Oil Wars

The U.S. recently sent a new ambassador to Venezuela. Chavez himself recieved the man in the presidential palace.

This is in contrast to the Venezuelan ambassador to the U.S. who has never been recieved by Bush. Once while noting this Chavez said to an American ambassador, "here we do things differently".

That is true, in more ways than one.

The much talked about reforms to the Venezuelan Constitution have been finally all put together, discussed and approved by the National Assembly and will be voted on by the Venezuelan people on December 2nd. I myself am not the biggest fan of those reforms but I will have more to say on that when they are all published in one neat tidy package. But it should not go without being noted that once again the Venezuelan "process", or "revolution", or "Bolivarian revolution", or whatever the hell it is, is certainly VERY democratic.

I am not sure where Chavez is taking Venezuela. I am not sure that I agree with where I THINK he is taking Venezuela. But one think is absolutely certain, whereever it is that he is taking Venezuela he is doing so with the full consent and approval of the Venezuelan people themselves. And one can't help but have a lot of respect for how above board, transparent, and democratic this whole process has been, from 1999 right up to today.

It bears keeping in mind that in much of the world things are not nearly so democratic nor free. For example, one of Bush's good friends did this just today:

President Gen. Pervez Musharraf declared a state of emergency in Pakistan on Saturday ahead of a crucial Supreme Court decision on whether to overturn his recent election win and amid rising Islamic militant violence.

Eight Supreme Court judges immediately rejected the emergency, which suspended the current constitution. The government blocked transmissions of private news channels in several cities and telephone services in the capital, Islamabad, were cut.

"The chief of army staff has proclaimed a state of emergency and issued a provisional constitutional order," a newscaster on state Pakistan TV said, adding that Musharraf, who took power in 1999 coup, would address the nation later Saturday.

Dozens of police blocked the road in front of the Supreme Court building, with the judges believed inside.

The state TV report gave no reason for the emergency but it follows weeks of speculation that he could take the step. Military vehicles patrolled and troops blocked roads in the administrative heart of the capital.

The U.S. and other Western allies urged him this week not to take steps that would jeopardize the country's transition to democracy.

During previous emergencies in Pakistan, a provisional constitutional order has led to the suspension of some basic rights of citizens and for judges to take a fresh oath of office.

"This is the most condemnable act," said Ahsan Iqbal, a spokesman for the opposition PML-N party of former Prime Minister Nawaz Sharif. Sharif was barred by Musharraf from returning to exile to Pakistan in September to mount a campaign against military rule.

"The whole nation will resist this extra-constitutional measure," he said.

Private Geo TV network reported the eight judges rejected the declaration of emergency and ordered top officials, including the prime minister, and military officers not to comply.

Geo reported that the army had entered the court building, but the report could not immediately be confirmed.

Shahzad Iqbal, an official at a cable TV news provider in Islamabad said authorities were blocking transmissions of private news channels in Islamabad and neighboring Rawalpindi. State TV was still on the air.

"The government has done it," he said.

Residents of Karachi said their cable TV was also off the air.

Declaring a state of emergency, besieging the supreme court, and taking all independent media off the air (or even off cable!) is certainly not a nice nor democratic thing to do. But I seriously doubt Musharraf has done anything that will jeapordize the over $700 dollars in aid the U.S. is giving him this year.

In the coming days and weeks, with rock throwers in the streets, talking heads on TV, and fustrated Chavez haters pecking away at their keyboards you are likely to hear alot about how Chavez is establishing a dictatorship, or is strongman, or is trampling peoples rights. But when listening to all that you may want to keep in mind what REAL autocrats are like and who they are able to count among their friends.

Meanwhile Venezuelans will proceed to the ballot box and, for better or worse, set their country on the path THEY want to set it on.
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October was a dissapointing month on the inflation front, but not unexpected, since the 1st of the month all business had to convert to Bs. F pricing nomenclature leading to what was warned would lead to inflation on arithmetic alone. Well here are the results.

It was 2.4% compared with 1.3% for September 07 and 0.7% October 06.

We are more or less on par with last year, but we might finish a tad better since the change already took place.

Link
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The good: Well, no wonder you can’t find anything in Venezuelan supermarkets these days – lowly workers and poor people are cleaning the places out. We already knew that the income of poor and working Venezuelans had boomed under Chavez. We also already knew that food consumption is way up there too. But today we learn that because Chavez has put so much more money in the hands of social classes D and E they now think they are moving up in the world and are shopping in supermarkets. According to Datos, visits to supermarkets by social class D have gone up 35% and while visits have gone up 39% by social class E.

Guess that explains why you can never find your favorite yogurt these days – the hoards that Chavez has given much of the oil money to got there first.

The bad: On the road to socialism there are some uncomfortable facts that are not going to make things easier. According to an article from Panorama newspaper today about 20% of all births in Venezuela are to teenagers. Venezuela has the second highest rate of teen pregnancy in Latin America after Brazil and Colombia. This is attributed to poverty, low levels of education, broken homes, and low self-esteem.

I hope the government has a plan to deal with this (come to think of it – why hasn’t something already been done about it?). It is going to be hard to improve peoples living conditions with problems like this left festering.

The incoherent: A dollar (or Bolivar) invested is better than one spent. Accordingly, any news of investments in new industries is very welcome. But it would be even more welcome if it was coherent enough to be believable.

At an international trade fair in Germany the Venezuelan state petrochemical company, Pequiven, announced large expansion plans. According to Pequiven’s general manager Francisco Toro (ahh, so he has a full time job – no wonder he has no time for blogging) the company will be building 6 new petrochemical plants to make plastics, resins, and fertilizers. So far so good.

But then things go a bit off the deep end. First, Toro says that they will be investing $20 billion per year!?!?!?!?!? Considering that $20 billion would be half of Venezuela’s oil revenue that seems rather improbable, to say the least. He then stated that 700,000 new jobs would be created. Of course, that that is more people than the oil and chemical giants Exxon-Mobil, Dupont, and BASF employ – combined – seems not to be a deterrent.

Lastly, he stated that $20 billion dollars in profits will be made per year. I wonder how much they have to sell in order to make a PROFIT of $20 billion?

One interesting thing is that this is not all going to be done by the State – something called “private socialist companies” (apparently that is not an oxymoron) will also be involved.

That they can’t even put forward a coherent set of numbers and plans doesn’t bode well for much ever getting done. Like the natural gas pipeline to Argentina that still doesn’t exist or even like previous unfulfilled plans by Pequiven, these announced plans look likely to stay on paper and never do Venezuela any good.
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