VenEconomy: One of the traits of the Hugo Chavez administration is its tendency to confuse imposing its will and terrorizing whoever says it nay with governing and managing a country on the basis of consensus.
For some time now, the President has been conducting a campaign of threatening the bankers, as he has done over these past 12 years with farmers, builders, academia, workers, politicians, and anyone else he feels like. He is no longer satisfied with having the banks struggling to cope with compulsory loan portfolio quotas or the drastic restrictions introduced by the amendment to the Banks and Financial Institutions Act. And it would seem that his latest unilateral decision to pardon the debts of all agricultural producers in areas affected by the heavy rains at the end of 2010 has not sufficed to assuage him either, much less the latest blow that he is about to deal the banks, based on his warning that they had better straighten up and fly right because "I'm going to take out Bs.F.15 million for housing loans (…) on the terms imposed by the government and not by the swindling mafias," when announcing yet another promise to build 150,000 housing units in 2011 at a cost of Bs.F.30 billion.
During the same event, and faced with evidence of the pernicious effects that these latest arbitrary measures will have for the banks, this Wednesday afternoon, the President indulged in an embarrassing fit of arrogance when he threatened to nationalize Banco Provincial, an affiliate of the Spanish Banco Bilbao Viscaya Argentaria (BBVA).
This display of brute force by the President was given during an event on the housing problem, broadcast nationwide by all radio and television stations. After hearing a complaint by a group of people who said they had been affected because Banco Provincial denied them a loan for a housing project in San Jose del Avila, the President asked to talk to the bank's president, Pedro Rodriguez, over the phone. When he got Rodriguez on the line, without allowing anyone to hear the banker's clarifications and answers, and totally ignoring them, Chavez yelled at him, to the astonishment of listeners and viewers, making three more than unfortunate remarks:
"If Banco Provincial, which you preside, is not prepared to comply with presidential laws and decrees, you can start to hand the bank over to me." "Tell me how much it costs. I'm not going to argue with you." And last of all, "It's not for sale, but you know that I can perfectly well expropriate it."
It is not known whether the people making the complaint were in the right or not, much less whether they met the legal requirements for obtaining a mortgage or whether the project is viable or not. It could be that everything is in order and aboveboard. But even if it is not, Banco Provincial will have no other choice but to assume the risk of financing this project or run the greater risk of being expropriated or nationalized.
The big boss has already cracked his dictatorial whip in the belief that he wields unlimited power.
Sunday, January 30, 2011
Friday, January 21, 2011
Sunday 1/23 may be make or break for Venezuela ... eventually, America
Arlen Williams: It could bring a new birth of freedom, or an atrocity worse than Tienanmen Square...
Over this past Christmas season, a hardcore, totalitarian mixture of Marxism and fascism (hence, Marxofascism) has been forced upon a nation in America's hemisphere, a nation of great strategic importance.
This nation is Venezuela, though even a doggedly observant newshound may not have caught a whiff of it.
Even so, this coming Sunday, January 23, Venezuela's courageous citizens need, perhaps desperately, the massively focused attention of Americans and of the entire world. Will the whole world be watching?
If they get that attention, it may mean the Venezuelans' key to freedom and perhaps a turning point in the renewed, worldwide soft war against freedom and sovereignty, by the globalist, Marxofascist complex. Yes Virginia and District of Columbia, there is a vast globalist, Marxist/fascist conspiracy. Just call it "the beast," to use the term the Bible provides for such machinations.
The beast in this case has apparently applied the tentacles and fangs of Cuba, FARC, Iran, and Russia, to come to the aid of Hugo Chavez, after his party lost the overall majority vote in Venezuela's parliamentary elections, September 26, 2010. And it becomes increasingly apparent, this beast includes others, even the American administration of Barack Obama.
"Enabling" dictatorship & classic communist property theft
While the majority voted against Chavez' party, they maintained a majority in their parliament. This vote signaled the potential failure of that governing majority to sustain itself. Their solution was to relinquish authority to Chavez by a very broad enabling act, granting him dictator status.
By Christmas time, the Chavez thugs' rallying cry was "Merry Chavismo," as they busied themselves confiscating farms left and right, especially in the relatively successful, freer market stronghold of the Sur del Lago region. This is a locality very rich in oil and natural gas, also in increasingly precious agriculture and never mind Venezuelan mouths, the top-down tyrannical regimes of the world are hungry for all of the above.
Chavez' ill-fitting excuse, not wasting even a micro-crisis: his government needed to come to the rescue after alleged chaos following heavy rains.
Massive protests followed. Farm machinery was parked on highways, blocking the movement of military confiscators. In one case, thug forces were halted by a ninety-something-year old man, blocking their path. But eventually, for the most part, they accomplished their kleptocratic work, as family and corporate farmers both had their land stolen by Marxist fiat.
As the demonstrations mounted, we are informed, Chavez told farmers that his bureaucrats would review their land rights, if they brought their legal deeds to them. They were stored in a building that was promptly burned. Chavez, not missing a Marxofascist beat, then assented it was arson, but blamed it upon his opposition in the Un Nuevo Tiempo (UNT) party. [link, propaganda: link] This was a move as sensible as blaming the shooting spree of a maniacal fan of Marx and Hitler upon pro-freedom, anti-statist patriots, here in America.
Further aspects and abuses
The overall usurpations, constitutional violations, and sundry tyrannical abuses of the Chavez regime read like a Marxist scouting manual. More than a few of them, oddly enough, remind one of efforts attempted and accomplished a bit more subtly or surreptitiously in America, lately.
*Use of "disaster" to nationalize, control, or destroy private property
*Seizure of private enterprise, including the nationalization of mass media
*Abrogations of power during a lame duck legislative session
*Minimal time allowed to debate major legislation
*Government by executive order
*Internet controls
*Broadcast media controls (Globovision tenuously remains)
*Publicly calling out Globovision, "Enemies of the homeland, particularly those behind the scenes, I will give you a name: Globovision. Greetings gentlemen of Globovision, you should watch where you are going…. I recommend you take a tranquilizer and get into gear, because if not, I am going to do what is necessary."
*Slandering opposition as "defenders of the bourgeoisie," or "defenders of the empire and of its politics of aggression"
*Prohibition of broadcasting material which foments "anxiety amongst the citizenry or that alters the public order"
*Imprisonment of anti-Chavez labor leader, Carlos Ortega, setting an example, for a chilling effect
Chilean historian and Venezuela watcher, Fernando Mires sums it up this way, "In Venezuela, the law is destroyed by the law, the judicial system is destroyed by the judicial system, and the Parliament is destroyed by the Parliament." Coincidences, indeed; funny how a little, loudly quacking duck will waddle the same way a bigger but stealthier one does. Immediately, Jorge Cardinal Urosa Savino and the Roman Catholic Episcopal Council of Venezuela were engaged. They were not on the side of communist totalitarianism.
According to El Universal: Cardinal Urosa Savino said in a statement that Venezuelan President Hugo Chavez and his government are disregarding the Constitution and "want to impose a Socialist-Marxist system in the country to control all sectors. This system is totalitarian and is leading to dictatorship; not to proletarian dictatorship but to dictatorship led by the elite who is ruling the country." He stressed that attempts at leading the country to this system of government opposes to the wishes of the Venezuelan people who already rejected the implementation of a socialist system in previous elections. "The government wants to impose a Marxist regime through unconstitutional laws, as the president has proclaimed," Cardinal Urosa said. He criticized government attempts to "control all production means through gradual monopolization of imports, distribution and marketing of foodstuffs." He said that this position is "in line with the purpose of dismantling the domestic production system. The aim is to make people depend on the government to eat."
The very critical rally this Sunday
Anti-dictatorship activist, Ulf Erlingsson has been documenting the totalitarian doings surrounding Venezuela. Items from his blog have been featured in Gulag Bound and we interviewed him on "Gulag Night," Thursday, January 13. He describes the event as follows.
On the anniversary of when the people of Venezuela threw out the last dictator, January 23 (Sunday) they take to the streets again to protest against dictatorship. There will be sympathy demonstrations in some 30 cities around the world, including Miami. The reason for holding this rally is not only the anniversary, but also the unconstitutional laws that have been implemented to deny any power to non-chavista parties, even in jurisdictions where they actually won the elections. There is no judicial separation of powers (e.g., judge Maria Afiuni is in jail without trial because Chavez didn't like her verdict in a case); there is no legislative separation of powers (the lame duck Congress granted Chavez the right to rule by decree); and there is no local democracy (all state and municipal elected bodies have been replaced by "communes" answerable only to Chavez). Furthermore there is media and internet censorship, and rampant confiscations of private property, both firms and farms. Rather than to use the oil wealth to improve conditions in Venezuela, Chavez is using it to subsidize the dictatorships in Cuba and Belarus, and he is apparently bribing the politicians of Bolivia, Ecuador, Nicaragua, and Honduras, to change also their constitutions to allow for perpetual reelection of the president. Being an ally of Ahmedinejad and Putin, and spending heavily on armaments for a high-technology war, he is clearly setting the stage for a conflict with the United States. The main event is of course in Caracas, from 9:30 to 11:30 AM ET.
Erlingsson also lists locations and times around the world, in which demonstrations will be held. These include, in the United States: Miami, New York, Los Angeles, Boston, and Dallas. In Latin America sites include: Guayaquil, Equador; Santiago, Chile; Sao Paulo, Brazil; Bogota, Columbia; Mexico City; and Buenos Aires, Argentina. In Europe: Madrid and Barcelona, Spain; Frankfurt, Germany; and Vienna, Austria. The signs may look like child's play, but that belies the danger and the courage to be required in Caracas, Sunday. During the aforementioned Gulag Night program, writer and researcher of the communist movement, James Simpson, explained that trustworthy connections of his relate that freedom activists in Venezuela, being rivals of Chavez totalitarianism, have already begun to be "disappeared." In large part due to the potential totalitarian thuggery that may ensue, the non-violent demonstrators are urged to bring cameras and Internet activists that do still have access will be reporting at the Twitter #FreeVE hashtag, as well as posting photos and videos. Some may also tweet using #Venezuela or simply #VE.
"The whole world watching?" -- the whole world of Marxofascist controllers must begin to be outed, using their support of Hugo Chavez, the little thug with the big mouth, as focal point. We start with the following. The American news media, whether liberal, status quo conservative, or in-between, have been ignoring this "huge story" to an astounding degree not seen since the Obama eligibility problem was so oddly squelched, at the time of his 2008 election and its certification. Apparently, media bosses and their political friends of allegiance to the Aspen Institute, Council on Foreign Relations, Trilateral Commission, Bilderbergers, and whatever other Beastbunglers do not wish the Venezuelan liberty movement noised up. Could this be one of the reasons?
Iranian President Mahmoud Ahmadinejad and visiting Venezuelan counterpart, Hugo Chavez, watched as officials from both countries signed 11 agreements promoting cooperation in areas including oil, natural gas, textiles, trade and public housing Among the agreements, Venezuela's state oil company Petroleos de Venezuela SA said the South American country was forming a joint shipping venture with Iran to aid in delivering Venezuelan crude oil to Europe and Asia. It said in a statement that the agreement for a joint venture also would help supply Iran "due to its limited refining capacity."
Lions and tigers and bears do poop in the woods and globalists do favor Marxofascist Europe and Asia -- and their not so little central banks too, Toto. Do you think it odd that Chavez and Ahmadinejad are both calling for a "New World Order," opposed to America's freely enterprising influence? That is in this AP article, too. It is a lot more than just George Soros, Maurice Strong, Rockefellers, Obama and Geithner's parents' employer: the Ford Foundation, the Rothschilds, and a few other "philanthropists" working that agenda. Now, it appears a globalist deal has been cut for these two nations. In a subsequent article, but very shortly, we intend to point out more of the global-Marxofascist alliances and dynamics involved with Chavez' Venezuela. For this moment, understanding their oil trade as these two tyrants' ticket to the New World Order, it becomes much less mysterious that the newly inaugurated Obama was so unsupportive of the 2009 freedom movement in Iran, just as with Venezuela (and Honduras). And understanding this, clearer yet become the Obamunist moves with Deepwater Horizon, George Soros' Petrobras, and their crippling of America's oil industry in the Gulf of Mexico. Bill Ayers' friend, Chavez, up; American lifeblood down. Friend of Farrakhan and New Black Panthers, Ahmadinejad up; friends of freedom around the world, such as Israel, down. [link] Are we keeping score, here at home? On the home front, where we are to defend against "enemies domestic," one needs to pay attention to what the Obama regime is doing and not so much, what comes trippingly off the teleprompter. No, we cannot shoot this beast (in case Marxstream Media Matters gives a read). That would be a horrible thing on numerous levels, but we have to use all the moral tools in the Constitution's kit, plus warily watch here in America, and watch the world. Watch Venezuela, this weekend. And pray -- and tell your neighbors who need to know and would like to pray too, for the true peace of God accountable freedom. It will be Sunday, after all. The lives and essential liberties of all of Venezuela may depend on it. Yours too.
Over this past Christmas season, a hardcore, totalitarian mixture of Marxism and fascism (hence, Marxofascism) has been forced upon a nation in America's hemisphere, a nation of great strategic importance.
This nation is Venezuela, though even a doggedly observant newshound may not have caught a whiff of it.
Even so, this coming Sunday, January 23, Venezuela's courageous citizens need, perhaps desperately, the massively focused attention of Americans and of the entire world. Will the whole world be watching?
If they get that attention, it may mean the Venezuelans' key to freedom and perhaps a turning point in the renewed, worldwide soft war against freedom and sovereignty, by the globalist, Marxofascist complex. Yes Virginia and District of Columbia, there is a vast globalist, Marxist/fascist conspiracy. Just call it "the beast," to use the term the Bible provides for such machinations.
The beast in this case has apparently applied the tentacles and fangs of Cuba, FARC, Iran, and Russia, to come to the aid of Hugo Chavez, after his party lost the overall majority vote in Venezuela's parliamentary elections, September 26, 2010. And it becomes increasingly apparent, this beast includes others, even the American administration of Barack Obama.
"Enabling" dictatorship & classic communist property theft
While the majority voted against Chavez' party, they maintained a majority in their parliament. This vote signaled the potential failure of that governing majority to sustain itself. Their solution was to relinquish authority to Chavez by a very broad enabling act, granting him dictator status.
By Christmas time, the Chavez thugs' rallying cry was "Merry Chavismo," as they busied themselves confiscating farms left and right, especially in the relatively successful, freer market stronghold of the Sur del Lago region. This is a locality very rich in oil and natural gas, also in increasingly precious agriculture and never mind Venezuelan mouths, the top-down tyrannical regimes of the world are hungry for all of the above.
Chavez' ill-fitting excuse, not wasting even a micro-crisis: his government needed to come to the rescue after alleged chaos following heavy rains.
Massive protests followed. Farm machinery was parked on highways, blocking the movement of military confiscators. In one case, thug forces were halted by a ninety-something-year old man, blocking their path. But eventually, for the most part, they accomplished their kleptocratic work, as family and corporate farmers both had their land stolen by Marxist fiat.
As the demonstrations mounted, we are informed, Chavez told farmers that his bureaucrats would review their land rights, if they brought their legal deeds to them. They were stored in a building that was promptly burned. Chavez, not missing a Marxofascist beat, then assented it was arson, but blamed it upon his opposition in the Un Nuevo Tiempo (UNT) party. [link, propaganda: link] This was a move as sensible as blaming the shooting spree of a maniacal fan of Marx and Hitler upon pro-freedom, anti-statist patriots, here in America.
Further aspects and abuses
The overall usurpations, constitutional violations, and sundry tyrannical abuses of the Chavez regime read like a Marxist scouting manual. More than a few of them, oddly enough, remind one of efforts attempted and accomplished a bit more subtly or surreptitiously in America, lately.
*Use of "disaster" to nationalize, control, or destroy private property
*Seizure of private enterprise, including the nationalization of mass media
*Abrogations of power during a lame duck legislative session
*Minimal time allowed to debate major legislation
*Government by executive order
*Internet controls
*Broadcast media controls (Globovision tenuously remains)
*Publicly calling out Globovision, "Enemies of the homeland, particularly those behind the scenes, I will give you a name: Globovision. Greetings gentlemen of Globovision, you should watch where you are going…. I recommend you take a tranquilizer and get into gear, because if not, I am going to do what is necessary."
*Slandering opposition as "defenders of the bourgeoisie," or "defenders of the empire and of its politics of aggression"
*Prohibition of broadcasting material which foments "anxiety amongst the citizenry or that alters the public order"
*Imprisonment of anti-Chavez labor leader, Carlos Ortega, setting an example, for a chilling effect
Chilean historian and Venezuela watcher, Fernando Mires sums it up this way, "In Venezuela, the law is destroyed by the law, the judicial system is destroyed by the judicial system, and the Parliament is destroyed by the Parliament." Coincidences, indeed; funny how a little, loudly quacking duck will waddle the same way a bigger but stealthier one does. Immediately, Jorge Cardinal Urosa Savino and the Roman Catholic Episcopal Council of Venezuela were engaged. They were not on the side of communist totalitarianism.
According to El Universal: Cardinal Urosa Savino said in a statement that Venezuelan President Hugo Chavez and his government are disregarding the Constitution and "want to impose a Socialist-Marxist system in the country to control all sectors. This system is totalitarian and is leading to dictatorship; not to proletarian dictatorship but to dictatorship led by the elite who is ruling the country." He stressed that attempts at leading the country to this system of government opposes to the wishes of the Venezuelan people who already rejected the implementation of a socialist system in previous elections. "The government wants to impose a Marxist regime through unconstitutional laws, as the president has proclaimed," Cardinal Urosa said. He criticized government attempts to "control all production means through gradual monopolization of imports, distribution and marketing of foodstuffs." He said that this position is "in line with the purpose of dismantling the domestic production system. The aim is to make people depend on the government to eat."
The very critical rally this Sunday
Anti-dictatorship activist, Ulf Erlingsson has been documenting the totalitarian doings surrounding Venezuela. Items from his blog have been featured in Gulag Bound and we interviewed him on "Gulag Night," Thursday, January 13. He describes the event as follows.
On the anniversary of when the people of Venezuela threw out the last dictator, January 23 (Sunday) they take to the streets again to protest against dictatorship. There will be sympathy demonstrations in some 30 cities around the world, including Miami. The reason for holding this rally is not only the anniversary, but also the unconstitutional laws that have been implemented to deny any power to non-chavista parties, even in jurisdictions where they actually won the elections. There is no judicial separation of powers (e.g., judge Maria Afiuni is in jail without trial because Chavez didn't like her verdict in a case); there is no legislative separation of powers (the lame duck Congress granted Chavez the right to rule by decree); and there is no local democracy (all state and municipal elected bodies have been replaced by "communes" answerable only to Chavez). Furthermore there is media and internet censorship, and rampant confiscations of private property, both firms and farms. Rather than to use the oil wealth to improve conditions in Venezuela, Chavez is using it to subsidize the dictatorships in Cuba and Belarus, and he is apparently bribing the politicians of Bolivia, Ecuador, Nicaragua, and Honduras, to change also their constitutions to allow for perpetual reelection of the president. Being an ally of Ahmedinejad and Putin, and spending heavily on armaments for a high-technology war, he is clearly setting the stage for a conflict with the United States. The main event is of course in Caracas, from 9:30 to 11:30 AM ET.
Erlingsson also lists locations and times around the world, in which demonstrations will be held. These include, in the United States: Miami, New York, Los Angeles, Boston, and Dallas. In Latin America sites include: Guayaquil, Equador; Santiago, Chile; Sao Paulo, Brazil; Bogota, Columbia; Mexico City; and Buenos Aires, Argentina. In Europe: Madrid and Barcelona, Spain; Frankfurt, Germany; and Vienna, Austria. The signs may look like child's play, but that belies the danger and the courage to be required in Caracas, Sunday. During the aforementioned Gulag Night program, writer and researcher of the communist movement, James Simpson, explained that trustworthy connections of his relate that freedom activists in Venezuela, being rivals of Chavez totalitarianism, have already begun to be "disappeared." In large part due to the potential totalitarian thuggery that may ensue, the non-violent demonstrators are urged to bring cameras and Internet activists that do still have access will be reporting at the Twitter #FreeVE hashtag, as well as posting photos and videos. Some may also tweet using #Venezuela or simply #VE.
"The whole world watching?" -- the whole world of Marxofascist controllers must begin to be outed, using their support of Hugo Chavez, the little thug with the big mouth, as focal point. We start with the following. The American news media, whether liberal, status quo conservative, or in-between, have been ignoring this "huge story" to an astounding degree not seen since the Obama eligibility problem was so oddly squelched, at the time of his 2008 election and its certification. Apparently, media bosses and their political friends of allegiance to the Aspen Institute, Council on Foreign Relations, Trilateral Commission, Bilderbergers, and whatever other Beastbunglers do not wish the Venezuelan liberty movement noised up. Could this be one of the reasons?
Iranian President Mahmoud Ahmadinejad and visiting Venezuelan counterpart, Hugo Chavez, watched as officials from both countries signed 11 agreements promoting cooperation in areas including oil, natural gas, textiles, trade and public housing Among the agreements, Venezuela's state oil company Petroleos de Venezuela SA said the South American country was forming a joint shipping venture with Iran to aid in delivering Venezuelan crude oil to Europe and Asia. It said in a statement that the agreement for a joint venture also would help supply Iran "due to its limited refining capacity."
Lions and tigers and bears do poop in the woods and globalists do favor Marxofascist Europe and Asia -- and their not so little central banks too, Toto. Do you think it odd that Chavez and Ahmadinejad are both calling for a "New World Order," opposed to America's freely enterprising influence? That is in this AP article, too. It is a lot more than just George Soros, Maurice Strong, Rockefellers, Obama and Geithner's parents' employer: the Ford Foundation, the Rothschilds, and a few other "philanthropists" working that agenda. Now, it appears a globalist deal has been cut for these two nations. In a subsequent article, but very shortly, we intend to point out more of the global-Marxofascist alliances and dynamics involved with Chavez' Venezuela. For this moment, understanding their oil trade as these two tyrants' ticket to the New World Order, it becomes much less mysterious that the newly inaugurated Obama was so unsupportive of the 2009 freedom movement in Iran, just as with Venezuela (and Honduras). And understanding this, clearer yet become the Obamunist moves with Deepwater Horizon, George Soros' Petrobras, and their crippling of America's oil industry in the Gulf of Mexico. Bill Ayers' friend, Chavez, up; American lifeblood down. Friend of Farrakhan and New Black Panthers, Ahmadinejad up; friends of freedom around the world, such as Israel, down. [link] Are we keeping score, here at home? On the home front, where we are to defend against "enemies domestic," one needs to pay attention to what the Obama regime is doing and not so much, what comes trippingly off the teleprompter. No, we cannot shoot this beast (in case Marxstream Media Matters gives a read). That would be a horrible thing on numerous levels, but we have to use all the moral tools in the Constitution's kit, plus warily watch here in America, and watch the world. Watch Venezuela, this weekend. And pray -- and tell your neighbors who need to know and would like to pray too, for the true peace of God accountable freedom. It will be Sunday, after all. The lives and essential liberties of all of Venezuela may depend on it. Yours too.
Thursday, January 20, 2011
VenEconomy // One of the iron hands behind the silk gauntlet
VenEconomy: One of the iron hands behind the silk gauntlet thrown down by the President before the opposition benches in the National Assembly last Saturday is more than evident. It consists of the President's proposal to use the special powers granted him under the Enabling Law to set up a Superintendency of Costs and Companies.
Although little is known of the powers this new agency will have, what the President revealed with regard to its objectives is more than alarming. According to him, it will issue measures for regulating and imposing ceilings on companies' profits, which, as he sees it, should not exceed 20%. He did not explain whether this 20% is to be calculated on total sales or on a company's net worth.
Another feature of this Superintendency is that it will only accept the participation of members of communal councils and workers involved in federations having close ties with the government, without taking into account the opinion of workers as a whole or their legitimate representatives, much less employers.
The excuse for this new interventionist advance by the government is what it understands to be the unleashing of a "wave of speculation with the prices of essential goods such as food, medicines, and mass consumption products."
It is clear that the Executive is, once again, refusing to admit that it is its interventionist measures over these 12 long years that have caused shortages of basic goods and the constant rise in their prices.
These measures, as the majority of analysts have warned constantly, have put the productive sector in a straightjacket and gradually strangled it. Among them, we have mobilization waybills, price and foreign exchange controls, inefficiency at ports and customs posts, growing contributions by business to the National Treasury, harassment by inspection agencies, punitive anti-speculation laws, and other laws that allegedly aim to guarantee national sovereignty but hang like a Sword of Damocles over the private sector.
The Executive also chooses to ignore that its property confiscation measures have reduced the private industrial park and that the state-owned companies that have replaced it have proved to be proverbially unsuccessful.
Apart from that, it continues to be blind to the fact that the devaluations it has been implementing periodically imply increases in costs for commercial and industrial enterprises, and that, by preventing price increases, it is further strangling companies and opening the door to the professional opportunists, more often than not people close to government circles.
It is obvious that this new agency will also have unprecedented powers to interfere in companies' production chain, operations, and administration, strapping them into an even tighter straightjacket, which, far from putting a stop to spiraling inflation, will simply fuel it.
Although little is known of the powers this new agency will have, what the President revealed with regard to its objectives is more than alarming. According to him, it will issue measures for regulating and imposing ceilings on companies' profits, which, as he sees it, should not exceed 20%. He did not explain whether this 20% is to be calculated on total sales or on a company's net worth.
Another feature of this Superintendency is that it will only accept the participation of members of communal councils and workers involved in federations having close ties with the government, without taking into account the opinion of workers as a whole or their legitimate representatives, much less employers.
The excuse for this new interventionist advance by the government is what it understands to be the unleashing of a "wave of speculation with the prices of essential goods such as food, medicines, and mass consumption products."
It is clear that the Executive is, once again, refusing to admit that it is its interventionist measures over these 12 long years that have caused shortages of basic goods and the constant rise in their prices.
These measures, as the majority of analysts have warned constantly, have put the productive sector in a straightjacket and gradually strangled it. Among them, we have mobilization waybills, price and foreign exchange controls, inefficiency at ports and customs posts, growing contributions by business to the National Treasury, harassment by inspection agencies, punitive anti-speculation laws, and other laws that allegedly aim to guarantee national sovereignty but hang like a Sword of Damocles over the private sector.
The Executive also chooses to ignore that its property confiscation measures have reduced the private industrial park and that the state-owned companies that have replaced it have proved to be proverbially unsuccessful.
Apart from that, it continues to be blind to the fact that the devaluations it has been implementing periodically imply increases in costs for commercial and industrial enterprises, and that, by preventing price increases, it is further strangling companies and opening the door to the professional opportunists, more often than not people close to government circles.
It is obvious that this new agency will also have unprecedented powers to interfere in companies' production chain, operations, and administration, strapping them into an even tighter straightjacket, which, far from putting a stop to spiraling inflation, will simply fuel it.
VenEconomy // More like an amnesiac's purely fictitious rambling
VenEconomy: This (last) Saturday, President Hugo Chavez "rendered" the Report & Accounts of his administration in 2010 before the National Assembly, facing, for the first time in five years, a plural audience where, besides the 98 government party (PSUV) deputies, a bench of 67 opposition deputies was present.
Apart from the unusually conciliatory, reasonable, and condescending tone adopted by the President, a number of points that emerged during this marathon ceremony (more than seven hours) are worth highlighting.
The first is the forced absence of two deputies elect, Biaggio Pilieri and Jose Sanchez (Mazuco), both of whom are being held in prison accused of crimes they did not commit, in violation, moreover, of the parliamentary immunity to which they are entitled under the Constitution. Their seats were occupied by their alternates.
The second is a presentation by the President that was a far cry from a rendering of accounts for his performance during the past year and was more like an amnesiac's purely fictitious ramblings.
The nearest Hugo Chavez' presentation got to the true state of affairs was when he mentioned that 2010 had been a "difficult" year on the agricultural front. But even here his "rendering of accounts" fell short, as he only admitted to a 2.3% drop in rice production due to the "long summer," whereas Fedeagro's statistics put the drop at 30.8%.
As for the rest, he merely touched briefly on the issues that are of real interest to the population, such as citizen security, the cost of living, housing, health, and employment, and without assuming any responsibility for the decline in the indicators for each of these areas.
The third was Chavez' attempt to resurrect his democrat's facade by offering to "send back" the Enabling Law that the outgoing National Assembly granted him in December in a manner that was unconstitutional, illegitimate, and even immoral. But let no one be fooled. Watch out, because his offer to rescind the Enabling Law before May 1 was very clear: "I'll send you back the Enabling Law; I've no problem with that. I'm going to work harder and faster."
Those who swallowed the offer of conciliation need to bear in mind the following two items of news.
The first is a clarification given by Vice President Elias Jaua: "We are getting ready to deal more efficiently with any emergencies that may arise; laws to deal with those who are left homeless in order to provide a solution once and for all to the housing problem and to transform the economic and social conditions that generate this situation."
And the other is the decision by the Supreme Tribunal of Justice to abide by a request by the President that it order all judges, "as a matter of urgency" and on a "temporary" basis, to restrict measures of execution that involve the loss of possession or tenancy of a property intended for housing, even when a final sentence has been handed down by a court.
It is clear that they are paving the way and buying time so that Hugo Chavez can legislate against the right to private property.
Apart from the unusually conciliatory, reasonable, and condescending tone adopted by the President, a number of points that emerged during this marathon ceremony (more than seven hours) are worth highlighting.
The first is the forced absence of two deputies elect, Biaggio Pilieri and Jose Sanchez (Mazuco), both of whom are being held in prison accused of crimes they did not commit, in violation, moreover, of the parliamentary immunity to which they are entitled under the Constitution. Their seats were occupied by their alternates.
The second is a presentation by the President that was a far cry from a rendering of accounts for his performance during the past year and was more like an amnesiac's purely fictitious ramblings.
The nearest Hugo Chavez' presentation got to the true state of affairs was when he mentioned that 2010 had been a "difficult" year on the agricultural front. But even here his "rendering of accounts" fell short, as he only admitted to a 2.3% drop in rice production due to the "long summer," whereas Fedeagro's statistics put the drop at 30.8%.
As for the rest, he merely touched briefly on the issues that are of real interest to the population, such as citizen security, the cost of living, housing, health, and employment, and without assuming any responsibility for the decline in the indicators for each of these areas.
The third was Chavez' attempt to resurrect his democrat's facade by offering to "send back" the Enabling Law that the outgoing National Assembly granted him in December in a manner that was unconstitutional, illegitimate, and even immoral. But let no one be fooled. Watch out, because his offer to rescind the Enabling Law before May 1 was very clear: "I'll send you back the Enabling Law; I've no problem with that. I'm going to work harder and faster."
Those who swallowed the offer of conciliation need to bear in mind the following two items of news.
The first is a clarification given by Vice President Elias Jaua: "We are getting ready to deal more efficiently with any emergencies that may arise; laws to deal with those who are left homeless in order to provide a solution once and for all to the housing problem and to transform the economic and social conditions that generate this situation."
And the other is the decision by the Supreme Tribunal of Justice to abide by a request by the President that it order all judges, "as a matter of urgency" and on a "temporary" basis, to restrict measures of execution that involve the loss of possession or tenancy of a property intended for housing, even when a final sentence has been handed down by a court.
It is clear that they are paving the way and buying time so that Hugo Chavez can legislate against the right to private property.
Sunday, November 14, 2010
AN revs up its engines to consolidate the Castro-communist project
VenEconomy: The National Assembly (AN) has been revving up its engines in order to consolidate the Castro-communist project. Its haste is due to the fact that its absolute power expires in January 2011 thanks to the will of the people who voted against revolutionary hegemony on September 26.
With this last-ditch effort, the redder-than-red parliamentarians will complete the Chavista project's legal network with five laws relating to the People's Power or Branch. Naturally, they will not approve them before mounting a show of taking them out on the street to "consult" with "their people."
These five new laws are the Organic People's Power Act, the People's Public Planning Act, the Communes Act, the Social Comptrollership Act, and the amendment to the Communal Economy Promotion and Development Act.
This package of laws is being camouflaged with the promise of giving people the opportunity to actively participate in the decisions of the State. This is a total fallacy, if account is taken of the fact that all these laws are aligned with the Federal Council of Government Act, a body that comes under the absolute authority of the President of the Republic.
The truth of the matter is that these laws will give another harsh blow to decentralization in order to concentrate all the power in the President's hands. The regional and municipal authorities will be appointed by Chavez at his discretion, and political-territorial policies will also depend on Miraflores.
Equally serious is the fact that it will give another mortal blow to private property. By establishing so-called social property, the government will become the owner of everything and it will be the government that will decide what, where, when, and how to produce.
This Thursday another bill joined the five new laws mentioned above when it was submitted to the plenary session of the National Assembly for its first debate: the Banking Sector Institutions Bill, which contains the same communist poison, in this case bringing the banks into line with the socialist plan.
Then there is the 2011 Budget Bill presented by Jorge Giordani to the National Assembly, which makes the government's intentions quite clear. The Budget Bill proposes handing over 35% of what was formerly distributed through the Intergovernmental Decentralization Fund - FIDES (=15% of VAT revenue) and the Special Economic Allocations Act - LAEE (=25% of oil revenue) to community organizations. Based on an average oil barrel price of $40 -as proposed in the Budget Bill-, this 35% would represent Bs.F.4.6 billion of a total of Bs.F.12.88 billion. Until now, under existing rules, the Bs.F.12.88 billion should be sent in full, directly and without delay, to the regions and municipalities.
Once again, following a defeat, Chavez is pushing ahead with his plan to make Venezuela a country of communes.
With this last-ditch effort, the redder-than-red parliamentarians will complete the Chavista project's legal network with five laws relating to the People's Power or Branch. Naturally, they will not approve them before mounting a show of taking them out on the street to "consult" with "their people."
These five new laws are the Organic People's Power Act, the People's Public Planning Act, the Communes Act, the Social Comptrollership Act, and the amendment to the Communal Economy Promotion and Development Act.
This package of laws is being camouflaged with the promise of giving people the opportunity to actively participate in the decisions of the State. This is a total fallacy, if account is taken of the fact that all these laws are aligned with the Federal Council of Government Act, a body that comes under the absolute authority of the President of the Republic.
The truth of the matter is that these laws will give another harsh blow to decentralization in order to concentrate all the power in the President's hands. The regional and municipal authorities will be appointed by Chavez at his discretion, and political-territorial policies will also depend on Miraflores.
Equally serious is the fact that it will give another mortal blow to private property. By establishing so-called social property, the government will become the owner of everything and it will be the government that will decide what, where, when, and how to produce.
This Thursday another bill joined the five new laws mentioned above when it was submitted to the plenary session of the National Assembly for its first debate: the Banking Sector Institutions Bill, which contains the same communist poison, in this case bringing the banks into line with the socialist plan.
Then there is the 2011 Budget Bill presented by Jorge Giordani to the National Assembly, which makes the government's intentions quite clear. The Budget Bill proposes handing over 35% of what was formerly distributed through the Intergovernmental Decentralization Fund - FIDES (=15% of VAT revenue) and the Special Economic Allocations Act - LAEE (=25% of oil revenue) to community organizations. Based on an average oil barrel price of $40 -as proposed in the Budget Bill-, this 35% would represent Bs.F.4.6 billion of a total of Bs.F.12.88 billion. Until now, under existing rules, the Bs.F.12.88 billion should be sent in full, directly and without delay, to the regions and municipalities.
Once again, following a defeat, Chavez is pushing ahead with his plan to make Venezuela a country of communes.
Tuesday, November 2, 2010
VenEconomy // Even more evident how truly evil Chavez' revolution is
VenEconomy: On October 31, it was made even more evident how truly evil this revolution advocated by Hugo Chavez is.
Until now, there are those who might could have found a degree of rationality or justification in this government's demagogical decisions; and yet others might have attributed to certain confiscatory measures some "benefit" for this or that sector of the population.
The expropriations of Constructoras de Valvulas, Venepal, and Rualca, say, which allegedly were to have given way to social companies where workers had a shareholding, or the de-privatization of SIDOR, which was applauded by the workers because of promises of improved wages and better benefits. Today all these companies are mere shadows of their former selves and the workers are still waiting for just some of the promises to be made good.
Something for which there is no objective, political or ideological reason or justification is the confiscation of Siderurgica del Turbio (Sidetur), a company of the Sivensa Group that manufactures and markets steel and steel products.
In order to justify this confiscation, this Sunday the President accused Sidetur of selling its products at very high prices. That is a lie.
Sidetur is a socially responsible company that abides by the law. The products it manufactures and markets are key inputs for the construction sector whose prices have been regulated since 2006, even though there has been inflation of more than 100% since then.
What benefit will Sidetur in government hands bring to the country? VenEconomy can find not a one. But a cynic might think that Chavez wins by removing from the game a company that has demonstrated that the private sector can, in fact, work with the communities, even better than the government itself.
Nor does the confiscation of six urban developments in Yaracuy, Carabobo, and Miranda or the temporary occupation of eight more developments or the special measures against 19 more announced by the President in his Sunday program this Sunday make any sense whatsoever.
Who benefits or what is gained by confiscating buildings that are already under construction? No one. However, the country loses in terms of investments that will now not be coming and sources of productive employment that it will not have.
Today, Venezuela is a confiscated country where more than 350 private companies have been destroyed and more than 2 million hectares of fertile productive land left fallow or producing less. There is no information about a single case where these properties are producing more or at lower cost, are creating more jobs or generating better benefits for their workers.
In conclusion, Venezuela is a country where those who are governing it destroy simply for destruction's sake in the interests of a communist revolution that the majority of Venezuelans don't want.
Until now, there are those who might could have found a degree of rationality or justification in this government's demagogical decisions; and yet others might have attributed to certain confiscatory measures some "benefit" for this or that sector of the population.
The expropriations of Constructoras de Valvulas, Venepal, and Rualca, say, which allegedly were to have given way to social companies where workers had a shareholding, or the de-privatization of SIDOR, which was applauded by the workers because of promises of improved wages and better benefits. Today all these companies are mere shadows of their former selves and the workers are still waiting for just some of the promises to be made good.
Something for which there is no objective, political or ideological reason or justification is the confiscation of Siderurgica del Turbio (Sidetur), a company of the Sivensa Group that manufactures and markets steel and steel products.
In order to justify this confiscation, this Sunday the President accused Sidetur of selling its products at very high prices. That is a lie.
Sidetur is a socially responsible company that abides by the law. The products it manufactures and markets are key inputs for the construction sector whose prices have been regulated since 2006, even though there has been inflation of more than 100% since then.
What benefit will Sidetur in government hands bring to the country? VenEconomy can find not a one. But a cynic might think that Chavez wins by removing from the game a company that has demonstrated that the private sector can, in fact, work with the communities, even better than the government itself.
Nor does the confiscation of six urban developments in Yaracuy, Carabobo, and Miranda or the temporary occupation of eight more developments or the special measures against 19 more announced by the President in his Sunday program this Sunday make any sense whatsoever.
Who benefits or what is gained by confiscating buildings that are already under construction? No one. However, the country loses in terms of investments that will now not be coming and sources of productive employment that it will not have.
Today, Venezuela is a confiscated country where more than 350 private companies have been destroyed and more than 2 million hectares of fertile productive land left fallow or producing less. There is no information about a single case where these properties are producing more or at lower cost, are creating more jobs or generating better benefits for their workers.
In conclusion, Venezuela is a country where those who are governing it destroy simply for destruction's sake in the interests of a communist revolution that the majority of Venezuelans don't want.
Tuesday, October 26, 2010
In Our Opinion...
PDVSA on Monday confirmed the sale of US 3 billion of new global 2017s. Considering the current price in the international markets is around 70, this renders an implied FX rate of USD/VEF of 6.15-6.25. This compares to the USD/VEF 5.3 rate that has been prevailing in the SITME market.
In our opinion, this might be the clearest signal yet from the Venezuelan Government that a devaluation of the Venezuelan Bolivar is imminent and that the SITME's days are numbered. Would the Chavez Administration allow PDVSA to participate by selling USD directly onto the SITME platform at an FX sufficiently high to potentially encourage some private supply of USD bonds into the system?
In our opinion, this might be the clearest signal yet from the Venezuelan Government that a devaluation of the Venezuelan Bolivar is imminent and that the SITME's days are numbered. Would the Chavez Administration allow PDVSA to participate by selling USD directly onto the SITME platform at an FX sufficiently high to potentially encourage some private supply of USD bonds into the system?
Wednesday, October 20, 2010
Digging Venezuela out of the mess Chavez has plunged it into...
Veneconomy: PDVSA is offering two new bond issues of US$3 billion each. The first is PetroBono 2013 offered in replacement of PDVSA Bond 2011. This issue comes with a coupon at 8% and matures on November 17, 2011.
The second is PetroBono 2017, the purpose of which is apparently to finance PDVSA's investment projects, including "the social and comprehensive development of the country." However, it is thought that the proceeds from this issue will end up being frittered away to cover the revolution's expenses.
This issue matures in 2015, 2016, and 2017 and comes with a coupon at 8.5%. The bond is denominated in dollars as it is being offered to investors for payment in bolivars at Bs.F 4.30/$.
It is commented that demand for the 2017 issue will be high, and for that reason it could be increased to $4.5 billion.
It is assumed that the vast majority of buyers will resell their bonds on the European market to obtain the foreign currency needed to cover companies' urgent needs, in particular for the purchase of raw materials, servicing debt, and honoring other liabilities.
Added to that there is the $1 billion that will be acquired by the Central Bank to be resold gradually via SITME (System for Foreign Currency Securities Transactions).
Analysts estimate that the 2017 issue could be traded at between 65% and 75% of its face value, which suggests an implicit swap rate of between Bs.F 6/$ and Bs.F 7/$.
Assuming that the bond will be traded at the higher price (75%), it could end up with a yield of 16.5% at maturity. This 16.5% would be the true cost of the issue for PDVSA and the country.
There is no other country in the world that is so badly managed and so broke that it has to pay 16.5% in order to obtain financing or gain access to credit.
This issue may be welcomed by many in the short term, given the tremendous demand for foreign currency in the country as a result of the inflexible exchange controls; but in the short term it will be highly prejudicial for the entire population as, once again, it will permit the government to put off implementing sound policies for digging Venezuela out of the mess Chavez has plunged it into.
The second is PetroBono 2017, the purpose of which is apparently to finance PDVSA's investment projects, including "the social and comprehensive development of the country." However, it is thought that the proceeds from this issue will end up being frittered away to cover the revolution's expenses.
This issue matures in 2015, 2016, and 2017 and comes with a coupon at 8.5%. The bond is denominated in dollars as it is being offered to investors for payment in bolivars at Bs.F 4.30/$.
It is commented that demand for the 2017 issue will be high, and for that reason it could be increased to $4.5 billion.
It is assumed that the vast majority of buyers will resell their bonds on the European market to obtain the foreign currency needed to cover companies' urgent needs, in particular for the purchase of raw materials, servicing debt, and honoring other liabilities.
Added to that there is the $1 billion that will be acquired by the Central Bank to be resold gradually via SITME (System for Foreign Currency Securities Transactions).
Analysts estimate that the 2017 issue could be traded at between 65% and 75% of its face value, which suggests an implicit swap rate of between Bs.F 6/$ and Bs.F 7/$.
Assuming that the bond will be traded at the higher price (75%), it could end up with a yield of 16.5% at maturity. This 16.5% would be the true cost of the issue for PDVSA and the country.
There is no other country in the world that is so badly managed and so broke that it has to pay 16.5% in order to obtain financing or gain access to credit.
This issue may be welcomed by many in the short term, given the tremendous demand for foreign currency in the country as a result of the inflexible exchange controls; but in the short term it will be highly prejudicial for the entire population as, once again, it will permit the government to put off implementing sound policies for digging Venezuela out of the mess Chavez has plunged it into.
Oliver L. Campbell // PDVSA: Financial results -- January/June 2010
Former Petroleos de Venezuela (PDVSA) Finance Coordinator Oliver L Campbell writes: PDVSA has just published its financial results for the first semester of 2010. In its report, the company follows accounting convention and compares the figures with the first semester of the preceding year. However, I have preferred below to make the comparison with the full year 2009 so the reader can follow the trend in the two consecutive periods. It is easy enough to multiply January/June by two and compare it with the previous year.
Notes:
1) These items reflect an increase of 25% in the average export price, a reduction of 3% reduction in oil production and of 9% in export sales in 2010.
2) Companies in the agricultural and food sector have been transferred to other government entities.
3) The cause of the reduction in 2010 is not shown but it may be arise from reduced costs incurred by CITGO, where product demand has fallen, and to the translation of bolivar costs at the new exchange rate..
4) The reason for the significant fall in these costs is not given but again the new exchange rate applicable to bolivar costs will have had an influence. .
5) 2009 includes a profit made on the sale of dollar denominated bonds in the swap market. The first semester 2010 benefits from an exchange gain when translating a net liability in bolivars into dollars at the new exchange rate.
6) The figure is not available but will be insignificant since CITGO at present is not making much, if any, profit.
7) The increase in gross income arising from higher oil prices has made it possible to increase these contributions.
8) The substantial increase arises because the new exchange rate of Bs 4.30 instead of Bs 2.15 to the dollar has inflated taxable income which is calculated on the bolivar figures.
9) Several authorities believe the true production figure is lower than that reported by PDVSA.
10) The Venezuelan basket of crude and products is at present $75 per barrel, If this price continues, and the export level does not slip, then the government take in 2010 could reach $40 billion.
11) This figure includes a reduction of $1,243 million arising from the translation at the new exchange rate of investments in subsidiaries whose functional currency is the bolivar..
12 The commercial receivables increased from $9,178 million to $13,836 million at the end of June 2010. No explanation has been given.
13)The long-term debt to equity ratio of 29% at the end of June is acceptable.
14) There are reductions in various items: royalties payable, accounts payable to contractors, and compensation payable for aquatic assets expropriated.
I disagree with the external auditors as regards the provision for litigation. The amount has been surprisingly reduced from $2,094 million at the end of 2009 to $1,494 at the end of June 2010 without any explanation. It takes an act of faith to believe what is stated in note 22, "although it is not possible to predict the outcome of these matters, management, based in part on advice of its legal counsel, does not believe that it is probable that losses associated with the proceedings discussed above, that exceed amounts already recognized, will be incurred in amounts that would be material to the Company's financial position or results of operations."
I do not know what management consider "material" but it is quite probable the compensation payable to ConocoPhillips, ExxonMobil and other claimants will exceed $10 billion.
On June 30, 2010, PDVSA transferred its agricultural and food companies to other government bodies. Although " the Company will continue to provide financial support to the activities of PDVAL throughout 2010," it is hoped PDVSA can now concentrate on increasing crude oil production potential rather than on food purchase and distribution which is best left to companies specialized in that area.
Notes:
1) These items reflect an increase of 25% in the average export price, a reduction of 3% reduction in oil production and of 9% in export sales in 2010.
2) Companies in the agricultural and food sector have been transferred to other government entities.
3) The cause of the reduction in 2010 is not shown but it may be arise from reduced costs incurred by CITGO, where product demand has fallen, and to the translation of bolivar costs at the new exchange rate..
4) The reason for the significant fall in these costs is not given but again the new exchange rate applicable to bolivar costs will have had an influence. .
5) 2009 includes a profit made on the sale of dollar denominated bonds in the swap market. The first semester 2010 benefits from an exchange gain when translating a net liability in bolivars into dollars at the new exchange rate.
6) The figure is not available but will be insignificant since CITGO at present is not making much, if any, profit.
7) The increase in gross income arising from higher oil prices has made it possible to increase these contributions.
8) The substantial increase arises because the new exchange rate of Bs 4.30 instead of Bs 2.15 to the dollar has inflated taxable income which is calculated on the bolivar figures.
9) Several authorities believe the true production figure is lower than that reported by PDVSA.
10) The Venezuelan basket of crude and products is at present $75 per barrel, If this price continues, and the export level does not slip, then the government take in 2010 could reach $40 billion.
11) This figure includes a reduction of $1,243 million arising from the translation at the new exchange rate of investments in subsidiaries whose functional currency is the bolivar..
12 The commercial receivables increased from $9,178 million to $13,836 million at the end of June 2010. No explanation has been given.
13)The long-term debt to equity ratio of 29% at the end of June is acceptable.
14) There are reductions in various items: royalties payable, accounts payable to contractors, and compensation payable for aquatic assets expropriated.
I disagree with the external auditors as regards the provision for litigation. The amount has been surprisingly reduced from $2,094 million at the end of 2009 to $1,494 at the end of June 2010 without any explanation. It takes an act of faith to believe what is stated in note 22, "although it is not possible to predict the outcome of these matters, management, based in part on advice of its legal counsel, does not believe that it is probable that losses associated with the proceedings discussed above, that exceed amounts already recognized, will be incurred in amounts that would be material to the Company's financial position or results of operations."
I do not know what management consider "material" but it is quite probable the compensation payable to ConocoPhillips, ExxonMobil and other claimants will exceed $10 billion.
On June 30, 2010, PDVSA transferred its agricultural and food companies to other government bodies. Although " the Company will continue to provide financial support to the activities of PDVAL throughout 2010," it is hoped PDVSA can now concentrate on increasing crude oil production potential rather than on food purchase and distribution which is best left to companies specialized in that area.
Monday, October 18, 2010
VenEconomy // The costs of Venezuela'a Castro-communist Revolution
Venezuela is paying a high price for the imposition of the Castro-communist project.
In the interests of the revolution, the regime has been legislating grotesquely outside the bounds of the Constitution and, resorting to farcical illegality, wiping out private property by dint of "expropriations," which, in fact, is no more than pillage by those who abuse their power in the belief that it is eternal.
These mass "expropriations" of private companies are costing the country dear, not only because this practice has meant the destruction of the domestic productive apparatus, but also because of investments that have not been made. In the first quarter of 2010, direct investment was -US$1.8 billion.
It is proving equally costly in terms of jobs lost, shrinking domestic production, shortages, and inflation caused by the overwhelming and patent managerial incapacity and laxness of the government officials with whom Chavez surrounds himself.
Today not a single erstwhile productive and efficient private company confiscated by the government is the shadow of its former self.
Siderúrgica del Orinoco (SIDOR), just 18 months after being taken over by the State, set its liquid steel production goal for 2010 at 1.6 million mt, 59% less than the 3.9 million mt it produced in 2008. Even the state-owned companies are today are mere relics of what they were 12 years ago.
At PDVSA this deterioration has been more than obvious. Just over a decade ago, the state-owned oil company met with international standards in terms of good management, efficiency, and productivity, comparable with world class companies such as Shell or Exxon. Today, PDVSA only produces 2.9 million b/d (according to official figures), and not the 5 million plus barrels a day it should be producing according to the development plan it had at the start of the century.
Equally serious is the situation of the basic industry companies in Guayana, in particular that of Aluminios del Caroni (Alcasa). According to Alcasa's in-house news sheet, Hoja de Aluminio, the company has an accumulated debt as at July this year of nearly Bs.F.1.40 billion, and its budget for 2011 already has a deficit of Bs.F 1.75 billion, not counting its debt to date, according to an article posted on the web page of the journalist Damian Pratt.
On August 8 this year, Pratt wrote a lapidary open letter to Hugo Chavez on the occasion of his visit to Guayana.
Among other things, he tells Chavez that the instructions he gave in early 2005 to "turn the basic companies into socialist companies" and to "abandon criteria of profitability and productivity" have been followed to the letter, achieving the "feat" of leaving them bankrupt, despite the fact that it was precisely during that period (2005-2008) that aluminum prices reached an all-time high! And, stresses Pratt, "it was savage, vicious statism disguised as socialism that bankrupted them."
The question Pratt (and the entire country) asks Chavez is, "Aren't you and your government going to answer for this disaster?"
In the interests of the revolution, the regime has been legislating grotesquely outside the bounds of the Constitution and, resorting to farcical illegality, wiping out private property by dint of "expropriations," which, in fact, is no more than pillage by those who abuse their power in the belief that it is eternal.
These mass "expropriations" of private companies are costing the country dear, not only because this practice has meant the destruction of the domestic productive apparatus, but also because of investments that have not been made. In the first quarter of 2010, direct investment was -US$1.8 billion.
It is proving equally costly in terms of jobs lost, shrinking domestic production, shortages, and inflation caused by the overwhelming and patent managerial incapacity and laxness of the government officials with whom Chavez surrounds himself.
Today not a single erstwhile productive and efficient private company confiscated by the government is the shadow of its former self.
Siderúrgica del Orinoco (SIDOR), just 18 months after being taken over by the State, set its liquid steel production goal for 2010 at 1.6 million mt, 59% less than the 3.9 million mt it produced in 2008. Even the state-owned companies are today are mere relics of what they were 12 years ago.
At PDVSA this deterioration has been more than obvious. Just over a decade ago, the state-owned oil company met with international standards in terms of good management, efficiency, and productivity, comparable with world class companies such as Shell or Exxon. Today, PDVSA only produces 2.9 million b/d (according to official figures), and not the 5 million plus barrels a day it should be producing according to the development plan it had at the start of the century.
Equally serious is the situation of the basic industry companies in Guayana, in particular that of Aluminios del Caroni (Alcasa). According to Alcasa's in-house news sheet, Hoja de Aluminio, the company has an accumulated debt as at July this year of nearly Bs.F.1.40 billion, and its budget for 2011 already has a deficit of Bs.F 1.75 billion, not counting its debt to date, according to an article posted on the web page of the journalist Damian Pratt.
On August 8 this year, Pratt wrote a lapidary open letter to Hugo Chavez on the occasion of his visit to Guayana.
Among other things, he tells Chavez that the instructions he gave in early 2005 to "turn the basic companies into socialist companies" and to "abandon criteria of profitability and productivity" have been followed to the letter, achieving the "feat" of leaving them bankrupt, despite the fact that it was precisely during that period (2005-2008) that aluminum prices reached an all-time high! And, stresses Pratt, "it was savage, vicious statism disguised as socialism that bankrupted them."
The question Pratt (and the entire country) asks Chavez is, "Aren't you and your government going to answer for this disaster?"
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