Thursday, June 19, 2008
Here is reason number one why Chavez should get his head out of his ass.
In recent posts I have hammered away at the notion that Chavez either has no development plan at all or at the very least is taking his sweet time in implementing whatever plan there is.
In the meantime Venezuela is living off its oil bonanza, wasting tonnes of money, and is extremely vulnerable to any significant and long term decline in oil prices.
From Chavez's behaviour he seems to think high oil prices are here to stay.
As he may find out the hard way over the next few years that is not necessarily the case.
Oil prices could be driven down over the next few years and the reason can be summed up in one word:
IRAQ
With major western oil companies locked out of most countries with large reserves and OPEC therefore having a strangle hold on increasing production the U.S. has looked to Iraq to provide access to it oil and push down prices by ignoring OPEC quotas and ramping up production.
In the 1990s the U.S. hoped that Venezuela, who had allowed its oil industry to fall under the control of pro-U.S. right wing elements, would bust OPEC by maximizing production and driving down prices. That strategy almost worked, except that Chavez then got elected and deep sixed that strategy.
Plan B was then Iraq, the invasion of which should have given the U.S. complete control over Iraq's oil.
Of course, it is well known that the U.S. went to war in Iraq largely to control its oil reserves. Even dimwits like Alan Greenspan have understood that. And the Wall Street Journal touted the Iraq war as the United States best anti-OPEC action in its editorial pages.
Oil may not have been the only reason for the U.S. invasion, but it was certainly a big one. With up to 115 billion barrels of light sweet oil Iraq has the possibility to become the second largest producer of low cost, high quality oil in the world after Saudi Arabia. And given that Iraq's oil is of such high quality (ie, easily refinable) and easily accessible (ie, it is on land) Iraq could potentially ramp up production very quickly.
Yet to date Plan B has not worked out either. Iraq's production has been stymied by virtue of Iraqi's resisting the U.S. occupation and not being easily subjugated. The fact that the Iraqi resistance has put up such a valiant and effective resistance is probably as responsible as anything for today's high oil prices.
Yet that the Iraqi resistance is both legitimate and effective by no means guarantees that it will win. Many insurgencies throughout history have failed. And given that the Iraqis are up against the worlds one military superpower it both amazing and testament to the Iraqi's valor that they have yet to be defeated.
However, over the past six months the military situation in Iraq seems to have turned in the United States favor. While there are ebbs and flows to any war and this one is far from decided it does appear that the United States may finally be prevailing. U.S. casualties are down, the Iraqi military has been built up to some extent, the civil war in Iraq seems to have run its course, and segments of Iraqi society that formerly resisted seem to have either been bought off or beaten down.
So while a U.S. victory is not assured it has to be considered a real possibility.
What does that mean for the oil industry and Venezuela? Simple. The Iraqi oil industry may start ramping up production dramatically over the next few years and working to undermine prices.
In fact, we are already seeing the first signs of this. Witness this report from last week:
In other words, Iraq intends to add another 4 to 5 hundred thousand barrels to world markets this year alone. This may not sound like much but in fact it is huge. Oil is a commodity with a HIGHLY inelastic price cure (meaning very small changes in supply or demand cause very large price fluctuations). While this may not drive down prices that much their increasing production on this scale in future years may.
And they are planning to do just that as today's New York Times outlined:
Got to love those no-bid contracts!!! And what no French companies are getting in on the spoils? I guess the U.S. puppets, under orders from you know who, are following the "no troops, no oil" philosophy.
This pretty much sums it up - the U.S. can bring down oil prices, make a bunch of money for itself, and cut Venezuela, Russia and Iran down to size all in one fell swoop by winning in Iraq and asserting control over its hard won prize - Iraq's oil.
And make no mistake, after thousands of its soldiers being killed and hundred of billions of dollars spent the U.S. WILL control Iraq's oil. No way are some worthless puppets going to be allowed to control it.
Yup, 6 million barrels per day of oil is the stated goal and it would "suppress" oil prices. Are you paying attention, Chavez?
And maybe, just maybe, if the Iraqi people lose this fight Exxon will have the whole country again.
If that happens, it won't be just the Iraqis who lose. Countries like Venezuela who make virtually all their money off of oil will also feel the effects in a dramatic way.
If this isn't a reason for Chavez to get his head out of his ass and start fixing his economy and come up with a serious development plan I don't know what is. His good fortune can't last forever, and it may be running out faster than many currently think.
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In the meantime Venezuela is living off its oil bonanza, wasting tonnes of money, and is extremely vulnerable to any significant and long term decline in oil prices.
From Chavez's behaviour he seems to think high oil prices are here to stay.
As he may find out the hard way over the next few years that is not necessarily the case.
Oil prices could be driven down over the next few years and the reason can be summed up in one word:
IRAQ
With major western oil companies locked out of most countries with large reserves and OPEC therefore having a strangle hold on increasing production the U.S. has looked to Iraq to provide access to it oil and push down prices by ignoring OPEC quotas and ramping up production.
In the 1990s the U.S. hoped that Venezuela, who had allowed its oil industry to fall under the control of pro-U.S. right wing elements, would bust OPEC by maximizing production and driving down prices. That strategy almost worked, except that Chavez then got elected and deep sixed that strategy.
Plan B was then Iraq, the invasion of which should have given the U.S. complete control over Iraq's oil.
Of course, it is well known that the U.S. went to war in Iraq largely to control its oil reserves. Even dimwits like Alan Greenspan have understood that. And the Wall Street Journal touted the Iraq war as the United States best anti-OPEC action in its editorial pages.
Oil may not have been the only reason for the U.S. invasion, but it was certainly a big one. With up to 115 billion barrels of light sweet oil Iraq has the possibility to become the second largest producer of low cost, high quality oil in the world after Saudi Arabia. And given that Iraq's oil is of such high quality (ie, easily refinable) and easily accessible (ie, it is on land) Iraq could potentially ramp up production very quickly.
Yet to date Plan B has not worked out either. Iraq's production has been stymied by virtue of Iraqi's resisting the U.S. occupation and not being easily subjugated. The fact that the Iraqi resistance has put up such a valiant and effective resistance is probably as responsible as anything for today's high oil prices.
Yet that the Iraqi resistance is both legitimate and effective by no means guarantees that it will win. Many insurgencies throughout history have failed. And given that the Iraqis are up against the worlds one military superpower it both amazing and testament to the Iraqi's valor that they have yet to be defeated.
However, over the past six months the military situation in Iraq seems to have turned in the United States favor. While there are ebbs and flows to any war and this one is far from decided it does appear that the United States may finally be prevailing. U.S. casualties are down, the Iraqi military has been built up to some extent, the civil war in Iraq seems to have run its course, and segments of Iraqi society that formerly resisted seem to have either been bought off or beaten down.
So while a U.S. victory is not assured it has to be considered a real possibility.
What does that mean for the oil industry and Venezuela? Simple. The Iraqi oil industry may start ramping up production dramatically over the next few years and working to undermine prices.
In fact, we are already seeing the first signs of this. Witness this report from last week:
Securing its oil pipeline, Iraq can increase production and exports
BAGHDAD, June 13 (UPI) -- More of Iraq's oil has seen the light of day and exports have realized post-invasion records as measures to stem attacks and other interference have proved successful along the key northern pipeline system.
Some who used to target the pipeline -- especially on the link from Baiji north through hot Sunni Arab insurgent territory and to Turkey -- are now paid to protect it, though long-term success is far from guaranteed.
"The export pipeline was under attack constantly last year this time," Oil Minister Hussain Shahristani told United Press International during an interview in his Baghdad office.
"Since then, with the awakening of the tribes in the region, we have recruited some young men from these tribes into our Oil Protection Force, and they've been doing a very good job defending those pipelines," he said. "We have really eliminated all the attacks, and that's why we've been able to export more."
The yearlong effort comes just in time: Iraqi oil exports passed the 2 million barrels per day average last month as oil continued climbing to record prices.
Overall oil production averaged 2.55 million bpd in May, "and we'll keep on adding to it toward the end of the year," Shahristani said. "We are planning to reach 2.8 (million) to 2.9 million bpd."
In other words, Iraq intends to add another 4 to 5 hundred thousand barrels to world markets this year alone. This may not sound like much but in fact it is huge. Oil is a commodity with a HIGHLY inelastic price cure (meaning very small changes in supply or demand cause very large price fluctuations). While this may not drive down prices that much their increasing production on this scale in future years may.
And they are planning to do just that as today's New York Times outlined:
Deals With Iraq Are Set to Bring Oil Giants Back
BAGHDAD — Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.
U.S. Blames Shiite Leader for Deadly Baghdad Blast (June 19, 2008) Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.
The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.
The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India.
Got to love those no-bid contracts!!! And what no French companies are getting in on the spoils? I guess the U.S. puppets, under orders from you know who, are following the "no troops, no oil" philosophy.
For an industry being frozen out of new ventures in the world’s dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.
While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world’s oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.
The Iraqi government’s stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.
For the American government, increasing output in Iraq, as elsewhere, serves the foreign policy goal of increasing oil production globally to alleviate the exceptionally tight supply that is a cause of soaring prices.
This pretty much sums it up - the U.S. can bring down oil prices, make a bunch of money for itself, and cut Venezuela, Russia and Iran down to size all in one fell swoop by winning in Iraq and asserting control over its hard won prize - Iraq's oil.
And make no mistake, after thousands of its soldiers being killed and hundred of billions of dollars spent the U.S. WILL control Iraq's oil. No way are some worthless puppets going to be allowed to control it.
David Fyfe, a Middle East analyst at the International Energy Agency, a Paris-based group that monitors oil production for the developed countries, said he believed that Iraq’s output could increase to about 3 million barrels a day from its current 2.5 million, though it would probably take longer than the six months the Oil Ministry estimated.
Mr. Fyfe’s organization estimated that repair work on existing fields could bring Iraq’s output up to roughly four million barrels per day within several years. After new fields are tapped, Iraq is expected to reach a plateau of about six million barrels per day, Mr. Fyfe said, which could suppress current world oil prices.
Yup, 6 million barrels per day of oil is the stated goal and it would "suppress" oil prices. Are you paying attention, Chavez?
In an interview with Newsweek last fall, the former chief executive of Exxon, Lee Raymond, praised Iraq’s potential as an oil-producing country and added that Exxon was in a position to know. “There is an enormous amount of oil in Iraq,” Mr. Raymond said. “We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country.”
And maybe, just maybe, if the Iraqi people lose this fight Exxon will have the whole country again.
If that happens, it won't be just the Iraqis who lose. Countries like Venezuela who make virtually all their money off of oil will also feel the effects in a dramatic way.
If this isn't a reason for Chavez to get his head out of his ass and start fixing his economy and come up with a serious development plan I don't know what is. His good fortune can't last forever, and it may be running out faster than many currently think.
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Tuesday, June 17, 2008
Republicans for Chavez
Recall how the other day a whole bunch of rich people stood and applauded Chavez? Some of them were so giddy they might have wet their pants. As I said before, I hadn't seen so many rich people so happy in Miraflores since, April 12, 2002 (btw, I wonder how many of those honored guests in Miraflores the other day were last there to sign the Carmona Decree?).
Anyways, what brought about their state of delirium was the fact that Chavez eliminated the tax on financial transactions. That tax was exactly what the name implies - a tax on all banking and brokerage transactions.
As you can imagine, well to do people wheeling and dealing in stocks hated it. The 60% of Venezuelans who don't even have bank accounts probably barely knew it existed. And although it wasn't per se graduated by income it was a highly progressive tax payed almost entirely by the top 10% or 20% of Venezuelan society.
So isn't this rather ironic - a "leftist" government eliminating a tax on the wealthy? I sure think so. Actually, I think it is worse than ironic, it is disgusting and a sell out of the principles the Chavez government is supposed to stand for.
So far there are two defenses of this act that I have heard. The first is, "it's a minor tax so who cares"?
Well, a quick check of the SENIAT (the Venezuelan tax authority) shows it is anything but minor:
So there you go, for the month of May 2008 about $526 million dollars was collected via that tax. Annualized that comes to $6 billion dollars!!!! This is not peanuts. Further it is a stunning 21% of all tax revenue collected.
To a government that is so high on petro dollars it has lost its bearings maybe this is nothing, but in reality $6 billion dollars per year could go a long ways. They could build a whole automobile industry or shipping building industry with that. They could probably completely renovate every hospital in the country. And if they don't want to spend it, they could pay off the entire foreign debt of the country in a little over 4 years just with the proceeds fo that tax!!
The second argument is that the tax was somehow "inflationary". This is patently absurd and is just playing on the fact that the average person doesn't understand economics and doesn't know better. Taxes don't create inflation. Having too much money chasing too few goods does. Yet taxes neither create nor destroy money - they just change whose hands that money is in. So by eliminating this tax the government will have less money and rich Venezuelans will have more. Anyone care to tell me how that will reduce inflation (and I can't wait for the first person to tell me "yes, it will because the rich will take the money out of Venezuela and put it in banks in Miami")
Quite frankly, this constant use of "inflation" as some catch all defense for every dumb act of the governments has gotten old already. Really, really old.
Suffice it to say, the elimination of this tax is a body blow to the finances of the Venezuelan government, puts a cool $6 billion more in the hands of the rich (seriously, some of those rich assholes standing and applauding in Miraflores will pocket tens of millions per year because of this), and deprives the government of vast resource it could use to help the poor and develop the country.
And someone please tell me again, this is supposed to be a leftist government?!?!?!?
If it is all I can say is I am confused. Really, really confused.
Finally, one other very important observation on this. It has been interesting to note in the week since this was announced how virtually no-one in the media, either pro or anti Chavez, has anything to say about it. This was clearly the biggest and most significant part of Chavez's announced changes yet it gets hardly any mention.
Why?
Simple. The rich, their mouthpieces in the private media, and even the anti-Chavez blogs who like to hyper-criticize everything aren't going to complain. This change is putting huge amounts of money back in their pockets so they prefer to celebrate it quietly.
The Chavista media also stays almost completely mum about it. Makes sense, after all what are they going to say: "President Chavez just proved what a great socialist he is by giving billions in tax breaks to rich capitalists"?
So the rich shut up because they just got a whole lot richer and the government supporters say nothing because they can't cross "El Commandante". Meanwhile, your average working Juan just got shafted.
Now we see why in the RCTV debacle they never did what I wanted - turn the media over to popular control decided through voting. As it stands now, only the rich or those with government positions have access to the media. Everyone else is shut out. And given how the rich and the government just colluded to screw everyone else that is exactly how they want it.
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Anyways, what brought about their state of delirium was the fact that Chavez eliminated the tax on financial transactions. That tax was exactly what the name implies - a tax on all banking and brokerage transactions.
As you can imagine, well to do people wheeling and dealing in stocks hated it. The 60% of Venezuelans who don't even have bank accounts probably barely knew it existed. And although it wasn't per se graduated by income it was a highly progressive tax payed almost entirely by the top 10% or 20% of Venezuelan society.
So isn't this rather ironic - a "leftist" government eliminating a tax on the wealthy? I sure think so. Actually, I think it is worse than ironic, it is disgusting and a sell out of the principles the Chavez government is supposed to stand for.
So far there are two defenses of this act that I have heard. The first is, "it's a minor tax so who cares"?
Well, a quick check of the SENIAT (the Venezuelan tax authority) shows it is anything but minor:
Por concepto de Impuesto a las Transacciones Financieras ITF, ingresó al Fisco Nacional la cantidad de 1,13 millardos de BsF, lo cual representó el 21,1% del total de lo recaudado en el mes.
Via the Financial Transactions Tax 1.13 billion BsF entered the national treasury, which represents 21.1% of the total collected in the month.
So there you go, for the month of May 2008 about $526 million dollars was collected via that tax. Annualized that comes to $6 billion dollars!!!! This is not peanuts. Further it is a stunning 21% of all tax revenue collected.
To a government that is so high on petro dollars it has lost its bearings maybe this is nothing, but in reality $6 billion dollars per year could go a long ways. They could build a whole automobile industry or shipping building industry with that. They could probably completely renovate every hospital in the country. And if they don't want to spend it, they could pay off the entire foreign debt of the country in a little over 4 years just with the proceeds fo that tax!!
The second argument is that the tax was somehow "inflationary". This is patently absurd and is just playing on the fact that the average person doesn't understand economics and doesn't know better. Taxes don't create inflation. Having too much money chasing too few goods does. Yet taxes neither create nor destroy money - they just change whose hands that money is in. So by eliminating this tax the government will have less money and rich Venezuelans will have more. Anyone care to tell me how that will reduce inflation (and I can't wait for the first person to tell me "yes, it will because the rich will take the money out of Venezuela and put it in banks in Miami")
Quite frankly, this constant use of "inflation" as some catch all defense for every dumb act of the governments has gotten old already. Really, really old.
Suffice it to say, the elimination of this tax is a body blow to the finances of the Venezuelan government, puts a cool $6 billion more in the hands of the rich (seriously, some of those rich assholes standing and applauding in Miraflores will pocket tens of millions per year because of this), and deprives the government of vast resource it could use to help the poor and develop the country.
And someone please tell me again, this is supposed to be a leftist government?!?!?!?
If it is all I can say is I am confused. Really, really confused.
Finally, one other very important observation on this. It has been interesting to note in the week since this was announced how virtually no-one in the media, either pro or anti Chavez, has anything to say about it. This was clearly the biggest and most significant part of Chavez's announced changes yet it gets hardly any mention.
Why?
Simple. The rich, their mouthpieces in the private media, and even the anti-Chavez blogs who like to hyper-criticize everything aren't going to complain. This change is putting huge amounts of money back in their pockets so they prefer to celebrate it quietly.
The Chavista media also stays almost completely mum about it. Makes sense, after all what are they going to say: "President Chavez just proved what a great socialist he is by giving billions in tax breaks to rich capitalists"?
So the rich shut up because they just got a whole lot richer and the government supporters say nothing because they can't cross "El Commandante". Meanwhile, your average working Juan just got shafted.
Now we see why in the RCTV debacle they never did what I wanted - turn the media over to popular control decided through voting. As it stands now, only the rich or those with government positions have access to the media. Everyone else is shut out. And given how the rich and the government just colluded to screw everyone else that is exactly how they want it.
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No jobs? Then let them have credit cards!
Seeing as Chavez can't be bothered to create an industrial policy that would let people get better paying jobs and have careers that will last 5 minutes past the price of oil tanking he has decided to do the next best thing - let them get bank loans:
I swear to god, this place is becoming more like the U.S. every day. Industrial workers in the U.S. are losing jobs and suffering pay cuts left and right - but they can still pig out on credit cards, at least until they default and everything gets reposessed.
Now Venezuela doesn't have many industrial workers to begin with because that country's governments for the past 50 or 60 years have had better things to do with their money than waste it building industry. But hey, they will help you get a bank loan and maybe even a credit card.
Think of it, with bank accounts and credit cards even the poor could get in on the Cadivi pinata!
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Chavez pushes Venezuela's banks into poor barrios
CARACAS, June 17 (Reuters) - Angel Caballero's experience in business administration may have helped get him a job with Venezuela's Banesco bank, but it was his knowledge of Caracas' poor barrios that the bank was really after.
The former steel industry worker manages $1.5 million of loans spread over 250 clients in some of the most impoverished areas of Caracas' west side, helping Banesco tap into one of Venezuela's fastest-growing lending markets.
"At first people were a little wary," said Caballero, who was raised in the Caracas barrio of Magallanes de Catia. "But once the loan is approved, people feel they are being taken into account and they are very responsible about paying."
Faced with galloping inflation and heavy regulation by the government of leftist President Hugo Chavez, Venezuela's banks are expanding their portfolios of small loans to low-income clients as they search for new business.
Venezuelans see banks as the institutions doing the most to improve the lives of citizens, according to a recent survey by pollster Datanalisis, despite Chavez's threats to nationalize banks as part of his self-described socialist revolution.
Though there are not yet statistics on the growth of these loans, analysts say they are expanding banks' client base while helping incorporate into the banking system the 60 percent of Venezuelans that still stuff their savings in sock drawers.
I swear to god, this place is becoming more like the U.S. every day. Industrial workers in the U.S. are losing jobs and suffering pay cuts left and right - but they can still pig out on credit cards, at least until they default and everything gets reposessed.
Now Venezuela doesn't have many industrial workers to begin with because that country's governments for the past 50 or 60 years have had better things to do with their money than waste it building industry. But hey, they will help you get a bank loan and maybe even a credit card.
Think of it, with bank accounts and credit cards even the poor could get in on the Cadivi pinata!
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Sunday, June 15, 2008
Can this man save Venezuela's economy?
In a surprising move President Chavez today named Ali Rodriguez Araque as the new Minister of Finance.
For those who don't know, Ali Rodriguez has a long history on the Venezuelan left and in the Chavez administration. Rodriguez spent many years in the 1960s fighting in Venezuela's small left wing armed insurgency. Later he turned to electoral politics and was elected to Venezuela's congress where he focused on oil issues and fought tooth and nail, but without success, to reign in the state oil giant PDVSA and stop the nascent privatization of the oil industry.
Later, with his political party Fatherland for All (Patria Para Todos), he joined forces with Chavez. Again focusing on the oil industry he helped carry out the Chavez led revitalization of OPEC which instantly boosted Venezuela's oil revenues and continues to reap huge dividends for the country to this day. For his efforts, he was named President of OPEC, only the second Venezuelan to ever hold that office.
Later, when the Chavez led efforts to reign in PDVSA were confronted by a seditious and devastating oil strike Rodriguez took the helm of PDVSA, restarted the oil industry, and rebuilt PDVSA's productive capacity. His performance in all of this was simply spectacular.
Later he was named Foreign Minister and while this blogger entertained hopes that he would be named Vice-President his age and health problems seemed to put him in a state of semi-retirement.
Until today that is.
Ali Rodriguez brings several important attributes with him. First, he is known and being both conciliatory and pragmatic. Yet as his dealings with the oil strike showed he can be decisive and firm when it is called for.
More importantly, he is known as a doer, not a talker. Suffice it to say, the Chavez administration needs more doers and fewer talkers.
Finally, he is both analytical and intelligent. He does his homework and solves problems.
Even if he is not a trained economist, which he isn't, this would seem to make him well suited for the job. And given that radical, but well thought out, changes are clearly needed in Venezuela's economic policies Rodriguez could be the perfect person.
So the question is - can he change policy and turn around Venezuela's economy?
I highly doubt it. First, lets be real, economic policy is set by Chavez himself and Chavez gives no inkling of even understanding that there are problems, much less what they are and still less how to solve them.
Further, if Rodriguez did have in mind trying to make significant changes in course he almost certainly would have had to tell Chavez that before accepting this position and insisted that no major changes be made until he was in office and had time to evaluate the situation. Yet just last week Chavez announced his economic "reforms".
Sadly, while Rodriguez having been named to this position two years ago may have been cause for celebration it now almost certainly means nothing. Chavez and his economic policies are just too far gone to be fixed by Rodriguez or anyone else.
Ali Rodriguez may very well be the right person but he is almost certainly arriving at the wrong time.
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For those who don't know, Ali Rodriguez has a long history on the Venezuelan left and in the Chavez administration. Rodriguez spent many years in the 1960s fighting in Venezuela's small left wing armed insurgency. Later he turned to electoral politics and was elected to Venezuela's congress where he focused on oil issues and fought tooth and nail, but without success, to reign in the state oil giant PDVSA and stop the nascent privatization of the oil industry.
Later, with his political party Fatherland for All (Patria Para Todos), he joined forces with Chavez. Again focusing on the oil industry he helped carry out the Chavez led revitalization of OPEC which instantly boosted Venezuela's oil revenues and continues to reap huge dividends for the country to this day. For his efforts, he was named President of OPEC, only the second Venezuelan to ever hold that office.
Later, when the Chavez led efforts to reign in PDVSA were confronted by a seditious and devastating oil strike Rodriguez took the helm of PDVSA, restarted the oil industry, and rebuilt PDVSA's productive capacity. His performance in all of this was simply spectacular.
Later he was named Foreign Minister and while this blogger entertained hopes that he would be named Vice-President his age and health problems seemed to put him in a state of semi-retirement.
Until today that is.
Ali Rodriguez brings several important attributes with him. First, he is known and being both conciliatory and pragmatic. Yet as his dealings with the oil strike showed he can be decisive and firm when it is called for.
More importantly, he is known as a doer, not a talker. Suffice it to say, the Chavez administration needs more doers and fewer talkers.
Finally, he is both analytical and intelligent. He does his homework and solves problems.
Even if he is not a trained economist, which he isn't, this would seem to make him well suited for the job. And given that radical, but well thought out, changes are clearly needed in Venezuela's economic policies Rodriguez could be the perfect person.
So the question is - can he change policy and turn around Venezuela's economy?
I highly doubt it. First, lets be real, economic policy is set by Chavez himself and Chavez gives no inkling of even understanding that there are problems, much less what they are and still less how to solve them.
Further, if Rodriguez did have in mind trying to make significant changes in course he almost certainly would have had to tell Chavez that before accepting this position and insisted that no major changes be made until he was in office and had time to evaluate the situation. Yet just last week Chavez announced his economic "reforms".
Sadly, while Rodriguez having been named to this position two years ago may have been cause for celebration it now almost certainly means nothing. Chavez and his economic policies are just too far gone to be fixed by Rodriguez or anyone else.
Ali Rodriguez may very well be the right person but he is almost certainly arriving at the wrong time.
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