Oil Wars

Today Ultimas Noticias gave an update on the new bridge being built over the Orinoco river. Next week the last section of this massive bridge will be installed and it is expected that either later this month or in early June President Chavez and Brazilian President De Silva will inaugerate it.

First some background. The largest river in Venezuela is the Orinoco which runs from the south central part of the country to the to the north east where it empties into the Carribean. It is a very large river with a strong current. So large that bridging it is no easy task. For that reason up until now there has only been a single bridge that crosses. This is insufficient given that the major cities and industrial centers of Ciudad Bolivar and Ciudad Guyana lie on its eastern bank while more or less the whole rest of the country is to the west of it.

So the Venezuelan government has begun building other bridges across the river and it is the first of these that is being finished. It is quite an impressive structure. Here is the diagram of it published in todays paper:



Note that it will have four main towers supporting the center spans. It will have two lanes of traffice in either direction. Also, in accordance with the boom in Venezuelan rail line construction the center of the bridge will accomodate a rail line. And not least, it will be two miles long!

Here is a nice graphic of what the bridge will look like when it is finished:



The construction which is now being completed has been a massive undertaking as the following pictures show:







Note the five construction cranse in operation simultaneously. Pretty impressive.

The bridge has suffered from cost overruns and will wind up costing over $600 million dollars. It is a Brazilian company that has been responsible for the construction which is part of why the Brazilian president will help inaugerate it. Another reason is that it will help shorten travel time to Brazil. And for Venezuelans it will cut a hour and a half of the time needed to travel between Barcelona and Ciudad Guyana. Those wishing to read more on the bridge can do so here.

Also, construction on a third bridge over the Orinoco will begin shortly.

Lastly, here is a follow up to a post I did previously on all the imaginary rail lines being built in Venezuela. Ultimas Noticias published today an obviously faked photograph of new rail cars being transported to Caracas for the rail line to Tuy.



I first I thought the drivers on that highway were probably upset about the delays but then I remembered none of this is real anyways!
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The U.S. military and media go to great lengths to keep the war in Iraq from public view. But once in a while the grim reality seeps out for the rest of us to see. This Sunday will be one of those times. Please make sure to save the date and watch Baghdad ER
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Mary Anastasia O'Grady, the Wall Street Journal's anti-Chavez hack was at it again today. In today's Op-Ed piece she was openly pining for the collapse of the Venezuelan economy. Sadly, her line of thinking very much matches that of many in the Venezeulan opposition. For that reason it is worth a look:

The trouble is that Mr. Chavez is awash in cash and that is what he is using, both overtly and surrptitiously, to extend his influence in the poorest countries of the region. A better way to clip the Venezeulan despot's wings would be for the Federal Reserve to use the tools at its disposal - including open market operations - to sop up the extra dollar liquidity that is sloshing around the globe. Oil, like gold, has spiked in price under this inflationary bias, creating windfall profits for the world's worst type-A tyrants.

Of course, political uncertainty has added to petroleum price hikes. But an explicit Fed objective of dealing with inflationary expectations by, for instance, bringing gold back to $400 an ounce, is guaranteed to rein in oil prices.

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Venezuelan democrats will tell you that there is not much hope for a change in the government without an oil-price retreat. Until that happens, Mr. Chavez will be too powerful. That's bad news for the 26 million Venezuelans who are experiencing sky-rocketing crime rates and declining living standards under Chavismo.

Of course we see the usual O'Grady type lies here. The standard of living is clearly going up in Venezuela, not down (which is why there is no "hope for a change in government". We also see use of standard code phrases - "Venezuelan democrats". Who is that? Not the same people who tried a coup and an oil strike to overthrow an elected government I hope.

Yet, she is at the same time revealing something far more important here - and that is her willingness to carry out a scorched earth policy against Venezuela as long as it adances her goal of getting Chavez out of power.

Why would she advocate something that would be so damaging to the Venezuelan economy? Easy. What she really care about are not Venezeula or the great masses of people that live in Venezeula. No, her interest is limited to the wealthy business and political elite, both Venezeulan and American. If it takes destroying Venezuela and driving its people into the ground to get their hands back on the oil and back in control of all the other resources in that country so that this tiny elite can once again make great fortunes for itself, that is what they will do. O'Grady has done us a favor. For in one little Op-Ed aritcle she has given us a very nice and succinct example of the cynicism of those who oppose Chavez.
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Still don't think Iraq and Venzeuela are about oil? I think you'd have to have your head buried pretty deeply in a sand dune not to realize they are - yet some still refuse to acknowledge reality. Sometimes though, it helps to make the point by showing what a central role oil plays even in places other than Venezuela and Iraq. And from the Guardian we have an excellent example of just that:

When two poor countries reclaimed oilfields, why did just one spark uproar?

The outcry over Bolivia's renationalisation and the silence over Chad's betrays the hypocrisy of the critics

George Monbiot
Tuesday May 16, 2006
The Guardian

Civilisation has a new enemy. He is a former coca grower called Evo Morales, who is currently the president of Bolivia. Yesterday he stood before the European parliament to explain why he had sent troops to regain control of his country's gas and oil fields. Bolivia's resources, he says, have been "looted by foreign companies", and he is reclaiming them for the benefit of his people. Last week, he told the summit of Latin American and European leaders in Vienna that the corporations which have been extracting the country's fossil fuels would not be compensated for these seizures.

You can probably guess how this has gone down. Tony Blair urged him to use his power responsibly, which is like Mark Oaten lecturing the Pope on sexual continence. Condoleezza Rice accused him of "demagoguery". The Economist announced that Bolivia was "moving backwards". The Times, in a marvellously haughty leader, called Morales "petulant", "xenophobic" and "capricious", and labelled his seizure of the gas fields "a gesture as childish as it is eye-catching".

Never mind that the privatisation of Bolivia's gas and oil in the 1990s was almost certainly illegal, as it took place without the consent of congress. Never mind that - until now - its natural wealth has only impoverished its people. Never mind that Morales had promised to regain national control of Bolivia's natural resources before he became president, and that the policy has massive support among Bolivians. It can't be long before Donald Rumsfeld calls him the new Hitler and Bush makes another speech about freedom and democracy being threatened by freedom and democracy.

This huffing and puffing is dressed up as concern for the people of Bolivia. The Financial Times fretted about the potential for "mismanagement and corruption". The Economist warned that while the government "may get richer, its people are likely to grow even poorer". The Times lamented that Morales had "set back Bolivia's development by 10 years or so ... the most vulnerable groups will find that an economic lifeline is soon removed from their reach". All this is humbug.

Four days before Morales seized the gas fields - on May 1 - an even bigger expropriation took place in an even poorer country: the African republic of Chad. When the Chadian government reasserted control over its oil revenues, not only did it ensure that an intended lifeline for the poor really was removed from their reach, but it also brought the World Bank's claims to be using oil as a social welfare programme crashing down in flames. So how did all those bold critics of Morales respond? They didn't. The whole hypocritical horde of them looked the other way.

The World Bank decided to fund Chad's massive oil scheme in 2000, after extracting a promise from the government of Idriss Deby - which has a terrible human rights record - that the profits would be used for the benefit of the country's people. Deby's administration passed a law allocating 85% of the government's oil revenues to education, health and development, and placing 10% "in trust for future generations". This, the bank said, amounted to "an unprecedented system of safeguards to ensure that these revenues would be used to finance development in Chad".

Without the World Bank, the project could not have gone ahead. It was asked to participate by Exxon, the leading partner in the project, to provide insurance against political risk. The bank's different lending arms stumped up a total of $333m, and the European Investment Bank threw in another $120m. The oil companies (Exxon, Petronas and Chevron) started drilling 300 wells in the south of the country, and building a pipeline to a port in Cameroon, which opened in 2003.

Environmentalists predicted that the pipeline would damage the rainforests of Cameroon and displace the indigenous people who lived there; that the oil companies would consume much of Chad's scarce water and that an influx of oil workers would be accompanied by an influx of Aids. They also argued that subsidising oil companies in the name of social welfare was a radical reinterpretation of the bank's mandate. As long ago as 1997, the Environmental Defence Fund warned that the government of Chad would not keep its promises to use the money for alleviating poverty. In 1999, researchers from Harvard Law School examined the law the government had passed, and predicted that the authorities "have little intention of allowing it to affect local practice".

In 2000, the oil companies gave the government of Chad a "signing bonus" of $4.5m, which it immediately spent on arms. Then, at the beginning of 2006, it simply tore up the law it had passed in 1998. It redefined the development budget to include security, seized the fund set aside for future generations, and diverted 30% of the total revenues into "general spending", which, in Chad, is another term for guns. The World Bank, embarrassed by the fulfilment of all the predictions its critics had made, froze the revenues the government had deposited in London and suspended the remainder of its loans. The Chadian government responded by warning that it would simply shut down the oil wells. The corporations ran to daddy (the US government) and, on April 27, the bank caved in. Its new agreement with Chad entitles Deby to pretty well everything he has already taken.

The World Bank's attempts to save face are almost funny. Last year, it said that the scheme was "a pioneering and collaborative effort ... to demonstrate that large-scale crude oil projects can significantly improve prospects for sustainable long-term development". In other words, it was a model for oil-producing countries to follow. Now it tells us that the project in Chad was "less a model for all oil-producing countries than a unique solution to a unique challenge". But, however much it wriggles, it cannot disguise the fact that the government's reassertion of control is a disaster both for the bank and for the impoverished people it claimed to be helping. Since the project began, Chad has fallen from 167th to 173rd on the UN's human development index, and life expectancy there has dropped from 44.7 to 43.6 years. If, by contrast, Morales does as he has promised and uses the extra revenues from Bolivia's gas fields in the same way as Hugo Chávez has used the money from Venezuela's oil, the result is likely to be a major improvement in his people's welfare.

So, on the one hand, you have a man who has kept his promises by regaining control over the money from the hydrocarbon industry, in order to use it to help the poor. On the other, you have a man who has broken his promises by regaining control over the money from the hydrocarbon industry, in order to buy guns. The first man is vilified as irresponsible, childish and capricious. The second man is left to get on with it. Why? Well, Deby's actions don't hurt the oil companies. Morales's do. When Blair and Rice and the Times and all the other apologists for undemocratic power say "the people", they mean the corporations. The reason they hate Morales is that when he says "the people", he means the people.

Still don't beleive oil talks and bullshit walks? Then maybe you should read up on Cheney's recent visit to some rather undemocratic Central Asian republics starting to pump out lots of black gooey stuff.

Bottom line - the quickest way to become America's friend is to give them unfettered access to your oil. And the quickest way to get on their shit list is tell them your going to decide for yourself what you want to do with your oil. Just ask Hugo.
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Today appeared some more nicely organized information on Venezuel's recent economic performance. In particular there was this nice table from El Universal laying out the economy's performance:



The left half gives the quarter by quarter growth of different sectors of the economy over the past two years. Interestingly, after almost 70% growth in the first quarter of 2004 which reflects the recovery from the oil strike the oil sector has been pretty flat. The real growth has been in the non-oil sectors such as construction and commerce which are often growing more than 20%. Manufacturing is certainly doing ok, generally growing between 8 and 10%, but it would probably be doing a lot better if the Bolivar weren't so overvalued and people bought more Venezuelan made products as opposed to imports.

On the right it gives the quarter by quarter growth in the GDP overall. Again, ever since the spectacular recovery in 2004 we see the growth has leveled off to a still excellent growth rate of about 10%. What is particularly good is that rate doesn't seem to be declining but rather is holding steady. Oil prices being what they are I'm optomistic Venezuela can have another year of almost 10% growth.

On another note the El Universal article gave some numbers on job growth. You may recall I did a post a couple of weeks ago that turned out to have some erronous numbers on job growth that I will hopefully be able to fix (the numbers I used appeared to be too high because they included jobs in the informal sector of the economy, not just jobs in the formal sector). However, this article pointed out that in the first quarter of 2006 there were 376,000 new private sector jobs created. If accurate that is a incredible number - it would come to nearly a million and half new private sector jobs in a year! That would be spectacular job growth in a country of Venezuela's size.
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The Venezuelan economy is so consistant in its long running boom that I feel like I could almost cut and past the posts each quarter detailing. That, though, would be cheating, so here are the real numbers released today by the Venezuelan Central Bank:

The economy grew 9.4% in the first quarter of 2006. Given that the projected growth was around 5 or 6% this is much better than what was expected.

Breaking down the numbers we once again see that the growth is concentrated in the private and non-oil sectors. Here are the details:

The oil sector actually decreased by .2 percent

The non-oil sector grew by 10.9 percent.

Making up the non-oil sector we had the following growth rates:

Manufacturing up 9.4 percent

Commerce up 21 percent

Construction up 21.2 percent

Communications up 28.1 percent

This stellar growth comes on top of 17% growth in 2004 and 9% growth in 2005. The torrid pace of Venezeulan growth is a welcome boost for Venezuelans and probably the final nail in the coffin for the oppositions electoral prospects.

A final note: Once I can get the GDP numbers in terms of constant Bolivares from the BCV web-site (this may be a month or so) I will be able to calculate the evolution of Venezuelan per capita income over Chavez's term. But given that it was only down a few percent as of last year with this 9% growth is virtually certain that per capita income across the board is up during Chavez's term. This is significant because in the 40 years proceeding Chavez's coming to office the Venezuela was one of the few countries in the world that had a decreasing per capita income. That would then be another very bad trend reversed by Chavez.
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Here are some thought provoking statistics about Venezuela given in Ultimas Noticias today.

In 1950 Venezuelan women had on average 6.1 kids (yikes). In 1960 that went up to 6.7 kids (double yikes). Fortunately, of late they've come more to their senses and have a more rational 2.7 kids. Still a lot though. And all those kids make Venezuela a very young country. This wasn't one of the statistics given but if I recall correctly the median age there is something like 22 or 23 years old. If you're 40 you feel down right ancient.

The number of people living in each household is 4.35. I would have guessed higher.

But here come the killer statistics. In 2004 only 17.8% of births were to married women. 57% were to women living with a man but not married and 19% were to single women (these numbers don't add up to 100%, maybe there are some where the mother's status isn't known). This means 76% of child births in Venezuela are to women who aren't married!! Quite a stunning statistic. But based on my personal observations in Venezuela this doesn't surprise me much. It is very unusual run into a traditional nuclear family in Venezuela - that is, a father, mother, and their biological children all together. In fact, I don't think I've ever met one. Further, it seems as though the vast majority of Venezuelans have half brothers and half sisters. That is women and men typically have children with more than one partner.

This is certainly very different from many societies, or at least certain social strata in those societies. I have no intention of trying to account for this or explain its significance - people who have ideas are free to share them in the comments. But these statistics do reflect on aspects of Venezuelan family life that can't help but be obvious.
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Today the U.S., again showing off its "either you are with us or against us" mentality, criticized Venezuela's anti-terrorism efforts and as punishment cut off all arms sales to Venezuela. As a practical matter this has little effect on Venezuela as they aren't currently purchasing much of anything from the U.S. The main impact will be on some aging F-16 fighters that they now won't be able to get spare parts for. Most likely, they will now buy Russian fighters to replace them.

However, the most interesting aspect of this news isn't the arms cutoff but the non-sense about terrorism. For those wishing to read the State Departments report it can be found here. It really doesn't go into any detail beyond what can be found in the media reports such as this:

WASHINGTON - The United States is imposing a ban on weapons sales to Venezuela because of what it claims is a lack of support by President Hugo Chavez’s leftist government on counterterrorism efforts, the State Department said Monday.

The Bush administration will also list Venezuela — the fifth-largest supplier of oil to the United States — as a “country of concern” in the war on terrorism, an official told NBC News, speaking on condition of anonymity.

The label is not as severe as being listed as a “state sponsor of terror,” but it reflects what the State Department reported in April about Venezuela in its annual terror report.

“Venezuelan cooperation in the international campaign against terrorism remained negligible,” the report said. “President Hugo Chavez persisted in public criticism of U.S. counterterrorism efforts, publicly championed Iraqi terrorists (and) deepened Venezuelan collaboration with such state sponsors of terrorism as Cuba and Iran.”

The report also accused Chavez of having an “ideological affinity” with two leftist guerrilla groups operating in neighboring Colombia, the FARC and the National Liberation Army. The United States considers both to be terrorist organizations.

If this doesn't show the imperial arrogance and hubris that comes with being the worlds sole superpower it's hard to think of what would.

Let's see, Venezuela itself is not involved with terrorism. But it befriends country's that supposedly are - Cuba and Iran. So now its not what you do but what your friends do that matters. If that's the case how does the U.S. avoid decertifying itself? For example, the U.S. openly befriends and supports Packistan. Yet that country supports terrorists operating in the Kashmir and India. Further, that country is a proliferator of WMD as the designer of its atomic bomb was shopping its design around to other countries like Iran. And this is not only a country that the U.S. befriends but funds with hundreds of millions of dollars. I guess no-one will ever accuse the U.S. government of being consistant.

Then they accuse Chavez of having "publicly championed Iraqi terrorists". I assume they mean he supports the insurgency which is resisting U.S. occupation. Well, welcome to the club Hugo. And who'd have thought by defending the right of self-determination and standing against good old fashioned imperialism we would be viewed as coddlers of terrorists? I guess given that smearing people with the "commie" label doesn't really work anymore they had to come up with something else.

Then we get to the heart of the matter - he has a “ideological affinity” with some Colombian guerillas? Wow, I guess I better run right out and burn my Karl Marx Reader that I still have hanging around from my college days. They're beyond even guilt by association. It's now guilt by even having some shared thoughts. Scary. I think I just realized I'm in league with Hamas. Hamas thinks Bush is an asshole. I think Bush is an asshole. Damn, Hamas and I are practically the same thing!

The other day I said Chavez should wear his not being selected to a human rights commission (with such human rights lumineries as Saudi Arabia and China) as a badge of honor. Yet now the State Department has handed him another badge of honor. Looks like he is going to have quite a collection before these people are done.
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You can't put it much better than London Mayor Ken Livingstone did today:

Not a difficult choice at all

Chávez and Venezuela deserve the support of all who believe in social justice and democracy

Ken Livingstone
Monday May 15, 2006

President Hugo Chávez of Venezuela will today become the second head of state - after the Queen - to be welcomed to London's City Hall. When it comes to the social transformation taking place in Venezuela, the political qualifications often necessary in our imperfect world can be set aside. It is crystal clear on which side right and justice lies. For many years people have demanded that social progress and democracy go hand in hand, and that is exactly what is now taking place in Venezuela.

It therefore deserves the unequivocal support of not only every supporter of social progress but every genuine believer in democracy in the world.

Venezuela is a state of huge oil wealth that was hitherto scarcely used to benefit the population. Now, for the first time in a country of over 25 million people, a functioning health service is being built. Seventeen million people have been given access to free healthcare for the first time in their lives. Illiteracy has been eliminated. Fifteen million people have been given access to food, medicines and other essential products at affordable prices. A quarter of a million eye operations have been financed to rescue people from blindness. These are extraordinary practical achievements.

Little wonder, then, that Chávez and his supporters have won 10 elections in eight years. These victories were achieved despite a private media largely controlled by opponents of the government. Yet Chávez's visit has been met with absurd claims from rightwing activists that he is some kind of dictator.

The opponents of democracy are those who orchestrated a coup against Chávez, captured on film in the extraordinary documentary The Revolution Will Not Be Televised. It is a film that literally changes lives. By chance, a TV crew was in the presidential palace when the military coup of April 2002 against Chávez took place. It captured minute by minute the events that unfolded.

Anti-Chávez gunmen, in league with the coup organisers, opened fire on a pro-Chávez demonstration. As guns are commonplace in Venezuela, some in the crowd returned fire. US television stations manipulated these images by editing out the gunfire aimed at the pro- Chávez crowd to claim that anti-Chavez demonstrators had been attacked.

A million people took to the streets of Caracas to demand Chávez's release. The moment when the army deserted the coup leaders and went over to support the demonstrators is shown on film.

It is a sign of how little David Cameron's Conservative party has changed that London Tories are boycotting today's meeting with Chávez. This contrasts, of course, with the Tories' longstanding feting of the murdering torturer General Augusto Pinochet. To justify their position they ludicrously compare Chávez to Stalin. Sometimes it is necessary to choose the lesser of two evils. Britain fought with Stalin against Hitler. But with Chávez the choice is not difficult at all. He is both carrying out a progressive programme and doing so through the mandate of the ballot box.

George Bush's refusal to respect the choices of the Venezuelan people shows that his administration has no real interest in promoting democracy at all.

Not since the 1973 coup that brought Pinochet to power have people faced a clearer or more important international choice. In Venezuela millions are struggling to take their country out of poverty. They are doing so by means that are among the most democratic in the world. Both are inspiring.

Today Venezuela is being opposed largely on the basis of lies. We have to make sure Venezuelans have to face nothing worse. It is the duty of all people who support progress, justice and democracy to stand with Venezuela.

We need to make sure Venezuela faces nothing worse than an onslaught of lies, indeed.
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