Saturday, January 31, 2015

Rats Begin Deserting the Ship

from Powerlineblog
Leamsy Salazar was the head of security for Hugo Chavez and, after Chavez’s death, for Diosdado Cabello, the leader of Venezuela’s National Assembly and second-in-command of the Socialist Party. Salazar has defected to the United States and unleashed some explosive allegations against his former bosses.

Salazar says that Hugo Chavez died in December 2012, not March 2013 as was claimed by his successor, Nicolás Maduro. Salazar says that Maduro and his cronies covered up Chavez’s death for three months so they could sign decrees under his name. Latin American politics has the reputation of being surreal, but maybe this represents, rather, the around-the-bend craziness of a socialist state. Think North Korea.

Salazar also says that Cabello is the head of an international drug cartel that includes other leading members of Venezuela’s Socialist Party, and that receives assistance from Cuba’s Communist government. Is this claim true? I don’t know, but Salazar reportedly is assisting law enforcement in New York with drafting a criminal complaint against Cabello.

It is hard to imagine that Venezuela’s socialist regime can last much longer. The Chavez/Maduro government has wrecked the economy by controlling prices, so everything is either in short supply or non-existent. The IMF says Venezuela’s economy will shrink by seven percent this year; that is undoubtedly an optimistic figure. And, of course, the price of the country’s only export, oil, has plummeted.

It is noteworthy that “eight other members of President Maduro’s personal security force have deserted Venezuela and defected to the United States, according to reports in Venezuelan newspaper El Nacional.” These particular rats are well-positioned to know when the ship is about to sink. It can’t happen too soon.

Friday, January 30, 2015

Venezuelan Government Resolution Approves Military's Use of Deadly Force Against Protestors

from the PanAm Post
An internal ruling made by the Venezuelan Ministry of Defense, published on Tuesday, January 27, in state newsletter Gaceta Oficial, legalizes the use of lethal weapons by the national armed forces (FANB) against protesters.

Resolution 008610, signed by General-in-Chief and Defense Minister Vladimir Padrino López, establishes the “use of force, with a firearm or any other potentially lethal weapon” as the last resort to “prevent disorder, support the legitimately constituted authority, and counter all aggression, immediately confronting it with the necessary measures.”

Article 68 of the Constitution, however, stipulates: “The use of firearms and toxic substances to control peaceful demonstrations is prohibited.”

The new measures also specify that a new Public Order Manual for state security services will be created within the next three months to facilitate training and prevent abuses. However, the new rules on the use of force are to be applied “immediately.”

Under Venezuelan law, the Defense Ministry does not have the authority to override or ignore the Constitution and the norms contained therein. María Esperanza Hermida, coordinator for enforcement in Venezuelan NGO (Provea) argued that the measure violates the Universal Declaration of Human Rights (UDHR) and the International Covenant on Civil and Political Rights (ICCPR), as well as transferring competencies to the military which are the preserve of the civil police.

In an interview with the PanAm Post, Jose Vicente Haro, a Venezuelan university professor of constitutional law, said that restricting or limiting the application of human rights is a measure that can only be discussed in the National Assembly, as a bill subject to modification that must be approved by two-thirds of legislators, as outlined in Article 203 of the Constitution.

Haro also explained that Article 23 of the Constitution establishes that all human-rights treaties signed and ratified by Venezuela have an overriding constitutional character, taking precedence over any law or resolution issued by the Venezuelan state.

Criminalization of a Right

Hermida raised further concerns about the scope for interpretation contained within the Defense Ministry’s ruling that lethal force could be used to “support the legitimately constituted authority.” For the Provea activist, protests by their essence are a complaint against the authorities, meaning that any demonstration against the government could be dispersed with live ammunition.

Hermida explained that the great majority of the 9,286 protests that took place in 2014 — the highest figure yet in Venezuela — didn’t become violent until state security forces attempted to disperse them. As such, she argued, stipulating in a quasi-legal text that simply expressing anti-government sentiments could be constituted as aggression is to criminalize the right to protest.

She mentioned that several recent precedents reinforce a authoritarian trend within government policy. One recent law on Organized Crime and Terrorism permitted Venezuelan judges to classify peaceful marches as terrorist activity. Legislation creating a so-called Protection System for Peace similarly established a week ago that all citizens must report activity responsible for “destabilization” to the authorities, something which Hermida describes as encouraging the formation of vigilante groups.

“The next massacre, the next Caracazo, the next Bassil Dacosta, could be legal. The military want to accelerate violence and sow fear. They’re going to kill people, and they’ll do it ‘within the laws’ that they themselves approve,” online Venezuelan activist Luis Carlos Díaz wrote on Facebook.

Against International Law

Local human-rights and civil-society organizations under umbrella coalition Forum for Life are set to protest the new measures before the relevant UN bodies, either under the ICCPR or the UN Convention against Torture.

Haro also made reference to the American Convention on Human Rights, approved by the Organization of American States (OAS) over 50 years ago, and the ICCPR, which came into force in 1997. Both enshrine the right of peaceful protests and prohibit the use of firearms by state security bodies to impede, contain, or attack these kind of demonstrations.

He suggested that Venezuelan now exhibits all the requirements to request an application of the OAS Democratic Charter, which would result in a delegation of external observers being dispatched to meet with the Venezuelan authorities.

The professor also noted that Venezuela’s membership of the UN Security Council and the Human Rights Council obliges it to comply with all relevant international treaties and resolutions.

He further argued that other states now ought to use the UN to call for a commission to demand an explanation from the Venezuelan government over the new norm which contradicts the Universal Declaration, claiming that “in Venezuela there’s not a democratic system. There’s a government which ought to be described as a modern dictatorship.”

Wednesday, January 28, 2015

Flourishing Corruption in Venezuela

...and what America is trying, with sanctions, to do about it.

Sunday, January 25, 2015

Thousands March, Venezuelan Government Yawns...

from ABS News
Thousands of opponents of President Nicolas Maduro marched in the capital Saturday to denounce the socialist government for a deepening economic crisis marked by widespread shortages and galloping inflation.

Politicians addressing the crowd tried to project an image of unity in their first organized march since deadly anti-government disturbances a year ago failed to unseat Maduro.

Turnout at what was billed the "March of the Empty Pots" was far lower than past rallies.

Analysts say that while frustration with Maduro is high, many Venezuelans are staying home out of fear of another crackdown on government opponents and are too absorbed putting food on the table to push for political change.

Police in riot gear blocked marchers' access to downtown

Friday, January 23, 2015

Socialismo del Siglo XXI

from the Tampa Tibune
The problem with socialism isn’t that you eventually run out of other people’s money. It’s that you eventually run out of oil money.

Well, at least in Venezuela. It doesn’t have an economy, you see, so much as a poorly run oil exporting business that isn’t enough to subsidize everything else. And that was true even when oil was over $100 a barrel. So now that it’s under $50 a barrel, Venezuela’s government has gone from defaulting on its own people, as former minister Ricardo Hausmann put it, in the form of rampant inflation and shortages, to really doing so, to the point that it might have to start defaulting on its debt, too.

It shouldn’t be this way. Venezuela, after all, has the largest oil reserves in the world. It should be rich. But it isn’t, and it’s getting even poorer now, because of economic mismanagement on a world-historical scale. The problem is simple: Venezuela’s government thinks it can have an economy by just pretending it does. That it can print as much money as it wants without stoking inflation by just saying it won’t. And that it can end shortages just by kicking people out of line. It’s a triumph of magical thinking that’s not much of one when it turns grocery shopping into a days-long ordeal that may or may not turn up such things as food or toilet paper.

This reality has been a long time coming. Venezuela, you see, has the most oil reserves, but not the most oil production. That’s, in part, because the Bolivarian regime, first under Chavez and now Maduro, has scared off foreign investment and bungled its state-owned oil company so much that production has fallen 25 percent since they took power in 1999. Even worse, oil exports have fallen by half. Why? Well, a lot of Venezuela’s crude stays home, where it’s subsidized to the tune of 1.5 U.S. cents per gallon. (Yes, really). Some gets sent to friendly governments, such as Cuba’s, in return for medical care. And another chunk goes to China as payment in kind for the $45 billion it’s borrowed from them.

That doesn’t leave enough oil money to pay their bills. Again, the Bolivarian regime is to blame. The trouble is that although it’s tried to help the poor, which is commendable, it’s also spent much more than it can afford, which is not. Indeed, Venezuela’s government is running a 14 percent of gross domestic product deficit right now, a fiscal hole so big that there’s only one way to fill it: the printing press. But that just traded one economic problem — too little money — for the opposite one. After all, paying people with newly-printed money only makes that money lose value, and prices go parabolic. It’s no wonder then that Venezuela’s inflation rate is officially 64 percent, is really something like 179 percent, and could get up to 1,000 percent, according to Bank of America, if Venezuela doesn’t change its byzantine currency controls.

Venezuela’s government, in other words, is playing whac-a-mole with economic reality. And its exchange-rate system is the hammer. It goes something like this. The Maduro regime wants to throttle the private sector but spend money like it hasn’t. Then it wants to print what it needs, but keep prices the same like it hasn’t. And finally, it wants to keep its stores stocked, but, going back to step one, keep the private sector in check like it hasn’t. This is where its currency system comes in. The government, you see, has set up a three-tiered exchange rate to try to control everything — prices, profits, and production — in the economy. The idea, if you want to call it that, is that it can keep prices low by pretending its currency is really stronger than it is. And then it can decide who gets to make money, and how much, by doling out dollars to importers at this artificially low rate, provided they charge what the government says.

This might sound complicated, but it really isn’t. Venezuela’s government wants to wish away the inflation it’s created, so it tells stores what prices they’re allowed to sell at. These bureaucrat-approved prices, however, are too low to be profitable, which is why the government has to give companies subsidies to make them worthwhile. Now when these price controls work, the result is shortages, and when they don’t, it’s even worse ones. And, remember, this was a problem even when Venezuela had dollars. Now it doesn’t. Not when 95 percent of its exports come from oil, and its price has fallen by half. (It’s actually a little worse than that, since Venezuela’s crude is so heavy that it sells at a $5-a-barrel discount to the rest of the world’s). Without as many petrodollars, Venezuela has had to cut back on imports so much that its shortages, which had already hit 30 percent of all goods before the central bank stopped keeping track last year, have gone from being a fact of life to the fact of life. Things are so bad that there isn’t a bank run — who wants to save their worthless currency? — but rather, as Jonathan Wheatley puts it, a supermarket run. People have lined up for days to try to buy whatever they can, which isn’t much, from grocery stores that are even more empty than usual. The government has been forced to send the military in to these supermarkets to maintain some semblance of order, before it came up with an innovative new strategy for shortening the lines: kicking people out of them. Now they’re rationing spots in line.

It’s a man-made tragedy, and the men who made it won’t fix it. So it turns out Lenin wasn’t just right that the best way to destroy the capitalist system is to debauch the currency. It’s also the best way, as Venezuela can tell you, to destroy the socialist one.

Sunday, January 18, 2015

Line Up, Venezuela!

Your government ruined your economy, so if you want to eat, get in line!

Saturday, January 17, 2015

Protests Again in San Cristobal

from Reuters
SAN CRISTOBAL (Reuters) - Masked youths are once again blocking streets and burning tires in the Venezuelan city of San Cristobal, the epicenter of last year's massive anti-government protests.

The groups are small and the unrest contained, but dissent is rising in this volatile Andean city, a barometer of frustration with nationwide shortages that are putting pressure on the socialist government of Nicolas Maduro.

Students, who also accuse the government of corruption and repression but whom Maduro labels "coupsters," are threatening to unleash larger demonstrations again.

"It's time," Deiby Jaimes, 21, said from behind a barricade of burning trash as police gazed down from their hilltop perch. "There's a social, economic and political crisis. Economically we're completely lost and in a delirium."

But Jaimes and other students said they were restraining themselves to see if other Venezuelans also take to the streets.

Last year's protests split the opposition and failed to attract widespread support from Venezuela's poor, meaning mainstream anti-government leaders like Henrique Capriles are calling for less radical tactics including peaceful rallies and a good showing at an upcoming parliamentary vote.

"People are scared," said Jaimes, an accounting student, as dozens around him knocked rocks together menacingly. "But fear is disappearing due to shortages. We're expecting a social explosion."

High demand and a Christmas lull in distribution have aggravated shortages across the nation of 30 million people. Queues sometimes snake around entire blocks, prompting isolated scuffles for coveted milk or diapers.

Although there has been scattered violence around the OPEC nation, many eyes are once again on the opposition hotbed of San Cristobal, where clusters of demonstrators have been facing off with security forces since the New Year.

It was here that the attempted rape of a student last year prompted protests that spread into a wave of national demonstrations.

Major General Efrain Velasco Lugo, who is in charge of security for the western Andean region, called the protesters misguided delinquents. "They want to torch the city again."

Their motto, he added, can be boiled down to "because I think differently to you, I'm going to topple you."

Indeed, Maduro says right-wing foes, encouraged by the United States and compliant foreign media, are plotting an "economic coup" to topple his socialist government. Protesters retort they are decrying flawed policies, like currency controls that have crimped imports and led to shortages.

Army officials said on Thursday 18 protesters had been arrested in San Cristobal, capital of Tachira state, in the last 10 days, with six currently behind bars.

Rights group Penal Forum said 56 demonstrators were arrested nationally this year, with most now released.

A national guard shot a protester in the chest on Thursday night during clashes in San Cristobal, a student leader said. Reuters could not immediately verify the information.

The situation remains a far cry from unrest between February and May that left 43 dead and hundreds injured during the biggest disturbances in more than a decade. Victims included demonstrators, government supporters and security officials.

Still, the mood is increasingly combative in San Cristobal, traditionally known as the "cordial city," as life becomes a series of queues.

Taxi driver Luis Perez wakes up around 5 a.m. to wait in line for gasoline.

"We produce so much oil, and look how we're suffering," he said as he finally filled up his creaking blue 1982 Chevrolet.

"We need a change of government," he added before paying less than 2 cents a liter for the world's cheapest gasoline.

Roughly 15 percent of fuel in Tachira is smuggled out of the state, estimates Nellyver Lugo, a ruling party state legislator who heads a commission on gasoline. Lack of spare parts for trucks and tricky contract negotiations reduced supplies this year, she added.

Up to 25 percent of food is smuggled out for sale at a hefty profit in Colombia, the army says, citing discoveries of subsidized flour stashed in tires or rice in engines.

Even once-fervent "Chavistas" are becoming skeptical as inflation and shortages threaten anti-poverty advances under the late Hugo Chavez's 1999-2013 rule.

"There was a lot of hope, but things didn't pan out the way we wanted," Ronald, a government employee who would not give his last name, said as he stood in line clutching scarce toilet paper. "Now we're paying the price. I hope they implement changes."

But Maduro, whose approval levels have steadily eroded since his 2013 election, has so far balked at implementing pressing but unpopular measures such as raising gasoline prices or unifying a baffling three-tiered currency control system.

Sinking oil prices have compounded Venezuela's cash crunch, prompting fears that the nation may have to default. An impending national parliamentary election has raised the stakes further.

With Maduro out of the country for the last 10 days on an apparently unsuccessful trip to lobby for an oil supply cut, Venezuela's perennially fragmented opposition is scrambling to unite and call for peaceful protests.

"The government is weaker," 24-year-old student leader Reinaldo Manrique said, standing next to a charred bus near the University of the Andes.

"It won't survive an explosion like last year's."

Tuesday, January 13, 2015

El Socialismo del Siglo XXI No Vale

from Investors Business Daaily
In a refreshingly powerful and direct statement, Venezuela's bishops Monday blamed "Marxist socialism" and "communism" by name for the horrors and chaos gripping their country, according to a story in El Universal.

The bishops said the long lines of people trying to buy food and other basic necessities and the constant rise in prices are the result of the government's decision to "impose a political-economic system of socialist, Marxist or communist," which is "totalitarian and centralist" and "undermines the freedom and rights of individuals and associations."

The Venezuelan bishops specifically stated that the private sector was critical for the well being of the country. The document, read by Monsignor Diego Padron in Spanish, said the country needs "a new entrepreneurial spirit with audacity and creativity."
So not only did these bishops diagnose the cause of the misery correctly; they also warned that communism harms the poor most of all.

They sounded positively like readers of Investor's Business Daily, matching the content of this editorial here.

More interestingly, the timing comes just as a certain former colleague of theirs from another part of South America continues to denounce free-market economies
The Venezuelan archbishops make the useful observation that if capitalist economies have problems, socialist alternatives are far worse for the poor and needy. Could it be the pope's Latin American colleagues on the ground in the cesspool of communism are the ones who can get through to the holy father on economics? Stay tuned.

Friday, January 9, 2015

Monday, January 5, 2015

Obama and Cuban Vampyrism

from the Washington Post
An enduring characteristic of Barack Obama’s presidency has been his determination to implement the ideological agenda with which he arrived in office without regard for conditions in the real world. He imposed timetables for “ending the wars” in Afghanistan and Iraq unlinked to military progress. He insisted on pursuing Israeli-Palestinian peace talks, even though the leaders of both sides were manifestly unwilling. He began his second term by seeking a new nuclear arms deal with Vladi­mir Putin, despite abundant evidence that Putin was preparing for confrontation with the West.

Now, six years into his presidency, Obama has launched, as his first significant initiative in Latin America, detente with Cuba. It’s a torch that many liberals have carried for decades. Once again, however, the president has acted with willful disregard for current events.

In particular, two salient facts were ignored. The first is that the regime of Raúl Castro was desperate for an economic opening to the United States — meaning that concessions offered gratis by Obama could have been used to leverage meaningful political concessions by the regime. A simple one could have been an end to the arrests and beatings of peaceful dissidents, such as those that occurred last week.

Second, Obama ignored the slowly mushrooming crisis that triggered Castro’s distress and that ought to be the focus of U.S. energies in Latin America. That is the slow but potentially catastrophic collapse of Venezuela, a major U.S. oil supplier with three times Cuba’s population that, as 2015 begins, is well on its way to becoming a failed state.

Venezuela has been a virtual Cuban colony in recent years, which is one big reason for the fix it is in. After sheltering caudillo Hugo Chávez during his slow demise from cancer, Havana helped to install as his successor Nicolás Maduro, a former bus driver of astonishingly small talents. Since Chávez’s death 22 months ago, Maduro has faithfully continued the 100,000-barrel-a-day oil subsidy that keeps Cuba’s moribund economy from crumbling.

Meanwhile, Maduro has overseen the degeneration of his country’s economic, political and social situation from abysmal to truly disastrous. Economic production declined by 5 percent in the first half of this year, inflation rose past 60 percent and an estimated one-third of consumer goods were in shortage — and that was before the 50 percent drop in the price of Venezuela’s oil, which provides 95 percent of the hard currency for a country that imports most of its food and medicine.

By many measures, Venezuela is already a failed state. According to the Venezuelan Violence Observatory, a record 25,000 people were murdered in the country in 2014, the second-worse homicide rate in the world after Honduras. The U.S. government estimates that half of the cocaine produced in South America now moves through Venezuela — 300 tons a year — with the help of top leaders of the military and police. There have been deadly clashes between official security forces and the armed civilian “collectives” organized by the regime. And Wall Street has begun anticipating a Venezuelan default.

As oil revenue has plummeted in the past few months, Maduro has refused to address even the most extreme economic distortions — such as a black-market exchange rate for the dollar 350 percent higher than the highest of three official ones, or gasoline that sells for pennies a gallon. Instead he has delivered endless speeches denouncing the “economic war” he claims is being waged against Venezuela by the United States, and he has imprisoned top opposition leaders such as Leopoldo López, a U.S.-educated moderate leftist. “My country,” López wrote in a letter published by the Wall Street Journal on Dec. 25, “is on the verge of social and economic collapse.”

Oddly, the only discernible policy the Obama administration has toward this unfolding implosion is the one it just repudiated for Cuba: sanctions. The day after announcing the normalization with Havana, Obama signed legislation mandating visa bans and asset freezes for senior Venezuelan officials linked to violations of human rights, including the killing of dozens of street demonstrators last year.

Venezuela’s opposition supports those sanctions. But its leaders have also been saying that the country desperately needs outside diplomatic intervention. A halfhearted effort by the Unasur regional group petered out months ago. Now the region’s big governments, like the White House, focus on the political rehabilitation of Cuba while ignoring the situation in Caracas.

That’s particularly wrongheaded because there is a clear role for foreign mediators to play in brokering a deal between the government and moderate opposition that could allow for a political truce, the release of prisoners and emergency measures to stabilize the economy. “To remain silent,” wrote López, “is to be complicit in a disaster that doesn’t just impact Venezuela but could have implications across the hemisphere.” Too bad his country wasn’t on Obama’s preconceived agenda.