The New York Times looks at Venezuela and revisits the effect of the Devil´s Excrement in tomorrow´s Sunday magazine under the title ¨The Perils of Petrocracy¨A good look and description of why Pdvsa and Venezuela are in trouble. The more things change the more they stay the same…
Archive for November, 2007
The Perils of Petrocracy in the NYT
November 3, 2007November 3, 2007
With
the same lack of scruples that has characterized so many actions of
Chavez and his cronies in the last nine years, Chavismo set the stage
for the final coup d’etat against Venezuela’s Constitution, when it
handed in today the final proposal for its reform to the Electoral
Board in order to hold a referendum to approve it next December 2nd.
It
is a coup, because the proposed reform is absolutely and completely
illegal because it alters fundamental principles of the Constitution
written by a Chavismo dominated Constituent assembly in 2000. These
fundamental principles are contained in the first nine articles of the country’s Constitution, which while not being altered in the proposed reform, are certainly modified by the changes that will be voted on in a month.
is a coup, because the proposed reform is absolutely and completely
illegal because it alters fundamental principles of the Constitution
written by a Chavismo dominated Constituent assembly in 2000. These
fundamental principles are contained in the first nine articles of the country’s Constitution, which while not being altered in the proposed reform, are certainly modified by the changes that will be voted on in a month.
Simply
put, making Venezuela a socialist state, suspending the alternability
granted by the Constitution when allowing Chávez to be reelected
indefinitely and allowing Chavez to create regional “territories” at
will, all represent matters, which require a Constituent Assembly and
are thus illegal and represent a coup against Venezuela’s
Constitutional order.
put, making Venezuela a socialist state, suspending the alternability
granted by the Constitution when allowing Chávez to be reelected
indefinitely and allowing Chavez to create regional “territories” at
will, all represent matters, which require a Constituent Assembly and
are thus illegal and represent a coup against Venezuela’s
Constitutional order.
There many other
illegalities, such as the fact that in the end it became a farce of
changes which were not discussed or consulted with the people as
required by law. On top of the 33 articles proposed by Chavez, the
Assembly added its own 25 after the law did not allow new ones to be
discussed. It also added some 15 transient articles, turning the
trampling of the rule of law into a true massacre of Constitutional
order.
illegalities, such as the fact that in the end it became a farce of
changes which were not discussed or consulted with the people as
required by law. On top of the 33 articles proposed by Chavez, the
Assembly added its own 25 after the law did not allow new ones to be
discussed. It also added some 15 transient articles, turning the
trampling of the rule of law into a true massacre of Constitutional
order.
The whole process and reform turned out to
be so grotesque, that Chavez lost the backing of the largest political
party besides his own, when Podemos leaders simply refused to join such
an absurd proposal. \u003cdiv\> \u003c/div\>\u003cdiv\>CNE Director Vicente Diaz did not vote in favor of taking the proposal to referendum, saying that the proposed reform is illegal and at the very least the Electoral Board should have requested an opinion from the country’s Supreme Court.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>And it was the silence of that Court which made the whole process bizarre, as the Court has yet to rule on any of the injunctions and suits brought in front of it to stop the process. In fact, even on the issue of whether the reform should or not be voted as a block the Court has been derelict in not ruling to protect the rights of Venezuelans. It was Chavez who made an about face on the issue, magnanimously allowing it to be voted as blocks, but of course, defining himself what those blocks should be, rather than the interpretation that a group of voters could define it. \u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>Thus, it was a very dark day today, in which one of the most sordid processes in the country’s democratic history was completed. The man that reached power by being critical of decisions being made by politicians in smoke filed rooms, has single-handedly imposed his illegal will and staged the final needed coup on the country’s Constitution, so that he can impose his dictatorial and autocratic rule on all Venezuelans.\u003cspan\> \u003c/span\>\u003c/div\>\u003c/div\>”,0]
);
D([“ce”]);
be so grotesque, that Chavez lost the backing of the largest political
party besides his own, when Podemos leaders simply refused to join such
an absurd proposal. \u003cdiv\> \u003c/div\>\u003cdiv\>CNE Director Vicente Diaz did not vote in favor of taking the proposal to referendum, saying that the proposed reform is illegal and at the very least the Electoral Board should have requested an opinion from the country’s Supreme Court.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>And it was the silence of that Court which made the whole process bizarre, as the Court has yet to rule on any of the injunctions and suits brought in front of it to stop the process. In fact, even on the issue of whether the reform should or not be voted as a block the Court has been derelict in not ruling to protect the rights of Venezuelans. It was Chavez who made an about face on the issue, magnanimously allowing it to be voted as blocks, but of course, defining himself what those blocks should be, rather than the interpretation that a group of voters could define it. \u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>Thus, it was a very dark day today, in which one of the most sordid processes in the country’s democratic history was completed. The man that reached power by being critical of decisions being made by politicians in smoke filed rooms, has single-handedly imposed his illegal will and staged the final needed coup on the country’s Constitution, so that he can impose his dictatorial and autocratic rule on all Venezuelans.\u003cspan\> \u003c/span\>\u003c/div\>\u003c/div\>”,0]
);
D([“ce”]);
//–>
CNE
Director Vicente Diaz did not vote in favor of taking the proposal to
referendum, saying that the proposed reform is illegal and at the very
least the Electoral Board should have requested an opinion from the
country’s Supreme Court.
Director Vicente Diaz did not vote in favor of taking the proposal to
referendum, saying that the proposed reform is illegal and at the very
least the Electoral Board should have requested an opinion from the
country’s Supreme Court.
And it was the silence
of that Court which made the whole process bizarre, as the Court has
yet to rule on any of the injunctions and suits brought in front of it
to stop the process. In fact, even on the issue of whether the reform
should or not be voted as a block the Court has been derelict in not
ruling to protect the rights of Venezuelans. It was Chavez who made an
about face on the issue, magnanimously allowing it to be voted as
blocks, but of course, defining himself what those blocks should be,
rather than the interpretation that a group of voters could define it.
of that Court which made the whole process bizarre, as the Court has
yet to rule on any of the injunctions and suits brought in front of it
to stop the process. In fact, even on the issue of whether the reform
should or not be voted as a block the Court has been derelict in not
ruling to protect the rights of Venezuelans. It was Chavez who made an
about face on the issue, magnanimously allowing it to be voted as
blocks, but of course, defining himself what those blocks should be,
rather than the interpretation that a group of voters could define it.
Thus,
it was a very dark day today, in which one of the most sordid processes
in the country’s democratic history was completed. The man that reached
power by being critical of decisions being made by politicians in smoke
filed rooms, has single-handedly imposed his illegal will and staged
the final needed coup on the country’s Constitution, so that he can
impose his dictatorial and autocratic rule on all Venezuelans.
it was a very dark day today, in which one of the most sordid processes
in the country’s democratic history was completed. The man that reached
power by being critical of decisions being made by politicians in smoke
filed rooms, has single-handedly imposed his illegal will and staged
the final needed coup on the country’s Constitution, so that he can
impose his dictatorial and autocratic rule on all Venezuelans.
Fascist is, fascist does
November 2, 2007Today students marched to the Electoral Board in what was a large march that has been covered well by the media.
The students met with the CNE Board and expressed their desire that the
referendum be postponed, a position that I find is hard to sustain
unless you can prove procedures have been violated as the Constitution
is quite clear that the CNE has 30 days to hold the referendum once the
Assembly has approved it. I believe the approval is spurious, but it is
not for the CNE to decide that.
The students met with the CNE Board and expressed their desire that the
referendum be postponed, a position that I find is hard to sustain
unless you can prove procedures have been violated as the Constitution
is quite clear that the CNE has 30 days to hold the referendum once the
Assembly has approved it. I believe the approval is spurious, but it is
not for the CNE to decide that.
In any case,
after the students presented their letters, a group of students
attempted to chain themselves to the stairs of the CNE in order to
stage a permanent protest at the Electoral Board. The action, while I
did not agree with it, as they were guests at the CNE, was certainly
not violent but gave the National Guard and the police the excuse to
repress and use violence against the marchers.
after the students presented their letters, a group of students
attempted to chain themselves to the stairs of the CNE in order to
stage a permanent protest at the Electoral Board. The action, while I
did not agree with it, as they were guests at the CNE, was certainly
not violent but gave the National Guard and the police the excuse to
repress and use violence against the marchers.
And
they were extremely violent both inside of the CNE and outside where
they began using tear gas immediately without any particular reason as
the students had already been vacated from the inside. Violence inside
was limited by the intervention of CNE Director Vicente Diaz, but the
same National Guard soldiers he controlled inside, went outside to
express theirs fascists militaristic impulses.
they were extremely violent both inside of the CNE and outside where
they began using tear gas immediately without any particular reason as
the students had already been vacated from the inside. Violence inside
was limited by the intervention of CNE Director Vicente Diaz, but the
same National Guard soldiers he controlled inside, went outside to
express theirs fascists militaristic impulses.
But perhaps the clearest moment of what I mean, was when the police, the same one that the Minister of the Interior said today
had a “patriotic attitude” in controlling the marchers, began violently
beating a kid, managing to blow off his front teeth in the process. All
of a sudden one of the cops realized that Globovision was broadcasting
the abuse, so that the kid was surrounded by cops attempting to hide
what they had done. Sadly, the student is the son of former
Metropolitan Police Chief Henry Vivas, who is currently in jail and
spent a large part of his life finding ways to peacefully control
marches and demonstrations.\u003cdiv\> \u003c/div\>\u003cdiv\>But the fascism of the cops and National Guard is simply overflowing and is ratified by the Minister of the Interior when he says, “it is the responsibility of the state to enforce with all its weight the principle of authority”. No, it is the responsibility of the State to avoid violence and protect the citizens and curiously, it never uses the same weight and enforcement when it comes to the pro-Chavez crowds who are always illegally present at these opposition marches, ready to confront and be violent like they did today.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>But you can’t expect from the Minister who conforms to a Forrest Gumpian “Fascist is, Fascist does” culture ingrained in him by the military and matured by his own stupidity. Lately, even the deaths in the prisons that he fails to supervise have been according to the Minister “induced by thugs paid by the opposition in order to destabilize”.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>Fortunately, human rights violations do not have a time limit for their prosecution and the Minister and his thugs will one day, no matter how far into the future be brought in front of the courts to pay for their crimes. \u003c/div\>\u003c/div\>”,0]
);
D([“ce”]);
had a “patriotic attitude” in controlling the marchers, began violently
beating a kid, managing to blow off his front teeth in the process. All
of a sudden one of the cops realized that Globovision was broadcasting
the abuse, so that the kid was surrounded by cops attempting to hide
what they had done. Sadly, the student is the son of former
Metropolitan Police Chief Henry Vivas, who is currently in jail and
spent a large part of his life finding ways to peacefully control
marches and demonstrations.\u003cdiv\> \u003c/div\>\u003cdiv\>But the fascism of the cops and National Guard is simply overflowing and is ratified by the Minister of the Interior when he says, “it is the responsibility of the state to enforce with all its weight the principle of authority”. No, it is the responsibility of the State to avoid violence and protect the citizens and curiously, it never uses the same weight and enforcement when it comes to the pro-Chavez crowds who are always illegally present at these opposition marches, ready to confront and be violent like they did today.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>But you can’t expect from the Minister who conforms to a Forrest Gumpian “Fascist is, Fascist does” culture ingrained in him by the military and matured by his own stupidity. Lately, even the deaths in the prisons that he fails to supervise have been according to the Minister “induced by thugs paid by the opposition in order to destabilize”.\u003c/div\>\u003cdiv\> \u003c/div\>\u003cdiv\>Fortunately, human rights violations do not have a time limit for their prosecution and the Minister and his thugs will one day, no matter how far into the future be brought in front of the courts to pay for their crimes. \u003c/div\>\u003c/div\>”,0]
);
D([“ce”]);
//–>
But
the fascism of the cops and National Guard is simply overflowing and is
ratified by the Minister of the Interior when he says, “it is the
responsibility of the state to enforce with all its weight the
principle of authority”. No, it is the responsibility of the State to
avoid violence and protect the citizens and curiously, it never uses
the same weight and enforcement when it comes to the pro-Chavez crowds
who are always illegally present at these opposition marches, ready to
confront and be violent like they did today.
the fascism of the cops and National Guard is simply overflowing and is
ratified by the Minister of the Interior when he says, “it is the
responsibility of the state to enforce with all its weight the
principle of authority”. No, it is the responsibility of the State to
avoid violence and protect the citizens and curiously, it never uses
the same weight and enforcement when it comes to the pro-Chavez crowds
who are always illegally present at these opposition marches, ready to
confront and be violent like they did today.
But
you can’t expect from the Minister who conforms to a Forrest Gumpian
“Fascist is, Fascist does” culture ingrained in him by the military and
matured by his own stupidity. Lately, even the deaths in the prisons
that he fails to supervise have been according to the Minister “induced
by thugs paid by the opposition in order to destabilize”.
you can’t expect from the Minister who conforms to a Forrest Gumpian
“Fascist is, Fascist does” culture ingrained in him by the military and
matured by his own stupidity. Lately, even the deaths in the prisons
that he fails to supervise have been according to the Minister “induced
by thugs paid by the opposition in order to destabilize”.
Fortunately,
human rights violations do not have a time limit for their prosecution
and the Minister and his thugs will one day, no matter how far into the
future be brought in front of the courts to pay for their crimes.
human rights violations do not have a time limit for their prosecution
and the Minister and his thugs will one day, no matter how far into the
future be brought in front of the courts to pay for their crimes.
November 1, 2007
It is
anybody’s guess why the Autocrat/President/Chief Justice of the Supreme Court “came to the conclusion” that indeed the proposed
Constitutional Reform could be voted separately in two or three blocks and not
as a unit like he and his cohorts had contended up to now. It was he, in his
role as autocrat, that arrived at the decision and not the Supreme Court, which
has had a number of injunctions on the subject for the last two months, but
clearly did not want to go against the wishes of the all powerful autocrat. And
as proof that he is the law, he ordered the National Assembly to incorporate
his suggestions in order to vote on the reform as soon as possible.
But it was
not clear why he did it, since the proposal forces the Electoral Board to throw
away all of what it had done in order to fulfill the Constitutional mandate
that this has to be voted on 30 days after the National Assembly approves it.
And
therein lies the first problem; the changes would make it quite difficult for
the referendum vote to take place on December 2nd. as planned, which has led
some to suggest that that was exactly the purpose. But I just don’t buy it.
Time is running against the Government and the proposal is not very popular and
on top of that regional authorities, who would get the Chavista vote out for
the reform, seem to have little interest in doing so, as they will see their
power reduced by the reform.
In fact,
the proposal raised more questions that answers, as some of the articles
proposed by The Assembly are related the ones proposed by Chávez and you could
not separate them. Just sorting that out, as well as the advertising on the
different proposals could take days and there is simple no time for that.
In fact,
the about face suggests that it would have been better off for the Supreme
Court to rule as it would have delineated the criteria on how to vote these
reforms and how one can propose or not that some articles are voted as a block.
Some have
suggested this may make the proposed reform more popular as it would seem more
open, but I just think that the whole affair just gets more confusing and it
may just be that Chavez came up with this on his own and announced without consultation
without realizing the possible consequences of the measure.
But to
suggest this, just when the cry of the students has been for a postponement of
the referendum seems to give ammunition to the student’s proposal, which I do
not believe will favor Chavismo. To begin with, shortages are increasing and
people are getting frustrated with them and they are blaming only the Chavez
Government. Add to that the upcoming rush in inflation due to the new tax and
the soaring swap rate and the mood, which has already been rarified by protests
lately, can only become worse. Additionally, the Enabling Bill also imposes a
time limit on the approval of the Constitution since there are many bills that
require approval.
I also
don’t buy that Chavez could lose the proposal as it stands today. It is clear
that what people don’t like is the indefinite reelection, but Chavez is putting
that on the same block with the shortened work week and the retroactive
severance pay, so there is little chance that it has something to with it.
But the
gauntlet has been thrown and now Chavismo will have to disentangle its
consequences, unless of course, the Venezuelan Supreme Court rules that Chávez
is wrong and the whole thing was a ploy to make him look more open that he
really is. Just in case this is the goal, Teodoro Petkoff challenged Chavez to
separate the indefinite reelection from his overall proposal to be voted on
separately, which Chavez will never dare accept. But even this theory of the
“more open” and “gentler” Chavez seems too far-fetched and inconsequential to
be behind the proposal.
So, we
will just have to wait and see how the complexity is disentangled from the
autocrat’s proposal and if the CNE has the capability to hold the vote in 31
days as the National Assembly wants. It definitely seems rushed to me, but so
has seemed the whole process that has led us to this point and to an absolutely
fraudulent and illegal proposal by Chavez to change the Venezuelan Constitution.
As new tax slows down financial system, inflation soars in October in Venezuela
November 1, 2007It was the first day of the new financial transaction tax and lo andbehold, the financial system sort of ground to a halt, given the
level of improvisation and the lack of preparation by the Government. Basically, the Government did indeed modify the terms of the original decree, exempting some transactions like credit cards, the stock exchange and the interbank system from the new 1.5% tax. But things were so unclear, and the regulations so badly defined, that banks did not process any transaction via the Venezuelan Central Bank and their policy was very clear: when in doubt, charge the tax, which led to most large transactions, including those with local debt, which in theory is exempt, not taking place for the time being. Thus, only cash and checks were processed since it was very clear in their exchange that a 1.5% tax had to be charged.
level of improvisation and the lack of preparation by the Government. Basically, the Government did indeed modify the terms of the original decree, exempting some transactions like credit cards, the stock exchange and the interbank system from the new 1.5% tax. But things were so unclear, and the regulations so badly defined, that banks did not process any transaction via the Venezuelan Central Bank and their policy was very clear: when in doubt, charge the tax, which led to most large transactions, including those with local debt, which in theory is exempt, not taking place for the time being. Thus, only cash and checks were processed since it was very clear in their exchange that a 1.5% tax had to be charged.
One of the main victims of the halt was the parallel swap market, which simply died in the last three days ahead of the tax, and today was functioning with a huge spread so that if the transaction was eventually charged the 1.5% tax, then banks and brokers would be covered.
Thus, volumes were small, and few transactions were taking place, which simply adds to the pent up demand of the last few days and may fuel further rises in the upcoming days.
And October inflation was announced today and it was much higher than analysts were expecting at 2.4%, certainly showing the effect of the soaring swap rate, despite the fact that the Government claims it is irrelevant. As I have suggested before, if it is so irrelevant how come the Government spent some US$ 12 billion so far this year trying to bring it down?
In any case, with the 2.4% this month, the accumulated rate increase for the year is already 13.4%, above the 12% target set by the Government and still two more months to go. This, despite the fact that the value added tax was lowered by 6 percentage points in two stages, which gave the CPI an artificial decrease. Even worse, the Food and Beverages group, which affects the poor the most, as over 80% of their income is spent on this group, was up 4.1% for the month of October. For the last twelve months food inflation has been 33%, absolutely killing purchasing power gains by the poor. Add to this shortages and the contribution of the new tax to inflation in upcoming two months of the year and anyone that argues, like the Minister of Planning, that things are going well, has no clue as to what he is talking about. And that is in large part the origin of the problem.
The Government has yet to explain how with record oil prices it needs to set such a financial transaction tax at a whopping 1.5%, which will generate next year 9% of the budget. One thing is for sure, it will add between 4 and 5% to the CPI in the remainder of this year, absolutely destroying not only the Government’s goals, but also the purchasing power of the Venezuelan poor. But tell that to the Tax Superintendent who still insists this tax does not contribute to inflation. Maybe e should look at Alcoholic Beverages and tobacco in October, as this group was up 9.1% after a special new 10% tax was levied on those items last month.
So, another oil windfall in Venezuela’s history becomes a lost opportunity, as mismanagement and ignorance are such that people have not felt the effects of the huge inflows into the country.
The Devil's Excrement 