The Devil's Excrement

Check out Bruni’s collection of Government-paid ads from only today which either promote Chavez’ name or image in them. Is that fair? Should that be legal? It is simply abusive. And the CNE? Rooting for Chavez…of course.

Well, what seemed so tough to attain, a unity candidacy, was achieved last night when Julio Borges agreed to withdraw his candidacy in favor of that of Zulia Governor Manel Rosales. Clearly, Petkoff’s withdrawal last week helped quiet a bit, but what was really important was the fact that with Petkoff and Borges openly campaigning, Rosales’ somewhat stealth candidacy propelled him to the top of the opposition preferences rather quickly. Reportedly, all of the other candidates who had registered for the primary, but barely appeared in the perefences have accepted to withdraw, leaving Rosales, Smith and Er Conde as the alternatives to Chavez.

While I am sorry that there was no primary, I really think we should start having democracy from below in Venezuela, I am quite pleased with the outcome a unity candidate led by Rosales. My initial preference for Teodoro Petkoff was quickly tempered by his terrible campaigning skills and his refusal to participate in the primary, despite initially indicating that he would participate. Since I have never been impressed by Borges or Smith, then Rosales was my preference and I hope his standing in the polls forces Er Conde to withdraw quickly.

As for Rosales, he may not have the economic knowledge of a Petkoff, but he is first of all a democrat. He has shown that he is a good campaigner and can appeal to the population at large. He woudl also try to be a President for all Venezuelans in contrast to the autocrat. He has been an efficient and effective Governor and continues to enjoy the support of the people in his state. That in itself tells you quite a bit. He has proven he can administer, has better economic know how than the top few dozen people in the Chavez Government (not too hard!) and while he has the old style campaign style, this is not a matter of style, but substance. I think he should have been more decisive about running and not worry so much about the Government forcing him to step down. In fact, they still might try it, so in the end there is little difference.

So, let’s see how the Government reacts and how they attempt to disqualify Rosales.The CNE is still a problem, but as we say in Spanish “la pelea es peleando”, something like “you have to fight your fights”.

In what is to me a surprisng decision, mostly by its how soon they announced it, the CNE has decided that Governor Manuel Rosales does not have to resign from his position in order to be a candidate in the upcoming Presidential election. No decision on the fingerprint machines was announced.

In the
best tradition of the witch hunts of
the 50’s in the US, Deputy Jose “Sherlock” Albornoz is quickly turning into Joe “Mac” Albornoz
McCarthy with his trial by headline of NGO Sumate.

In the beginning according to Joey Albornoz, it was that Sumate had violated the foreign exchange illegalities
law by changing dollars and not being registered in Cadivi (The foreign
exchange office). This was plastered all over the headlines, except there were
two problems: One, you don’t register with CADIVI to receive dollars, the
dollars are simply sent to a local bank which proceeds to exchange them to
Bolivars via teh Central Bank. Two, There is no violation of any law if you either changed it before
the law went into effect, or use alternate mechanisms such as security swaps or
CANTV ADR’s which are perfectly legal.

Well, it
turns out that Sumate actually
went through the banking system, as demonstrated by its Directors and
confirmed by the Superintendent of Banks. Separately, Sumate presented
its contributions from the National Endowment for Democracy, which are public
and listed in the website of that bi-partisan foundation, from the Canadian
Embassy (Mr. Danger’s neighbor?) and from the Konrad Adenauer Foundation. Sumate
also said that they had received money for a project that was returned.

Then last
week the Directors of Sumate showed up to testify on the source of the funds,
but Joey “Mac” Albornoz, did not want to talk to them, he wanted to talk to the
accountant of Sumate. Well, he had not invited him and he happens to be a
volunteer who is not even in the payroll of Sumate. A new invitation was forwarded
with the guy’s name and he showed up today to testify and said that Sumate has
no accounts in US dollars, that it all came in the form of Bolivars from
the banks. He also mentioned a project to study the Electoral registry that
never panned out because of the lack of data, which was funded by the Health
and Human Services Department of the US Government and that the money was
returned even before this investigation began.

Despite
this, Joey “Mac” Albornoz continued making his best imitation of McCarthy and
Tascon, when
he said that “Sumate did receive dollars”. Yes it did, but there was
nothing illegal about it. He made a big deal about the returned money, called
the US
Ambassador a liar. Even funnier was saying that the money was returned to a
company called “USdisburning” Office, which is nothing but the way the US
Agency for International Development disburses funds, via the US Disbursement Office, not exactly a
company.

Albornoz
even insisted that there was a “presumption” of a foreign exchange illegality, which
simply shows he can’t tell up from down or is a huge liar, so as not to use a coarser sentence. Receiving dollars to a local bank is not illegal. The bank converts them at the official rate and you have Bolivars. As long as they have a legal origin and are used for a legal purpose, nothing significant has happened. Banks do this everyday.

But we all
know this is simply a witch hunt, another one in a long string of witch hunts
from the same people who considered million dollar illegal contributions from
Spanish banks to Chavez’ 1998 Presidential campaign “unimportant” or similar
million dollar illegal contributions from
the same banks to Chavez’ 2000 Presidential campaign, while he still was
President, “insignificant”. The difference is that you can’t touch Chavez and
those contributions were actually proven to have occured in Spanish Courts. In the Venezuelan Courts,
they never got anywhere and were ignored by characters such as Joey “Mac” Albornoz.
Curiously, no sector has benefited the
most form the Chavez largesse’s and corruption than the financial system, of
which the Spanish banks are two of the three largest. Curious, no?

And Alfredo noticed that Steve Jobs and Apple are imperialistic, oligarchic institutions, probably friendly with Mr. Danger and his cohorts. (He told us little about the new machines though)

Disclaimer:
The following post does not attempt to spread, diffuse or distribute its
contents. While this post was written
while the author may have been legally considered to be in Venezuela, its
contents are hosted, stored and accessed in a foreign country. Anyone that
believes that reading it violates the CNE regulations towards the Presidential
campaign, should abstain from reading it, enjoying it, understanding it, distributing
it and/or diffusing it. The post itself does not judge or imply a value on any
presidential candidate and/or its supporters; it is simply an intellectual
exercise on the meaning of the new CNE regulations. The author is not
responsible for the contents of the comments generated by this post.

There were
these two great ads this weekend in national newspapers by the branch of Big
Brother at the Electoral Board (CNE), telling us what we can or not do or say
during the upcoming Presidential campaign. Over the weekend the ad dealt with the
do’s and don’t’s, which I read with some interest, particularly faced with
such difficult questions as the fact that the regulations forbid having
electoral advertising “that promotes the exaltation of political hate”.

Now, given
that the word hate means, according
to the dictionary “intense animosity or dislike”, this is certainly one
that could be tricky to comply with, but which clearly could lead to many cheap
and easy jokes. I mean, loving your political opponent is not exactly the norm,
so where do you draw the line between strongly opposing and “promoting the
exaltation of political hate”. Do you have to say “Our Dear and beloved
President which we hope to unseat, and then you begin to blast his incompetent Government? (UUps!)

Another
example may be if I give you the pictures below, with the headline “Hugo
Chavez, love him or leave him or get rid of him”, could I be accused of promoting animosity or
dislike? Or abstention?:

I guess it
would be all in the eyes of the beholder, no?

I guess,
only as an example, that maybe I would be violating the regulations if I post
these two pictures:

With a
caption that said: “Hugo Chavez the day he had more than 200 innocent Venezuelans
killed and Hugo Chavez, 14 years later enjoying more happy times” This may
be ruled as going against his “honor”. Or would it? Can you dishonor someone by
telling the truth?

But by
now, you may be wondering what this has to do with my blog? Why am I concerned
or wondering about this at all? Am I planning to campaign for or against
someone?

Well,
today the “companion”
ad appeared in major newspapers and down below, it says very clearly:

“There
will be sanctions, in the case of (…long list of cases)…The diffusion of
messages distributed through the Internet….”with a sanction of 200 tax units
(equals to Bs. 548,000 or some US$ 2,500, in 2006). Now, this really grabbed my
attention.

First
of
all, this one is sort of difficult to understand and interpret in
detail. All of the Internet? Does the CNE have such powers? What
if I am not in Venezuela?
If I have a blog, am distributing its contents it? i.e. Am I delivering it?
Spreading it? Or diffusing it? Umm, hard to tell, particularly about the
diffusing. It seems I am indeed diffusing my content, no? But what if my blog is
abroad (which it is) and I do the post abroad (which I do sometimes). Does it
apply? Hard to tell, even if revolutionary justice can be quite creative about
finding its enemies guilty, even when they are not. Will they ask Interpol to send me back to pay the 200 tax units?

The
curious thing about all of this is that between now and Dec. 3d., Chavez will continue to be able
to hold his Sunday program “Alo Presidente” according to the same regulations
and the decision of the “independent” CNE (no hate implied!). If he follows the
pattern of the last five years, during his long broadcast hours he will surely attempt
against the honor, privacy, dignity or reputation of people, promote the
exaltation of ethnical, religious, gender or political hate, promote abstention,
use images of children (or even use real ones!), use the national and regional
symbols or those of the heroes of Venezuela, will name people and will use
public funds in promoting himself and his candidacy.

This
text
is a carbon copy of the regulation (I left out cruelty to animlas or
soemhing like that) and includes 90% of what the regulations say
you can’t do…but…

…the CNE
will say nothing to him…but this blogger may get into trouble because of this
post alone.

Francis Fukuyama on Chavez
from
the Washington Post, you can also find
a discussion with him on the subject here. Here is a man who understands democracy, social policies
and economics rather well, I thoight it was important to reproduce his full article here. He is a
professor of international political economy at the School
of Advanced International Studies at
Johns Hopkins University.

History’s Against Him By Francis Fukuyama

Sunday, August 6, 2006;
Page B0

CARACAS, Venezuela

Early on in Hugo Chavez’s
political career, the Venezuelan president attacked my notion that liberal
democracy together with a market economy represents the ultimate evolutionary
direction for modern societies — the “end of history.” When asked
what lay beyond the end of history, he offered a one-word reply:
“Chavismo.”

The idea that contemporary
Venezuela
represents a social model superior to liberal democracy is absurd. In his eight
years as president, Chavez has capitalized on his country’s oil wealth to take
control of congress, the courts, trade unions, electoral commissions and the
state oil company. Proposed legislation that would limit foreign funding could
soon constrain nongovernmental organizations as well. And people who signed a
recall petition against Chavez in the run-up to a 2004 referendum on his rule
later found their names posted on the Web site of a pro-Chavez legislator; if
they worked for the government or wanted to do business with it, they were out
of a job and out of luck.

Chavez’s success in
attracting attention — cozying up to Fidel Castro’s Cuba,
signing an arms deal with Russia,
visiting Iran and
incessantly criticizing the United States
— has popularized the notion that Chavismo embodies a new future for Latin America. By preserving some freedoms, including a
relatively free press and pseudo-democratic elections, Chavez has developed
what some observers call a postmodern dictatorship, neither fully democratic
nor fully totalitarian, a left-wing hybrid that enjoys a legitimacy never
reached in Castro’s Cuba or
in the Soviet Union.

Latin America has indeed
witnessed a turn to this postmodern left in some countries, including in Bolivia, where
Evo Morales, Chavez’s kindred spirit, won the presidency last year.
Nonetheless, the dominant trends in the hemisphere are largely positive:
Democracy is strengthening and the political and economic reforms now being
undertaken augur well for the future. Venezuela
is not a model for the region; rather, its path is unique, the product of a
natural resource curse that makes it more comparable to Iran or Russia than any of its Latin
American neighbors. Chavismo is not Latin America’s
future — if anything, it is its past.

How did Venezuela end
up at such a pass? The answer is oil, oil, oil.

The country’s modern
political order was negotiated in a Miami
hotel room in 1958 by leaders of its two traditional political parties; the
resulting pact created a viable democracy that provided stability for four
decades. But stable politics did not make for sound economics. With the growth
of oil revenue through the 1970s, Venezuela was relieved of the need
to create a modern non-oil economy. Commodities that the country once exported
— such as coffee and sugar — soon withered. And rather than foster social
mobility or strong public institutions, the two political parties bought social
peace by distributing oil rents through subsidies, government jobs and
patronage.

Venezuela did not suffer the Latin American
debt crisis of the 1980s, a trauma that in many ways inoculated countries such
as Brazil, Mexico and Peru from relapsing into the worst
forms of economic populism. Instead, Venezuela experienced a disastrous
decline in living standards as oil prices fell during the 1980s. The country
had never been part of the global economy — aside from the energy sector —
and had no competitive industries to fall back on. Chevez and others on the
left blame Venezuela’s problems on globalization and “neoliberal”
economic policies, but with the brief exception of the opening attempted by
President Carlos Andres Perez in the late 1980s and early 1990s, the country
never truly sought to globalize its econom

There is more continuity
between the pre-Chavez and Chavez eras than proponents of either would like to
admit. The recent rise in oil prices has again exempted Venezuela from
the laws of economics. The Chavez government has imposed a blizzard of
regulations controlling the exchange of currency, setting prices, limiting the
ability of employers to hire and fire, and mandating trade and investment deals
based on political considerations — all of which further undermine Venezuela’s
weak private sector. Yet, because of its hefty oil revenue, Venezuela’s
economy has grown sharply over the past two years. The irrationality of
Chavistanomics will not be felt until oil prices fall.

Venezuela‘s peculiar history shows why
Chavez does not represent the region’s future. Countries such as Brazil, Mexico
and Peru, lacking Venezuela’s oil
resources, know that they cannot get away with such dysfunctional policies;
they experimented with them and were burned. It is no accident that postmodern
authoritarianism is most successful in oil-rich countries such as Iran, Russia
and Venezuela.
While Bolivia’s
Morales aspires to be another Chavez, it will soon dawn on him that his
country’s natural gas is not a fungible commodity like Venezuelan crude oil.
Morales’s only real customer is Brazil,
which he has already alienated through his nationalization of the heavily
Brazilian foreign energy investments.

The dominant political
forces in Latin America, while bringing to power a new generation of
politicians on the left, run counter to those in Venezuela. Central banks and
finance ministries throughout the region are much more capable than in the past
of maintaining sound monetary and fiscal policies, and even left-leaning
presidents such as Brazil’s
Luiz Inacio Lula da Silva and Argentina’s
Nestor Kirchner are not inclined to stray far from economic orthodoxy.

In contrast to Chavez’s
politicization of Venezuela’s
institutions, Mexico
has made its Supreme Court and Federal Electoral Institute politically
independent. Brazil and Colombia have increased the autonomy of local
governments, permitting experiments in budgeting and education; and Brazil and Mexico have undertaken programs to
increase the incomes of the poor while giving them incentives to keep children
in school.

There are already signs of
an anti-Chavez backlash. While the Venezuelan president rails at U.S. interference in Latin politics, he has
tried to promote populist allies such as Ollanta Humala of Peru and Andres Manuel Lopez Obrador of Mexico. Venezuela’s neighbors
resent this, and have punished the Chavista candidates at the polls. Indeed,
Chavez may well have cost Lopez Obrador the Mexican presidency, since the
number of votes the latter lost because of dislike of Venezuelan interference
probably exceeded the small margin by which he lost the election.

Chaavez’s popularity among Venezuela’s
poor is based on his social policies. He has begun innovative initiatives, such
as a network of health clinics in low-income neighborhoods, where Cuban doctors
treat the poor. He has created subsidized food outlets that equalize the prices
paid by rich and poor. And he has attempted to distribute land to peasants.
Some of these policies, such as the clinics, meet pressing social needs and
should have been undertaken long ago; others, such as the food subsidies, will
be hard to sustain absent high oil prices.

A response to Chavismo
must recognize that populism is driven by real social inequalities. Proponents
of economic and political liberty in Latin America
are often suspicious of grand social-policy experiments, perceiving them as a
road to bloated welfare states and economic inefficiency. But free trade alone
is unlikely to satisfy the demands of the poor, and democratic politicians must
offer realistic social policies to compete.

Social policy is,
unfortunately, difficult to get right: Unless it creates incentives for the
poor to help themselves, it can become an entitlement that breeds dependence
and out-of-control fiscal deficits. In Brazil, Lula’s government took over
a program of income transfers to the poor but in the process weakened
enforcement procedures obliging parents to keep their children in school. And
market policies are no panacea: Even Chile, which has extensive high-quality
private education, saw huge student protests this spring because of the low
quality of its publicly funded schools.

Democratic governments in
Latin America must also work patiently at enhancing the quality of their public
institutions — improving simple things such as issuing business licenses,
enforcing property claims and controlling crime. There is no cookie-cutter solution;
it often requires local-level experiments, such as the Brazilian city of Porto Alegre’s
“participatory budgeting” initiative from the early 1990s, which
opened the budget process to civil-society groups and forced politicians to
show where the money was going. Bad public administration saps economic growth
and delegitimizes democratic institutions, paving the way for violent swings
and backlash.

Last December, a bridge on
the road connecting the Venezuelan capital to its international airport collapsed,
diverting traffic into the mountains and stretching a 45-minute journey into
one lasting several hours. A two-lane emergency highway now bears this traffic;
renovation of the bridge is still months away. The bridge epitomizes what is
happening to Venezuela
today: As Chavez jets to Minsk, Moscow
and Tehran in
search of influence and prestige, the country’s infrastructure is collapsing.

The postmodern
authoritarianism of Chavez’s Venezuela
is durable only while oil prices remain high. Yet it presents a distinct
challenge from that of totalitarianism because it allows for democratic choice
and caters to real social needs. At a recent conference of business leaders
here, I witnessed many speakers openly criticize Chavez; their remarks were
cited in the mainstream media. There is no police state in Venezuela — at
least not yet.

Chavismo remains a threat.
But it need not embody Latin America’s future,
not if the region’s democrats can reduce economic inequities through innovative
social policy and nimble public institutions. Of course, such developments
would not mark the end of history. Just the end of Chavismo.

I started
this blog exactly four years ago today. Not that I keep track, but
Userland has this way of terrorizing me a few days before the anniversary,
reminding me that I need to pay US$ 39.95 in x days if I want to keep blogging.
And every time I start wondering whether this will be the last year or not, or
even how many more years it will be. The truth is I have no clue. Writing this
blog has been fun, frustrating, satisfying, difficult, easy, hard,
illuminating, threatening, enlightening and certainly a learning experience. I
have met great people thanks to the blog and they outweigh the fanatics, the
pains in the buts, the liars and the obsessive ones.

I have learned that there are some people out there that support Chavez out of
this fanatical belief in anything left wing and that no matter what he does, he
is their heroe. I have also learned that there are also people exactly at the
opposite end of the political spectrum that are at times quite similar to the
extreme pro-Chavez people. But in the middle there are a bunch of people that I
consider the target of this blog, who just care about this poor country and its future and
can’t stand what is happening, even if politically we don’t agree on
everything. At least we are willing to discuss it with honesty.

I have also learned that democracy is not as ingrained in Venezuelans as I
thought it was. Neither are the values that lead you to have respect for human
rights. Of all sorts. This is perhaps the saddest lesson of the last seven
years. We apparently lived forty years of an illusion of democracy. Little was
apparently learned by most people in those four decades. I have also learned
that too many people have a price and it is remarkably low, even if this is irrelevenat. A price is a price. As Chavistas have
left their ideals aside and become part of the new oligarchy, the old oligarchy
has begun to work with them. And they are making huge amounts of money
together, illegally and immorally. And the robolution does not seem to care

Today, President
Chavez “reiterated his will to fight corruption”, as the evidence of
corruption everywhere mounts each day that goes by, whether it is in the way
the finances of the country are run, or the agricultural sector and its many
corrupt funds, or PDVSA, as the flashy lifestyle of the revolutionaries,
reivindicates the politicians of the IVth. At least you could seldom tell they
were stealing based on their lifestyle. But note how few people have been punished because of their corrupt ways in the robolution. Remeber the 42 cases denounced by the Head of the DISIP in 1999? They are still there, gathering dust. Much like Bolivar 2000, Caez, FIEM, the bonds, the bonds again, the Argentinian bonds now, the PDVSA buy out, the CD’s, FONDAFA, and on and on.

Unfortunately,
I can no longer be optimistic. Not because Chavez will or not remain in power,
but because we have once again wasted the oil windfall of the last few years,
much like we did in the previous ones. What is worse this time around is the
level of dishonesty and unethical behavior floating around. The idea that
things can be easy, either because the Government gives them to you or because
you steal them. That politics is above all, that results just don’t matter.

I also
think that before the robolution is over, there has to be a huge shake up of
our economy. We will all lose, but the poor will lose the most. Very little
foundation for a solid economy has been laid in the last few years. On the
contrary, half of the manufacturing sector has been destroyed, many parts fo the real econo, were simply wiped out. Just because this was supposed to be a revolution….

PDVSA has been
reduced from a world class company to a mediocre, political, inefficient and ineffective company. There
is very little investment. The oil windfall hides the distortions, but they
become larger as the days go by. Inflation will hit 12-14%, but savings rates
are 4-6%, while lending rates are 8-14%. You can buy an Electricidad de Caracas
bond in Bolivars that yields 7.38%, but you can also buy an Electricidad de
Caracas bond in US$ that yield 9% in
dollars! The banking system makes money because they charge commission and
their Government paper goes up when interest rates go down. Governemnt debt in Bs. and dollars is way up. So is the lack of transparency and accountability. There are simply no checks and balances.

One day,
the laws of economics will prevail, like they always do, and it will be the worst financial crisis in
our history. I wonder who will be blamed? We will likely spend ten years
blaming someone, rather than trying to avoid the same mistakes again. Another populist
will win, with the same promises and the same policies. And we will see the
movie again.

Meanwhile,
the Governments spends billions to protect us from a military threat that only exists in
their imagination, as 44 Venezuelans are killed daily by crime and poverty has
not budged in the last seven plus years.

But as
long as Userland supports the software I will likely be here chronicling the
events for the next four years and some of you may not be bored enough to come
back and read my tales. Sometimes I will post more, sometimes less. But I will
be here, what else can I do? I do want a better Venezuela. That was the whole point, wasn’ it?

Two from the news:

1) I don’t know if this is true or not, but the Miami Herald has an article about corruption  in the agricultural development fund Fondafa in the town of Zaraza, Guarico state in central Venezuela, whereby local crop producers would hire locals to sign for credits and pay them for doing it. As a result, among those participating were a group of prostitutes. According to one person interviewed for the article “The brothels closed down because the women got credits from Fondafa”.

Must be the first time that prostitution goes down thanks to corruption. Maybe Freakonomics should study the case.

2) The day after the sister of former President of the CNE Jorge Rodriguez calls for an investigation of Clinica Avila, because she claims they did not want to treat her brother, the tax office shuts down the administrative office of the clinic. Government denies any connection.

Sure, just a coincidence!