Archive for April 24th, 2006

Chavez may reconsider withdrawal from Andean Pact if Peru and Colombia give up pact with US

April 24, 2006

Chavez’s whim to have Venezuela withdraw from the Andean Pact seems to have
backfired among some of his allies who have called for Venezuela to change its
decision, the autocrat responded in his usual non-democratic and disrespectful
fashion, saying that he is willing to reconsider if both Colombia and Peru
withdraw their intention to join the free trade Treaty with the US.

Chavez’ decision reportedly took even the Foreign Minister by surprise. Venezuela does benefit from the Andean Pact and
certainly will have a difficult time benefiting from Mercosur, which we just
joined, not only because the other participating countries are better developed
than Venezuela
and the Andean pact countries, but also because Mercosur partners have already
been involved in it for years. Even worse for Venezuela,
the Andean Pact is actually a strong generator of jobs, since it is the
manufacturing sector which generates 70% of the employment in Venezuela. But Chávez
could care less about this. All he cares about is for his regional leadership,
how to project it and promote it. He does not believe in know-how or knowledge,
he relies in his gut feeling and political hates and desires. There are also
issues like respect and sovereignty that Chavez is violating with his demand,
which Chavez always appeals to whenever anyone gives an opinion, however bland,
about his Government or Venezuela.
Cost and
inefficiencies are obviously not a problem for Chavez, as Venezuela began
on January 1st. to use all of the Andean Pact forms and formats, including
changing passports to the Andean passport, which was part of a long term plan,
which Chavez had to know about. This improvisation is captured very well in
today’s Tal Cual by Weil’s usually incisive cartoon:

(Women comes in with her hard to get new passport with the Andean pact format, just as man reads that Venezuela is withdrawing from it)

Students “Lay down for life”

April 24, 2006

Crime has
become a very severe problem in Venezuela.
Last July I showed
some statistics prepared by Human Rights organization Provea, using official
Government data which showed an almost three fold increase in crime since
Chavez took over nationwide. The same statistics showed that some progress was
made on this issue in the mid 90’s. There is no single reason for this dramatic
increase in crime, but the Chavez administration has never made this an
important issue and up to a month ago, the autocrat himself would not even
mention the topic. Of course, the deterioration and politization of the
Venezuelan police has contributed dramatically to the problem, as the cleansing
of police forces of those not loyal to the process has removed many of the best
trained professionals in those forces. This has led not only to an increase in
crime, but the obvious involvement of police forces in criminal acts, as in the
recent Faddoul case, but also to a huge increase of a factor of FIVE in the
number of deaths caused by policemen during the same years.

The results are obviously tragic as more than 70,000 civilians have died in
criminal acts in the last seven years. This affects mostly the poor and the young,
which led last Saturday to a protest organized by a group of university
students to “lay down for life”. The protest by well-covered with
lots of pictures by Daniel,
so I will not go over the details, but it was a huge success and addressed a
very important problem for all Venezuelans. I complain a lot about the lack of
involvement by people in what is happening in Venezuela,
but participation was not only quite a success, but the picture below, shamelessly
stolen from Daniel’s blog, shows the level of commitment by some to demand the
respect of human rights in Venezuela.

Some oil il related tidbits

April 24, 2006

-In this “democracy” things are not even discussed anymore between independent powers. On March 16th. Minister of Oil Ramirez sent a memo “ordering” the National Assembly to approve the contracts for the new oil partnerships.They obviously did, you don’t argue with the autocrat.

-Curiously, for the champions of “sovereignty”, the approved contracts include international arbitrage, as ordered by Ramirez.

-And the new Cuban/Venezuelan oil company in which Cuba has 51% allows for Cuba to sell oil in the international markets, essentially giving a “legal” framework to what had been happening all along. Nice deal, you buy oil at preferential prices and preferential interest rates, don’t even pay for it, and then turn around and sell it at international prices. Ahora PDVSA es del pueblo…cubano? (Now PDVSA belongs to the…Cuban people?)

-The total amount of the gasoline subsidy (gasoline is sold at 4.46 US$ cents per liter or 17 US$ cents per gallon) is 14.5% of the National Budget or three times what is spent on the “Misiones”. By the way, my share of the subsidy as one that is in the top 25% of the population by income is ten times larger than that of those in the bottom quartile.

-In an article in today’s Wall Street Journal, that newspaper suggests that Chavez will also nationalize the heavy oil partnerships. Given the huge amount of resources required to further exploit the Orinoco tar sands and the fact that PDVSA has no money to do it on its own, this would mean that there will be no more new heavy oil projects in the foreseeable future. .

As someone said today, Chavez is so sure of winning in December that he no longer even gives a damn about Venezuelans.