodríguez shed his crocodile tears for him after his assassination

The Attorney General has made a
mockery out of the rule of law and due process, choosing instead to support the
Government of which he was the first Vice President, a fact that will not be
forgotten by Venezuelans when the day of reckoning comes. And now he threatens one of the very rights he is
supposed to defend, the right of free speech. Nobody will ever forget his
partisan role on Chávez’ return on April 12th.,
arms up in the air in celebration as the corpses were still warm
and  leaving the murders of innocents Venezuelans in the black
hole of the
impunity that permeates this administration. Mr. Isaias Rodriguez
the fascism, cynism and intolerance of this Government. What he has
done today is simply
another attempt to muzzle free speech and silence one of the few voices
freedom left in Venezuela.
If rather than threatening and accusing El Universal, Mr. Rodríguez
investigated the cases presented every Sunday in that paper’s “Expediente”
cases he would have made a positive contribution to the country.

But he is not interested in that,
he is among those that believe that the fake revolution is immortal and he
wants to have a prominent role in it. We will never forget.

Here is the translation of the
meek editorial that has irked the
Attorney General and has made him behave like the partisan and mediocre
politician and human being he really is:

on its knees

To subordinate justice to one
ideological dimension, subtracting form it efficiency and autonomy, is to place
the engine out of the rails, leaving the wagons defenseless and abandoned. That
is why there has been an increasing lack of legitimacy on the part of the
Public Ministry and the Courts

The center of interest from the
point of view of the news is crime, guerrillas, paramilitary groups and the lack
of security in general. The center of interest may also be criminalility, but what
should concentrate the greatest efforts of public administration is the penal
process, when the index of convictions is very scant and impunity triumphs.

In this context are the statements
by the Executive Director of COFAVCIC, analizing the specific modus operandi,
which reveals deviations and perversions in security forces and in the administration
of justice itself. That is the gravity of the alarm, when you prove that all
citizens in Venezuela
are subject to a very high risk of abuse.

As Cofavic has pointed out, the
politization of the penal system and its inefficiency, besides the inexistence
of a policy against crime, which is a set of actions focused on directing the
prevention and reduction of criminality in a ratiuonal and scientific way, all
end up in this increasing insecurity.

As a consequence, penal justice
has to be professional and has to be coordinated with prevention, investigation
repression and the treatment at penitentiaries, because the relation between justice
and society tends to destabilize the latter even more. From it, the feeling of
insecurity in the face of Government statements and the manipulation of

A large part of the directives
and procedures for social control demand a profound revision and as the
absolute priority is the rational combat of poverty, with the participation of
social, economic and political sectors of the country.

The fight against poverty is not the exclusive realm of
anyone but of the Nation, understood as a productive and harmonic set.

There has to be work closely done among specialists both
national and foreign in maintaining the decentralization of police forces,
improve the regional mechanisms for coordination and strengthen justice making it
professional, autonomous sand objective. That is the highest aspiration of all
the citizens.

Coronel on Telesur: A must read

July 27, 2005

Gustavo Coronel takes apart Telesur in this great article. An excerpt:

quality of Telesur is very low but, at least, the adventure has been
cheap so far. Compared to the several billions of dollars Chávez has
recently spent in military hardware including aircraft, warships,
helicopters, rifles, Argentinean debt bonds, PetroCaribe and
PetroAndina and the billions he has already pledged to buy Ecuadorian
debt, oil tankers made in Brazil and to bail out the Uruguayan airline,
the US$10 million capital he put into Telesur is peanuts. Of course,
only Venezuelan street children could appreciate how welcome such an
amount would be to take hundreds of them off the street, off drugs and
prostitution. In the context of the glorious Chávez revolution this
amount is just a small initial contribution to his dreams of regional

A picture of thugs, militarism and impunity

July 26, 2005

When you think you have seen it all, then this picture is in the front
page of today’s El Nacional. The picture was taken at yesterday’s
anniversary of the city of Caracas, where the illustrious Mayor of the
Libertador municipality, Freddy Bernal, gave a medal to the wife of the new Minister of
Defense, who is the man in white on the right of the picture. His wife
is shown on the left in military garb. Clearly Mayor Bernal decided he
had to suck up to the new Minister who was named to the position only two
weeks ago. As if this were not enough, Mayor Bernal also gave a medal
to the woman in the middle, whose name is Lina Ron. Lina Ron is a
pro-Chavez rebolutionary that is allowed to do whatever she pleases
because of her support to the President. A while back I wrote about how she showed up
with a bunch of thugs at a police station and freed her husband and four
other men who had been detained for attemtping to kidnap a woman from a
hospital, which caused the resignation of the Head of Police of that
municipality. And only last July 8th. Ron and her supporters kidnapped
and harassed two reporters for daring to take pictures in her
terrirtory. (How democratic, no?) This kidnapping was protested
formally by Reporters sans Frontiers to the Attorney General. This is the type of impunity and
savage values that this militaristic revolution is installing in this
country. Reporters are harrased (Do I hear freedom of expression in Venezuela from
anyone out there?), Thugs and abusers are given medals by Government
officials and are proudly hugged by the Minister of Defense. (Do I hear there is respect for the law and due process in
Venezuela?). Military garb is the rule of the day among civilians and
military alike. (Do I hear this is not a militaristic Government?)

Oh yeah! I forgot that Mayor Bernal, without the supposed “research”
that was going to be done on the date of the foundation of Caracas, did
away with the Diego de Lozada medal and invented new ones. Poor Diego! It took almost five hundred years for him to realize he just wasted his time!

Note added: It is unclear to me now if the women on the left is
Maniglia’s wife or the Mayor’s wife. If it is the Mayor’s wife, then it
will be an even more significant show of militarism as she was never in
the military.

Tales from the revolution

July 25, 2005

As one
watches events in Venezuela,
one can’t help but wonder what these revolutionaries have in their minds.
Politics and the show of politics seem to be the daily priorities. Let someone
else handle reality. Let someone else do the work they are supposed to do. But
the revolution only cares about revolutionary issues. Important issues such as:

What a great idea. Since after seven years the Government’s TV station VTV is
so crappy that less than 2% of the Venezuelan people watch it, why don’t we
start an international TV channel. This way, we can do it right, much like
fixing the local hospitals by bypassing them and starting Barrio Adentro. To
make sure that Telesur will have a truly independent Editorial line, we will
name the Minister of Communications as its first President. Since the whole
thing is very improvised, just like the revolution, for the first year, we will
only transmit for four hours a day. That sure should capture viewers, who will
be wondering what wonderful revolutionary ideas we will be broadcasting in
those four hours. With Telesur we should be able to export the revolution. We
can broadcast about the ineptitude of the revolution, or the ruin that Castro
turned Cuba into, and if we have nothing to show, hey, we can have Chavez hold
a six or seven hour monologue that will make any Latin Saturday variety show
seem very boring compared with his wisdom, his poetry, his insults and his
music. Hey! Maybe we can talk to Osama and have them send some videos that we
can broadcast where they take responsibility for some terrorist act. That
should really piss off Bush!

Renaming Caracas: Caracas is buried in garbage, but the real
problem is that it has an oligarchic name. Before we can fix that (the garbage)
we should really stop celebrating the anniversary of the city and look
carefully into who really founded the city. All those guys that wrote whole
books about the history of Caracas
did not really do a proper job. How can they be sure it was founded on July
25d.? Maybe if we spend some money on daily ads in the local newspapers,
someone will come forward with some information. After all, Caracas was only the name of the tribe that
was here before the Spanish arrived. Maybe we can have a contest and have
“the people” choose the best name for the city, before the idea from
Ibsen Martinez of naming it 10º 30’ Latitude North, 66º 56’ Longitude
West really catches on. Yeah, we better hurry up; imagine if they begin calling
it Kennedy or something like that.

No more exports: Let’s promote national industry, thus, rather than export
steel to multinationals; we will simply sell it at a cheaper price to
local companies. And if we can’t sell it all, we could even lower the price
further. Imagine how that would develop local industry. We could have a boom!
We could even give it away. Hey! Now that I am Minister of Basic Industries I
am having great ideas. It’s a pity I have no formal training on any of this.
Maybe I should talk to Ramirez and convince him that we should not export oil
either. I bet if we give it all away locally, we could really get people to use
the steel at the same time. Hey! We could even do the same with meat. What? We
import meat? So? Oh! We need the money from the oil to pay the meat. Never mind…

To sow the oil 1961 (Validity of a slogan) by Arturo Uslar Pietri

July 24, 2005

While I
was away Jorge posted the translation I left of Arturo Uslar Pietri’s 1936
article “To sow the oil”, 25 years later Uslar himself revisited his original
article in an article entitled “To sow the oil 1961 (Validity of a watch
word)”, which I translated below and which seems to be as valid today as then:

To sow the
oil 1961 (Validity of a slogan)
by Arturo Uslar Pietri

In the
first semester of 1936 I was collaborating with the daily newspaper “Ahora” and
I would frequently write its Editorials. It was a full time for opinion
journalism and publications would make an effort to direct and enlighten the
criteria of the readers. It was a feverish time for analysis, a time for examining
our conscience, of looking for a direction for a country that had just left the
longest dictatorship of its history and which, full of hope and doubts, of
impatience and fears, of ignorance and faith, wanted to heal itself of its ills
and establish a democracy where there would be an abundance of goods.

We began
to discover the true physiognomy of the country. A physiognomy which was not
the beautiful and conventional one that had been the legacy of the old literary
geographers, of a land full of abundance, copious and generous, full of
accessible richness which, like a sleeping beauty, had been separated from its
true destiny by the spell of the Governments of strength, but that would wake
up more splendorous than ever with the exorcism of freedom. The physiognomy
that was beginning to reveal itself, as a result of the first serious
investigations, was that of a poor country, backwards and full of obstacles for
progress. The so called “necessity census” became fashionable, which were
unending catalogs of all of those things that we had lacked: hospitals, school,
aqueducts, roads, sewers, parks, silos. Without forgetting the bust of Bolivar
for the square and the renovation of the ruinous temple of each town. The
country was beginning to realize that it lacked almost everything, that what it
had was insufficient or inadequate and that the resources which it had were out
of proportion with the magnitude of the requirements and the sciences.

The only
talk was about problems. The word problem became fashionable. There were
education problems, there was a health problem, there was a transportation
problem, that of agriculture, of the currency, of the organization of labor, of
municipal autonomy, of the federal system.

We were
three million Venezuelans, in large majority badly fed, badly dressed, badly
housed, a large fraction of which had its capacity for a useful life diminished
by ignorance, by malaria, by parasites, by isolation. Confronting these needs
we counted on resources which were disproportionably limited. It was estimated
that it was thousands of million what was needed to invest in order to
radically modify that unfavorable state of things and the more the census of
needs grew, the more pitiful, by contrast, that the credit account appeared. A
million sacks of coffee and some ten thousand tons of cocoa per year were the
traditional products for export. We also had oil and its production had reached
the volume, which appeared then to be large, of 154 thousand barrels of oil a
day. We had imports that amounted to 211 million bolivars and an effective
national budget of roughly some 180 million bolivars.

that small budget the estimates of what was needed for schools, hospitals and roads
that the country needed, grew like the silhouettes of giants. It was a David-like
enterprise to try to win over with those weapons that Goliath of problems that
rose threatenly in the path to our progress.

There appeared
then the “arbitristas”. People with more imagination than science, enthused
like the Quixote by some simple idea which, according to them, needed to be
applied to magically achieve the transformation of the country. There were
thoughts of loans, of monetary manipulations, of obscure financial formulas and
even of a semi secret plan by which we could end up making use of unlimited
amounts of money.

There was
not yet any school of economic sciences and there were very few Venezuelans
that had devoted themselves with some seriousness to the study of economics.

that confusing anguished panorama I wrote an editorial that was published on
July 14th. 1936 in the daily “Ahora” (Year I, # 183)

In it, in
an effort to see it in the most objective and simple manner I pointed out some
fundamental facts. That the traditional agricultural and cattle production of
our soils had not only not increased, but was showing a trend towards
diminishing and that a large part of the resources that we could make use of,
originated from destructive and non reproductive ideas. The destructive
activity of mining and oil, the destructive activity of beefwood or other wood

From this
simple fact, one derives a very simple consequence. We had to develop in Venezuela a
simple economy. We had to develop in Venezuela a productive and
renewable economy that could grow and advance with the country, instead of
shrinking and in that way develop the transient wealth of mining activities:
“It is necessary to get out the most income from the mines to totally invest it
in aid, facilities and stimulus to agriculture, breeding and national
industries.” That is, take to the maximum mining income and devote the totality
of its provenance to the creation of our own economy in a “true act of national

To put it
in more simple language and make it dramatically attractive it occurred to me
to synthesize that in one single phrase that could be converted into a
watchword for a national crusade, in the slogan and creed of the Venezuelan
action. It was then that I proposed “as watchword for our economic policy: to
sow the oil”. That same phrase became the title of the editorial.

It was
launched as a warning shout and as a call to reason. I thought that if people
could penetrate the sense of that simple and almost paradoxical phrase, it
could turn itself into the starting point of a great transformation of the
country. “What do we need to do? Everyone seemed to ask. The simple and
concrete answer that it occurred to me was “To sow the oil”. It had the
obscurity and peptic contradiction of a sibilic oracle. The Sibila of the Venezuelan
destiny could tell all of us one day the same thing “Sow the oil”. In the most
literal of senses it could appear to be a magic ritual” take the dark and foul
smelling substance that sprouts from the drilling towers and that flows heavily
and viscously through the oil pipelines, to turn it into furrows and convert
them into harvest. In this way the black and inert oil could be turned into millions
of irrigated and sowed hectares, into fat herds, into chimneys of factories,
into rotation of axles of transmission into the happy crackle of motors.

It seemed
like a magical formula, but it was the most precise synthesis of a realistic
economic policy. We were not going to sow the black oil in the furrows of the
farmland, like witches in a Walpurgis Night, but we were going to turn oil into
money and invest the money in a healthy and growing economy.

I wrote
that phrase and stayed, with quiet emotion, waiting for the launching of the
call. I thought it would have the virtue of waking and shaking everyone up. Among
the uproar of the voices that raise themselves with contradictory offers and
claims, it did not seem but one more voice lost in the clamoring without truce.
There were some spoken comments and very few written ones.

could have remained there, without other consequences, but words also have
their destiny. They don’t die with the sound that enunciates them, but acquire
their own life and begin their adventure and their action. There are no truly
useless words nor can anyone be sure that what one has said will die.

The phrase
“To sow the oil” was born and as much of a meaning it had a destiny. From the
page of the newspaper it had already jumped to minds and opinions. It began to
be repeated. It later appeared in papers. It broke out in the oratory of
popular meetings. When, in 1938, the Free School of Economic and social
sciences was founded, it had turned itself almost into a proverb. When, in
1946, the Venezuelan Development Corporation was founded, it was adopted as its

It had
already entirely escaped me by then. Many of the people who repeated and
invoked it, had no idea of who may have created it. I, on the other hand, felt
that in this way, the notion that it had turned itself into an anonymous and
collective expression, allowed it to fulfill better its own destiny. It had
been forged to awaken the collective conscience and insofar as it was becoming
a popular phrase, it was on its safest way of reaching its goal.

There were
those that attributed it to someone else. Few wanted to recognize it as mine. Venezuela,
which has demonstrated, in general, to be generous in recognizing its intellectuals,
has been, sometimes, somewhat parsimonious and reticent with me. I don’t want
to elucidate the causes now, juts point it out. Either they did not recognize
me as the author of the phrase or they tried to find a different one that was
not me. Its paternity has been attributed most frequently to Alberto Adriani.
It was an intelligent attribution. Adriani, dead in the prime of his capacity
to serve, was a man of clear mind and practical sense that had the passion to
get Venezuela
moving in a heroic fight against backwardness. The idea that the phrase
expressed coincided in many points with his way of understanding the paths to
the economic development of Venezuela.
However, the phrase was not his, nor does it appear in any of his writings or
statements, nor any person has attributed it to him that heard him say it, and
if, for the good of the country, his fertile life had been extended, he would
have been the first one to deny the attribution.

This is
all for the anecdote. An anecdote that, the truth be said does not lack
interest and significance. The fact that matters to point out for me, for now,
is that the slogan “To sow the oil” is having its first quarter of a century

We could
ask now if it has been useful and if it still preserves its validity for
today’s Venezuela.

current country is much different from that one that saw the appearance of the
editorial in the “Ahora” daily on June 1st. 1936. The population has
doubled since then, Malaria has disappeared, the rate of illiteracy has been
reduced, a large number of roads, buildings and public services have been
built, infant mortality has decreased, the average life of a Venezuelan has
increased, there has been industrial development, the budget has grown 35 times
and what the state used to spend in one year, is now spent in ten days.

All of
this means that the economic capability of the country has grown and this has
been possible, fundamentally, by virtue of the development of oil activity. The
154,000 daily barrels of production of 1936 have reached, in a continuous
ascent, the three million barrels a day, approximately, that we have reached at
present. From this source, and not from any other, has originated the move up
of all the other indices in our economy.

the basic terms of the problem have not changed substantially since 1936. If
oil activity represented then one third of national income, today, directly or
indirectly, it represents more. It ahs grown, instead of diminishing our oil
dependency, and the proportion of destructive activity in our economic complex
has not diminished.

If the
advise ‘To sow the oil”, launched in 1936, had been efficiently converted in a
true national policy, we would have today a Venezuela which would be much
richer and much more independent of oil. If we had invested directly in
economic development, loans for production, equipment and supplies, technical
education and colonization, the dozens of thousands of millions of bolivars
that oil income have produced in these twenty five years, we would be today one
of the most prosperous, rich and independent countries of the world.

it was not done that way, or only a small part was it done. From 1936 to 1939,
the increase in oil income was scant. In 1939, the Second World War created
obstacles and deviations for the economic development of Venezuela. Nevertheless,
the time of waiting and tension was taken advantage of to make a profound
review of oil policy which culminated with the reform of 1943, In this way,
Venezuela insured for itself, after the war, the largest oil income it had ever
known in its history and one of the largest that any country has ever derived
from a single activity.

Thus the
bases were laid to undertake, in a scale that would have seemed a fable to the Venezuela of
1936, a gigantic program of sowing the oil. At the end of the war the National
Budget did not even reach five hundred million bolivars. If we had then planned
the investment of the increase in income that was going to take place because
of the oil reform, it would have been possible, almost without increasing
bureaucracy or political expenses, to achieve a complete transformation of the
national economy.

To this
end we counted on instruments which were ready and prepared for it, such as the
tax reform of 1942 that allowed a more just redistribution of the national
income via taxes and the agrarian reform that allowed, in a reasonable time,
the end of the large estates and the backwardness of the rural areas.

political events of 1945 blocked this possibility and opened a long period of political
instability and administrative discontinuity.

1946 and 1960 a large part of the oil income was destined to non reproductive
ends, for ornate public works, sumptuous or unjustified investments and to the
excessive growth of the bureaucracy.

the oil wealth was made use of to a certain extent, but in a random way,
incomplete and unplanned The avalanche of money that has gone through this
country brought many transformations and not few advances, but it did not
become the instrument for a coordinated and solid transformation of our
economic and social conditions.

It would
have been necessary to have a clear and well defined concept of what oil should
be in national life. Neither an isolated economic prodigy, nor ordinary income,
neither a field of independent activity propitious to rehearse theories and

That is,
to waste the wealth in investments that are not development, nor consider it as
an industry isolated from the national complex.

A coherent
conception of oil within the framework of Venezuelan life was needed. To
consider oil not as a specific and isolated activity to which one can apply
systems appropriate for exploration and conservation which are ideally perfect,
but more like and instrument for development.

Providence has given Venezuela
an immense wealth underground. Venezuela
is an undeveloped country. Logic would indicate that what we have to do is to
make use of the wealth underground to develop Venezuela in all aspects.

conception of oil as a fundamental and irreplaceable instrument for the
development of the country may not coincide exactly with the requirements of an
oil policy, which considers oil on its won, out of the framework of the
Venezuelan needs and proposes only to find the way to exploit it more
rationally and conserve it for a longer period of time.

To exploit
rationally and make use to the maximum of oil reservoirs is certainly something
which can not be ignored, but postponing and delaying the development of Venezuela in
the name of the convenience of conserving oil for future generations lacks a historical

generations are not going to ask if we left them a lot or little oil
underground, but they are going to launch at us a much more grave and
peremptory question which is no more than this one: Did we make intelligent and
opportune use of oil to build a country?. The tragic implication of that
question is not going to be eluded by our absent shadows or our fuzzy memories
alleging that we tried to make a prudent and rational exploitation.

If England
had not taken advantage when it had the opportunity of its coal richness to
turn rapidly into the first and largest industrial power of the XIX century, it
would be a weak consolation for the British of today to contemplate the very
large mountains of coal, which could have been conserved at the price of no
taking their country to the level of development that it reached.

Oil is
before anything the most powerful instruments for development that Venezuela has.
It should be used and conceived that way. National and world circumstances have
created this possibility. It is our duty to use it and not expose us to, what
may be a conceptual error, the conditions evolve and turn against our interests
and we come to realize it when it is too late and the opportunity has passed us
without forgiveness.

Today much
like yesterday, the investment of the majority of the oil income in economic
development continues to be Venezuela’s
most important need. At the recent Conference, the American Secretary of the
Treasury, Dillon, announced the possible investment over the next ten years of
a sum of approximately twenty billion dollars for the progress of Latin America. This promise was received with approval by
a whole continent of twenty countries with almost two hundred million inhabitants,
because they see in it the possibility of a definitive push in the
transformation of the economic and social conditions of this vast part of the

It calls
us to reflection that, during that same decade, Venezuela, from its own fiscal
resources, will obtain an amount that is not inferior to that one. In effect,
the current level of our budget, at the exchange rate that the Central Bank receives
the currency, can be estimated at a magnitude close to two billion dollars per
year. With such fiscal income, the Venezuelan state should be in the capacity
of promoting the most extraordinary development program that any American country
has ever known.

throughout the years the inadequate orientation of public spending, has
affected an enormous part of those resources in taking care of management costs
that only indirectly stimulate national economic progress.

The truth
is that today as much as yesterday and even with more urgency than yesterday the
statement of the objectives of Venezuelan economic policy, is simple and

We need to
stimulate the production of oil and of the mines up to the highest levels
compatible with world possibilities in terms of prices and volume. We need to maintain
an aggressive competitive and expansive position of the oil and mining industry
established in Venezuela.

From that production,
maintained at the highest level, at the highest prices possible from our
position in world markets we must derive for the state the highest possible share
compatible with the needed stimulus for investment and the development of extractive

That is,
take the oil and mining industries to produce at maximum, with the maximum
benefit for the country.

And then,
consider the funds arising from our share in that industry as if it came from a
loan without interest and term, which needs to be repaid by the increase of the
industrial and agricultural production of the country. That is, the investment
at the maximum level of the oil and mining income in the effective economic
development of Venezuela.

This means
nothing more than sowing the oil which goes to prove and I can not say that it
does not please me, that today, much like twenty years ago; this continues to
be the fundamental slogan for Venezuelan progress

Chavez’ blog diary parody

July 23, 2005

If you have not seen the parody blog of Chavez’ diary, go look at it, very funny! (In Spanish)

La Vuelta (The Flip): A truly revolutionary swindle.

July 23, 2005

When Hugo
Chavez was a candidate for the Presidency, he continuously attacked PDVSA,
accusing the oil company of being an island, not responding to the country’s
interests, run by technocrats, corrupt and unaccountable to its owners, “the
people”. Today almost seven years later, Hugo Chavez has total control of
PDVSA, which is truly an island, run by incompetent political hacks, full of
corruption, has not presented financials since 2002 and “the people” have no
clue as to what is the real status of the company. Venezuelans have no idea of
how much oil PDVSA produces, how much money it makes, how many dollars it
receives. The company was not handing over all of the foreign currency to the
Central Bank as required by law (the law has been changed) and even PDVSA
officials disagree in public about what has been done done with the company’s funds.

thus become another political territory to be milked and fought over.
Corruption is rampant as evidenced by the lifestyle of some PDVSA executives, their
purchases abroad, their trips in company’s jets, their ostentation. Even the Chavez
controlled National Assembly has investigated PDVSA and CITGO for corruption,
even if it has not voted to ask for the prosecution of anyone yet.

Sadly, Chavez’ promise of fighting corruption is the one
in which he could have made a dent the easiest. He had the mandate and the
goodwill to stop it. Unfortunately, it had not been a year since Chavez had been
in power when the head of the intelligence police, his comrade in arms Jesus
Urdaneta presented Chavez with 42 cases of corruption within his
administration. Chavez did nothing. Four months later Urdaneta, who participated
in the 1992 coup attempt with Chavez split from Chavez and his Government over corruption. Since
then, despite the many cases, some blatant, of corruption, not a single member
of Chavez administration has been convicted of corruption and those charged can
be counted with one hand. This has had the opposite effect. Since there is no
fear of being punished, corruption is more pervasive than ever.

In the following I tell the story of “La Vuelta” (The Flip),
a financial swindle that was set up in 2003.More than US$ 600 million was bilked
from people in this combination Ponzi scheme/corruption swindle set up by some “revolutionaries”
aided by other comrades from within the “New” PDVSA. This scandal broke while I
was away; I have been trying to piece together and understand it before writing
about it. Below my take on “La Vuelta”

La Vuelta (The Flip): A truly revolutionary swindle.

It was early in 2003. PDVSA was upside down after the Chavez
administration had fired 18,000 people for their participation in the general
strike in December 2002 and January 2003. At the same time, the Government had
issued a decree establishing exchange controls in the country. For companies
providing services to PDVSA this created two problems: One, their contracts
were in dollars, but it was unclear whether they could or would be paid in
foreign currency as the exchange control decree exempted oil companies but it
was unclear whether this included them. Two, the people that they used to deal
with within PDVSA were all gone, replaced by a strange combination of leftist
union leaders and political hacks from Chavez’ MVR and the Patria Para Todos

A group of “entrepreneurs” with contacts at the highest
levels in PDVSA West (reportedly via the union leaders) had a bright idea: Why
didn’t they buy the invoices from the service companies at a discount, turn
around and using their contacts collect the full amount from PDVSA?

Thus was born “La Vuelta”, by which these revolutionary financiers
would buy the invoices at 60% of their value and turn around and get 100% of
the invoice using their contacts. This flipping of invoices was so successful that soon the entrepreneurs
did not have sufficient funds to purchase all of the outstanding invoices and
began setting up a network of “brokers” that would pay 20% interest per month
to depositors or half the profit of their scheme, every time they “flipped it”.
Reportedly, the intermediaries would get 10% and the PDVSA insiders would get the
other 10%.

“La Vuelta” became an extraordinary success; the problem
was that they were being so successful and efficient that they were running out
of “un payable” invoices. Thus, in order to keep up the scheme, they had others set
up their own companies that would provide services and workers to PDVSA,
inflate prices and keep feeding the scheme. Unfortunately, Hugo Chavez ordered
a stop to the payments in US dollars and the whole pyramid began to shake at
its foundations.

At that point “La Vuelta” survives by switching to
Bolivars and using the black market to sustain payments. As with any other
pyramid, at this point there were some delays in paying the “customers”, but
the second “Vuelta” successfully survived its
conversion to Bolivars. However, in order to attract clients the clients were
still paid in US dollars at the 20% interest rates.

Early this year, 30 managers of PDVSA are fired for “corruption”
even though not one has been formally charged with it. Separately, the union
leader, that supported the Government throughout the 2002-2003 strike and thus Chavez
named to the Board of PDVSA in January 2003 was also fired reportedly for being
at the heart of the swindle. He has not been charged either.

The departure of this 31 individuals all based in Zulia state
implied the death of La Vuelta. Soon payments stopped the whole house of cards collapsed
and the reported leaders of the scheme left the country.

Since then, it has been charges and countercharges on the
issue, with the Chavista Mayor of Maracaibo
involving The Governor and even suggesting La Vuelta has something to do with
the death of Prosecutor Danilo Anderson. Others have suggested that General
Alberto Gutierrez, the MVR candidate for the Governorship of Zulia state was
involved in the whole scheme.

We might never know who was or not involved in all of
this. What we do know is that there were insiders of PDVSA that were speeding
up payments, allowing huge contracts with unknown companies and helping out in
the whole process. It sounds naïve to believe that a single member of the Board
of Directors was involved, more so when the PDVSA structure separates functions
supervised by different Directors in order to prevent this type of collusion
between those handing out the contracts and those making the payments.

Whatever the case, “La Vuelta” swindled greedy Venezuelans
of some US$ 600 million and the scheme was run for almost two years non-stop at
a 20% per month clip. The numbers are simply staggering, as we may be talking
of as much as US$ 1 billion in commissions to the PDVSA insiders and another
US$ 1 billion to the organizers over this period of time.

A truly revolutionary swindle!