Oil Wars

The Venezuelan opposition likes to make fun of the amount of time that President Chavez spends traveling abroad. Never mind that those trips did things like revitalize OPEC and help thwart U.S. efforts to try to isolate Venezuela. And just this week Chavez has been in China doing great work for Venezuela. Even if the opposition likes to ignore this sort of thing the international business press like the Wall Street Journal take note (from Thursday's edition of the WSJ):

Mr. Chavez is in the middle of a six-day trip to Beijing, his fourth visit since taking over as president in 1999. During the trip he has signed deals for housing, mining, telecommunications and oil with Chinese companies.

One of those deals was between the state oil company, Petroleos de Venezuela SA, or PdVSA, and China National Petroleum Corp.'s service and engineering unit, involving sales of oil-drilling rigs, a person familiar with the plans said.

The deal will consist of the purchase of 12 Chinese- manufactured oil-drilling rigs, which are expected to be produced by Baoji Oil Machinery Co, CNPC's largest oil-equipment maker by capacity, the person said. The two companies also will set up a joint-venture factory in Venezuela for the production of more drilling rigs, the person familiar with the plans added.

"Chinese-made drilling rigs are competative in terms of technology and price, although China is still weak in key control software," the person knowledgeable about the signing added.

Now when a country whose many industry is oil production takes steps to be able to manufacture drilling rigs that sure sounds like a good idea to me - and time well spent by its leader making that deal happen.

The reality is that President Chavez's working travel is often quite productive and rewarding for Venezuela despite the opposition alternately ignoring or ridiculing it. And he is not the only one that travels. Maria Machado, Teodoro Petkoff, Leopoldo Lopez and other opposition luminaries have also done lots of globe trotting. But what does Venezuela have to show for any of their travels? Nothing that I can think of.

The fact is Chavez produces for Venezuela. Until the opposition learns to produce something besides coups, strikes and street riots they would do well to simply shut up, observe Chavez, and try to learn from him.
|

It sure is fun waking up on a Saturday and seeing this splashed all over the Yahoo news:

CARACAS, Venezuela - The U.S. government is spending millions of dollars in the name of democracy in Venezuela — bankrolling human rights seminars, training emerging leaders, advising political parties and giving to charities. But the money is raising deep suspicions among supporters of President Hugo Chavez, in part because the U.S. has refused to name many of the groups it's supporting.

Details of the spending emerge in 1,600 pages of grant contracts obtained by The Associated Press through a Freedom of Information Act request. The U.S. Agency for International Development released copies of 132 contracts in all, but whited out the names and other identifying details of nearly half the grantees.

U.S. officials insist the aid is aboveboard and politically neutral, and say the Chavez government would harass or prosecute the grant recipients if they were identified.

Chavez, however, believes the United States is campaigning — overtly and covertly — to undermine his leftist government, which has crusaded against U.S. influence in Latin America and elsewhere.

"The empire pays its lackeys, and it pays them well," he said recently, accusing some of his opponents of taking "gringo money."

While USAID oversees much of the public U.S. spending on Latin America, President Bush's government also has stepped up covert efforts in the region. This month, Washington named a career CIA agent as the "mission manager" to oversee U.S. intelligence on Cuba and Venezuela.

The Bush administration has an $80 million plan to hasten change in Cuba, where Chavez has sworn to help defend Fidel Castro's communist system. The U.S. also is spending millions on pro-democracy work in Bolivia, where Bush has warned of "an erosion of democracy" since a Chavez ally, socialist Evo Morales, was elected president in December.

Chavez makes no distinction between the programs supported by U.S. funds and the secret effort he claims the CIA is pursuing to destabilize his government. And it appears a crackdown on the U.S. aid is looming as Chavez runs for re-election in December.

Venezuelan prosecutors have brought conspiracy charges against the leaders of Sumate, a U.S.-backed group that frequently points out perceived flaws in the voting system. The pro-Chavez National Assembly is preparing to require nonprofit groups to reveal their funding sources. And Chavez has threatened to expel U.S. Ambassador William Brownfield, whom he accuses of stirring up trouble with USAID donations to youth baseball teams and day-care centers.

Much of the spending is overseen by USAID's Office of Transition Initiatives, which also works in such "priority countries" as Iraq, Afghanistan, Bolivia and Haiti.

OTI says it has overseen more than $26 million for programs in Venezuela since 2002, when it began work here after a failed coup against Chavez. Much of it has gone toward more than 220 small grants as part of USAID's "Venezuela Confidence Building Initiative."

"It's a pro-democracy program to work with Venezuelans of any point of view," said Adolfo Franco, USAID's assistant administrator for Latin America and the Caribbean. "It's without political bias."

The USAID grants for 2004 and 2005 reviewed by AP include some charity projects — like $19,543 for baseball equipment that Brownfield delivered to a pro-Chavez neighborhood and $23,189 for chickens and coops at a poor school.

Others seem to promote good government, like $15,289 to publish a pocket guide on citizenship.

One recipient, the Development and Justice Consortium, held a workshop in a poor Caracas neighborhood on seeking accountability in local government. A neighborhood banner read "Chavez Forever," but teacher Antonio Quintin reminded students that "governments are only delegates."

Most attendees had no idea U.S. money paid for the class, and even die-hard Chavez supporters saw nothing subversive in it. "As long as it brings benefits, it doesn't matter where the funding comes from," said Ingrid Sanchez, 40, a member of a local planning council.

But other projects remain so vague as to raise concern among Chavistas, such as a $47,459 grant for a "democratic leadership campaign," $37,614 for citizen meetings to discuss a "shared vision" for society, or $56,124 to analyze Venezuela's new constitution of 1999. All went to unidentified recipients.

U.S. officials call the concerns baseless. They point to U.S.-funded programs meant to bridge the divide between Chavez's backers and opponents, such as conflict resolution workshops and public service announcements urging peaceful coexistence.

Much of the spending was for "in kind" aid — anything from snacks to airfare, rather than cash. And every grant requires the inclusion of people from across the political spectrum.

Even some pro-Chavez groups got support, said Russell Porter, an OTI official for Latin America.

Still, USAID said revealing more of their identities would be an "unwarranted invasion of personal privacy" that could endanger the recipients, saying some have been questioned for 12 hours at a time by the Venezuelan secret police.

"It's simply for the security of the recipient," Porter said. "The only thing we've held back are the names of the groups."

U.S. officials say they simply want to promote dialogue and strengthen Venezuela's "fragile democratic institutions."

But at the same time, Bush has repeatedly called Chavez a threat to democracy, and Chavez sympathizers find it hard to trust the U.S. government's motives.

"It's trying to implement regime change. There's no doubt about it. I think the U.S. government tries to mask it by saying it's a noble mission," said Eva Golinger, a Venezuelan-American lawyer who wrote "The Chavez Code: Cracking U.S. Intervention in Venezuela," a book that cites public documents to argue that Washington is systematically trying to overthrow Chavez.

Golinger sees parallels in past U.S. campaigns, partly covert, to aid government opponents in countries from Nicaragua to Ukraine. "It's too suspicious to have such a high level of secrecy," she said.

The U.S. State Department also has supported electoral observer missions and training for human rights activists as part of the $26 million spent since 2002.

In addition, the government-funded National Endowment for Democracy has awarded $2.9 million in pro-democracy grants for Venezuela since 2002, and the U.S.-funded International Republican Institute and National Democratic Institute have provided technical training to help restructure various Venezuelan political parties and supported training of electoral observers.

"It isn't designed to favor one party or another," said the National Democratic Institute's president, Ken Wollack. "All parties have participated."

But friction is mounting as Chavez seeks re-election. He holds a wide lead in the polls, and predicts the U.S. will try to discredit the December vote if he wins, with ammunition provided by U.S.-funded nonprofit groups.

Chavistas say their president has good reason to be concerned, given how quickly U.S. officials recognized his opponents during a short-lived coup in 2002. Immediately after Chavez was driven from power, the International Republican Institute's then president, George Folsom, issued a statement praising those who "rose up to defend democracy."

Chavez regained the presidency amid huge street protests, and the IRI's leadership later renounced Folsom's statement as contrary to the group's pro-democracy mission.

Still, all these efforts to influence another country's political process raise concerns outside Venezuela, too.

"It's very hard to accept an innocent directing of those funds," said Bill Monning, a law professor at the Monterey Institute of International Studies in California. "We would scream bloody murder if any outside force were interfering in our internal political system."

Sumate leader Maria Corina Machado, who met Bush at the White House last year, faces up to 16 years in prison if convicted of conspiracy for using $31,000 from the National Endowment for Democracy that she says went for voter education courses. Three other Sumate members also face charges.

Meanwhile, Venezuelan lawmakers recommended that Sumate be investigated for currency and tax law violations, and they've given initial approval, in a first reading, to a new law that would require non-governmental organizations to reveal their funding sources.

CIVICUS, a South Africa-based international group that supports citizen participation, says the proposed law will "endanger the existence of an independent civil society."

Russia adopted a similar law targeting human rights and pro-democracy groups this year after opposition leaders rose to power in the former Soviet republics of Georgia, Ukraine and Kyrgyzstan. Critics say Venezuela's law would bring heavy-handed tactics, but Chavez supporters say they need to keep tabs on U.S. spending.

"They're promoting a U.S. agenda," Golinger said, "and that's the overall goal: to eventually get Chavez out of power."

Wow, $26 million dollars spent on Venezuela over the past 4 years by some "transitions" office. Exactly what kind of transition would they be looking for? Actually, I think we can all guess.

Of the $26 million dollars $13 million has gone to unnamed recipients. Yet they claim their isn't political bias in who they are giving the money to. Sure, I believe that!!! Well, not really. And it sure would be interesting to know if some of that money going to unnamed sources could be financing the political campaigns of either the clown or Manuel Rosales. That would be illegal, but given that the U.S. government is hiding the information there is no way to know.

Personally, I would like to know why Venezuela allows the U.S. to have an embassy or any official representation in Venezuela if they are giving out money for political purposes but won't say who they are giving it to. After all, when the Venezuelan Information Office in the U.S. so much as makes a telephone call to a U.S. citizen it has to be reported to the U.S. government. I think its about time the Venezuelan government started making the same requirements of the U.S. "diplomats" running around Venezuela financing an anti-democratic opposition.
|

Last Sunday President Chavez inaugurated a new pediatric cardiological hospital which will give specialized care to children with heart defects that need to be surgicaly corrected. This hospital will give access to advanced life saving care to needy children in both Venezuela and in other parts of Latin America. It seems to be a very nice hospital, have a look:











Building this hospital is certainy a significant accomplishment and a great show of social solidarity to both poor Venezuelans and poor Latin Americans in general.

So who could complain right? Well leave it to the Venezuelan opposition to prove the old addage that no good deed goes unpunished is true.

Why does the Venezuelan opposition have its nose bent out of shape over this hospital you ask? Because to ensure that it's services go to those intended, ie the poor, it will possibly only be accepting patients from public hospitals that serve the poor, not from private clinics that serve the upper classes.

An opposition blog devoted a post to this alledged "discrimination". If you can make your way through all the insults the comments section is a must read. They tried to claim that medical care should be based solely on medical need and not anything else (sounds good to me). Yet when it was pointed out that people without money get dicriminated against all the time because they can't go to private hospitals their rejoinder was that is normal and the rich do the poor a favor by going to private hospitals (?!?!) otherwise the public hospitals would be even more overcrowded.

So to make a long story short here we see a perfect example of the Venezuelan opposition in action. When the rich get care because they have money and the poor don't get that care that is the normal (and apparently quite acceptable) way of the world. If to redress that the government builds a hospital and makes its use exclusively for the poor - well, that is a crime against humanity!!! Such is the Venezuelan opposition: what is theirs is theirs, and what is meant for the poor, that should be their too.
|

Just as a big discussion has broken out in the comments section about how Venezuela should best go about trying to promote long term economic development the L.A. Times runs an article on the huge move into cooperatives in Venezuela. The article covered a lot of interesting ground but the statistic that jumped out at me is that 7% of the Venezuelan work force already works in cooperatives and that is expected to grow to 30%.

Without a doubt, Chavez appears to be betting the farm on these cooperatives. It is there success or failure that will make or break Venezuela's efforts to wean itself off its longstanding dependance on oil. Read it for yourself and see what you think the odds of success are:

Big Cooperative Push in Venezuela
Incentives are helping to spur the wealth-sharing business model. Some question its viability.
By Chris Kraul, Times Staff Writer
August 21, 2006

MARGARITA ISLAND, Venezuela — For 20 years, Eustacio Aguilera's family owned the Hotel Residencia Guaiqueri in this tourist destination and free-trade zone.

He hired the cooks, the maintenance men and the cleaning women. But now when he asks them to prepare a meal or tidy a room, he is careful to treat them collegially. The staff may do menial work, but they are also co-owners.

"Before we had a boss. Now we are the bosses," said Hermogenes Garcia, a longtime maintenance man at the Guaiqueri.

The hotel is among 100,000 cooperatives formed in Venezuela in the last two years that are the centerpiece of President Hugo Chavez's new socialist model to create jobs and redistribute this oil-rich country's wealth. They now employ 7% of the country's workforce, a number that could grow to 30% in a few years, government officials say.

Chavez is spending hundreds of millions of dollars in oil and tax revenue on the cooperatives. Although there have been allegations of gross inefficiency and graft, cooperatives have become a powerful part of the economy and society.

More than 700,000 impoverished workers across the nation have suddenly become stakeholders, such as the 200 families in Bolivar state that were recently given the right to operate a toll road connecting state capital Ciudad Bolivar and Puerto Ordaz. Poor workers are now operating steel and textile factories, fisheries and dairy farms across Venezuela with the prospect of sharing in whatever profits the enterprises turn.

"Before this was just a job. Now you feel the hotel is yours," said Robert Carreno, head of housecleaning at the 40-room Hotel Kamarata, another hotel on Margarita Island that recently converted to a cooperative. "I have to give much more of myself now."

At Mango de Ocoita, some 80 miles east of Caracas on Venezuela's steamy Caribbean coast, Pedro Venegas gets emotional at the mention of Hugo Chavez. The cocoa farmer credits him for membership in a worker-owned farm cooperative and the use of a $7-million cocoa processing plant going up nearby.

Venegas hopes the cooperative and factory will revive his industry after years of stunted prices for cocoa beans. The plant will enable him and 3,000 other farmers in the cooperative to produce cocoa butter, powder and liquor that they can export directly to foreign customers, instead of selling raw beans into what for years has been a buyer's market.

"We owe it all to the commandant," said Venegas, who works several acres of cocoa trees in an orchard hacked out of a snake-infested jungle. "Up to now we've had to sell to whichever buyer came along, but now we will have the upper hand."

It's little wonder that a wide variety of groups including existing companies are rushing to form cooperatives. The government offers cooperatives exemption from all taxes as well as interest-free loans. The movement is changing the nature of Venezuelan society, putting quality of life and "solidarity" above the profit motive, said Oly Millan, Chavez's minister of popular economy.

But critics say the cooperatives are a replay of policies that already have failed across Latin America. For several decades after World War II, many Latin American nations engaged in state-sponsored economic programs designed to boost local industries and keep out imports.

"The underlying assumption of the program was that the state could do a better job than the private sector, which is inherently self-aggrandizing and doesn't look after the interests of the workers or the broader public," Boston University Professor David Scott Palmer said.

Several nations ended up defaulting on huge loans that they had taken out to finance state-owned industries, generating a hemispheric economic crisis in the early 1980s. The crisis pushed most of Latin America into embracing free-market policies that broke down barriers to imports, foreign investment and privatization of state-run monopolies.

Now, the pendulum is swinging back to the left in countries such as Venezuela whose leaders say free trade hasn't done enough to reduce poverty and inequality.

Chavez and his officials say that cooperatives are the fastest way to make good on a social debt to hundreds of thousands of poor workers — or the "excluded ones," as Millan describes them.

Skeptics inside and outside Venezuela question whether the cooperatives, heavily dependent as they are on government subsidies, can survive the first serious drop in oil prices, whose increases have been buoying the nation's economy and increasing consumer spending.

Dan Hellinger, a political scientist at Webster University in St. Louis, said the cooperatives would take "one or two generations" to prove themselves. Although he lauds Chavez's bid to make cooperatives the "main strategy for economic development," he wonders whether oil prices and the president's socialist ideology will endure that long.

Venezuela's embattled business groups say the cooperatives, in addition to other Chavez measures such as price and currency controls, are killing private investment and the growth of skilled jobs. The strategy, they say, will leave the country's economy vulnerable to the vagaries of oil prices.

"The fear that their companies may be turned into cooperatives either by force or by necessity to compete is causing business owners not to invest and not to hire more people," said Ismael Perez Vigil, executive director of business group Conindustria.

Government officials say the new movement in Venezuela is less top-down central planning than bottom-up participatory democracy.

The state provides the money, lots of it, for the cooperatives to buy assets, which are often government assets such as toll roads or bridges or abandoned factories and other businesses. But once the cooperatives are on their feet, the government lets the managers make major business decisions, said Millan, the economy minister.

"The state is a non-invasive facilitator," Millan said, adding that the primary purpose of cooperatives is not to turn a profit but to "realize the potential of the country, create networks of productivity and improve the quality of life."

Cooperatives are obligated to buy and sell among themselves whenever possible, a policy that leaves private companies at a disadvantage. Cooperatives have an edge in bidding for government contracts including those awarded by state-run oil company Petroleos de Venezuela.

The transformation is hardly occurring without a hitch. There have been several high-profile scandals involving Venezuelan paper and textile mills that have been run by worker cooperatives that have either failed to get the factories running after massive infusions of cash or have been accused of malfeasance.

Carlos Molina, the national superintendent of cooperatives, said in an interview that substandard bookkeeping and infrequent auditing are too often the norm. He acknowledged that the government was not even sure how many of the 138,000 licensed cooperatives were actually operating as businesses. The first thorough census of cooperatives will begin this month, he said.

"The weaknesses definitely include the management of the books at many of the cooperatives which don't give a good picture of whether the cooperatives are successful or failing," said Molina, who issued similar warnings in testimony this month before Venezuela's national assembly.

Nevertheless, Guaiqueri Hotel owner Aguilera sees mostly the benefits of Chavez's policy. Located near the beach, his hotel was going broke last year and he was faced with the option of either selling or forming a cooperative. He settled on a hybrid form called a co-managed cooperative in which he turned over a 45% interest to workers in exchange for a $500,000 loan to refurbish and remarket the property.

The 28-member cooperative includes 12 existing hotel workers, plus 16 poor and unskilled employees who had no previous hotel experience. They were added as part of the Chavez social initiative called Mission About-Face. The program seeks to incorporate hundreds of thousands of poor into the workforce via the cooperatives.

Aguilera, maintenance man Garcia and all other Guaiqueri hotel cooperative members have an equal say in how it is run and share in the profit if the hotel starts to produce one. The hotel cooperative has formed a dozen committees to make decisions on everything, including bookkeeping and the daily menu. For professional advice, the cooperative can turn to an 11-member advisory board that the government has formed.

Aguilera says business has improved 40% since the cooperative invested in a website as part of a new marketing plan. Because the hotel now qualifies as a member of the "network of productivity," it is eligible to receive hundreds of government employees traveling on package deals. The hotel's niche is middle-class government workers who pay as little as $10 a night.

"It hasn't been easy," Aguilera said. "But now we are a stable business instead of just barely scraping by."

Down the street, Carreno and 52 other employees of the Hotel Kamarata say occupancy is up since its cooperative was formed last year with a $500,000 loan.

David Pinto, a government official who oversees the finances of some 25 cooperatives on Margarita Island including fisheries and construction companies, says the cooperatives must run a viable business or face replacement by another cooperative.

"This is not some pinata given by President Chavez. If they don't make a go of it, the government will step in," Pinto said.

Carreno says cooperative members realize that "this is a great opportunity, one that may not come again."

|