Saturday, April 08, 2006
"There was a plan to destabilize Venezuela"
Some extremely interesting information has just come to light via Colombia regarding the plots to overthrow or assasinate Chavez and the murder of the Venezuelan prosecutor Danilo Anderson. It would seem the Colombians were deeply involved in this and some Venezuelan opposition types, such as Patricia Poleo, may also have been involved. Or at least so says a very high ranking Colombian intelligence (D.A.S.) official who is now in a Colombian jail and is spilling the beans about both corruption within that agency and the plots against Venezuela.
I'll translate and post on it in the morning but in the meantime here it is in the Colombian news magazine Semana for those who can read spanish.
UPDATE: Here is the translation of the full article which speaks for itself:
From everthing that has been revealed it seems clear that there was indeed an active plan afoot to assasinate President Chavez. Colombian President Uribe himself admitted that people within his intelligence agency, DAS, met with former Venezuelan military officers as part of such a plot. And now we have these new revelations that would tend to confirm that. We also now have an indication of why the rabid opposition journalist, Patricia Poleo, may be trying so hard to avoid talking to authorities. While this article doesn't implicate her in anything befriending top paramilitary leaders would seem to imply she is more than a simple journalist.
The case of the murder of Danilo Anderson is certainly very complex. He was investigating people accused of involvement in the April 11 coup against Chavez so it would make sense the opposition would want him gone. Yet there have been media reports pointing to his running an extorsion ring and that his investigations were simply part of a big shake down effort. With all the accusations and counter accusations it is simply too confusing to really be able to draw any conclusions. There are probably people who want it that way and who are working hard to confuse everthing with smokescreens. Hopefully, this former DAS official will provide yet more information that may ultimately clear the smokescreens to reveal what really happened.
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I'll translate and post on it in the morning but in the meantime here it is in the Colombian news magazine Semana for those who can read spanish.
UPDATE: Here is the translation of the full article which speaks for itself:
In his exclusive interview with SEMANA the ex-director of systems of the DAS revealed how plans were made to assassinate high officials of our neighboring country.
One of the most delicate topics that SEMANA covered with the ex-boss of information systems for DAS, Rafael Garcia, was that of Venezuela. In the interview he asserted that being official of the intelligence agency, he was a witness of the plot against the president, Hugo Chavez, in which, according to Garcia, participated the then director of DAS Jorge Noguera. “I am a personal witness to the things that happened.” He also said he knew of plans that were hatched to assassinate various Venezuelan government officials, among whom were the Venezuelan president. Just that is very grave news. The case of Venezuela began two years ago when authorities in that country surprised 114 Colombian near Caracas and Chavez said that there was a plot against him. Months later it was shown that the group was a mix of young campesinos from the north of Santander and paramilitaries for the North Block Self Defense commanded by Rodrigo Tovar Pupo, alias ‘Jorge 40’.
“There isn’t any doubt that these groups are organizing to commit an assassination,” asserted President Chavez the day of the capture of the Venezuelans.
Six months afterwards prosecutor Danilo Anderson was assassinated in the streets of Caracas and the president called him “ a valiant prosecutor and a martyr of the Bolivarian Revolution”. There hadn’t been a similar terrorist attack in that country in more than 30 years and it was supposed that the attack was political in nature.
The worst for Colombia occurred in November 2005. The Venezuelan Attorney General gave credibility to the versions of Geovanny Jose Vasque de Armas, who was 36 years old, who after asking for protection from the government of Hugo Chavez, said he was put back in the paramilitaries (AUC) to perform intelligence work for the DAS. Based on his testimony the Venezuelan authorities accused the ex-director of the DAS, Joge Noguera, of having advance knowledge of a plan to assassinate high Venezuelan officials including the prosecutor Anderson and President Chavez.
Immediately, the AUC witness was called a serial liar by some in Colombia and for many he was not credible. Noguera himself, in an interview with SEMANA, classified him as such. Nevertheless, Garcia affirms the opposite in his interview:
SEMANA: Whose idea was the conspiracy against Venezuela?
Rafael Garcia: It was a big process. But I prefer to speak to the prosecutor about that.
SEMANA: Did you know that Jorge Noguera was conspiring against President Chavez?
R.G.: Many of the things that they have said are true. I am a first hand witness to them. I was always on top of what they were doing with that.
SEMANA: What exactly did you know?
R.G.: That there existed a destabilization plan against the Venezuelan government. As far as I knew there were two people that knew, an ex-director of intelligence of DAS and I. And in terms of high level Colombian government officials there were six people involved but I’m not going to give their names.
SEMANA: Is it true that you accompanied Jorge Noguera to some of the meetings in Venezuela where they met to discuss the plan?
R.G.: I’m not going to answer that.
SEMANA: Did that same group plan the murder of the Venezuelan prosecutor Danilo Anderson?
R.G.: The plan contemplated the assassination of various leaders of that country. The plans which I knew about didn’t include Anderson. Maybe that was a mistake or perhaps further on they changed the plan. The plan was against high government officials including Chavez.
SEMANA: Do you know if the journalist Patricia Poleo participated in this?
R.G.: I know she is friends with ‘Jorge 40”
[Patricia Poleo is an opposition journalist who the government has accused of participating in the meeting where Danilo Anderson’s murder was planned. She has steadfastly denied any involvement but rather than meet with prosecutors to answer their questions she fled to Miami – OW]
SEMANA: As far as you know is there a relationship between Jorge Noguera and ‘Jorge 40’ in the conspiracy to assassinate Hugo Chavez?
R.G.: Yes, Yes there is.
SEMANA: Do you know if ‘Jorge 40’ was present in the planning meetings that were held in Maracaibo?
R.G.: I’m not going to answer that.
SEMANA: Why haven’t you told all this to the prosecutors?
R.G.: I have already told the Attorney General that I need protection for me and my family.
SEMANA: Would you be willing to tell everything that you know to the Venezuelan authorities?
R.G.: I would prefer to take care of my legal problems in Colombia, but I wouldn’t have any problem talking to them.
SEMANA: Does president Alvaro Uribe know about all this?
R.G.: I don’t know. The only thing I can say is that in December of 2002 I received instructions to place an monitoring system in the border post of Paraguanchon, en La Guajira, at a very high price, so as to have all the DAS information available on the Venezuelan border. It was the first border post that had this system and I remember that Jorge Noguera put a lot of pressure on me to do it. I had to use half of all our people in order to be able to complete that in record time.
SEMANA: How long did it take?
R.G.: We did it in 15 days. We had a system in Paloquemo that was on line with terminals in Paraguanchon. With that we had full access to intelligence information, including the full DAS database.
SEMANA: But they did all that to control border crossings?
R.G.: The intention was to have migration control at that site but the costs were extreme given that we even put a satellite channel that cost a lot of money.
SEMANA: But the intelligence work went beyond just controlling border crossings?
R.G.: Of course. It always impressed me that we put such a system in a remote border crossing which didn’t even have appropriate personal to control that information. Later, in 2004, we had all the border posts connected.
SEMANA: If you had such a sophisticated system in the border how is it that that very May 152 paramilitaries and campesinos crossed into Venezuela and you didn’t realize it?
R.G.: I don’t want to talk about that.
From everthing that has been revealed it seems clear that there was indeed an active plan afoot to assasinate President Chavez. Colombian President Uribe himself admitted that people within his intelligence agency, DAS, met with former Venezuelan military officers as part of such a plot. And now we have these new revelations that would tend to confirm that. We also now have an indication of why the rabid opposition journalist, Patricia Poleo, may be trying so hard to avoid talking to authorities. While this article doesn't implicate her in anything befriending top paramilitary leaders would seem to imply she is more than a simple journalist.
The case of the murder of Danilo Anderson is certainly very complex. He was investigating people accused of involvement in the April 11 coup against Chavez so it would make sense the opposition would want him gone. Yet there have been media reports pointing to his running an extorsion ring and that his investigations were simply part of a big shake down effort. With all the accusations and counter accusations it is simply too confusing to really be able to draw any conclusions. There are probably people who want it that way and who are working hard to confuse everthing with smokescreens. Hopefully, this former DAS official will provide yet more information that may ultimately clear the smokescreens to reveal what really happened.
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Stratospheric
Of the course of the past week Ultimas Noticias has given some new polling data on President Chavez that gives him some truly unbelievable numbers. The numbers, from polling done by the Datos firm, speak for themselves so I’ll jump right in.
For starters Chavez’s approval rating as president is 83.1%. The components of that are 22.9% who thing he is ok to good, 41% who think he is good, and 18.4% who think he is excellent. I think this 83% approval even tops his numbers from when he was first running for president.
15.8% have an unfavorable view of his performance. 5.7% think he has been ok to bad, 5.5% think his performance is bad, and 4.6% think he has been terrible.
So the bottom line is 83% think favorably of him while 16% think unfavorably of him. I doubt there isn’t a politician the world over who wouldn’t do anything to have numbers like that (no wonder half of Latin America is falling over itself to befriend and imitate Chavez).
When it comes to political parties 40.2% say they support the MVR (Chavez’s political party) while the most popular opposition party, Primero Justicia is backed by only 7.7% followed by other opposition parties such as Accion Democratica with 3.2%, Proyecto Venezuela with 3.1% and Copei with 1.9%. A full 30% don’t support any party.
Given that the country is only about 8 months away from presidential elections the opposition can’t take any consolation from any of these numbers. Barring the biggest political comeback of all time Chavez seems to be headed for re-election by a large margin.
The poll also touched some other subjects of interest. For example there has been much discussion about a possible reform to the constitution to allow the president to be re-elected indefinitely. A majority of Venezuelans oppose such a reform, 42.8%, with 39% backing allowing presidents to run an unlimited number of times. Clearly even many Chavez supporters think his time in office should be limited (count me amongst that group).
These numbers did get broken down by social group which was interesting. For example, social class D – those just above being considered poor – were evenly split on this issued with 45.2% in favor of unlimited re-elections while 45.9% opposed it. But in social class E – the poorest Venezuelans – 47.2% favor unlimited re-elections while only 36.3% oppose it. Clearly the poor would like Chavez to stay around a long time.
On the topic of corruption 72.6% think there is a lot of corruption in Venezuela. Most Venezuelans also think the government is taking insufficient action against corruption. 41.5% think the government is fighting hard against corruption, 34.5% think it is doing little about it, and 19% think it is doing absolutely nothing about it. So while the great majority of Venezuelans approve of the job that Chavez is doing there is definitely room for improvement on individual issues like corruption.
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For starters Chavez’s approval rating as president is 83.1%. The components of that are 22.9% who thing he is ok to good, 41% who think he is good, and 18.4% who think he is excellent. I think this 83% approval even tops his numbers from when he was first running for president.
15.8% have an unfavorable view of his performance. 5.7% think he has been ok to bad, 5.5% think his performance is bad, and 4.6% think he has been terrible.
So the bottom line is 83% think favorably of him while 16% think unfavorably of him. I doubt there isn’t a politician the world over who wouldn’t do anything to have numbers like that (no wonder half of Latin America is falling over itself to befriend and imitate Chavez).
When it comes to political parties 40.2% say they support the MVR (Chavez’s political party) while the most popular opposition party, Primero Justicia is backed by only 7.7% followed by other opposition parties such as Accion Democratica with 3.2%, Proyecto Venezuela with 3.1% and Copei with 1.9%. A full 30% don’t support any party.
Given that the country is only about 8 months away from presidential elections the opposition can’t take any consolation from any of these numbers. Barring the biggest political comeback of all time Chavez seems to be headed for re-election by a large margin.
The poll also touched some other subjects of interest. For example there has been much discussion about a possible reform to the constitution to allow the president to be re-elected indefinitely. A majority of Venezuelans oppose such a reform, 42.8%, with 39% backing allowing presidents to run an unlimited number of times. Clearly even many Chavez supporters think his time in office should be limited (count me amongst that group).
These numbers did get broken down by social group which was interesting. For example, social class D – those just above being considered poor – were evenly split on this issued with 45.2% in favor of unlimited re-elections while 45.9% opposed it. But in social class E – the poorest Venezuelans – 47.2% favor unlimited re-elections while only 36.3% oppose it. Clearly the poor would like Chavez to stay around a long time.
On the topic of corruption 72.6% think there is a lot of corruption in Venezuela. Most Venezuelans also think the government is taking insufficient action against corruption. 41.5% think the government is fighting hard against corruption, 34.5% think it is doing little about it, and 19% think it is doing absolutely nothing about it. So while the great majority of Venezuelans approve of the job that Chavez is doing there is definitely room for improvement on individual issues like corruption.
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Wednesday, April 05, 2006
The carnage continues
Today crime is again at the forefront of the news in Venezuela. This is due to the high profile kidnapping and murder of three Venezuelan-Canadian children. But contrary to the image that case might create the real daily tragedy is in Venezuela’s poor neighborhoods. Everyday Ultimas Noticias has three or four articles detailing different murders. They are all too depressing like this one published today:
Crime is definitely the one great issue that the current government has been unable to deal with in any meaningful way. More than 9,000 Venezuelans are murdered each year. While the murder rate was flat in 2005 that is hardly an accomplishment to be proud of when it is so high.
Despite several high profile initiatives and pro-Chavez political leaders now having control over virtually all police forces there seems to be lacking either the ideas or the will to effectively combat crime. Further it is interesting that the protesters mentioned in the article see the main police force in Caracas as part of the problem, not part of the solution. Maybe they should fire the entire force and start a “Mission Policia” or “Mission Seguridad” to replace them with people who will fight criminals, not become partners with them.
In any event, it would be nice if someone found a solution to this problem soon. This bloodletting got old a long time ago.
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The people of the Brazul neighborhood blocked the Intercommunal avenue of El Valle to protest the murder of Aquimedes Briceno (35), who was murdered on Monday.
“My brother was a spokesperson for the Protonic Sciences Cooperative, that is part of the Committee on Urban Lands. Monday, at 4:35 pm, when he was returning to who neighborhood after purchasing some construction materials, was approached by two people who without saying a word shot him three times”, said Nelida Teran Briceno, sister of the deceased.
“Arquimedes was a graduate of Mision Vuelvan Caracas in electrical work, father of 3 children and an excellent friend. Under is command were 54 people, some of whom were waiting for the materials (cement, sand, ceramics, and cinder blocks) right when he was murdered” said a neighbor.
In the view of Nelida Teran, the death of her brother was a settling of scores, because according to her because the Land Committee had declared war on the criminals in the area.
The witnesses to the event have incriminated two individuals who have terrorized the neighborhood whose aliases are “Jhonatan” and “Carlitos”.
The neighbors expressed their desire that the Metropolitan Police leave the area. “Here the police are the primary accomplices of the criminals. We are tired of seeing them selling them turf to the drug dealers and selling contraband liquor. We want a more effective group like the National Guard,” said another of the women present at the demonstration.
Crime is definitely the one great issue that the current government has been unable to deal with in any meaningful way. More than 9,000 Venezuelans are murdered each year. While the murder rate was flat in 2005 that is hardly an accomplishment to be proud of when it is so high.
Despite several high profile initiatives and pro-Chavez political leaders now having control over virtually all police forces there seems to be lacking either the ideas or the will to effectively combat crime. Further it is interesting that the protesters mentioned in the article see the main police force in Caracas as part of the problem, not part of the solution. Maybe they should fire the entire force and start a “Mission Policia” or “Mission Seguridad” to replace them with people who will fight criminals, not become partners with them.
In any event, it would be nice if someone found a solution to this problem soon. This bloodletting got old a long time ago.
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Tuesday, April 04, 2006
Come back in ten years
Of late Venezuela has been playing hardball with some international oil companies and that has been widely reported in the media:
As has been gone over before these "Service Agreements" with private oil firms were very disadvantageous for Venezuela. Besides having low royalty and tax rates they allowed the private oil firms to have full control over all operations and Venezuela was contractually required to reimburse them for whatever they claimed their expenses were.
The Venezuelan government finally said enough is enough and this year forced all these private firms to accept a new joint venture status with the Venezuelan government (through PDVSA) having majority ownership and operational control. To be sure, none of the firms were thrilled with this change, they were enjoying windfall profits which are now largely going to disappear. But most agreed to the new terms as their operations in Venezuela are still profitable and worth retaining.
However, several firms have held out and refused to come to terms with the Venezuelan government. This led to the above mentioned oil field siezures. This is obviously a drastic step on the part of the Venezuelan authorities. The question is, was it appropriate and will having done it prove beneficial or harmful?
In one sense it was clearly necessary. The Venezuelans had been insisting all along that the oil companies renegotiate their contracts or face confiscation of their fields. Having made that threat the Venezuelans could hardly let some companies refuse to negotiate and not take action. This would clearly have cost them credibility in all future negotiations. If you make an ultimatum you need to follow through or none of your future statements will be taken seriously.
However, the larger question is whether or not the Venezuelan government is going too far in trying to wring concessions from these companies and maximize its take from the oil sales. If the Venezuelans are not assertive enough they risk not getting as much as they might be able to and allowing the companies to get windfall profits at the expense of the Venezuelan treasury. On the other hand, if they are too aggressive and make it so that the oil companies are making too low of a return they risk scaring away investment by these same companies which Venezuela may want or need in the future.
So how are we to know if Rafael Ramirez overplayed his hand or underplayed it? The answer is we can't. There is no hard and fast rule to how to conduct these kinds of negotiations. You have to stake your position on your educated guesses and hunches as to what the other side’s position is and what they are willing to tolerate. Poker faces, bluffs, and public posturing will abound.
Rather predictably the Venezuelan opposition will claim that Chavez's government is running the oil companies out of Venezuela and scaring off future investment. Likewise government supporters will claim it has been a singular success in maximizing revenues for the government and ending abuses by foreign oil firms. But in reality the only way to know whether Ramirez played his cards well is to watch what happens over time. If the multinationals continue to operate and invest in Venezuela then Venezuela clearly didn’t push too hard and other countries that took a softer stance lost out on potential revenues. Conversely, if the foreign firms in large measure pull out or limit their future investments in Venezuela then Ramirez may indeed have pushed them a little too far. There is just no way to know right now which it is. So we'll have to ignore all the rhetoric for right now and revisit this post in ten years time to get our answer.
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CARACAS, Venezuela -- Venezuela has seized control of oil fields from France's Total SA and Italy's Eni SPA in a show of force against those resisting President Hugo Chavez's efforts to pry more profits from the industry at a time of high oil prices.
The move signals that Chavez's government is ready to send top oil companies packing unless they play by Caracas' new rules, but experts say the tactic could backfire by spooking partners Venezuela needs to develop potentially some of the world's largest untapped reserves.
Oil Minister Rafael Ramirez announced Monday that state oil company Petroleos de Venezuela SA, or PDVSA, had taken control of Total's Jusepin field and Eni's Dacion field, which together produced 115,000 barrels a day, after the two companies refused to turn operations over to state-controlled joint ventures.
In challenging the government, they join Exxon Mobil Corp., which earlier sold off its stake in the 15,000-barrel-a-day Quiamare-La Ceiba field rather than submit to tightened terms.
The three dissenters are among the world's six largest oil companies by market capitalization.
Ramirez was resolute Monday.
"We're not going to trample over anybody but we can't accept being trampled on either," he said. "Companies that don't adjust to our laws, we don't want them to continue in the country."
The seized properties were among 32 oil fields the government has reclaimed from private companies by voiding their oil-pumping contracts and replacing them with so-called "mixed companies" that give PDVSA a 60 percent to 80 percent stake and sharply raise royalties and taxes, among other measures.
As has been gone over before these "Service Agreements" with private oil firms were very disadvantageous for Venezuela. Besides having low royalty and tax rates they allowed the private oil firms to have full control over all operations and Venezuela was contractually required to reimburse them for whatever they claimed their expenses were.
The Venezuelan government finally said enough is enough and this year forced all these private firms to accept a new joint venture status with the Venezuelan government (through PDVSA) having majority ownership and operational control. To be sure, none of the firms were thrilled with this change, they were enjoying windfall profits which are now largely going to disappear. But most agreed to the new terms as their operations in Venezuela are still profitable and worth retaining.
However, several firms have held out and refused to come to terms with the Venezuelan government. This led to the above mentioned oil field siezures. This is obviously a drastic step on the part of the Venezuelan authorities. The question is, was it appropriate and will having done it prove beneficial or harmful?
In one sense it was clearly necessary. The Venezuelans had been insisting all along that the oil companies renegotiate their contracts or face confiscation of their fields. Having made that threat the Venezuelans could hardly let some companies refuse to negotiate and not take action. This would clearly have cost them credibility in all future negotiations. If you make an ultimatum you need to follow through or none of your future statements will be taken seriously.
However, the larger question is whether or not the Venezuelan government is going too far in trying to wring concessions from these companies and maximize its take from the oil sales. If the Venezuelans are not assertive enough they risk not getting as much as they might be able to and allowing the companies to get windfall profits at the expense of the Venezuelan treasury. On the other hand, if they are too aggressive and make it so that the oil companies are making too low of a return they risk scaring away investment by these same companies which Venezuela may want or need in the future.
So how are we to know if Rafael Ramirez overplayed his hand or underplayed it? The answer is we can't. There is no hard and fast rule to how to conduct these kinds of negotiations. You have to stake your position on your educated guesses and hunches as to what the other side’s position is and what they are willing to tolerate. Poker faces, bluffs, and public posturing will abound.
Rather predictably the Venezuelan opposition will claim that Chavez's government is running the oil companies out of Venezuela and scaring off future investment. Likewise government supporters will claim it has been a singular success in maximizing revenues for the government and ending abuses by foreign oil firms. But in reality the only way to know whether Ramirez played his cards well is to watch what happens over time. If the multinationals continue to operate and invest in Venezuela then Venezuela clearly didn’t push too hard and other countries that took a softer stance lost out on potential revenues. Conversely, if the foreign firms in large measure pull out or limit their future investments in Venezuela then Ramirez may indeed have pushed them a little too far. There is just no way to know right now which it is. So we'll have to ignore all the rhetoric for right now and revisit this post in ten years time to get our answer.
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Monday, April 03, 2006
Hell hath no fury....
Today in the Wall Street Journal there appeared a historical column that at first appeared to have little to do with Venezuela, save that it was about taxes which has been a key subject here recently. But when I finished reading it I realized it actually had a lot to do with Venezuela.
Rather than reproducing the column let me describe what the issue was.
In the 1930s the U.S. was in the midst of a very bad depression and the Senate was holding hearing to investigate how the stock market crash of 1929 came about. In the course of these hearing it came out that the extremely wealthy banker, J.P. Morgan, and many of his rich associates, paid not a penny of income tax. While many far less wealthy paid taxes (although only 7% of the population do to the poverty and unemployment of the time) these magnates used loopholes to avoid paying anything.
There was generalized outrage over this and Robert Follette, the Progressive Senator from Wisconsin, introduced a bill that made a summary of everyone’s tax return public information. The idea was that by allowing anyone to go to a public office and look up how much anyone else paid in tax it would shame the wealthy into paying (sort of like what Seniat is doing to stores in Venezuela).
Of course, the wealthy were aghast at this and fought for repeal of the law. The repeal effort was spearheaded by Raymond Pitcairn, a glass manufacturing magnate from Pittsburgh. Through a massive lobbying effort he was able to have the law repealed the very next year even though it only affected a small minority of the population and most people supported it. How could a small minority affect change so quickly? This is how it was explained in the columns last paragraph:
Now, Mr. Pitcairn obviously leaves out the impact that their money has in all this. Nevertheless, he is making an important observation about the attitudes of these elites and one that made me immediately think of what happened in Venezuela a few years ago.
In 2002 and 2003 it was a regular occurrence for thousands of Venezuelans, most of them from the upper segments of Venezuelan society, to take to the streets and demand that President Chavez resign or hold new elections (this even before it was time for the recall referendum). In watching this at the time the most recurring thought that went through my mind was who do these people think they are? What arrogance and pretension for them to think they can demand an elected President to resign before his time is up. Yet they made such demands time and time again. What’s more, they didn’t limit themselves to just making these demands but they actually took actions intended to push Chavez from office. Listening to them at the time they clearly saw nothing wrong with that. They seemed to take it as a given that they had a right to do these things.
After a while it occurred to me who these people were and why they acted as they did. They are the same people Mr. Pitcairn is referring to above – people with wealth who are used to getting their way. They are people who are used to being accommodated, be it by the servants in their homes or officials in a government office. When there is a law or regulation that is an impediment to something they wish to do they know whom to call to have that impediment removed. And they don’t take no for an answer. The poor are throughout their lives taught to know their place and accept their lot. But not these people. Upper class people much more readily challenge authority and rules than do poorer people. And that makes sense as it is the upper classes who generally have the power to make whatever changes to the existing authorities and laws they wish.
Of course, these people are not unique to the Venezuelan opposition. They are found in the Bangkok elite trying to resist that countries progressive president. They are found in the U.S. elite that makes sure its taxes are cut even while the country drowns in red ink. This is how elites are the world over.
What is unique about Venezuela is that this elite now finds itself in a very unusual position. Its faces a government elected by a poor majority that will not accommodate it. When it became apparent in 1998 that Chavez would be elected this elite tried to woo Chavez. If you can’t beat him, co-opt him they thought. This strategy had always worked before as most politicians campaigned on the left but governed on the right.
Yet within a short period of time they realized they couldn’t co-opt him, that he intended to stay true to his electoral mandate and govern on behalf of Venezuela’s poor majority. That is when they began “to make a fuss” as Mr. Pitcairn has pointed out people of their social strata are prone to do. Their often hate filled writings and speeches are filled with scorn for those who oppose them. They dismiss the results of elections or the rulings of courts with the backhanded contempt of a powerful minority not accustomed to being ruled over by the majority – and a majority that in their minds is made up of rabble.
Now that they have failed, at least for the time being, to get their way they seem both outraged and befuddled. The rich and powerful aren’t used to losing and they are not at all graceful in defeat. Their arrogance and pretension, and the anger and spite they generate, are as evident now as they were three years ago. And as long as the Chavez government stands between them and what they want they will continue making ther fuss. Hell hath no fury like an elite rebuffed.
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Rather than reproducing the column let me describe what the issue was.
In the 1930s the U.S. was in the midst of a very bad depression and the Senate was holding hearing to investigate how the stock market crash of 1929 came about. In the course of these hearing it came out that the extremely wealthy banker, J.P. Morgan, and many of his rich associates, paid not a penny of income tax. While many far less wealthy paid taxes (although only 7% of the population do to the poverty and unemployment of the time) these magnates used loopholes to avoid paying anything.
There was generalized outrage over this and Robert Follette, the Progressive Senator from Wisconsin, introduced a bill that made a summary of everyone’s tax return public information. The idea was that by allowing anyone to go to a public office and look up how much anyone else paid in tax it would shame the wealthy into paying (sort of like what Seniat is doing to stores in Venezuela).
Of course, the wealthy were aghast at this and fought for repeal of the law. The repeal effort was spearheaded by Raymond Pitcairn, a glass manufacturing magnate from Pittsburgh. Through a massive lobbying effort he was able to have the law repealed the very next year even though it only affected a small minority of the population and most people supported it. How could a small minority affect change so quickly? This is how it was explained in the columns last paragraph:
Mr. Pitcairn had successfully manipulated public opinion on a matter affecting a tiny minority of Americans. “Minorities create news because they do daring things and act together,” he explained in a recruiting letter. “The get they’re way against larger numbers because they demand what they want and make a fuss about it.
Now, Mr. Pitcairn obviously leaves out the impact that their money has in all this. Nevertheless, he is making an important observation about the attitudes of these elites and one that made me immediately think of what happened in Venezuela a few years ago.
In 2002 and 2003 it was a regular occurrence for thousands of Venezuelans, most of them from the upper segments of Venezuelan society, to take to the streets and demand that President Chavez resign or hold new elections (this even before it was time for the recall referendum). In watching this at the time the most recurring thought that went through my mind was who do these people think they are? What arrogance and pretension for them to think they can demand an elected President to resign before his time is up. Yet they made such demands time and time again. What’s more, they didn’t limit themselves to just making these demands but they actually took actions intended to push Chavez from office. Listening to them at the time they clearly saw nothing wrong with that. They seemed to take it as a given that they had a right to do these things.
After a while it occurred to me who these people were and why they acted as they did. They are the same people Mr. Pitcairn is referring to above – people with wealth who are used to getting their way. They are people who are used to being accommodated, be it by the servants in their homes or officials in a government office. When there is a law or regulation that is an impediment to something they wish to do they know whom to call to have that impediment removed. And they don’t take no for an answer. The poor are throughout their lives taught to know their place and accept their lot. But not these people. Upper class people much more readily challenge authority and rules than do poorer people. And that makes sense as it is the upper classes who generally have the power to make whatever changes to the existing authorities and laws they wish.
Of course, these people are not unique to the Venezuelan opposition. They are found in the Bangkok elite trying to resist that countries progressive president. They are found in the U.S. elite that makes sure its taxes are cut even while the country drowns in red ink. This is how elites are the world over.
What is unique about Venezuela is that this elite now finds itself in a very unusual position. Its faces a government elected by a poor majority that will not accommodate it. When it became apparent in 1998 that Chavez would be elected this elite tried to woo Chavez. If you can’t beat him, co-opt him they thought. This strategy had always worked before as most politicians campaigned on the left but governed on the right.
Yet within a short period of time they realized they couldn’t co-opt him, that he intended to stay true to his electoral mandate and govern on behalf of Venezuela’s poor majority. That is when they began “to make a fuss” as Mr. Pitcairn has pointed out people of their social strata are prone to do. Their often hate filled writings and speeches are filled with scorn for those who oppose them. They dismiss the results of elections or the rulings of courts with the backhanded contempt of a powerful minority not accustomed to being ruled over by the majority – and a majority that in their minds is made up of rabble.
Now that they have failed, at least for the time being, to get their way they seem both outraged and befuddled. The rich and powerful aren’t used to losing and they are not at all graceful in defeat. Their arrogance and pretension, and the anger and spite they generate, are as evident now as they were three years ago. And as long as the Chavez government stands between them and what they want they will continue making ther fuss. Hell hath no fury like an elite rebuffed.
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Sunday, April 02, 2006
Huh?
I don't really have time or energy to comment on this at the moment. But lets just say this proposal of Chavez's sounds a little bizarre and not very workable. Or at least some details need to be spelled out:
A few initial questions would be how much oil would they be selling at this price? Would it be within the OPEC quota system? Would the $50 price go indefinitely into the future? Are there customers who are willing to lock into such a price?
Maybe this will become a little more clear once the full interview is released (if anyone sees a link to a transcript please let us know). One thing I would agree with though. $50 is a very reasonable and sustainable long term price.
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Chávez seeks to peg oil at $50 a barrel
· Price could see Venezuela producing for 200 years
· Country's reserves may exceed Saudi Arabia's
Mark Milner
Monday April 3, 2006
The Guardian
Venezuelan president Hugo Chávez is poised to launch a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel.
A long-term agreement at that price could allow Venezuela to count its huge deposits of heavy crude as part of its official reserves, which Caracas says would give it more oil than Saudi Arabia.
"We have the largest oil reserves in the world, we have oil for 200 years." Mr Chávez told the BBC's Newsnight programme in an interview to be broadcast tonight. "$50 a barrel - that's a fair price, not a high price."
The price proposed by Mr Chávez is about $15 a barrel below the current global level but a credible long-term agreement at about $50 a barrel could have huge implications for Venezuela's standing in the international oil community.
According to US sources, Venezuela holds 90% of the world's extra heavy crude oil - deposits which have to be turned into synthetic light crude before they can be refined and which only become economic to operate with the oil price at about $40 a barrel. Newsnight cites a report from the US Energy Information Administrator, Guy Caruso, suggesting Venezuela could have more than a trillion barrels of reserves.
A $50-a-barrel lock-in would open the way for Venezuela, already the world's fifth-largest oil exporter, to demand a huge increase in its official oil reserves - allowing it to demand a big increase in its production allowance within Opec.
Venezuela's oil minister Raphael Ramirez told Newsnight in a separate interview that his country plans to ask Opec to formally recognise the uprating of its reserves to 312bn barrels (compared to Saudi Arabia's 262bn) when Mr Chávez hosts a gathering of Opec delegates in Caracas next month.
Venezuela's ambitious strategy to boost its standing in the global pecking order of oil producers by increasing the extent of its officially recognised reserves is likely to face opposition. Some countries will oppose the idea of a fixed price for the global oil market at well below existing levels. Others are unlikely to be happy with any diminution of their influence over world oil prices in favour of Venezuela.
Caracas's hopes for an increase in its standing would be a far cry from the days when Mr Chávez came to power after years of quota-busting during which Venezuela helped to keep oil prices down. "Seven years ago Venezuela was a US oil colony," said Mr Chávez.
As he seeks to bolster his country's standing on the world stage, the Venezuelan president has also introduced radical changes to the domestic oil industry. Last Friday his government announced that 17 oil companies had agreed to changes which will see 32 operating agreements become 30 joint ventures that will give the government greater say over the country's oil industry.
The original deals were signed in the 1990s as part of a drive to attract more investment into the country's oil industry. However Mr Chávez said the deals gave foreign companies too much and the government too little. Under the new arrangements state-run Petroleos de Venezuela will hold 60% of the joint ventures. "Now we are associates and this commits us to much more ... it's no longer a contract for doing a service, it's a strategic alliance," Mr Chávez told the companies that signed up.
The new arrangements were not universally welcomed by the oil companies. Exxon Mobil and the Italian energy company Eni have refused to sign up to the new arrangements.
A few initial questions would be how much oil would they be selling at this price? Would it be within the OPEC quota system? Would the $50 price go indefinitely into the future? Are there customers who are willing to lock into such a price?
Maybe this will become a little more clear once the full interview is released (if anyone sees a link to a transcript please let us know). One thing I would agree with though. $50 is a very reasonable and sustainable long term price.
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