Oil Wars

President Hugo Chavez as we all know has instituted a national land reform bill. Incorporated within the regulations that make up the entirety of the land reform bill is the seizure of lands that remain idle or are otherwise unused, producing no benefit for the State. The governement has instituted a policy that allows for landless peasants to claim lands are not used in an effort to better the condition of the rural poor and afford them a worthy existence without having to indenture themselves into fuedal like servitude with no possible expectation of betterment and with no guarantee of subsistency.

The issue of land seizure is contentious at the very least. Certainly no one expects for property or land to be siezed, excepting those who actually work the land and produce value to the land and/or property, for the the benefit of the owner no doubt, but also to the state and its people. Is it unreasonable to expect that the government, facing huge corporations with billions to spare and who own lands within country where land is a valuable resource, and where those corporations let those lands lie fallow waiting for markets to catch up to demands, for the government to assess the condition of the usage of land? Fairness is to be valued in this equation and the Venezuelan government has done just that in asking for negotiations of large landowners prior to seizure:

Chávez invites "large estate holders" to negotiate

President Hugo Chávez Thursday invited "large estate holders to negotiate land holding."

When presenting the results of Vuelvan Caras employment plan, the Venezuelan ruler ensured that his government does not "want to despoil anyone." The measures only intend to redistribute the land in order to favor the have-nots. "Let us negotiate," he insisted, local Unión Radio reported.

Nevertheless, Chávez warned that anyone who opposes this process would be prosecuted to the full extent of the law. He made a call to land owners to reach an agreement. "We are reaching out to you. If you have 20,000 hectares, a house, animals... I don't want to take anything from you. Even though you have no right on the estate, we are willing to let you own a part of it legally."

Meanwhile, unofficial sources said that early on Thursday members of Chávez' military house arrived in La Marqueseña ranch, in southwestern Barinas state. The Venezuelan ruler has reportedly plans to broadcast his weekly radio and TV show "Hello, President!" from this estate, recently taken over by regional authorities and the National Land Institute (INTI).

Call me dumb but this sounds of inclusiveness to me. The plan is known: "talk to me, how can we resolve this matter", Is how this headline grabs me. No doubt others will take portions of it an make of it what they will for obvious reasons. But the truth remains, the government is seeking input on how to ameliorate the situation - if others want to make a cause of the matter, that does not make null the governments honest effort to right a potential grievance before it is highligted as a spite against the government.
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...you don’t have primaries. Last week I mentioned what a tragedy it is for Venezuelan democracy that none of the parties participating in the upcoming legislative elections, including the ruling MVR of President Chavez, are selecting their candidates through primaries. The results are entirely predictable (from Ultimas Noticias):

Eighteen militants of the Fifth Republic Movement (MVR), among them the governor of Trujillo, Gilmer Viloria, were expelled from the party for having become parallel candidates to the candidates of the MVR for the upcoming parliamentary elections of December 4.

So Willian Lara is upset because some jilted MVR members have decided to run on their own. Well, what did they expect? Its one thing to ask the losers of primaries to bow out gracefully, accept their loss, and close ranks and support the party. Its something else entirely to not even allow people compete for these nominations. In my post of last week I made a mistake when I said there were no consequences to not holding primaries. In truth, there is a price to be paid for not allowing internal democracy. This is one manifestation of this.
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Apparently back in 1965 New Orleans as hit by a bad hurricane called Betsy. At that time Lyndon Johnson was president and he made a trip to New Orleans to inspect the damage. Today in the New York Times there was a recounting of that trip.

Here are a couple of excerpts:

The presidential motorcade drove down Canal Street, broken store windows lining both sides, and made several stops. Johnson spoke with bystanders and toured a shelter packed with storm victims. An aide wrote, "Most of the people inside and outside of the building were Negro ... the people all about were bedraggled and homeless ... thirsty and hungry."

At one point, a woman rushed up to the president to tell him that both of her sons had drowned. The next day's New York Times reported, "according to Bill D. Moyers, the presidential press secretary, Mr. Johnson was 'almost overcome.' " He watched the stream of evacuees who had been rescued by boat from the rooftops of their houses and were now on foot, carrying whatever possessions were left.

When another woman asked the president for drinking water, Johnson dispatched a Secret Service agent to make sure it was delivered. An entry in the White House travel diary paints a grim picture: "Calls of 'water - water - water' were resounded over and over again in terribly emotional wails from voices of all ages." The president suggested that local soft drink bottlers (in an era before bottled water was an American staple) make their inventory available.

Sure does seem like not a lot has changed in 40 years. Then again, let me not be too harsh. I don’t think you hear the word “negro” too much anymore.
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Just a quick update on some happenings in Venezuela:

First, some of the military officers who participated in the April 2002 coup against President Chavez sought asylum in Colombia. News reports indicate that they have been turned down by the Colombian government and may wind up back in Venezuela to face the Venezuelan legal system.

There was this sweet little comment about it in the news though:

BOGOTA, Colombia - Former top Venezuelan military officials accused of trying to oust Venezuelan President Hugo Chavez in a 2002 coup are seeking refugee status in Colombia.

Rear Adm. Hector Ramirez, who was named Venezuela's defense minister during the failed two-day coup, is one of nine former or current military officers seeking refuge in Colombia, local media reported Tuesday.

"Unfortunately, we cannot return to our country, precisely due to political persecution," Ramirez said, according to the RCN radio Web site.

So lets see if I understand this correctly. Mr. Ramirez thinks that he is being prosecuted for political reasons. That he helped lead a bloody overthrow of a government wouldn’t have anything to do with it ,would it? Of course not. Such is the thinking and logic of the opposition. I’m sure if he ultimately goes to jail (as Chavez did when he lead a coup) the opposition will immediately add him to their list of “political prisoners”. This is why when you hear any of the anti-Chavez types talking about political prisoners you should take a step back and be careful not to step in the bullshit.

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In what has become a non-stop torrent of good economic news the National Institute of Statistics reported reported today that unemployment in August 2005 was 12.1% which is a reduction from the 14.2% in August of last year. At the same time the number of people employed in the formal sector of the economy rose to 5,645,735 from 5,119,222. An increase of more than 500,000 jobs in the past year. And with the strong growth Venezuela has been experiencing hopefully this very positive trend will continue.

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Lastly, Ultimas Noticias reported today that of the 167 opposition candidates populated for the National Assembly only 14 are women. A little bias there maybe?

This is particularly funny given the oppositions habit of crowing about how women are often at the forefront of their movement. Thats actually partly true. After all, when you have a movement led by such notorious cowards as Antonio Ledezma, Carlos Ortega, Carlos Andres Perez, Gustavo Cisneros, Juan Fernandez among others of course they are going to put the women out front. You don’t think THEY want to risk getting hurt do you. But of course, once things settle down and the opposition is back in power women will go back to their natural place in society – in a kitchen or on a billboard in a skimpy bikini. They know to let the real work of governing be done by men. “Know your place, accept your lot.” That should be the official motto of the opposition.
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The title taken as the Venezuelan answer to Gunboat Diplomacy of yesteryear. Hugo Chavez on his recent visit to New York City to address the General Assembly of the United Nations Gave a profound speech addressing all countries on the take heed of the need of the poor. Where most others pay lip service to issues that may present themselves as convenient, the Venezuelan head of state at the request of NY congressman Jose Serrano visited the South Bronx where he was warmly received. Despite the obvious air of propagandistic showmanship, the effects of Chavez’ visit has a very real affect on how his persona is viewed by the general public with respect to the initiatives he has already instituted.

When I see this kind of performance my first instinct is to think of a young Cassius Clay, loud mouthed, eager and sure. Opponents not to be lulled by rhetoric; The left hook is TRUE and STRONG and will knock an opponent on their ass. Now the great Muhammad Ali was floored too. Parallels to the great ones demise need to be taken in comparison to democratic principals absent in the world of pugilism.

Chavez’ impact on mainstream media is a boon to his persona and/or overall message of helping the poor. To this extent he has offered to provide fuel “directly” to the US poor bypassing costly middlemen. This is a an interesting situation, and for those that follows Venezuelan political dealing’s should not go without considering the particulars on how the federal government views such direct dealings with outside interests opposed to federal liking. For some insight here is a clip of an interview conducted by “Democracy Now”:

JUAN GONZALEZ: Mr. President, welcome. Bien venido a los Estados Unidos. Your democratic revolution has a different aspect to it, in that your rich in oil, and the world badly needs oil. What do you do in Latin America to use oil as a weapon to assist the poor. Can you tell us a little more about what you are offering to the communities of the United States who are also suffering from high oil prices.

PRESIDENT HUGO CHAVEZ: This is the result of our awareness, that only through integration we can advance and we can progress among Latin American countries, breaking the paradigm of capitalism, of free trade, and neo-liberalism. In the year 2000, we started a cooperation program especially with the Caribbean and Central American countries, and some of the South American countries, with the Caracas Energy Accord, and there for the first time in history we included Cuba, because Cuba is considered like a country that is not part the Americas, and we think it is part of the Americas; Jamaica, nicaragua, grenada, many countries.

This mechanism includes the sale of oil and oil by-products with a discount of up to 25 percent. This discount becomes in the end a donation we give these countries, however, when the price of oil, starts increases, in the year 2000 we signed the Caracas Accord and the price at that time was 20, 25 dollars a barrel. When we realized that the prices started to increase and it goes beyond 40 and beyond 50, and I doubt very much the price is going to drop any time soon because this is part of the structural crisis, the world has to face it, it is a reality. There is a drop in the oil reserves, there is an increase in consumption and demand. The refining capacity is low.

The consumerism of the world is unbearable. The world of the U.S. people must come to understand, how this country with 5 percent of the world population only, consumes 25 percent of the oil and the energy of the world. I mean that type of consumption is totally unbearable and this planet cannot stand it any more. When we realized that the price of oil went up beyond 50 dollars, we initiated another cooperation scheme. We have created, therefore, Petrocaribe and we are going to start with small Caribbean and Caricom countries, and the larger Antillas such as Cuba, Jamaica, and Dominican Republic.

So we’re now providing, first we’re ensuring the supply of oil, direct supply of oil from state to state, in order to avoid the speculation of multinationals and traders. They buy gasoline in Venezuela and then they go to a Caribbean country, and they charge double so we are selling the products to the states directly. We are not charging for freight, we assume the cost of freight. But apart from that, this discount is not of 25 percent it goes to 40 percent of the total, and this money will be paid back in 25 years time, with 2 years of grace and 1 percent interest rates. So if you make all of the mathematical calculations, the donation percentage is almost 70 percent because it’s a long term adjusted 1 percent. So what Venezuela’s doing is supplying 200,000 barrels of oil to the Caribbean and other Central American and South American countries such as Paraguay, Uruguay and smaller nations in South America. 200, 000 millions of barrels, if you apply calculations, mathematical calculations by 1.5 percent of our GDP, 1.5 percent of the GDP is devoted to this cooperation. It means we are financing these sister nations that next year will reach 1.7 billion dollars a year, in 10 years is 17 billion dollars. It’s a way for us to share, to share our resources with these countries.

And what about the us population? Well after many meetings with the U.S. citizens, we decided to propose a scheme for poor populations and low-income populations in the us. We’ve seen that poverty in the us is growing everywhere. It’s close to 11 percent poverty according to some estimates and instead of the figures you have to go deeper into it because if you see Katrina, and you saw what’s happened, 100,000 people were abandoned and they are abandoned, and they’re just surviving.

So here we have CITGO, this oil company. We have the CITGO company here in the United States. This is a Venezuelan company, so let’s have a look at the U.S. map the distribution area of CITGO in the U.S. We are present in 14,000 gas stations in the U.S., and here we have a different refineries, asphalt refineries, eight refineries that we have in the U.S., the plants for filling units, the third, refineries, terminals, and so on.

We want to use these infrastructures to help the poor populations. We have made some progress. We have given instructions to the president of CITGO, Felix Rodriguez. We want that up to 10 percent we refine here. We supply every day to the us 1.5 million barrels of oil, crude and product and we refine, here, close to 800,000 barrels a day refined here in the us. So we would like to take 10 percent of what we refine those products and to offer these products in several modalities to the poor populations. And the pilot project will be starting in Chicago we are already operating in Chicago. Well let’s hope that there’s not going to be any obstacle by the government opposed to this project being implemented, but we will be working in those poor populations. We have some allies, local partners and we have a number of communities, and we are going to donate some heating oil, because the winter is close, and for the school transportation to school, for the Mexican neighborhood which is the largest in Chicago, La Villita, is the name of this neighborhood with close to 900,000 inhabitants, and so there are other neighborhoods with Hispanics and Latinos. October, the 14th we’re going to start with these pilot projects with small communities and schools, but there are other pilot projects that will start in November in Boston, and here in New York.

So different modalities, with local authorities, mayors, organized communities, religious groups. So we are very pleased to announce this. And to help just with a drop, and a grain of contribution to help these low-income populations, Blacks or Hispanics or also White population so we’re just starting with this project.

AMY GOODMAN: Venezuelan President Hugo Chavez speaking in his first interview in the United States.

Taking into consideration the obvious benefits afforded by reduced fuel, it comes as no surprise that third world countries would seek a better deal on this valuable commodity. What is surprising is how independent states within countries whose governments are opposed to socialist values, can survive in this atmosphere. But! I think I know why. Economic principals state the where there is a lack in supply the demand will be greater felt. Venezuela with a lions share of the supply in this equation cannot be denied even by its most critical opponents. A testimony to how the Ven. government has a handle on capitalistic market driven commodity trading. Take for example the little island of Puerto Rico, a commonwealth of the United States. In the energy crunch felt by the world, this stepchild of US vestigial imperialism feels the crunch as much if not more so than the average Pepe.


What does this say for the allure of the Bolivarian plan. There is no doubt that we are all brothers as Caribbean’s, Chavez echoed those sentiments with regards to Puerto Rico. Now how will this play out with the federal government? It is true that states have rights to do what they will. For instance Alabama and other red states share a common economic interest in seeing the Cuban embargo end so that they will be free to do business with Cuba on non “cash up front” terms when trying to sell agricultural goods. So then if that sets a precedent then PR doing business with the Ven Gov. should be easy as cake, No? Internal politics will decide that one. But the fact that it is an issue contested within a US territory is significant enough to mention. One can speculate if the outcome is positive, meaning the deal goes through and PR receives the preferential deal other countries receives, what would other states in the union say about that? Would states then seek independent agreements like those offered by the Venezuelan Government to organizations who represent the poor, for themselves for their own purposes? What precedent would that set for the federal gov. to contend with?

What then is Tanker Diplomacy? Does it extend to nations or portions of nations? And what does that say about Venezuelan Foreign Policy - to recognize good solid supply and demand principls as mandated by good old fashioned capitalism? I mean really is it that hard to understand - if you got it and you dont need all of it for yourself what do you do with it?

All the best examples in life, it is said, are learned in kidergarten. Share, and you will make friends.
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Its not easy being an opposition hack these days. All the news and statistics coming out of Venezuela is so overwhelmingly positive that its hard for them to find anything to complain about or negative statistics to harp on. They really have to dig, just to find any little thing to complain about. Such is the revitalization that Venezuela is currently undergoing.

But just when I thought things couldn’t get any better in Venezuela, guess what? They got better. And in way I didn’t really expect.

As I’m sure most readers know Venezuela’s economy is overwhelmingly dependent on the oil industry. Historically, 80% of all Venezuelan exports are petroleum related. While this is to be expected from a country that has such large oil reserves it is not completely healthy. It is the equivalent of having all your eggs in one basket. Such that when oil prices have headed south so has the Venezuelan economy.

To remedy this it has always been the goal successive governments to diversify the Venezuelan economy and in particular its exports. The efforts of the Chavez administration in this respect were always somewhat suspect. Chavez has never seemed to put much emphasis on exports in his speeches or initiatives – he is more focused on “endogenous” production for the local markets. Further, he has followed the unhelpful policy of letting the Venezuelan Bolivar be overvalued compared to other currencies thereby making Venezuelan exports more expensive and less competitive in world markets. So I didn’t expect Chavez to have any more success in this area than any of the previous governments did.

How wrong I was. Yesterday the National Institute of Statistics said that Venezuela , through the first six months of this year, had non-oil exports of $4,663,000,000. If this level of non-oil exports continues Venezuela would easily surpass $8 billion which would be a record. The highest previous level of non-oil exports was $6,992,000,000 in 2002. This is an astounding increase in non-oil exports and is quite surprising given that Venezuela’s currency is still overvalued. All I can say is that with respect to the Venezuelan economy right now it is looking like Chavez can do no wrong.

What are these non-oil exports made up of? Primary steel and aluminum which are produced by the heavy industries in the Guyana regions (BTW, Richard Estes has part 3 of his series on those heavy industries over at American Leftist. Be sure to check it out). They accounted for 38.6% of the exports. Next was minerals at 33.6% followed by chemicals at 10.3% And where did these exports go? Primarily to the U.S. which was the destination for 43% of them followed by Colombia at about 10%.

In any event some very welcome, if surprising, numbers. Hopefully the good times and good numbers will keep rolling.
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This is a little off topic for the blog but I'm sure many readers will be aware that the U.S. has been experiencing problems with its electoral system in recent years. And I'm talking about the actual vote counting, not the fact that the person who gets the most votes may not win. The problems with punch cards not being read properly, butterfly ballots, and computers that just drop votes because their memory system is overwhelmed are but a few of the problems.

To help find a solution the U.S. government formed a independent electoral commision, led by Jimmy Carter and James Baker, to look into possible solutions to these problems. And what is one of the key solutions they came up with? That all computers used for voting should emit paper receipts so that the voter could verify that his/her vote was recorded properly and then these papers would be kept and audited for confirmation of the overall vote tally.

Sounds like a good idea. Wonder where they got the idea from though? You guessed it, Venezuela. Venezuela has largely automated its vote with machines that emit a paper receipt. It was an audit of these receipts that confirmed that the Presidential Recall Referendum results last year were indeed accurate.

So once again, Venezuela is out front, showing the way.

And by the way, in Venezuela the person who gets the most votes actually wins the election. Another inovative idea that the U.S. might want to consider adopting.
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The Venezuelan Constitution, Article 67: All citizens have the right of association for political purposes, through democratic methods of organization, operation and direction. Their governing organs and candidates for offices filled by popular vote, shall be selected by internal elections with participation of their members....

Elections for Venezuela’s National Assembly are right around the corner in December. To that end both the pro and anti Chavez parties have been busy putting together their slates of candidates. The opposition finished putting together their list today and Chavez’s political party, the MVR, did so last week.

Right now I won’t be getting into any kind of discussion of who the candidates are or who I think is likely to win. First, there is something much more fundamental and important to discuss, namely how the candidates were selected. As the above quotation from the Venezuelan Constitution states candidates of political parties are to be chosen by internal elections – ie primaries.

How did the MVR chose its candidates for the A.N.? Simple, President Chavez and some other top leaders of the MVR sat together in a room and decided who would run and who wouldn’t. And no, I’m not being facetious, that is exactly how it was done. This very small group of people sat there and decided for a political party with millions of adherents who their candidates would be. More than twenty current MVR Assemblymen were barred from running again while other people, presumably more to this groups liking, were selected to be candidates. Certainly not very democratic, most definitely not an example of the famed “participatory democracy” and most certainly unconstitutional.

Of course, it should be born in mind that historically almost no candidates of any party in Venezuela have ever been chosen through primaries. All of them, be they from Accion Democratica, COPEI, or M.A.S. were always hand picked by party bosses. The notion of party members being able to vote and decide on who the candidates will be is entirely foreign to the Venezuelan political culture.

I personally can’t think of any examples of party primaries – save one. For the local elections of this past August, the MVR used primaries to select its candidates. This was a huge step forward in terms of militants of any party having a voice. Of course it was much work to organize the primaries. And it was messy. Not all the losers accepted their defeats with grace. And the powers that be might not have necessarily liked who won in all the contests. Nevertheless, it was a superlative example for all of Venezuela of how things should be done. And those of us who support the MVR and Chavez are proud that it is our political tendency who lead the way.

And now we are...right back where we started. Important decisions are made by party bosses while everyone else just gets to watch passively. Why these big steps backwards? I don’t know. I have not heard any rationale or justification for the change. And I certainly can’t think of any. If anything, it is MORE important that the National Assembly candidates be chosen by primaries than the candidates for local councils. After all, which is more important and in which does your average person most desire a say?

Not to mention the irony of all this. In the U.S. you have two large parties, the Democrats and Republicans, which are both widely accepted as being the parties of big business. Yet, all of their candidates are selected via primaries. So the average member of the Democratic or Republican party gets more of a say in what goes on in their party than the members of the “participative” MVR.

And what of the opposition? Would they seize the democratic high road, follow the will of their supporters, and make themselves look good versus the Chavistas in the process by holding primaries? Of course not. Lets remember, the opposition, as the saying goes, never misses an opportunity to miss an opportunity. Their candidate selection consisted of a group of party bosses, media magnates, and wealthy business people sitting around deciding who will be their candidates – i.e. they did things exactly as they have always done them. They couldn’t take the high road an be more democratic than the Chavistas because the bottom line is they are thoroughly arrogant and elitist people who don’t have a democratic bone in their body.

Further, even though Teodoro Petkoff, editor of the opposition newspaper Tal Cual, likes to write editorial after editorial condemning alleged breaches of the Constitution is he likely to say anything about this egregious violation? No. After all he had is own political party once, M.A.S. (Movement to Socialism) under which he served as a congressperson and ran for president. And did he ever get chosen through primaries? Of course not. The last thing some one as wealthy, powerful, and “intellectual” as Petkoff is wants is for the little people to be able to decide who the candidates will be. After all, it was Petkoff’s party and if you don’t like how it’s run you can just go out and form your own party. So it has been in Venezuela since anyone can remember (and for example of this take a look here ). So don’t expect to hear any whining from the opposition about this clear lack of democracy. It is exactly how their leadership likes it.

What are the consequences of all this? Nothing really. After all, save for a glimmer of internal party democracy earlier this year by the MVR this is how things have always been in Venezuela. And the electoral authorities are notoriously lenient on these matters. They could have banned the opposition candidates from taking part in last August’s local elections as none of them were chosen in primaries. But for the sake of being inclusive rather than exclusive they didn’t. And if they were to enforce Article 67 of the Constitution for the upcoming elections they’d have to cancel the elections all together as no one is complying with it. But while there may be no consequences to this nor anything I can do about it nothing changes the huge step backwards it represents. A step backwards for which there is no excuse or defense, not even the highly overused excuse of “other guy is doing the same thing”. I also know exactly where the buck stops when it comes to this huge step backwards – Hugo Rafael Chavez Frias. This is certainly no badge of honor for him. I say this not to condemn him. Rather I say it because we should not look the other way on this simply because Chavez is doing no worse than the opposition does. That is simply not good enough from a person who should always stand head and shoulders above the opposition.
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