Oil Wars

I'm sure most people will remember this famous quote from President Bush in July 2003:

There are some who, uh, feel like that, you know, the conditions are such that they can attack us there. My answer is: Bring 'em on. We got the force necessary to deal with the security situation.

Bush wanted the insurgents to bring it on and bring it on they did. Since this famous utterance the insurgents have killed over 2,000 more U.S. troops, wounded over 15,000 more, and created all sorts of havoc. Bush laid down a challenge and they took him up on it.

Now it seems as if Bush is having second thoughts about having said that. In a press conference the other day he said:

Sounds like kind of a familiar refrain here -- saying "bring it on," kind of tough talk, you know, that sent the wrong signal to people. I learned some lessons about expressing myself maybe in a little more sophisticated manner -- you know, "wanted dead or alive," that kind of talk. I think in certain parts of the world it was misinterpreted, and so I learned from that.

So now he wants... what? The insurgents not to bring it on? Talk about sending mixed messages. I mean really, if he didn't want the insurgents to bring it on what did he say it for? Maybe after a few years of having your soldiers blown to pieces every day it's not as easy to have quite so much swagger. Or maybe he thought the insurgents couldn't "bring it on", as implied by his pre-mature "mission accomplished " statements.

In any event maybe one of these days the idiot will learn to follow the old adage: "Say what you mean and mean what you say".
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Of late immigration and the status of people who are "undocumented" has created a political firestorm in the United States between two right wing groups - the business community that wants as many immigrants as it can get for cheap labor and other conservatives who are often racist and don't want more Hispanics coming to the United States.

Yet the United States is not the only country that where immigration is an issue - it is in Venezuela too. Moreover, in Venezuela many people who are as Venezuelan as you can get and have lived there their entire lives are cut off from basic services because they don't have proper documentation - a national I.D. card or "cedula" as it is called in Spanish.


A Venezuelan ID card or "cedula"

In Venezuela everyone is expected to have a cedula and carry it with them at pretty much all times. Without it you cannot do even simple things such as carry out banking transactions. Without it you also cannot get any sort of government assistance. Worse still it is difficult to travel without it. Checkpoints abound on all major intercity roadways and one is often required to present one's cedula. Without it you are not legally entitled to pass and the only way to continue on your trip is to pay a bribe to the police officer.

As example of how difficult it is to function without it during the 02/03 oil strike some relatives in Venezuela were put in a very difficult position as several were fired from their jobs by opposition employers and just getting enough to eat was a major concern. Some relatives in the U.S. attempted to send them money to help. Unfortunately, the intended recipients, although they are 100% Venezuelan and have never been outside the country, didn't have cedulas and as a result could not pick up money from Western Union or any other financial institution. They couldn't be helped simply because they lacked a basic document that all Venezuelans are expected to have but millions have been unable to obtain. Its as if someone was born in the U.S. but had to live like an "illegal immigrant" simply because they couldn't get proper papers.

This completely absurd and unacceptable situation has gone on for decades and previous governments showed their indifference by doing nothing to remedy it. Conveniently for them they didn't have to worry about getting punished at the polls for this as people without cedulas can't vote either.

Finally, the Chavez administration came along and began a massive program, called Mission Identidad (Mission Identity), to make sure everyone living in Venezuela could get a cedula. So far between 2 and 3 million Venezuelans have benefited from this program. These millions of native-born Venezuelans who had spent their lives living in the shadows can now enjoy the full spectrum of rights and access to government services that Venezuelans are entitled to. Their days of hiding, being denied government assistance, and having to suffer abuse at the hands of petty government officials are over. It is no wonder that the vast majority of them now support the Chavez government, the first government to recognize them for what they are - Venezuelan citizens.

Further, Venezuela has had large-scale immigration from other Latin American countries, namely Colombia and the Dominican Republic. Many of those people lived in Venezuela for decades without being able to become citizens. Chavez changed that too and hundreds of thousands of them have been granted the citizenship to which they are entitled.

So successful have these programs been that they are being exported to other countries such as Bolivia:

Air Force conscript Máximo Paco beamed as he showed off the national ID card that he had long wanted but just received under a new program financed by Venezuelan President Hugo Chávez.

''I'm very thankful for the help from Venezuela,'' Paco said as he surveyed a table bedecked with a laptop, two laser printers, a webcam and a card laminator -- part of a massive ID system launched in Bolivia two months ago but modeled after one begun by Chávez in Venezuela two years ago.

The Bolivian ID card effectively recognizes Paco's citizenship, secures his right to vote and makes him eligible for an array of public services.

Imagine what it must have been like for Mr. Paco to have been "undocumented" in his own country.

They say you can tell a lot about a society by how it treats its weakest and most vulnerable members. I think that is true. You can tell a lot about the United States by just listening to the debate on immigration. You can tell a lot about previous Venezuelan governments by how they allowed millions to languish in the shadows. And you can tell a lot about Chavez by how he has brought those millions out from the shadows and allowed them to assume their rightful place as full Venezuelan citizens.
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All Chavez has to do during his re-election campeign is keep asking that simple question and he wins, hands down. So say the new polling numbers out from Sejias.

First here are the actual numbers on people intending to vote for Chavez:

When aske who they would vote for, Chavez or an opposition candidate 65.6% said for Chavez versus 34% for an opposition candidate.

When asked to name WHO they would vote for 56/9% said for Chavez, 4.1% for Zulia governor Rosales, 3.3% for Tal Cual editor Petkoff.

There is nothing really new here in spite of the fact that Chavez's numbers appear to be going up (and that has the people over at ND in a lather). But here is the real find:

When asked how things in the country have gone over the past seven years people answered as follows:

They have improved, 62%; they have stayed the same, 15.5%; they have gotten worse, 20.6%

And when asked how their own families situation has changed they said:

It has improved, 46.9%; it has stayed the same, 36.1%; it was gotten worse, 16.8%


So Chavez has sky high poll numbers and the reason is clear - most Venezuelan's recognize that the country is better off after seven years of his rule and they personaly are better off. The opposition can keep blabbering on with all their excuses but the bottom line is they can't defeat an incumbent who has made peoples lives better.
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Here is a little taste from a good article on the Wall Street Journal today on the assistance Venezuela is giving to Bolivia:

New President Has Bolivia Marching to Chavez's Beat

La Paz, Bolivia - Since Evo Morales took office as president here in January, the coca grower turned socialist politician has aligned his country so closely with Venezuela's Hugo Chavez that it is sometimes difficult to tell where one government begins and the other ends.

After the election of the populist, for instance, foreign steel companies were told they would have to renegotiate a proposed deal to develop a huge iron-ore deposit known as El Mutun. But they didn't count on facing Venezuelan government experts on the Bolivian side of the bargaining table.

During an April 25 session with India's Jindal Steel & Power Ltd., two Venezuelan experts whispered into the ears of their Bolivian counterparts and passed them notes, says Juan Mogrovejo, a representative of Jindal Steel who attended the meetings. Then the Bolivians hardened their terms, demanding that the length of the contract be cut to 20 years from 40. "The proposed contract changed radically," Mr. Mogrovejo says. Other companies have also expressed dismay at the new terms.

So the steel company execs probably thought they were going to have an easy time dealing with some naive green horn Bolivians. Wouldn't it have been nice to be a fly on the wall and see the expressions on their faces when they realized that instead they were facing experienced Venezuelans who were likely on to all their tricks!

This is precisely the type of collaboration between countries that is so very helpful yet costs almost nothing. Kudos to Chavez and Morales for doing this.

And here is some more of what Bolivia is getting from Venezuela:

Mr. Morales has also adopted many of Mr. Chavez's social programs, including the use of Cuban doctors and teachers in poor neighborhoods. And estimated 708 Cuban doctors and volunteers have set up six clinics that offer, among other things, free eye consultations. At a Santa Cruz clinic, 200 Bolivians recently stood in a line that snaked around the block, waiting in the hot sun to get appointments for an eye examination. The clinic performs 100 free cataract operations dails. Some patients spent the night sleeping on the steps of the clinic. "It's a miracle," said Juan Alvarez, 56, an upholsterer awaiting surgery on an eye that clouded up three years ago after an injury.

Literacy classes are also a big hit. In a cramped classroom on the wind-swept pateau above La Paz, a few dozen Ayamara Indian women and men gathered around a television set recently to learn the alphabet. At the end of the day's session, Hugo Chura, the Bolivian official in charge of the program, stood up to give a pitch. "Previous governments here never cared about you,", he said in the Aymara language. "But the new president does. And he has friends like Fidel Castro and the Venezuelans who care about you too." The class broke out in applause.

Thanks to such programs, Mr. Morales's approval ratings now hover above 80%.

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Today there was a good article on the new Bolivarian University in Venezuela in the Washington Post. In theory there has been free education in Venezuela for quite some time given through the main public university, the Universidad Central de Venezuela, or UCV. However, rather than being the province of poor but talented and hardworking studends the UCV has become another playground of the rich with some from the middle class thrown in for good measure. Don't expect to run into people from Caracas's poorer areas such as Petare, El Valle, or Antimano there. The poor are effectively excluded by entrance exams that their primary education does little to prepare them for.

To counterbalance this the Chavez government set up the Bolivarian University which is fairly well described in the article:

Chavez Educates Masses at a University in His Image

By Monte Reel
Washington Post Foreign Service
Thursday, May 25, 2006; A21

CARACAS, Venezuela -- As his students copied down their homework assignments, Jose Fernando Benitez reminded them why they should take the work seriously: There were their own interests to consider, but also those of President Hugo Chavez's Venezuela.

"The government is spending millions on you," Benitez said before the students in his communications class at the Bolivarian University of Venezuela spilled into the halls. "It is not an option to avoid reading and doing the work. You have an obligation to do your best."

The vast majority of students at the three-year-old university grew up in poverty. Now they are recipients of a tuition-free education. They are also part of a massive underclass that Chavez aims to empower through the social programs that have fed his domestic popularity. The school, the cornerstone of those programs, is aimed at educating millions and promoting the sort of social activism that Chavez says can help Venezuela's poor majority to overcome decades of oppression by the rich.

The government has already built a network of health and education programs. But Chavez has promised more, and to keep those promises from souring into disillusionment, officials acknowledge they will need a lot of industrious bodies, all tuned to roughly the same ideological wavelength.

Thousands of students expected to staff free public health clinics as physicians will get their diplomas at Bolivarian University. So will social workers slated for neighborhood literacy centers, and journalists whom the government believes are necessary alternatives to an opposition-controlled national media.

Even before its first graduation ceremony, the school has become the largest university in Venezuela. About 180,000 students are enrolled, but that number is a mere suggestion of its ambition: The government hopes the student body will grow to 1 million within three years, with more than 190 satellite classrooms throughout the country.

The government's political opposition, a group increasingly relegated to the sidelines of Venezuelan public life, sees the university as a thinly disguised propaganda factory that takes advantage of the country's most vulnerable citizens.

"Unfortunately, the government is using education as a political tool," said Julio Borges, an opposition leader running for president against Chavez in December's elections. "The Bolivarian University is just another vehicle, a bridge, to politicize the population."

But Venezuela's people are already thoroughly politicized; even the university's physical structures are potent political symbols. Most of the buildings, including those on the main Caracas campus, once served as headquarters for the state petroleum company, an institution purged of many anti-Chavez employees after a crippling strike against the government in 2002. Offices once reserved for executives who favored free-market economics are now decorated with posters of the socialist icon Che Guevara.

Aside from a few bulletin boards and scattered posters, the walls in the corridors are largely bare, an attempt to protect students from what administrators call the "mercantilization of education." There are no "for sale" boards here, and no traces of corporate sponsorship.

Instead, displays such as the one behind glass in the main building's lobby command attention. It's an oversize exhibit featuring motionless marionettes. Some are gathered outside a scaled-down Mercal, the subsidized grocery stores that Chavez has opened in poor neighborhoods. Doctors dressed in blue scrubs operate on a patient in a public health clinic. Hard-hatted maintenance men wearing Chavez campaign shirts sweep the make-believe streets clean.

And looking out over all of it is a plasticized model of El Comandante, sitting behind a desk on the simulated set of Chavez's weekly television show, "Alo, Presidente," wearing a red beret and military jacket. His prominent position on an elevated platform and his emphatically raised left arm suggest he's not just another puppet; instead, he looks more like the one pulling the strings.

'The New Man'

Alejandro Padron is like a lot of the students here: 19 years old, from a poor family, who grew up loving sports more than books and never really thought of his long-term prospects until faced with the drab inevitability of a service industry job. He said he took entrance exams for the Central University of Venezuela, and -- like most of his friends -- didn't make it. He watched as some of those friends paid fees to take the tests over and over, and began to resent the hopelessness of it. College in Venezuela, he decided, was a racket only the rich could beat.

"You begin to invest in something you'll never have," he said. "Then you realize that it's just another way to keep you enslaved."

There was no question about getting accepted at Bolivarian University, because everyone gets in. It doesn't matter if applicants spent the past 11 years in prison for murder -- as did a 49-year-old law student who said he is eager for a second chance -- or if they're foreign tourists interested in social activism in Venezuela. Inclusion is the golden rule here. So Padron enrolled last year and decided to major in politics.

But when classes started, he had second thoughts.

"My first day was frustrating, because I saw a lot of people who were already ideologically formed -- you know, Lenin and Marx," he said. "I was like, 'What is that? It must be a religion.' " But he soon made friends with a tight group of young students, all frank idealists who said they were fully committed to the Bolivarian Revolution, a model derived from the legacy of Simon Bolivar, the South American liberator. Whatever political commentary Padron can offer today, he said, he learned "with the help of my comrades."

"The goal of Bolivarian University is to form 'the New Man,' " said Padron, dropping a term coined by another revolutionary, Guevara, to refer to someone who is selflessly dedicated to bettering society. "The New Man is not a technocrat, but rather is proficient in various fields -- professional and technological -- and is completely focused on his community. He is a humanist."

Padron now immerses himself in his class readings. The Caracas campus's library, in the basement of the main building, holds a generous collection of political texts, the vast majority from Latin American authors aligned with Chavez's socialist vision but with a few titles from opposition leaders sprinkled in. Like Chavez, the library does not demonstrate shyness in proclaiming its distaste for the U.S. government and for the Bush administration in particular. A poster on the wall beside the checkout counter shows a mouse with fur painted with the stars and stripes of a U.S. flag; the mouse is caught dead in a trap. The American author with the most titles under his name in the political section is Michael Moore.

Padron and other students sat at an outdoor cafe on the campus grounds one recent evening, chatting long after the cashiers had locked their registers and stacked the rest of the chairs in a corner. Conversation turned to the United States, the country that Chavez has identified as his nemesis, the "empire" that he regularly taunts as an oppressor of Latin Americans. The opinions expressed at the table matched those of their president: The students said they respected U.S. founders and activists such as the Rev. Martin Luther King Jr. and Malcolm X but professed bafflement at what, in their view, was the apathetic regard for the poor at the root of free-market capitalism espoused by the United States.

"In the 21st century, it seems as if the people in the United States are asleep," said Cesar Trompiz, 19, a law student and a friend of Padron's. "It seems like they don't even know what's going on in their own country."

That won't happen to them, the students said, noting that they value community service over individual comfort. They're not sure exactly what they will do after graduating, but their jobs probably will be somehow connected to the public sector.

Critics of the university, however, wonder how the flood of Bolivarian graduates can be absorbed into the Venezuelan economy.

"When they get to the job market, I think they are going to be even more frustrated than they were before they got to the university," said Evelyn Rousseo, a retired high school principal in Caracas. "I think the long-term effect on the students is that they are going to feel deceived, that it was all a big lie."

'The New Regimen'

A small crowd gathered in the university parking lot earlier this month to board buses to attend a political rally downtown. All wore red, the trademark color of the Bolivarian revolution.

But instead of taking to the streets to protest what they don't like about their government, the students here march in support of it. The flier taped to the front doors of the main university building defined that day's rally as an occasion to stand up for Chavez and against "Yankee Imperialism."

"As Socrates said, we're all political animals," said Nelson Sosa, 26, a second-year law student. "But we have to support good politics, not ambiguous ones."

Sosa and other students said they would be free to protest against Chavez's government if they chose to, but they haven't chosen to yet. There is no sign of an opposition presence anywhere at the university.

University administrators say that absence does not represent an absence of democratic principles. Temir Porras Ponceleon, the vice minister of higher education and the vice rector of Bolivarian University, said those who make up the political opposition in Venezuela today are like those who defended a return to a monarchy after the French Revolution. The political system underwent a fundamental shift when Chavez took power in 1998, he suggested, and the opposition must adapt.

"My hope is that inside of the new political regimen, we develop a center, a left and a right -- but they all have to accept the fundamentals of the new regimen," Ponceleon said. "Different political tendencies can exist, and only time will tell how they will evolve . . . and still respect the new regimen."

If all goes according to plan, the millions of students graduating from Bolivarian University in coming years will be the ones largely responsible for determining that.

"The state needs professionals who share the fundamental basics of the republic," Ponceleon said. "That is to say, who share the principles like public education that is truly public, to guarantee the permanence of the republic."

Unfortunatly, as with everything in Venezuela, the opposition has to rear its ugly head:

"Unfortunately, the government is using education as a political tool," said Julio Borges, an opposition leader running for president against Chavez in December's elections. "The Bolivarian University is just another vehicle, a bridge, to politicize the population."


Of course Mr. Borges got his education at Oxford University in England. I'm sure from his point of view if you can't go to someplace worthwhile like Oxford why bother. This is typical of the wealthy opposition, only they should have aspirations and dreams. The remaining 90% of Venezuelans should just know their place and accept their lot. Fortunately, most Venezuelans aren't accepting any of that non-sense anymore.
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Now that I know how to post graphs I have been culling economic data from the Venezuelan Central Bank to do some nice graphs on and show how Chavez compares to his predecessors. Given that the subject of inflation has already come up in the comments section and been the source of some dispute I thought I'd go ahead and post that graph. Here is the annual inflation rate for Venezuela going back to 1989:



Looking at this graph it immediately becomes apparent that inflation is much lower under Chavez than the previous presidents. In fact, his worst year, 2002, has lower inflation than all but one year from previous presidents. Also, except for 2002 when the opposition created tumult through coup attempts and strikes, inflation has consistently trended down under Chavez.

This makes it particularly ironic that the opposition likes to criticize him for having high rates of inflation. Compared to when they were running things inflation is much lower under Chavez. This is all the more remarkable because the reduction in inflation has been accompanied by very strong economic growth.

So the opposition can complain, whine, and find fault. Those are about the only things they are good at. But when it comes to actual performance the numbers show Chavez has done a much better job at keeping inflation under control than they did.
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It was a slow news day and I didn't know what I was going to post on. Fortunately, Bush decided to open his mouth and help me out. Here are some utterances of his on Venezeula and Bolivia from this article:

"I am going to continue to remind our hemisphere that respect for property rights and human rights is essential for all countries in order for there to be prosperity and peace"

At least he knows what his priorities are - property rights come before human rights.

"I'm going to remind our allies and friends in the neighborhood that the United States of America stands for justice; that when we see poverty, we care about it, and we do something about it"

I think I pulled my groin muscle laughing too hard after reading that one. On the up side, if I have to go out on disability at least I'll have more time to blog!

"I'm going to remind our people that meddling in other elections to achieve a short-term objective is not in the interests of the neighborhood"

Indeed, meddling in elections is completely inappropriate, not to mention tactless. Have some patience, let the electoral process run its course, and if you don't like the result THEN overthrow them.

"We can spend money, and we do in the neighborhood, but the best way for there to be growth is to encourage commerce and trade and prosperity through the marketplace"

"I'm going to remind people that the United States stands against corruption at all levels of government, the United States expects the same from other countries in the neighborhood."

Indeed, government officials musn't steal. That would reduce the amount of monies avialable to be stolen by people in the private sector like Halliburton.

All jokes aside we could go through and parse these statements. But why bother, they speak for themselves. And hopefully you will find them to be as entertaining as I did!
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You would think having watched Chavez revitalize OPEC and oil revenues increase the opposition would have learned something and would be in favor of continueing those policies in any future government. You could be forgiven for thinking that (after all, continueing successful policies would seem the rational thing to do) but you would be wrong.

Just this month a review of Chavez's tenure came out which gave some revealing opinions. I won't analyze it all, people who are interested can read it here. But I do want to comment on what they had to say about the Venezuela's oil industry. First we have this little gem by Oscar Mendoza (never heard of him before):

In 1968, oil production in Venezuela was at 3.6 mbpd and it was in third place among world producers, with about 10 percent of the global share in production. In 1975, the government went full steam ahead with the nationalization of the oil industry, taking control over the whole operation.

Fast forward to 2006, and production is well below 2.5 mbpd. And declining. Venezuela’s government is using oil and the generous income it generates as a geopolitical weapon against the interests of its own people.

Hopefully, I've done enough posts on the oil industry recently for people to instantly recognize the falsehoods peddled here. Suffice it to say, as this graph shows, Venezuela is producing over 3 MBPD of oil and its production is increasing, not decreasing. Sadly, these falsehoods are par for the course when it comes to the opposition.

He then goes on to say:

Due to Venezuela’s role as one of the main energy producers in the Western Hemisphere, it is imperative that the oil industry regain the importance it had decades ago. The so-called oil liberalization strategy (Plan de Apertura Petrolera), developed in 1991, aimed to have production up to 6 mbpd by the year 2006. If it had been implemented as planned, we would be producing that amount today. A wide privatization strategy to increase production by 8 mbpd is not completely out of the question. We need change. We need a government that looks after the real interests of the nation. It is not easy, but a large number of Venezuelans are fighting for it.

Yeah, sure, spend tens of billions on increased production and have prices go back down to $8 per barrel just like the last time that was done. Sorry, but Venezuela does have a government that looks "after the real interests of the nation" instead of just making more jobs for oil industry managers. Thats why they cut back production and increased revenues.

Its also interesting to note this person advocates privatization of the oil industry. Maybe he has a lot of Exxon-Mobil stock in his portfolio? In any event most Venezuelans are fully conscious of what a losing proposition that is for Venezuela so I doubt many of their presidential candidates will make it the conerstone of their campeigns.

Then we get to Roberto Smith who actually IS a presidential candidate (though he is currently only polling 1%):

The political polarization in Venezuela has made the impossible quite possible: The qualified, trained and expert personnel that used to run the country’s oil business were fired and blacklisted by the government. In other words, the people who used to run our oil industry are barred from participating in it at any level. Not only are they barred from PDVSA’s operations, but also from any company related to the state-owned oil industry.

As a result, Venezuela’s oil production has decreased. Currently, our country’s actual production level is 2.6 mbpd. To make matters worse, refining problems have forced several products out of the normal production line. Finally, it is hard to quantify the effects of the pressure placed on foreign companies that have invested in Venezuela’s oil industry. Companies have been forced into joint-venture agreements that make it very difficult for foreign investors to consider our country as a secure investment destination.

As is the norm for opposition types he can't be bothered to get basic facts right. First, he talks about people being fired from PDVSA without once mentioning what they did to get fired. Most likely because he too supported the oil strike. Then he falsely claims that "as a result" Venezuela's oil production is down. But again, not true. The decline came in 1999 when cutbacks were intentionally made. The production in 2005 is the same as 2001 so he is giving us nothing but the standard opposition distortions.

Moreover he thinks Venezuela having re-written contracts to collect a fair share of taxes and royalties will deter foriegn investors. If all the foreign investors want is Venezuelan oil to be given to them for almost nothing then its probably a good thing for them to be scared away. All the oil operations that the foreign companies are operating make less money for Venezuela than if the country simply pumped the oil itself. So the approprate thing to say to big oil is "don't let the door hit you on the way out".

Then he gets to his vision for Venezuela's oil industry:

The future for our country, undoubtedly, is to build a strong and growing oil industry. Reaching production levels never reached before, levels that could generate income that would allow Venezuelans to benefit directly, should be a primary goal.

So lets see, in the 1990s Venezuela opened up its oil industry to foriegn investment, had the government pour in billions of dollars to greatly expand output, and what it got in return was $8 a barrel oil and greatly reduced revenue. Such a great outcome sure cries out to be repeated doesn't it - at least to opposition minds apparently. Fortunately Venezuelans are smart enough to have learned from the past and not want to see such fiascos repeated. That is probably why Smith is polling only 1%.

So come December 3rd Venezuelans have a choice. They can vote to continue with the current policies of supporting OPEC, restricting production, defending prices, and reaping increased oil revenues. Or they can go back to the policies of the 90's where oil profits are used to increase production with no regard for OPEC quotas and prices go through the floor. There is a very clear choice to be made. I have little doubt Venezuelans will make the right choice
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