The Devil's Excrement

It was a day for articles about Venezuela in the international press. RMG sends this article from the BBC on the Cuban Doctors in Venezuela. meanwhile Scott from Burtonterrace, always concerned about our country, sends this link from a fairly good article by The Economist on the recall referendum. I particularly like the sentence in which the author says “Mr Chávez has suddenly gone cold towards this aspect of participatory democracy“, a point that only those that live here can truly appreciate since we had to put up with Mr. Chavez’ almost daily boasts that he was such great democrat that he wanted every issue decided by the people. Not anymore. Finally, there is the article in The Wall Street Journal (by subscription) entitled “Low maintenance, investment, hamper oil output in Venezuela“. The article coincides with oil experts and even Chavez’ slip yesterday that the ccountry’s oil production is coming up short, but it does send shivers up my spine to wonder what is going to happen to our country going forward. (Daniel also has anecdotal evidence of the problems within the oil industry) Here is the lead paragraph of the article, followed by the last one:

“Venezuela’s oil production, after a surprising rebound from a midwinter, antigovernment strike, now appears to be declining because of insufficient investment, poor maintenance and a shortage of skilled workers, industry analysts contend.

A variety of estimates peg the reduction at about 500,000 barrels a day below prestrike output of three million barrels a day. The delayed, poststrike shortfall, though only one piece in a world-wide oil-supply puzzle, is contributing to currently tight global supplies, experts say.”

“The loss is mainly occurring in the older oil fields in western Venezuela near Lake Maracaibo. Many of those wells, some of which have been in production for decades, need constant maintenance and redrilling to keep operating. Others must be injected with water or natural gas to coax heavy crude to the surface. The western fields naturally lose 15% to 25% of their annual production capacity if they don’t receive costly technical attention, analysts and industry experts say. “The real production issues are poorly done maintenance and too much pumping early on,” said Roger Diwan, an analyst with Petroleum Finance Co. in Washington. “Basically, the wells are buckling, and sand is moving in the fields.”

A scary picture for a country with an extremely bleak fiscal picture.

PDVSA announced it has named Boris Marchegani as the new Head of International Commercialization. Who is he? Easy, Mr. Marchegani is the CEO and co-founder of Pepex the same company that PDVSA handed all of its commercialization to last February. Unfortunately for PDVSA, Pepex and Venezuela, the results were a fiasco as other oil traders began arbitraging PDVSA and its customers. At that time, PDVSA had to stop working with Pepex due to the poor results. Now, the “genious” and CEO behind that company is brought in by the same man, Aires Barreto, who originally hired Pepex. Barreto, who had retired from PDVSA where he was a Director for Hector Ciavaldini, a jump well-above his previous managerial level at the company, was recently named Vice-President of the company and more recently Head of Commerce and Supply. Indian-born Barreto has more lives than a cat, the only question is why he keeps involving Mr. Machegani in PDVSA’s dealing or why Mr. Marchegani would even be interested in the position after being CEO of Pepex. Somehow, I can’t help but think that some interesting business deals are involved and not precisely in PDVSA’s or Venezuela’s interests.

For months, both local and foreign experts have been saying that Venezuela was producing no more than 2.5 million barrels of oil while the Venezuelan Government and the Minsitry of Energy and Mines was assuring everyone that the amount was 3.2 million barrels a day. Well, today President Chavez himslef said the country was producing 2.3 million barrels of oil. Innocent mistake or slip of the tongue?

The First Circuit Court on Administrative matters admitted the injunction introduced by the Venezuelan Medical Federation and suspended the permit given by the Medical College of Caracas (This is not a school, it is a union and the Federation is the union that encompasses all unions) to the Cuban doctors working in the program within the barrios. The Court ordered that any foreign Doctors that are in violation of the Law of Medical Practice to be replaced immediately replaced by Venezuelan ones. Here is the decision.  

This country is in trouble, the Venezuelan Supreme Court rules that the National Assembly incurred in omission because it did not name the members of the Electoral Board before the legal deadline for it. The Court gave the Assembly ten days to do it and set a deadline of an additional ten days to name a provisional Board. Well, there are now widespread rumors that the Court itself can not find one person considered to be “impartial” to both sides. If the rumor is true, this country is in more trouble that I thought it was, all our leaders are simply irresponsible!

As usual, Juan Forero of the New York Times, does his shoddy job in reporting about Venezuela and the referendum. (One can not talk about Forero reporting from Venezuela, he seldom has a byline from Caracas, is an unknown to the international press circles and some people even question that he really exists). Let’s look at today’s article on the opposition mobilizing to ask for a recall referendum:

-“Tens of thousands of antigovernment demonstrators clogged streets in Caracas”. Well, the question is not tens of thousands, it is whether there were enough hundreds of thousands to make the million or not.

-“For an opposition led by a haphazard coalition of big businessmen, labor groups and media owners”. Curiously, Forero leaves out political parties, ignoring the fact that starting at the far left (Bandera Roja, Causa R, Socialists) to the middle (socialchristians, socialdemocrats) all political parties except Chavez’ MVR and miniscule party Patria Para Todos are part of the opposition. (There are no significant political parties in Venezuela that can be considered to be part of the “right”)

-“The most immediate obstacle is that a new electoral board must be chosen to oversee the recall. Venezuela’s Supreme Court has said it would pick the board, possibly by early next week”. This is not considered to be an obstacle except by Forero’s ignorance. The Supreme Court said it would pick a Board ten days after the omission by the National Assembly was declared. This means there will be a Board by August 24th.

-“Some government officials have also raised deep concerns about the way the signatures were collected. They say the process is illegitimate, arguing that the signatures could only be collected after the half-way point of the president’s rule”. Interesting, the Venezuelan Supreme Court ruled that this was not an issue, it seems only Chavez’ lawyer and Forero have not heard about this important decision.

-Polling companies in Caracas have said that if there were a referendum on Mr. Chávez’s rule, two of every three Venezuelans would vote to remove him”. Well, all polls, including those that Chavez used when he was a candidate give numbers of 70% or more, none say or have said two-thirds for quite a while. Picky? Maybe, but the article does try to give the impression that Chavez has more popularity than he does.

I have never understood why Forero remains at the New York Times, he has always been sloppy, ill-informed and biased. In my book that is three strikes and you are out, for a reporter from a newspaper as important as the New York Times.

An excerpt from today’s Tal Cual Editorial (by subscription only)on why Chavez has been unable to distribute better income and Table from the inside of the same paper:

“If one takes into account that in the year 2002 and so far in 2003 both inflation and unemployment increased significantly, we can infer that up to today, the distribution of income has become more negative towards workers. At the close of 2001, the percentage of unemployed Venezuelans reached 13% of the active population. At the close of 2002 the number was over 16% and at this moment it is at 18%. On the other hand, inflation in 2001 closed at 12.3% and jumped to 31.2% in 2002 and in the first seven months of this year it is already at 17.4%, with which one may Project to the end of the year a number somewhat higher than that of 2002. (All official numbers from the INE 8National Institute for Statistics and the BCV, the Venezuelan Central Bank.). In other words, the increase in unemployment and the CPI of the last year can only translate in an even more regressive distribution of income for labor sectors

This is the real and dramatic balance of the four and half years of the Chavista Government. But there is another aspect. Our esteemed charlatan goes around the world proposing referenda about the external debt, repeating the usual clichés about the “external debt”, but here at home, in only tour years he has increased public debt by more than US$10 billion. And he ahs just requested authorization to borrow US$ 3 billion from international banks.

Thus a debt that Chavez received in US$24 billion (between external and internal), he has taken it to more than US$34 billion.

What does this mean in practical terms?

From the national budget increasing percentages will be used to pay the debt, taking them out of educational and health expenses. The future an immediate generations will pay the broken dishes of a coarse administration, which has done nothing but repeat the trends that I, the Supreme condemned in the past and which he still refers to (abroad) as if his won administration had not been a magnified and worse repetition that those carried out by his predecessors.

How crummy has this “revolution” turned out!”

The above table shows some important macroeconomic numbers and how they have evolved during Chavez’ Presidency. From top to bottom: Price of a barrel of oil, GDP change,inflation, unemployment, imports, exports, exchange rate and foreign investment. The only missing parameter is debt, as the Tal Cual Editorial points out, total debt has increased from US$ 24 billion to US$ 34 billion despite oil income that has been by far, the highest in the country’s history. Macroeconomic numbers never tell the whole story, but if they don’t improve, it is impossible to the people’s lot to do.

An excerpt from today’s Tal Cual Editorial (by subscription only)on why Chavez has been unable to distribute better income and Table from the inside of the same paper:

“If one takes into account that in the year 2002 and so far in 2003 both inflation and unemployment increased significantly, we can infer that up to today, the distribution of income has become more negative towards workers. At the close of 2001, the percentage of unemployed Venezuelans reached 13% of the active population. At the close of 2002 the number was over 16% and at this moment it is at 18%. On the other hand, inflation in 2001 closed at 12.3% and jumped to 31.2% in 2002 and in the first seven months of this year it is already at 17.4%, with which one may Project to the end of the year a number somewhat higher than that of 2002. (All official numbers from the INE 8National Institute for Statistics and the BCV, the Venezuelan Central Bank.). In other words, the increase in unemployment and the CPI of the last year can only translate in an even more regressive distribution of income for labor sectors

This is the real and dramatic balance of the four and half years of the Chavista Government. But there is another aspect. Our esteemed charlatan goes around the world proposing referenda about the external debt, repeating the usual clichés about the “external debt”, but here at home, in only tour years he has increased public debt by more than US$10 billion. And he ahs just requested authorization to borrow US$ 3 billion from international banks.

Thus a debt that Chavez received in US$24 billion (between external and internal), he has taken it to more than US$34 billion.

What does this mean in practical terms?

From the national budget increasing percentages will be used to pay the debt, taking them out of educational and health expenses. The future an immediate generations will pay the broken dishes of a coarse administration, which has done nothing but repeat the trends that I, the Supreme condemned in the past and which he still refers to (abroad) as if his won administration had not been a magnified and worse repetition that those carried out by his predecessors.

How crummy has this “revolution” turned out!”

The above table shows some important macroeconomic numbers and how they have evolved during Chavez’ Presidency. From top to bottom: Price of a barrel of oil, GDP change,inflation, unemployment, imports, exports, exchange rate and foreign investment. The only missing parameter is debt, as the Tal Cual Editorial points out, total debt has increased from US$ 24 billion to US$ 34 billion despite oil income that has been by far, the highest in the country’s history. Macroeconomic numbers never tell the whole story, but if they don’t improve, it is impossible to the people’s lot to do.

In order to avoid any temptation by any group to attempt to stop the petition with the signatures from reaching the National Electoral Council Headquarters, in a suprise move, the petition was handed in early this morning. (It already happened when the signatures for the failed consultative referendum were handed in last year, violent pro-Chavez groups attempted to block and hijack the truck that carried the signatures).  The more formal part of the hand in will take place later today during the march/rally.

It seemed like New Yera’s Eve, roughly an hour ago, as the people of Caracas and some parts of Venezuela took to the streets to celebrate that the mid-point of Hugo Chavez’ Presidency was here and we can call for a recall referendum to terminate his mandate. It was festive, with drums, people dancing and lots of fireworks, organized and not organized as people got ready for tomorrow. As the fireworks peaked, people began singing the National Anthem, definitely making the celebration quite emotional.