Archive for March 23rd, 2006

Morals and Lights by Teodoro Petkoff in Tal Cual

March 23, 2006

Morals and
by Teodoro Petkoff in Tal Cual

In the
revolution of upright men, the pot of corruption took its lid off

The septic
tank is overflowing and is running over. The corruption scandals follow each
other in a manner that is unstoppable. Of course, you would have to recognize
that for any reason that may be and no matter what the power game that you may
guess is behind the accusations and investigations of corruption cases, the
truth is that at least in the case of the sugar plant in Sabaneta and Justice
Luis Velasquez Alvaray the bull has been handled by the horns and there has
been action against those presumed to be involved in the corruption.  For now…However, we can’t but point out that
these cases were know long ago and for electoral reasons, that is, for a
political variation of corruption, they were only uncovered once the elections
were over with. Thus, until wee see the corresponding penal sanctions we can
not be sure that what has been taking place up to now was not a show, also with
electoral purposes, to simulate a “war against corruption”, but more of the
declaration and spectacle type than real

to the report attributed to the Inspector General of the Armed Forces, already
on January 5th. 200h, the Chief of State had been informed by
General Delfin Gomez Parra of the administrative irregularities taking place in
the sugar plant. Nevertheless a year went by before the case was made public
and the former Minister revealed with candor that he had done nothing because
“it was not convenient to do it before the elections”

By the
way, Albarrran (the Minister) is going around like a lost soul begging for
access to the state media sources-which is a saying, they belong to the
party-to explain himself and in all of them they don’t allow him even to go
enter. Now we are seeing how the sector that backs Nicolas Maduro has proposed
the bizarre idea of creating in the National Assembly a “Comp trolling
committee” that would control the Comptrolling Committee against corruption
that heads Pedro Carreño, whose apparent diligence appears
to worry the warriors against corruption because it could air too many dirty
rags. It is thus obvious those with what they have taken the lid off, some
think it is already sufficient and that the “war” needs to have the limit of
the conveniences of the party and the Government.

In the
same way, the case of Justice Velásquez Alvaray (or should
we already say former Justice?) we knew about this in Tal Cual since last
October and obviously they let it run for alter the elections.

 In any case, the
accusations of Jesse Chacon (The Minister of the Interior), which ratify what
we said in this daily-without the numerical precision of the Minister-, take
the lid off a sewer whose rugged paths, if they were followed in depth, could
produce more than one surprise, given the ample ties who had-or had-the named
Justice in the highest circles of power.

To top it all off, the ineffable Comptroller of the Republic
has given us a “lesson in ethics” that joined with the foolish acts of the
Prosecutor in the Anderson case, leaves in a very bad place a power that it is
ironically named the Republican Moral Council, of which one of its members, the
Comptroller, never appeared to learn about what was happening under his nose.
Perhaps because he was too busy trying to float the truth about the Sierra Nevada case (A corruption case in the ‘70s)

So you understand it by Oscar Garcia Mendoza

March 23, 2006

Oscar Garcia Mendoza, President of Banco Venezolano de Credito, is always criticized for his dire forecasts, but he his predictions have been uncanningly on the money in the last two decades. His bank is the only commercial bank in Venezuela that refuses to buy Government paper. They may be losing money today with this policy (or making less), but in the long run it will pay off for them. This article was written for Correo del Caroni.

So you understand it
by Oscar Garcia Mendoza in Correo
del Caroni

collapse of Viaduct #1 is the real, physical evidence of what this regime is.
It is the authentic proof of how those that hold power in Venezuela are
finishing it off.

continue not understanding this. The reasons may be many and it is useless to analyze
it. But it is worth using this physical and thus evident destruction for
demonstration purposes.

Viaduct collapsed and we can all see it. We know it happened due to the chaotic
management of the Government. And we also know that there many more areas, I am
cutting myself short: in all of the areas where by the action or inaction of
the Government is physically destroying the country. But these sectors are not
as evident.

It is happening
with health, with education, with oil, with infrastructure, with public
finances, with agriculture, with everything with which the ominous hand of the
Government has something to do with. They cover everything up with lies and
disinformation. But the terrible consequences are there and we will all suffer

hospitals that are now in chaos, soon they will be like Viaduct 1. The schools
and colleges, which are in chaos, soon will be like Viaduct #1. Pdvsa, which is
a chaos, will soon be like Viaduct #1. The roads, bridges, highways etc. which
are in chaos will soon be like Viaduct #1. Public Finances where corruption and
chaos rule, will soon be like Viaduct #1. The agricultural areas which the demagogical
policies are destroying will soon be like Viaduct #1.

These have
been years of destruction and corruption. There are some that don’t want to see
it. Open your eyes, your ears, clear your senses. The suffering, that mary are
subject to today, will be multiplied in the future. It hurts and maybe it is
cruel to say it, but that is the way it is.

There are
some who benefit. In this dance of ignorance and bad management, Government
officials and “clever” entrepreneurs and bankers take advantage of
circumstances and get rich harming the totality of the population. They are the
usual collaborators. They are there for all to see. .

It is time
to change this. Venezuela
has no time, nor do Venezuelans.

The absurd civil service pension system in Venezuela

March 23, 2006

One of the
problems in Venezuela
that needs to be addressed is that of pensions. The country only has 26 million
people, but some three million are Government employees who may enjoy sometimes
easy pensions. To make matters even worse, these pensions are unfunded so that
payment comes out directly out of the regular budget of the institution where
the person was employed, as in the case of the Comptroller who retired from the
Libertador Municipality.

This is where politics usually comes in. It works into this perverse system in
two different ways. First, whenever a new Government is elected, the Government
becomes very generous in giving out early pensions to get rid of those that it
does not consider to be loyal. Second, many retirees get involved in politics
and hustle and lobby for positions that will have a higher salary than the
position they retired from. The reason? Once they leave the new position, they
will retire once again, but at the higher new salary.

The system is so absurd, that at the higher levels, the retirement pension is
equal to the salary of the position and if that salary goes up, so does the
pension. Thus, all former Central Bank Directors have a pension equal to the
salary of a current Director.

The system becomes particularly perverse when it comes to taking into account
the military or university Professors. First of all, they are not part of the
civil service, so that you can actually retire form one, go work for the other
and retire again and get twice the salary while you are still working. Despite
what double dipper Russian said today, this can
not be done in the civil service system. But to make matters even worse, both
the military and the universities have their own pension requirements, which
may be as low as 20 years of service in the military and 25 for Professor’s,
with the added benefit that many times university Professors are given credit
for their pensions for the years they were doing Graduate work, or even for the
years they were TA’s at the University.

Think about it, if you graduate at 22 with a Bachelors and become a TA and
enroll in the Graduate program, you can be retired by the time you are 47. Your
salary will come out of the University’s budget, requiring ever increasing
amounts of money from the budget and the Central Government.

In the long run, this is a recipe for disaster. No budget can support this
unless oil prices go up exponentially. Moreover, most of these people that
retire early go find another Government job, particularly the military and academics
who can retain their pension and their new salary.

Obviously this whole thing is ludicrous, more so when you think about the fact
that Venezuela
is a poor country with a GDP per capita just under US$ 4,000. Given the profile
of its population in terms of wealth, it makes no sense to have double dippers,
getting two salaries when under a more rational system they would be getting
only one salary and retiring later.

Remarkably enough, this structural problem had actually been solved by none
other than Teodoro Petkoff in the last two years of the Caldera administration.
As Planning Minister Petkoff got together with unions, the private sector and
the Government and created a consensus that this could not go on, that pensions
had to be funded and rational. Basically, there would be a new system after a
transition, whereby you could only retire at 60 years of age, if you had worked
for 35 years for the Government or the private sector and 65 years of age if
you had worked less than 35 years.

When Hugo
Chavez became President he held off applying the new law under the excuse that
the new Government had objections to the fact that the law allowed the private
sector to manage the pensions. Chavez gave a committee of his supporters six
months to rewrite the law. Then another six months. Then another six months and
that was the last we heard on this issue. Nothing has been done in seven years
on a problem that had been essentially solved.

The real
problem was not who would manage the funds. The real problem became the
academics who were both in the Chavez appointed committee and the Chavez
administration… They would be the ones most affected by the law, because most
of them would not be able to retire after 25 years, but would instead have to
wait until either 60 or 65 years of age. In fact, many of those that worked on
this problem left the Chavez administration in order not to lose their tenure
at their respective universities and be able to retire after 25 years of work. So
seven years have been wasted on a problem that was essentially solved.

I have
always been interested in this problem because the math never made much sense
to me and I saw how it undermined not only the budget of some of the institutions
where I worked in Venezuela,
but it would undermine their heart and soul also. I had friends in their mid-thirties
making plans for retirement at 45 so they could get another job. Their careers
became secondary to this sort of chess game of finding the shortest path to retirement
and legal double dipping.

as so many things in Venezuela,
it is always difficult to get hard numbers of the situation at any Government
institution or university because of the ways the budget is revealed. However,
the Universidad Central de Venezuela, actually gave out the information to researchers
from Unesco and El
Nacional published a brief summary
of the data.

results are indeed scary. Universidad Central de Venezuela currently has some
50,000 students and seven thousand professors. At first glance this would
suggest there are seven students for each Professor. However, of the seven
thousand Professors, 41.9% are retired! Almost 3,000 of them get a pension that
comes straight from the ordinary budget of the university. This is unfunded and
whenever the active Professors get an increase, so do the retired ones,
including my father’s widow, who will get his pension until her death. He has
been dead for over a decade.

this is no way to run a country. It is problems like this that need to be addressed
for the good of all Venezuelans. The current system only benefits the ones that
already have a job, at the expense of those that have very little. It does
sound indeed perverse to have people getting double salaries in a country with
so much poverty. To make matters even worse, the Chavze administration has
increased salaries at the top two or three jobs at most Government institutions
by factors of ten. When this happens, every single retired person, be it
Deputies of the National Assembly, Directors of the Central Bank, Directors of the
Electoral Board or Supreme Court Justices all have their pensions adjusted to
the new levels. The cost is enormous, at the expense of the needy. But at the
political level the silence on the issue is almost deafening, as those that
benefit from this perverse system, stay quiet in order to protect their potential
future and juicy pensions.