The Devil's Excrement

While I am
not thrilled with some of Rosales’ economic proposals, I can’t help but be
fully behind his candidacy, for the simple reason that Manuel Rosales’
principles and values are much, very much closer to mine than those of the
militaristic, autocratic, egotistical, intolerant and divisive man that has
been our President for the last eight years. In fact, have nothing in common
with the autocrat at all levels.

–To begin
with, Rosales is a family man. He not only has a family, but has a proven track
record that he really and truly cares about people the poor and those without resources. While our current President talks about
the kids on the streets, Manuel Rosales has adopted three of them so far, for a
total of ten kids, including just as a curiosity, triplets.

–Rosales
is running to be President of all Venezuelans, without the sectarism of the
current President and his party MVR. As Mayor of Maracaibo and Governor of
Zulia he has proven this is the case. He is a true democrat, respecting others
and talking to everyone. People have forgotten how well Governor Arias Cardenas
got along with Rosales, working as a team to make a difference in Zulia.

–Rosales
has handled his candidacy and unified the opposition with exquisite timing and
ability, managing to do what no leader of the opposition has done in years. You
don’t hear bickering and infighting and the people that I have contacted that
work with him, talk about openness and reachability (If this word exists)

–Rosales
has made fighting crime and security one of his main priorities, while the current
Government ignores the problem in the face of absolute failure to fight it.
Militaristic solutions to the crime problem don’t work as the last eight years
have shown.

–Rosales
is the only President in modern Venezuelan history to talk mainly about elementary
education as his main priority in the educational field. Yes, he has plans for
the other sectors but he seems to understand the problem better than many of
the educators that have gone through the Ministry of Education and have typically
emphasized or paid attention to higher education.

–Rosales
has promised to establish nutritional programs aimed at pregnant women and kids
under six and basic education kids by reestablishing and expanding the milk and
school lunch’s programs that this Government canned when he got to power.

–Rosales
has made contact and has on board the country’s best experts on social programs and
problems. He believes in knowledge and know how and not the trial and error and
intuition that has destroyed Venezuela
and its infrastructure in the last eight years.

–Rosales
has an ambitious US$ 40 billion program for infrastructure, housing and barrio
refurbishing, including electricity, water, sewage and water treatment. I have
not seen the details, but I imagine, he is reviving the program generated
informally by a bunch of planners and architects from Central University.

–Rosales
said he will revive and pass the pension system that was shelved by this
Government and had been approved in 1998 by Congress. This project creates
pension funds and makes retirement uniform in ages and requirements.

–From
what I have heard from Rosales he understands the need to create employment for
all and how the Government can not do it alone and needs to attract investment.

–Yes, I
do not like Mi Negra. I find it populist, hard to finance, cyclical and a
concern. Given the distortions in the economy, there will be a need for
devaluations in the next three years, no matter who wins. What happens then to
the amount given to people through Mi Negra? If they stay the same, it just
does not help. We have to tie up the politicians hands, eliminate the Bolivar.
Create a basket of hard currencies to back the circulation of the US$ in Venezuela. That way, Government’s
will have to hold spending if oil prices drop and the purchasing power of poor
people will never go down.

–It is
clear Rosales does not want to antagonize the military but he has clearly
stated that he will cut spending on new military equipment other than that
needed for internal security.

–Finally, as Governor Rosales has been effective, efficient and practical, a Governor appreciated and loved in his own state of Zulia.

That is
why tomorrow I will go to the Rosales “Avalancha”, we need to mobilize people
to get the autocrat out of power in December, restore democracy in Venezuela and
have a Government that cares for all Venezuelans.

Atrevete! Go tomorrow!

I have written three times about the La Paragua massacre by the Venezuelan military (1,2,3). The Government has tried to cover it up and has shown a remarkable insensitivity to the whole issue. These are people and people’s lives we are talking about. As usual, a few soldiers have been jailed, but none of the bosses. Am I to believe that the 26 kilos of gold were stolen by mere soldiers? And more people are missing than the Government claims, admits or says.

In contrast to the prisoner of Miraflores or the insensitive Minister of Defense Baduell, Manuel Rosales went to La Paragua to check things firsthand and vcrisis not only provided the picture above, but also a great story on it. Meanwhile Daniel gives us his historical analogy to Dukakis’ demise in the 1988 election when he remained aloof from events.

All of this happening, more deaths from abuses and all Chavez can do or say is hail the supposed alliance between the people and the military. Some alliance! But the people only see death and pillage as the military hiearchy becomes very rich indeed. Remember General Cruz Weffer? He was the one in charge of Plan Bolivar 2000, the first big corruption scandal of the Chavez Government. He has his own million dollar private jet now. He doesn’t even hide it. I can write about it, because he could not deny it.

These are the truths of the “pretty” robolution.

This article was distributed yeasterday by the people at Veneconomia, written by Toby Bottome. It speaks for itself, but I can’t help but point out the destructive character of this so called revolution, which can’t stand those that do things well, whose own incompetence and inefficiency leads them to be jealous of those that can do and who in the face of failure of their own cooperative program, prefer to destroy than to allow them to suceed at their own game. This is the reality of the robolution, no values, nothing to admire, full of hate and jealousy. What kind of legacy can be derived from this for future generations? Is this the “ideology” that Chavez wants to introduce into our educational system?

The cannibalism of the revolution by Veneconomy

The
quality of Venezuelan cacao goes back to before Colonial times. The varieties Maracaibo, Chuao and
Choroni are equal -if not superior- to the world’s most prized fine cacaos.
Today, the fine cacaos account for 5% of the world’s total cacao crops, and Venezuela has
excellent possibilities of its fine cacao capturing 50% of the total world
export market.

One would think that the Bolivarian government, which is
constantly trumpeting the importance for the economy of “banner products” and
endogenous production, would give support and incentives to the small cacao
producers who eke out a living in the eastern (Sucre and Delta), central
(Miranda and Aragua), and western (Barinas, Zulia and Tachira) regions of the country.

But, if the experience of some small producers in
Barlovento, Miranda state, is anything to go by, it seems as though the exact
opposite is true. These small producers are receiving absolutely no protection
from the law and have been left at the mercy of groups of vandals who have
damaged their property and crops and threatened them with violence while the
National Lands Institute (INTI) and the Ministry of Agriculture and Lands
remain totally indifferent.

What happened recently at Hacienda Agricola La Concepcion,
located between Panaquire and El Clavo (Miranda), is a case in point. This is a
privately owned farm with proven deeds of title going back to 1738 and it is
fully productive with 308.75 hectares given over to fine cacao and trees for
timber.

Agricola La Concepcion C.A., the owner of the farm, has
worked hard at developing an excellent cacao of the highest quality that has
won international recognition. This small company exports its entire production
to Europe Japan, and the United
States, where it has positioned Venezuelan
cacaos with chocolate houses such as Michel Cluizel and Scharffen Berger. It
also gives technical, financial, and marketing assistance to another 47
producers in the area and in Aragua state. Moreover, in the purest Bolivarian
spirit, Agricola La Concepcion supported some of its former workers in setting
up a cooperative (Cooperativa Emprendedores del Cacao 1902), which operates and
maintains production both at La Concepcion and the Cacao Processing Plant,
where all member producers in the area process their cacao.

On September 20 this year, the farm was invaded -with
violence- by a group calling itself a cooperative and with the support of the
INTI. As a result, nearly a hundred people were prevented from working, the
property was ransacked and wrecked, seeds destroyed, and the crop stolen. Now
this group poses a permanent threat to owners and workers alike, keeping them
in a state of anxiety, while the authorities have turned a deaf ear to the
complaints and requests for help filed by the farm’s administrators.

It seems that neither small producers nor those who, in
good faith, have tried to follow the guidelines of the cooperativism preached
by the Bolivarians are safe from cannibalism in this revolution.

I have
just finished reading the book “Venezuela Endeudada” (Venezuela in Debt)
by Jose Guerra just published by De la A a la Z Ediciones, a very timely and
well documented contribution to understanding the effects of the Devil’s
Excrement. Guerra was Chief Economist of
the Venezuelan Central Bank until 2005 and is a Professor of Economics at
Universidad Central de Venezuela. The book is subtitled “From Carlos Andres
Perez to Hugo Chavez

The book
draws parallels to the Presidency of Carlos Andres Perez (CAP) to that of Hugo
Chavez, exploring the contradictions and similarities between the two periods. The
book explores and shows the paradox that the country tends to go higher into
debt in periods of oil bonanza, as Governments do not only spend the windfall,
but actually spend more, making the economic cycles sharper when oil prices
drop. Thus, debt service conditions economic policy because of the weight it
represents in the budget. Guerra notes in particular how periods of high oil
prices in 1974 to 1978 and now from 1999 to 2005, have coincided with the
periods of highest deficit spending in the country’s recent history. In both
cases, the deficits were associated to the expansion of the Government in the
country’s economy, which required and is currently requiring huge expenditures.

Guerra
goes back to the 1920’s reminding us that Dictator Juan Vicente Gomez actually
paid the country’s external debt in 1930, thanks to the application of the hydrocarbon
bills of 1920 and 1922. From then until 1969, the country’s debt was basically
nil, with the Government spending only the income it received. It is not until
CAP’s “Gran Venezuela”
project that the country in the midst of extraordinary oil income, also
increased its debt from 9.2% of GDP in 1974 to 29% of GDP by 1978 when CAP’s Presidential
term ended. The next Government controlled interest rates, discouraging savings
in local currency, encouraging people to save abroad (sound familiar?). When
oil prices dropped, there was a deficit in the balance of payments and the currency
was devalued sharply for the first time in more than 20 years. As oil prices
dropped in the mid 80’s the Government acquired more debt as the only way of
sustaining spending.

In the 90’s
despite low oil prices, debt as a percentage of GDP actually went down, as the
Caldera Government reduced debt to only 18% of GDP from a high of 72.6%,
despite the lower oil prices.

Finally,
Guerra arrives at the Chavez era, showing that the first two years were
completely the opposite of the last sixand that the more things change the more they stay the same. The first two years spending went down
due to low oil prices; no new debt was issued internationally turning erroneously
to the internal market. The result of this were two years of recession, which
made the Government turn its policies 180 degrees, with the Government
developing a policy of increase and deficit spending while anchoring the
exchange rate, which led to the sharp devaluation of February of 2002.

Since then,
Guerra quantifies how the Government increased spending, going from 21% of GDP
to 27.4% in 2005, while total debt increased to 33.4 % of GDP, without considering
that of the Central Bank, which reached 10.3% of GDP (from essentially zero in
2000) in , which gives a total of 44.1% of GDP in 2005.

The
problem is that this is another severe distortion in the economy. Debt service
has increased sharply at a time of high oil prices. When and if prices drop,
debt service, already higher than social spending, will be difficult to be
covered, unless there is a devaluation that reduces internal debt, but impoverishes
the population. Add to it military spending, funding for the “reserves”, direct assistance
programs and the recipe for disaster has already been formulated. And Guerra gives us all of the quantitative details.

The book
also has a very nice introduction by economist Gustavo Garcia, who notes the
absence of “economic rationality” in Venezuela’s current finances. Add to this
the nice tables of statistics throughout the decades (and the book!) and I can
not but recommend this book to anyone interested in the dynamics of the country’s
debt and the strong support to the idea that oil is indeed “The Devil’s
Excrement

Just when I was feeling better about the upcoming election, the Carter Center shows up and makes a proposal to the Electoral Board to participate in the observation on Dec. 3d.

I wonder which Carter Center will show up, the one that thinks electronic voting is wonderful, like in Venezuela, or a danger, as in Florida.