Archive for September, 2011

Too Many Rumors in Caracas, what to look for…

September 28, 2011

Rumors flying right and left in Caracas, only the international press and Twitter (@fredliberty2010, @DolarToday) saying much. What should one believe?

I don’t know…

But from day one of Chavez’ illness, I have told people to watch for one sign:

The day Venezuela’s VP Elias Jaua is replaced, the day that I believe something is up.

So, don’t wait for signs from the sky, or from Twitter , or from your local Babalao, watch the VP, If he stays, nothing is afoot, if he is replaced…

Oh Baby!

Clueless Chavismo Does Not Even Know How To Deal with A Landslide

September 27, 2011

Late in August, I am not sure what day, landslides in the road to Choroni blocked the road. I have two friends in their eighties that had to be helicoptered out that week. At the time, the wise Governor of Aragua State said that it would take four days to clear the road.

It may seem like a chicken and egg problem, the Governor says these are the worst landslides in history, but the rainy season has not been particularly bad. It could be a maintenance problem, or may be not.

But what is amazing is that today, the same guy, Governor Isea, gives a press conference to say that tonight, sometime after 7 PM, traffic was partially restored on the road to Choroni.

We are talking SEVEN times later, 28 days to be exact, rather than four and there is still a rock on the way such that only one car can pass thru at a time. Yes, in the middle there was partial access, but these guys are ONLY a month late!

Is he proud of this? Does he really think he is a hot shot Governor? How clueless can he be? We are talking about beautiful Choroni, a town that lives off tourism being isolated for a full month!

Even if the beach is nice:

an believe it me, it is. Why would you even bother to try to go there?

And you will not even bother going until the rains end, maybe in February?

This does wonders for the local economy of Choroni.

And in talking to my friends, who have had a house there for decades, they don’t ever remember the road being closed for more than two or three days and it has now been a month!

And you can bet Isea will hold a press conference when full traffic is restored! That’s how clueless these guys are, they don’t even know how to deal with a landslide or a series of landslides, which are not even a record.

But they think they are doing great!

The non-existing automobile policy of the Venezuelan Government goes brainless

September 25, 2011

Donkeys in downtown Caracas, circa 1920

Starting this week, the Venezuelan Government will cap the prices at which cars can be sold in the country. This is yet another silly and failed policy by a Government who has done little in terms of defining any policy for the sector.

The Government did not have a policy in place before exchange controls were imposed in 2003, nor has it had a policy since.

Before exchange controls, it increased taxes on cars, such that all cars pay a basic 30% custom taxes, which becomes higher by 10% for luxury cars, which are defined as those that sell for more than US$ 30,000. After controls, the Government has gone from a free for all of imports at the preferential official exchange rate, to limited foreign currency for car parts or car imports.

In the middle, the Government did all sorts of things that simply did not help. Like allow any automobile brand to come in and give the importers cheap controlled dollars. For local manufacturers this created problems, it is hard to compete with imports, when your local costs are seeing 25% inflation year after year. Everything from fancy American cars, to German cars, to cheap Chinese imports, got cheap dollars until the numbers of cars imported (and the dollars!) simply soared to levels that were simply absurd. And the Government took notice. (They apparently weren’t watching)

Oh yeah! In the middle we were promised cheap Iranian and Chinese cars, made in Venezuela, that would break the back of all other car companies. We are still waiting.

Of course, the Government does not ask itself the basic question: Why do people want so many cars?

The answer is simple: cheap gas and cheap relative car prices relative to inflation. Cheap gas means that the cost of fueling the car is irrelevant when you buy or drive a car in Venezuela, courtesy of a crazy 8.5 US cents per gallon policy by the Venezuelan Government, since Chavez has yet to increase the price of gas even once during his twelve years in office. (Yes, with 1,300% inflation in those years!)

The second reason is that on a relative basis, cars are cheap. Twelve years ago, when Chavez took power, one dollar cost Bs. 0.575, given that inflation has been around 1,300%, that same dollar should cost around Bs. 7.45, instead the Chavez administration gives car companies dollars at Bs. 4.3 for the import of cars and parts to make cars. On top of that, in 1999 car companies could buy all the dollars they wanted to make cars, today those dollars are limited, i.e. the number of cars being sold is quite limited.

But even worse, the number of cars being sold is limited in an environment where the Government is printing money. How much money? Let me put it in perspective. In 1999, all of the Bolivars in the country would have bought 700,000 $20,000 cars. Today, all of the Bolivars out there would buy over 4,000,000 cars at the same price. That’s a factor of seven times!

Ever heard of supply and demand?

Not the Chavistas. For them it is all speculation. Thus, the “new” automobile policy is aimed at that. The solution is to regulate how much car companies can earn and they have magically decided to fix that at 10%. With 25-30% inflation that sounds like a sure no brainer so that that there will be fewer and fewer cars for sale in the upcoming years. Less investments, fewer companies, fewer cars.

It is indeed a revolution, just like Cuba, Venezuelans will be driving beaten down cars, or more romantically for a brainless revolutionary, they will be riding the donkeys or mules that their grandparents rode like the picture above.

Praying for Hugo in Manhattan

September 22, 2011

I am still a little confused by these images from the prayer service for Hugo Chavez held in Manhattan. Are we to believe now that Maduro has become a believer? And how about Sean Penn? And you have to wonder about a church whose claim to fame was that Fidel Castro the agnostic visited once.

But it is the images that I wonder about.  The word “cursi” comes to mind (Corny in English?). But in the end who were they aimed at?

Look at the invitation:

Chavez’ pose is reminiscent of the “good” Chavez days. It looks airy, almost super natural. Very religious. The question is who are they trying to canonize? Hugo?

Or is the picture below, is that of the soon to be anointed Son and the Spirit under him?:

Is a message being sent? To whom? The Vatican or the Venezuelan people?

Or was this just another corny Chavista show?

(Note the Sixtine Chapel like shades on the purple image of Hugo!)

What autocrats do in the name of the “people”

September 21, 2011

I will break my rule not to talk about other countries to show you this picture in Libyia taken within Gaddafi’s compound, which has me mesmerized.

That is what autocrats do in the name of the “revolution” and the “people”.

Does it get more ridiculous than that in Barinas?

The Not So Diplomatic Russian Ambassador to Venezuela

September 19, 2011

Today, Tal Cual carries a letter his newspaper received from the Russian Ambassador to Venezuela which is as undiplomatic in all respects as one could possibly think. The letter shows Ambassador Zaemskiv must have gone to the same School of Diplomacy most Chavista diplomats have gone to, showing that Mr. Zaemskiy is not on top of his job, he does not even know the details of what he is complaining about, but at the same time he is trying to defend Russian technology, by blaming five helicopter crashes on the ability of the Venezuelan military to fly them. He seems to forget, his Government had a responsibility for technology transfer.

As Petkoff details in his reply to the Ambassador’s letter, his newspaper wrote an article saying that five Russian helicopters, four Mi-17 helicopters and an Mi-26 helicopter had crashed in the last four years. Well, the Ambassador felt somewhat insulted by this, writing to say that it was only three, but if you check Venezuelan papers you will see that the original article was indeed correct. In Russian, and using independent sources from Tal Cual: один, два, три and  четыре for the Mi 17 and один for the Mi 26, and not three Mi 17’s like the Ambassador wants us to believe , but a total of five magnificent Russian machines, that just crashed.

In his last sentence the Ambassador talks about saving Venezuelan lives with these machines. Well, Mr. Ambassador, each of these wonderful crappy things you make in Russia and sell to Venezuela is worth like US$ 15 million: Do you know how many lives could have been saved with those US$ 75 million (It is a little more, but I did not bother to find out how much the Mi 26 is worth)

So, save your crappy sob, sob for another day or your бабушка (babushka).

As Petkoff notes, he is being called a liar in no uncertain terms, based on just the number of crashes, which the Ambassador had wrong, something which I think was not something a diplomat does in foreign soil, even if it is to defend Russian technology and he had the details right. He might be better of just saying nothing. Don’t insult your host, even if your are mad. But after this faux pas, Ambassador Zaemskiv compounds his lack of manners and diplomacy by saying:

“After each accident, a detailed investigation was performed composed of both Venezuelan and Russian military (my comment: No guarantee right there!)…the results of these investigation accepted by both sides is that there were no irregularities in these reliable machines”

Read: The accidents were due to the unreliable Venezuelans, they could not run the trinkets we sold them.

Which may be true, but maybe, just maybe, the people were not trained well, the whole thing was rushed, badly implemented, badly sold. It’s the sale that matters in Russian capitalism. In its rush to make the sale, Russia sold Venezuela helicopters that Venezuela did not have the trained personnel to fly. But hey Mr. Zaemskiv, if they crash, maybe we will buy more! Nice for Russian capitalism, exploiting dumb militaristic Venezuelan socialism, no?

The truth is that his words would be a scandal anywhere except in Stebanish country. Chavez and the Venezuelan military love buying expensive, useless toys, wasting money on things they can’t run, but feel happy about having. Ambassador  Zaemskiv pretty much says so: they sold us crap that we can’t handle, and he seems quite happy about it.

Whether the machines are good or not is irrelevant, here is a picture:

the truth is Ambassador Zaemskiv, that your country sold us crap. That your country has been irresponsibly selling crap to Chavez and making deals to take advantage of Chavez is well know. If the machines were “fine” and “reliable” like you say, the helicopter providers (you!) were not, they did not provide the training, nor the manuals, nor the know-how, nor the technology transfer required when you sell such a sophisticated machine.

And yes, these equally irresponsible Venezuelans on the other side buying your Russian crap, without training, manuals and with the same irresponsible attitude that you have.

And I can’t help to wonder, who collected the “comision” (отдача) in this deal. Do you Ambassador Zaemskiv know? You must, you seem very defensive in your letter.

And please Ambassador, you can use the comments section if you want to, we would love to hear from you!

(And yes, Petkoff may have also gone overboard calling the Ambassador a communist and used to lying, but I guess he has a right to rant too!)

The Venezuelan Electoral Board is Responsible for Executing the CIDH’s decision

September 18, 2011

While I had been assuming that it was now up to the Venezuelan Supreme Court to decide on the Leopoldo Lopez case, after reading the decision by the CIDH, it turns out that this does not seem to be the case. I am no lawyer, but I read the whole document to understand what was argued and ruled. My conclusion, given my limited legal understanding and abilities, is that the Court is ordering both the State in general and the Consejo Nacional Electoral specifically to obey the Court. In page 83 of the Acrobat document (you can find both formats here), the Court says:

  1. El Estado, a través de los órganos competentes, y particularmente del Consejo Nacional Electoral (CNE), debe asegurar que las sanciones de inhabilitación no constituyan impedimento para la postulación del señor López Mendoza en el evento de que desee inscribirse como candidato en procesos electorales a celebrarse con posterioridad a la emisión de la presente Sentencia, en los términos del párrafo 217 del presente Fallo.

That is: The State, via the relevant organizations, and in particular the Consejo Nacional Electoral, must insure that the disqualification does not become an impediment for Mr. Lopez Mendoza in the event that he wishes to register as a candidate in electoral processes after the issuing of the current sentence.

Thus, the members of the Electoral Board (CNE) would be personally responsible for the continued violation of Lopez’ rights as well as for failing to obey the Court’s mandate. Each one of them individually.

Given the uncertainty about Chavez’ health and the fact that these people will personally feel the pressure, the case and the decision,  become even more interesting than I thought. Chavez may want them to vote one way, but they have their future to consider…

Will Leopoldo Lopez be allowed to run by the Chavez Government?

September 16, 2011

Now that the Human Rights Court of the OAS has ruled that Leopoldo Lopez’ political rights were violated by the Venezuelan Government, will he be allowed to run?

My gut feeling says no, although there are arguments for saying they will.

Basically, it depends on the Government’s perception (and polls) on how it affects the current race.

Currently, Henrique Capriles is the clear front runner with almost 60% of the preferences in a race that even includes Lopez. However, it will not be the same poll if Lopez is openly campaigning and is allowed to register.

Thus, it boils down to whether they think Lopez takes sufficient votes away from Capriles to allow a third, and more easily beatable, candidate to get past both Lopez and Capriles.This could work both ways, if Lopez has no impact on numbers, this would give Capriles even more strength.

My gut feeling is that they will not let him run for a simple reason, a Capriles/Lopez or Lopez/Capriles duo would make a fearsome campaigning team with no links to the IVth. Having said that, Capriles could still say he would name Lopez as VP, even if he is not allowed to register for the primaries.

Additionally, accepting the decision means all of those banned from public office due to a decision by the Comptroller would be covered by the decision.

Not an easy choice for the Government…somehow I like that…

Protests have become a daily event in Venezuela

September 15, 2011

Yesterday, there were many protests against the Government as usual, what is different is the rage of the people and who they are. These are not opposition members as Chavez tries to portray, these are “pueblo” the very supporters of Chavez that seem to be getting tired of the lies and promises that never materialize.

I found two protests that were interesting, in part because the images are quite powerful. One is by people who were left homeless in the 2010 floods and are still living in temporary housing, despite promises that their problem would be resolved soon. The result? Well, the nice policemen tear gassed the protesters and some were injured:

The second case took place in Carabobo, near Moron, where people were protesting the fact that they had spent 24 hours without electricity and blocked the highway. The traffic jam was gigantic and as night fell, the protesters started looting the trucks that could not move on the road as seen in this picture:

As you can see this was not just a few people, but everyone seemed to be participating.

And I found this image quite dramatic, a barefoot guy trying to put a stolen pig on his motorcycle to carry it away after taking it from some poor trucker nearby:

Yeah! Hugo is widely popular and a hero to the “people”. Maybe that was the only reason to try to advance the election, the problems will get worse and worse as time goes by…and they know it!

Smoke and Mirrors in the Chavez Revolution: Oil and Research

September 14, 2011

Hugo is so full of it. Today:

“Science and Technology are fundamental to obtain independence, that is the way, I am telling all of you..”

From PDVSA’s 2010 financials (page 14, point g)): During the years 2010, 2009 and 2008, the amounts recognized for this conecpt were US$ 188 million, US$ 276 million and US$ 555 million

Ummm… Research and Development in the most important industry in the country, and it is down 66% in three years and that is “the fundamental way to obtain independence”?

Someone should have told Ramirez…the President of PDVSA…Oh, well!! That’s why he needs another twelve years…

Oh yeah! And on the back of that budget, he plans to triple oil production in eight years…Of course, if you check the website of PDVSA it says 5.8 million by next year (Hat tip @garciabanchs) I guess the smoke comes from whatever they have been smoking…