The Devil's Excrement

If there is one analyst/politician that I tend to agree with is Teodoro Petkoff of Tal Cual. He seems to have a degree of common sense and fairly good understanding of economic issues, that most Venezuelan politicians lack. I guess being an economist helps (Even though he strongly disagrees with my belief that a dollarization of the Venezuelan economy would be positive). But I did not like parts of his Editorial today on what is going on in Cojedes which I wrote about last night. Essentially Petkoff does not give much importance to Governor Yanez’ decree on “intervention” of these farms:

“The exact reach of the intervention decree issued by the Government of the State of Cojedes is not clear, but it is neither an expropriation (which supposes indemnification) nor, much less, confiscation of land (which does not contemplate it)

As far as can be understood, the idea would be that a commission, within a term of sixty days would verify, with the owners of those 25 great farms, that by their extension, in principle, could fall under the definition of large states (latifundios), all involving who owns the land, as well as what it relates to its limits and the degree of utilization of the territory”

Well, I simply disagree, too many times I have seen Chavez try something, step back from it, only to come back later in full force and win, catching the opposition off guard in their naïve belief that Chavez or Chavismo would play fair. I am in the camp that thinks this is simply a trial balloon, one of many that Chavez has flown since he became President. At the end of the sixty days, the commission will expropriate or confiscate and much like the signatures for the recall vote or the cheating in the recall vote, it will be too late to do anything about it. The opposition will scream bloddy murder and nothing will happen. Maybe something will, a lwayer will go to the Supreme Court to reverse the decree, the Court will either not accept the case or rule in a contorted way and that will be that.

What I do agree with is with other parts of the Editorial when Petkoff talks about the real implications that land reform has in modern Venezuela:

“The problem does not have the dimensions that the Chavista mythology ascribes to it, especially for foreign consumption, where they make believe that we have an agrarian situation similar to 1958, Mexico in 1910 or today’s in Brazil. The truth is that the agrarian reform (even if it was incomplete, it gave away during its fifteen years three million hectares, access to credit and even housing to 200,000 agricultural families) and the capitalist development of farmlands, adding to it the violent urban development of the country (86% of the population is urban) the agrarian problem is no longer that of when Betancourt argued for reform to prevent what he used to call the “zamorazo”. But this does not impede that there still are some 500 properties (according to the 2001 census) that can be qualified as large farm estates. And if the peasant pressure does not have the characteristics of that in the middle of the last century, the elimination of large farm estates and giving land to the peasants or small agricultural producers that do not have land, will serve to complete the modernization of the agrarian structure…

But, in general, the anti-large states position still has a connotation of social justice which can not be minimized

The truth is that up to now, in this six years of Chavista Government, there has been in agrarian matters, much less work accomplished  than that done by Betancourt, Leoni and Caldera in their respective presidencies.”

And that my friends is simply a fact of this fake revolution.

If there is one analyst/politician that I tend to agree with is Teodoro Petkoff of Tal Cual. He seems to have a degree of common sense and fairly good understanding of economic issues, that most Venezuelan politicians lack. I guess being an economist helps (Even though he strongly disagrees with my belief that a dollarization of the Venezuelan economy would be positive). But I did not like parts of his Editorial today on what is going on in Cojedes which I wrote about last night. Essentially Petkoff does not give much importance to Governor Yanez’ decree on “intervention” of these farms:

“The exact reach of the intervention decree issued by the Government of the State of Cojedes is not clear, but it is neither an expropriation (which supposes indemnification) nor, much less, confiscation of land (which does not contemplate it)

As far as can be understood, the idea would be that a commission, within a term of sixty days would verify, with the owners of those 25 great farms, that by their extension, in principle, could fall under the definition of large states (latifundios), all involving who owns the land, as well as what it relates to its limits and the degree of utilization of the territory”

Well, I simply disagree, too many times I have seen Chavez try something, step back from it, only to come back later in full force and win, catching the opposition off guard in their naïve belief that Chavez or Chavismo would play fair. I am in the camp that thinks this is simply a trial balloon, one of many that Chavez has flown since he became President. At the end of the sixty days, the commission will expropriate or confiscate and much like the signatures for the recall vote or the cheating in the recall vote, it will be too late to do anything about it. The opposition will scream bloddy murder and nothing will happen. Maybe something will, a lwayer will go to the Supreme Court to reverse the decree, the Court will either not accept the case or rule in a contorted way and that will be that.

What I do agree with is with other parts of the Editorial when Petkoff talks about the real implications that land reform has in modern Venezuela:

“The problem does not have the dimensions that the Chavista mythology ascribes to it, especially for foreign consumption, where they make believe that we have an agrarian situation similar to 1958, Mexico in 1910 or today’s in Brazil. The truth is that the agrarian reform (even if it was incomplete, it gave away during its fifteen years three million hectares, access to credit and even housing to 200,000 agricultural families) and the capitalist development of farmlands, adding to it the violent urban development of the country (86% of the population is urban) the agrarian problem is no longer that of when Betancourt argued for reform to prevent what he used to call the “zamorazo”. But this does not impede that there still are some 500 properties (according to the 2001 census) that can be qualified as large farm estates. And if the peasant pressure does not have the characteristics of that in the middle of the last century, the elimination of large farm estates and giving land to the peasants or small agricultural producers that do not have land, will serve to complete the modernization of the agrarian structure…

But, in general, the anti-large states position still has a connotation of social justice which can not be minimized

The truth is that up to now, in this six years of Chavista Government, there has been in agrarian matters, much less work accomplished  than that done by Betancourt, Leoni and Caldera in their respective presidencies.”

And that my friends is simply a fact of this fake revolution.

You have to love the naiveté of the people at the Ministry of Science and Technology, few of which have ever been involved with either. According to today’s Inside Telecom column in El Universal by Victor Suarez, the Ministry has various ambitious projects in the drawing board:

-The Bolivarian PC: The Ministry is drawing up a “national Hardware Plan” which includes a project to assemble in Venezuela 20,000 of the 150,000 PC’s that the government plans to acquire in 2005. Since there are no local components for it, it will all be imported and the computer will be called the “Computador Popular Bolivariano” or Compubol. The plan is to eventually assemble up to a million units.

According to the report, representatives from the Ministry have talked to Intel and AMD, but the motherboards are too expensive. Thus, they are now in contact with Indian and Chinese manufacturers who obviously use the same microprocessors.

I have to wonder what the competitive advantage these people find in Venezuela is. It is not salaries as Venezuelan salaries are low, but now low enough and the laws are too protective of workers. It is not technology, as Venezuela has zero, as in zip, technology to contribute to such a project, we don’t even make video tubes.

What will be gained from this? Experience in manufacturing? This was already tried by the private sector who found that it moves too fast to be competitive and there are few competitive advantages. Can Venezuela produce a PC cheaper than then $200 PC Wal-Mart sells? I doubt it. But even if it could, I would let the private sector do it anyway.

-Informatics goals for 2010: The Ministry has also established some goals for Venezuela’s informatics infrastructure by 2010. I will not argue the details of the goals, they are all highly desirable. My question is they realistic?

Just one of them shows how unrealistic these goals are:

-To have (by 2010) a highly developed internet commerce system

Well, the company I work for owns one of the most successful e-tailers in Venezuela. It ahs been opened for five years. It will be closing on Christmas day. Why? Many reasons but among them, lack of purchasing power by Venezuelans, lack of penetration of the Internet, lack of penetration of the banking system, lack of penetration of credit and debit cards and no economies of scale. Once again, if the private sector can’t, can the Government? Doubt it.

You have to love the naiveté of the people at the Ministry of Science and Technology, few of which have ever been involved with either. According to today’s Inside Telecom column in El Universal by Victor Suarez, the Ministry has various ambitious projects in the drawing board:

-The Bolivarian PC: The Ministry is drawing up a “national Hardware Plan” which includes a project to assemble in Venezuela 20,000 of the 150,000 PC’s that the government plans to acquire in 2005. Since there are no local components for it, it will all be imported and the computer will be called the “Computador Popular Bolivariano” or Compubol. The plan is to eventually assemble up to a million units.

According to the report, representatives from the Ministry have talked to Intel and AMD, but the motherboards are too expensive. Thus, they are now in contact with Indian and Chinese manufacturers who obviously use the same microprocessors.

I have to wonder what the competitive advantage these people find in Venezuela is. It is not salaries as Venezuelan salaries are low, but now low enough and the laws are too protective of workers. It is not technology, as Venezuela has zero, as in zip, technology to contribute to such a project, we don’t even make video tubes.

What will be gained from this? Experience in manufacturing? This was already tried by the private sector who found that it moves too fast to be competitive and there are few competitive advantages. Can Venezuela produce a PC cheaper than then $200 PC Wal-Mart sells? I doubt it. But even if it could, I would let the private sector do it anyway.

-Informatics goals for 2010: The Ministry has also established some goals for Venezuela’s informatics infrastructure by 2010. I will not argue the details of the goals, they are all highly desirable. My question is they realistic?

Just one of them shows how unrealistic these goals are:

-To have (by 2010) a highly developed internet commerce system

Well, the company I work for owns one of the most successful e-tailers in Venezuela. It ahs been opened for five years. It will be closing on Christmas day. Why? Many reasons but among them, lack of purchasing power by Venezuelans, lack of penetration of the Internet, lack of penetration of the banking system, lack of penetration of credit and debit cards and no economies of scale. Once again, if the private sector can’t, can the Government? Doubt it.

You have to love the naiveté of the people at the Ministry of Science and Technology, few of which have ever been involved with either. According to today’s Inside Telecom column in El Universal by Victor Suarez, the Ministry has various ambitious projects in the drawing board:

-The Bolivarian PC: The Ministry is drawing up a “national Hardware Plan” which includes a project to assemble in Venezuela 20,000 of the 150,000 PC’s that the government plans to acquire in 2005. Since there are no local components for it, it will all be imported and the computer will be called the “Computador Popular Bolivariano” or Compubol. The plan is to eventually assemble up to a million units.

According to the report, representatives from the Ministry have talked to Intel and AMD, but the motherboards are too expensive. Thus, they are now in contact with Indian and Chinese manufacturers who obviously use the same microprocessors.

I have to wonder what the competitive advantage these people find in Venezuela is. It is not salaries as Venezuelan salaries are low, but now low enough and the laws are too protective of workers. It is not technology, as Venezuela has zero, as in zip, technology to contribute to such a project, we don’t even make video tubes.

What will be gained from this? Experience in manufacturing? This was already tried by the private sector who found that it moves too fast to be competitive and there are few competitive advantages. Can Venezuela produce a PC cheaper than then $200 PC Wal-Mart sells? I doubt it. But even if it could, I would let the private sector do it anyway.

-Informatics goals for 2010: The Ministry has also established some goals for Venezuela’s informatics infrastructure by 2010. I will not argue the details of the goals, they are all highly desirable. My question is they realistic?

Just one of them shows how unrealistic these goals are:

-To have (by 2010) a highly developed internet commerce system

Well, the company I work for owns one of the most successful e-tailers in Venezuela. It ahs been opened for five years. It will be closing on Christmas day. Why? Many reasons but among them, lack of purchasing power by Venezuelans, lack of penetration of the Internet, lack of penetration of the banking system, lack of penetration of credit and debit cards and no economies of scale. Once again, if the private sector can’t, can the Government? Doubt it.

Via this site or the news, I learn that the Venezuelan Government will acquire 100,000 AK-103 and AK-104 assault rifles from the Russians and license the manufacturing of another 200,000.

While the discussion seems to center around the US or Russia difference and whether the guns are the rights one or not, I am simply flabbergasted that this Government will spend some US$ 300 million to acquire more guns and this price does not even include the bullets!

Imagine a country where only twelve million Venezuelans are above 18, whose military already has more than half a million assault rifles and they plan to add another 300,000 to “modernize” the Armed Forces. We are talking almost one assault rifle for every ten adult Venezuelans!

There are two very sad aspects about this. First of all, those guns will end up killing only Venezuelans. Second, this revolution that claims to feel so much for the poor continues to spend inordinate amounts of money in weapons. Another Chávez promise down the drain. Chavez had promised when campaigning in 1998 that he would divert big military spending from the military to the people.

While many view this as a political issue, to me it’s economic. For decades, the Venezuelan military has spent inordinate amounts of money on expensive weapons projects that have only been useful to intimidate civilians and help grown men play games. This from Governments, past and present, that never assumed their proper role of giving good services to their people. How I envy the Costa Rican model! No military, only police…

Via this site or the news, I learn that the Venezuelan Government will acquire 100,000 AK-103 and AK-104 assault rifles from the Russians and license the manufacturing of another 200,000.

While the discussion seems to center around the US or Russia difference and whether the guns are the rights one or not, I am simply flabbergasted that this Government will spend some US$ 300 million to acquire more guns and this price does not even include the bullets!

Imagine a country where only twelve million Venezuelans are above 18, whose military already has more than half a million assault rifles and they plan to add another 300,000 to “modernize” the Armed Forces. We are talking almost one assault rifle for every ten adult Venezuelans!

There are two very sad aspects about this. First of all, those guns will end up killing only Venezuelans. Second, this revolution that claims to feel so much for the poor continues to spend inordinate amounts of money in weapons. Another Chávez promise down the drain. Chavez had promised when campaigning in 1998 that he would divert big military spending from the military to the people.

While many view this as a political issue, to me it’s economic. For decades, the Venezuelan military has spent inordinate amounts of money on expensive weapons projects that have only been useful to intimidate civilians and help grown men play games. This from Governments, past and present, that never assumed their proper role of giving good services to their people. How I envy the Costa Rican model! No military, only police…

Manuel Caballero writes an article in today’s El Universal in which he describes some of the credentials of those that were recently appointed to the Supreme Court called “Excellent Credentials” in which he basically reveals not the credentials but the lack of credentials. I will no translate it all, but I loved how he closed it”

Since I don’t want to have problems with the new Bolivarian Justice, I will limit myself to give here in the same order (as the article) the initials of these three new jewels of our Judiciary: Francisco Carrasquero, Omar Mora Diaz and Luis Velasquez Alvaray.

Postcriptum: Before closing this, I would like to point something out that is at the same time a declaration of principles. Up to now, I have been willing to sign at the bottom of texts which can be incriminatory by the Government’s Justice system. This time I will not do it with those that call the current Supreme Court a brothel, and thus accuse Ivan Rincon of being a pimp. I will not accompany the reporter accused of such an insult. No: such a parallel is an infamy. Those beings that inhabit the maison closes have already been hit, offended by words and acts, despised and on op of that, badly paid. Do not include me so that to all f those disgraces which are generally a product of misery, I would go and to add to that humiliation such an insulting comparison. 

Manuel Caballero writes an article in today’s El Universal in which he describes some of the credentials of those that were recently appointed to the Supreme Court called “Excellent Credentials” in which he basically reveals not the credentials but the lack of credentials. I will no translate it all, but I loved how he closed it”

Since I don’t want to have problems with the new Bolivarian Justice, I will limit myself to give here in the same order (as the article) the initials of these three new jewels of our Judiciary: Francisco Carrasquero, Omar Mora Diaz and Luis Velasquez Alvaray.

Postcriptum: Before closing this, I would like to point something out that is at the same time a declaration of principles. Up to now, I have been willing to sign at the bottom of texts which can be incriminatory by the Government’s Justice system. This time I will not do it with those that call the current Supreme Court a brothel, and thus accuse Ivan Rincon of being a pimp. I will not accompany the reporter accused of such an insult. No: such a parallel is an infamy. Those beings that inhabit the maison closes have already been hit, offended by words and acts, despised and on op of that, badly paid. Do not include me so that to all f those disgraces which are generally a product of misery, I would go and to add to that humiliation such an insulting comparison. 

There is lots of concern over the decree by the Governor of Cojedes state Johnny (no misspelling) Yanez Rangel ordering the “intervention of all urban, rural or lands with agricultural vocation, public or private, which are presumably not in use or under the regimen of large estates, which are in conflict of ownership and or with distribution problems”

In this first decree, the regional Government intervenes 16 farms, belonging to private individuals, foreign and local companies, politicians and retired military. It also extends the intervention to other extensions of land that are later determined to be covered by the decree according to technical studies.

The legal counsel for the state backed the decree with this senseless statement:

“Property is going to be respected, the term intervention may be strong, but the intention is to establish order, under no scenario is this an expropriation, what we are looking for is for win-win situation”

Anyone understand that statement? I certainly don’t.

Separately, the Governor himself said:

“What we are looking for is to end anarchy…the idea is to coordinate and find out about the lands and define which ones are agricultural, and which ones are private or public…the land not in use in private hands must be used, if not, we will expropriate them…we are intervening 120 Hectares, we will study the condition in which they are today and will apply legal regulations, to make them produce, sustained under the framework of endogenous development”

In 2001, Chavez had approved under the framework of an enabling law, a land Bill that allowed the Government to expropriate land that was not being used and regulating the use of land. However, the law itself said that it could not begin to be enforced until a national land registry of farm land was completed and it gave the power to implement the law to the Institute for Lands. That law did not give regional Governors the power to implement the Bill.

There are conflicting reports about the purpose of the decree. To some, it is trial balloons to have Chavze implement similar interventions nationwide. to others, it is a dispute between the use of land for raising cattle or for agriculture. Finally, others say that the Cojedes Government has been trying to start a sugar processing plant and needs the land being intervened in order to carry out his project that has been planned jointly with Cuban “experts”.