Tag Archives: socialist

May
6
2011
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In Case You Missed It… Is Hugo Chavez an idiot?

Is Hugo Chavez an idiot?
Washington Post Blog
By William J. Dobson
May 6, 2011

When I was in Moscow last year, I paid a visit to Boris Nemtsov, one of the leading figures of the Russian opposition. Naturally, I had come to Nemtsov to discuss Russian politics. But the conversation quickly turned to, of all things, Venezuelan economics.

Nemtsov has no love for Vladimir Putin and his regime. The Russian government has arrested him and thrown him in prison, and it strangles the political movement he leads. But Nemtsov saw one bright side: At least he didn’t have to live under the economic policies of Hugo Chavez. “Putinism will survive if oil prices are huge. Frankly, it is the same with Hugo Chavez, but Hugo is more stupid than Putin. Chavez nationalizes industries. He establishes price controls. Putin looks cleverer. He doesn’t touch the real economy much . . . he doesn’t touch small, average businesses,” Nemtsov told me. “Economically, he looks closer to Chinese authoritarians than to Hugo. Because Hugo has no ideas about the economy at all. He is a real idiot.”

Ouch. Harsh words. But then again, Nemtsov has the numbers to prove it. Venezuela was the only country in South America to see its economy shrink last year. By many reports, it now suffers from the world’s highest inflation. In 2010, Venezuela was the only South American country to have a negative balance of foreign investment. (It dropped by $1.4 billion.) The International Labor Organization says that Venezuela was one of only five countries in the region to see job growth fall. (The others were Barbados, Jamaica, Honduras, and Trinidad and Tobago.) Power outages, rolling blackouts, and water shortages have become common as state infrastructure crumbles. And, in perhaps the most stunning achievement, the state-owned oil company has reported falling profits – even as oil prices rise.

When I mentioned these and other signs of economic decline to members of Chavez’s political party last year, they scoffed. What I didn’t understand, they said, was that Venezuelans were some of the happiest people in the world. Okay, maybe. But I didn’t meet anyone happy about the shortages of basic staples like milk, sugar and meat. And I didn’t meet anyone happy about the fact that crime has reached epidemic levels. Experts estimate that there were more than 19,000 murders in 2009. It is hard to know the precise number because the government stopped publishing the figure after it began to soar.

But fortunately all of this is about to end. Chavez just announced that he is raising the minimum wage by 25 percent. He is also going to end unemployment by creating 3 million jobs in the next eight years. And he will build 150,000 houses this year and another 200,000 in 2012.

Of course, he has made these promises before. In 2005, he was going to build 120,000 houses. A government ministry later said 21,400 were built, less than 20 percent of the promised total. In fact, over the duration of Chavez’s time in office, the government builds an average of 12,500 homes a year.

But Chavez will reach his goal. Because his real goal isn’t meeting housing targets he has failed to meet before. It is to inject enough short-term cash into people’s wallets to raise his chances for reelection in 2012. Never mind that that cash will disappear from their wallets as the minimum wage hikes fail to keep pace with inflation. Indeed, Chavez’s newly announced measures will make inflation worse. But he isn’t concerned with that. As he told a crowd this week, “I have a year and a half more in this government, then six more in the next one.” That is Chavez’s main consideration. Six more years. Because, whatever he does to Venezuela’s economy, the man is no idiot.

 
Apr
15
2011
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In Case You Missed It… Articles Roundup Week of 4/15/11

In case you missed it, here are some of the most relevant stories of the week. Oil reserves in Venezuela are dwindling, while the government ban on currency exchange negatively impacts Venezuelan businessmen. According to the International Monetary Fund, Venezuela has the worst inflation rate in the world. As Colombia reassures its commitment to hand over suspected drug trafficker Walid Makled to Venezuelan authorities, accusations abound that Venezuela itself is becoming a drug state.

Venezuela: vanishing foreign reserves, Financial Times

There’s something fishy going on with Venezuela’s public finances. Given that oil prices have doubled in the last two years, and that by law state oil company PDVSA should transfer a portion of its profits to the central bank, one might expect foreign exchange reserves to have strengthened considerably. They haven’t. In fact, they have been on a downward trend. Surprising? Not really. For some time now, the Chavez administration’s economic management has been unorthodox, not to say anarchic.

Chavez Policy Sends Venezuelans on Cross-Border Exodus for Cash, Bloomberg

For Gustavo Posse, the easiest way to get dollars these days involves a 403-mile drive from Valencia, in central Venezuela, to Cucuta in Colombia. Posse, the owner of a medical clinic, made the drive last month to get hard currency to pay for the surgical equipment he was importing from the U.S. The 58-year-old businessman said he asked the Venezuelan government to sell him dollars. The answer was no.

Inflation: Venezuela World’s Worst, Latin Business Chronicle

Venezuela and Argentina have the world’s highest inflation rates. In Latin America, Peru and El Salvador boast the lowest rates. Venezuela posted the world’s highest inflation last year, followed by Argentina, according to a Latin Business Chronicle analysis of data from the International Monetary Fund (IMF) for 186 countries worldwide.

Colombia Will Extradite Drug Kingpin to Venezuela Instead of U.S., The Wall Street Journal

Venezuelan President Hugo Chavez clinched a major diplomatic victory over the U.S. after the Colombian government confirmed that it will extradite Walid Makled to Caracas instead of the U.S. The White House has tagged Mr. Makled, a Venezuelan national now being held in a jailhouse near Bogota, one of the world’s top drug lords. The decision, announced Wednesday by Colombian Interior Minister German Vargas Lleras, could represent a major setback for Washington’s anti-narcotics efforts in the region since U.S. officials are likely to have limited access to a treasure trove of information on suspected drug-running networks in Venezuela.

Venezuela accused of becoming ‘narco state’, Financial Times

Mr. Makled, who claimed in a prison interview last week that he once had 40 Venezuelan army generals in his pay, has said he will reveal “all he knows” if extradited to the US. That would help “dismantle some of the most important drug networks in the world today”, according to Richard Lugar, a Republican senator. Mr. Chávez has, meanwhile, accused the US of wanting to use Mr. Makled to take Venezuela to an international criminal court.

 
Apr
8
2011
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In Case You Missed It… Articles Roundup Week of 4/8/11

In this week’s roundup… the similarities between Venezuela’s Chávez and Libya’s Gaddafi, a high-ranking U.S. military commander raises concerns about the Caracas–Tehran connection, Colombia confirms the extradition of alleged drug lord Walid Makled to Venezuelan authorities, and President Chávez signals that more nationalizations are on the way. To check out all of our musings find us on Twitter @whatsnextvz or on StumbleUpon.

A Caribbean Tripoli?, The Economist

IT IS a long way from Tripoli to Caracas. But although Hugo Chávez, unlike his friend and close ally Muammar Qaddafi, is an elected president, there are some striking similarities between the Libyan and Venezuelan regimes. Mr Chávez’s grassroots “communes” resemble Colonel Qaddafi’s “people’s committees”. And a new decree, published last month, speeds up the creation of a sectarian militia like that which opened fire against unarmed protesters in Libya.

US general voices concern over Iran-Venezuela ties, AFP

The United States is worried about increasingly close ties between Venezuela and Iran, a top US military official told lawmakers Tuesday. “My concern, as I look at it, is the fact that there are flights between Iran and Venezuela on a weekly basis, and visas are not required for entrance into Venezuela or Bolivia or Nicaragua,” said General Douglas Fraser, head of the US Southern Command.

Colombia Confirms Plan to Extradite Makled To Venezuela, The Wall Street Journal

Colombia President Juan Manuel Santos reiterated Wednesday that he plans to extradite to Venezuela and not to the U.S. a suspected drug trafficker who in his heyday was said to smuggle 10 tons of cocaine a month into the U.S.

Álvaro Uribe: Chavezism loses ground in Latin America, El Universal

Former Colombian President Alvaro Uribe said that chavezism is losing ground in Latin America, highlighting that some allies of Venezuelan President Hugo Chávez are moving away from Chávez’s government model.

President Chávez: More nationalizations are on the way, El Universal

The Venezuelan government will nationalize more means of production, but will also favor the coexistence of “social ownership” and partnerships with the private sector, said President Hugo Chávez, in an interview published by Uruguayan newspaper La República.