Oil Wars

Readers will recall that a couple of months ago the Venezuelan state oil company, PDVSA, released its audited Financial Statements for 2003. The Financial Statement, which can be found here, provided a wealth of information in its 150 pages. Not only did it give very detailed production numbers (which proved the government had been providing correct information all along while the opponents of Chavez had been lying) but it gave everything from how many rigs were in operation, to a description of Venezuela`s different oil fields, to how much the total compensation package was for its top executives.

I took advantage of being in Caracas to go to PDVSA`s headquarters and try to look up some Financial Statements from before the Chavez government came into office. Even just walking in off the street I was granted access to PDVSA`s library without any problems or questions asked. And there I found copies of their financial statements going back for years.

I pulled out the 1998 financial statements and started to look for the information I wanted. I was immediately dismayed. Instead of finding something analogous to the 150 page very detailed report that the current management had prepared I found a skimpy 40 page report which provided very little information at all, and none of the information I was looking for. For example, I was hoping that the 1998 report would give the total compensation paid to the top executives as the current report did. Yet this information wasn´t in the 1998 report at all. I guess the previous management of PDVSA didn´t want the general public to know how much money they were making. Further while the 2003 report provided all sorts of numbers on oil production, such as how much was produced in each region, how much of each type of oil was produced, and how much was exported the 1998 report gave absolutely NO information on oil production.

At this point I became a little peturbed. After all, for years now I have been listeng to the opposition decry the CURRENT government as a block box. Further, we have always been told that the previous management of PDVSA was very thorough, professional, and provided detailed information. Yet looking at this report I realized that wasn´t true at all. The current PDVSA management is providing far more detailed reports and more information then the previous management. And while the opposition often derided PDVSA for being late with its financial reports now I know why they were never late with theirs - they were so skimpy they could probably be thrown together in a couple of days. Even to say the old reports contained 40 pages is an exageration as a good share of that was taken up with pictures. It is very evident that the old PDVSA management provided the information it had to by law - nothing more. While the new PDVSA management willing provides voluminous amounts of information the old management sure seems to have acted as though it had something to hide.

All of this leads to the larger issue of governmental tranparency. While the opposition tries in its international propoganda campeign to say that the Venezuelan government is opaque and deliberately tries to withold information from its citizens nothing could be further from the truth. Not only does the above example show this but so too does the outcome of last weeks elections which were deemed fully transparent by two sets of international observers. So too do the full page advertisements taken out in national newspapers to explain everything from the governments budget to reforms in Venezuelan laws. And in traveling around Venezuela it quickly becomes apparent that even highway overpasses are being put to use to explain to average Venezuelans what exactly their government is doing. Take these examples:



This sign put up by the Venezuelan tax authorities asks `Do you know where your taxes are going?` It then goes on to explain that 2% of the budget goes to fund the court and jail system.



This one tells us that 32% of Venezuela`s budget goes to fund sports, culture, and education.



And this one tells us that 1.85% of the budget goes to fund science and technology.

These signs are all over the place. It is hard to go more than a few miles without running into them. So after having spent some time crisscrossing Venezuela I can tell you I know a lot more about the Venezuelan budget than I do about the United States budget even though that is the country where I pay taxed. I have yet to see any signs in the U.S. along the lines of `10% of the budget goes to bomb into submission countries that George Bush doesn´t like`. Yet while asking your average American how much the U.S. spends on education would probably ellicit nothing but blank stares I would bet most Venezuelan`s could tell precisely how much their government spends on it.

Once again we see that the assertions made by the opposition`s propaganda machine just do not conform to reality. For not only is Venezuela`s government not a black box it is probably fair to say it is setting the worldwide standard for transparency.
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Today I was walking down the Avenida Mexico in western Caracas when I ran across a center for Mission Ribas, which is one of the governments large educational programs. Entering it I was able to talk to several pro-Chavez militants including one who was the regional coordinator for Mission Ribas. In talking to them for a couple of hours one topic came up that for me was fascinating. And that is why more Chavez supporters didn´t show up to vote on Sunday. The response I was given was that a great many of the party´s militants, including the ones I was speaking to, were quite upset about the fact that all the candidates for the pro-Chavez parties were handed picked by the party leadership rather than by the members of the parties via primaries! This led many of them to abstain from get out the vote efforts.

At this, I almost keeled over as this is a problem that I had spoken to before in this blog. Not only is it unethical and undemocratic that candidates be simply named rather than chosen through elections it is also ultimately self-defeating. Just as countries need a democratic political system as a mechanism for the peaceful resolution of conflicts and competing ideas so too do political parties. By not allowing for internal elections parties such as Chavez´s MVR and its allies like PPT risk creating a sense of exclusion amongst their own membership which in turn leads to apathy, demoralization, and splits.

And in fact that is precisely what has happened. The banner headline on todays edition of El Mundo is about ¨Dissident Chavismo¨. In fact a number of pro-Chavez candidates who were not selected as candidates and ran as dissidents actually won. And this despite the morochas which made it hard for smaller parties to be successful. What did these candidates complain about and base their campeigns on? Precisely the fact that there was/is a lack of internal democracy within the pro-Chavez parties which is proving to be very harmful.

This wasn´t always so. In last August´s municipal elections the pro-Chavez candidates had been selected via internal primaries. [please note during all of this that NONE of the opposition parties have chosen any of their leadership or candidates through internal elections]. So why the big step backwards on this issue? I don´t have an answer for that. But I do know that it most definitely a big step backwards and that unless it is rectified soon it bodes ill for the future of the pro-Chavez political forces.

Further, there really is a moral to be drawn from all of this. And that is doing what is what is right rather than what is expediant is not only the morally correct thing to do, in the long run it vastly increases the odds of success. There is no clearer example of this than what has happened with the Venezuelan opposition. Rather than doing what is right by trying to change Venezuela through the democratic process they have consistantly tried to take short cuts to power by trying coups and general strikes. They have been so impatient that they have always been looking for ways to short circuit the democratic process rather than work within it. Not only has this been completely unethical and reprehensible it has also been precisely what has lead to their demise as a force on the Venezuelan political scene.

Chavismo itself needs to look at that experience and draw the right conclusions. Handing picking candidates might have seemed like the best way to get get the best people in the National Assembly but it wasn´t. Rather it served only to alienate their own supporters and deprive the Assembly members of legitimacy within their own parties. Because of the weakness and ineptitude of the opposition this error went unpunished. But Chavismo shouldn´t count on being so fortunate in the future.

Again, doing what is right, not simply what is expedient at the moment is the best course of action not simply because it is what is morally right but also because it is what will be most effective over the long term. There are people within Chavismo who definitely need to internalize that lesson.
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As has been pointed a number of times in this blog Venezuela`s very strong economic performance has led to a boom in automobile sales. In fact, we saw more evidence of that a couple of days ago when El Universal reported that through the end of November automobile sales have totalled 204,349 which is an outstanding by Venezuelan standards. This represents an increase of 73% over last year.

However, there is a downside to this boom in car sales. And that is all these cars have to go some where and right now they are clogging up practically every road and highway in Venezuela. On the intercity highways traffic is oftent backed up for miles behind toll booths. The Francisco Farjardo highway, the main east-west expressway in Caracas which is 5 lanes wide at points often seems more like a parking lot than an expressway. And city streets of Barquisimeto and Caracas are so choked with cars and busses it often takes a half hour just to go a dozen blocks. Just to give you an idea here are some pictures of what I am talking about:



This is mid-day traffic on Baralt Avenue (yes, of the coup fame) in western Caracas









And this is what the regular street traffic in the other side of town, eastern Caracas, looks like. This traffic moves at a crawl and you can walk to places faster than you can drive to them.

Maybe it`s sitting and fuming in all this insane traffic that litteraly drives the opposition crazy? How else can one explain how while the economy booms the voices of eastern Caracas are ever more shrill and irrational?
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Being out of the country I have missed a lot of the good press Venezuela is getting by helping low income Americans with their heating bills. This winter has already gotten off to a cold and snowy start. Further, home heating oil prices have risen sharply. Nevertheless, the U.S. government, frozen in its own indifference, has refused to increase the amount of funding for heating oil for the poor. As is pointed out in this Washington Post article, New Yorkers are greatfull that Venezuela has stepped in to fill the breach. Further, I thought the following was a pretty good rebuttal to the notion of Venezuela`s magnanimity being a political stunt:

Rep. Jose E. Serrano (D-N.Y.), who brokered the oil deal, brushed aside suggestions that Chavez was playing petro politics.

"To those who say this is to score political points," he told a shivering crowd when the first oil arrived, "I invite any American corporation that wants to score points with my community to start this afternoon."

Yup, the Federal government and big corporations are welcome to come to New York and play politics anytime. Actually, the sooner the better.
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Here are the two best posters I have seen in Venezuela so far:



This one shows Carlos Ortega, a key opposition leader who was instramental in leading both the April 2002 coup and the ill-fated oil strike of 02-03. The government sought his arrest for sedition and later captured in gambling him, of all places, a bingo parlor. The caption reads: Yes Mr Bush, its Carlos Ortega from the resistance, fighting against this regime. I need more dollars.




This is a poster I saw at the Central Univesity of Venezuela, apparently for a student campeign. However, its message seemed more than anything to very succinctly describe what the opposition did last Sunday. It reads: We have kept a silence which very much resembles complete stupidity.
Yes, my opposition friends, you did indeed. You did indeed.
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It would appear that the Venezuelan opposition is dead and buried. Their last hope was that the election observers from the European Union and the O.A.S. wouldn´t validate the result. As per the prelimary result released by the E.U. they aren´t going to get their wish.

The report released by the E.U. was critical of the Venezuelan government and electoral authorities in a number of regards:

1) using public funding to help the pro-Chavez campeign

2) low public confidence in the electoral authorities (CNE) based on inappropriate use of lists of people signing petition against the government to punish people.

3) using public resources (public transport, etc.) to help voter turnout.

4) government controlled media being very biased in favor of pro-Chavez candidates (they did note that the private media was very biased against Chavez but argued that government owned media has a greater responsibility to be objective.)

5) the actual process of voting was overly complicated and many people could not do it without the assistance of polling station workers.

6) government functionaries and office holders openly campeigned which is a violation of Venezuelan law.


All of that said though the observers found that the actual carrying out of the vote was very good, met the highest international standards and the final results accurately reflected the vote. They further found that the CNE was accomidating towards opposition parties demands and that they complied with and met all the conditions of the EU observers. Here are some key quotes in this regard:

In the context of lack of confidence and extreme polarization, the EU recognizes the efforts made by the CNE to increase confidence of the political parties in the process. Among those efforts was the auditing of various elements of the automated voting process such as the programing of the voting machins, the fingerprint reading machines, and the vote totalling systems, and the increasing of the vote counting audit to 45% of the votes.

....................................................

The discovery of a fault with the promming of the voting machines, with the resulting remote possibility of violating the secrecy of the vote, was handled by the CNE in an oppertune and adquate manner. The possibility of violating the secrecy of the vote was examined by the EU experts, who considered it remote, and certainly more complicated that in conventional elections. The violating of voting secrecy only could have occured if the sequence of the identity of the voters and the sequence of the actual votes could be reconstructed. Such a reconstruction would have implied that a qualified user had access to three different sources of information. Those sources would be the memory of the voting machines, the memory of the fingerprint reading machines, and the complete key to the code for encryption (which was devided between the political parties and the CNE) used by the system to protect the voting data. The elmination of the fingerprint reading machines was an important measure to re-establish confidence of the political parties. As a consequence it was surprising to the EU that the principal political parties of the opposition withdrew from the elections without giving new reasons.

..............................................................

The use of the electoral resource known as the morochas, which permits the duplication of paties to avoid the subtraction of the seats obtained from the district voting from the list those obtained from the list voting without a doubt violates the spirit of the Constitution, but is techinically permitted by the system of proportional mixed voting created by the Organic Law of Suffrage and Political Participation.

.....................................................................

The security and transparency measure that were introduced in the automated voting process were on a par with the most advanced international practicies.

.....................................................................

The registry of voters (REP) has been the object of a permanent debate and the illegality of some of its entries has been pointed out.... Nevertheless, the political parties had sufficient access to the voting registrey.

.......................................................................

The audit, or manual counting of the voting reciepts, was observed in 75 voting center. Despite the long time to carry out the audit the results clearly indicated the accuracy of the results, with few cases of discrepancies between the number of voters marked down in the voting registry, the number counted by the machine, and the number of voting reciepts counted. The general conclusion of the observers was that the voting machines appeared to be very accurate.

That is all I have the time or enery to translate right now. But the main point is despite the wrist slaps over a number of issues the actual voting process was conducted with adequate safeguards and the results announced are accurate. The observers didn´t see that the opposition had any legitimate reason to pull out of the election.

It is also quite notable that they didn´t even attempt to claim the results were somehow illegitimate due to the opposition not participating. They´re adults who know better than to go along with such infantile assertions.

With this the election of last Sunday passes into history. The pro-Chavez forces now have carte-blanche to govern as they please as the opposition willing abondoned the electoral arena. The only thing left to do is to speculate about what the opposition could possibly have been thinking.
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Yesterday I wrote a post showing the voting rates in off-year U.S. congressional elections and showing how, at 37%, they were comparable to Venezuela´s recent election. But in thinking more about it I realized that in reality the average Venezuelan Assembly person got a higher percentage of his constituents to vote for him than did the average U.S. congressperson. Here is why:

In the U.S. congressional elections we saw 37% of the electorate on average votes whereas in the just concluded N.A. election there was a turn out of 25%. But there is a huge difference. Almost all U.S. congressional contests there are two parties contesting the vote and they split the votes. Lets assume that in the U.S. the average voting pattern in Congressional races is 60% for the winner to 40% for the loser. That means the winning candidate, on average, got 60% of the votes from the 37% of the electorate that bothered to vote giving the percentage of the electorate that voted for the winner as 22.2% (37% x 60%). By contrast, in the Venezuelan contest the pro-Chavez candidates got virtually 100% of the vote as the opposition pulled out. That means that the percentage of the electorate that voted for the winning candiate was 25% (100% x the 25% of the electorate that bothered to vote). So, the average member of the Venezuelan Assembly had a higher percentage of his consituants vote for him than did the average member of the U.S. congress elected in similiar elections (25% for the Venenezuelans versus 22.2% for the U.S.).

I think this should put to rest any notion that the Venezuelan National Assembly somehow lacks legitimacy (the again, maybe I´m really just showing that the U.S. congress is an illegitimate body).
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ok, I know I shouldn´t debase the blog with this stuff but sometimes I just can´t resist. As long time followers of the Venezuelan situation know the opposition has always blamed its failures on others. The coup wasn´t really a coup or it was all Pedro Carmona`s fault. The `strike` of 02/03 wasn´t their fault - according to them Chavez manipulated them and tricked them into going on strike.

Sooooo, anyone want to start making wagers on how long it will take the opposition diehards to start blaming their abstention in yesterdays election on Chavez? After all, you have to know its coming. At some point we are going to be hearing: `the bastard tricked us and provoked us into boycotting the elections - it was a setup by him all long`

My guess is we`ll all be hearing this in about a year. But feel fee to chime in with you`re own guesses.
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For those wondering what it was like in Caracas today it was a most ordinary day - extremely ordinary. There was literally nothing save newspaper headlines to indicate that there had been an election the day before. In El Valle, which is a pro-Chavez neighborhood, people went to work normally in the morning. In wandering around the campus of the Universidad Central de Venezuela I saw lots of students playing cards or otherwise hanging out but heard nothing about politics. I went to the main opposition rallying spot, Plaza Francia, and there wasn`t even a single solitary opposition person in sight. Lots of Christmas trees but absolutely no politcs to be found. If Carcas is at all representative of Venezuela as a whole on this the main reaction is simply complete indifference. I guess the opposition really does know better than to think all the people that didn´t vote support them. Otherwise they would have called a rally to show their millions of supporters. Instead they seem to be fading away with barely a wimper.
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If the opposition thought there stupid boycott idea was going to gain them support internationally or somehow undermine the legitimacy of the Venezuelan government they were badly mistaken. Take for example this article from the New York Times:

The withdrawal of the parties also ensured that Venezuela's opposition has, for all practical purposes, ceased to exist in an organized form, paving the way for an easy victory by Mr. Chávez for another six-year term in the election for president late next year. Mr. Chávez, first elected in 1998, has already served longer than any leader of a major Latin American country, except for Fidel Castro of Cuba.

"Chávez would have annihilated them anyway," Alberto Garrido, a critic of the government and an author of several books about the president, said by phone from Caracas. "Now, they are starting from scratch. There are people in the opposition, but the opposition leadership is in tumult, without a strategy. Tomorrow, Monday, they will not know what to do."

With polls indicating that government candidates would crush them in the election, opposition leaders had for weeks threatened to pull out. They accused electoral authorities of using digital fingerprint machines at polling sites that would permit the government to determine how individuals had voted. Last Monday, in a decision brokered by the Organization of American States, the National Electoral Council announced that it would not use the machines.

But to the surprise of election monitors, opposition parties began announcing their withdrawal on Tuesday, with some anti-government leaders charging that an open vote could not be guaranteed because four of five members of the Electoral Council are viewed as partial to Mr. Chávez. The opposition decision appeared to be aimed at appealing to international support and discrediting Venezuela's government, which has strong approval ratings.

"The main objection was the digital fingerprint machine, which was removed, and now their line is we don' t trust the system, there must be another trick there," said José Miguel Vivanco, the Americas director of Human Rights Watch, which has been harshly critical of Mr. Chávez.

"It's really hard to understand what exactly the political opposition leadership has in mind," he said. "But certainly it is not going to help them to present themselves as victims that deserve solidarity from the international community. With these kinds of tactics I don't think they'll gain any ground."

All the rest of the international media I have read, including the anti-Chavez Washington Post, has had similiar reporting. But what I find particulary damming is one of the opposition`s international propaganda war, Jose Vivanco of Human Rights Watch, is slamming them as being unworthy cry babies.

I don´t know. The mystery of what these idiots could have been thinking continues to deepen.
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Just for fun I looked up the abstention rates in the U.S. congressional elections and found this table which nicely summarizes them. Again, I don´t consider the level of abstention to be in any way meaningful. People who don´t vote don`t count - full stop. Further, it is pretentious and absurd for anyone (such as the Venezuelan opposition) to claim that they speak in the name of people who didn´t vote or that those who didn´t vote somehow were endorsing their position. So this is just really indulging my own curiousity, but for fun lets see what the numbers reveal.

First lets remember that half of all U.S. congressional elections coincide with Presidential elections which makes for higher turnout. But the other half do not which make them more akin to the voting that just occured in Venezuela. Here are some of the off year turnout numbers:

1994 38.78%

1990 36.52%

1986 36.40%

1982 39.79%

1978 37.21%


Notice a pattern here? In the supposed great democracy that is the U.S the voting rates hovers around 37% - not all that much better than what was seen in Venezuela. Plus, even during off year elections there are often gubenatorial or other local elections which tend to pull the voting rate up. In yesterdays vote in Venezuela there were no such other elections. And lest we forget, in at least some of the U.S. elections their is a real contest to see who will win. With the opposition pulling out, yesterday`s vote in Venezuela was a forgone conclusion. So all things considered, participation in yesterdays election really wasn´t anything that wouldn´t pass for ordinary in the U.S.
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As expected yesterday was certainly very anticlimatic. The two things that were expected to happen happened. First Chavez-allied parties won virtually the entire National Assembly. El Universal gives the prilimary breakdown of the results with the major parties getting the following number of seats in the 167 seat chamber:

MVR 105

PPT 11

Podemos 9

PCV 8

UVE (the MVR twin) 12

So as Ultimas Noticias headlined this morning the National Assembly is now painted red. And there is no representation there by the old and by now discredited parties such as AD, COPIE, and even the newer Primero Justicia.

Given that with the boycott the outcome was a forgone conclusion the voter turnout was light. The statistics now put abstention at 75%. The opposition is trying to assert that this is 75% rejection of Chavez which is of course a completely absurd arguement. In legistlative elections most people do not vote to begin with. Furtmore, if the outcome is a forgone conclusion as it was in this case then there is less incentive for people, either pro or anti Chavez, to vote. Further over at the Lubrio blog there is an interesting analysis showing that the opposition only increased abstention by 7% as that was the increase in the abstention rate between last Augusts municipal elections and yesterdays vote.

Some of the arguements by the opposition are so self delusional that you would think they were being made by 6th graders. They argue that the low turnout means the results are somehow not legitimate?!?! I guess the famous maxim that in a democracy you count those who vote not those who do not vote is something they never learned. They further argue that the result shows Chavez does not have a high level support as if he did where were all the people turning out to vote for him. With victory assured I would imagine that a good many of them went shopping or just stayed home.

I do not know what more to say about this right now. Unless the international observers refuse to validate the results I do not think there will be much more to talk about. Save that this monumental blunder by the opposition is just one more to add to the list, and one they will probably come to see as a tremendous mistake 6 months from now when it is too late to do anything about it.

BTW, as an update to what I saw yesterday I spent most of it visiting people in Los Teques which is a upper middle class area in the mountains south of Caracas. The big mall there, Las Cascada, was mobbed (gee the economy is really doing sooooooo bad) and the one polling station I saw looked to be empty. Not surprising given the location. In the evening when I returned to El Valle there certainly was a festive atmosphere whith constant fireworks going off until the rain mercifully put an end to it after mid-night so you could sleep.
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This is all more anti climatic than I had expected. With the opposition forfieting rather than face certain defeat a large Chavez victory sure looks to be in the cards. So I do not know how much there will be to say today on the voting. So let me just say what I have seen this morning.

I am back in Caracas. I spent the night right off of the Baralt Avenue in the heart of western Caracas. At about 6 a.m. a whole bunch of fireworks went off to wake everyone up. Then they played a trumpet revelary basically calling everyone out to vote. I then took a taxi to El Valle which is the working class-poor section of Caracas where I am staying. There is a very heavy military and police presence in the streets. Lots of streets had been closed off and there were big army trucks with lots of heavily armed soldiers in the streets. There were also lots of police riding around on motorcycles. They are clearly prepared for any contingency.

I didn't see any actual voting centers until I got to El Valle. There I passed three. There were moderate lines of people voting - maybe 20 or 30 people out of each voting center. This was at 9.00 a.m. The polling centers themselves were very heavily guarded with at least half a dozen soldiers outside each one.

Apart from the police and army presence the city seems very calm and normal. People are out and about shopping and just engaging in normal Sunday morning activities. So, so far so good.

BTW, I have seen a lot of European Union observers. Outside one polling station there were about 10 of them, very identifiable with their jackets. Unfortunately I could not get any pictures as you are not allowed to take pictures of the polling stations.

Quite frankly, I think the main action is going to come Monday or Tuesday when Venezuela wakes up with a A.N. dominated by pro Chavez forces. Thats is probably when the opposition will try to play whatever cards it thinks it has - be it violence or trying to get the election discredited by the observers or other international players. I do not think it will work. It seems to me they are just completely liquidating themselves from the A.N. just as they liquidated themselves from the military in the coup and from PDVSA by virtue of their insane strike. In any event I am sure we will see.

UPDATE, Greg Wilpert has an excellent article on the election over at Venezuelanalisis that I urge that everyone read. I completely agree with his assessment that the opposition did not campeign before the vote because it never planned to participate. This boycott was planned all along. Well, so long lemmings.
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