Oil Wars

OW called it and now it is reality; Manuel Rosales' visit to Miraflores during the short lived Carmona champagne party at the presidential fortress is becoming an issue in the upcoming elections.

For those who were visiting another planet during that time period, Rosales is accused of signing what some call an attendance sheet, and others call a manifesto, of sorts in support of illegal and newly proclaimed government. Little did the bubbly sipping attendees expect that in less than 24 hours after The first hint of inebriation the people of Venezuela would rise in support of the Chavez government. As foreign sponsored coups go, this case posed problems, an anomaly of sorts with history as a guide, where popular support unexpectedly surpassed the whims of the few, foreign and domestic alike, eventually correcting the illegal wrong committed by the opposition.

Now there is a candidate who was in attendance at the swearing in of the new, short lived government, as the chosen candidate, sans primary elections. One must pause and take notice of who the opposition thinks the proper candidate should be. Can they plausibly expect for someone in attendence at the Moet bubbly party to win? What were his reasons for being there? In the controversial aftermath of the decision to produce a formidabele candidate, have fallen by the way side and into the gutter, pronounced candidates Teodoro Petkoff and Julio Borges. To what is owed such prominence as a candidate such that Rosales can supercede candidates whose campaigns have preceded Mr. Rosales’ by months?

The absence of primaries, duly entitled to the likes of SUMATE (NGO), sponsored by the US National Endowment for Democracy (NED), and abruptly cancelled due to lack of cohesion amongst the Venezuelan opposition parties led to Rosales’ popular candidacy, curiously after the fact. A unification effort, supposedly made without the support of known US receipt of funds. Rosales’ credentials are in line with what a serious candidate against Chavez might be; Governor of a state, popular, such that he might survive elections touted to be controlled and fixed by the ruling party, and verbose in his stance against the government.

The jury is out, and those among the voting population are sequestered. The crux of the matter lies in the interpretation, personal in nature, or does attendance constitute complicity, compliance, or some other Bastardization against democracy.

Your thoughts...


email at:
johnny_loconozco@hotmail.com

(Ruben, Flanker, Slave contact me)
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It has been well documented over the past couple of years that Chavez is doing an excellenent job of making sure that government revenues, through oil sales and increased taxes, are finally reaching those who most need them and boosting their income significantly. As was pointed out here the poorest segment of Venezuelan society (social class E which is 58% of the population - for those needing a refresher on the social classes see here) had seen its REAL income go up by 50% in the past two years.

That is a stunning accomplishment which shows that Chavez's social programs are doing exactly what they are intended to do - boost the income and standard of living of those who most need a boost.

Today we get even better news, that the income growth of the poorest is continueing unabated and possibly even accelerating. The Datos polling firm which tracks the income growth recently updated its numbers for the first quarter of 2006 (hat tip to John):



From this chart we see that social class E has seen its income go up 18% in nominal terms during the first 3 months of this year. Inflation was running around 4 or 5% for that period so the REAL income growth was at least 13% for only the first quarter!!!! Compare this to the 16% growth for ALL of 2005 and we see real income growth for the poor went up almost as much in the first quarter of 2006 as it went up in all of 2005!! If this trend continues it could even beet the 30% income growth of 2004.
Looking at this chart sure clearifies one thing about the opposition's presidential campaign. When the Missions (Chavez's social programs) were first intraduced they fought them tooth and nail. Now in their presidential campaign they swear they'll keep them. Given this stunning success in boosting peoples income we can see why they no longer dare to challenge them.

On a final note we still see that the income growth for social class D is still lagging and barely growing at all in real terms. I really hope someone in the government is paying attention to that and is working on plans to address it.
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Many like to say that the good things happening in Venezuela are nothing more than the result of high prices. Of course, one would have to be quite naïve not to realize that the surge in oil prices does have a lot to do with Venezuela’s recent successes.

But high oil prices in and of themselves guarantee you nothing. You still need a competent and efficient government that implements the right policies. If you don’t have that you are lost no matter how much money is coming into the country.

Witness the case of Iraq which exports almost as much oil as Venezuela, has received billions and billions of dollars in foreign aid, and has hundreds of thousands of foreigners there to presumably help the country. Although it has virtually the same population as Venezuela and should be booming it seems to be moving in the opposite direction as Venezuela as the New York Times pointed out on Saturday:

Weary Iraqis Face New Foe: Rising Prices

BAGHDAD, Iraq, Aug. 25 — For Mehdi Dawood, Iraq’s failures have leached into the cucumbers, a staple of every meal that now devours a fifth of his monthly pension.

And it is not just the vegetables. Fuel and electricity prices are up more than 270 percent from last year’s, according to Iraqi government figures. Tea in some markets has quadrupled, egg prices have doubled, and all over the country the daily routine now includes a new question: What can be done without?

“Meat, I just don’t buy it anymore,” said Mr. Dawood, 66, holding half-filled bags at a market in Baghdad. “It’s too expensive.”

“We are all suffering,” he said. “It’s the government’s fault. There is no security. There is no stability.”

As if Iraqis did not have enough to worry about. Going to the market already requires courage — after repeated bombings there — and now life’s most basic needs are becoming drastically more expensive.

Three months into the administration of Prime Minister Nuri Kamal al-Maliki, the inflation rate has reached 70 percent a year, up from 32 percent last year. Wages are flat, banks are barely functioning and the consensus among many American and Iraqi officials is that inflation is most likely to accelerate.

……………………………………………………….

Mr. Maliki’s office has responded with proposals to spur foreign investment and calls for public patience, even forgiveness. But billions in American aid has already been spent on Iraq with limited impact.

Compared with security problems, which can be addressed to some extent by deploying more troops to the streets, the economy is harder to control, especially since most Iraqi commerce occurs beyond the reach of government policy.

Fuel remains the country’s most visible example of economic dysfunction. A gallon of gasoline cost as little as 4 cents in November. Now, after the International Monetary Fund pushed the Oil Ministry to cut its subsidies, the official price is about 67 cents.

The spike has come as a shock to Iraqis, who make only about $150 a month on average — if they have jobs. Estimates of unemployment range from 40 to 60 percent. And with black-market sellers commanding $3.19 a gallon because of shortages, up from about $1.25 a few months ago, the actual price most Iraqis pay is far higher than what is officially sanctioned.

Filling up now requires several days’ pay, monastic patience or both.
Three years after fuel shortages led to riots in Basra, tension is often palpable at the pumps. Lines stretch as far as the eye can see, and at least two shootings have been reported in Baghdad this month alone. Near a station downtown this week, bribes and line cutting appeared to be the norm. At one point a Mercedes and several police vehicles cut ahead of at least 50 cars while a policeman watched.

“Why are you letting people come from outside?” shouted a man who was just a few cars from the station after seven hours of waiting.

The station’s manager said the drivers given special treatment must have had a note showing that they were doctors, or attending a funeral. A few hundred yards back, by a beat-up station wagon, Abdul Rehman Qasim had a different theory: the drivers avoiding the wait possessed either money or power. He had neither.

“I’m a poor guy,” he said. “So I leave some of my children here. They spend the night in the car.”

“Under the government of Maliki, things are getting worse and worse,” he added. “Only God can save us.”

In Iraq’s once-bustling markets, frustration is equally acute. Car bombers have regularly attacked commercial districts, and prices seem to be up at every stall. At markets in a middle-class Shiite area near downtown, chickpeas have doubled in price. Lamb now runs as high as $2.75 a pound, up from $1.50.

Cucumbers, tomatoes and eggplant have all jumped too, while the price of the propane gas cylinders most families use for cooking has quintupled to more than $15.

“We live hand to mouth,” said Mr. Dawood, a retired clerk for Pepsi.
Veiled women shopping nearby agreed. “We’re tired, and the situation is horrible,” said Zakiya Abid Salman, 55, a widow carrying eggplants. “There are no jobs, and the prices are always rising.”

Merchants said they had no choice but to increase prices because of the increased costs of doing business. And still, they said, their incomes have declined.

Ali Fouad, 27, pushing live fish around a shallow tub of water, said the price of transporting his product from farms south of Baghdad has nearly tripled since last year. A few months ago he sold about 110 pounds of fish a day, earning roughly $50 after expenses. Since he had to raise prices about 60 percent, he said, he sells less and earns only $20 a day.

“What’s our life today?” he asked. “We are working only for gas, ice and electricity. There is no savings.”

…………………………………………

Ali al-Dabagh, a spokesman for Prime Minister Maliki, said in an interview that “the government is working hard to find solutions.” He blamed terrorists for undermining Iraq’s elected leaders, but he acknowledged that the country “needs an administrative revolution.”

For the families trying to survive, time sometimes seems to be running out. Fathi Khalid, 43, a vegetable seller with a mostly empty stall, said obstacles seemed to multiply by the day. Sometimes roads are blocked so harvests never arrive. Sometimes he cannot afford to pay the right bribes. And week after week, his customers purchase less and less.

“Most people buy half what they used to,” he said. “The vegetables sit here and rot.”

It really is unreal that with skyrocketing oil revenues and foreign aid Iraq has inflation that is spiraling out of control. In Venezuela, by contrast, inflation has been more than cut in half. Too bad for Iraq Nelson Merentes, Venezuela’s Finance Minister, already has a full time job. But I hear former Finance Minister Tobias Nobrega may be available. God knows, the Iraqi’s need some good old fashioned Chavista competence.
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The next presidential election in Venezuela is on December 3rd of this year. It is almost universally accepted that Chavez will easily win re-election.

So not to get ahead of ourselves but the question then arises will their be significant changes in the next presidential term. Chavez will almost certainly be stronger than ever. What can we then look foward to? Here are at least some thoughts on what the political future of Venezuela might hold.

After February 3rd 2007 the democratic revolution will continue

The present presidential term ends on February 2nd 2007 and with all the polls pointing to another landslide victory for the Comandante, what is there is store for Venezuela going into the next presidential term?

The reams written on such themes as corruption in the regime and a Fifth Column operating within the government sabotaging social initiatives such as Mercal, as well as the snails pace justice meted out by a judiciary, that is
obviously not working, are all causes for concern within a democratic revolutionary process

A widening of democracy at the base is currently taking place via the figure of the Communal Councils (* see note below) but in the upper echelons of the Chavez administration there are great concerns about:

• Elected public officials riding on the “Chavez train” but acting like AD bureaucrats
• Incipient corruption within local and state government
• Deliberate inefficiencies in implementing community projects
• Fifth Columnists operating “with impunity”
• The absolute majority in the National Assembly which on the surface appears a negation of pluralistic democracy

With reforms to the Bolivarian Constitution of 1999 being mooted for 2007, Chavez is due to strike a mortal blow at the hearts of those who accuse him of being “autocratic, totalitarian and a dictator”.

Using article 72 of the Constitution, there are plans to call for a relegitimation of all elected public officials using the mechanism of collecting 20% plus of signatures registered in the Electoral Register. Chavez himself can initiate this process or the National Assembly. This will then trigger a mass recall referendum for parish councils, mayoralties, state and municipal legislative chambers as well as the deputies of the National Assembly itself.

With a mass RR on the cards, how can opposition or international private media maintain that Chavez is a dictator who wants to perpetuate himself in power in a way similar to Fidel Castro? Such a referendum is designed to “weed out” the “chavistas in disguise” and those acting as AD bureaucrats. In the final analysis, this means more power to the people within the framework of a working participatory democracy.

The opposition also has a lot to gain from this strategy, virtually being served up on a silver platter by the so-called “rrrrregime” since they will be able to participate in the electoral circuits where the incumbent has been recalled. No doubt, the opposition will turn out in mass to ensure that the 20% of signatures required is easily obtained – they couldn’t be stupid enough to by-pass this opportunity – or could they?

The end result should be a loosening of the control of the majority of current elected officials who are not doing their jobs correctly or efficiently. The people know who’s-who at a local level and this will open the door at the same time for local social and political activists to enter the electoral arena based on performance rather than “amiguismo” – or “jobs for the boys”.

Many opposition deputies who lost their seats in the December 2005 National Assembly elections could make it back into the Assembly itself and breathe life back into the opposition parties which have managed to self-destruct since the 2002 coup and oil industry sabotage.

It’s ironic that the opposition could make a partial come-back thanks to the “dictator”, as they call Chavez, using the mechanisms of the 1999 Bolivarian Constitution, which they unanimously rejected in the constituent process in
1999, in the context of participatory democracy, which they also reject, preferring the democracy of the elites, or standard representative democracy.

The final word will be with the votes of the people, extending democracy and deepening its effects far beyond the bounds of anything that could have been imagined just eight years ago.

When, and not if, this process takes place, the legs of many opposition and private mass media lies will have been cut off, as Chavez proves himself to be one of the greatest exponents of democracy in the history of this political system.


* Communal Councils - Democracy: Economic and Political

Alongside the co-op movement, Venezuelans are engaged in building a new form of local political democracy through so-called Communal Councils. Modeled on Brazil's innovative participatory budgeting process, these councils grew out
of the Land Committees Chávez created to grant land titles to the many squatters in Caracas's barrios. If a community of 100 to 200 families organizes itself and submits a local development plan, the government grants land titles. Result: individuals get homes, and the community gets a grassroots assembly. The councils have budgets and make decisions on a range of local matters. They delegate spokespersons to the barrio and the municipality. Today, a few thousand Communal Councils exist, but within five years the government plans to bring all Venezuelans into local counsels. In conjunction with cooperativization in the economy, the Community Council movement may portend the creation of a new decentralized, democratic political reality.

Interesting thoughts on a deepening of the democratic revolution. Definitely not what most people probably expect but it would be interesting to see.
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