Sunday, November 30, 2008

Chavez proposes reelection, eyes presidency through 2021

Venezuelan President Hugo Chavez on Sunday announced he was seeking a constitutional amendment to allow himself to seek reelection, saying he hoped to remain in power until 2021.

Chavez said he was directing his ruling United Socialist party (PSUV) to seek a "constitutional amendment and reelection of the president of the republic" saying he was "ready (to govern) through 2021."

"I give the PSUV and the Venezuelan people my authorization to begin the debate and take the steps necessary to obtain that constitutional amendment and reelection of the president ... and I am sure that we will get it now," Chavez said at the swearing-in of Caracas' Libertador district's mayor Jorge Rodriguez.

"I am ready, and if I am healthy, God willing, I will be with you until 2019, until 2021," the 54 year old Chavez added.

On November 24 -- almost a year after losing a vote on extending his powers -- Chavez had said "It's the people's right (to vote on the issue). We'll see if the people use this right, and if all the country approves it or not if there is a referendum."

Just over a week ago Chavez's party scored a string of victories in key local polls, but in a blow to his socialist revolution the opposition won some major power centers.

The results shook up the political landscape of the OPEC nation, reducing the almost blanket authority of the fiercely anti-liberal Chavez and his party.

"The symbols won by the opposition are more than expected: they won the capital and states representing the economic and political heart of the country," said Luis Vicente Leon from Datanalisis.

Some 45 percent of the population will now be governed by politicians from the opposition, who won in states representing around 70 percent of national economic activity.

But Chavez said at the time that the opposition had suffered a "new, big defeat. They continue overestimating what happened as a victory. That's crazy," Chavez argued.

If "we're applying scientific analysis, the popular revolutionary victory continues growing," Chavez argued.

But Chavez, a friend to Iran, Russia and communist Cuba, lost ground in his expected plan to seek support to abolish term limits to try to win a third six-year term in 2012.

Venezuela’s challenge

Last Sunday's Venezuelan elections have prompted a wide range of interpretations, from the landslide victory of Chavez's Party because of the numbers of gubernatorial and mayoral races it gained to the triumph of the opposition because it won in the most populated regions.

In reality, the results demonstrate a deeply divided nation that, as such, needs more conciliation than confrontation.

The election speaks for itself. The party of President Hugo Chavez won 17 of 22 governorships, gaining two new states, and also maintained overwhelming control of mayorships. At the same time, the opposition parties triumphed in the Capital District, Carabobo, Tachira and other regions, which collectively produce 70% of the Gross National Product and where 45% of the population resides. In short, according to the National Electoral Council, 51.62% voted in favor of Chavez and 48.38% against.

The true winner was democracy. Voters made their voices heard and the results are being accepted. This is more important than the verbal excesses of the campaign. Now, however, it is more critical to establish the tone necessary to work in the political reality made so apparent by the election.

In this sense, Chavez still doesn't act in accordance with the demands of a democracy. He finds it difficult to accept defeat without hurling warnings at the winners. He chooses to try to intimidate those within reach since confrontation is his style of governing.

For its part, the opposition demonstrated in this election that it is a group of parties with nothing more in common than the visceral rejection of Chavez.

The election shows a deep divide that, for the good of the country, should be closed. For that to happen, the political will of the government and the goodwill of the adversaries will be needed.

Venezuela Oil Basket Falls Below $40

The average price of Venezuela's mix of medium grade and heavy crude oil has now slipped below $40 a barrel – two-thirds of the figure reckoned essential to financing state spending without resorting to drastic cuts.

The price closed the week at $39.59 a barrel, continuing the slide seen since September. The average for November as a whole of $44.90 a barrel was way down on the peak of $129.54 a barrel recorded in mid-July this year. the average last week was $40.68.

News of the latest fall comes amid signs that the government, however reluctantly, is gradually moving towards recognizing that the global financial crisis and its knock-on effect on oil demand and prices mean that cuts in the 2009 budget may be inevitable.

This, however, has yet to be stated out loud in public by anyone in power, least of all Finance Minister Alí Rodríguez Araque, although earlier this week he conceded that some changes might be necessary during the course of next year.

Venezuela is pushing for member states of the Organization of Petroleum Exporting Countries (OPEC) to reduce production by a further one million barrels a day (bpd). A new cut was needed to ensure stability in the market, he told reporters on arriving in Cairo on Thursday for the extraordinary meeting of oil ministers. OPEC then promptly decided to delay a decision on cuts until its meeting in mid-December.

Venezuela New Order Hovers As Chavez Routes Around Opposition

Time was when President Hugo Chávez enthused about decentralizing power in Venezuela. He even had the principle of sharing power down the line written into the new Bolivarian Constitution adopted at his behest in 1999.

Decentralization was to be a central tenet of his bid to recast the country in a new mould after what he saw as the misgovernment under the old Fourth Republic, in which the two old warhorses of Venezuelan politics, Acción Democrática (AD) and the Social Christians at Copei, alternated in power.

The new Fifth Republic was to be entirely different. Power was to be redistributed to give the people at the bottom a bigger say in how the country was run. No more bossyboots in Caracas telling the poor and under-privileged what to do and what to think, and when and how to do it.

But, as they say, that was then and this is now. Talk in the corridors at the National Assembly is of a introducing a barrage of legislation giving the federal government more sway over what people further down the chain of command can and cannot do.

The thrust of this, it's said, is that state governments and municipal authorities would be subject to more direct control from the Executive.

The plan is part and parcel of Chávez' plan to change the political structure of the country by dividing Venezuela into five or six large territories controlled by regional overlords directly appointed by him.

This would be a huge shift from the present power breakdown made up of 23 separate states and the capital, all of them governed by elected authorities with a degree of autonomy from the national government. And, critics say, it would turn the very notion of decentralization on its head.

Chávez has been talking of his proposed redesign for some time now, but apart from political junkies and conspiracy theorists, few people appear to be taking much notice. That may be about to change as it becomes clearer by the day that what he's really talking about is money.

Bright eyes have spotted what they see as the first step down this road tucked away in, of all places, the Budget Bill for 2009 as it trundles through parliament. The text includes a reference to obliging state institutions to "build solid structures for the establishment of the new territorial vision."

Mindful of constitutional niceties, officials intend to use existing laws and state organizations to push through this far-reaching change. For a start, they've got their eye on the Special Economic Assignations Law (LAEE), which usually gets shunted through Parliament in tandem with the budget.

They're also said to fixed their gaze on, of all things in this particular context, the Inter-Governmental Fund for Decentralization (Fides) as the vehicle for wrenching Venezuela from the pattern of the past and resetting it under Chávez' New Order.

The ultimate aim of all this, according to both friend and foe, is to achieve Chávez' over-riding aim of transforming Venezuela into a new society based on what he calls a "socialist productive model."

The innate contradiction inherent in the plan is there for all to see in another piece of legislation that's also plodding its way through a parliament where Chávez' United Socialist Party of Venezuela (PSUV) holds all but absolute sway.

This is a Bill setting out a new Law of Arrangement and Management of Territory, which has already been approved in a first debate and under which Chávez as the "supreme authority" would have the ultimate say in overseeing the new political structure of Venezuela.

The text states that "state and municipal public administrations and their decentralized entities will be submitted to the directives of the regional authorities, and obliged to collaborate actively in the execution of plans and projects considered to be of regional importance."

And today, the Secretary General of the opposition party Democratic Action (AD), Henry Ramos, warned of just such a thing -- that the government of Hugo Chávez was seeking to usurp control from the just elected governors and mayors through his "appointment of vice presidents" over them.

In this future most probably not far away nobody will be able to say they weren't warned, even if they were asleep at the wheel.

Venezuela's Red States and Blue States -- Opposition Gains, But A Split Decision

Miguel Octavio, head of research at Venezuela's leading investment bank BBO, takes us through the regional election map and explains what the wins and losses mean for Chavez, the Opposition and the future of Venezuela.

The Venezuelan opposition won in five states and the Metropolitan area of Caracas, gaining ground with respect to Chavez’ PSUV, as it won in the four most populous states in the country, but Hugo Chávez managed to limit the gains to these five states, blocking dissident Chavismo from winning anywhere and scoring a big victory at the levels of races for mayor.

While a look at the map of Venezuela indicates a huge victory by Chávez’ PSUV (Red States) versus the opposition (Blue States), the numbers suggest otherwise. Chávez did win 17 of the 22 states, but the opposition won where the large population concentrations are.

The opposition won all but one of the states it was expecting, surprisingly losing Sucre State, but winning all important Miranda state, the second largest state in the nation. In addition, the opposition managed to win the race for Metropolitan Mayor of Caracas, which was too close to call and had been in the hands of Chavismo since 2000. With this win, the opposition scored a huge victory in Caracas, also winning four of the five municipalities which comprise the Metropolitan area.

In the end, Chávez’ PSUV obtained 53.4% of the total number of votes, while the opposition, including dissidents, received 46.5%, but the difference between the two of 480,000 votes, can mostly be accounted by a single state, Lara, where popular pro-Chávez candidate Henry Falcón obtained 78% of the vote as both sides voted overwhelmly for him. Falcón is not a favorite of the President and was at one point ready to run alone if Chávez’ PSUV did not nominate him.

While all races for mayor are not in, it appears as if the opposition did not do as well in local races due to the myriad of divisions across the country with Chavismo obtaining control of over 70% of all the mayoral races based on preliminary numbers.

Divisions within the opposition did have a harmful effect in at least two states. Bolívar and Yaracuy could have been won by the opposition if they had not fielded more than one candidate. In the end, dissident Chavismo added little to the opposition as they failed to gain a single Governorship, despite polls suggesting they would have a strong showing in three or four states. Chávez’ home state of Barinas was won by his brother in the only hotly disputed race at the Governor level. The loser, a former Chávez supporter, claims he can prove he won.

For Chávez, the results represent an important political defeat as the possibility of a new Constitutional referendum being approved by the people to allow his indefinite referendum seems remote given these results. However, they also represent a victory for him as his party was able to contain the opposition’s victory to the expected states, as there were few surprises.

Curiously, Chávez’s effort at banning opposition politicians from running was mostly wasted as the opposition scored victories in three of the four races where important candidates had been banned and the fourth was the one most unlikely to have gone for the opposition in any case.

Two opposition parties, Rosales’ un Nuevo Tiempo and Primero Justicia, consolidated themselves as the top two new forces in Venezuela’s political landscape as they obtained more votes nationwide than any of the old parties of the 4th Republic. Two new faces from these two parties scored significant victories: In Zulia State, Maracaibo’s mayor Pablo Perez won handily and his new position should give him the visibility he deserves. In the Sucre municipality of Caracas, Primero Justicia’s Carlos Ocariz won with 55% of the vote -- including the populous barrio of Petare, formerly a Chavez stronghold -- which should allow him to project himself in the future. Two new faces to watch for.

Thus, it is not a clear win for either side. Both sides won and lost. For the opposition, controlling fives states establishes a power base that will allow it to run more effectively in future campaigns. After all, Chavez has made used of the Government’s resources for the benefit of his candidates, overwhelming the opposition in the size and intensity of the campaign. Even if the Governors don’t have as many resources, they should be able to provide some counterbalance to the current biased conditions.

In theory, there should not be any new elections until 2010, when Venezuela will choose a new National Assembly. Given the likelihood that the country will be forced into a large economic adjustment before then, the opposition should be able to gain some ground on Chávez before then.

However, it does sound like Chávez will try to push another constitutional referendum next year and based on his initial statements, he will clearly continue to push his revolutionary agenda in 2009.

  • Miguel Octavio is the Executive Director in charge of research at BBO, Venezuela's leading investment bank.

Saturday, November 29, 2008

OPEC Fiddles While Venezuela Burns

Saudi Arabia says OPEC needs to drop production until oil moves back above $75 a barrel. As the largest member in the cartel, it would seem that the kingdom would get its way.

No such luck.

"OPEC on Saturday deferred a decision on a new oil supply cut amid signs that Saudi Arabia and its Gulf allies are demanding tighter adherence to restraints agreed in the past two months," according to Reuters.

It is remarkable odd that there should be dissent within OPEC at this point. Some of the member economies are in real trouble. Venezuela and Iran are running huge national budget deficits. Hugo Chavez of Venezuela may not be able to keep a lock on his dictatorship if he cannot support a system where he can send spread money within his own nation and neighbors who have come to rely on his largess.

The math behind the OPEC trouble is simple. Cartel members make more money when crude is at $120 than when it is at $60.

OPEC could certainly raise the price of oil. It only needs to make a huge cut in production, one to bring supply below the falling international demand be eroded by a global recession.

But, if the members cannot agree on how the cut is to be made, when, and and how it is be monitored and supported, consuming nations will continue to benefit from low energy costs. That all by itself could keep the recession from growing longer and deeper than it might otherwise.

Veneconomy: Democracy in Venezuela?

Just over 24 hours after the elections on November 23, President Hugo Chávez threw off his democrat’s disguise and embarked on a stepped-up offensive of insults, discrediting remarks, and threats against the recently elected governors of the democratic alliance.

The first to fall prey to the President’s belligerent discourse was Governor-elect of Miranda Henrique Capriles Radonski, who beat Chávez’s appointee, Diosdado Cabello. Chávez accused Capriles Radonski falsely and for he hundredth time of being a coupster and traitor calling him by as many epithets as occurred to him, saying that he would not meet with him, so showing his contempt for the will of the 583,795 constituents (53.11%) who voted for Capriles. With this offensive he showed his yes-men the line they should adopt with the authorities of the democratic alliance.

The best demonstrations of PSUV leaders adopting this servile attitude towards Chávez were given by:
1) The new mayor of Libertador Municipality, Jorge Rodríguez, who changed his attitude overnight with regard to his relations with the mayor for Greater Caracas, Antonio Ledezma. He switched from his call for dialogue and concerted action made in the early hours of Monday, November 24, to a frontal attack and a refusal to acknowledge Ledezma’s authority;

2) Deputy Mario Isea and other government officials launched a battery of accusations against Manuel Rosales, whom Chávez threatened to put into prison. Rosales was not only accused of all kinds of corruption during his term as governor of Zulia, but he as also been cited, without any proof whatsoever, as being involved, with eight other Venezuelans, in planning the alleged assassination of Chávez; and

3) Gems in the Chavista crown, among them Iris Varela, Lina Ron, and La Piedrita, the government side’s attack force in Caracas, have stirred up hatred and incited people to violence against the new governors of Táchira and Miranda, the mayor for Greater Caracas, and the metropolitan mayors.

Apart from this abject servility, some of the outgoing government-coalition governors and mayors are giving an appalling demonstration of pillage and vandalism of State property.

The best examples of this are occurring in Miranda State Government, the Greater Caracas Mayoralty, and Sucre Mayoralty, where there are not only reports of equipment and furniture being stolen, invoices being destroyed, and even of bank accounts being cleaned out, but authority over public entities until now attached to these local governments, among them health modules and schools, has suddenly been withdrawn.

And as though that were not enough to show the true totalitarian nature of the Chávez administration, it has now trained its sights, once again, on Globovisión, the country’s only open-signal information channel that has the courage to stand up to the government’s policies. Conatel, a supposedly “autonomous” agency, has opened a second administrative procedure against this television station, following the President’s orders, which means that Globovisión is about to lose its concession.

On Sunday, November 23, Chávez asked, who can say that democracy does not exist in Venezuela and that there are no autonomous agencies? The answer is “the facts, Mr. President!”

Chavez’ will prevails: PSUV wins in 17 states, opposition in five

Caracas Daily Journal (Jeremy Morgan): President Hugo Chavez' ruling United Socialist Party of Venezuela (PSUV) largely kept its grip on power at state level in Sunday's election, although the opposition inflicted some notable upsets on the way. There'd been concern that the second-tier elections would be marred by abstention, but this proved unfounded when the National Electoral Council (CNE) reported a turn-out of 65.45 percent.

The CNE's preliminary results after a long delay on Sunday night showed the PSUV controlling 17 states, with the opposition gaining three to take its total to five.

Chavez had played a prominent role throughout the campaign, even though he himself wasn't running for office. The election came to be as much or more about him than anything else, and in its immediate wake, the vote was deemed in that light to have broadly endorsed his mandate.

With the PSUV still controlling large swathes of the country, the opposition had failed to come anywhere near repeating the narrow margin which defeated Chávez' constitutional reform plan at last December's referendum.

The opposition regained some lost ground when it pulled out of the parliamentary elections in 2005. Its big win at state level was in Miranda, where Henrique Capriles Radonski put an end to any hopes of re-election incumbent PSUV Governor Diosdado Cabello might have been harboring. Capriles Radonski got 53.27 percent to Cabello's 45.94 percent.

However, failure in Miranda would have been little short of disastrous for the opposition. Cabello's majority last time was barely 3.5 percentage points, and he was beset by high crime in a state with more than its fair share of prosperous voters. Voters also switched sides in Carabobo, where former governor Henrique Salas Feo got his old job back by beating broadcaster Mario Silva of the PSUV by 47.72 percent to 44.29 percent.

The third state to go over to the opposition was Tachira, with Cesar Perez Vivas of the Social Christian party, Copei, getting 49.53 percent against 48.04 percent for the PSUV's Leonardo Salcedo. But in Aragua state, former finance minister Rafael Isea of the PSUV won 58.77 percent to see off Henry Rosales of Podemos, the social democratic party which once supported Chavez but went over to the opposition, who got 39.96 percent.

In Guarico, where dissidence threatened after Chavez disowned incumbent Governor Eduardo Manuitt, former information minister Willian Lara walked to victory with 52.3 percent. Manuitt's daughter, Lenny, who ran with support from the small pro-Chavez party, Patria Para Todos (PPT), got 33.46 percent.

The PSUV had made much of taking Zulia state, making outgoing opposition Governor Manuel Rosales a target of numerous allegations yet to be proven in court. The results suggest this may have backfired. Rosales was not allowed to run for a third successive term and the opposition picked Pablo Perez, also of Rosales' party, Un Nuevo Tiempo (UNT). He won the race for governor with 53.49 percent against 45.11 percent for Gian Carlo Di Martino, until now PSUV mayor of the state capital, Maracaibo – the job Rosales stood for.

Caracas shifts; Libertador sticks with PSUV

Caracas Daily Journal (Jeremy Morgan): If the opposition was looking for victory, it had to go no further than Metropolitan Caracas. Antonio Ledezma had been a late choice as the opposition's unity candidate for Metropolitan mayor, and went on to beat former minister Aristobulo Isturiz of the United Socialist Party of Venezuela (PSUV) by 52.40 percent of the votes to 44.97 percent, according to latest figures from the National Electoral Council (CNE).

Minutes after learning that he'd won, Ledezma sent a message to President Hugo Chavez recognizing they'd had differences but emphasizing this wasn't the moment for them. He "invited" the president "to work together to rescue Caracas."

However, Ledezma also said he would be out looking for funds for the city. Chavez has threatened to reduce or cut federal funding for states and municipalities that turn against him. Carlos Ocariz of the opposition beat minister Jesse Chacon (of telecommunications and before that interior and justice) by 53.270 percent to 44.97 percent. He said it was time to turn the political page and start work.

Preliminary results had former vice president Jorge Rodriguez retaining PSUV control of Libertador municipality in the west by 53.05 percent against 41.92 percent for student leader Stalin Gonzalez.

Both sides of the political spectrum appear to step back to consider the outcome of the election

Caracas Daily Journal (Jeremy Morgan):
Both sides of the political spectrum appeared to step back to consider the outcome of an election in which it seemed neither side had really won but nor had the other lost. There was muted reaction across the divide as they began to take stock.

There was little of the abrasive approach from President Hugo Chavez which had raised questions about his conduct during the campaign. Instead, he chose to adopt a statesman-like approach after the National Electoral Council (CNE) began a process of unveiling the results that still wasn't over on Monday.

The people of Venezuela had once more spoken and expressed themselves almost nine years after the new Constitution had gone into effect at his behest, Chavez said. He saluted the "millions who voted, went to express their opinion in a civic, democratic, happy manner with very few incidents" in a "triumph of the Constitution."

The opposition urged the president to "convoke the new political forces" that had won, a reference to their gaining control of three states and Metropolitan Caracas. They, too, lauded the "civic attitude" shown by the people.

Julio Borges of Primero Justicia noted that the opposition had been "95 percent successful" in reaching agreement on single unity candidates before the election. This, it appeared, was a message that the opposition shouldn't forget and would serve in the future. At present, no elections are scheduled for next year.

Across the divide, Vanessa Davies, a senior official in the top echelon of the ruling United Socialist Party of Venezuela (PSU), evidently had her eye on political horizons as well. She said that with the regional elections out of the way, the time had come to "open the way to the revolutionary revision and re-impulse." She, it seemed, had little time for people basking in the moment of victory or relief, either.

Dr.Franz J. T. Lee: The New Man in Venezuela!

Dr.Franz J. T. Lee, South African professor at the University of The Andes in Merida, Venezuela,talks about the New Man in Venezuela, LatinAmerica and the rest of the world.

Many admired the absolute sincerity of Hugo Chavez ... but he now tells lies to defend nefarious actions in his government!

VHeadline Venezuela News reports: Approximately twenty-five percent of Venezuela's Foreign Ministry (MRE) were said in 2004 to be 'Ni-NI' (neither for or against the then administration of President Hugo Chavez Frias) ... they were generally confused, and did not have any significant understanding of what the process of the President's Bolivarian Revolution was/is all about.

In an article published, Friday, on the Aporrea website, Yurilin Peraza says that seeking to justify electoral losses instead of thinking, tackling the factors which brought about those losses is a serious error.

In translation Peraza writes:
In the Constitutional Referendum last December (2007) -- which his government lost --President Hugo Chavez Frias worked hard to qualify it as a "pyrrhic victory" instead of deciphering the signals he was getting from the people, especially in the central regions of the country. A real-time correction (implemented then) would have avoided promoting the candidacy for re-election of (now outgoing) Miranda State Governor Diosdado Cabello, because of his poor governmental management. He could also have avoided the incompetence of Juan Barreto as Metropolitan Mayor, and that of Jose Vicente Rangel Avalos and his "sifrina" wife, who depended more on organizing fashion shows than truly meeting the needs of the electorate ... and, worse still, that of Freddy Bernal who for the last eight years as seen very few problems resolved and was really was the weakest of the bunch. It's all absurd!

(Newly-elected Libertador Mayor) Jorge Rodriguez did not win because Bernal has been a good Mayor, loved by the people. Jorge Rodriguez won because of his (high-profile) performance when he headed the National Electoral Council (CNE) and because the people in Libertador municipality are the most humble of people and are really loyal to Chavez. There are no upper-class neighborhoods (in Libertador) like there are in all the other municipalities in Greater Caracas; nevertheless the opposition's puppet candidate, Stalin, pulled a fairly substantial share of the votes.

Albeit there were 'punishment' vote and of 'dissenting' votes, especially from the middle classes engendered by their disappointment and uncertainties about the political party (PSUV) since the aforementioned municipal officials and governors had done little or nothing to address their most immediate necessities. Rather, they were ordered to please the rich, the millionaires to "keep them happy" and amen to corruption in these institutions ... a quick example is authority given for the construction of the Sambil shopping mall in La Candelaria!

Another interesting factor is to consider the fact that many people admired the absolute sincerity of Hugo Chavez ... but unfortunately he now tells lies to defend nefarious actions in his government which, far from favoring, hurt his credibility. What is absolutely clear, yes, is that Acosta Carles deserves public contempt for being a traitor to Chavez and his inefficiencies ... but he is worth more than the four characters mentioned above and, more so, since they continue to say they are revolutionaries ... but their performance as mayor and governors shows otherwise.

Another important aspect is for President Chavez to modify, correct his overly aggressive, offensive and rude way of speaking. President Chavez often uses (insults and provocations) against his opponents. That kind of behavior is not appreciated by the vast majority of people in the middle class and many others besides. You may recall the reaction of many people, including many "Ni-Nis," when Chavez very publicly ridiculed and humiliated Petroleos de Venzuela (PDVSA) employees he sacked in 2002?
  • Yes, apologies were offered later but people do not deserve all these insults ... it is NOT the best way (for the President) to behave in public under any pretext. We understand that it was in states where there were more insults slung that the PSUV lost.

In conclusion, I hope that the PSUV will take into account that there is a latent danger in that the opposition has managed to capture Metropolitan Caracas Mayoralty, the Governorship of Miranda State and the municipality of Caracas-Sucre, besides holding on to the Mayoralties of Baruta, Chacao and El Hatillo and they are very assertive of this fact.

Let us also remember that the 1992 coup d'etats were won in the interior of Venezuela but were lost because the targets were not reached in Caracas.

Hopefully, Diosdado Cabello, Freddy Bernal, Juan Barreto and Jose Vicente Avalos, will have the courage to apologize to Chavez, because all (the opportunities) that have been wasted and the violence that is already unfolding in aggression against the residents of the localities where they governed is principally because of the inefficiencies and their responsibilities having neglected the oaths of office they made when they were elected.

Yurilin Peraza


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Washington Times: No go for Hugo

Against the odds, the Venezuelan opposition delivered a stiff rebuff in Sunday's election to hemispheric nuisance Hugo Chavez, whose brand of socialism is as grandiose as it is incompetent.

Nonetheless, Chavez proclaimed the outcome "a revolutionary victory," but it was an incomplete one. True, his party won 17 states, but they are mostly rural. The opposition won the five most economically important states and the two largest cities, including the capital, Caracas. The opposition now governs 40 percent of Venezuela's people.

The election results rather clouded what Mr. Chavez clearly believed was a strategic triumph, the arrival of four Russian warships for joint naval exercises, which is almost comical when you think about it. Although a State Department spokesman piled on a bit when he expressed the hope the fleet was accompanied by tugboats in case of a breakdown.

Russia would like to make diplomatic inroads in Latin America but it can't be helpful to the Kremlin's self-esteem that its best friend in the region in widely regarded as a buffoon.
Mr. Chavez labored mightily to skew the results of the election. He increased public spending by 60 percent and an electoral panel he controls kept 300 opposition candidates off the ballot. And he threatened to call out the military if a close ally of his lost his state election. The ally, a rabidly pro-Chavez talk show host, lost anyway.

It was Mr. Chavez's second setback in less than a year. Last December, the voters rejected proposed constitutional reforms that would have strengthened his grip on power. He is still trying to find a way to evade term limits that would force him to leave office in 2012.

Venezuelans are increasingly disenchanted with his government -- 30 percent inflation, runaway food prices, violent crime and Colombian guerrillas openly setting up shop in the country. Falling oil prices have hurt Mr. Chavez's ability to buy votes at home and friends abroad. And now he doesn't even have President Bush to kick around anymore.

Venezuelan Finance Minister Sticks With 2009 Budget

Finance Minister Alí Rodríguez Araque now says he doesn't rule out "modifying" his 2009 budget during the course of next year. The budget continues to move forward at the National Assembly even though economists warn it's been badly overtaken by events.

The minister argues that the law means he can't modify the budget now that it's gone to the legislature. Skeptics say he would however be allowed to withdraw the Bill and submit a new one, and they say he should do precisely that.

Instead, the finance committee at the Assembly on Thursday began a second discussion of the Bill, which has already been passed in its original form on a first debate in the full chamber. Critics claim that the committee is wasting its time. They say that the budget could be drastically rewritten via a flood of amendments during debate in the chamber.

Instead, Rodríguez Araque continues to insist it's still too early to alter the plan. He's holding to the line that Venezuela will get through the crisis "relatively comfortably". Economists argue that the country's economic reliance on oil exports, which account for about half gross domestic product (GDP) and at least four-fifths of overall export earnings – could make it more not less vulnerable to the vagaries of world oil markets.

The head of the finance committee, Deputy Ricardo Sanguino of the ruling United Socialist Party of Venezuela (PSUV), says legislators will spend some days debating the Bill. The plan is to have it cleared through a second debate and a final vote by December 11. Then it will go to President Hugo Chávez for signature.

The trouble with the Bill, economists say, it is that it's based on the assumption that the price of Venezuelan oil will average $60 a barrel next year but the price has already withered to barely two-thirds of that.

Friday, November 28, 2008

Rainy Season Caracas Hit By Water Shortages And Power Cuts

As if life wasn't hard enough for the long-suffering people of Caracas, they've been hit by a prolonged shortage of water – and ironically enough, right in the middle of the rainy season.

One estimate has it that at least two million people, roughly a third of the capital's population, have gone without water for at least two days, and it's said a lot of them are still waiting. Critics claim the real figure's probably higher. It's not just the rickety, ramshackle, tumbledown poor districts that have been hit, although they usually get it worst from this sort of thing.

Middle class areas such as Chacao and distinctly up-market Altamira in the center of the city and El Hatillo to the south got it in the neck as well. Better-off Venezuelans like to pride themselves on being well turned-out, but an air of scruffiness may be starting to become the odor, pardon, order of the day.

The water shortage has been exacerbated by a landslide on the outskirts of the capital. Whether this was caused by Mother Nature or building work nearby has yet to be established with any certainty. Either way, tons of waterlogged mud crashed through a pipeline buried below the surface of the ground and swept away a 40-meter stretch. Hidrocapital, the water company, promised to have the service back up and running by Thursday evening.

As it turned out and not to the surprise of residents long inured to being constantly reminded that getting things done in the city can prove a long and arduous uphill struggle, this didn't happen. So some folks turned to truck drivers who deliver drinking water to districts which still don't have running water. They soon found out this was to little avail, too, because there wasn't any water for the trucks, either.

Officials blame recent heavy rains for the people's hardship, as if the heavens opening up right in the middle of the monsoon-like rainy season were something that had unexpectedly leapt out at them. Much the same rationale was put forward as water shortages began to be accompanied by a wave of power cuts. All this put paid to the customarily long Friday lunch with compañeros from the workplace.

Caraqueños, hardly the most patient people on the planet, are not in the best of moods right now.

The Canadian Press: Crystallex sends letter to Venezuelan government in Las Cristinas dispute

Crystallex International Corp. (TSX:KRY) sent a letter Friday to the Venezuelan government regarding troubled Las Cristinas project and said it may be forced to submit the dispute to international arbitration.

The letter notified the government of a dispute between Crystallex and the Bolivarian Republic of Venezuela under the agreement between the Canadian government and Venezuela for the promotion and protection of investments.

The dispute centres on the denial of a key permit by the Ministry of Environment and Natural Resources and comments made by the minister.

Crystallex said it hoped to settle the dispute amicably within six months, but said if a deal is not reached it has the option of submitting the dispute to international arbitration.

The Toronto-based company has been working for years with the mining ministry in Venezuela on the Las Cristinas property in Bolivar State.

Crystallex shares plunged earlier this month amid reports that the Venezuelan government has chosen a Russian firm to run the project, however the company has said it has not been told of any change of control.

Venezuela has not yet issued Crystallex an environmental permit for the mine, but the company said in September that discussions with the Ministry of Basic Industry and Mining "have been encouraging."

Crystallex reiterates status of contract with Venezuelan Guayana Corporation to mine Las Cristinas gold

VHeadline Venezuela News reports:
In an e-mailed statement, Crystallex International Corporation (KRY) vice president A. Richard Marshall on Friday afternoon reiterated the company's position with regard to the status of its contract with the Venezuelan Guayana Corporation (CVG) to mine gold at Las Cristinas in southeastern Bolivar State:

The Las Cristinas is a Venezuela Government Project. In 2002 Crystallex was awarded a Mine Operating Contract to build and operate the Las Cristinas Gold Project on behalf of the State. Crystallex has submitted plans that have been reviewed by the National Assembly, the CVG, the MIBAM and the MinAmb.

In the summer of 2007 the MinAmb approved the Environmental Impact Study and requested a Bond and Environmental Tax payment in order to issue the Environmental Permit allowing for the final construction phase. Crystallex posted the Bond and paid the Taxes and the MinAmb certified receipt of both.

The Company is still awaiting the issuance of the Permit to proceed. Through the advancement of the Project we have observed support in Government Agencies, the Governor's office and local communities.

Crystallex has been recognized in Bolivar State for its social programs and was the recipient of the "outstanding Citizen" award in 2004 for its community programs.

We have built housing in the local communities, paved roads, donated school supplies, built water treatment plants for the local communities, built a sewerage network, upgraded the local medical facility and are in the process of completing a sewerage treatment plant and an 10,000 square foot medical facility for the local communities.

We have purchased mining equipment and fabricated many of the large milling items required for the operating of the Las Cristinas Gold Project and are prepared to build and operate the project as outlined in the Mine Operating Contract.

We hope that the Government will focus on the project and clear the path as outlined in the Contract and follow through with the commitments outlined at the time they requested the Bond and Taxes.

Richard Marshall
VP Investor Relations
Crystallex International Corporation

Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Angry gold miners return to the streets of Ciudad Bolivar demanding immediate payment of monies overdue!

VHeadline Venezuela News reports: Angry gold miners have returned to the streets of Ciudad Bolivar demanding the immediate payment of monies due to them under a government "conversion" plan to compensate them for having to give up small-scale and artesanal mining in the south of Bolivar State which has done so much damage to the environment over recent years.

Individual amounts of Bs.F 10,000 (about US$4,600) had been promised paid just before last Sunday's local and regional elections across Venezuela and many of the demonstrators believe they were tricked into voting for the pro-Chavez United Socialist Party of Venezuela (PSUV) on false promises that were never realized.

Admittedly some payments were made prior to the elections but many miners found that the checks they presented at the banks were returned because of insufficient funds in the payee accounts belonging to the Basic Industries & Mining Ministry (Mibam) led by Minister Rodolfo Sanz who is also president of the juggernaut state-owned Venezuelan Guayana Corporation (CVG) group of industries.

Striking miners' spokesman William Rivas Alberto Carvajal says they were given a firm date for the payments which are already many years overdue, but State Governor Francisco Rangel Gomez, recently re-elected to office, has not followed up on President Hugo Chavez' direct orders for the miners to be paid without leaving anyone out in the cold. "We were kicked off our mine working at Chiguao and Chiguaito and we have not been afforded any shelter whatsoever. What we are asking for it is that someone addresses our complaints and resolves the problem so that we can finally achieve justice."

Miner Angel Balcazar says that he attended a ceremony on November 20 at a local park where Mibam Minister Rodolfo Sanz made great show of delivering payments to the mining community ... as long as the TV cameras were focused on him!

"He (Sanz) handed out checks for about a thousand miners and then left more than five thousand without their payments. Deputy Mibam minister, Ricardo Vilchez, then pledged to give us our checks on Tuesday or Wednesday ... but we have not had any answers so far!"

Another miner, Eugenio Osta says that "we miners what to become contributing members of society, but there are as many of us outside and excluded as there are inside mining. They reach agreements with transnationals to exploit the mines, and all we ask is that we should get to work for them and that we are not excluded."

Some miners have gone so far as to allege corruption in the debt payments and have called on the authorities to look into the alleged irregularities. Nirvia Rivas, describing himself as a miner's legal representative, has called for Minister Sanz to fulfill the promises made and to provide answers on when and where the payments are to be made to those who have been "lost in data" supposedly somewhere in between Ciudad Bolivar and HQ in Caracas.

VHeadline Venzuela News


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Conatel starts a new probe into news TV channel Globovisión

Globovisión's legal counsel Ana Cristina Núñez confirmed that "Conatel has no powers to address issues related to election results."

Officials from Venezuela's National Telecommunication Commission (Conatel) visited the seat of private TV news channel Globovisión to give notice of another administrative investigation into the television network, for alleged solicitation to public order disturbance when the station broadcast remarks of then Carabobo state governor candidate Henrique Salas Feo before the National Electoral Council (CNE) stated he was the winner.

According to CNE director Vicente Díaz, the statements of now Carabobo governor-elect Salas Feo came after the top electoral body published the first official bulletin of electoral results. Therefore, they do not imply any electoral offense.

Meanwhile, Globovisión's legal counsel Ana Cristina Núñez confirmed that "Conatel has no powers to address issues related to election results." Further general director of the TV news channel Alberto Federico Ravell said that the investigation was launched because the Venezuelan President and his cabinet are grieving after they lost political ground in the country.

Chávez warns that he will closely watch opposition governors and mayors

The Venezuelan head of State also said that "the plan of the opposition is to remove Chávez from power."

Venezuela's President Hugo Chávez said on Thursday night in state-run channel Venezolana de Televisión (VTV) that the "new metropolitan Mayor, the mayor of Sucre Municipality (east Caracas) and the governor of Miranda state will be closely monitored."

He added "the dumb Chávez of 2001 and 2002 was left behind; the 'gringos' and the fifth column infiltrated in Caracas slums must know that. I am not going to let violence to erupt again. I am here to remind you that."

The Venezuelan Head of State also said that "the plan of the opposition is to remove Chávez from power. All of them, the most renowned opposition leaders, that in a few days are going to take office, they were involved in the plot for the coup d'état (the movement to overthrow Chávez in April 2002). All of them caused moments of terror."

Chávez said that there is a plan devised by the Pentagon that has been activated. He insisted: "the revolution is armed and prepared to counter those who may attack the people."

Recalling his own coup attempt against President Carlos Andrés Pérez on November 27, 1992, Chávez said: "Here with my papers and in my office, I want to pay tribute to those who fell in combat. It was the military youth who rose against the Pact of Punto Fijo (an agreement for bipartisanship achieved between the establishment parties in Venezuela) and against the bourgeois looting."

Chancellor: The CVG had signed a contract with Crystallex in good faith, believing it would meet its contractual obligations!

VHeadline Venezuela News reports: In an interview published in Friday's editions of El Diario de Guayana, jailed Sifontes Mayor-elect Carlos Chancellor has told reporter Yuri Hatziageldis that he does NOT want presidential pardon or an amnesty ... all he wants is to be let out of jail on bail.

Chancellor has the distinction of being the first-even Mayor to have been democratically elected to office whilst being held prisoner, and he did it with more than 80% of the votes in the Sifontes municipality of southern Bolivar State. He's been held in custody for 22 months awaiting trial on more than 11 criminal charges which he hotly disputes. His lawyers have asked successive courts to grant bail which has been denied because magistrates believe there is a high risk of flight.

As regards what has been dubbed "the Crystallex International case," Chancellor is keen to clarify that his beef is NOT with its Venezuelan subsidiary, Crystallex de Venezuela C.A. and explains that the (parent company) Crystallex International had received a contract from the Venezuelan State under which it undertook to provide benefits for the mining communities in the south of Bolivar State.

"It has failed to do (what it undertook to do)," Chancellor claims adding that the company, rather, sought to evict local miners by placing 'Alcabalas' (check-points) to prevent the passage of miners to the sites where they worked, and that this "caused a spontaneous explosion of local protests that were neither organized nor sponsored by me!"

  • In the end, the then deputy Mining Minister at the Venezuelan Guayana Corporation (CVG) Orlando Ortegano signed an agreement to remove the obstacles that had hindered local miners.

Chancellor complains of injustices allegedly committed for five years by the transnational, "forcing the miners to cross dangerous mountain terrain, while the managers travelled in luxury vehicles on a road built specially for them." He says that the CVG had signed a mine operating contract with Crystallex in good faith, thinking that the transnational was going to meet its contractual obligations and to generate 50 jobs in 2002, while assuming the cost of maintaining 22 workers, assistance with technical projects for small miners, assuming the cost of a rural outpatients primary medical center in Las Claritas, the training of personnel with equipment and mining machinery, development of community social programs, implementation of road improvements and the construction of 30 homes in the town of Santo Domingo in San Isidro parish.

"The only thing they've done is to build a drinking water plant, which is not fit for human consumption! And the key clause regarding special benefits has been broken, there's been an increased environmental impact by preventing access by small-scale miners to certain areas protected by the company ... it was at that point that I intervened, with the consequence we now know. Crystallex has been required by the State to withdraw from the (project) assignment of 25,000 tonnes of gold bullion ... the richest of proven gold reserves in Venezuela, the second largest in the world and the sixth in Latin America."

"The miners and indigenous communities of Tumeremo, El Dorado, the peasants, students and farming populations voted for me in the absence of a municipal government that gave no answer in a timely manner despite having handled millionaires budgetary resources ... they were NOT able to give answers to the problems that the community continues to suffer, such as drinking water and very high levels of unemployment."

"I have no words with which to thank the vote of confidence the people have given me in this electoral process, to be elected Mayor, despite the fact that I am physically separated from my people in Tumeremo, El Dorado, San Isidro, Kilometer 88 and all indigenous communities with whom I have an excellent relationship. My whole life has been lived in Tumeremo ... my children, my family home are all in the Sifontes municipality ... I am the son of people committed to these people, and now I am Mayor of this municipality!"

In his electoral campaign, Chancellor had promised to govern without political retaliation and he says he is ready to forget his personal confrontation with the regional Governor, Francisco Rangel Gomez. He says that President Chavez and Rangel Gomez will not make "a government of opposition" in Sifontes ... "all that the people want is for someone to face up to challenges such as the problem of water, construction of houses, roads and health."

His lawyer, Alicia Hernandez says that 2nd Circuit Judge, Eli Rendon Nunez, has been reluctant to grant bail even if there is no civil or legal disqualification of her client from becoming Mayor ... Chancellor also says that an alleged risk of flight, is invalid since conditional parole has been granted on two occasions under strict conditions. Since then, he claims, he has been at the court's disposition despite having had his constitutional rights violated in preliminary hearings. His candidacy for Mayor was admitted in accordance with electoral process and he won fairly, with electoral authorities conferring on him the powers accorded to him under Section 174 of the 1999 Constitution to exercise the office of Sifontes Mayor for four years.

Chancellor says his mayoralty doesn't change anything with regard to the court case and that he is still prepared to stand trial, declaring his innocence of all charges.

He says he is only requesting parole within the legal framework that he should meet with people who elected him and that not that he has been proclaimed Mayor, he must be allowed to exercise the mandate of the people of the Sifontes municipality.

"I do not ask for a pardon or amnesty, I am willing to undergo due legal process, to demonstrate that the accusations against me have no legal basis. Ultimately I will prove my innocence, and for that reason I do not fear a legal process against me!"

VHeadline Venzuela News


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Dr. Odeen Ishmael: Great expectations for Latin America and the Caribbean (LAC) -US relations

VHeadline commentarist, Guyana's ambassador to Venezuela, Dr. Odeen Ishmael writes: With the election of Barack Obama as the new US President, there are great expectations throughout Latin America and the Caribbean (LAC) that the new American administration will show a revitalized interest in the region.

Judging from Obama's public statements during the election campaign, LAC countries are optimistic that his administration will end what they view as neglect of the region by the United States (US) particularly in the past four years.

Obviously, Obama will encounter difficult policy challenges especially in South America where large sections of the population have embraced the political left. US influence has seemingly diminished on this continent where democratic changes, propelled by the active participation of workers, peasants, women and indigenous communities, have brought into power leaders who champion social justice and reform.

  • Currently, the US government has lukewarm relations with "leftist" countries such as Venezuela, Bolivia, and Ecuador, but there is much anticipation that the new Obama administration will apply an approach of constructive engagement with those governments.

All of this is expected to form part of a policy strategy with a renewed bilateral and international emphasis in LAC. This strategy could also involve the appointment of a special envoy to the region, as well as early meetings with regional leaders. A positive approach will undoubtedly result in a clearer appreciation of the region�s political, economic and social problems.

The problem of the greatest common concern -- to the US and LAC -- is clearly that of drug-trafficking and there have been numerous complaints that the United States has not been doing enough to assist its poorer partners in containing, if not eliminating, this scourge.

Since the period of the Clinton presidency, the Caribbean sub-region earned the depiction as the "third border" of the US ... but governments of this sub-region feel that the US has NOT made enough efforts to help strengthen the policing efforts there, especially when they have to budget higher proportions of their resources in the effort to block drug shipments through this "border" to the markets in the north. But, perhaps, a change may be coming...

The President-elect has already declared that he will commit the US government to increasing security measures in LAC. Noting that the region has "one of the highest murder rates in the world," he stated recently that the Attorney General and Homeland Security Secretary will meet their Caribbean and Latin American counterparts in the first year of his presidency "to produce a regional strategy to combat drug trafficking, domestic and transnational gang activity, and organized crime."

Economic problems are also of pressing concern. The LAC countries surely applaud Obama's promise to double US foreign aid to the region to US$50 billion annually -- even though this pledge was made before the current escalation of the economic crisis in the United States.

And, no doubt, Guyana, Bolivia, St. Lucia, Paraguay, Honduras and Haiti, among other poor indebted countries, are happy to know that he supports a complete cancellation of their foreign debts.
Then, there is the perennial immigration issue to which countries such as Mexico hope the US government will see as a priority. Many others, especially those of the Caribbean and Central America, also look forward to a re-examination of the US policy of "criminal" deportation in which their views will be given sympathetic consideration. The Guyana government, for instance, has always pointed to the danger this type of deportation poses on internal security and the social fabric of the Caribbean.
  • Leaders of this region have also expressed profound optimism that Obama will induce a positive advance in US-LAC relations, including a change in attitude towards Cuba.

Currently, US diplomatic relations with both Bolivia and Venezuela are at a low ebb, especially since the American ambassadors to both countries were expelled amid allegations that they were plotting with internal opposition groups against these leftist governments. Nevertheless, the presidents of both countries have expressed optimism that Obama's presidency could ease the diplomatic tension. Bolivia's President Evo Morales and Venezuela's President Hugo Chavez, in separate statements welcoming his victory, expressed expectation that Obama will end the Cuba blockade and work towards improving relations between the United States and their countries.

Brazil's President Luiz Inacio Lula da Silva also urged Obama to end the blockade on Cuba and to forge more active relations with Latin America. But despite such hope, the Brazilian government remains suspicious of Obama's views on free trade.

The President-elect supports taxing Brazil's sugar cane-derived ethanol, which is more competitive than the US corn-based bio -fuel, and is critical of free trade deals with other Latin American countries such as Colombia.

There is little hope that the FTAA negotiations will be resumed, since in any case, a few South American countries are no longer interested in that process. But LAC governments feel that the Obama administration can take new initiatives to reopen the WTO negotiations on the question of agricultural subsidies -- an important issue in which the US and LAC hold opposite positions.

The Obama administration will also have to face the fact that, as the region has grown more economically independent and self-confident in recent years, more and more of the governments are expanding their economic and political relations with China, Russia, the European Union and even Iran. These developing ties have added a new dimension to the geopolitics of the region where, as many political observers feel, the "eastern" influence has expanded as a result of the declining attention by the US in the past few years.

Governments of the region now expect the new American administration will rebuild diplomatic links throughout the hemisphere and advance policies that promote democracy, opportunity, and security while treating all its southern partners with dignity and respect. Indeed, the region's citizens are impressed by Obama's principles relating to social justice and equal opportunity, and his message of hope and change has surely inspired them.

Expectations, therefore, are very high that the new president will bring major positive changes in US relations with the region. These expectations may NOT be met immediately but, as the new administration settles down to its task, the region looks forward to the launching from Washington of fresh initiatives which can advance a more constructive and mutually beneficial relationship between the US and its hemispheric neighbors.

Odeen Ishmael

(The writer is Guyana's Ambassador to Venezuela. The views expressed are solely those of the writer.)

Russian Technologies Corp to conduct feasibility studies for JV development of Venezuelan mining

VHeadline Venezuela News reports:
According to a report published in the regional newspaper Nueva Prensa de Guayana, the Ministry of Basic Industries & Mining (Mibam) is seeking to enhance the processes of production and consolidation of its industrial processes in four cooperation agreements signed during the 5th Venezuela-Russia High Level Intergovernmental Commission held some two weeks ago to allow the Venezuelan Guayana Corporation (CVG) to strengthen its position in the mining sector, specifically in the south of Bolivar state.

A Letter of Intent signed with the Russian Technologies Corp sets out terms and conditions to conduct a technical, economic and financial feasibility aimed at forming a joint venture for the development of the mining sector, and to improve working conditions and generate employment throughout the sector.

The RUSAL company is already forging ahead with a series of multi-metal ore-processing and separation projects as defined by Mibam, and it conducting further exploration work in designated sectors to gain an overview of opportunities to exploit and develop new deposits for alloy production. The new joint venture also plans to install an integrated industrial complex to mine for bauxite, an alumina plant with a capacity of 1,400,000 metric tonnes per year and an aluminum plant with a capacity of 750,000 tonnes of primary aluminum per annum.
  • The CVG and Rusal are also set to conduct a feasibility study for the construction of a thermoelectric plant, as part of plans to enhance energy supplies to state-owned enterprises at Los Pijiguaos and Cabruta for the production of alumina and primary aluminum.
The creation of a Minera Venrus JV for the exploration, processing, storage and marketing of gold, as well as development and transfer of mining technology, construction and gold processing is one of the concepts reviewed in an agreement while another is for the CVG and RusCaolin to set up a joint operational venture (to be named Ciproca) for ceramics and related products in industrial units for the production of tiles, sanitary ware, crockery, ceramics and glazed stoneware and ceramic and water-based paints.

VHeadline Venzuela News


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Chávez Supporters Attack Swearing-In Ceremonies In Miranda and Zulia, Venezuela

The aftermath of last Sunday's regional elections has been overshadowed by concern that Venezuelan politics could be set to return to the violent ways of the not so distant past. And it would appear that hard elements among the president's supporters or chavistas are the cause of that.

Ceremonies in which prominent opposition electoral victors were to be sworn in on Wednesday were marred by violent behavior and disorder in Los Teques, capital of Miranda state, and Maracaibo, the capital of Zulia state.

Miranda was arguably the opposition's biggest election trophy, with Henrique Capriles Radonski toppling Diosdado Cabello, a big wheel in the ruling United Socialist Party of Venezuela (PSUV) in the race for governor by 579,349 votes (53.27%) to 499,570 votes (45.94%).

Men in red shirts ran amok not far from where Capriles Radonski was being sworn in before an enthusiastic crowd of his own supporters. Red is President Hugo Chávez' political trademark, and this was said to have been just one of several indications that the miscreants were his supporters.

The trouble was said to have been started by men on motorbikes who threatened the crowd. This prompted opposition sympathizers to reply with volleys of bottles and stones, and fighting erupted.

Questions hung over the conduct of a recently-promoted Miranda state police deputy commissioner who was alleged to have countermanded an order to separate the two sides and quell the disorder.

The head of the force confirmed that an "irregularity" had taken place but didn't go into detail or say what would be done about the officer. One of Capriles Radonski's campaign vows was to weed out bad officers from the police ranks.
Rioters attacked several newly elected members of the state legislature, some of whom had to be protected by security officers. An opposition candidate who didn't win was said to have been punched in the face. With the police unable to control the mob, a squad from the National Guard was called in and restored some semblance of order. Three people including one police officer were reported injured afterwards, but apparently there were no arrests. Tension persisted into the next day, when storekeepers fearful of looting suddenly brought down their shutters.

In Zulia, dozens of protesters besieged a theater where the popular opposition outgoing governor, Manuel Rosales, and his successor, Pablo Pérez, were to be sworn in on Wednesday. Barred from running for a third successive term, Rosales won by a large majority in the race for mayor of the state capital, Maracaibo.

The swearing-in ceremony was delayed four hours before Rosales and Pérez formally took office. Reports reaching Caracas said that some of those involved in the violence outside the theater had few scruples of their political affiliation and loyalty to the government.

They were demanding that the regional branch of the National Electoral Council (CNE) carry out a fresh audit of the vote because they were convinced Pérez had won by fraud. This was an echo of the accusation the opposition frequently made after it lost one election after another when Chávez was at the height of his popularity a couple of years back.

During the disorder, several officials from the CNE and their cars also became targets of men angry about the outcome of the election. This prompted a plea for peace the following day from CNE President Tibisay Lucena, whose impartiality has long been an object of suspicion for the opposition.

While confirming that violent incidents had taken place, Lucena did not say by whom they had been committed. "This isn't the way, and that's the position of the electoral power," she said.
There was also tension in the president's home state, Barinas, were his elder brother, Adán, was elected to succeed their father as governor with a flat 50% of the votes cast. For three days, the candidate who came second, Julio César Reyes – a rival chavista – has refused to concede defeat and he has called his supporters out on to the streets.

Thursday, November 27, 2008

The straw that broke the camel's back appears to have been TV coverage of widespread acts of violence and intimidation!

VHeadline Venezuela News reports: Channel 33 Globovision -- Venezuela's 24/7 television news channel -- is threatened with closure according to the TV stations managing director Alberto Federico Ravell speaking just after 9.00 p.m. local time Thursday. The opposition-allied broadcaster is to be subject to closure according to a decision handed down by the Venezuelan National Telecommunications regulatory body CONATEL although Ravell says he believes it comes on orders handed down directly from President Hugo Chavez Frias himself.

Globovision has long been a thorn in the flesh of President Chavez who has accused the TV channel of conducting a vilification campaign against his government and himself.
  • The broadcaster counters saying that they report what's happening "just as it is!" and without the kind of censorship it claims is exercised by the state-owned channel 8, Venezolana de Television (VTV) which constantly broadcasts heavily slanted pro-government material.
The closure may come as a personal embarrassment to already-divorced Communications & Information (MinCI) Minister Andres Izarra who had had a secret "assignation" with one of the channel's prettiest presenters, and married her when she fell pregnant! She was forced to leave her well-paid job at Globovision when the news broke of her liaison with the MinCI Minister, and was harassed and had her car tires slashed.

Among the complaints laid against Globovision's broadcasting are claims that it has incited continuing violence by its on-air reporting direct from the streets of Caracas where wholesale looting and violence is sweeping the city despite a heavy police and military presence on the streets.

The straw that broke the camel's back appears to have been TV coverage of widespread acts of violence and intimidation over last weekend's local and regional elections where marauding motorcyclists from the President's own United Socialist Party of Venezuela (PSUV) were rounding up voters like cattle to the polling stations and hunting down anyone caught without indelibile ink on their fingers (showing that they had already voted!).

Ravell says that Chavez "has finally dares to show his true face as an authoritarian dictator! There is no longer any separation of executive powers in Venezuela -- what the President says he want, the President gets done for him, unquestioningly!"

According to Venezuela's Constitution it behoves the National Electoral Council (CNE) to penalize any broadcaster found in breach of electoral rules such as is now claimed by Conatel. Ravell says he is indignant over how the President simply went on VTV to broadcast instructions to his PSUV party faithful during the election run-off and that CNE president Tibisay Lucena was "quite unable to prevent him from breaking all the rules!"
"To justify the closure of this channel they would have had to invent all sorts of calumnies and invent new rules, new legislation and new jurisprudence ... but its easier for them to send National Guard (GN) to close us down. The loss of face and the shamelessness that this government has must be paid by someone and they are paying it by clamping down on us just because we let two (opposition) governors go on air to denounce electoral fraud."
The Chavez government's next step, Ravell continues, "will be to decree that Henrique Capriles Radonski will not be able to take over the Governorship of Miranda State that he won democratically in the election; that they will ban Antonio Ledezma from using the Avila TV channel and they will try to "inhibilitar" (disable the democratic functions) of Eduardo Lapi, Leopoldo Lopez and Enrique Mendoza."

Contacted by telephone late Thursday evening, Venezuela's former ambassador to the United Nations, Dr. Milos Alcalay (a Constitutional lawyer) said "it's true, the Chavez government is assuming dictatorial powers that are totally outside any concept of the law or the Constitution ... he speaks about freedom of expression and press freedoms in Venezuela, but the only freedoms that are guaranteed are to those who are willing to play lap-dog to everything he says and does. That is not freedom, that is authoritarianism, dictatorship!"

VHeadline Venzuela News


Venezuela is facing the most difficult period of its history with honest reporters crippled by sectarianism on top of rampant corruption within the administration and beyond, aided and abetted by criminal forces in the US and Spanish governments which cannot accept the sovereignty of the Venezuelan people to decide over their own future.


Venezuela's Chavez Calls For One Currency For Region -- And Promptly Runs Into Doubts

To judge by initial reactions, President Hugo Chávez will find little support for his suggestion that member countries of the Bolivarian Alternative Alliance of the Americas (ALBA)
– his answer to the Bush Administration's free trade treaties with countries in the region, and before that, the Free Trade Area of the Americas (FTAA).

Economists noted that the Southern Cone bloc, Mercosur, was making slow progress towards economic union, which they deemed had to be a crucial first step towards any idea of monetary union.

"They're not even talking about that, and right now would most definitely not be the right time," said an analyst at the Venezuelan Central Bank (BCV), asking not to be named as he wasn't authorized to speak to reporters. "And anyway, ALBA's more a political organization rather than an economic one," that source added. "Chávez founded it as a counter-measure against Washington. ALBA doesn't have much weight, be it political or economic."

The Unión Radio website reported that Ricardo Hausmann, director of the International Development Center at Harvard University, was anything but enthusiastic about Chávez' plan. Hausmann, a frequent commentator on developments and trends in Venezuela, said there were "technical reasons" which meant the idea of a common currency for ALBA didn't make much "economic common sense." And he appeared to think this was all the more so in Venezuela's case.

Chávez has proposed that the currency would be named the Sucre after an independence hero and would be backed by Venezuela's hydrocarbons reserves, the largest in the Americas. But for a country to adopt a currency supported by petroleum would be "to say bread today and hunger tomorrow," Hausmann was reported to have remarked. Furthermore, he argued, Venezuela had had the most unstable currency in Latin America during the last 15 years. For another country to attach itself to a currency backed by Venezuela would be to attach itself to "a currency that's at the door of a maxi-devaluation."

Government officials insist that there will be no change in the official exchange rate of BsF2.15 to the dollar throughout this year, and that foreign exchange controls are here to stay. In the wake of the global financial crisis, there's been talk in government circles of tightening up the controls, which were eased earlier this year. The controls were imposed in the wake of a two-month opposition-led national strike in early February 2003 and have been in force ever since. But the official rate is constantly under pressure from the illegal "parallel" rate on black markets, which is over twice the government rate.

As far as Housmann was concerned, Venezuela wasn't the only problem when it came to a common currency. He pointed to Ecuador's decision to rescind on repayment of interest on some of its foreign debt were this to be found to be based on "illegal" terms. ALBA countries have announced they will support Ecuador in this decision, and Chavez even said that Venezuela will also analyze its debt to see if any of it was illegal.

Meanwhile, traders on Wall Street who specialize in trading Venezuelan, Ecuadorian and Latin American debt took the statements with a grain of salt. "The feeling that we have," said one trader at Venezuela's leading investment bank BBO, "is that the Government of Ecuador might have been buying back bonds at extremely low prices, thanks to the possible default scenario that they keep painting.

Yesterday and late last week we saw buying from accounts that normally don't even know where ecuador is located on the map -- a sure sign of insider and abnormal trading. Unusual accounts came in buying blocks of 10 million at a time and, of course, moved the market. Bonds yesterday were 25.00 and ended the 29.00. This morning they are offered at 36. Our feeling is that Ecuador will pay and the country has been profiting handsomely from the chaos caused by their statements."

Leaders of Russia, Venezuela meet; bodyguards tussle

A strange thing happened Thursday moments after Russian President Dmitry Medvedev and Venezuelan President Hugo Chavez boarded a Russian destroyer docked here.
Bodyguards for the two men scuffled at the head of the gangplank. It lasted less than a minute, and it didn't seem to dampen the spirits of the two leaders during the first trip ever by a Russian president to Venezuela.

But the tussle suggested the difficulties in establishing deep ties between two nations with a shared interest in showing the United States that they can't be pushed around - but with sharply different cultures and languages.

With four warships making Russia's first post-Cold War visit to Venezuela for joint maneuvers aimed at deepening relations, analysts have questioned the compatibility of the two navies. Russia's fleet is organized along Cold War lines to engage the United States. Venezuela has 17 vessels, which concentrate on combating drug trafficking, particularly cocaine smuggled from neighboring Colombia meant for the United States or Europe.

Neither Chavez nor Medvedev professed any concern about potential pitfalls.

Chavez signed a deal aboard the ship to buy two Russian Ilyushin II-96 passenger airplanes. "I'm overwhelmed with emotion," Chavez said.

Non-skeptics can point out, of course, that the Soviet Union served as Cuba's patron state for nearly 30 years before the Soviet Union collapsed in the late 1980s. "But Russia is now the most capitalist country in the world," said Mikhail Makeev, a Caracas-based correspondent for ITAR-Tass, the Russian state news agency.

Under Chavez, Venezuela is practicing "21st century socialism." The Chavez government has been nationalizing private companies, setting prices for basic goods and spending billions of dollars a year in food, educational and medical subsidies for the poor. Chavez also is using capitalism as a punching bag for the global economic crisis.

Russia is also seeking to rebuild ties with Cuba. Medvedev flew there on Thursday after 24 hours in Venezuela, on the final leg of a week-long trip to Latin America that included stops in Peru and Brazil. Analysts in Russia said Medvedev came to Venezuela with dual motives. He wanted to sell more weapons to Venezuela, which already has purchased $4.4 billion worth of Russian arms since 2005.

Medvedev also wanted to respond to the Bush administration's decision to send a ship to the Black Sea to deliver humanitarian aid to Georgia following that country's conflict with Russia in August. "As an answer, Russia will send its ships to the American zone of interest," said Alexander Golts, a Moscow-based military analyst for the online Yezhednevny Zhurnal (Daily Journal). Chavez said the visit shouldn't bother the United States.

U.S. Secretary of State Condoleezza Rice agreed, saying on Wednesday that the United States retains "the preponderance of power" in the Western Hemisphere. "A few Russian ships is not going to change the balance of power," she added.

Joint exercises between the Russian vessels - led by the Peter the Great, a cruiser - and the Venezuelan ships are scheduled to begin Monday.

Communications will have to be better than the dispute that led to Thursday's scuffle. It appeared to begin when beefy Russian bodyguards blocked Chavez's protectors from following him up the gangplank onto the Admiral Chabanenko. The Venezuelan bodyguards tried to push their way through. One Venezuelan official grabbed the back collar of a Russian bodyguard.

After Medvedev and Chavez had driven away several hours later, a Russian official named Valery Nikitin downplayed the incident. "There's nothing," he said. "Everything is fine." A Russian bodyguard standing alongside was asked to comment. "Nyet! Nyet!" he replied.

More Caution As Gloom Hits Christmas Shopping In Venezuela

There were more bad tidings from the business community about the outlook for the economy as Consecomercio, which represents wholesalers and retailers, warned that consumer demand would likely drop by 13% during this year's festive season.

This, it said, would mark "an important fall from one year to another" after a 30% increase in the same period of 2007. Middle class Venezuelans are already out and about on the annual shopping spree, but there's notably less throwing around of cash and credit cards as if there was no tomorrow.

People in a shopping mall tended to take more than one look at what was in shop windows, comparing prices and then whipping out a pocket calculator to work out what was on and what wasn't. "I've got to be careful," said one youngish man, looking just a little harried. "I've got five little ones, and I don't now how I'm going to keep them all happy. It's not going to be much of a fiesta this year."

He used to have two jobs, but lost the second one waiting tables in an up-market restaurant a month back. "I'm out looking for another evening job but so it seems is everybody else," he lamented, "and in the meantime I've got to count the coins." And then came the classic of all time: "My wife doesn't understand me."

Another business group that represents small and medium-sized industrial companies, Conindustria, reiterated its oft-repeated message that the changing circumstances of the economy meant the only way out for the government was to count on the private sector. Conindustria President Eduardo Gómez Sigala complained that while industry had the potential to develop the country, "what there isn't, is support" from the authorities. "The government's policy is wrong."

The farming lobby, Fedeagro, latched on the President Hugo Chávez' penchant for helping out neighboring countries, a policy which some economists say he'll have to abandon if the economy slides on the back of dwindling world oil prices. Fedeagro President Gustavo Moreno cast doubt about a recent agreement under which Venezuela is lending financial assistance to food producers and companies in Nicaragua.

Moreno claimed that Venezuelan agroindustry was much more efficient but wasn't getting any backing from the government. Biotechnology had been developed and applied in 23 other countries, but Venezuela was falling behind, held in the grip of "the caprice of some bureaucrats."

Veneconomy: Chavez and ALBA in Venezuela -- From One Absurdity To The Next

The Editors of Veneconomy analyze Venezuela's Bolivarian Alternative for Latin America (ALBA) as a counterweight to the G20 Economic Summit in Washington, where Chavez called for Ecuador, Venezuela and others to default on their "illegal" debt and create a common currency zone -- not to mention taking over CAF's building in Caracas.

From the Editors of Veneconomy:

Dmitri Medvedev, Peter the Great, and the Russian fleet overshadowed the Extraordinary Summit of the Bolivarian Alternative for the Americas (ALBA) called by Hugo Chávez to compete with the last meeting of the G20 in Washington.

The proposals and decisions that emerged from this ALBA Summit are so absurd that they are worthy of comment.

One is the decision by Venezuela and its ALBA pals to support the default Ecuador plans to declare, even though this decision does no good either to Ecuador or to the other ALBA countries. By declaring this default, Correa would cut of his country from access to international financing for decades. Five years ago, Argentina took a similar decision and, were it not for the petrodollars that Chávez has “facilitated” the Kirchners, Argentina would not have been able to obtain access to any international financing whatsoever since then.

Unfortunately, Ecuador’s decision not to honor its liabilities has implications for Venezuela. It so happens that $800 million of Ecuador’s debt is tied up in structured notes, where one of the conditions for their issue was that Venezuela would respond for those $800 million in the event that Ecuador failed to do so.

On top of that, Chávez announced that he would also study the legitimacy of Venezuelan debt and did not discard the possibility of taking a similar decision to Ecuador’s. If he does, Venezuela will also find its access to fresh international credit shut off at a time when the national budget contemplates borrowing to the tune of some $12.3 billion, $7.3 billion of which is new borrowing and $5 billion the renewal of debt that matures next year.

Another absurdity that emerged from the ALBA Summit is the proposal of a common monetary zone, with the purpose of making the region commercially independent. Apparently, the proposed common currency would be similar to the euro, possibly seasoned with a Bolivarian system of barter.

But, if the idea is to establish a common currency, the first thing that has to be done is to implement harmonized monetary and fiscal policies, including a free exchange rate and a free trade policy. Yet, Venezuela, the country proposing a single currency for the region, is also the promoter of indiscriminate controls within its own borders, from the rationing of foreign currency by Cadivi to out-and-out protectionism, which is on the increase.

Although it should be clear to the heads of state who attended the ALBA Summit how absurd and ridiculous Chávez’s proposal are, it seems that access to petrodollars has clouded their judgment, as the four presidents formed an accompanying band to Chávez’s tune and applauded like seals.