The Devil's Excrement

Took a gizillion pictures in China, here are two which show the spectacular views and the people of China

Returning to Venezuela after three weeks of traveling, I find that very little has changed since I left. The scandals, stupidity and headlines seem to be variations of the same theme. After all, how much proof do we need that Chavez and his cronies are simply involved in an ideological project with no content and whose only objective is control of the country without benefiting the population in the name of socialism?

The headlines from abroad tells us that the data contained in Reyes’ computer proves that Chavez had a close relationship with the FARC. Is there a surprise there? Only the imbecile cheerleaders of the revolution still try to claim the data is false. One really does not need much proof to know how tight Chavez was and is with the FARC. Have people forgotten the FARC’s Foreign Minister Rodrigo Granda? Granda lived in Venezuela under a different name in total opulence, using papers provided to him by the Chavez Government. He even registered to vote! And when he first came to Venezuela he was provided full VIP protocol service at the airport, ordered by none other than the current Minister of the Interior. If Huguito disagreed with this actions, why was Chacin, who also had a second identity a turbulent past and a few million dollars under his name when he left the Ministry, brought back to the position last year?

And it was Chacin that was caught live during the hstage handover calling the FARC guerrillas “comrades” and telling them to keep it up, “we support your fight”. And Chavez did all but cry when he found out that Raul Reues had been killed, calling him a hero and the like.

And then of course, people seem to have forgotten that General Gonzalez Gonzalez fall out of favor with Chavez came about when he told Chavez about the FARC camps within the borders of Venezuela and Chavez did nothing. Did we really need to know more?

The material found in Reyes’ camp simply confirms the details and it has provided data that has led to arrests and captures, so it is absolutely idiotic to even suggest the data was faked by the CIA. If you argue that, you have to suggest that the presence of FARC leader Ivan Marquez at the Miraflores Palace, a man wanted internationally for murder, drug trafficking and terrorists acts, was also a CIA plot, which would then imply Chavez is CIA, as absurd a suggestion as saying FARC has not helped the FARC and has no ties to them.

Meanwhile, the members of the Electoral Board CNE, none of which are lawyers, do not even consult with their legal counsel to rule 4-1 that all decisions by the comptroller finding wrongdoing by an Government official, bans them from running in the regional elections. What a great tool! A person appointed by you single handedly decides there are crimes without a court mediating in the process and bans anyone the Government from running. Never mind that the Constitution says otherwise. But who gives a damn about the Constitution anyway. Mugabe would be proud of them, he never thought of doing something like that!

And then there is Hugo going to Court against his former wife claiming that he is not given the proper rights to be with his daughter. Never mind that he does not pay the alimony established by the Court or that he has had more important things to do on significant days for the same daughter, he has to make the point that his ex-wife can not oppose him. After all, which Court will rule against Chavez in a country where women are always favored in these cases? He is after all, the archetypical irresponsible Venezuelan father.

And as Chavez decreed the nationalization of Sidor, a majority of the country went dark in a clear indication of the inability of the Government to even sustain functioning institutions. But did Chavez get the message? No way, he is not a thinking person just a rabid ideologue.

And the Government sold US$ 4 billion to lower the parallel swap rate, which moved down a bit, but the country’s bonds moved even more as foreign investors are wary of Venezuela’s risk, even with oil at US$ 120. It makes no sense for the country’s bonds to yield close to 11% for the long term issues or even more ridiculous, the 2010 issue which yields close to 9%. Public employees got a 30% minimum salary increase which will cost in the words of the Minister of Planning only 3 percentage points of inflation. Sure, this money will have no impact on the swap exchange rate as more money flows into the economy. But Minister El Troudi is no economist, as it should be, given the disregard for economic principles by the revolution.

And it was no surprise what happened at Venezuela’s largest University, Universidad Central. There were four candidates, only one pro-Government, the winner got about 2,000 votes, while the Chavista candidate, who was born a revolutionary under the name Lenin, got 531 votes, down from about 600 when Minister Merentes ran in 2002. Incredible from a University that cheered Chavez’ victory in 1998.

And Chavez and his Minister of Defense denounced the secessionist movements that want Zulia state to split from Venezuela much like Santa Cruz voted last Sunday. Except that no one has been able to find what the proposal is, who is making it and who supports it. It must be an ultrasecret CIA movement.

Which shows that not much canged in the last three weeks in Venezuela…which is unusual when I travel…

While I like to limit the subject matter of my posts in this blog to Venezuela, on very special occasions I digress, but this post is likely to be one of the biggest departure from the focus of this blog. I just spent three remarkable weeks traveling through China and somehow I feel not only the need to put together my thoughts, but it also seems fitting to tell you about it in view of the large differences between what is going on in Venezuela and what is happening in China from both a political, social and economic point of view.

I visited China twenty-two years ago in 1986 when I went to a conference and I wanted to go back and see the changes that I have read so much about. I have actually followed quite closely a lot of what is happening there, but even then nothing prepared me for what I saw and I am still trying to understand and digest it all. Three weeks barely gives you time to understand a country as complex as China, which is undergoing such a massive transformation in all aspects of its life, but I will try to give you my own biased and superficial description of what I saw in that fascinating country.

China is certainly a quirky country, full of contradictions and contrasts. I visited some major cities like Beijing, Shanghai, Xian, but also visited what may be a tiny city there, the picturesque town of Guilin in the south, as well as numerous towns and cities along the Yangtze river, where I spent four days, including Fulin, Fengdu, Yichang and Chongqing, the last one having a population in its metropolitan area of 32 million people, more than all of Venezuela. Thus, I saw the remarkable metropolis that Shanghai has become, the elegant beauty of Beijing, but I also saw life in rural areas and the transformation caused by the gigantic Three Gorges Dam, which will be completed later this year.

I barely recognized Beijing or Xian, the two cities I visited in 1986. The transformation has been simply staggering. If it were not for the historical monuments, such as Tian An Me or the Forbidden Palace, it would have been hard to say I had been there earlier.

The forces unleashed by Den Xiao Ping on the Chinese economy are remarkable. From what I understood, there are two features that dominate the new China: the conversion to a market economy and the decision to give regions a lot of independence in what they can do and their planning. While certain issues are still decided in Beijing, provinces and municipalities function essentially independently, raising funds through real state “sales” (land is owned by the Government, so they are truly selling only 70 year leases) and taxes and using the money for their own local infrastructure projects.

What is most impacting is how rational and pragmatic the process is. Local authorities hire the best and are not second-guessed by the central Government. The orders are to be fairly pragmatic and empty of ideology. Simply put the people should improve their lives. And market polices dominate the how it is done, as simple as that. Wealth is seeing as something good in the belief that it will trickle down. Differences between top and bottom do remain huge.

The “best” rule through a complex process by which only the best and brightest are able to go to the University (11% of those eligible are accepted in a very competitive system for university posts) and the Communist party attracts the best from those that graduate. But beyond that, the Chinese also have an incredible work ethic. Students have hours that would seem absurd anywhere in the West, starting classes early in the morning and ending late at night. At river town Yichang, the best school in the city starts at 7 AM and ends at 10 PM, as students stay to do their homework. Similarly, students make sure they do their weekend homework early, so as to be able to attend the “special” classes, special activities and training required if you want to get ahead.

While one hears about the large-scale projects taking place in China, what impressed me the most is how infrastructure, both roads and housing has been the priority everywhere in the belief that good infrastructure leads to economic prosperity. It was clearly impressive to see the effort in relocating 1.2 million people along the Yangtze riverbanks, but it was more impressive to see the roads everywhere, the huge high rises, the airports, the power plants, which were everywhere. If in the peak of the housing boom in Spain the crane was jokingly said to have become the national tree, then in China I saw forests of them.

Of course a lot of this infrastructure building is only possible because labor is very cheap, allowing architects and designers to create projects that would be prohibitively expensive anywhere else. We did see housing built in the late eighties and early nineties that looked poorly built, already aging and with problems. But overall quality seems to be improving. Curiously, when you get or buy an apartment, you get no plumbing, air conditioner, appliances, toilets and even wiring. This leads to huge high rises with hundreds of exterior air conditioners, which create rain in the summer as they drip.

But there was also cleanliness and a level go hygiene that was not present 22 years ago. There has been a very direct campaign at the grassroots level to improve habits. The cities are clean, sadly, cleaner than Venezuela now. Running water is everywhere, which was not the case 20 years ago. I am not sure how it was done, other than I heard subsidies in which the Government would help pay certain expenses for improving hoes, but they were always shared with homeowners.

The economy is incredibly free. The Government controls certain things, but is always looking to liberate them. State owned companies go public almost daily, giving managers the mandate to make running them more open and always with profit in mind. The financial system seems a little bit obscure in how it functions, but even in that area the Government is opening up to foreign competition.

There seems to be corruption at the Government level, but there are also examples that while the Government is allowing some officials to make some money, there is a limit to excesses. One of the Shanghai officials that successfully led to the renovation of certain parts of the city is in jail for 16 years, he was just too obvious.

The scale of developments is simply beyond anything I ever expected and I have been a China believer for some time. But it is one thing to read about it an another to see it. How do you explain Shanghai going from 20 to 2,000 skyscrapers in 20 years? Or Beijing going from 85,000 cars in 1986 when I was last there to 3.5 million today? Or that sometime in the next four years China’s per capita income will exceed Venezuela’s, but they do not depend on oil? Or China’s GDP exceeding that of the US before 2030?

Those are massive changes and they have been achieved in a period of time unparalleled by anyone in history.

More importantly, China has now a modern infrastructure, something that the US or Europeans countries can’t boast they have. I thought of that as I crossed Frankfurt’s airport, full of long and somewhat dreary corridors and compared them to Beijingss brand new incredible airport or Shanghais new airport terminals. Even small cities have brand new pretty airports that would put Maiquetia to shame.

Family life is very special. The old live for the young and the one-child policies have emphasized that even more. The whole of family life is centered upon improving the kid’s life, sacrificing everything along the way. People express their love for the young in ways the West does not do. Basically, the sacrifices and efforts end only at death and go as far as leaving apart from the kids. Nothing is too small to guarantee the future of the kids. The children from the one-child only era, have become in their own words “Little Emperors”, pampered to death, but at the same time subjected to incredible pressures to succeed.

In my way, China is still divided in two by class an
d family. By class, because despite the remarkable progress, 60% of the population remains rural and largely poor, while the rest is prosperous and lives in the cities. Similarly, there is a division by age, the young have accepted and embraced the changes and the challenges, while the old still may have misgivings. Life for the old was simple and most things used to be guaranteed. The system was unfair, but everyone understood it. Now too many things are changing, individual imitative is the key, but the fear of uncertainty permeates their thinking.

But neither group questions what is happening. For the old, the great leap forward and the Cultural Revolution were policies they backed and they simply failed. For the young, they were events to be understood and analyzed, but neither group wants to see it from a critical point of view. Both Mao and Ping have an almost deity status, together with Dr. Sun Yat Sen, the founder of the Chinese Republic in 1919. No matter how much I asked, I found little criticism of either of them.

A prosperous and enterprising 74 year old lady living in a town in the Yangtze, who is doing today much better than twenty years ago (she has a new apartment and three stores), skirted gracefully my question as to who her preferred leader was by saying that all of them, whether Mao or Ping, made positive contributions and tried different things for the “people” and while some failed, other succeeded in making things better and that is what is important. I got similar answers everywhere as I tried to get some criticism of Mao, but failed to so.

Of course, the Chinese people have been repressed and controlled in the way they think for a long time and what they have today is simple a continuation of those policies. The state controls the media and all of the news flow. There is guidelines and censorship. Most Chinese only heard of the killing of ethnic Han Chinese in Tibet, but have heard nothing of the killings in reaction to that. Most of them have heard the Government’s story that Tibet has always been part of China, ignoring 700 years of independence up to 1951. Thus, what is big news in the West seems irrelevant and puzzling to most Chinese.

Because in the end the Chinese are extremely nationalistic and proud. To them the Olympics is something, which is not only a priority, but it should have taken place in China long ago, to show the progress their country has made. They feel they were short changed in earlier picks for Olympic cities. Any interference with that has to be politically motivated.

Curiously, the Chinese seem to feel more sympathetic to the US than to Europeans, as the former have never occupied China and even helped the country in the war with the Japanese. The Japanese clearly do not occupy a very favorable status for most Chinese. I learned early in my trip that any praise for anything Japanese would be met with a negative or at least skeptical reaction and I even used it as bait when it seemed obvious that I would extract some sort of reaction.

I did try to probe on freedom of speech issues everywhere and was always met with the same response: “Yes, we have some limitations, but things are improving all the time”. It may be true, but the Government still exerts total control over the media.

Twenty years ago, sex was taboo and public displays of affections were a no, no. Today the young enjoy levels of freedom and openness unheard of before. They joke of an MBA meaning Married But Available and people live together before marrying in the big cities, even if mothers to dominate the kids lives, having they marry before a certain age and demanding prior approval of the perspective partners. Mothers seem to be truly overbearing in China, even after the recent changes.

Freedom of speech limitations are always scary, but there were less scary than twenty years ago. It is illegal to have satellite dishes that receive foreign signals, but some have them. The Internet is indeed censored and you can read the English paper and know it was written by the Government. But the Chinese know more about the world than they used to do and books and magazines are not censored the way they used to be.

Movement is also freer. When I was there in 1986, I could not go everywhere, neither could the Chinese. Today we both can roam essentially everywhere, the magnitude of internal Chinese tourism is staggering and migrations to the cities is such that an estimated 170 million people have move to the cities in the last two decades. How is that for scale?

I was actually more bothered by the issues of sexism, racism and classism more than others. Women are not only discriminated against but even the one-child policies today, give a remarkable strong preference to males over females. Similarly, there is a strong deference and preference paid to the rich and Government officials everywhere. The latter live in special compounds and have all sorts of privileges.

Racism is also present and there are clear policies to deal with it despite words to the contrary. Tibet may be part of China, but the new Tibetan railroad is being used to “export” Han Chinese to the area to dominate the Tibetan population, while the natural resources are used to develop the rest of China.

Finally there is the environment. It can get very bad. Chongqing was absolutely awful! Beijing was not better, except that it rained hard while I was there clearing the air significantly, I can honestly say that I did not see blue skies in the three weeks I was there and was bothered by pollution in at least two cities. The Government seems to be talking a lot about the environment but doing very little. It was on this issue that I heard the most criticism of all, including the negative possible effects of the Three Gorge Dam, which leads me to think that the Government itself may be promoting these protests as an excuse to attack these issues and have the population rally around protecting the environment.

But all in all, it was a very positive impression that I got from China, their slope is positive for most basic issues, including human rights. Here is a Government using all of its resources to improve the well being of its people, while at the same time maximizing foreign investment to help it improve the impact even further. It is a revolution, but based on the individual, rather than the collective (They tried that and failed!) It is a belief that the entrepreneurship of the individual will overwhelm state policies to the point that economic sectors that are liberalized become a free for all as there are no anti-monopoly rules except in sectors still under control by the Government. I never saw so many cell phone stores in my life!

It is indeed a belief in Deng Tsiao Ping’s famous “To be rich is glorious” that will expand and trickle down to the people. Combine that with decades of Government domination with very hard working people and you get an incredible miracle.

At times I worried that those same forces could be turned around and the whole process be reversed in the presence of an external threat. That certainly seems like a real possibility, but at the same time, the young have now lived for twenty years under this new system and have seen the improvements. I am not sure they can be turned off from on day to the next unless the threat was real.

In fact, if I were a Chinese Government official, I would worry about how these young people will react the day things slow down, or if the environment continues to deteriorate or more political freedom is not given to them. In the end, the Government has to continue on the positive slope on all fronts for people to be happy. Media control may one day allow the Government to turn the people in the face of an external threat. But in the long run, it will be internal development that will determine how the Chinese future plays out.
Right now, it looks very good.

Today’s blackout may simply be showing the dark future awaiting us…

Miguel from the Yangtze River

You can’t help but be awed by the growth of China in the last three decades. I was here twenty-two years ago and the changes are simply staggering. You hear and read mostly about the great modern infrastructure projects of China, such as the building of a whole city of modern skyscrapers in the Pudong region of Shanghai, which now has more tall buildings that New York, or the Three Gorge Dam project, where I am today. But the basic infrastructure is what has impressed me more.

In small towns like Guilin in the South, right north of Vietnam, or in Yichang along the Yangtze River, cities you may have never heard of, the highways, schools, buildings and airports have nothing to envy the best and now old infrastructure of Venezuela. In fact, it is us that should envy that infrastructure, each and every one of the airports, for example, was as modern as the Maiquetia airport. And secondary highways near the small cities I mentioned are in better shape and better maintained that Venezuela’s main highway, the Autopista Regional del Centro.

All of this infrastructure requires planning and money. What is perhaps most interesting about the planning part is that in many cases, these highways were the first things to go in, even before housing was built. Of course, by now the Chinese have lots of experience in large scale planning such as the relocating of 1.4 million inhabitants along the Yangtze River or moving a few million people from the old residential areas of Shanghai to new housing.

Which leads me to the initial question of this post: What could you do with US$ 5 billion in Venezuela, if you spent it in infrastructure projects. The question comes up, because that is precisely the amount President Chavez will be spending on buying out the cement companies and steel company Sidor.  It is not a moot question, the nationalization of these well functioning companies is being done at the expense of using the funds in new infrastructure to benefit the population, rather than power grabbing, ideological projects with no added value to the “people”.

Let’s take for example housing. Chavez has been in power nine years and in not one of them has he been able to match the lowest number achieved by the Caldera II administration in any year, despite the much lower income of those lean years.

A small apartment 80 squared meters is sold on Venezuela for Bs. 60 million. This is roughly US$ 28,000 at the official rate of exchange, which is the only one the Government recognizes. Thus, with US$ 5 billion, if you spent it all on housing, you could build 185,000 apartments, which is probably an underestimate, given that the Government would not have to buy the land to build them and I am likely overestimating the cost, since my assumptions give you a cost per square meter 350 dollars per squared meter, which is high for low income housing. But in any case, the Chavez administration has yet to exceed half that number in any given year.

Or take hospitals. I don’t know what a hospital costs, but I know somebody building a hotel In Caracas told me that each room costs US$ 4,500 per square meter, including all costs.  So, suppose we build a 200-bed hospital with 6×4 meter two bedroom rooms. This means that you have to spend some US$ 21.6 million for the rooms. Since it is a hospital and you need equipment like surgery rooms, MRI and the like, I will throw in another US$ 20 million for the rest of the infrastructure or US$ 41.6 million per 200 bed hospital. Which means you could build at least 120 200 bed hospitals with this money. Quite a few for a Government that can’t even maintain the existing ones, let alone having built a single one in nine years. (Even failed Presidential candidate Rosales has built a couple)

I am on a boat in the Yangtze, there is actually an Internet connection, but it is less than modem speed, so I don’t know how much it would cost to build a mile of highway, but maybe some reader can enlighten us.

In any case, the point is that you could do so much with US$ 5 billion for the people. The Chinese with all the quirks of their system that I am still trying to digest have proven it over and over, as I see town after town that has been built from scratch along the shores of this magnificent river. But they have also understood the power of free enterprise and markets and how when you combine the two, everything investment gets magnified for the benefit of the people.

Just the opposite of what Chavez believes in.

But in the end it takes more than money to get things done. You need money, but also management capability and the ability to dream, not dream fantasies of power and grand epic gestures, but real concrete accomplishments for the people.

As I saw the Three Gorges Dam this morning, a US$ 25 billion project, I was reminded that Venezuela has the Guri dam, the fourth largest dam in the world, finished 38 years ago. Guri was conceived, designed and completely built by year 22^nd. of the now much maligned and despised Fourth Republic. At the rate we are going, one day that Republic’s revindication will be absolute.

Chávez has a dilemma: he needs a wife.

Naomi Campbell or Pilar Córdoba won’t do because he needs a Venezuelan wife.

By Venezuelan, I mean really Venezuelan, someone that was born in Venezuela, speaks Venezuelan and looks Venezuelan. She also has to be at least thirty years old and cannot have a second nationality.

It is not me who is saying this, it is the Venezuelan Constitution.

No, the Constitution does not say anything about the President’s wife, but it does say something about who can be the President of Venezuela.

That’s right:  Chávez needs a wife to propose her as the candidate for the Presidency of Venezuela in 2013. That would fix all his problems with the Constitutional Reform.

A wife as a President and him behind her, using all his power as usual, right?

Well, not quite.

The solution is not so straightforward.

The problem for Chávez is that Venezuelan wives end up being …..VENEZUELAN WIVES!

 I sure know, I’ve got one!

Before you stop reading arguing that I am a misogynist and that I shouldn’t use this blog to settle my domestic affairs, let me tell you that I think that Venezuelan women are wonderful, intelligent, competent human beings but they cannot help it: they are genetically programmed to be Venezuelan women.

When you start dating them, they answer “whatever you want, sweetheart” to any question that you may have, they are soft, gentle, understanding and sooo beautiful. They move their long hair, make you little eyes and give you a million dollar smile that takes you to flirting paradise. Then, once they get married, the genetic switch is activated and they transform themselves into “cuaimas” (see translation here)

The problem with cuaimas is that they cannot be tamed. Quite the opposite, they tame you! And if you are not happy with it, they send you to hell and leave you forever. They may or may not have a career, may or may not have kids, may or may not have money, they don’t care: cuaimas have very short tempers and a mind of their own.

So that’s Chávez dilemma: nobody knows how a Venezuelan wife will behave when put in a Presidential seat, but giving the normal behavior of any Venezuelan wife, he surely knows that’s not a very promising situation for him.

He may end up serving her  coffee in the Alo Presidenta.

So, he’d better settle for one of his brothers, or his mom.

….Although his mom also happens to be a Venezuelan wife.

Jorge Arena
Most Distinguished Returning Ghost
and PTG (Proud Tomato Grower).