The Devil's Excrement

I have been meaning to write about the economy, but between
work, travel and the recent events, it has been hard to sit down and do it. The
Venezuelan economy continues to be dominated by the distortions that
I have described before, except that they are much worse than they were
last time I wrote a long article about it. In September of last year, economic
variables looked much better than they do today. International Reserves were
higher, the deficit was lower, inflation was lower, monetary liquidity was
lower, the parallel rate was lower and Venezuela had a healthy balance of
payments pictures. Thus, the economic outlook has deteriorated, but the
authorities continue to act as if there was no problem In fact, the new
Minister of Finance Rodrigo Cabezas, insists that what is needed is a policy of
increasing Government spending in order to maintain growth, but it is precisely
the high growth of Government spending, which has been the primary driver in
the creation of these distortions. Spending has grown by 25% in real terms for
the last two years, which is simply unsustainable and this has created a wide
variety of distortions in the economy, which will sooner or later lead to a
financial crisis of such proportions, that it will take years to overcome it.

While the Government hailed the growth in first quarter GDP,
which came at 8% over the same quarter of 2007, the numbers are less pretty than
they may look at first sight. First, while the non-oil economy grew at a 10.6%
clip, fueled by high Government spending, the non-oil economy dropped 5.6% due
to lower oil production. Within non-oil sectors, those that grew were propelled
by Government spending and high monetary liquidity with the commerce,
construction and financial sectors growing by over 20% and more worrisome 9 of
the 12 showed slower growth. Unfortunately, we don’t know much about the
agricultural sector, as it is no longer reported by the Central Bank (funny,
no?) individually, but grouped with “others”.

But it was the balance of payments numbers that looked
worrisome, which showed a deficit of US$ 5.21 billion, down from a surplus a
year earlier. The current account surplus, which has been running positive in Venezuela and the rest of Latin
America thanks to the commodities boom, was only US$ 3.6 billion
down 47.7% from the same period in 2006. This was the result of the drop in oil
exports, but also due to the high levels of imports during the first quarter.
Imports were US$ 9.1 billion, a huge number for what is typically the slowest
quarter for imports in the year and up 47$ over the first quarter 2006.

To put the deficit in the balance of payments in
perspective, it is the largest of the last ten years, at a time when oil income
is booming. What this means is that once again, the economy is being run on the
back of the oil cycle and it is simply oil income which is providing growth,
while internal variables continue to deteriorate. Nothing new on the
mishandling of the Venezuelan economy, all previous recent crisis in ‘82, ‘89,
’94 and ‘02 were not that different. 
What is probably different this time around is that the huge imports are
destroying both agricultural and industrial capacity, as local inflation and
fear of controls have limited investment and made local production less
competitive.

In the end, the balance of payment numbers indicate that
devaluation is looming in the horizon, no matter what the Government says. Unfortunately,
the more it is postponed, the larger it will be and the bigger the crisis
facing the country as these adjustments always lead to a contraction of the
economy and it takes time for people to recuperate their purchasing power and
for the economy to settle.

Then, the Ministry of Finance just published expenditures
for the first quarter and during those months, the Government spent US$ 15.2
billion and the deficit was US$ 3.8 billion an remarkable clip for what is
typically the slowest quarter of the year. What is worse is that since then,
the Government has cut the VAT, will cut it again on July 1^st. and
will have to budget some  US$ 3 billion
for the salary increase for public workers announced on May 1^st. Thus,
the revenue/expenses pictures will simply get worse.

The problem is that this time around there may be too many
distortions in the system to make the adjustment a normal one. First of all,
interest rates are deeply negative, which encourages people to spend and go
into debt, creating a potential time bomb for the financial system. But even
worse, in previous crisis, the Government had some way of making and adjustment
but this time around, it has little room for maneuver:

Inflation: May
inflation just came in and the rate continues to accelerate. CPI was 1.7% for
May, giving an accumulated value of 5.9% for the year, ahead of 2006, but this
includes a fairly artificial lowering of the inflation rate, because the Government
simply cut the Value Added Tax rate in March, which gave the rate a one time
kick down which has nothing to do with fundamentals. Even more worrisome, food
inflation is 29.6% and that does not take into account the fact that 30% of the
items under control can’t even be found in the markets, so the price remains
“constant” according to the Central Bank’s methodology.

Inflation is not going down, because of the excess monetary
liquidity and the lower offer of goods as noted in the first quarter report by
the Central Bank. Simply put: Too much money chasing for too few goods. There
is little encouragement to manufacture, if you can import the same product, get
controlled dollars and make the same profit at the end. That is why the
commerce sector is the best one to be in.

But even worse, such high level of inflation is what makes
the decision to devalue so difficult: Imagine adding fuel to the fire, adding
20% devaluation to the currency. It would be terrible for everyone, but would
hurt the poor the most. Unfortunately it is simply inevitable unless oil prices
were suddenly to jump up.

International
Reserves: International Reserves are currently at US$ 24.4 billion, an
incredibly low level, given the strength in oil prices. This is the result of
removing the so called “excess” reserves for the development fund Fonden, together
with trying to fight the high monetary liquidity using a PDVSA bond and buying
the CANTV and Electricidad de Caracas shares. We are told repeatedly that this
should be of no concern, as the Government has lots of money in the development
funds, but I do not expect them to return these to the international reserves
and in any case, Fonden has already committed all but US$ 9.7 billion of its
funds, so the day they are needed they may not be there after all.

While the Minister of Finance has said that he expects
reserves to recover near US$ 30 billion by the end of the year, even if true,
it will not help much given that monetary liquidity is expected to increase by
another 45% by year’s end. And is this huge growth in monetary liquidity that
has been pressuring the currency via the parallel market and the dropping
reserves have also begun to unnerve foreign investors. It is the typical
mismanagement of the oil cycle, where the Government feels invulnerable to any
setback in the oil markets, but it is more vulnerable than ever.

Monetary Liquidity:
The Government seemed to finally realize that the huge growth in monetary
liquidity last year was pressuring the parallel market, which in turn was
pressuring inflation. Thus, it decided to do something and issued first Bono
del SUR II, and later US$ 7.5 billion in PDVSA bonds, a staggering amount for a
private issue. The theory was that this US$ 9 billion (There was US$ 750
million in a dollar linked bond in local currency in the Bono del Sur) would
push the parallel rate lower, by increasing dollar supply to the market and
reducing monetary liquidity. The problem is that despite this huge issuance,
monetary liquidity is only US$ 3 billion below its peak and pressures have not
been reduced. And guess what? After an initial psychological drop the parallel
rate is above Bs. 4,000 once again and not the Bs. 3,000 that Government
experts had predicted.

As we describe below, this becomes worse going forward, as
the amount of issuance in the next few months is limited by the announced
withdrawal from the IMF as well as the fact that the PDVSA bonds are still
being digested by the market.

Parallel Rate:
The parallel rate, which was at Bs. 2,700 last September shot up near Bs. 4.500
early in the year, dropped to Bs. 3,500 when the PDVSA bond was issued, but the
impact was only psychological and the price is now near Bs. 4,100. And it seems
extremely unlikely to drop at this time. There are three factors that influence
this market. Monetary liquidity, psychology and Government intervention.
Monetary liquidity is excessive and unlikely to drop, psychology is very
negative as people worry about Government threats to the private sector and
dropping reserves and recent issuance shows that Government intervention only
has a very brief and temporary effect. Thus, you can expect the parallel rate
to simply drift lower between now and the end of the year. And this, in turn,
will continue to pressure inflation.

Another problem with the parallel rate shooting up is that
arbitrage opportunities become more attractive. When the difference between the
official rate of Bs. 2,150 to the US$ and the parallel rate was Bs.
400, the difference was not too significant for people to find ways to play it.
But today, with the parallel rate at Bs. 4,100, the difference is almost 100%
and it is too interesting to pass up. First of all, everyone that can do it
takes advantage of requesting Internet dollars, which everyone is entitled to
US$ 3,500, at the official rate. I have heard of the existence of outfits that
go around buying the Internet allocations for those that do not have the Bs. To
do it and even the credit card to do it. This seems to be more widespread, as
one hears about it more and more.

Then there is travel. After two and half years of fixed
exchange rate and significant inflation, buying airline tickets at the official
rate of Bs. 2,150 to the US$ is one of the best deals in town, much like cars
subsidized at that rate are such a bargain. Thus people are traveling more and
more and taking advantage of the US$ 5,400 per person everyone is entitled to.
(Of course, only the well to do can afford it!)

Then there is the fact that if you get official dollars for
whatever you sell or make, with the inflation rate running at 20%, people are
actually borrowing to import products and raw materials and bringing two to
three years of stock at the favorable official exchange rate.

And then there is of course, corruption.

Sovereign bonds: For
the last three years the Venezuelan Government has used the issuance of dollar
denominated bond in local currency as a way of relieving some of the pressures
in the economy. The strategy worked for a while, but as shown by the issuance
of the PDVSA bond, the impact of these issues is not what it used to be due the
huge growth in monetary liquidity. But now, with the decision to withdraw from
the IMF, the Government ahs complicated matters by announcing a measure which
most international analysts find illogical due to its consequences.

Basically, Chavez himself made this decision and it was
clear that the full consequences were not known to him or his collaborators.
The main problem is that all of 
Venezuela’s debt was issued with conditions among which was one which if
this happened, 25% of the holders of each bond issued by the country could get
together and ask for the acceleration, the early payment of the bond.

Obviously, if the bond is above 100, you have no interest in
doing this, but if it is below 100, you can make some money by voting to accelerate.
As the Government keeps saying that it will withdraw, investors have been
buying bonds below 100 and going short those above 100. Essentially when you go
short, you borrow the bond from someone else and sell it, in the belief that it
will go down and you can buy it at a lower price later.

Combine this with lower reserves, deteriorating balance of
payments and there has been an important sell off of Venezuelan bonds in the
last two months. On top of that, many investors have been selling Venezuelan bonds
to purchase PDVSA ones, because they have a higher yield and because PDVSA owns
CITGO, which is worth more than the amount of bonds outstanding of PDVSA and
thus CITGO represents a guarantee if the company ever decided to stop making
payments. 

This sell off and volatility in the country’s bonds limit
the ability of the country to place new debt, so, for the time being at least,
the main strategy used by the Government in the past to reduce the distortions
in the economy, will not be available. Even if it were, the large PDVSA issue
and the small impact it had on monetary liquidity and the parallel rate,
demonstrates that the Government is running out of tools to control the
economy.

It is somewhat ironic that by threatening to withdraw from
the multilateral agencies, the Chávez Government has exchanged institutions
that do show some degree of solidarity with countries, for the biggest
investors and speculators on the planet, who are the primary investors in the
country’s debt. These investors could care less about Venezuela and
are always looking to make an extra amount using a variety of complex
strategies.

At the current clip, there is only so much longer that the
country can continue to spend, create monetary liquidity without something
yielding and creating a crisis. The obvious solution would be to slow the
spending rate, but it is clear that this is not being contemplated.
Unfortunately, the longer this continues without any adjustment, the bigger the
crisis that will take place in the end. There is, of course, the perverse
obvious solution, which is simply to devalue. When this type of adjustment
comes, it will be the average Venezuelan that will be hit, inflation will
accelerate, consumer loans will default, imports will become very expensive helping
local industry temporarily, but given the distortions the adjustment may have
to be so large, that its consequences may be simply unpredictable.

While on the picture above left it may seem as if Chavez is explaining how to use Kirchoff’s Laws to simplify electrical circuits to the Foreign Press, he is actually displaying his newest coup theory, the “slow fuse coup” which is currently being carried out by who else…yeap, you got it, the US Government! By contrast, on the right, you have Weil’s simple explanation of the fast sleight of hand that Chavez himself has pulled on our rights and freedoms during the last few years.

And these two videos shows what happens in a Dictatorship when anti-Government students attempt to go to a protest: They are simply blocked from doing it by having the National Guard block the entrance to the toll booth with their own trucks or motorcycles. Please remember that last week, the students were gassed for blocking the roads, which we heard is illegal, unfair, in violation of people’s rights etc. But when the National Guard does it seems to be ok as no Government figure has come out and said anything about it, after all, it would never occur to the students to gas the National Guard. The first video is at Palo Negro (top), the second at Tapatapa (bottom):

A blogger, in English, from within the student movement:

The end of Venezuela as I know it

Dorothy Kronick wrote this excellent article  in the American Prospect (worth the short free registration to read the whole article) on the RCTV shutdown, which contains some very interesting tidbits about it, like the “new” justifications for the end of the concession, such as the fact that the Minister of Communications said that RCTV had the “highest quality bandwidth” of any station and that is why it was singled out.

But for sheer ignorance of democratic principles, fair play, equality, the law and the like, nothing beats this cynical statement by Temir Porras, an adviser to the Ministry of Industry and Commerce. As they say in those ads, simply “priceless”:

Temir Porras, who began working in the Chávez government in 2001 and is
currently an advisor to the minister of industry and commerce, has a
similar view.  “Of course there are political motivations, and I
support that.  A media outlet should not adopt one particular political
line,” he said in an interview. “Venevisión and Televen, for economic
reasons, realizing that Chávez will be around for a long time,
re-accommodated their political line after the coup.  RCTV and
Globovisión didn’t.  They forgot that their existence depends on
Chávez. I am sure that when the Globovisión concession expires, Chávez
will not renew it — we can say that right now.  Unless, of course,
they try to moderate their tone, which would make them look rather
ridiculous.  Essentially, those that collaborate with the government
project will be left in peace — that can be said about media outlets
as much as landowners or other actors.”

Cuban style exploitation by Teodoro Petkoff in Tal Cual

Information coming from Barinas tells of a large numbers of Cuban workers that were hired to accelerate the construction of the soccer stadiums for the upcoming America Cup

Cuban workers are also the only ones working at that mysterious “city”that is being built near Carayaca. Those Cuban workers should be the concern of the local criollo unions.

With the complicity of the Chavez Government they are being subjected to a truly salvage exploitation, of the pre-capitalist savage style, a feudal savage style, which would make you laugh at the neoliberal type. They do not contract the workers; the Cuban state does it from them.

They receive as payment less than the Venezuelan minimum salary and the Cuban Government charges for each worker US$ 600, of which the worker and his family in Cuba, see nothing but US$ 20, in pesos. They are true servants of the master, depending on the feudal lord of the Cuban state. Exploitation, extraction of added value, sneaker than this one, does not exist in any other country n the world.

Venezuelan union leaders, specially those from UNETE, which supports Chavez and has an internationalist duty, because of that which says that the proletariats from the world have to be united, and since they have nothing to lose but their chains, should go and aid their humble Cuban proletariats, subjected to such a savage exploitation. They should do it even as self-defense, because that is the relationship, which “I the Supreme” wants his Government and his party to have with the working class. He has said it even. The unions, that is, the organized working class has to be subordinate to the party. , which now is the same as the Government and the Sate. Chavez does not want unions that represent workers in front of their employers, but he wants them to represent the Government in front of the workers. He wants neither complaints nor collective bargaining agreements.

I remember visiting, many years ago, a workers Assembly at a Cuban company. They complained that they had been requesting the building of a locale for chemical products, because not having it threatened their health. They asked me to say a few words. I said that if Cuban workers could exercise the right to strike, that locale would have been built three years before. There, at that moment the assembly ended. “Thanks to the Venezuelan comrade”

The union leader of the company, by the way, was in the Presidium, together with the General manager, and his voice was not that of one of the workers, but that of management.

That XXth. Century Socialism is the one Chavez wants for his. Unions that are there to watch the interest of the State-employer and not that of the workers.

As an old extreme-left Venezuelan used to say, when referring to the Polish workers of “Solidarity”: “Those are not strikes, because the workers can not strike against themselves.” It was not cynicism, but innocence. Cuban workers, over exploited and mistreated, deserve the solidarity of Venezuelan union members.

Joaquin Villalobos of Salvadorian guerilla fame, wrote this interesting article about Chavez and his revolution, although I do not agree with a few things he says, a lot of them are right on the money and I thought it was worth translating it.

Chavez wants to buy himself a revolution by Joaquin Vilalobos

With a lack of conditions and credentials to make a revolution, the Venezuelan President relies on provocations. The closure of RCTV, his last act of brave arrogance, has reverted against him the process of accumulation of strength and revitalizes an opposition that was demoralized

Normally parents punish their kids banning them from watching TV, however Cubans when their kids behave badly, are forced to watch state TV. Chavez has made a grave error in shutting down a pro-opposition TV station that had been on the air for more than half a century. Like it or not, this was not an attack on the capitalist meditatic power, but a direct hit to the cultural identity of Venezuelans that will have severe implications for the Government.

To pretend to replace soap operas and the entertainment of the poor with pathetic “revolutionary” programming is as grave as leaving them without food.

The starting point of this and other mistakes by Chavez is to believe that he has made a revolution, while all he has done is simply to have won elections and this did not happen because of his accomplishments, but for the errors and arrogance of an opposition that has many jewels and not much popular backing. This helped him get an electoral majority that allowed him to control institutions and change some rules, but it has not given him sufficient correlation to impose a drastic ideological turn like he is pretending.

There has been no revolutionary rupture in Venezuela, like there was in Cuba and Nicaragua, where democracy had no precedent.

In Cuba the change was violent and complete, all of the institutions were founded again and up to today, there is no opposition, nor elections, nor freedom of the press, nor private property.

In Nicaragua the change was equally violent, even if it damaged freedom of the press, elections and private property survived.

Venezuela may have an extreme crisis of polarization or a prolonged period of unrest, but not a revolution. When that happens political violence takes preeminence first as a rebellion and later with a counter-revolution. In Venezuela, political violence continues to be more verbal than real.

Sleeping with the enemy

Forty years of pacific alternation built a democratic culture among Venezuelans that up to now has managed to block political violence. In Venezuela there is a weakened legality, but there is legality. The mistake of the opposition coup in 2002 was precisely to ignore the importance of this. It is not easy to overthrow Governments and it is also not easy to radically and coldly modify the pillars of a preexisting system. A revolutionary rupture creates a situation of great social exaltation that, for better or worse, opens spaces to change many things, including ideological or cultural topics, very sensitive in a society, however, these are the hardest to change.

Ant-capitalist revolutions emerged more from dictatorships than from poverty. In Venezuela there was no dictatorship and poverty was not important in Chavez’ ascent, even if is today to defend him. All revolutions are austere and this is not known by Venezuelans from either the right or the left. Venezuela is neither an industrial, nor an industrious capitalist country, but rentist and consumerist. Chavez is strengthening the economic role of the State redistributing oil income and forming new economic elites via populism, business opportunities and corruption.

All of this is neither new, nor a revolution, nor is it socialism.

Chavez does not have a revolutionary party but a fragmented political structure, composed by a diverse ideological mix. To his right are the military, to his left some intellectuals and below him a multicolor base. To turn that into a party implies to confront a whole bunch of leaders who are accustomed to express their dissent. Chavismo has done something positive in giving power and identity to thousands of Venezuelans that were excluded but its political structure is not cohesive neither by its ideology, nor by its history, but by oil income. Chavez does not have a revolutionary army; on the contrary, the Army has defeated him twice (1992 and 2002). The current complicity of the Army depends on weapons purchases, which are not in preparation for combat but lucrative corruption, and are precisely these privileges that shutdown the path to revolutionary ideas.

The Venezuelan army will not kill nor die for Chavez.

Fidel Castro survived innumerable attempts on his life, Ortega led a triumphant insurrection and Evo Morales jumped from the barricades to the Presidency.

Chavez, on the other hand, sells oil to the Americans, in two occasions has surrendered without fighting and sleeps with an enemy’s army. This pushes him to use provocations that allow him to obtain his revolutionary credentials, at least with an insult of Bush. The attacks strengthen him and his tolerance weakens him. He needs external enemies that help him hide the corruption of his civil servants, the incompetence of his Government, the divisions among his ranks and the insecurity in the streets of the country.

With the closure of RCTV, Chavez is reverting against him the process of accumulations of strengths and is revitalizing a demoralized opposition.

Perhaps Chavez may make changes in Venezuela, but he will never be able to eliminate elections and in these, there are no unmovable majorities, nor eternal alliances, nor insurmountable fraud. The money from oil can help Chavez to do many things, but it will never allow him to buy a revolution.

Well, the Chavez administration must be feeling the heat by now, given the performance of the Deputies of the National Assembly today. The students have by now moved their fight beyond freedom of speech and RCTV to turn it into a discussion of all civilian rights for all Venezuelans and without discrimination. And the message seems to be getting across as the members of the National Assembly held a press conference which was diametrically the opposite of what the Chavista Deputies said last week about the student demonstrators.

As they invited the students to go to the Parliament on Thursday, the Deputies praised them for their ideas and proposals, saying their movement was authentic and will contribute to the discussions. They said they would of course invite them, as this is what they do regularly with Venezuelans from all walks of life (Did they hear anyone on the RCTV shutdown?). It was all niceties, filled with phrases like “Venezuela for all”, “these bright kids”, “authentic” and the like. And most of the words were spoken by none other than Cilia Flores, the wife of the Foreign Minister, who was one of the members of the Cabinet that blasted the students the most last week, calling them preppies, arrogant and manipulated.

Clearly, polls must be telling the Government something that they have changed so much in so little time. Lost in the intensity of the student demonstrations was the fact that at the University of Los Andes, the movement led by Nixon Moreno, the same man that is currently requesting asylum at the Vatican’s Embassy, beat the Chavista group by more than a three to one margin.

The students are definitely mad at the politicians. In press conferences today, they reiterated that they are owed an apology by both the National Assembly members and other members of the Government. They also began talking about the fact that the Chavez Government has placed social rights above civil rights, but has delivered little on social rights, while forgetting the importance of civil rights. Thus, they said discrimination is rampant on the part of the Government and the way they have been treated has shown that. They said they want this to stop and will march and demonstrate until it is stopped.

The Government is looking for a way to neutralize the protest. Initially they tried repressive action, but it backfired as the children of revolutionary officials are part of the protests and Venezuelan police has always been quite abusive of demonstrators so that given them a free rein to control the crowds led to excesses and repressive actions that have affected the image of the Government in Venezuela. A second strategy has been to delay permits, but while this worked well on Friday, did not work on Monday and there may already be problems with tomorrow’s “Universities”march. After not allowing that march today, now the Mayor of the Libertador district is saying he has received no request for tomorrow’s march.

For the Government the problem is critical, after Chavez sailing for the last six months with his whims and wishes, Enabling Bill, nationalizations, secret discussion of Constitutional reform and the like, the student movement represents a significant stumbling block on his path and is suddenly very well organized. The path to indefinite reelection and other reforms of the Constitution, the fight for control of the Universities and even changing laws under the Enabling Bill, will now become a difficult battle for the autocrat.

Even worse, any misstep along the way, like excessive force on demonstrators or a move against a media outlet, could increase international pressures, which while irrelevant at the end of the day for the outcome of the confrontation, seem to matter quite a bit to the Government and thus would like to avoid them.

For now, the students are ready to take things one day at a time, as the Government feels thei heat and the impact of their demonstrations.

And you have to wonder about that little pathetic man, the People’s Ombudsman German Munadarain , whose position in Spanish is called “The People’s Defender”, but who seldom is seen around when it is time to actually defend anyone’s rights. Yesterday he suggested he was actually outraged at the Human Rights Committee of the OAS for having the audacity to request a list of those detained during last week’s demonstrations.

According to Mundarain, the OAS Committe (CIDH), composed by only people with a track record in the defense of human rights, “invaded” its own functions, when it asked for the list of those students detained during last week’s demonstrations. Mundarain hilariously said that he had to protect the honor of reputation of people and even more hilariously he said that those detained were just those that overstepped the law.

Well, first of all, I wonder where Mr. Mundarain was when the same “honor and reputation” as well as the privacy and human rights were violated and invaded by the Chavez administration via the infamous Chavez/Tascon/Maisanta database which not only contained the names and addresses of over four million Venezuelans who signed the recall petition against President Hugo Chavez, but it also had a list of all of Chavez’ “supporters” classified by their participation in the Government’s “misiones” as well as their participation in recall processes against non-Chavista officials. This list was used to discriminate, fire, deny basic Government services and in hiring and contractual decisions. The list was so perverse, that you could select a voting center and click on a button called “Patriots” to identify those that the software classified mathematically as being pro-Chavez. This list was used for two years in blatant fashion and is still in use today by teh Government, even though Chavez himself “ordered” this fascist use of the list to stop, as it had been “enough” in the Dictator’s own words.

And where was Mr. Mundarain when all this happened? How about the honor, reputation and rights of those that were discriminated and identified using this devilish tool of the Chavista Government? He never said anything, investigated anything or even publicly said anything about it.

And if the OAS’ Human Rights Commission is asking for information is because there has been so little of it. First of all, hundreds were detained for over 24 hours and held incommunicado in violation of the country’s laws. Second, many were charged with blocking the streets which in itself is not a crime in Venezuelan law. But more importantly, even today the discrepancies between the numbers given by the Prosecutor’s Office (only 130 detained during last weeks’ demonstrations) and those of Mr. Mundarain’s office (276 people detained during the demonstrations), leave a lot to be desired. Moreover and very curiously, not a single policeman has been charged, despite the fact that there are dozens of pictures showing police officers carrying concealed weapons during the demonstrations, which in itself is a crime, without regards to the violent repression of the demonstrators in many instances as well as the practical news blackout by the official media.

If Mr. Mundarain were doing his job, truly defending the people and not his job, then the CIDH would not have to request any information. Until he is changed or imprisoned, Venezuelans only have the legal intervention of the CIDH of the OAS to defend them, because the People’s Ombudsman has miserably and totally failed his mandate in the last seven years.

Reportes Without Borders (RSF) released its final report on the visit to Venezuela to look into the RCTV case and once againm I found the report expertely written, these guys not only understood the issues but wrote about them once again with extraordinary precision. The report entitled : “Closure of Radio Caracas Television Consolidates Media hegemony” goes right to the point and details why the move was simply political:

“Reporters Without Borders went on a fact-finding trip to Venezuela from 24 to 28 May, meeting with national and foreign journalists, media owners, media specialists, human rights activists and political analysts. It was at RCTV on the day it stopped broadcasting. Its requests for meetings with government officials and representatives of public and pro-government media went unanswered. Their silence was as eloquent as the comments of the people it did meet, and tends to confirm that RCTV’s closure was not just an administrative measure. On the contrary, it was a political move, one that establishes government hegemony over the broadcast media and constitutes a grave danger for editorial pluralism. It also revealed a new aspect of this political system known as “Chavism” – one that could be called media hegemony.”

“Imagine yourself with a TV remote control, zapping between five or six TV stations all showing exactly the same images of the president giving a speech. This bizarre situation is the almost daily lot of Venezuelans. The president’s speeches rarely go on for less than three hours and some go for seven if he is feeling inspired. Far from limiting himself to cutting ribbons at openings, making the occasional formal address to the nation or praising the recipients of awards, Chávez delivers dissertations. “

“The licence did end on 27 May but RCTV could under the law request its renewal. Venevisión, whose licence expired on the same date, succeeded [on 23 May, the same day that the supreme court’s constitutional division rejected RCTV’s appeal] in being able to continue to broadcast for another five years.” What is the reason for this different treatment?

“Let us sum up. Complete control of the state, government and armed forces. No opponents in parliament, as the opposition boycotted the 2005 legislative elections. A ruling party that is virtually the only party. Twenty-two out of twenty-four state governors who are entirely loyal. And soon, a largely neutralised civil society.

By closing RCTV and above all by taking its equipment for Tves, Chávez has tightened his grip on the last bastion that was holding out – the media. “

“As the president of the Bolivarian Republic of Venezuelan decided unilaterally to close RCTV;
Reporters Without Borders intends to refer the case of RCTV to the United Nations Human Rights Council, whose next session will be in Geneva from 11 to 18 June, to the UN special rapporteur for freedom of expression and to the Council of Europe. The press freedom organisation also intends to refer the case to the Inter-American Commission on Human Rights IACHR) and to its special rapporteur for freedom of expression and information. Referring the case to the IACHR obliges the government of the Bolivarian Republic of Venezuela to cooperate with the commission and attend any hearing it convenes.”

It’s certainly nice to know some people dig in and “get it” in contrast with this reporter who in very unethical fashion and even though he claims to have lived in Venezuela, managed to selectively ignore some of the most important facts of the case, such as the fact that there were other stations involved and not a single legal decision has ruled against the  TV station. In fact,  the only legal decision on what happened in 2002, was handed down by Chavez’ hand-picked Supreme Court, when it ruled in the case of the Generals involved in Chavez’ departure, that on that date there was a  “power vacuum” and not a coup.  In fact, it was a Chavez’ Chief of Staff of the Armed Forces, who later became his Minister of Defense, who came on TV and told Venezuela and the world that Chavez had resigned. Without that, none of the events of Chavez departure in 2002 would have occurred. The Chief of Staff was never  asked by the Prosecutor to explain why he did what he did on that fateful day.