The Devil's Excrement

You have
to wonder about this Government and the financial system. So much ideology,
attacks on the oligarchs and the rich, but the Venezuelan banking system has
made money hand over fist ever since the ignorant Colonel became President. I have
outlined in these pages how the Venezuelan financial system has benefited from
so many Government operations and gifts that simply make no sense. Yes, they are stuck with
absurd amounts of Government paper, but they keep making money as the boats
sinks.

The latest
measure this week was for the Central Bank
to increase the amount of foreign currency the banks may have from 15% of their
equity to 30%. So, in the midst of exchange controls, now all of a sudden banks
can increase their net dollar position by a factor of two!. Not even in the horrible times of the
IVth. Republic did this limit go above 15%, but now the revolutionaries double
it! Your everyday Venezuelan can’t protect himself or herself from devaluation,
but banks are allowed to increase their protection. What gives?

The
ostensible explanation given by Government officials is that this will allow
the Government to reduce the excess monetary liquidity without having the
Central Bank, which is already in the red and in deep trouble, issue more CD’s.
Well, as we say in the vernacular, this
explanation is simply “mierda de toro”.

You see,
banks have no access to CADIVI or exchange-controlled dollars, thus, if they want
to purchase dollars, they have to go to the parallel market or the Argentinean
bond market, controlled by the Government. In either of these, the Bolivars they pay for the dollars don’t
get sterilized or disappear from the money supply, but they simply go back into
the system. This only happens when you go through the Central Bank. In the swap
market the Bolivars go to whoever is selling the dollars. In the case of the Argentinean
bonds, they go to Fonden which in this way gets bolivars, since it only got
dollars when it was funded from the “excess” reserves taken away from the Central
Bank. The only reason Fonden wants to have Bolivars is to spend them, so the
Bolivars go back into the monetary liquidity very fast.

Thus, the
only likely mechanism for the banks to go from 15% to 30% of their equity in
foreign currency is to buy Argentinean bonds or buy Venezuelan Government bonds
directly from the Government whenever it offers one of those Bs/US$ sweet
deals.

And that
is probably where the explanation lays. In the last few weeks emerging bond
markets have been jittery and both Argentinean and Venezuelan Government bonds
have been very volatile. By “sweetening” the deal for the banks, they will be
more amenable to take the risk of acquiring foreign currency to protect their
equity via these bonds. Thus, the Government with this new measure has simply
guaranteed that they can place the US$ 600 million in Argentinean bonds it
still has in stock or any new Bs./US$ bond they may want to issue in the near
future.

Thus, the revolution
ain’t got any principles my friends and is willing to let the oligarchic capitalists
make a bundle if it fits their goals. The average Venezuelan can go screw his
or herself and remain unprotected from any devaluation, which of course will
make them poorer, but Chavez and the politicians simply don’t care. Politics above all!

A friend pointed out these two contradictory headlines next to each other in today’s page A6 of El Nacional, that show the two realities Venezuelans are living under Chavez, mainly due to his own personal ambitions. On the left, the pro-Chavez Governor of Apure state complains that there are 750 Kms. of his state where there is no protection. Right next to it, our esteemed Minister of Defense Maniglia proudly announces that Venezuela is sending both military personnel and equipment to Bolivia.

As my mother says: Charity begins at home. I guess the corolary is: Not in an autocracy

The above was the headline
of Frankfurter Allgemeine Zeitung in its coverage of the walk by Alek Boyd and
Patricia Wegenenast y Mohamad Merhi from Koblenz
to Brussels calling for clean elections in Venezuela. You
can follow the progress of the walk in
this site expressly created for the walk. The description of the blog says
it all “For a pluralistic Venezuela,
with citizens free to elect their expectations for a better future”. For German
speakers you can also follow it in Patricia’s
blog or the German version of Una Venezuela, Ein Venezuela. They will arrive in
Brussels
tomorrow where they will meet with European Union officials.

Please drop by and give them your moral support for this important
effort to raise awareness about our problems. As you will see in the pictures,
it is not easy walking 40 Kms. a day.

Thanks to Alek, Patricia and Mohamad for their effort!

Chavez may visit Venezuela today!

One must
recognize that the Chavez administration has a remarkable ability to turn
issues into a fuzzy area where unless you know the details, everything looks
fine from afar, but in reality it isn’t.

This week
we have seen this twice, both in the case of the riots at the Universidad de Los Andes and the case of the audit of the electoral
registry that the muniversities have proposed:

—The audit of the electoral registry:
Some of the best technical universities in the country proposed onths ago that they could
do a better audit of the electoral registry than any international institution.
Moreover, they argued, if the gave the green light to the registry, people
would have confidence in it. Two of the three universities involved (UCV and USB) generate
90% of the university research in Venezuela, as measured by their yearly publications.

Problem is
that there are many more universities, some of which began (in jealousy!) complaining that they
were not involved in the process. Well, in the spirit of collaboration and
cooperation, seven other universities were included in the project. Problem was, in the spirit
of democracy, each university also has a vote in the process, and therein lays the
problem and likely that was precisely the trap.

You see
the seven universities have been acting much like the old Chavez-dominated
National Assembly in that everything they propose is voted on dand there is little
discussion and at the end the vote is mostly seven to three according
to the President of Simon Bolivar University Benjamin Sharifker, himself a
distinguished scientist of international renown.

While
these three universities (UCV, ULA and UCAB) object to the procedure, their main
concern at this time is the fact that the CNE refuses to allow an audit that
involves looking outside the CNE register, like using public death or borth registers, geographical
demographics and the like. Last night these three universities were ready to pull
out of the project and today they will make a final decision on the matter.

Clearly,
the audit has to look beyond what the Electoral registry contains. By looking at birth records and ID
records at the national scale, one can tell whether the registry is consistent
or not, whether it has been inflated with ghost voters or not and whether
people vote more than once.

If the CNE
wins the battle, the three universities will withdraw from the process, but the
Chavez Government will proceed to tell the world how the registry is squeaky clean
and was audited by seven of the “best” universities in the country. And the
world will believe it and nod in agreement that Chavez is truly the most democratically
elected President of the Western world since Alvaro Uribe.

—The riots at the Universidad de Los Andes: The origin of the riots is the ruling by the
Venezuelan Supreme Court that the University may not have the autonomy to hold
its own elections for student union. The decision was made at the request of an
injunction by a pro-Chavez student group that lost the last election and
appeared to be going to lose this one by an even wider margin. Thus, the Court admitted the case and stopped the election from taking place.

The issue
arises because the new
Constitution says (Art. 293) that the CNE will organize and supervise all
elections for unions, professional associations and political organizations”. However
the same Constitution (Art. 109) recognizes that Universities are autonomous in
their organization. This principle has been in Venezuelan law for quite a while
and is common in most of Latin America. It also has been at the crux of most student/Government conflicts in Venezuela’s history. The question is whether these organizations are covered or not by autonomy.

It has
been understood since 2000 when the new Constitution was approved that universities
have autonomy and indeed they have organized all elections, except in one
University where the Government has not carried out any elections as
established by law. (Interestingly, the “democratic”
union created by Chavez UNT, has yet to hold elections which is stopping all other individual union
elections from taking place for more than 250 trade unions. Incredibly, UNT is
apparently thinking of postponing any elections once again until next year,
so they can devote all their time and energy to getting Chavez reelected! Screw the rank and files and their problems!)

Well, last
week when the students learned of the intervention of their election by the
Supreme Court, they started protesting. This led to the National Guard raiding
the University with tanks, which in turn led to more violent riots. Yes,
students were armed and people were hurt on both sides, but it was the concatenation
of the two events, the Court’s decision and the violation of the autonomy, which was to blame
for the events of the last few days. And they are likely to continue unless
elections are held soon.

But the
Government’s version is that this is nothing but a destabilization plan by the
opposition and the presence of Teodoro Petkoff at that university last Friday,
led Minister Chacon to involve Petkoff in this plan, to which Petkoff responded
today,
calling it a “dirty war” against his candidacy. As usual the People’s Ombudsman
acts like the
Government’s Ombudsman, calling the riots shameful, rather than defending the
rights of everyone involved, guardsmen and students alike.

For once,
something positive is done by this Government, in that the National Assembly proposed
a dialogue to solve the problem, something that we have not seen in the last seven
years where everything has been ordered from the top, the way the autocrat wants
it. Unfortunately, every time I praise something the Government does, they
later come out and screw it up. That is
how democracy works, you talk, you have a dialogu, not the way Chavez wants or likes it. Let’s see if it
lasts.

As far as
I remember, nobody had ever asked for a university election to be organized by the CNE before, the students are asking that the university not organize it, teher seems to be no other option but the CNE, since these are clearly political organizations and Art. 293 would apply.

It has been tacitly understood that autonomy gave the rights of
self determination and organization to the Universities themselves. Unions on
the other hand have largely refused to let the CNE organized their electoral
processes, saying this violates international labor agreements signed by the
Venezuelan Government. The Court admitted the case and will rule in the future.

But it is now wonder the Government wants to supervise
all this. According to Elides Rojas, the Chief of the press room at El
Universal, there have been 112 electoral processes at unions and universities not
supervised by the CNE in the last two years. Curiously, in a country where
Chavismo never seems to lose an election, 109 of them have been won by the
opposition. This is precisely what the Government wants to stop. (For the PSF’s
reading this, most of these elections have been decided by fairly wide margins
and the pro-Chavez forces have seldom claimed there was fraud.)

Thus, the
Supreme Court’s decision had a very clear political objective. Once again, from
afar, those reading about the riots will believe these students are simply
trying to use this as an excuse to protest and the more naive may even think
Petkoff and the opposition have something to do with the riots. That is exactly how
the Government wants to spin it and it will likely be successful once again. Just
twisting the facts to fit its story.

I guess this country has been screwed up for quite a while when the Student Union leaders at Central University (UCV) and Universidad de Los Andes (ULA) are named Stalin Gonzalez and Nixon Moreno respectively..

What were they parents thinking of? Funny thing is, they both ended up on the same side. I bet their parents never thought that possible.

(I just checked, there are over 1600 people with Nixon as first, second or last name registered to vote, very few as last name. Remarkably, there are only 1400-plus Stalin’s, but over 4500 Lenin’s)

Former Yaracuy Governor Eduardo Lapi was detained this morning as his home was raided by the intelligence police. Reportedly he will be charged with misuse of funds. Thus, as the robolution robs, steals and charges commisions, opposition figures are detained for subtle charges of misuse of funds. If the same criterai were applied to the Government, they would all be in jail, beginning with William Lara who one no longer knows if he is speaking as Minister or as spokesman for Chavez’ political party MVR. Or how about former CNE President Jorge Rodriguez who still has ten bodyguards and three official vehicles for his use.

This weekend Hugo Chavez continued intervening in the Peruvian election, in violation of the OAS Interamerican charter, going as far as calling Alan Garcia a thief, which is probably true, but curiously saying little about Ollanta Humala whose curriculum is as bad as Garcia’s. But he really stepped over the line calling President Toledo a traitor and a madman. He seems to be doing that daily these days.

But if anyone seems to be losing it is Chavez himself. Despite the oil windfall, he has little to show in Venezuela beyond his promises. He travels abroad promising the world and giving away Venezuela’s money as protests increase at home. But he seems not to care. Students at ULA and other universities continued their protests today over electoral autonomy, while protests shutdown the streets in Caracas near CONAVI, the housing institute and charges and countercharges of corruption continue to fly around between Government figures.

But Chavez is removed from all of this, as he has been outside of Venezuela two thirds of the days in the month of May, going as far as promising to “save the world”, giving away US$ 1.5 billion to Bolivia, more than CITGO originally cost in what has always been called an act against the country’s sovereignty, except we still own CITGO and it is worth much more. So much for defending sovereignty! It is unclear if Venezuela will get anything out of these US$ 1.5 billion, except some solidarity out of that country’s leader, who may not be in power for long, if the history of that country is any guide.

But Chavez has found a tough enemy in Ala Garcia and even in lame duck Toledo, who clearly is not going to go down without a fight. Today Toledo called on the OAS to act on Chavez’ intromission in Peruvian affairs, saying the organization can not wash its hands on this problem. For the OAS this represents a problem, it does not want to get on Chavez’ nerves by acting, but it damages the reputation of the institution when such a fragrant violation of its charter is ignored.

Meanwhile, Chavez the madman, proposes a new “Bolivarian Andean” Community after destroying the previous one, without asking his countrymen or Cabinet about it. It was just a whim. But as Rafael Poleo said in his “Pendulo” column last week, Chavez gave a press conference in which he basically defined his sphere of influence in South America. The problem is that if Garcia wins, the Chavez’ new community might be smaller than Chavez wants or even smaller than the previous one. Colombia is unlikely to go with it; neither will Peru if Garcia wins, leaving Ecuador, Venezuela and Bolivia to participate in this novel union. But this is too small for the absentee landlord of Venezuela. What will he do then? Poleo thinks that Chavez will include Argentina and Paraguay, basically leaving Peru, Colombia and Brazil outside of his loop.

This may seem like a losing proposition for anyone, but that is not how Chavez thinks. He is frustrated by his lack of accomplishments at home. He controls the country, but he has little to show in the last seven years despite the huge oil windfall. He knows the ten million votes in December is very far from reality, even manipulating the vote. So his personal project is more important than the local one. He is the new Simon Bolivar, the new integrator; even if he acts like a disintegrator in the short time since his project was formally aired.

The problem is that he has gained some powerful enemies on the way. Lula, Fox and now Toledo have been irked by Chavez to the point that they have gone on the offensive against him. When Toledo says that he will remain active in Latin American politics in order to “promote and preserve” democracy, the message seem to be very clear: He is ready to go around lobbying against Chavez’ project in his spare time. Lula talks softly, but Petrobras is wielding a big stick. Uribe can now claim a huge mandate, which clearly does not include Chavez in the plans.

The problem is that life for Chavez is also getting tougher at home. The whole point about having a primary is precisely that the opposition candidates can openly make these points. Meanwhile, corruption is internally eroding the revolution as factions within the Government fight to preserve or even gain more territory. People protest daily, most of them you don’t even read it in the news.

If I were Chavez I would leave my international ambitions aside for a while and concentrate on controlling the local herd. I hope he doesn’t! This looks like it may unravel for him quite fast at the rate it ahs been going

It’s 10 PM, 99.82% of the Colombian votes have been processed manually and Uribe is the winner. We still don’t know the final results of December’s election and it took weeks for the final result of the recall vote to be announced. I wonder what Carrasquero, Rodriguez and Lucena have to say about their new-fangled 300-million dollar automated system they purchased, but can’t produce similar results.

So much for the best voting system in the world as the Chavistas call their automated system.