The Devil's Excrement

 If ever there was a government where there is no separation between political party and the Government it has to be this one. Chavez’ MVR does whatever he says and even party affairs are broadcast live forcing TV broadcasters to transmit these events for free. But then, the same tow-faced Government wants to walk a very fine line, when the Minister of Foreign Relations says that he will not hold a meeting with the Ambassador or denounce it internationally. But at the same time Chavez’ MVR plans to denounce at the OAS the “intromission” by the US Ambassador in Venezuelan Internal Affairs. The truth is that what the Government is preparing itself for, is for the possibility that if the recall referendum is held other countries might want to send international observers. The only way that Chavez may obtain a victory in a recall referendum is if his Bolivarian Circles take to the streets and intimidate people into not voting, then according to the Constitution, Chavez may not be recalled if the number of people voting to recall him is less than the number of those that voted for Chavez in his last election. Much like in Peru’s Fujimori election, the presence of foreign observers may represent the only obstacle for Chavez to make the world believe that he was not recalled.

In the same note, the Minister of Foreign relations says that Venezuela’s democracy is “normal”. Weird concept the Minister has of normalcy in a country where electoral processes have been on hold since January 23d. This has stopped Venezuelans from carrying out the most basic right of a democracy, the right to vote.

Smoke was the only bad thing coming out of the CNE today, as the new Board was sending positive signals. Perhaps the best one was the strong statement y the CNE President on Chavez’ comments on the CNE from Havana. He said (page A-2 of El Nacional by subscription only): “The electoral power is independent and will not be below any other power or influenced by opinions even if they come from the President of the Republic. The decision we will make in the next few hours particularly on referenda, including the recall referenda for the President will be made in autonomous fashion.” Speaking directly to the President Carrasquero added: “Nobody has the power to morally condemn the CNE” in clear reference to Chavez saying in Havana that if the CNE approved the signatures in the current petition, it would be morally disqualified to organize any election.

Meanwhile, the CNE approved today, in unanimous fashion, the new internal regulations. This was a necessary step for the Electoral Board to make any decisions and the fact that it was unanimous was an excellent sign.

Meanwhile, President Hugo Chavez continued demonstrating that he does not understand democratic concepts, when he said in his Sunday address that he had called the President of the CNE to complain about the visit by the US Ambassador to Venezuela to that institution. Clearly, under the separation of powers, Chavez had no right to call the President of the CNE. Chavez called the visit a violation of Venezuela’s sovereignty and asked that the US Government cease its” interventionistic obsession”. Today Robert Noriega, the Subsecretary for the Western hemisphere defended the visit by the US Ambassador saying that” The US refuses to interfere with the internal affairs of Venezuela, but we are not disinterested spectators. Noriega added that Venezuela’s democracy is threatened.

Smoke was the only bad thing coming out of the CNE today, as the new Board was sending positive signals. Perhaps the best one was the strong statement y the CNE President on Chavez’ comments on the CNE from Havana. He said (page A-2 of El Nacional by subscription only): “The electoral power is independent and will not be below any other power or influenced by opinions even if they come from the President of the Republic. The decision we will make in the next few hours particularly on referenda, including the recall referenda for the President will be made in autonomous fashion.” Speaking directly to the President Carrasquero added: “Nobody has the power to morally condemn the CNE” in clear reference to Chavez saying in Havana that if the CNE approved the signatures in the current petition, it would be morally disqualified to organize any election.

Meanwhile, the CNE approved today, in unanimous fashion, the new internal regulations. This was a necessary step for the Electoral Board to make any decisions and the fact that it was unanimous was an excellent sign.

Meanwhile, President Hugo Chavez continued demonstrating that he does not understand democratic concepts, when he said in his Sunday address that he had called the President of the CNE to complain about the visit by the US Ambassador to Venezuela to that institution. Clearly, under the separation of powers, Chavez had no right to call the President of the CNE. Chavez called the visit a violation of Venezuela’s sovereignty and asked that the US Government cease its” interventionistic obsession”. Today Robert Noriega, the Subsecretary for the Western hemisphere defended the visit by the US Ambassador saying that” The US refuses to interfere with the internal affairs of Venezuela, but we are not disinterested spectators. Noriega added that Venezuela’s democracy is threatened.

Two articles with good, if depressing, content on the Venezuelan economy in local newspaper El Universal. First, in its front page editorial entitled “Special Interests” it says:

-In the last four years something very grave was added: the demential growth in internal public debt from 2.3 trillion bolivars in 1998 to 18.4 trillion bolivars today. This cocktail produces an amazing paradox: an economy that collapses by 18.9% in the first quarter, decimating thousands of companies and hundreds of thousands of jobs and families, a drop in the lending portfolio of 35% in real terms, a growth in its expenses and late payments and an exchange control which serves as a financial “corral” and forcefully induces the growth in deposits. However, banks pays less for deposits, increases its public debt portfolio to 11.2 trillion bolivars against only 7.7 trillion in loans, but its earnings jump up 41% to 805 billion bolivars in the first half of the year while paying only 27 billion bolivars in taxes, and continues acquiring Government paper feeding the destructive machinery of a regime which will end in a maxi devaluation.

The numbers and concepts are reinforced inside in an interview with the vocal president of Banco Venezolano de Credito, Oscar Garcia Mendoza, who with his usual sharpness and humor says things like:

-To tell you the truth this is a Government that is a Robin Hood backwards, it takes from the poor to pay interest to the bankers and the rich, but it feels the brazenness need to say that it is a regimen for the needy”

-According to the Ministry of Finance last year interest payments on internal debt were 3.1 trillion bolivars, while expenditures in social security and health only reached 1.5 trillion bolivars.

-A perverse effect ahs been created, there ahs been complicity, camaraderie between the banking system and the Government to place internal debt in these amounts. The terrible thing is that the state does not invest those resources in recovering hospitals, new roads or improve the quality of life, it simply covers current expenditures, generates more corruption and initiates a demagogue policy to stay in power at any price”

-This Government is condemned to not pay or devalue.

-We visited the western part of the country and we verified that the pumps are idle; of thirteen ships six or seven are not working, the companies in the Orinoco belt says PDVSA is not providing them with sufficient chemicals for the mix and transport of the extra heavy crudes, wells are overproducing, and a member of the Central Bank Board says that income is not yet up moth normal levels.

The National Electoral Council has been at the center of attention for the last few months. On Thursday and Friday, inspections by the Attroney General’s office raised the ire of the opposition as two judges even attempted to take away some signatures from the consultative referendum which never took place (The judges have been denounced in the Supreme Court for exceeding their powers). On Friday, in an intriguing turn of events, the National Guard actually blocked the inspection attempt, while another Court did a visual inspection at the request of a Deputy from one of the parties which backs Hugo Chavez. Today, the tension continued or intensified as there was a fire at the building where the Electoral Board is, raising eyebrows among those that do not believe in coincidences (including me). Now, it may be  fortuitus, but you have to remember that most buildings here are made of brick and fires are much less common than in the US. Moreover, the clouds of smoke were huge and a couple of dozen members of Chavez’ “Bolivarian Circles” were there protesting from the moment the TV stations started broadcasting the fire. Reportedly, it was an electrical fire caused by a short-circuit, but the event makes everyone very uneasy. You can read the news about the fire here in English, or here and here in Spanish.

Two articles today in El Nacional (page A 20, by subscription only) and El Universal page 1-22 on international reports on PDVSA and the country’s difficulties with oil production.

The one in El Universal focuses on the report by the EIA (Energy Information Administration) which says that PDVSA’s exports are down by 25% so far this year in dollar terms.

The one in El Nacional has some interesting numbers and is base on reports by the IDB (International Development Bank) and CAF (Andean Corporation for Development). CAF projects that if the company does not invest US$ 4 to 5 billion to recover production, it will have a cash flow shortage that will be up to US$ 11 billion by 2008, this assuming the Government stops drawing dividends from the company which is unlikely to happen. According to an unidentified source at CAF, the only recourse the Government may have is increase the price of gasoline, a highly unpopular move (The price of gas in Venezuela is currently 15 US$ cents a gallon at the parallel market exchange rate.

The IDB report concludes that PDVSA’s own oil production has gone down by 1.2 million of barrels of oil per day since 1999. Total oil production is two hundred thousand barrels of oil less than in 1990 and PDVSA has compensated the drop partially with the operational agreements of the oil opening (much criticized by Chavez) which add half a million barrels per day and the strategic associations of the Orinoco heavy oil belt which contribute 450,000 barrels of oil a day.

These numbers are very scary to me; the only way that the standard of living of people can improve is for there to be economic growth. The private sector is doing terrible and it sounds like PDVSA will do worse going forward. This makes it impossible to expect any improvement in the standard of living unless this course is reversed. Even scarier would be if the price of oil were to fall….

Two articles today in El Nacional (page A 20, by subscription only) and El Universal page 1-22 on international reports on PDVSA and the country’s difficulties with oil production.

The one in El Universal focuses on the report by the EIA (Energy Information Administration) which says that PDVSA’s exports are down by 25% so far this year in dollar terms.

The one in El Nacional has some interesting numbers and is base on reports by the IDB (International Development Bank) and CAF (Andean Corporation for Development). CAF projects that if the company does not invest US$ 4 to 5 billion to recover production, it will have a cash flow shortage that will be up to US$ 11 billion by 2008, this assuming the Government stops drawing dividends from the company which is unlikely to happen. According to an unidentified source at CAF, the only recourse the Government may have is increase the price of gasoline, a highly unpopular move (The price of gas in Venezuela is currently 15 US$ cents a gallon at the parallel market exchange rate.

The IDB report concludes that PDVSA’s own oil production has gone down by 1.2 million of barrels of oil per day since 1999. Total oil production is two hundred thousand barrels of oil less than in 1990 and PDVSA has compensated the drop partially with the operational agreements of the oil opening (much criticized by Chavez) which add half a million barrels per day and the strategic associations of the Orinoco heavy oil belt which contribute 450,000 barrels of oil a day.

These numbers are very scary to me; the only way that the standard of living of people can improve is for there to be economic growth. The private sector is doing terrible and it sounds like PDVSA will do worse going forward. This makes it impossible to expect any improvement in the standard of living unless this course is reversed. Even scarier would be if the price of oil were to fall….

Good article by Juan Raffalli in page 1-17 of El Universal entitled “Falsehoods about the recall referendum”. Some highlights:

–It’s necessary to consider first the requests for recall referenda for regional officials. False. The same regulation that establishes that requests have to be handled in the order in which they are received  states that in the interest of public interest priority may be given to requests that were introduced later. It is obvious that the presidential recall referendum has the highest national interest and it was thus established in the international agreement signed on May 29^th. by both the Government and the opposition.

–Before the recall referendum the national Electoral Commission has to be restructured in the next six months (Chávez dixit). False. The Organic Law of electoral power establishes among its transient articles that the Electoral Board has to adjust itself to the law within six months, but that period is a maximum temporal reference. But nowhere in that law is it established that there can be no electoral events simultaneously. If that were the case, the right to vote would be suspended, which is not possible even in the case of states of exception.

–Special regulations are required for the recall referendum: In any case, it would be regulations for the internal functioning (of the CNE). The Constitution expressly states that no fundamental right, which includes the right to vote, can be limited or suspended due to the lack of regulations. The agreement last May 29^th.  and prior decisions by the Supreme Court give full validity to the Suffrage Law which has articles about recall referenda which are perfectly applicable to the one in question.

–The signatures are fraudulent: It has been said that due to non-essential formalisms one can not sacrifice the right to express or petition, which would attempt against articles 5 and 62 of the Constitution. Moreover, what other requirement could be asked of those that sign the petition. Their blood group, their license plate? Only the people are entitled to initiate calling for a recall referendum according to Article 72 of the Constitution, which is explicitly mentioned in the petition. Could it be that more than two million people have to go to a public notary to certify their signatures? And how were the signatures verified to register in front of the CNE, Chavez’ MVR or to register hundreds of candidates to the Constituent Assembly? In any case, the best thing is that in the end if we were to have to collect the signatures anew, that event will be in itself an anticipated recall act so that for that one that may be recalled the remedy might be worse than the illness.

Good article by Juan Raffalli in page 1-17 of El Universal entitled “Falsehoods about the recall referendum”. Some highlights:

–It’s necessary to consider first the requests for recall referenda for regional officials. False. The same regulation that establishes that requests have to be handled in the order in which they are received  states that in the interest of public interest priority may be given to requests that were introduced later. It is obvious that the presidential recall referendum has the highest national interest and it was thus established in the international agreement signed on May 29^th. by both the Government and the opposition.

–Before the recall referendum the national Electoral Commission has to be restructured in the next six months (Chávez dixit). False. The Organic Law of electoral power establishes among its transient articles that the Electoral Board has to adjust itself to the law within six months, but that period is a maximum temporal reference. But nowhere in that law is it established that there can be no electoral events simultaneously. If that were the case, the right to vote would be suspended, which is not possible even in the case of states of exception.

–Special regulations are required for the recall referendum: In any case, it would be regulations for the internal functioning (of the CNE). The Constitution expressly states that no fundamental right, which includes the right to vote, can be limited or suspended due to the lack of regulations. The agreement last May 29^th.  and prior decisions by the Supreme Court give full validity to the Suffrage Law which has articles about recall referenda which are perfectly applicable to the one in question.

–The signatures are fraudulent: It has been said that due to non-essential formalisms one can not sacrifice the right to express or petition, which would attempt against articles 5 and 62 of the Constitution. Moreover, what other requirement could be asked of those that sign the petition. Their blood group, their license plate? Only the people are entitled to initiate calling for a recall referendum according to Article 72 of the Constitution, which is explicitly mentioned in the petition. Could it be that more than two million people have to go to a public notary to certify their signatures? And how were the signatures verified to register in front of the CNE, Chavez’ MVR or to register hundreds of candidates to the Constituent Assembly? In any case, the best thing is that in the end if we were to have to collect the signatures anew, that event will be in itself an anticipated recall act so that for that one that may be recalled the remedy might be worse than the illness.