Sunday, December 28, 2014
Wednesday, December 24, 2014
Thursday, December 18, 2014
Let us take the moment of President Obama’s betrayal of Free Cuba to step back a bit — back to say, May 19, 1895. That’s when the tribune of Cuba Libre, Jose Marti, was killed in combat against the Spanish Royalists at the Battle of Dos Rios. His body was barely in the ground when he was mocked by the New York Times as the “so-called President of the Cuban Republic.” It called him a “commonplace poet and writer, a prolix orator of diffuse style...”
The separatists, the Times sneered, “lacking a chief having any prestige at all,” gave Jose Marti their money. It said he must be “severely judged.” Why? “To put into turbulence a country which asked for nothing but peace and work, to expose it to a ferocious race, thinking always of revenge against the whites, to light the fires of civil war, pillage under the pretext of ‘Cuba libre,’ and put obstacles in the way of reforms which had been demanded for years, are not acts that claim indulgence.”
Those were but some of the libels against Jose Marti issued at his death by the newspaper that is now extolling — that has spent years plumping for — the normalization of relations that Mr. Obama promises with the Cuban communist regime. For Marti to sustain his revolution against the Spanish, the Times said, “he had recourse to all sorts of means: lies, false news, calumny.” Yet that is what the Times has used against the anti-communist forces in its long fight to vindicate Castro.
If we seem sensitive on the point, it is because the newspaper whose flag the Sun flies was on the other side of that fight. It was unambiguously on the side of Cuba Libre. When Jose Marti was in exile in America, he maintained his office inside the newsroom of the New York Sun. The Sun hung the flag of Free Cuba from its windows over lower Broadway. IT was from those offices that Marti left for his return to the Cuba on whose soil he finally fell.
We’ve told this story before in these columns but it’s rarely seemed more relevant than today, when the long campaign of solidarity with the anti-communist Cubans and with the Americans whose property was stolen by the communists in Cuba has been betrayed in a political calculation by a lame duck administration. Even such a principled skeptic of the embargo as the Wall Street Journal — which is covered with glory in the anti-communist cause — is appalled at the nature of the deal just announced.
This is a moment to remember that Congress is part of this struggle. It passed as recently as 1992 a law called the Cuban Democracy Act. It was sponsored by a Democrat, Les Aspin, then in the House, and signed by a Republican, President George H.W. Bush. It allows the president to relax certain restrictions only if he “determines and reports to Congress” that the government of Cuba has, among other things, met a string of conditions.
That is, the president has to be prepared to assert in good faith that Cuba has, as the law puts it, “held free and fair elections conducted under internationally recognized observers,” “permitted opposition parties ample time to organize and campaign for such elections,” and allowed “full access to the media to all candidates in the elections.” Which one of those conditions can the Democrats today say that Cuba has met?
The good news is that Congresswoman Ileana Ros-Lehtinen and Senator Marco Rubio are vowing to take up the cause of free Cuba in the Congress. Mrs. Ros-Lehtinen is quoted in the Bloomberg as warning that the president may be in violation of the Cuban Democracy Act and several other laws. In tomorrow’s Wall Street Journal, Mr. Rubio writes that in the months ahead he will work with members of both parties to do “prevent President Obama’s dangerous policies from becoming reality.”
“Our people cannot realize their full promise if the world becomes more dangerous because America retreats from its role in the world,” Mr. Rubio writes. He adds that “the Cuban people have the same rights that God bestowed on every other man, woman and child that has ever lived. All of those who are oppressed around the world look to America to stand up for their rights and to raise its voice when tyrants like the Castros are trying to crush their spirits.” We don’t have the slightest doubt that the spirit Jose Marti is right there with him.
Tuesday, December 16, 2014
The website of the Venezuelan newspaper El Nacional was packed one recent day with stories about the shortages plaguing the economically stricken country. One covered a lack of medicine for diabetes patients. A second reported on multiplying lines at gasoline stations in Caracas and other cities. A third recounted the government’s failure to supply international airlines with the $3.6 billion in hard currency they are owed, which has caused a reduction in flights to Venezuela.
Unmentioned on this day was the case of El Nacional itself: Because of the government’s refusal to allow the paper to import newsprint, one of the last independent sources of news in the country may soon exist only in cyberspace. “To get newsprint in Venezuela, you need an authorization,” the paper’s publisher, Miguel Henrique Otero, told us during a recent visit to Washington. “For one and a half years we have not gotten the paper. We can’t inform the public because we don’t have the paper.”
The discrimination against the 71-year-old newspaper is part of a broader campaign by the government of Nicolas Maduro to eliminate the last independent media in the country. Since 2013 two other big newspapers and a television network have been sold by longtime owners to investors linked to the regime or to shell companies whose principals are unknown. The result has been the shutdown of critical coverage of the Maduro government even as it presides over an economic collapse and mounting political repression, including the arrest or prosecution of top opposition leaders.
Otero told us his newspaper was also offered a buyout but refused it. The denial of paper soon followed. El Nacional has been forced to reduce its print run, which was once 220,000 papers on Sunday, by more than half, and to cut its daily edition to 16 pages, compared with 60 to 70 pages several years ago. Other independent newspapers around the country have also been affected; a dozen have been forced to stop printing. But El Nacional’s case is particularly important because it is the last large national paper to fairly cover the political opposition and report aggressively on problems like the mounting shortages.
That it is still appearing at all is due to an extraordinary campaign of solidarity by other Latin American newspapers, which have been shipping their own newsprint to Venezuela to supply El Nacional. Among those participating are publishers in Colombia, Costa Rica, Chile, Peru, Brazil, Argentina and Puerto Rico.
The backing is particularly impressive considering that governments in the region have abandoned any effort to intervene against the Maduro regime’s repression, despite a 2001 treaty that commits them to act when democracy is threatened.
The Obama administration, too, has mostly steered clear of the Venezuelan crisis.
Last week Congress passed legislation mandating sanctions against senior Venezuelan officials involved in human rights violations; after resisting the measure for most of this year, the White House now says it supports it. Pulling the visas and freezing U.S. assets of the Maduro regime’s enforcers is a worthwhile step, but it won’t save Venezuela — or El Nacional. “How long can we last? I don’t know,” Otero said. “How long can Maduro last?”
Monday, December 15, 2014
Citizens attending any hospital in Venezuela may come across signs listing medical specialties lacking staff. This prevents medical care from being provided and violates the right to health set forth in the Constitution.
Shortage of staff is attributed to the gargantuan flight of professionals in the health sector.
Intensive care, neonatology, pediatrics, anesthesiology, endocrinology, and hand surgery are just some of the specialties left without professionals in both the public and private sectors.
Figures from health associations show that as many as 14,700 physicians have left the country seeking new horizons.
Insecurity at medical facilities, lack of medical supplies, low wages, poor offer of postgraduate studies, and the privilege given by the government to health program Misión Barrio Adentro medical care in low-income areas are some of the driving forces behind the flight of professionals.
from Yahoo News
CARACAS, Venezuela (AP) — Locked up and denounced by Venezuela's government as a terrorist, Leopoldo Lopez may be out of sight, but he is not out of mind.
Building-sized posters of the charismatic opposition leader shouting, with his fist pumped into the air, dot wealthy Caracas neighborhoods. The same image can be found stenciled on the walls in the pro-government slums, but below the word "Murderer."
President Nicolas Maduro raises the specter of his foe nearly every night, using his televised addresses to denounce the 43-year-old Harvard graduate who, despite having been jailed since February, has become Venezuela's most popular politician as well as a human-rights icon drawing international pressure on the government.
Accused of inciting violent protests in early 2014, and the threat of a 13-year prison term hanging over him, Lopez is again exhibiting the defiance he used to call opponents of the South American country's socialist government into the streets, but now in a windowless courtroom secured behind four military checkpoints. During his most recent appearance in the ongoing trial, the square-jawed Lopez delivered a rollicking, hour-long speech fit for a political rally.
"I have to tell you, when we get out, we will be even more determined," he told Judge Susana Barreiros.
The proceedings have been almost completely closed to the public. In November, The Associated Press had a rare opportunity to witness the trial as a guest of Lopez's family. Cameras were barred, as was any note-taking.
The tall, former triathlete was surprisingly gaunt and a thick beard covered his familiar clean-shaven face. But his powerful voice still filled the fluorescent-lit room, where his wife grew teary-eyed among some two dozen observers in wooden pews.
Lopez denounced the young judge as lacking courage and compared her to a hired assassin. He waved copies of the constitution drafted by the late President Hugo Chavez, and held up a book of the writings of Venezuela's beloved revolutionary leader Simon Bolivar, a distant great uncle of Lopez.
His blue blood political heritage and old-money roots make him a natural champion of the Venezuelan elite. Ivy League-educated and accompanied by his equally photogenic wife, a former TV hostess and champion kite-surfer, Lopez comes off as a Venezuelan version of a Kennedy — albeit a stridently conservative one.
Of the two factions opposing Venezuela's unsteady administration, Lopez represents the more radical extreme. While others such as opposition heavyweight Henrique Capriles were advocating gradual electoral change, Lopez called hundreds of thousands of supporters into the streets to demand that Maduro resign only months into his six-year term.
Violence stemming from the protests left more than 40 people dead, including both Maduro supporters and opponents.
The government's view is that Lopez pretended to rally ordinary people fed up with crime, inflation and widespread shortages but was actually conniving with students and the United States to overthrow the government.
The unrest fizzled after Lopez was jailed, and chronic infighting between his faction and more moderate leaders has prevented the opposition from taking advantage of growing discontent with the administration over Venezuela's economic free fall.
With ample time for reflection, Lopez doesn't appear to have become any more eager for compromise. Unity isn't a goal in and of itself, he told AP in an interview outside the courtroom doors.
And his political martyrdom has had an upside. Lopez's personal brand is booming. For years, the former mayor of Chacao, a wealthy Caracas suburb, was seen as arrogant and overly-ambitious, if effective. He now consistently polls among the most popular politicians in the country, with his favorability approaching 50 percent, while Maduro's has slid below 30 percent, according to surveys released in recent months by a leading national pollster, Datanalisis.
Previously unknown beyond Venezuela, human rights groups now consider Lopez Latin America's most prominent political prisoner. U.S. President Barack Obama and the U.N. High Commissioner for Human Rights have called for his release. Foreign Policy magazine named him one of the 100 most important global thinkers this year, and the Harvard Kennedy School awarded him its alumni achievement award in absentia.
When Lopez will leave his cell remains a question. The defense considers the federal trial to be a circus, with Maduro bent on keeping Lopez behind bars. Judge Barreiros has denied all but one of the defense's 63 proposed witnesses, while allowing the prosecution to call more than 100.
So why put on such a strenuous show for a judge whose hands may be tied?
"This is our only opening, limited as it is," Lopez told the AP.
Defense attorney Juan Carlos Gutierrez said they hope the trial will keep international attention on Lopez and bring pressure on the administration. "We know Lopez's liberty depends on Maduro, and not a judge," he said.
The chief prosecutor's office did not respond to requests for comment.
The court has met only a handful of times in six months, often convening as night falls. Before each hearing, soldiers with riot shields and submachine guns close the streets around the courthouse. Only family members and, sometimes, international observers and others on their guest lists are allowed through. AP is the first international news outlet to have made it into the courtroom.
As the restrictions tighten around Lopez, he is rattling his cage more fervently. He's begun staging a daily protest, banging on his prison bars at dusk. Lopez has refused to end the defiance, even though it's meant his visitors are restricted to only his two young children and the noise is heard only within the prison walls.
His wife, Lilian Tintori, said that when he surrendered to authorities in February, the family thought his detention would be brief. She told their 5-year-old daughter that Lopez was just on a business trip. Asked why they didn't flee when the charges were levied against her husband, Tintori pointed to one word tattooed on her wrist: Venezuela.
Her husband has a matching one on his ankle, she said. "Someone has to stay and fight."
On a recent visit to the prison, Tintori caught sight of her husband from a distance, making out his long figure waving from his prison bars. He was keeping his balance by clinging to the window bars, giving him the appearance of a man just hanging on. "Hello, beautiful!" he called out.
A piercing police siren made any additional words impossible. Lopez gave a final fist pump through his bars before vanishing from view.
Saturday, December 13, 2014
Saturday, December 6, 2014
Thursday, December 4, 2014
When Angel Fernandez, a former production engineer with Venezuela’s state-owned petroleum company, relocated to Canada’s oil-sands region, it wasn’t for the weather. The draw was a paycheck that he said can stretch as much as 100 times further.
“It’s been very difficult adjusting to temperatures” that typically max out at -10 degrees Celsius (14 degrees Fahrenheit), Fernandez said in an interview. “But for the opportunity, it’s worth it.”
Fernandez, 33, is part of a growing exodus of skilled oilfield workers from Venezuela, where real wages for engineers have fallen to the equivalent of less than $400 a month, about 9 percent of the global average. The world’s worst inflation, swelling crime rates and a plunging currency are prompting others to move abroad, dragging down oil production at a time when slumping crude prices threaten the country’s export revenue.
While Venezuela’s foreign affairs ministry has declined to provide emigration data, job websites show surging interest. The number of Venezuelans with active resumes on Rigzone.com, a Houston-based oil and gas research company with an employment database, jumped 22 percent this year through October, and is up 68 percent over 2011. Daily page views on MeQuieroIr.com, which helps Venezuelans looking to emigrate, reached 180,000 to 200,000 in September and October, compared with an average of 60,000 for the past four years.
“This is the highest and most prolonged traffic spike we have experienced since we launched in 2001,” MeQuieroIr.com Director Esther Bermudez said in an e-mailed response to questions. Bermudez worked for seven years in Petroleos de Venezuela SA’s public affairs department in Caracas, before emigrating to Montreal in 2001.
PDVSA is pumping about 8,000 barrels per employee per day, compared to about 26,000 barrels in 2004, according to the trade group Gente del Petroleo. While Venezuelan President Nicolas Maduro has pledged to double output, few in the industry are confident this goal can be reached.
“It’s clear they don’t have the human capacity to lift output,” said Eddie Ramirez, the group’s director and a former PDVSA employee who has long criticized the government. Production peaked in 2008 at 3.2 million barrels a day, and last year slid by 11,000 barrels to 2.9 million a day. PDVSA declined to comment on turnover rates.
Real wages for engineers in Venezuela with five to six years of experience are less than $400 a month, based on guidelines published by Venezuela’s Engineering College. That’s about 9 percent of the global average of $4,333 a month, according to Hays 2013 Oil & Gas Global Salary Guide. Three years ago, Venezuela’s engineers took home about about 80 percent of the global average.
The currency has lost 85 percent on the black market since Maduro took office in April 2013. The inflation rate, at 63 percent, is “destroying wages,” said Jose Bodas, general secretary of the Federal Union of Venezuelan Oil Workers or FUTPV, which represents about 100,000 workers at PDVSA.
“There’s no oil worker in the world that makes as little as you do in Venezuela,” he said.
In neighboring Colombia, engineers make more than four times more, about $1,650 a month. That’s drawing Venezuela’s oil workers across the border. The country issued 4,234 temporary identity cards to Venezuelans in the first half of this year. That’s 6.9 percent more than all of last year and more than double 2012 levels, according to the Foreign Affairs Ministry. Those figures don’t identify specific occupations.
Colombia’s oil engineering council CPIP and its union USO both say the number of Venezuelans entering the industry is increasing, accounting for 70 percent of professional licenses handed out to foreigners.
Fernandez, the former PDVSA engineer, moved last year to Grande Prairie, Alberta, where the temperature in January typically ranges from -10 to -20.9 degrees Celsius. He earns more than $100,000 a year working for Encana Corp. (ECA)
When he left PDVSA, his paycheck was worth about $1,000 a month; that’s at official exchange rates, which almost nobody gets. The real rate, the unofficial, black market exchange rate available to everyday folk, would give him about $38 now.
“The major driver was economic,” he said.
Venezuela’s bolivar fell to a record low of 166 bolivars per dollar on the black market today compared to official rates that range from 6.3 to 50, according to dolartoday.com, a website that tracks the rate on the Colombian border.
For Jesus Castro, 38, crime was another reason to leave behind family and friends in Barquisimeto, western Venezuela, where he worked as a PDVSA electrical maintenance supervisor.
“I didn’t want my children to grow up like caged birds,” he said by telephone from Calgary, where he works as a project manager for utility EnMax Corp. In the past four years, he said he’s seen an influx of Venezuelans. “Friends, family, sometimes people I don’t even know personally call me asking how to fill in forms, get a visa or help to find a job.”
The wave of emigration has accelerated this year after Maduro devalued the currency in May, said Ivan Freites, a union official with FUTPV.
“We’ve seen an uptick in departures due to the additional financial pressures on workers created with devaluation,” Freites said in an interview in Caracas. An earlier exodus followed a general strike in 2002 and 2003, and about three-fourths of the estimated 20,000 people who left PDVSA then are now working in countries including Mexico, Argentina and Colombia, or in the Middle East, he said.
Datanalisis polls shows 10 percent of the population is thinking about emigrating in the near future, more than double levels of two years ago, said Luis Vicente Leon, president of the Caracas-based research company.
Departures aren’t reflected in PDVSA’s headcount, which rose 6 percent last year to 140,626, according to its 2013 annual report. That’s because people who leave are usually replaced, though often by lesser trained and less experienced people, Freites said.
“My salary, benefits and professional development opportunities are depressing when compared to other Latin America markets,” Gonzalo Guinand, an engineer at one of Venezuela’s largest engineering and construction contractors, whose biggest client is PDVSA, said by telephone from Caracas. “I don’t see a promising future here if the economic and political situations don’t change for the better.”
Monday, December 1, 2014
For Saudi Arabia, its decision last week not to cut oil production seems to have been an attempt to protect market share. But for Venezuela, that decision may mean "game over" for the economy.
Oil accounts for 95 percent of Venezuela's export earnings,and combined with gas, it's 25 percent of the country's gross domestic product. As the price of oil hits a four-year low at $70 per barrel, the OPEC nation's oil-dependent economy is set to implode, experts say, bringing deeper political instability and chaos to the world's 10th-largest oil exporter.
Anti-government protests flared earlier this year as Venezuelans started to feel the effects of the economy's staggering 60 percent inflation and currency controls that have generated scarcity of basic needs such as toilet paper and toothpaste.
The country's heavily government-subsidized economy is expected to contract by 1 percent in 2015, according to IMF projections.
"Scarcity is getting worse in Venezuela. Basic products are so hard to get," said Josseline Viera, a doctor in Venezuela. "It used to be that certain products were scarce, now it's basically everything."
Viera says shortages have made it impossible for hospitals to find essential medical products such as gauze and acetaminophen.
"I basically have to send patients to other hospitals," she said. "But patients have to go to a lot of clinics and hospitals before they find the medical supplies they need for their care. I feel very sorry for my country."
Experts predict the situation in Venezuela will worsen as early as the first half of 2015.
"It will be a year of extreme scarcity," Venezuelan economist Angel Garcia Banchs said. "What's coming to Venezuela is chaos that will probably lead to barbarity and people looting. "
The state of the Venezuelan economy is the result of years of economic mismanagement that the government, for years, was able to cover up by pumping oil revenues to support its populist policies. But this was when oil was at more than $100 per barrel, and despite declining oil production in Venezuela, revenues were enough to keep people happy.
But since this summer, Brent fell from above $115 per barrel to $70, thanks in part to North America's shale boom, and oil analysts predict oil prices will keep declining below $70 for Brent and even more for crude.
One analyst at Nomura recently estimated that Venezuela may need oil prices to hit $200 a barrel to balance its budget. (The precise figure is difficult to determine, because Venezuela doesn't disclose as much economic data as other countries do.)
As oil prices keep falling and Venezuela is left empty-handed, its government will have no other option but to increase taxes, impose price controls and potentially eliminate gasoline subsidies for Venezuelans, something that will create unrest in the South American country, according to Diego Moya-Ocampos, a senior political risk analyst at IHS.
"This scenario increases the threat of a new wave of strong anti-government protests in Caracas and key urban centers," Moya-Ocampos said. "Demonstrations can escalate into road blocks and confrontations between security forces and protesters."
Moya-Ocampos also said that anti-government protests could escalate as in the 1989 "Caracazo" or "Caracas disaster," in which fuel price increases unleashed bloody riots: "This could lead to direct or indirect military intervention to guarantee political stability and bring about a change in the direction of economic policy," he said.
A day after OPEC's announcement that it would not make the production cuts that Venezuela had pleaded for, President Nicolas Maduro tried to reassure Venezuelans that declining oil prices won't affect social programs.
"If we had to cut anything back on our budget, we would cut extravagances, we would cut our own salaries as high officials, but we will never cut one Bolivar of the money that goes to education, food, housing, the missions of our nation," Maduro said Friday during a televised address that was translated from the Spanish by CNBC.
Recent polls show Maduro's popularity has dropped to a record low.
"The economy will overcome politics," said the economist Garcia Banchs, who noted that typically in Venezuela, economic realism has taken a back seat to political priorities. That's about to change. "The economy will be on top, and political changes will have to happen."
Venezuela's oil revenue could face another threat aside from declining prices: approval of Keystone XL pipeline bill, which congressional Republicans have vowed to bring back for another vote after they return to Capitol Hill in January. If passed, the pipeline could mean that heavy crude from Canada would replace the crude Venezuela exports to the United States.
"If Venezuela were not willing to more heavily discount its crude compared to Mexico's crude, then there's no point of getting it (from Venezuela) if we can get it from Canada or Mexico," said Susan Kaufman Purcell, director of the Center for Hemispheric Policy at the University of Miami. "It will clearly affect Venezuela because of the three countries, it's the most unreliable."
Saturday, November 22, 2014
Monday, November 17, 2014
Friday, November 14, 2014
The Revolutionary Armed Forces of Colombia, a Marxist terror group based in that nation and partially bankrolled by the government of Cuba, is richer than Al Qaeda, the Taliban, and Boko Haram combined, according to a Forbes ranking of the world's richest terrorist organizations.
As Breitbart News reported yesterday, the leaders on the list of richest terror groups released this week are no surprise. The Islamic State, which makes an estimated $2 billion a year, tops the list, followed by Hamas, who make half of that. The third richest terrorist group on the globe is no jihadist group, however, with no oil revenue (as ISIS so heartily enjoys), or as much international support from Arab nations as Hamas.
It is the FARC, a group the international left have strived to argue is neither violent nor relevant in the 21st century. The group earns an estimated $600 million a year.
Forbes estimates that the Taliban, the fifth richest group, makes $400 million a year; Al Qaeda misses the top five with $150 million. Boko Haram, one of the poorer yet nonetheless dangerous jihadist groups, rounds out the list at number ten with $25 million a year in revenue. The three groups make less combined in a year than the FARC.
The FARC is the most resilient Marxist/Maoist guerrilla group in Latin America, one of the few survivors in a crop of terrorist syndicates that include the now-defunct Shining Path (Sendero Luminoso) in Peru and the barely-relevant National Liberation Army (Ejército Nacional de Liberación--ELN) in Colombia as well. It has survived due to a number of international factors, apathy among the most pivotal. While the world took up arms against radical Islamists and called for peace between Russia and the post-Soviet states, the FARC carved out a stronghold in Colombia, under the guise of being Che Guevara-esque "liberators" of peasants.
While true in much of the 80s and 90s, the attitude that the FARC were a minor international problem changed dramatically under the leadership of President George W. Bush. Thanks to subsequently released reports, we now know that the Bush administration worked closely with then-President Álvaro Uribe to recreate the counter-terrorism strategies used against Al Qaeda in Colombia. They worked, as leader after leader of the FARC was killed through strategic targeting. By the end of the Bush years, much of the remaining FARC leadership had fled to Cuba.
The end of the Bush/Uribe era has meant the beginning of a series of talks-- all mostly ignored by guerrilla members on the ground-- defined as a "peace process" meant to reintegrate FARC soldiers into civilian life. The Colombian government under current President Juan Manuel Santos has gone so far as to establish a sort of "re-education camp" for captured FARC terrorists (many forced to join the group as children) in order to teach them how to become productive members of society. The talks have so far been held in Havana, new capital of Latin American terrorism, and the FARC have made several demands-- including both becoming a part of Colombia's political infrastructure and some immunity for its leaders. A year ago, the Santos government agreed to give the FARC political leverage in the democratic process; this did not stop the FARC from committing acts of terror, like they had promised to do.
In return, the Colombian government has attempted to offer a series of "ceasefires" in which the FARC would refrain from committing terrorist acts. All have been broken.
In the meantime, the FARC have worked to soften their image, releasing music videos with prominent communist Cuban rappers and Christmas greetings. The combination of propaganda efforts to appear interested in peace and the undeniable allure to the rest of the world of following the ensuing ISIS saga in the Middle East has proven beneficial to the FARC as they continue to engage in violent drug trade to fund their terrorism.
In the meantime, outlets like Al Jazeera have lionized the FARC as problem-solvers, suggesting that they have "solutions" to the illegal drug trade that the United States is likely to ignore because of the "war on drugs." The reality is that almost the entirety of Colombia's illegal drug trade is either run by or somehow influenced by the FARC, and that the United States efforts against the FARC are counter-terrorism. The Bush-Uribe project as a CIA, not a DEA, production.
The FARC are putting their friendly masks on this week yet again. After an indigenous tribunal-- the very people the FARC claims to represent-- sentenced two FARC leaders to 40 and 60 years in prison for various acts of terror, the group's leadership issued a statement claiming it was sorry: the group "profoundly laments" the incident.
FARC guerrillas' actions belie their attempts at making peace-loving statements in the past few years. Anyone paying attempting can easily identify their claims to peace as a sham. But few are paying attention, and now the FARC have risen to ISIS and Hamas levels of monetary backing. Unlikely ISIS and Hamas, however, their leadership is entirely based in our hemisphere, working to re-legitimize themselves 90 miles from American shores.
Sunday, November 9, 2014
Friday, November 7, 2014
CARACAS (Reuters) - Venezuela will continue to boost oil exports to China and India to capitalize on their booming economies, the OPEC member's oil minister said on Thursday.
"That's where we have to keep building our markets because those are the countries that have the biggest year-on-year growth," Asdrubal Chavez told a parliamentary committee.
"We're going to keep increasing our shipments to Asia: India and China," he added, without specifying figures.
Venezuela's exports of crude oil and refined products slipped 5.6 percent in 2013 from the year earlier to 2.43 million barrels per day, according to state oil company PDVSA [PDVSA.UL].
The United States remains the top destination for Venezuelan oil exports. But shipments are down 49 percent from a decade ago, according to the U.S. Energy Information Administration, as Venezuela's socialist government seeks to wean itself from dependence on its ideological foe to the north.
Meanwhile, Asia has become an increasingly important market for Caracas.
Venezuela has said it exports roughly 500,000 bpd of crude oil to China, part of which is used to pay off oil-for-financing agreements. The country exported more than 400,000 bpd to India last year, according to EIA estimates.
"Our job is to keep diversifying our markets," Chavez said.
His comments come after Venezuelan President Nicolas Maduro blamed the U.S. shale boom for tumbling oil prices. The slump has come at a delicate time for cash-strapped Venezuela, which needs to shore up its coffers to cover multibillion-dollar bond payments and growing arrears with the private sector.
The Venezuelan petroleum export basket, which includes crude oil and refined products, was at $72 dollars per barrel on Thursday, Chavez said.
"This is a scenario that will continue as long as certain market imbalances aren't corrected," he said, blaming the oil price slump on "an economic war and a financial war in the international market".
Maduro blames Venezuela's severe economic crisis on saboteurs out to topple him and accuses the United States of seeking to destabilize Russia by "flooding" the market with oil.
Separately, the new head of PDVSA, Eulogio del Pino, told the committee that the company aims to keep producing roughly 3 million bpd and exporting around 2.5 million.
Venezuela is pinning its hopes for increased production on new projects in the Orinoco region, where PDVSA says output is now 1.27 million bpd and set to pass 1.3 million by the end of this year.
(Writing by Alexandra Ulmer; Editing by Peter Galloway)
Thursday, November 6, 2014
Friday, October 31, 2014
Detained opposition leader and founder of political party Voluntad Popular, Leopoldo López, and deposed mayor of San Cristobal, Táchira state, Daniel Ceballos, are being subjected to torture and cruel, inhuman treatment inside Ramo Verde military prison, northern Miranda state, as reported by the dissenters' wives, Lilian Tintori and Patricia Gutiérrez.
Tintori and Gutiérrez revealed that feces have even thrown at inmates through the cell bars.
"On Saturday, October 24, early morning, they would not let them sleep. That early morning, Mr. Homero Miranda, who does not deserve to be called colonel, the director of Ramo Verde (prison), knowingly ordered their police officers to defecate in plastic bags, and they knotted the bags with ropes. Later, the police agents went up to the rooftop and hit the bags against the window bars until the bags tore, so the feces fell over Leopoldo (López), Daniel (Ceballos), Enzo (Scarano), and (San Diego police chief) Salvatore (Lucchese). Homero Miranda committed this miserable assault, following orders of (President) Nicolás Maduro," stressed Gutiérrez, according to a communiqué issued by party Voluntad Popular.
Detained dissenters Leopoldo López, Daniel Ceballos, Enzo Scarano, and Salvatore Lucchese are being prosecuted for their alleged involvement in street violence during the wave of anti-government protests staged between February and June.
Wednesday, October 29, 2014
Monday, October 20, 2014
Friday, October 17, 2014
CARACAS, Oct. 16 (Xinhua) -- Venezuelan President Nicolas Maduro on Thursday blamed Washington for the slump in global oil prices.
Washington is "flooding" the market with cheaper shale oil to bring down prices and ultimately impact Russia and other oil-producing nations, Maduro said at a televised Cabinet meeting.
"The U.S. and its allies want to affect oil prices to harm Russia, which produces around 10 million barrels per day, and that is the vital income of their economy," said Maduro.
Market analysts say a 20-percent dip in oil prices since June is driven by lower economic growth and weak demand for crude in Europe, along with signs that the core Gulf members of the Organization of Petroleum Exporting Countries are in no hurry to cut production.
Maduro called for an extraordinary meeting of the group to explore ways to stabilize international oil prices.
Thursday, October 16, 2014
The cost of protecting Venezuela’s debt against non-payment with five-year credit-default swaps, already the highest in the world, soared 2.13 percentage points this week to a five-year high of 19.89 percentage points yesterday, according to data provider CMA.Bloomberg
The level implies a 75 percent chance that Venezuela will default in the next five years.
PDVSA’s bonds due November 2017 fell 4.63 cents yesterday to 68.26 cents on the dollar, pushing yields to a record high of 23.76 percent. The company has $3 billion of debt payments due on Oct. 28.
Venezuela paid back $1.5 billion of debt that matured Oct. 8, reducing foreign reserves to an 11-year low of $19.8 billion.
Thursday, September 25, 2014
Saturday, September 20, 2014
Wednesday, September 3, 2014
CARACAS (Reuters) - A member of Venezuela's Socialist Party has rolled out a variation of the classic Christian "Lord's Prayer" to implore beloved late leader Hugo Chavez for protection from the evils of capitalism.
"Our Chavez who art in heaven, the earth, the sea and we delegates," red-shirted delegate Maria Estrella Uribe recited on Monday at the PSUV party Congress.
"Hallowed be your name, may your legacy come to us so we can spread it to people here and elsewhere. Give us your light to guide us every day," she said in front of an image of Chavez.
"Lead us not into the temptation of capitalism, deliver us from the evil of the oligarchy, like the crime of contraband, because ours is the homeland, the peace and life forever and ever. Amen. Viva Chavez!" she exclaimed to applause.
Though Chavez died of cancer in March 2013, he remains omnipresent in Venezuela. His photo is plastered all over capital Caracas, state TV frequently airs excerpts of his famously lengthy speeches and supporters sometimes don earrings or pendants with an artistic black-and-white rendition of his eyes.
Chavez won over many poor in oil-rich Venezuela with his massive social programs and frequent attacks of what he deemed a "squalid" business elite. Many feel a spiritual connection with the gregarious former soldier, who also hails from a humble background.
Opponents blast what they see as a detrimental personality cult. They also accuse current President Nicolas Maduro of piggy-backing off his predecessor's popularity to distract supporters from shortages of basic goods, an annual inflation of around 60 percent, and sky-high crime rates.
Thursday, August 28, 2014
Socialism: As Venezuelans prepare to be fingerprinted to buy bread, it bears noting that their country's transformation came with the late Hugo Chavez's promise of "a sea of happiness." Some happiness.
Fact is, socialism has made Venezuela the most miserable place on earth. But don't take our word for it. That's the result of objective research by Johns Hopkins University economist Steve Hanke.
He has created a "Global Misery Index" based on the original inflation-unemployment misery index of the late economist Arthur Okun and the interest rate and GDP per capita additions of Harvard economist Robert Barro. Put them all together and Venezuela tops the globe in misery with a figure of 79.9.
The misery in this case, as in so many others, is the product of socialism implemented in another purported but misguided effort to help the poor.
The fingerprints-for-bread requirement stems from 25% food shortages due to price and currency controls that lead to smuggling — with rationing instead of free markets the socialist answer. By year-end, Venezuelans must stand in line to be fingerprinted before buying 23 basic items including bread, sugar, toilet paper and other necessities in a system President Nicolas Maduro bills as "perfect."
"The whole thing is absurd," writes banker Miguel Octavio at his blog, The Devil's Excrement. "How much does this system cost? Who will run it? Who sells it? Who maintains it? Who profits from it? How do you implement it?" he writes. "Today it is fingerprint scanners, tomorrow it will be some different imaginary battle. But it will always be about attacking the consequences, not the causes."
But socialist failure extends beyond economics. On Monday, Gallup came out with a global perception survey showing Venezuela to be the most dangerous, crime-ridden hellhole on the face of the earth. It even topped all those Central American countries shipping illegal immigrants to the U.S. amid exaggerated tales of gang violence.
One of every 10 of Venezuela's 28 million people, according to a report in El Universal last week, has taken steps (not just contemplated, but taken actual steps) to emigrate. As this goes on, the U.S. embassy in Caracas warns that flights out of the country are severely curtailed, making Venezuela ever more like a prison.
Venezuela's Stefania Fernandez, a former Miss Universe, took her final catwalk from the pageant in 2010 waving a seven-starred Venezuelan flag in a veiled protest against crime. But she's a lot less subtle now, posing for a series of photos this week with a dirty bloody face, wearing her Miss Venezuela tiara.
Wednesday, August 20, 2014
A single mom, a brazen businesswoman, a party girl, a social-media rock star -- Maria Gabriela Chavez is many things. But the bona fide that counts on Chavez's resume is her bloodline. She is the daughter and longhaired likeness of the late Hugo Chavez Frias, Venezuela's former charmer in chief, who ruled this sharply divided land of 29 million for 14 years with one foot on the balcony and the other on the throat of the opposition.
Chavez died of cancer last year, but the aura endures. And ever since, pretenders to Chavismo's legacy have maneuvered to claim some of the glory. Few have climbed as high as Maria Gabriela, who, at age 33, with a journalism school diploma and no known job history, has just been named by President Nicolas Maduro as alternate ambassador to the United Nations.
With the highest inflation rate in the hemisphere, spiking crime and vanishing supplies of everything from eggs to antibiotics, Venezuelans aren't easily impressed. But word of naming the new envoy to a plum post at the world's leading multilateral organization chafed on even the most calloused companeros.
Until a week ago, Maria Gabriela, second in line of the four Chavez heirs, was known mainly as her father's favorite with a taste for high living and a reputation for scandals. Her most visible activity is feeding her Instagram page and keeping her 968,000 Twitter followers in Chavista aphorisms and factoids. Monday's offering was an item on the giant incoming asteroid scheduled to end life on Earth in 2880.
A year-and-a-half after her father's death, she has yet to clear out of La Casona, the official presidential residence. Even as she and her older sister, Rosa Virginia, help themselves to the palace linen and staff, Maduro and the First Lady, Cilia Flores, have been relegated to La Vineta, home of the vice president and guest quarters for visiting dignitaries.
The word in Caracas is that she'd grown accustomed to the whims of her father, who, after his divorce, rarely traveled abroad without Maria Gabriela on his arm in the role of virtual first lady.
Venezuelans know her by another honorific: the rice queen. The moniker commonly refers to a goodtime girl, as ubiquitous on the party circuit as rice is on a bride. In this case, it also refers to the Chavez scion's involvement in a murky import deal, in which she contracted a shadowy company to buy rice and corn flour from Argentina at a stiff premium.
The deal prompted a call last month for a corruption investigation by opposition lawmakers in Venezuela and Argentina. Hence, the whispers in Caracas that the sudden career upgrade was less an homage to the patriarch than a ploy to armor plate the Comandante's daughter with diplomatic immunity against inconvenient legal probes.
But another motive might better explain the instant ambassadorship. To strengthen his hand and suffocate rebellion, Chavez systematically centralized power, undercutting rivals he couldn't co-opt. And to keep a lid on palace intrigue, he turned to Cuba, swapping cut-rate Venezuelan oil for Castro Inc.'s best technology, domestic espionage.
As well as her beatified dad's blessing, Maria Gabriela also inherited his private line to Havana. And that, says Diego Arria, a former Venezuelan envoy to the UN, is the logic of sending an ingenue to Manhattan.
What the "infant diplomat" lacks in job training, Raul Castro's commissaries will supply in well-turned motions and speeches, ready for the teleprompter. "The Cubans are practiced in the workings of the UN, in part because it's one of the only international forums where they can still operate," Arria says.
This means little now, but the stakes could rise if Havana's proxy grabs a non-permanent seat on the Security Council, which is expected to vote on new rotating members in October. That would put the pariah of the Antilles closer to the head table of global governance.
Better still if Caracas's ranking envoy, Samuel Moncada, happens to be absent, in which case Havana's newest best friend will have her go at the microphone. Expect Chavista thunder and rice showers.
Wednesday, July 30, 2014
CARACAS—The Netherlands' release of a former top Venezuelan official wanted by the U.S. for alleged drug trafficking came after Venezuela raised economic and military pressure on two Dutch islands in the Caribbean, a top Aruban official said Monday.
Aruba's chief prosecutor Peter Blanken said that Venezuelan navy ships neared Aruba and Curaçao over the weekend as Dutch officials were debating what to do with Hugo Carvajal —Venezuela's former chief of military intelligence who was jailed in Aruba last week on a U.S. warrant.
"The threat was there," Mr. Blanken said. "We don't know what their intentions were, but I think a lot of people in Aruba were scared that something would happen."
Mr. Blanken said Venezuela's government also had threatened to sever Venezuela's vital commercial air links to Aruba and Curaçao. Venezuela's state oil company also threatened to withdraw from a contract to manage Curaçao's refinery, Mr. Blanken said, which would have put at risk some 8,000 jobs.
Aruban officials on Wednesday detained Mr. Carvajal, known as "el Pollo," or "the Chicken," but then released him on Sunday night after the Dutch government ruled that he was protected by diplomatic immunity. The decision overruled Aruban officials who had decided that the Venezuelan had no immunity because he hadn't been confirmed as consul by the Dutch government.
Much to the dismay of U.S. officials, Mr. Carvajal flew to Caracas on Sunday night to a hero's welcome from President Nicolás Maduro.
Annemijn van den Broek, a spokeswoman for the Dutch Foreign Ministry, said the decision to release Mr. Carvajal was made solely on legal grounds. She confirmed Venezuelan ships had come close to the islands, but said the Dutch Ministry of Defense had been told by the Venezuelans that the ships were returning from a naval exercise.
"I understand that the people on the island had a sense of urgency, but we have confirmation that this had nothing to do with the case," she said.
Ms. Van den Broek declined to comment on any threats of economic sanctions by Venezuela, but said the Venezuelan government made it clear they "were not amused by the situation."
A Venezuelan Foreign Ministry spokesman declined to comment. Mr. Maduro on Sunday night said that his government was "ready to do whatever it took" to get Mr. Carvajal freed.
"We are disturbed by credible reports that have come to us indicating the Venezuelan government threatened the governments of Aruba, the Netherlands and others to obtain this result," said Susan Bridenstine, a U.S. State Department spokeswoman. "This is not the way law enforcement matters should be handled."
She said the Dutch decided to release Mr. Carvajal "on the basis of claims of immunity that are beyond established international norms."
Manhattan federal prosecutors, who unsealed an indictment against Mr. Carvajal late Thursday, were blindsided by his release, said a person familiar with the matter. Prosecutors wouldn't have filed a provisional arrest warrant without believing there was a high likelihood of successfully extraditing Mr. Carvajal, the person said.
Officials in the Manhattan U.S. attorney's office feel the Dutch caved in to pressure from Venezuela, the person said. The officials fear the release could hurt the office's relationship with its network of confidential sources, who could be reluctant to share further information if it doesn't lead to results, the person said.
Andy Lee, director of Aruba's foreign affairs department, said Mr. Carvajal was deemed "persona non grata" and won't be permitted back to Aruba, a decision he said was passed down from Foreign Ministry officials in The Hague.
Mr. Carvajal's return to Venezuela was shown live on state television. The 54-year-old military man was warmly greeted at the airport with hugs and pats on the back from top Venezuelan officials.
He was then quickly shuttled in a vehicle to a theater in Caracas, where Mr. Maduro was giving a live address to loyalists and received a standing ovation as he was paraded up on stage.
Mr. Carvajal, who ran military intelligence for the late Venezuelan President Hugo Chávez, was a longtime confidante of the late leader. He took part in Mr. Chávez's unsuccessful 1992 military coup, and spent two years in prison with Mr. Chávez before being set free by a general amnesty in 1994.
Mr. Carvajal's role as one of the Chávez government's key liaisons to guerrillas from Colombia's Revolutionary Armed Forces of Colombia, known as the FARC, emerged after computers belonging to a slain guerrilla leader were captured by Colombian security forces in 2008.
Largely due to the information contained in the computers, Mr. Carvajal, along with two other top Venezuelan military officers, was put on the "Kingpin" blacklist issued by the U.S. Department of the Treasury that same year.
U.S. officials say Mr. Carvajal used his power to protect drug traffickers. In a Miami indictment unsealed Thursday just after his arrest in Aruba, the U.S. accused the Venezuelan official of taking bribes from late Colombian kingpin Wilber Varela, who was killed in 2008. In return for the money, Mr. Carvajal allegedly allowed Mr. Varela to freely use Venezuelan territory and waters for smuggling drugs to the U.S. by way of third countries like Mexico.
The U.S. alleged that Mr. Carvajal had relations with other kingpins. In numerous interviews given to Venezuelan, Colombian and U.S. media, Walid Makled, a top Venezuelan drug dealer, said that Mr. Carvajal and other top Venezuelan military officials were in his payroll.
Mr. Makled, who at the height of his power controlled Puerto Cabello, one of Venezuela's most important ports, and, according to U.S. officials, shipped 10 tons of cocaine to the U.S. a month, was arrested in Colombia in 2010 and extradited to Venezuela in 2011.
On Sunday, Mr. Maduro alleged that the evidence used to make the drug-trafficking charges against Carvajal was fabricated by Álvaro Uribe, the conservative former president of neighboring Colombia, who often butted heads with the late Mr. Chávez, and who was responsible for the military raid that led to the capture of the incriminating computers. Mr. Maduro promised that in coming days he would refute the allegations point by point.
Mr. Uribe couldn't be reached for comment.
Sunday, July 27, 2014
CARACAS, Venezuela—American probes into cocaine-smuggling to the U.S. has led to the first indictments of Venezuelan officials who worked at the top echelons of power, including a former general and a senior law-enforcement official.
Hugo Carvajal, a former chief of Venezuelan military intelligence, was detained in Aruba at the American government's behest, officials in the Caribbean island and the U.S. said on Thursday.
Mr. Carvajal, a retired general who was awaiting confirmation as President Nicolás Maduro's consul-general to Aruba, is the highest-ranking Venezuelan official to be arrested on a U.S. warrant. A former Venezuelan judge, Benny Palmeri-Bacchi, was arrested last week in Miami on drug-trafficking and other charges, it emerged on Thursday.
Indictments against Mr. Carvajal, Mr. Palmeri-Bacchi, and the former head of Interpol in Venezuela, Rodolfo McTurk, were unsealed on Thursday in Miami. The indictments accuse all three men of conspiring with Colombian drug traffickers to export cocaine to the U.S.
The arrests stand to deepen already strained ties between the U.S. and Venezuela, which has frequently accused Washington of vilifying Venezuelan officials as drug traffickers and plotting to overthrow its government.
Mr. McTurk's whereabouts were unknown and it couldn't be determined if he had a lawyer.
In a federal court on Thursday, Mr. Palmeri-Bacchi pleaded not guilty to charges of distributing cocaine to the U.S., conspiracy to obstruct justice, money laundering and extortion, Reuters reported. Mr. Palmeri-Bacchi's attorney didn't respond to requests for comment.
Mr. Carvajal was detained Wednesday night by the authorities at the Queen Beatrix International Airport in Oranjestad, Aruba, and was unable to comment. In the past, he has denied U.S. government accusations of wrongdoing.
Mr. Carvajal, who had been a close military aide to the late president, Hugo Chávez, was the most important target for American law enforcement. A team of investigators in the U.S. attorney's office for the Southern District in New York has worked for more than a year to build the case against Mr. Carvajal, said an official familiar with the case.
"This is pretty significant," said Myles Frechette, a former American diplomat in Venezuela with extensive experience in Latin America. "Obviously, this was done with lots of planning in advance. I'm sure the U.S. had gone through all the friendly countries in the Caribbean to say, 'If this guy shows, he's wanted for narco-trafficking.' And he fell into the trap."
The Venezuelan government called for his release, saying that Mr. Carvajal's detention was unlawful and warning that tiny Aruba, which is part of the Netherlands and is just 17 miles away, could suffer economic consequences.
Venezuela's foreign ministry said the government "energetically rejects the illegal and arbitrary detention of the Venezuelan diplomatic official." Venezuela also characterized the arrest of Mr. Carvajal by Dutch authorities as a violation of a 1961 international convention governing diplomatic relations.
Mr. Carvajal, whose nickname is "el Pollo," or "the Chicken," carries a diplomatic passport, but doesn't have diplomatic immunity because he hasn't been confirmed as consul general, said Ann Angela, spokeswoman for Aruba's prosecutor general's office. She declined to give details on why the arrest order was carried out now, citing privacy concerns.
The U.S. plans to formally solicit extradition, but the process is expected to take time, a U.S. official said. The State Department has 60 days to make an official request, Ms. Angela said. Mr. Carvajal met with prosecutors on Thursday, and will face a judge on Friday who will determine whether his detention complies with international treaties, Ms. Angela said.
In the Miami indictment unsealed Thursday, Mr. Carvajal is accused of taking bribes from late Colombian kingpin Wilber Varela, who was killed in 2008, and in return allowing Mr. Varela to export cocaine to the U.S. from Venezuela and avoid arrest by Venezuelan authorities.
Mr. Carvajal had long been targeted by American and Colombian investigators for what they called his active role in shipping Colombian cocaine through Venezuela and on to the U.S.
In 2008, the U.S. Treasury Department put him on a blacklist that prohibited any American entity from doing business with him, alleging that he had protected drug shipments from the Revolutionary Armed Forces of Colombia, or FARC, and provided the rebel group with weapons and logistical help. The State Department has classified the FARC as a terrorist group, and many of its leaders are wanted in the U.S.
Part of the purported evidence against Mr. Carvajal, as well as two other high-ranking Venezuelan officials blacklisted by the Treasury Department, had come from messages and memos that Colombia's government said that its commandos found in computer hard drives they recovered from a FARC camp after they bombed it.
In one 2007 missive by the FARC's Luciano Marín, the rebel commander recounted how Mr. Carvajal would be delivering "very powerful bazookas," what intelligence officials believed were rocket-propelled grenade launchers.
Venezuelan government officials, as well as the FARC, said that the documents were forged by Colombian intelligence officials. But an Interpol investigation found no evidence of tampering after studying the computer hard drives, and rebel deserters backed up many of the allegations.
Douglas Farah, president of Takoma Park, Md.-based IBI Consultants, which works with governments and private foundations on researching drugs and arms trafficking, said that American investigators may be interested in asking Mr. Carvajal about details of the inner workings of alleged Venezuelan government ties to smuggling organizations.
Mr. Farah said the U.S. missed such an opportunity when in 2010 Colombia arrested Walid Makled, an alleged drug kingpin, and turned him over to Mr. Chávez's government.
In March 2011, before being sent to Venezuela, Mr. Makled, in a televised interview with Univision, said he routinely paid off Venezuelan military officials to move his drugs around the country. "For example, I used to give a weekly fee of 200 million bolívares (about $50,000 at the time), and 100 million was for General Hugo Carvajal," Mr. Makled said.
"What the U.S. is probably hoping," Mr. Farah said of Mr. Carvajal's arrest, "is that this could open a significant window and to unlock the relationships the Venezuelan government has with other groups."
In a separate indictment made public Thursday, the former judge, Mr. Palmeri-Bacchi was accused of conspiring with the former head of Interpol in Venezuela, Rodolfo McTurk. The two were accused of helping one of Mr. Varela's associates, convicted drug trafficker Jaime Alberto Marin-Zamora, of moving tons of cocaine through Venezuela on its way to the U.S.
Wednesday, July 23, 2014
Friday, July 4, 2014
Tuesday, July 1, 2014
Wednesday, June 25, 2014
Thursday, June 19, 2014
Saturday, June 14, 2014
Friday, May 9, 2014
Thursday, May 8, 2014
Venezuela’s government announced the start of electricity rationing in western Zulia state as well as water rationing in Caracas to reduce demand on the power grid, a day after Ford Motor Co. (F) halted production in Latin America’s largest oil exporter.
The second-largest U.S. automaker joins competitor Toyota Motor Corp. (7203) and Dutch truck-maker CNH Industrial NV (CNHI) in suspending assembly in the South American country because of the difficulty of obtaining dollars to import parts from the government.
Shortages of everything from water to car parts and flour to pregnancy tests come after three months of protests against the government of President Nicolas Maduro that have left at least 41 people dead. The government yesterday said it will start rationing electricity and water as drought drains hydroelectric reservoirs and water tanks.
“This is another acknowledgment that the country is not working,” Michael Shifter, president of Inter-American Dialogue in Washington, said in a phone interview yesterday. “If this spreads to the rest of the country and becomes a nationwide rationing of electricity, it will significantly cut into Maduro’s support.”
Colombia stopped natural gas sales to Venezuela last week to preserve fuel during the periodic regional dry spell known as El Nino. The last electricity crisis prompted by El Nino in 2009 contributed to six straight quarters of negative economic growth in Venezuela.
“We’re running the risk of living a new electricity crisis like the one that started in 2009 if water levels at the Guri dam do not recover in the next four months,” Miguel Lara, a former president of Venezuela’s grid regulator, said yesterday in a telephone interview.
Venezuela’s economy will shrink 1 percent this year, according to a median estimate of eleven economists surveyed by Bloomberg last month. This compares to 0.5 percent growth they forecast in February.
Venezuela, which has the world’s largest oil reserves, suspended a nationwide electricity rationing plan in June 2010 after it increased investment in thermoelectric capacity.
The energy-saving plan follows measures to ration water in the capital, where residents are struggling with shortages of basic goods including toilet paper and bottled water.
More than one in four basic goods was out of stock in Latin America’s fourth-largest economy in January, the most since records began, according to the central bank. The bank stopped publishing up-to-date scarcity data in March.
The Dearborn, Michigan-based Ford, which took a $310 million charge in the first quarter for the sharp devaluation of the Venezuelan bolivar, had already cut production in the South American nation because a shortage of hard currency made it difficult to purchase parts.
“Ford’s production operations have been suspended in Venezuela due to material shortages,” Kristina Adamski, a company spokeswoman, said in an e-mailed statement May 6. “We have received a commitment from the Venezuela government to help resolve the issues and to get our production up and running by the start of next month.”
General Motors Co. (GM), the largest U.S. automaker, has two factories in Venezuela.
“Production in Venezuela continues at a reduced level given low availability of material,” Dave Roman, a GM spokesman, said yesterday in an e-mail. “We are working with Venezuela government representatives and discussions have been constructive. We have no further information to share at this time.”
GM in April reported a $419 million one-time loss for Venezuelan currency devaluation as part of its first-quarter earnings. Lower production during the first quarter in Venezuela contributed to a decline in GM’s South America market share, Chuck Stevens, chief financial officer of Detroit-based GM, said in April.
“We like Venezuela when it’s running normally,” Stevens told analysts in April on a conference call. “It hasn’t run normally for the last three quarters. Clearly that’s weighing down our results. We see no resolution in the near-term.”
Dollar shortages have depressed car sales in Venezuela by 86 percent in a year to March, according to Venezuela’s Automotive Chamber of Commerce. Only 1,674 new cars were sold in the country of about 28 million people that month.
The decline of industry and dollar shortages pushed inflation to 59 percent in March, the highest in the world.
State water utility Hidrocapital posted on its website yesterday a rationing plan for Caracas. No part of the metropolitan area will go completely without water, and the government is preparing rationing plans for other parts of the country, Environment Minister Miguel Rodriguez said yesterday on state television.
The eastern business district of Chacao, home to office towers, restaurants and shopping malls, will not have water service on Tuesdays and Saturdays, according to the plan. On the remaining five days of the week, water service will only be available in the evenings, Hidrocapital said.
The rationing plan will be in place until the wet season starts and water levels stabilize at major reservoirs, Rodriguez said yesterday.
Approval for Maduro fell to a record low 37 percent in April, according to a poll from Caracas-based Datanalisis published by newspaper El Universal May 5. Datanalisis President Luis Vicente Leon declined to confirm or deny the poll.
The utility “crisis has arrived at a bad moment for the government, as it comes at a critical time for the country” Leon said by telephone from Caracas yesterday. “The problems of shortages of medicines and food are perceived much more acutely by people who are having their water or lights cut off.”
Tuesday, May 6, 2014
CATIA LA MAR, Venezuela (Reuters) - The neighborhood of El Chaparral began receiving cash from the Venezuelan government in 2005. The windfall came courtesy of the late socialist leader Hugo Chavez's plan to fight poverty by transferring billions of dollars in oil revenue to communities around the country.
Within a year, auto mechanic Juan Freire was urging authorities to cut off El Chaparral and its sister community of Los Pinos, with a combined population of 250. The money wasn't going to the needy, he says, and it wasn't sowing growth. Instead, Freire alleges, leaders of the community council in this mountain suburb were using some of the cash for personal expenses and to build houses for family members. He and neighbors filed complaints with nearly a dozen state agencies seeking a halt to the transfers.
Yet the money kept rolling in: In 2008, the council received close to $1 million - equal to about $40,000 a resident.
"When we filed complaints, the responses would always be something like, ‘We'll send some recommendations,'" said Freire, 57. "They never gave us answers."
The unsupervised spending in El Chaparral is symptomatic of a vast community aid effort with lax financial controls. A network of more than 70,000 community groups has received the equivalent of at least $7.9 billion since 2006 from the federal agency that provides much of the financing for the program, Reuters calculates, based on official government reports.
The money is part of a broad government effort called the "communal state" that steers funds to communities, primarily through an outfit called the Autonomous National Fund for Community Councils, or Safonacc. But exactly how much money passes through this system, who gets it and how it's used are largely a mystery.
The communal revenue-sharing program was championed by the late Chavez. The charismatic former military officer wanted small neighborhood groups to form "communes" that would define civic life and anchor a citizen-driven socialist democracy. In one of his last speeches before dying of cancer in 2013, Chavez tasked his handpicked successor, Nicolas Maduro, with advancing the plan.
"I entrust this to you as I would my life," he told Maduro, a former bus driver who narrowly won election last year.
The most common of such organizations are the community councils, which number about 40,000, according to a 2013 Communes Ministry study. The study also identified another 30,000 such organizations, including networks of community councils.
Maduro has been beset by three months of violent opposition protests that have left dozens dead. He shows no sign of stepping down - and has vowed to advance Chavez's community financing plan. He has described the communes as the embodiment of Chavez's movement to reduce inequality through generous spending of oil revenue. Many communities have successfully founded community centers, repaired roads and opened small businesses.
"Without the communes, this would all end. The commune is the epicenter of solidarity, of truly human life, of socialism," Maduro said in November.
But the Venezuelan government doesn't publish an official accounting of how the community-support funds are spent. The Finance Ministry didn't respond to questions about the financing of community groups for this article. Safonacc is overseen by the Communes and Social Movements Ministry, which promotes "participative social development." An official at the ministry said she wasn't authorized to provide any information.
Some officials have raised red flags about the spending. The comptroller of Venezuela in its 2011 annual report singled out Safonacc for scrutiny. That report concluded Safonacc has no centralized system to track outlays or follow up on projects.
The comptroller's office said it does not keep a tally of total transfers to community groups; it only tracks the finances of the councils it audits. In spite of the irregularities it identified at Safonacc, the office said in an email, the complaints "do not allow objections with respect to the relevance of the existence of these social and community groups. On the contrary, (the complaints) illustrate the need to cooperate in the development and consolidation" of the community councils.
Political rivals say the government is using the system to finance its base while bypassing opposition mayors. They note that the Interterritorial Compensation Fund, which uses federal funds to help poor regions close the gap with wealthier ones, has for three years given more to the community groups than to the country's 337 municipal governments. The ICF funds Safonacc and also directly finances community groups. It has set aside $1.38 billion under the 2014 budget for community groups and $1.29 billion for municipalities.
"The communal state lacks the fiscal controls that would apply to state and municipal governments, meaning there is no way to guarantee the appropriate use of resources," said Jose Vicente Haro, a professor of constitutional law at the Universidad Catolica Andres Bello in Caracas. "At the same time, there is a clear tendency toward using these groups to reduce the resources available to opposition politicians, which violates constitutional principles."
The Reuters calculation of $7.9 billion in payments to the community groups is based on figures in the Communes Ministry's annual reports to congress and information posted on the Safonacc website. Some of the data on the Safonacc site was taken down after Reuters began inquiring about the spending.
The Communes Ministry issued a statement in January reporting that Safonacc only transferred the equivalent of some $733 million to community groups between 2009 and 2013. That statement appeared to contradict the ministry's own annual reports to the Venezuelan congress showing it has transferred more than that in a single year. The ministry didn't respond to requests for clarification.
Chavez for decades dreamed of creating a nationwide network of self-governing community groups. His vision was laid out in the plans for a revolutionary society he and military comrades hoped to create through a 1992 coup.
"Popular democracy will be born of communities, and its beneficent wisdom will spread throughout the social fabric of the nation," he wrote in the early 1990s, in one of a series of texts calling for the creation of a "concrete utopia."
Chavez's 1992 putsch failed but made him famous, and he catapulted into the presidency in 1999. A decade-long oil boom followed, financing lavish spending that guaranteed electoral support for his brand of socialism. During his 14-year rule, World Bank data show, the poverty rate fell by nearly half - to 25.4 percent of the populace in 2012, from 48.7 percent when he took over.
Oil revenue is the mainstay of the Venezuelan economy and a key component of the federal budget.
State oil company PDVSA last year paid a combined total of close to $44 billion in taxes, social spending and contributions to a national development fund known as Fonden, according to preliminary figures published in the oil ministry's 2013 annual report.
But tracking where and how the oil money is spent has grown more difficult over the years with the rise of opaque state-run funds that don't disclose their finances. Among them is the behemoth $100 billion Fonden. The secretive state fund in some years accounts for half all investment in Venezuela. As Reuters detailed in a 2012 article, Fonden is not subject to congressional oversight and provides no detailed description of its outlays.]]]
A similar pattern has played out with the community councils, originally created in 2006.
Some localities appear to use the money as intended. At the Jose Felix Ribas Commune, which comprises 24 community councils in the Caracas slum of Antimano, neighbors transformed an abandoned lot filled with junked cars. It is now a three-story community center with an internet cafe, a textile workshop and a study center for neighborhood kids.
"You see, this can be done," said 34-year-old Aura Aguilera, who works full time on community development. Since 2006, she says, she has helped manage some $150,000 to build the textiles business.
Authorities have made some efforts to fight waste and fraud.
The state prosecutor's office in 2011 said 1,500 people were under investigation for abusing community council resources. Prosecutors in September 2013 announced the arrest of three people. One was an employee of a federal agency that funds community groups, accused of making off with some $110,000 earmarked for boats to be used by fisherman. The comptroller's office has offered management training to more than 80,000 people, and has published audits showing irregularities. Reuters learned of the problems in El Chaparral through a comptroller's annual report.
Officials at the comptroller's office say they have no way of auditing each council. Instead, they say, irregularities can be detected through "social auditing" - in which citizens denounce fraud. In many cases, though, residents say they don't have enough information to convince authorities to open an investigation.
Victor Gonzalez, an auditor, in 2010 joined the board of his neighborhood council in the poor Caracas neighborhood of La Pastora. Through contacts in a Caracas municipal government, he says, he discovered the group had received 330,000 bolivars, equivalent to $153,000 at the time it was disbursed, to repair a retaining wall in the neighborhood. The previous board left no documentation.
Gonzalez, a staunch follower of Chavez, says the prior board spent the entire amount but only covered the wall with a thin layer of cement rather than fixing the structural problems. "Can you see 330,000 bolivars in that?" he asked, pointing out the wall, adorned with slogans celebrating the communes. "I can't."
The comptroller's office said it had received a complaint about the situation but dismissed it for lack of proper documentation.
"Of course I didn't have the documents - the board didn't leave anything behind," Gonzalez said when informed of the comptroller's response. "What was I going to do?"
The previous members of that council were unavailable for comment. The municipal government did not respond to an email seeking comment.
In the rural slum of Saman Mocho, outside the city of Valencia, resident Jesus Diaz says he was pushed from the council board in 2007. He was ousted through a recall referendum in a hastily convened assembly that did not reach quorum. Neighbors complained he was slowing a home construction program. He confirms there was a delay. But he says it was because he refused to transfer funds to a contractor's personal account, which would have been illegal, rather than to the construction company itself.
Saman Mocho's council in 2006 and 2007 received transfers totaling $1.3 million to build 40 houses. But by 2008, Diaz says, the contractor ran out of money after partially building only 10 homes. Residents later completed those houses with their own money. The national comptroller told Reuters the case was being handled by a local office of the comptroller and that it was "in the evaluation stage."
Before the comptroller completed the investigation, Saman Mocho was approved for more funding. A government housing program gave the council another $465,000 in 2011 to build 30 homes, including one for Diaz's daughter. This time, Diaz says, the project was successful. "It's a demonstration that the people can build homes, it's marvelous," said Diaz.
In El Chaparral, the community in 2005 built some 20 houses through a pilot of the communal-funding program. In time, complaints arose. The community directors withdrew money meant for development projects and distributed it among relatives, allegedly for safekeeping, said Freire, the auto mechanic. He said the community often did not know what projects the council leaders had proposed and how much the group had received in financing.
He and several neighbors filed complaints against three women who controlled the council's finances. In 2007 a community assembly voted to recall the trio from the board. The deposed leaders disputed the vote and won the support of Communes Ministry officials, who annulled the recall, according to Freire. He said he attended one meeting in which council leaders were seeking help from Communes Ministry officials to obtain $100,000 to buy heavy construction equipment, a purchase the community did not know about and would not have benefited from.
Ana Mercedes Salazar, one of the three council members, denied wrongdoing. "No, no, absolutely not. At Chaparral-Los Pinos all the projects that received funds were carried out," said Salazar. She says the council completed all of its projects by the book.
The comptroller's office disagreed. In its 2011 annual report, it found that the council failed to document expenditures, made out checks to a member of the council's board, and made expenditures unrelated to council projects. The comptroller found no evidence the Communes Ministry had inspected the projects it financed.
Salazar said she had not seen the report, which does not name her. Asked what actions it took after its investigation, the comptroller said it drew up recommendations for the Communes Ministry, Safonacc and the local community council.
El Chaparral residents say they see few signs of the several million dollars the community received. The council bought a house to be used for meetings, but it was in "terrible condition" and acquired at an inflated purchase price, according to an official complaint filed by a neighbor. On a recent visit, a hand-written sign on the door said a meeting scheduled to be held there had been moved because the house was too small to fit everyone.
Freire says micro enterprises were financed with $140,000, including an auto workshop, several catering businesses and a small cinder block factory. They are nowhere to be found, he says.
Five hundred avocado trees, purchased to create an orchard, were left to wilt and die, according to another neighbor. A planned medicinal garden is a now a fenced-in patch of weeds, strewn with trash.
Freire says the community councils system was no match for residents who know how to game it.
"Projects that are not supervised never work out," he said. "Some people see this and take advantage of it for personal enrichment."
Sunday, May 4, 2014
President Obama has vowed to "punish" the GOP at the ballot box for thwarting his proposed 39% minimum-wage hike in Congress this week. All he's really doing is plugging Venezuela's banana-republic economics.
Lashing out against Republicans who filibustered a Senate bid to jack up the minimum wage to $10.10 on Wednesday, the president vowed to make it an election issue come November.
"If there's any good news here, it's Republicans in Congress don't get the last word on this issue," he declared. "You do. The American people. The voters."
And it's true — polls show that about two thirds of Americans do support raising the minimum wage.
While there's little doubt the president will try to milk that political momentum, he can't change the economic reality of a rising cost of living that is fueling the public perception that wages have to rise.
The only reason raising the minimum wage has any traction at all in the political sphere is that the cost of living has risen sharply in the Obama years. Obama likes to blame employers for not paying workers enough.
But it's Obama's pattern of big-spending policies that have hurt the lowest-wage earners the most.
Purchasing power has fallen 8% in the past decade, a result of inflation for everyday goods. And such erosion hits the working poor the hardest.
The consumer price index suggests a 2% to 3% average annual rise in prices over the past decade. But the real picture is far worse.
Big-ticket purchases like homes are overcounted in our inflation data — while the mundane things people eat and wear each day are undercounted. Food, clothing, water, electricity, gasoline have all risen sharply.
The latter goods get lost in the averaging. But for some, they make up the bulk of their purchases. That's precisely why those at the lowest end of the pay scale — about 4% of American workers — are so severely squeezed in the Obama economy.
Combine all this with a record five-year buildup of public debt, and the net result is an incredible tax on the working poor to pay for big government.
Understandably, people want the lowest-wage earners to see some relief. But the private sector can't do much to alleviate this pain except lay off workers to pay for a wage rise. The Congressional Budget Office says up to 1 million workers will lose jobs if the minimum wage rises to $10.10. So much for worker solidarity.
It just goes to show the cynicism of governments who create high living costs and then blame the private sector for reacting, as they must, to their profligacy.
Skip Obama for a minute and take a look at the shambling country to our south, where raising the minimum wage is done easily by dictatorial decree as a matter of policy, with no opposition — Venezuela.
As the Senate Republicans halted the arbitrary rise to $10.10 on the eve of the Marxist May Day holiday, the Caracas government raised its minimum wage 39% to ease the pain that the orgy of government spending and 59% inflation rate have inflicted on Venezuela's poor.
Having Chicago-ized the electoral system, the government is less concerned with elections than with the poor man's means of protest — riots. Since February, Venezuela has been engulfed by them.
Venezuela's wage hike follows a 10% rise in January and several hikes the year earlier — all in an increasingly futile bid to keep up with government-fueled inflation. Now, Venezuelan sources tell IBD, as things unravel, the next stop may be a political coup.
Luckily, the U.S. isn't in such a dire position. But that doesn't mean the misery isn't real for our poor. It is. And that leaves us vulnerable to demagogues and despots.
As we've noted before, minimum wage hikes are a political tool. They don't create wealth or boost incomes. They merely kill jobs.
We hope Congress refuses to follow the failed Venezuelan model of Caracas-style economics.