The Devil's Excrement

Marino Gonzalez is a medical doctor with a Ph.D. in Public
Health Policy. He is the type of person who would be an ideal advisor to any Government,
but not in Venezuela
where he has to devote himself to study what is going on, instead of helping
out, because the revolution does not want help, they think anyone can do
anything and knowledge and expertise are unnecessary. Marino wrote this article
in today’s Tal Cual, which clearly shows how cynical and fake this Government
is. It speaks for itself.

Measles rojas, rojitas by Marino González in Tal Cual

We have an incompetent and authoritarian Government

That is public and well noted. What is becoming clearer is
also the cynicism of the current Government to take advantage of the good faith
of millions of Venezuelans. It creates illusions that contradict the suffering
of many sectors, especially the poorest and least informed.

It is also cynicism when the Government does not warn its
citizens, nor does it investigate the causes of the problems that affect them.

The Government of President Chavez has incessantly
repeated many fallacies about its management of the health sector. Such
repetitions have managed to even dazzle some international organizations, the
supposed defenders of good scientific practices.

In his last speech on the occasion of his annual message
to the National Assembly, President Chavez pointed out” “We can say today that Venezuela has
what it never had before: A public integrated health system.”

Previously he had pointed out: “In Barrio Adentro I, we
reached 56.8 million doctor’s appointments…” To close it off he said:” We
have expanded the hospital system, we are now going towards Barrio Adentro IV,
Barrio Adentro keeps advancing with…”

All of this rhetorical
euphoria, a product of ideological manipulation, has nothing to do with the
realty of the health of Venezuelans. The Government of President Chavez has
only built tales. And they keep telling them without any shame.

There is a very simple way
to prove what was just said.

If we had the best health
system in the world, as he has said in some sort of “communicational trance” in
Venezuela,
we would not have a single measles case. However, we have the highest number of
cases so far this year in the whole of the western hemisphere, according to the
reports of the Ministry of Health, as well as the weekly Measles Bulletin
elaborated by the Pan-American Health Organization.

Measles care is an
excellent indicator of the penetration and quality of a health system. In the
first place, because measles is an illness which can be completely eradicated.
It is produced by a virus and can be avoided via immunization.

In the second place,
because the technology (the vaccine) has a low cost and proven effectiveness. In
the third place, because through adequate organizational arrangements, it is
possible to cover all of the population at risk.

Because of all these
reasons, the Ministers of Health of the Americas adopted in 1994 the goal
of eradicating measles on the year 2000. Many of the countries in the region
have been successful against measles:

In Nicaragua the last case was reported in 1994, in
Honduras in 1997, in Guatemala in
1998. Only to cite countries with less relative development that Venezuela.
In Colombia the last case
was reported in 2002, in Peru
in 2000.

In the years of the rojo,
rojito Government, Venezuela
has turned itself into an island of measles. Only in 2002 we had 2,392 cases.
After an absence of cases from 2003 to 2005, measles has surged again in 2006
with 92 cases. This signifies the highest number of cases in the Americas. It is
more by far than the 14 cases of Brazil
or the 23 of Mexico.
In no other country in Latin America, have
there been cases of measles.

The cases of measles are
distributed across all of the regions of the country. We have had
cases in Zulia, Carabobo, Guárico, Amazonas, Distrito Metropolitano, Miranda,
and Nueva Esparta. So far in 2007, 23
cases have already been reported. Four more times than in the US. No other
country in America
has had a measles case in 2007.

The Government of President
Chávez has not passed the measles test. It is a health system impotent in the
face of simple problems, already solved in countries with fewer resources. A
National Assembly concerned about the problems has started an investigation.
Could it be the vaccine is ineffective? Could it be there was no adequate
quality control? Why does the Government say that vaccination is high and we
have measles? Is something similar happening with other vaccines? What is
happening with the Barrio Adentro vaccinations? Why doesn’t the Government give
information about all of this?

There is no doubt: the
rojo, rojito Government has been incompetent even with measles.

Without knowing Virginia has contributed this post with her comment below, which included these three pictures and her own caprions to it, which I thought were wonderful. You can add your own in the comments below at no extra charge, but Virginia’s will be hard to beat:

From left to right:

1)
You have to understand that I am the Supreme Leader of the South
2) Sorry, not anymore. The pantomime is over.
3) The result? Pusillanimous puts

So Chavez holds the Latin American Energy Summit in
Margarita island, where he was going to propose all sorts of grandiose and
unifying concepts for Latin America. Let’s see his main proposals:

—The tenth point in the final declaration would make a
call against Ethanol production from crops as proposed by The Venezuelan
declaration. After hours of discussion, we have yet to see the final
declaration, but we did see Hugo Chávez turning the reverse-ethanol-shift,
praising ethanol and saying Venezuela would import ethanol from Brazil. Strike
one.

—Chavez proposes a natural gas cartel to group Latin
American Gas Exporters, despite the fact that Venezuela does not even export a
cubic centimeter of natural gas. The President of Brazil nixes the concept as
Marco Aurelio Garcia pulled his weight and threatened to have Lula leave early.
Strike Two.

—Venezuela has proposed the Bank of the South with most
South American countries joining the idea, as Venezuela will provide most of
the capital for it. Brazil says not interested unless everyone contributes a
fair share. Proposal postponed. Strike Three.

Of course, Chavez held a strange press conference alone
after the summit was over, hailing it a “total success”.

Still waiting for that final document…

Oh yeah! And remember the enviromentalist´s dream that Chavez came up with of a gas pipeline through the Amazon? Well, Lula said, it’s OK as long as Chavez pays for it and goes no further than Pernambuco. You be the judge.

I was struck by this article in Publiuspundit about the best
performing stock market in the world in 2006:

you see the chart above corresponds to the Zimbabwe stock
market, which despite being one of the least friendly countries to investments
in the world had that outstanding performance. up 555% in 2006. According to the Luwig Von Mises
Institute in Austria the explanation is simple:

“This is what we are
seeing in Zimbabwe. With the country suffering from Mugabe’s catastrophic
policies, increasingly the only means for the government to fund itself has
been money-supply growth. This has only exacerbated the economy’s problems. The
flood of new money that authorities have created has caused the existing value
of money in circulation to plummet, i.e., the prices of all sorts of goods to
explode, some rising more than others.”

Why did this strike a chord? Because the second best market
in the world for the same year 2006, happens to have been the
Venezuelan Stock Market, where the same exaggerated money supply growth (up 67% in 2006) has
created inflation and in the face of exchange controls, similar to Zimbabwe,
people sought refuge in one of the few assets that could preserve the value of
your money, the stock market, driving it up 160% for the year 2006:

In fact, dampen some the extremes, add a little oil and the
explanation given below in the same article is quite similar,
change Zimbabwean for Venezuelan, the time frame and give it a little more
footing for Government bonds thanks to oil and the economic framework is similar and so were the
results for the market:

This relative outperformance versus
general prices is a result of stocks being a chief entry point for the flood of
newly created money. Keep Zimbabwean dollars in your pocket, and they’ve
already lost a chunk of their value by the next day. Putting money in the bank,
where rates are pithy, is not much better. Investing in government bonds is the
equivalent of financial suicide. Converting wealth into foreign currency is
difficult; hard currency is scarce, and strict rules limit exchangeability.

Of course, in early January our market came crashing down
thanks to Chavez’ threats to private property, as clearly seen in the graph. Of
course, according to the electoral magician now turned Vice-President Jorge Rodriguez,
that 33% drop did not even occur in another bizarre Chavista explanation of reality.

So, the lesson is when markets go up, it may be a reflection
of excess money supply more than economic health, something that the whole
world maybe be living through at this point. Next time you hear a country
imposing exchange controls and expansive monetary policies, just jump in, you
may be rewarded amply!

The new conductor of the Los Angeles Philarmonic, Venezuelan Gustavo Dudamel plays for the Pope on his birthday. Is Venezuela a developed country only musically?

The last few days have been unbelievable in terms of the
ability of the revolution to simply discard all semblances of appearances and
simply go out of its way to show its true colors in all walks of Venezuelan
life, showing and proving that this is far from being a democracy. Depressingly
so, I just wonder where the so called opposition is, Chavez and his fascist
cohorts keep at it and you barely hear anyone complain.

Perhaps the most depressing part was to have Chavez preside
once again over the celebration of death. We heard about the now heroes of
Puente El Llaguno, we were told the dead were sacrifices for this travesty, we
even heard how Chavez’ personal life was threatened that fateful day, as if US
marines had landed that day in Caracas. But Chavez seem to have forgotten we
saw footage of him waking to the car taking to Fuerte Tiuna that day, nobody
forced him, like a sheep he went, knowing full well the crimes he had
committed. But now, we hear about the millions that nobody saw taking to the
streets to protest in another macabre celebration by the autocrat, as his
stupid supporters nod with their heads, as he tells this new tale of the empty
heroics of the cowardly leader.

And the autocrat seems to have lost track of his own
timetable as if lost in his own time capsule. He tells the military that they
either have to become socialists or leave the military, as if his secret and
absolutely autocratic and dictatorial changes of the Constitution proceed in
absolute secrecy in violation of the same Constitution Chavez had himself
written to measure in 2000. The problem is that more than just his body size
has changed since then. He now has discovered the word “socialism” in the last
two years and as he has, we have yet to find out exactly what he means by it,
adding to it that XXIst. Socialism prefix, which evokes something like a
digital socialism, except that the man at the controls is dressed with your
typical Latin American military uniform, screaming orders and telling people to
put up or shut up, the same type that has always done things in the name of the
people, only to end up screwing them in the name of their own glory and crazy
project, much like the man from Sabaneta.

And that same man now pretends to give classes of democracy
and tolerance to the Chilean Senate, daring to call them fascists, precisely
the word that the Chilean Senators think of whenever they think of our
autocratic leader. Because if there is something that the Chilean Senate knows
how to identify is the ugly head of fascism, which they had to endure for so
many years and they see the clear similarities between their old nemesis that
ruled Chile for a decade and this parody of a statesman that claims to be the
democratic leader of Venezuela. And when the Chilean Senate saw the threat to
shutdown a TV station, they did not need much explanations to understand that
autocrats and dictators are the same across the ages and the countries, that
Pinochet, Fujimory and Chavez are cut from the same pattern despite the
different ideologies, times, colors and countries that allowed the prosperity
of their personal projects to overcome the best ideals of the democracies that
once flourished in their respective countries.

And the shutdown of RCTV is being hailed as yet another step
in this strange democracy that shuts down dissent and threatens all enemies, if
it does not go as far as jailing them. And the chorus of brainless supporters
cheers on when the autocrat says that RCTV participated in the so called coup,
when one does not remember RCTV being even the focus at the time. There were
other enemies then, but they have compromised their values and while not
aligned with the Government, they are no longer a nuisance. So, RCTV is the
nuisance by default and without the chance to defend itself or be declared
guilty by a Court, the autocrat and his chorus have reached a sentence and they
repeat it daily, hoping that in time it will become the truth.

Meanwhile, the basis for any socialist society, the working
class as represented by the unions, find themselves as marginalized by the
socialist revolution as the oligarchy. That same oligarchy that Chavez simply
said he cannot talk to and in which he groups the 30%+ that did not vote for
him or does not like him, which only shows his ignorance about classes and
social status in this society. But maybe we should just cheer because he wants
nothing to do with us, his intolerance just proves, once more, what his
supporters continue to be in denial about: That man ain’t no democrat!

And the union rank and file is getting restless. After three
or four years without a collective contract, after hearing Chávez use them as
an excuse for their fights, only to turn on them when he wins the fights, is
finally concvining them of what they have not wanted to recognize in recent
years, that Chavez just uses them at his convenience but in the end does not
believe in the union movement He only believes in authority, his and that of
the military and that, much like in military forts, he wants to run the country
with an iron hand, no dissent, no discussions, no concessions. What Chavez says
is the law, even if there are Courts that are supposd to decide it. If he used
the unions as his flagship against CANTV, now that he has decided to
nationalize it, he has no use for it, or for EDC, or for Sidor or any other
one. He only likes coops, because there are no unions, no organized force
against him. They don’t want profit, only solidarity, which is why they fail
and fail en masse.

And now even the judges have to wonder about their future,
as the Autocrat Dictator has told them they can’t go against him. It is no
longer a matter of following the Government’s directions whenever necessary,
the message seems to be: Check before you rule just to make sure you don’t do
what we don’t want. Either shape up or else, Chavez dixit. Not even the Supreme
Court can go against him now. Of curse, the Peoples’ Ombudsman and the
Prosecutor have always been on his side and now more than ever, as witnessed by
the extradition request for dummy Carmona: since the charge of rebellion is no
ground for extradition, the silly man is now being accused of attempting to
murder Chavez, as if he autocrat was not under his total control for 48 hours
during which, had they wanted to away with him, any form of funny accident
could have been staged. But it didn’t, because nobody tried.

And then there is corruption. At the rate the bolibourgeois
are stealing and scheming, the new oligarchy will be one hundred times richer
than the old one in only a few years. It took them little time to understand
that financial corruption is quick, simple and very profitable, why bother with
projects, bids and the like.

Thus, the Development Fund Fonden, which is in charge of
funding developing the country uses over US$ 4 billion of its US$ 12 billion budget to
help…

The Ministry of Finance…

in very creative
twist of the concept of development. Meanwhile hundreds of millions of US$,
amounts never before heard of in the context of Venezuelan corruption are
“earned” in bond sales, allocations and distributions with no transparency in
deals that challenge the ability of anyone including Chavistas to explain why
they are structured and executed the way they are other than they are these
fantastic vehicles for enrichment of the new revolutionary class.

Meanwhile, the country is en route to import US$ 40 billion
in goods in 2007, which happens to be twice what PDVSA generated in US
dollars in a full year only three years ago. And inflation is set to hit 30%,
insuring that with foreign exchange fixed under controls, local goods get more
expensive every day, guaranteeing that they can easily be replaced with an
imported item anytime. But hey! The economy is booming say the Chavistas, which
only goes to show that ignorance is simply a commodity.

And while the day of political reckoning may be far off,
that of economic calamity is not. Unless oil doubles over the next three years,
which is not exactly likely, the artificiality of the Venezuelan economy will
blow up before then. As one of our more astute readers said in one comment,
that fate was sealed the day the National Assembly approved the concept of
excess international reserves, while maintaining the growth in Government
spending.

In the meantime, those that have no hope that there will be
a political change, like me, watch this much like we watch some exotic
spectator sport, wondering in which quarter, half or episode the final goal
will be scored and if the fireworks afterwards will be as spectacular as we
suspect. And wondering how the Autocrat/Dictator will find someone responsible
to blame for that defeat, no matter how absurd and far-fetched it may be. And
much like the April 2002 murders and repression, we will be told it never
happened and even if it did, it was not his fault. That is not how things work
in autocracies.

—-Chavista
Deputy Pastora Medina: “Corruption cases are overflowing in the country”

Wow! Really? You could have fooled me! I guess she does not
know the new motto of the revolution: Patria, Socialismo o Hummers!

—-President
Hugo Chavez: President Hugo Chávez threatening cement plants with
nationalization “I am investigating cement companies, they prefer to export
rather than sell cement in Venezuela,
this is affecting our construction programs”

Jeez, nothing like trying to blame someone else for your
incompetence. The opposite is exactly the truth: Cement prices are higher in
Venezuela than in the international markets by 30-40%, thus cement plants
prefer to sell locally than abroad. The reason? Transportation costs. When a
company like Cemex Venezuela exports cements, it leaves for its Pertigakete
plant which ahs a deep port inside and the price is FOB. When it sells in
Venezuela, there are few competitors, bad roads; long distances and thus prices
are higher.

—–A new decree was issued on Friday exempting foreign
investors from taxes on the PDVSA n=bonds.

The new decree says that the change in the decree was due to
a “material error” in the original one. I guess it would have been to strng to
call it what it was: material ignorance.

—-Only
32.4% of all the cooperatives registered with the Superintendence of
cooperatives are still active.

That percentage is only good in baseball.

—-The Board of telecom company CANTV did
not give an opinion on whether investors should or not accept the
Government’s tender offer. They did exhort the Government to find a solution to
the “manifest inequality” in the price to be paid to foreign investors and
local investors.

You see, foreign investors will be paid $14.84 per ADS which
is the equivalent paid in local currency to local investors, but at the
official rate of exchange, which locals have no access to. The group most
affected by this will be the company’s workers who will likely not have a
chance to convert their shares to ADS. On top of that the workers are getting
half of what they originally paid for their shares in US$. There is an easy
solution to this: Have the Government pay everyone in US$. Nothing like the revolution discriminating its own citizens!

Judge Alcy Viñales, the one that freed the 29 people accused
of helping former Governor Lapi escape form jail, valiantly
spoke up yesterday, not only challenging the Government to prove she is
corrupt, which she was accused of by the Minister of Justice, but also turning
around and accusing that she was pressured to rule a different way and naming
the person.

Judge Viñales said that the day before her ruling she
received a phone call from the President of the Judicial Circuit Dario Suarez,
who told her that she should know what she had to do, that the order was to
keep these people jailed. She added: “I knew what was coming when I made my
sentence public. My decision did not satisfy any of the sides, I did not qualify
the detention as flagrant, because there were no punishable facts, nor elements
for conviction. The only person who was denied the right for a defense and was
exposed to public scorn was I.  I
challenge the President, the Minister of Justice and the Head of the National
Assembly to prove I am corrupt” demanded Viñales. She added that her decision
did not please the prosecutors nor the defense.

Funny how fast things can change when you go from being
Government to owner. It was only September of last year when CANTV started
paying pensioned workers minimum salary to abide by a Court decision. Despite
this, President Chavez would regularly come on TV and threaten that if the
company did not pay the pensioned workers what the Court had ordered, he would
nationalize it. Essentially the workers were protesting, because they wanted
the company to pay more than just minimum salary as well as interest on the
back pay owed them since the new Constitution went into effect.

Well, CANTV paid them the minimum salary and what the Court
ordered, but the workers continued protesting and asking for more. Then Chavez
announced the nationalization of the company and the workers started to
complain also about the price they were getting for their shares. You see, the
CANTV workers paid over US$ 4 per share when the company went public, but the
tender for the shares is only for US$ 2.12, so they feel they did not do too
well in the deal. 

Then day before yesterday, the Minister of transport and
Communications essentially
said that he did not have to deal with the company’s union as the pensioned
workers had accepted the minimum salary for their pensions. This led to a protest
yesterday by the pensioned workers who not only say the union is their only
representative, but also that they continue to demand higher pensions as well
as a higher price for their shares.

And then last night, Chavez himself fustigated
the union, saying that they wanted to destabilize the company from within.
Chavez claimed that these unions have been passive while the company was
private, but now that the Government was about to take it over, they were
starting to talk tough and blackmail the state.

How fast things change! These unions that were not tough are
the same ones that fought for years in the courts on the pensions to get the
decision that Chávez hailed so much in the last two years, but now that the
Government will become the owner wants to tone down. Moreover, CANTV’s unions
have fought the company at every step, obtaining a very generous collective
agreement. In fact, I find it remarkable that the workers have been so passive
on what they will get for their shares.

The workers have a spot on the Board of Directors, which
last year, when Mexican telecom magnate Carlos Slim offered US$ 21 per ADR (US$
3 per local share), paid Goldman Sachs to do a valuation of the company because
the Government’s representative on the Board, did not think it was high enough.
The valuation exists, but it has been kept secret as the Chávez Government
offered even less than Slim, at US$ 17.7 per ADR (US$ 2.51 per ordinary share
before a dividend).

Thus, much like in every other Government enterprise in the
country, the CANTV union has now become the enemy to the leader of the XXIst.
Century Socialism, since unions and workers rights are not a priority of this
novel tropical version of socialism that Chavez purportedly is proposing. He
talks about “social ownership”, but this apparently means the state owns and
decides everything in classical Soviet style.

Because what the defenders of the revolution never tell
people is how worker rights have taken a backseat in the Chavista revolution.
Most collective bargaining agreements are at least two and three years behind,
simply because the Government refuses to discuss them and there are no legal
instances that workers can appeal to because the Government controls them too.
In the case of Electricidad de Caracas, the company had negotiated an agreement
with the workers and was ready to sign it, but the Government asked management
not to sign it because the Government was taking the company over. The workers
have protested, as they fear that they will not get their agreement once PDVSA
becomes the owner of Electricidad de Caracas.

Thus, Chavez pulled another “Ethanol Shift”, switching sides
on an issue at his convenience, simply because his old position is no longer
aligned with his own personal power grabbing interests.

There is little waste in today´s Veneconomy Editorial, judge for yourslef

Yet
another black mark by PDVSA by Veneconomy

One characteristic of the Bolivarian PDVSA is the lack of transparency in its
management owing to the absence of credible financial statements and also to
the recurring reports of corruption. The $7.5 billion bond issue involves the
state-owned company, once again, in irregular, unclear operations.

Irregularities involving the bonds started to come to light last week, when
PDVSA announced that it had “detected duplication of orders by investors” and
that, therefore, it would proceed to cancel those orders and would not allocate
bonds to the people involved. However, the measure seems to be unfair, as many
of the people whose orders were cancelled claim they placed their order through
just one company. In the April 11 edition of El Universal, the journalist
Víctor Salmerón commented that, according to his sources in stock brokerage
firms, “a group of financial organizations apparently somehow used the identity
card numbers of some people without their consent to place orders.”

In addition to these irregularities, there are reports in the press of the
existence of a large volume of orders placed as a result of investors “selling
their quota” to other investors. Diario de la Economía, for example, cites the
case of an official of Banco Industrial de Venezuela who, at the eleventh hour,
filed 3,000 orders, apparently irregularly. Then there are the cases of people
who say they were offered as much as Bs.400,000 for the use of their identity
card. In the opinion of Oscar García Mendoza, the president of Banco Venezolano
de Crédito, the much trumpeted PDVSA bond issue is a “mega sham” whose only
purpose is to benefit a tiny group of the government’s richest and closest friends.

As García Mendoza quite rightly says, if the government’s true intention was to
reduce the money supply by Bs.17.01 trillion, all it needed to do was to sell
$4.7 billion at Bs.3,600:$ on the parallel market.

However, events point to the true objective being quite different. The PDVSA
bond issue magically generated fast returns for a few in the order of $2.8
billion (i.e. Bs.9.99 trillion), 20% more than the Bs.8.3 trillion earned by
the entire Venezuelan financial system in the three years between 2004 and
2006. (These Bs.9.99 trillion are the difference between the Bs.17 trillion
obtained from the sale of the bonds and the Bs.19.8 trillion that the holder of
the bonds would realize upon selling the bonds at 75% of their face value and
exchanging the proceeds from the sale into bolivars at the exchange rate of
Bs.3,600:$).

Should the government wish to refute Dr. García’s assumption, all it would have
to do is to publish the names of those who purchased $1 million or more of the
bonds.

What is perhaps worse is that Venezuela’s coffers could end up shrinking by
some $7.5 billion if the intention to use the bolivars from the bonds to buy
dollars from the Central Bank announced by Finance Minister Rodrigo Cabezas and
Energy and Oil Minister Rafael Ramírez pans out. (The orthodox thing would have
been to sell the bonds for payment in dollars, so avoiding this potential drain
on the reserves).

There is another irregularity worth mentioning. According to the Gaceta Oficial
of April 10, enrichments from these bonds will be free of income tax for only
five years and only for individuals resident in Venezuela and companies domiciled
here. In other words, a foreigner who buys the bond in Europe
would, in theory, be liable to Venezuelan income tax. That being the case,
buyers will be thin on the ground.