Wednesday, February 4, 2009

Archbishop: Venezuela has dug itself into a hole that the Chavez government refuses to deal with...

VHeadline Venezuela News reports:
Episcopal Conference (CEV) 1st vice-president, Monsignor Roberto Luckert questions why the Venezuelan people are now being forced to celebrate an event that was only supported by a minority of the people ... and why "certain situations" have dug Venezuela into a hole of discredit, humiliation and violence that the government refuses to deal with...

In a statement to the regional newspaper, El Carabobeno, Luckert says he sees no reason for celebrating February 2 (as decreed by President Hugo Chavez to commemorate the 10th anniversary of his presidency) and has advised Venezuelan Catholics to reject "all events related to that celebration" ... obliquely it was a sideswipe to President Chavez' ambitions to win a plebiscite on February 15 aimed at allowing him unlimited re-election to Venezuela's highest public office.

As Archbishop of the ancient colonial city of Coro, Luckert said "I have absolutely nothing to celebrate, and I feel bad because I think that this gentleman (Chavez) violated the Constitution when he led a failed coup d'etat in February 1992. Precisely what are we supposed to celebrate this February? He (Chavez) discredits you, me and anybody who dissents, saying that we are plotting, that we are against Venezuela."

Luckert also rejects all of the President's decisions with regard to celebrating February 2 ... he questions the referendum scheduled for February 15 inasmuch as he considers that -- even though governmental spokespersons have denied it, yet the President himself confirmed it during a speech last Saturday -- that his intention is to get re-elected as many times as possible.

"The most important thing for Chavez is to prolong his model of government thru 2049 ... it's the same model as Cuba's eternal President Fidel Castro Ruz, same as they're doing in North Korea and trying to do in Zimbabwe!"

VHeadline Venezuela News

Zulia Fedecamaras chief says Petroleos de Venezuela (PDVSA) owes over a billion bolivares to some 230 contractors

VHeadline Venezuela News reports:
Zulia State Federation of Chambers of Commerce & Industry (Fedecamaras) president Nestor Borjas says that state-owned oil corporation, Petroleos de Venezuela (PDVSA) owes over a billion bolivares to some 230 contractors and that it is endangering the economic stability of the suppliers with a potential loss of around 25,000 jobs.

Borjas accuses the Chavez government of having no legal foundation on which to decree the closing of state and private businesses last Monday for a spontaneous public holiday to celebrate the 10th anniversary of Chavez' ascent to the presidency of Venezuela ... he claims that units of the National Guard (GN) had closed drugstores and the region's Sambil Shopping Mall, imposing penalties of up to 50 tax units. He says his organization is gathering information from across the western State to determine what concerted action the private sector will take against central government.

"At this time there are 230 oil contractors in Zulia State whose existence is endangered because PDVSA owes them more than a billion bolivares and as a consequence there are some 25,000 endangered. We could see a great fall in the Zulia State economy since at least 50% of regional GDP depends on oil revenues."

Borjas emphasizes that Zulia "contributes 17% of national GDP and any political and/or economic abuse of Zulia companies may have serious effects on the nation's economy!"

VHeadline Venezuela News

Finance Minister Ali Rodriguez Araque says the Venezuela has no plans to nationalize any more private companies this year...

VHeadline Venezuela News reports:
Responding to questions in an interview published in the Zulia State regional daily newspaper, Panorama, Finance & Economy Minister Ali Rodriguez Araque said that the government has no plans to nationalize any more private companies this year...

As regards the Venezuelan government's outright purchase of (Spanish) Santander-owned Bank of Venezuela, Rodriguez Araque says that negotiations have reaching a point where the Venezuelan government is about to ask Santander "are we doing this or not?"

During the next few days he hopes to conclude the deal but denies that the transfer os US$12 billion from Venezuela's foreign reserves to the National Development Fund (Fonden) will produce what is described as a "double monetization" that many fear will increase inflationary indicators for 2009.

"These funds are for the purchase of imported components for industry ... they will be spent abroad and subsequently there will be no double monetization!"

Rodriguez Araque explains that contributions from PDVSA to Fonden "go right through, so they turn into Bolivares and they are monetized. It does not go through the Central Bank of Venezuela (BCV) and there's no plan to transfer additional funds to Fonden from the international reserves ... those analysts, some of whom have been in the BCV, are outrageously lying to the public!"

The statement was a direct contradiction of former BCV director Domingo Maza Zavala's statements last week which were widely reported in the international media. Maza Zavala had said that transferring $12 billion from international reserves would result in "a jump from a cliff for the Venezuelan economy."

The Finance & Economy Minister says that there may be issuance of external debt bonds ... "if necessary, yes, but there would have to be an evaluation of the price in Venezuela, one has to be very careful. Fortunately, we have the resources (in international reserves and in Fonden) to minimize those necessities."

As for the World economic recession, Rodriguez Araque was emphatic that Venezuela ... in spite of this year's crisis "will have positive figures in terms of growth ... a positive GDP ... not negative as happened during the 2002/3 oil strike" ... Venezuela today has the lowest relationship between external debt and GDP at 13.7% ... most countries top our figure in that respect! However, risk evaluators rate us high."

In conclusion Rodriquez Araque adds that, for now, there are no plans to devalue Venezuela's Bolivar currency ... "there may come a time when we may need to do so, but right now, it's not in our plans!"

VHeadline Venezuela News

Andrew McKillop: Russia ... from financial meltdown to oil shock?

VHeadline guest commentarist Andrew McKillop writes:
While the host of always-worse killer numbers on the US banking, finance and economic meltdown cannot fail to impress – leading to the growing likelihood that Obama's administration will simply have to nationalize the entire banking sector before it falls apart -- Russia's financial and economic meltdown is also impressive.

Unlike the USA, where the Obama team can and will print dollars, there is one missing ingredient for a nearly effortless return of the Putin-Medvedev regime to their previous icon status for Russia's fragile crop of 'new middle class' consumers, absolutely prepared to trade Western-style consumer trinkets for Western-style human or political rights.

By early February 2009 crowds in some Russian cities, specially in
far-off Vladivostok and the East, now openly criticise Hero Putin and the increasingly police state antics of his power elite.
The missing ingredient is a rebound in oil and gas prices, oil prices having taken the biggest part of the global economic recession shock, to date. Roughly 85% of Russia's export revenues come from oil, gas, and a mix of base metals and precious metals. All have suffered large, or massive price falls since midyear 2008 dealing a body blow to Russian GDP, the national budget and its huge deficit in 2009, and living standards for everyone. This includes the new middle classes who prefer to know about cell phones, and not know about torture cells or war crimes in Chechnya.

To be sure, 'wise investors' are rushing to sell out, liquidating their holdings and quitting the country: central bank and other estimates suggest about US$300 billion quit the country in the 3 months of Q4 2008. More headline grabbing to some, the Russian rouble has turned volte face, from a 'future world reserve money' according to some blithe spirit Russophiles in early 2008, to a money that can lose 7% or more of its value against the reference basket (mainly the US$ and Euro) in a single day.
One of those single-day 7% lessons in what happens in 2009 to the national money
of a country depending nearly exclusively on oil and gas exports, was the day
Putin addressed the Davos Forum, to sternly announce his continuing and official
love affair with 1990s-style New Economics.
Since August 2008, probably $250 billion of FX reserves, or 50% of the bank's early 2008 record total, has been spent trying to slow the devaluation rout of the rouble, at least 2 billion the single day Putin played rusty tunes from the Greenspan era to a polite but unbelieving crowd!


Countries like Saudi Arabia, or Qatar and Angola could be taken as able, or well able to sit things out atop their accumulated FX piles from oil and gas exporting, at least for a while. To be sure they will have to cut back a little, or a lot, on prestige projects like Ecological Cities at the desert's edge and increasing their oil pumping capacity, but they can sit things out.

In the case of Saudi Arabia oil watchers' folklore claims its rulers actually wanted the oil price crash of 1985-1986, followed by over 12 years of Cheap Oil, to 'reassert leadership' in world oil production, oil reserve depletion and oil reserve over-estimating. Today that is far from sure -- even Saudi rulers talk about "After Oil" investing, in big ticket soft energy gadget-filled Eco Cities, and "Stretching the Oil Age" by simply not increasing production or exports. This strategy, we can note, provides a nice alternative to admitting that further output expansion is geologically impossible.

Putin and Medvedev have a shorter shelf-life: they need to stretch their own power base and maintain good relations with many, shadowy, muscular domestic powerbrokers: Russia badly needs to find any way to increase its earnings from current levels, in at most 12 months. This could be shrunk by one-half, if we take the rate of 'cash burn' practiced by its central bank and economic ministries since around August 2008.

As noted above, approximately 50% of Russia's total FX reserves have already been burned out, as of early February 2009. The other half could go as fast, that is within 6 months – with one single possible result: a repeat of the 1998 default on its traded debt, often described by Putin as a shocking humiliation for Mother Russia, and more certainly of himself.

Related to GDP, Russia's international debt is surely less than the incredible accumulated private and public debt of the USA, about 360% of US annual GDP as of December 2008, but Russia has no easy way out through printing roubles, Obama-style.

Russia therefore needs oil prices to approximately double from current levels, that is to about $75 for WTI and Brent, with Urals grade close behind these markers. Curiously enough, Saudi rulers have since October-November 2008 politely let it be known that they, too, would like $75 oil.

Probably frustrating for Putin, however, his semi-traditional winter natural gas cut-off of Ukraine and down-the-line consumer countries, had almost zero impact on world gas prices, let alone oil prices!
  • An oil supply cut-off, however, specially one that is somehow coordinated with Saudi Arabia and other OPEC, could have spectacular price-rising impacts.
Latest data from the OECD IEA, US EIA and private sector oil data services, such as Platts, strongly contrasts with OPEC Secretariat estimates for decline in global oil demand. Demand is probably down about 2.5 million barrels per day since August 2008, to no more than ca. 85.25 Mbpd, but OPEC officially doubts this.

The target cut for Russia is therefore around 2 Mbpd. Added to real world and actual OPEC export supply cuts, which are perhaps 2 Mbpd, a total close to 4.25 Mbpd reduction of world net total export supply would rather quickly damage stories of brimming tank farms in Cushing, OK, and copious over-ground reserves of crude and products, that oil contract short selling traders love to cite as their ticket to bet one-way.

Russia only needs one condition for success -- that Saudi rulers do not 'save the West' through hiking production, and alongside Putin will sagely wait for $75 oil to return.


Like other oil, gas and coal exporters, ranging from Australia to Angola as well as OPEC states, Russia officially claims it is highly concerned about climate change, is unsure that its export supplies can be massively increased (although only pessimists could imagine they might fall), and is interested in Alternate & Renewable Energy (ARE) sources and systems, aka 'Cleantech'.

Any rational analysis of substituting say 25%- 40% of current global oil and gas supply with ARE in a period of 25 years, demanding at least 25 Mbpd oil equivalent energy supply from ARE and assuming rather large energy savings in the global economy, soon arrives at cost estimates well above $12,000 billion over 25 years.
  • Put another way this is more than current total investment spending in world oil and gas, running at about $400 billion in 2007, but very certainly less in 2008-2009.
How this type of spending is achieved, if it can be achieved, may at some stage even concern – all things are possible -- Vladimir Putin and Dmitri Medvedev. An energy levy or special tax on all traded oil and gas, with quite high and above all stable oil and gas prices, might tempt the Putin-Medvedev duo in their world statesmen role, a decent interval after they save Mother Russia through an oil price hike with their objective allies, if not friends the Saudi rulers.

We can be rather certain that current play-acting with the Clean Development Mechanism as a marginal activity linked to European CO2 credits trading will never, and can never generate the massive funding needed for ARE development outside the OECD countries, which includes Russia.

An energy levy on world traded oil and gas supplies at prices that please exporters and importers find tolerable, at least, can be one way to finance ARE development outside the OECD countries. Here again Putin may find political interest, creating new alliances that defuse Russia's growing geopolitical standoff with Europe and the USA.

With time, common effort to develop the ARE on a worldwide basis could, or might help rebuild East-West confidence.

This can be hoped, but in the short-term Mother Russia needs a doubling of oil prices!

Andrew McKillop

The CNE is NOT preventing the President from using the public airwaves to make announcements about his campaign!

VHeadline Venezuela News reports:
Opposition parties have accused the Chavez government of using governmental power and Venezuelan citizens' money to promote the Presidential referendum YES campaign and complain that the (supposedly autonomous) National Electoral Commission (CNE) remains silent on the subject.

Primero Justicia (First Justice-PJ) secretary Tomas Guanipa, claims that the electoral body has NOT issued any official condemnation of how President Chavez has used mandatory national TV and radio broadcasts to talk about his indefinite re-election campaign. "We wonder where the CNE is while the President uses all broadcast channels to broadcast a sports event that is part of his YES campaign? Where is the CNE when the government plagiarizes the NO campaign's propaganda and they allow it to continue broadcasting?"
Where is the CNE when there is YES propaganda in the music played in subway

The CNE is NOT preventing the President from using the public airwaves to
make announcements about his campaign!
Guanipa says the government may be able to censor the opposition and to prevent it from promulgating its message in the media "but they won't be able to censor our consciousness ... they won't be able to censor our will ... they won't be able to censor the fact that we, Venezuelans, have no fear of voting because we know that voting is our only weapon to destroy those who will not respect the popular will of the Venezuelan people."

Given this, Guanipa has asked all Venezuelans to go massively to vote on February 15: "Given the manipulation and disinformation, we can only respond by expressing our democratic will with energy, strength and love for Venezuela.

Guanipa adds that Venezuelans are themselves witnesses of the "abuse" of power by the government ... "if the re-election amendment is approved, the situation will worsen for future electoral events. Can you imagine how they will use the resources, power and all their threats to impose themselves in the elections ... the ball is now firmly in the hands of the Venezuelan electorate."

PJ's Luis Ignacio Planas says that political parties and other democratic organizations have done their part to inform the people against the amendment by knocking on doors ... "It is now the turn of Venezuelans to go out and vote!" He saus that despite attempts to stop the NO campaign, the attachment of the Venezuelan people to democratic values planted so many years ago in our country is now again taking control over our destiny."

He points out that, far from discouraging voters, critique directed at the CNE for NOT taking action against the governmental exploitation of "advantage-ism, shows what is happening at the CNE and that is why we ask everyone to go out and vote on February 15 to defeat the President's intent to get approval for his unlimited re-election!"

VHeadline Venezuela News

Venezuelan Communist Party (PCV) accuses state-run companies of violating the 1999 Constitution; Labor Laws

VHeadline Venezuela News reports:
The Venezuelan Communist Party (PCV) has accused several state-run companies of violating the 1999 Constitution and Venezuela's far-reaching Labor Laws ... communist labor secretary, Pedro Eusser has revealed that VenIrAuto -- the Venezuela-Iranian auto manufacturer -- has disregarded established trade union rights and has fired no less than 26 labor leaders and 11 workers for having set up a legitimate labor union ... the allegation is similar to one brought against Indugran La Fina, in Cojedes State, where 11 workers were summarily dismissed.
  • "This is not usual in a revolution" Eusser says. "If the workers control public companies, they also run comptroller functions and we will overcome these problems that are inherent in a capitalist mode of production."
Venezuela's communists have agreed to join a labor protest at the Mitsubishi Plant in eastern Anzoategui State following the death of two fellow-workers at the hands of the regional police and the illegal dismissal of some 125 employees.

PCV's national committee has proposed eliminating "old structures within the capitalist state"... focusing on inspectorates and the offices of the Labor Ministry so that they can act in defense of the workers. At the same time, they have denounced the dismissal of some 400 hundred banana workers.

Eusser has expressed his regrets over a decision by Orlando Chirino of the Autonomous Revolutionary & Unitary Classist Current who has called to reject the President's re-election amendment: "He is NOT fitted to be a union leader ... he would be defeated by the workers!"

VHeadline Venezuela News

PODEMOS leader Ismael Garcia: President Chavez must take pause to re-consider the direction in which he is taking Venezuela

VHeadline Venezuela News reports:
According to PODEMOS ("We Can") leader and National Assembly deputy Ismael Garcia , ten years of government by President Hugo Chavez Frias have reached "the most important political achievements in the last fifty years," because the creation of the 1999 Constitution by a Constituent Assembly was the beginning of a very important project in which he believed...

"It's project that is inclusive and participative for the country. We left representative democracy and have advanced into a political project that was approved by a clear majority of Venezuelan citizens in a country that has established a Constitution with absolute principles, based on a innovative model that poses profound changes within democracy. We should be leading all democracies ... not only in Latin America, but all around the world, if only that fundamental project were respected."

Garcia says that he used to support President Chavez in the development of a country that was "contextualized" in the 1999 Constitution!

"Our support and subsequent withdrawal from supporting Chavez was NOT due to the fact that he didn't give us a local government, a ministry or a seat on his Cabinet, but because we defended the Constitution ... even during the events of April 11, 12 and 13 of 2002. We have always been in support of the Constitution ... we will never support going outside of that Constitutional framework ... the national project that was born in 1999 but the new (modifications to the) Constitution are not the same project that the President originally had in mind."

That is why there are contradictions," Garcia says in an interview with regional newspaper reporters. "The struggle is about a democratic vision that is right there in the Constitution ... it is NOT about the autocracy and dictatorship that the President is building up for himself."
Garcia claims that the original concept was that the (Venezuelan) people should have been the political force behind Chavez' revolutionary project but "they are disenfranchised ... the Venezuelan people are not the main protagonists any more ... they are now playing the role of extras in Chavez' own movie production!"
He claims that "President Chavez has changed his political message since he is
an individual who has lived many years encapsulated within the Armed Forces ...
Chavez has a socialist model in mind that failed in the Soviet Union, failed in
Cuba ... but beyond that, he has never expressed anything that is how own
political thought!"
The Podemos leader says "the political/economic model that Chavez is proposing to Venezuelans ... and to everyone who is close to him ... has nothing to do with a dictatorship of the working class, or Marxism, nor Leninism, but with profound changes ... we supported his hope for change but it was not realized as such ... the government's social projects are of greater benefit of the mechanism of the Bolivarian Revolution and in this respect they have lost their true sense."

"President Chavez must take pause to re-consider the direction in which he is taking Venezuela, to improve what he is doing and re-launch the revolution with due consideration over time. Ten years ago, President Chavez and I discussed the national project we all wanted when he achieved the presidency ... that national project was founded in the 1999 Constitution and covered all sectors of Venezuelan life ... what Chavez has in mind now is a socialist model that has failed."

Garcia believes that the first time that when President Hugo Chavez proposed a Constitutional Reform, in which his re-election was included and was subsequently denied in a referendum vote in December 2007, it was already a violation of the Constitution.

"It was a violation of the Constitution because fundamental principles were violated that could only be changed in a Constitutional process ... today, two years later, President Chavez is proposing a Constitutional amendment that will allow unlimited re-election to all public offices ... and this must be approved or rejected by Venezuelan citizens at the ballot box on February 15.

The fact remains that Chavez had to run his amendment plan as soon as possible because his time is running out. "He has to do this quickly because Venezuela is having to face an unfortunate economic situation."

On the other hand, Garcia believes that solving problems related to safety and security must be the government's priority "since there are two violent deaths every 75 minutes ... THAT is today's main problem in Venezuelan society." He says the government is NOT showing any great interest in facing issues and he's certain that the violence nowadays is being fueled by the government itself!"

Garcia is certain that there are "certain subversive organizations within the police itself ... groups that have gathered in front of the Caracas Metropolitan Mayor's Office and who have harassed (former Defense Minister) General Raul Baduel. This is NO part of the original humble grassroots traditional Chavismo, but these groups are supported by the government. They are irregular, clandestine, groups, who are demonstrably on the government's payroll."

VHeadline Venezuela News

Tuesday, February 3, 2009

President Chavez' indifference to aluminum industry's plight came as "a bucket full of cold water" to CVG union leaders

VHeadline Venezuela News reports:
Trade union leaders are applauding a decision NOT to privatize a string of Venezuela's heavy industry units, but say they deplore what is described as the chronic abandonment of Venezuelan Guayana Corporation (CVG) aluminum factories in "these revolutionary times" ... but welcome a presidential decree that prolongs an earlier freeze on redundancies and dismissals.

After ten years of President Hugo Chavez' 21st century socialist revolution, the union leaders says they have reasons to applaud government actions but also a number of disappointments, among which is the undeniable fact that the government has virtually abandoned operational investment in state-owned companies at a time of worsening operative crisis in the aluminum sector topped by the worldwide financial crisis.

CVG-Alcasa's Sintralcasa union secretary, Henry Arias says he is convinced that the government has abandoned the aluminum sector and explains that of 200 cells in production Line I and II, there are 46 out of service ... 52 of a total 180 in Cell II are inoperable and Lines IV, 69 of 180 cells are not operative. Meanwhile, CVG-Alcasa workers feel uncertain about salaries, the paralysation retirement benefits and other critical delays in payments. "The reality being faced in state-owned companies is not the only topic of concern since there is a "lingering silence" on the part of top ministers in the national government.
Arias says the majority of workers were very interested to hear about "the
future of aluminum but they saw no light at the end of the tunnel" in President
Chavez' speech during his visit to Ciudad Guayana last Friday. He claims that
the governmental plan is to make Alcasa disappear and then to fuse all of the
companies together as it had done years ago with CAVSA.
CVG-Bauxilum union president, Antonio Rivas does, however, thank the Venezuelan President (Chavez) that the companies have not been privatized and that they have been upgraded to State Property in the 1999 Constitution. He recognizes achievements with regard to labor stability given in the decree to prolonging a statutory firing freeze and says that it gains more relevance in today's economic recession. However, Rivas demands government attention to the aluminum sector in particular and asks for more worker participation in the decision-making process as well as the "materialization" of sector investments that were announced by the President but have not yet been made.
Rivas is concerned over what he describes as utter silence from the President on
the subject of the aluminum companies' future and adds "it appears to me that
there is no plan at hand to recover the state-run companies."
CVG-Carbonorca union general secretary Emilio Campos also regrets that the government does not appear to be concerned about the nation's aluminum companies ... he points out that it's important that these companies should belong to the government, but he complains that they are not being well taken care of ... "the important thing here is not only that they are the property of the nation, but that the government should take good care of them too!" Campos believes that Chavez' seeming "indifference" displayed last weekend came as "a bucket full of cold water" to union leaders across the industry.

VHeadline Venezuela News

Chavez welcomes friendly relations with Obama based on "respect and dignity, not only for Venezuela but for Latin America as a whole!"

VHeadline Venezuela News reports: Venezuelan President, Hugo Chavez says there's no need to devalue the country's Bolivar currency in the "short term" ... that his government has been making some economic adjustments and there have been good results.

In a report published in today's editions of the national broadsheet, El Universal, Chavez says that Venezuela's reserves in international currencies are enough to bear with the low oil prices "for now (por ahora!)."

"If the oil prices remain where they are, we'll have to raise taxes or devalue
the Bolivar but we the ability to face this situation!"
Speaking on the US network CNN, Chavez emphasized the short-term but went on to say that it was impossible for him to discuss the long-term since Venezuela's economy and politics are "very dynamic processes."

On the subject of economic and personal liberties, Chavez said he had issued a decree to make February 2 a national public holiday to celebrate the tenth anniversary of his presidency and that allegations that businesses were forced to close by the National Guard were "all a lies! That would be unthinkable ... it is a fabrication by the opposition in their attempts to discredit a government that "proceeds according to the Constitution and the Laws ... there is hardly a country that has greater liberties than Venezuela."
  • Chavez was at pains to absolutely deny that Venezuela, particularly Caracas, is one of the most dangerous areas in Latin America because of crime ... "that's another lie to discredit!"
With regards how Venezuela's plans to deal with a potential decrease in US oil purchases as a consequence of its search for alternative energy, Chavez said that he "prefers to look at the world as a whole. No doubt about it, the world is going to need to maintain its industrial pace and the increase in oil consumption is unstoppable. It looks to me that President Obama is being fooled ... it's quite possible that since he's just arrived (in office), he doesn't have much knowledge about energy. I don't know how he's going to achieve what he has announced but it is highly unlikely that the United States will decrease its dependence on oil, their own and/or that which they import."

"What we all need is an agreement to respect each other's sovereignties," Chavez told CNN. "We have seven refineries in the United States and we have around 12,000 gas stations ... we provide jobs for thousands of US workers ... we're aiding hundreds of poor families in the US ... that the United States should have projects to deliver alternative energy is phenomenal ... if only we could do more ... all that is wonderful … but it's very difficult for the United States to decrease its dependence on oil in the short term."

As to a future encounter with US President Barack Obama at The Americas Summit later this year, Chavez said that being polite does not diminish personal courage and he wishes that he can reach the same level of relations he had had with the Clinton administration ... "with respect and dignity, not only for Venezuela but for Latin America as a whole!"

VHeadline Venezuela News

Gold Reserve's management will have had more than two months to consider Rusoro's hostile takeover bid and come up with alternatives

Mining Weekly (Liezel Hill):
Spokane, Washington-based Gold Reserve Inc, which is the subject of a hostile takeover bid from Rusoro Mining, has some issues of its own to raise with the Ontario Securities Commission, the firm said on Tuesday.

A day earlier, Rusoro announced that it had applied for an order from the Ontario Securities Commission (OSC) to cease trade in Gold Reserve's shareholder rights plan.

The rights plan, or 'poison pill' enables the company to fend off unwanted takeover bids, but Rusoro argues that Gold Reserve's management will have had more than two months to consider the offer and come up with alternatives by the time the offer expires on February 18.

However, "in the event that a hearing proceeds before the OSC with respect to the rights plan, we also intend to raise with the OSC the various significant and material deficiencies in the offer documents and in Rusoro's public filings," Gold Reserve shot back in a statement. "We are confident that our shareholders will continue to recognise that Rusoro's offer is opportunistic, financially inadequate and significantly undervalues Gold Reserve's assets and its overall contribution to the proposed combined company."

The offer was to have expired last month, but Rusoro extended the deadline, saying that it wanted to resolve uncertainty over the offer, after Gold Reserve filed a court injunction that, if granted, would block the takeover. The injunction will be heard in court on February 4. The injunction was filed because Gold Reserve says Rusoro's advisor on the transaction, Endeavour Financial, had provided advisory services to Gold Reserve too, and had access to confidential and proprietary information.

Vancouver-based Rusoro produces gold from mines in Venezuela and wants to buy Gold Reserve to take control of the firm's Brisas project, in the country. Rusoro is offering three of its own shares for each Gold Reserve class A share and each Gold Reserve equity unit.

Did Globovision censor CNN interview with Venezuelan President Chavez ... or was it an independent editorial decision?

VHeadline Venezuela News reports:
Venezuela's state-owned news agency, ABN is accusing (opposition-allied) 24/7 TV news channel Globovision of being used by the anti-Chavez political instrument to censor an interview with President Hugo Chavez Frias that was broadcast by the US news network CNN.

ABN says: "Even though Globovision daily broadcasts news by CNN as their "allied network," they rejected broadcast of the news-interview on Tuesday."

The state-owned news agency continues: "The interview was about the celebration of the 10th anniversary of the Bolivarian Revolution and (President) Chavez' arrival of to power by popular vote ... the news network Globovision is openly against the Chavez government and has become the 'press office' of those opposing the government."

ABN notes that one of Globovision's board members, Alberto Federico Ravell, had participated with some Venezuelan politicians and (opposition) leaders some weeks ago in a meeting in Puerto Rico facilitated by the US State Department to devise a strategy against the constitutional amendment proposed by Venezuela's National Assembly.

"Given their summons to violence and the promotion of anti-democratic values, Globovision is frequently accused of irresponsible use of the air waves by TV users committees. As early as December 2002, the Public Attorney asked the National Telecommunications Commission (Conatel) to enforce the law regarding the high content of violence and aggression in their Globovision's broadcast schedule."

VHeadline Venezuela News

Venezuela moving by inertia ... government ended 2008, began 2009 campaigning and all else in the country remains paralyzed!

VHeadline Venezuela News reports:
In an editorial published in today's edition of the Venezuelan political e-publication Descifrado, the authors say "the country is moving by inertia ... the national government ended 2008 and began 2009 campaigning in such a way that the country has remained paralyzed!

Descifrado continues: No legislation, no government, only decrees ... decrees only worsen things ... sooner or later the world economy crisis will reach us. In fact, even though the government has not acknowledged it, you can feel it already. The progressive fall in oil prices over the last six months is an indicator that the Chavez administration disregards time and again.

But you cannot hide the sun with a finger ... it's already been a month of the new year, and the needed corrections have not been made to delay the effects of recession on Venezuela.
The Venezuelan Central Bank (headless up until now) issued a statement last week containing the monetary policy for the first trimester of the year. The measure would be applauded if it weren't because the "decision" says nothing. Ministers, their subordinated officials, (National Assembly) deputies and civil servants in general are permanently campaigning, following in President Chavez' footsteps ... and he has not drawn the line at using all resources at his disposal to promote his option, the YES option, in a referendum to approve an amendment to the constitution that will allow all elected officials to be re-elected indefinitely.

Since they are all campaigning, those that cannot be involved ... such as those working at the National Electoral Council (CNE) ... disregard violations of the Constitution and the Electoral Law by not taking (appropriate remedial) actions to punishing the violators.

In a scenario of zero GDP growth, and where inflation will reach 50% (according to private sector estimates), the government maintains an astounding inertia, as if nothing were happening. To date, February 3, not even the tributary (taxation) unit been adjusted and without changes, it will negatively affect the government's January income ... no one mentions this!
Meanwhile the country -- with the addition of an improvised public holiday --
stands idle until February 15 until the Chavez government's euphoria fades
away (por ahora! for now!) and it begins making decisions.
The bad thing about all this is that everything will then come together at one time ... perhaps!

VHeadline Venezuela News

Patrick J. O'Donoghue's news and views from Venezuela -- Tuesday, February 3, 2009

VHeadline News Editor Patrick J. O'Donoghue reports:

Former Executive Vice President Jose Vicente Rangel claims that there are several Colombian paramilitary fronts operating in parts of Venezuela. During his Sunday TV show, Rangel says the groups have connections with narco-trafficking in Zulia State, arms traffickers in Tachira, run a training center in Carabobo State and do money-laundering in Nueva Esparta. In Caracas itself, the political analyst reports, there are five paramilitary groups, known as the El Hatillo, Miranda, Petare and Chacao Fronts. According to Rangel's report, the government is currently investigating and dealing with the irregulars starting with an investigation into the police forces of Chacao and Baruta, which, he claims, have been infiltrated by paramilitaries provided with false ID cards. Speaking about the upcoming referendum, Rangel maintains that the majority of survey polls place the government ahead and he alleges that the opposition is frustrated after the failure of its January 23 protest march ... the dominant tendency among opposition groups at the moment is to abstain.

Bolivarian National Guard (GNB) C-i-C, Gen Freddy Carrion denies news reports that his soldiers have been closing businesses that opened shop, despite a government decree declaring February 2 a national holiday. Carrion says it's completely false and that no orders had been given to close businesses. The situation in Venezuela is completely normal, he insists, adding that some businesses decided to open and did so with complete freedom and tranquility.
Yesterday, President Chavez ordered a national holiday to commemorate 10 years of the Bolivarian Revolution and to celebrate a meeting of the Bolivarian Alternative to the Americas (ALBA) set up as an alternative to the USA's failed Free Trade for the Americas (FTAA) Agreement.

To commemorate 10 years in power, Chavez held a mass rally at the Paseo los Proceres in Caracas where military parades are normally held. Accompanying the President in a cavalcade were the Presidents of Bolivar, Ecuador, Nicaragua and Honduras. The visitors were in Venezuela to attend the summit of the Bolivarian Alternative to the Americas (Alba).

Addressing a huge crowd of followers, President Chavez recalls that 10 years ago a new era in Venezuelan and Latin American politics started and that the region is no longer a backyard of the USA. People can see, Chavez told the crowd, gigantic changes that have taken place, if they compare the Venezuela of 10 years ago to what it is today. As regards Latin America, Chavez continues, 10 years ago it was almost wholly on its knees to the American Empire but today, he contends, the situation has changed and Latin America will be freed. The President made the statement celebrating 10 years of the Bolivarian revolution at a mass rally and cavalcade in Caracas. Tuesday was declared a national holiday. Chavez proclaims that the third period of the Bolivarian revolution has begun and will end on February 2, 2019.

Economy & Finance Minister, Ali Rodriguez has denied that the transfer of $12 billion from the international reserves to the National Development Fund signifies a double monetarization and will produce inflation. The Minister says some of the analysts who have worked in the Central Bank of Venezuela (BCV) know perfectly well that all contributions from the institution are destined to investments consisting of imported components only ... the dollars are used outside and there will be no inflationary impact in the country. Opposition economists have accused the government of using the transfer to resolve a fiscal deficit but Rodriguez replies that resources from Petroleos de Venezuela (PDVSA) for the Fund enter directly into the investment mechanism and because they are converted into bolivares, there is only one monetary process, not two. Attacks from the opposition on the transfer are connected, the Minister insists, to the constitutional amendment election process and are aimed at creating confusion among voters. The resources will be used for productive investment, Rodriguez declares, and $11.1 billion will be spent on the energy and petroleum sector, 5.3 billion on infrastructure works and 3.9 billion to housing and habitat, among others.

National Assembly (AN) deputies, Roy Daza and Earle Herrera are currently in Spain explaining the constitutional amendment proposed by President Chavez to domestic political and social sectors. Both have attended an solidarity act in Madrid celebrating 10 years of the Bolivarian revolution organized by Ambassador Alfredo Toro Hardy and the main Spanish solidarity with Venezuela group. The deputies will be meeting the Spanish press today and holding a series of interviews with different media sources in Spain and mainline political parties.

In the United Kingdom AN deputies, Augusto Montiel and Carlos Echezuria will be explaining the amendment at a meeting organized by the Embassy in London at Bolivar Hall in Central London's Grafton Way at 7.00 p.m. on February 4. The deputies are part of a 25-person group of deputies that have been dispatched throughout the world to inform about the constitutional referendum and explain why the Assembly supports and passed the amendment. The tour comes just a week before the referendum to eliminate term limits for all elected posts on Sunday, February 15. Deputy Montiel is a member of the British-Venezuelan parliamentary group and visited the UK several times.

At the Bolivarian Alternative for the Americas (Alba) summit in Caracas, the Presidents of Bolivia, Honduras, Nicaragua, Dominica and the Cuban Vice President have signed a food sovereignty and security agreement and set up a transnational food company. President Chavez says the company will start off with a capital of $49 million coming from a food fund set up one year ago at an Alba summit in Maracaibo. The company will be called Grand National and will compete with transnational food companies, Chavez declares, adding that the proposal is to install company HQ on the island of Dominica. The food security and sovereignty agreement will cover member countries of Alba as well as 11 countries belonging to the PetroCaribe scheme and is aimed at increasing sustainable production of food and guaranteeing sovereignty and security. The President has called on member countries not to waste time and to put the agreement into practice at once.

Patrick J. O'Donoghue

Rusoro applies for order to terminate Gold Reserve 'poison pill'

Press Release:

Rusoro Mining Ltd. has announced that in connection with its takeover bid for Gold Reserve Inc. it has applied for an order from the Ontario Securities Commission to cease trade Gold Reserve's shareholders rights plan (more commonly known as a "poison pill"). The OSC is expected to set a hearing date shortly.

Rusoro expects the hearing to be held prior to the expiry of its Bid, and it intends to issue a release announcing the hearing date once it has been set. Rusoro will also issue a press release providing any updates with respect to the poison pill as appropriate following completion of the OSC hearing. Rusoro fully expects that the poison pill will be cease traded and urges Gold Reserve shareholders to tender their shares immediately.

Rusoro has offered to acquire all of the outstanding Class A common shares and equity units of Gold Reserve on the basis of three Rusoro shares for each Gold Reserve share or equity unit. The offer deadline is 5:00 p.m. (Eastern time) on February 18, 2009.

Rusoro has considered, amongst other matters, that Gold Reserve will have had more than two months to consider Rusoro's offer and to table any alternatives by the Expiry Date. It is time for the poison pill to be removed so that shareholders can respond to Rusoro's offer.

George Salamis,
Rusoro Mining Ltd.

Crystallex-Revemin workers' low wages, unsafe working conditions ... endured a fierce struggle to keep the plant open

VHeadline Venezuela News reports:
Employees at Crystallex' (former) Revemin-Mineras Bonanzas are enjoying new benefits after the takeover of the El Callao plant by the Venezuelan State. The return of the mining concession took place in October 2008, and since then, the Venezuelan Guayana Corporation (CVG) gold mining subsidiary CVG-Minerven has assumed the administration and recovery of their mineral processing capacity.

Dennis Ramirez, secretary general of the Revemin union Sintrarevemin, acknowledges essential improvements and changes and says "we endorse CVG-Minerven's actions ... we've had substantial improvements in production and food bonuses and other contractual benefits thanks to the work of CVG-Minerven president Luis Herrera to push the change from (Crystallex) Mineras Bonanzas-Revemin back into the hands of CVG-Minerven."

Before becoming part of the CVG holding company, Crystallex-Revemin workers had low wages, not to mention unsafe working conditions in different areas; all of this was denounced by Ramirez who, together with his workmates, endured a fierce struggle with Crystallex to keep the plant open. Once the bitter end (with Crystallex) was achieved, he says it's now time to reap the reward and to show that the company (CVG-Revemin) is producing more thanks to recently-implemented changes in conveyor belts and equipment maintenance. He says that everything has accomplished in record time following Revemin's return to State control: "Substantially, the reversal process took eleven days to take the plant back to State control in such a way that all the 141 workers immediately started to receive the benefits we enjoy now."

"Crystallex used to pay very low wages ... an average of BsF.28 ($13) a day, and
now it's BsF.40 ($18.60) ... in other cases it was greater ... from BsF.700
($325.60) a month to BsF.1,600 ($744.20) ... and, besides, the workplace is
different now, safer, cleaner and more pleasant than when it was run by
As for a trade union unification, proposed by the southern miners, Sintrarevemin's Dennis Ramirez says that it will certainly strengthen both CVG-Minerven and the unions although a standard mining contract "is something we have discussed, although we haven't reached any concrete consensus on the subject."

Despite this, Ramirez told reporters that not everything is a bed of roses and that the union must continue an appeal to force Crystallex to settle a series of debts left behind from their involvement in Revemin-Mineras Bonanzas. Among the most affected is a group of nurses who have not received back pay for weekend overtime and meal bonuses.

CVG-Minerven operations supervisor Francisco Gonzalez says that the company now runs two conveyor belts which had the belts replaced to improve performance, and that mineral processing has been increased from 400 to 1,200/1,500 tonnes per day. As for environmental issues, dust emissions controls for activated carbon used to increase gold recovery have been enhanced and water used in the process is repeatedly recycled.

Industrial Safety inspector Jessica Hurtado says that since the takeover from Crystallex last October there have been no accidents, and that this, in itself, is a great achievement.

CVG-Minerven's plant manager Emir Rojas says that what has happened at CVG-Revemin is outstanding, and that what surprised him most was the mature behaviour of the union at the moment when Revemin was taken out of Crystallex' control back into State hands ... he says that this is evidence on its own that CVG-Minerven will keep doing their best to improve Revemin and to allow for maximum recovery from mineral processing.

  • Crystallex vice president A. Richard Marshall in Atlanta was this morning unavailable for comment.
VHeadline Venezuela News

Venezuela's iron ore production to rise to 25 million tonnes by 2013 with US$8 billion investment

VHeadline Venezuela News reports:
President Hugo Chavez says that iron ore production is expected to rise to 25 million tonnes per year by 2013, with an investment of US$8 billion. He was speaking during a ceremony at the reactivation of the Cerro Bolivar mine in Ciudad Piar with an estimated production of one million tonnes for 2009 ... "With this, we'll be increasing production 25% for all ores."
  • Current production is in the order of 21.3 million tonnes, including 18 million tonnes of raw iron ore and 3.5 million tonnes of liquid steel.
According to a report in the regional newspaper, Correo del Caroni, the President did not mention the effects of the international financial crisis on the Venezuelan steel industry, considering that the fall in prices and demand has already stopped most of the regional briquettes producers, with relevant repercussions in production, sales and income.

Chavez said that a new iron ore concentration facility is scheduled to start operations in September 2010, "allowing for increased yield from the higher grade iron reserves." The President revealed that US$57 million has been approved for a second stage and that "an additional $149 million is required during 2009 to keep the project going ... $57 million for the first quarter, which is the amount I'm approving now."

As a long term goal -- thru 2018 -- production is estimated at 30 million tonnes ... 25 million tonnes raw ore and 5 million tonnes of liquid steel ... "this projection illustrates Venezuela's industrial projection for the coming decade," Chavez said.

Basic Industries & Mining (Mibam) Minister Rodolfo Sanz has pointed to an expected increase in iron ore production capacity which should raise steel production to 7.8 million tonnes per year by 2013 with the incorporation of the new 1.5 million tonnes per year Siderurgica de Orinoco (SIDOR) facility.

"We're going to increase Sidor's capacity from 4 to 6 million tonnes with a total of $200 million in investments this year," Sanz said adding that it is important to note that steel production from Sidor dropped 729,000 tonnes, to 3,578,000 tons in 2008 ... 16.9% less than 2007 production of 4,308,000 million tonnes.

VHeadline Venezuela News

Unions: Convenient now to complete the permanent return of Revemin, Las Cristinas or any other project to CVG-Minerven

VHeadline Venezuela News reports:
Venezuelan Guayana Corporation (CVG) gold mining subsidiary CVG-Minerven union leaders Jesus Guerra, Julio Salazar and Jose Caraballo have come out strongly in opposing moves towards unity on a standard employment contract within the industry.

Guerra, Salazar and Caraballo agree with a proposal for the unification of labor contracts for the miners in the south of Bolivar State but that it is not the best moment to implement any change since some of the unions are in the process of renewing their management structures and, because of the uncertainty, it is difficult to have any open discussion on the issue.

Writing in the Sunday (February 1) edition of the regional newspaper, Correo del Caroni, reporter Natalie Garcia quotes Jose Caraballo as saying: "The feelings of all the workers is for unification. We all want to have the same socio-economic benefits for all. That's our goal, however, we all know that everything has its proper time ... and this is not it."

"According to the law, the unions may not request labor changes or initiate demands while internal elections are taking place, so let's follow the rules," he added. "When new union leaders are elected, it will be legal to proceed ... that's the solution, according to the law."

In statements, Sinmioro (Industrial Gold Mining Workers Union) secretary general, Elby Soto has described the current management at CVG-Minerven as "ill-fated," but Jose Caraballo says that "there are different opinions between workers, but when we see that the negative opinions are in the minority, very small, we know that we're on the right track."

Caraballo adds: "During this administration, the company has paid Bs.F 24 million ($11.16 million) in labor liabilities, i.e. all weekend overtime since 1991 ... this shows that the workers are getting payments that we thought we had already lost. There are still some payments overdue, but the good thing is that the workers have not been denied the company's willingness to settle outstanding debts."

"All of the basic industries are suffering from the crisis, yet CVG-Minerven has been paying labor debts and it's been hiring personnel ... just lately they hired 60 people ... so, for the populations in the south that have slow development, we can see that management wants them to develop faster. We also see that they're training personnel, since, as CVG-Minerven grows, it'll need more people. It's a privilege for us to be at the head of the southern mining communities."

In similar fashion, Jesus Guerra points out that "for the first time there's a political willingness, and in this case CVG-Minerven is about to become the spearhead of economic transformation in the south of Bolivar State, which will bring some balance to the national economy. We believe that the 'reconversion' of mines and treatment plants ... which have been in the hands of transnationals ... is especially appropriate in these times when economies are taking refuge in gold to face the global crisis."

Talking about the reversion of the Tomi, Victoria and Sosa Mendez mines to the Venezuelan state, Guerra says that "(the government) concluded that it's in the strategic interests of the State to manage its own gold resources, because, one can only guess what the transnational companies' attitude would be if they had (control over) the gold in these times of crisis. Since, in the good times they never made any significant social investment, never made any effort to do something, they would of course do even less, and would save the gold to safeguard their own interests."

For Guerra it's time for Venezuelan workers to exploit the mines so that the benefits remain here ... "In Venezuela there's not only the technology, but also the capacity for everyone ... especially in this area ... to develop any scale of project, from small mines up to the size of Las Cristinas."
"We believe that it's convenient now to complete the permanent return of Revemin, Las Cristinas or any other project to CVG-Minerven which should become the matrix to ensure benefits for the State and all the people."
Sinmioro's labor director and organization secretary Julio Salazar adds: "We're committed to this process and we're grateful for the policy to revert companies like Revemin and Jin Yan to State ownership. We believe the company is complying with the social agenda ... something that the transnationals never did ... CVG-Minerven is doing it with this new management."

After seeing a recent increase in CVG-Minerven gold production, President Hugo Chavez said that gold production will rise from slightly over 4,000 kilograms to 8,000 kilograms during 2009 and Caraballo believes that it is indeed possible due to the number of mines that have been reclaimed by the State and which are now under the tutelage of the CVG mining subsidiary.

Jesus Guerra adds that "under present conditions, the workers are happy since it seems that, through politics, the Revolution has finally arrived in this sector ... we're ready to channel all our efforts and to commit ourselves as a workers' vanguard to take on the responsibilities of (Venezuelan) people that knows how to exploit and administer our own resources."

VHeadline Venezuela News

Monday, February 2, 2009

Christopher Columbus "knew" where he wanted to go, and what he wanted to accomplish...

VHeadline commentarist and money market expert Fred Cederholm writes: I've been thinking about inventories ... about Christopher Columbus, the Obama stimulus putsch, housing, and unemployment! An inventory refers to a categorical listing of things. It can be used by an individual, business, or governmental unit to take stock in what is available for consideration in making their forward moving decisions. It is an accounting of items at a snapshot in time -- a benchmark reckoning.

After all … how can you plan for where you are headed, if you don't have an inking of what you've got on hand when you started out?

You see Christopher Columbus "knew" where he wanted to go, and what he wanted to accomplish. He just wasn't certain where he was … relative to his goal destination.
When he started out, he lacked an honest sense of direction -- he forged ahead. Progress was in days transpired. When he "arrived," he really didn't know where he was. When he returned and claimed success, he really didn't know where he had been. And… he did all of it on borrowed money!

Sound familiar? Humm!

Planet Earth is about to undertake similar voyages of collective discovery ... the major global economies are looking at a systemic meltdown ... economically, financially, and monetarily. All are embarking on their individual quests to fix "their" messes, yet few are considering what the impact of any successes (or failures) will have on the rest of the group. All "talk" about the astronomical costs, yet none have "inventoried" (or accurately quantified) those impending costs behind their malaise/travails.

Since the US economy has been the driving force behind the world's consumption
of goods and services, Uncle $ugar's recent apocalyptic downturns, and the
newly-installed Obama administration's stimulus planning are under the
microscope and the spotlight of all global parties.

As snips and snippets of the Obama team intensions leak out, it becomes clear that the economic crises (and the costs of resolution/turnaround) are escalating on every front. The numbers still continue to grow, we have yet to see any progress from the trillions spent to date from the previous administration, and we don't have a clue as to the ultimate costs and polices ahead. Housing, unemployment, and consumption HAVE been IDed as central targets for the stimulus. Yet, do we know where we are as far as the bottom? In a word… NO!

The Administration is pushing hard to begin their turnaround, but toward what end? And … to what definition of "success?"

A comprehensive inventory of non-performing loans at the major US banking/financial giants, including the GSE's Fannie, Freddie, and Ginnie has not been performed! They have tapped into 100s of billions of assistance to date, and are now returning to the public coffers for more. We don't have a clue what the summation difference is between market value and the outstanding mortgages. Are they multiple billion underwater, or mega trillion?

As more properties default into the resale market and prices continue to drop, what is the growth in deficiencies (losses) for each 1% decline in resale market value(s)? If those inside the Administration, the US Treasury, or the FED know, they certainly aren't telling the public!

Without such quantification, I strongly suspect we are only ONE-THIRD to the Real Estate bottom. We seen a majority of the Sub-Primes loans unwind, the Alternative-A category is only beginning, and the Lion's share of the negative amortization interest only ARM's looms on the horizon. ONE THIRD may be a correct presumption.

The Obama team has (for now) upped their job creation goals to 4 million new jobs in two years. Employment fell by 1.9 million in the last four months of 2008. We are now looking at losses of 500,000 to 600,000 a month for 2009.

Do the math, is this enough? The Obama plan calls for mega buck infusions for infrastructure to create jobs. Such may work fine for those unemployed from the construction sector, but what about those from banking/ Wall Street, retailing, mfg, and services?

  • How "equipped" are they to build roads, bridges, schools, railroads, airports, and the like. What ARE the skills of our unemployed?

Then too, how many of them are the newly "green carded" (or illegal) aliens matriculated into the US economy during the boom years?

What is our responsibility for them?

Fred Cederholm

Labor Minister says that companies opposed to Venezuela's national interests must go to into State control

When Roberto Hernandez was sworn in as Minister of Labor & Social Security
in April 2008, President Hugo Chavez told him that his major goal was to promote trade union unity, which is crucial for the government to build socialism. Nine months later, Hernandez says that he has done everything possible to achieve that goal, but he concedes that the working class is still fragmented. The minister claims that the purpose of his work is not only the consolidation of pro-government trade unions, but also to merge the opposition trade unions under the umbrella of a union movement that brings together all workers, notwithstanding their political position.

This concept concentrates the only way for socialism to move forward to the original plan: the involvement of the workforce in Venezuela's production model.

As there is a long way to the unity of trade unions, the government has outlined alternative strategies to get people involved in the production process. One example is the National Employment System, in which community councils act as coordinating agents. This system began operating in central Yaracuy state late last year, and is also under way in the states of Portuguesa, Lara, Aragua and Carabobo. "It is a system we are implementing for the first time ... uur main interest it to get community councils involved to conduct a census of people that require to be employed."
In the socialist model the government intends to implement, which is the role of workers in the management of the means of production?
The main goal of socialism is to promote wealth distribution and to transfer the administration of wealth. The Venezuelan society must assume all the economic, social, political and cultural activities. For that reason, the community councils are a major tool to achieve socialism. At the same time, the workers are the cornerstone of socialism. Therefore, it is not possible to build socialism without an organized and united working class.
Which is the role of workers in the production chain?
The workers organized in factory councils will assume the management of each production center. Of course, this is a long process and the main goal is the unity of the working class. If there is not unity, the factory council can be rather negative, since it could contribute to the division of workers. I insist that socialism means to give workers the main functions in the economic and political activities of the country.
The business associations claim that the private sector has been cornered...
That is not true. The private sector had not amassed so much profits as it has done in recent years.
President Chavez has said that the industries with labor disputes must be nationalized. Has the government set its sights on any of such companies?
-No. However, it should be clear that the companies opposed to the national
interests must be in state's hands or controlled by workers.

Patrick J. O'Donoghue's news and views from Venezuela -- Monday, February 2, 2009

VHeadline News Editor Patrick J. O'Donoghue reports:

Pro-government Simon Bolivar electoral commands undertook a nationwide electoral trial run on Saturday to test the efficiency of its machinery. Command president and Mayor of (Caracas) Libertador, Jorge Rodriguez says the rehearsal took place in 11,481 voting centers. The United Socialist Party of Venezuela (PSUV) and allied parties, Rodriguez points out, are fighting against lies and disinformation on the part of the opposition, one of whose principal aims, he claims, is to sow violence and to create uncertainty among people during the referendum campaign. PSUV vice president, Aristobulo Isturiz highlights the objective on referendum day, February 15, namely to secure a high participation in zones where the government won regional elections and around 80% where the opposition won.

Known as "Peace Walker," Colombian Gustavo Moncayo, whose son remains a hostage of the Revolutionary Armed Forces of Colombia (FARC), has announced that he will begin a new walking tour to collect signatures calling for a referendum on a humanitarian agreement with guerrilla forces. Moncayo made the statement in Villavicencio (Colombia) as he awaited the release of four more hostages. The renowned walker says he hopes to collect around 2 million signatures necessary for the Colombian government to accept a referendum on the matter. Last year, Moncayo walked 950 km from South-eastern Colombia to Bogota and entered Venezuela through Tachira State stopping at several State capitals on his way to Caracas where he was received by President Chavez.

Everyone in Venezuela from the opposition to the government has condemned the forced entry and vandalism inside the main synagogue of Caracas.The Israeli government has blamed the Venezuelan authorities for instigating attacks against Jewish targets because of its stand in the Israeli-Palestine conflict. Israeli Foreign Minister, Yigal Palmor says the attack, which took place on Saturday, could not have occurred without the approval of the highest state authorities and she condemns those physically as well is morally responsible for the desecration. Israel has no more message for the Venezuelan government, the Foreign Minister declares, because relations between the two countries were "cut off abruptly" by President Chavez.
According to news sources, a group of around 15 heavily armed people overpowered
synagogue guards and remained within for four hours destroying the main objects
of Jewish culture and spraying graffiti against the Israel State.

The Venezuelan government has been quick to condemn what occurred in the synagogue in Caracas as a criminal act of vandalism. Foreign Minister Nicolas Maduro has promised the Jewish community in Venezuela to investigate and apply justice to those responsible. Maduro brands those responsible for the outrage as an "anonymous group"waging a campaign to discredit the Venezuelan government for its support of the Palestinians. The Minister insists that nobody in Venezuela is persecuting the Jewish religion and that the incident will be investigated. The government's criticism, The Minister contends, is against Israeli elites and not the Israeli people.

Venezuela's Cardinal Jorge Urosa has condemned the attack on the synagogue situated in the Mariperez district of Caracas and calls on all sectors of society to reject religious violence. The Cardinal also states that the country is not interested in the Arab-Israeli conflict and insists that the authorities open an immediate investigation. Venezuela, the prelates insists, is a pacific country ... "we want to seek peace and cannot agree with this political violence ... violence of every type ... now it is anti religious violence, which we reject."

Labor & Social Security Minister Roberto Hernandez has appointed Carlos Millan as special labor inspector to investigate the conflict at the Mitsubishi plant in Anzoategui where two workers were killed by police attempting to evict workers who had taken over the plant. The Minister says the appointment is aimed at speeding up and dealing with all petitions introduced by the workers who occupied the plant since January 20. Millan forms part of a special committee set up by Hernandez. Today Social Security deputy minister, Yvan Delgado Abreu and labor relations director, Ramon Huiza will meet workers to assess their complaints lodged at the Anzoategui inspectorate and set up a timetable of work.

According to the president of exchange administration committee (Cadivi), Manuel Barroso, 94,000 people have been suspended from applying for preferential dollars because they have been unable to legally clarify transactions they made abroad. Speaking on a political talk show on Televen channel, Barroso reports that of the above number, 80,000 did not attend a summons to explain their transactions and of the 17,000 that did turn up, only 3,000 were able to prove a correct use of dollars received. Barroso adds that agents found plenty of dubious invoices and even rubber stamps on passports but without any register of migratory movements. Last year, Cadivi authorized $4.7 billion to credit card holders and this year the assignment of dollars has been cut drastically to stamp out abuses.

Patrick J. O'Donoghue

National Iron & Steel Corp reaches strategic agreement with Swiss CME to re-activate mining operations

VHeadline Venezuela News reports:
The Venezuelan government has created a National Iron & Steel Corporation and has reached a strategic agreement with Swiss Commodities & Minerals Enterprise (CME) Ltd to re-activate iron mining operations at the old Cerro Bolivar mine in southeastern Bolivar State.

President Hugo Chavez Frias, who made the announcement during a two-and-a-half-hour national TV/radio broadcast accompanied by CME CEO Tyron Cerrao, Basic Industries & Mines (Mibam) Minister Rodolfo Sanz and top government officials, explained how the new corporation will plan and control all activities in the iron mining sector from exploitation thru resource transformation.

After a contract-signing ceremony, President Chavez announced that a production goal for the first year of re-activation has been set at one million metric tonnes rising to three million metric tonnes in the second year of operations ... the entirety of the iron production (which is associated with other minerals -- mainly phosphorus -- will be in the hands of the recently created National Iron & Steel Corporation as part of the Venezuelan Guayana Corporation (CVG).

Commodities & Minerals Enterprise is to be sold to the Popular Republic of China as part of an agreement that will see the Venezuelan government invest around US$220 billion in the development of mining, agricultural, oil & gas, power generation, infrastructure and housing projects over the next four years.
  • A report carried in today's edition of regional newspaper 'El Carabobeno' says that the government will generate necessary funds from the National Development Fund (Fonden) although no amounts were detailed.
President Chavez is ignoring threats from the international Ternium consortium who have threatened to take the Venezuelan government to international tribunals following the nationalization of Siderurgica del Orinoco (SIDOR) last year.

"Some people are saying dumb things ... that they are going to sue us ... well, they can if they wish ... but if they do sue us, it'll be the worse for them" Chavez said, reminding Ternium that they are still negotiating payment. "They are voicing threats ... let them threaten ... we have lawful right and no international organization or influence will make us give up our will to breaking free ... it is Venezuelans who rule here."

Chavez accuses this international consortium of having looted Venezuela of US$-millions by "evading taxes and royalties numerous times."

Meanwhile, Chavez said he had given orders to deport some 30 Colombians being held by the authorities in Caracas on suspicion of involvement with paramilitaries. The Colombians were captured last week in a working-class neighborhood in the east of Caracas. First reports said the individuals were infiltrated paramilitaries, but Chavez clarified that they were found to be in Venezuela without proper identification and that their deportation was ordered after police investigators determined that they were not dangerous.

VHeadline Venezuela News

Obama and Chavez to meet in Trinidad in April

Caribbean Net News (Oscar Ramjeet):
US President Barack Obama will have a face-to-face meeting with his Venezuelan counterpart Hugo Chavez in April in Port of Spain, when the two leaders will be among three dozen heads of government and state at the three day Summit of the Americas. This information was confirmed by Summit Secretariat Communications Co-ordinator, Felipe Noguera. Top of the agenda of the Summit will be burning energy issues in which both the United States and Venezuela have a keen interest.

The Trinidad Express reported that Noguera told newsmen that Secretariat Chairman, Ambassador Carlos Luis Alberto Rodriguez indicated that Venezuela and the USA were at loggerheads on energy issues to be highlighted in the Declaration of Port of Spain. The declaration -- outlining policy goals in coming years for the 34 countries in the Americas in the fields of energy, education, environment and health -- will be signed by the leaders during the April 17-19 summit.

Asked to identify the contentious energy issues between the two countries, Noguera noted, "Any energy related issues that exist or emerge between the United States and Venezuela will be discussed during the Summit by both leaders who are expected to be present." He added that the Secretariat was not at liberty to discuss the issue publicly.

Chavez has been at loggerheads for months with former US President George W Bush accusing him of being a warmonger. Two months ago he expelled the US Ambassador to Venezuela. Since Obama took office on January 20, however, Chavez has toned down his anti-US rhetoric, even saying he has great expectations of the new US President.

Noguera confirmed also that two cruise ships had already been booked to provide floating hotel space to accommodate visitors for the Summit. Works and Transport Minister, Colm Imbert had said a week ago that every available room in hotels and guesthouses have been booked, forcing the Government to lease the cruise ships.

Caracas Mayor Cabinet official seized by hard-line Chavistas as Referendum tension mounts in Venezuela

Latin American Herald (Jeremy Morgan):
Metropolitan Mayor Antonio Ledezma revealed that his Cultural Secretary, Victor Carrillo, had been "detained in an irregular manner" by hard line government supporters last week. Ledezma said he had been given a video purportedly showing a group of individuals taking Carrillo away. He linked those people with the Tupamaros, one of several shadowy groups on the fringes of President Hugo Chavez' powerbase.

The Mayor said Carrillo had been taken to the offices of the Metropolitan Prefecture, which has been occupied by armed men who also appear to be supporters of the president, or chavistas. Then, as Ledezma put it, Carrillo was "supposedly rescued" by officers from the Policia de Caracas, the local force in the Libertador municipality in west Caracas.

The Mayor attributed the bizarre incident to Carrillo's earlier decision to enter a building housing Radio City. It, too, has been forcibly occupied by chavistas, and is legally the property of the Metropolitan Mayor's Office. Ledezma hails from the opposition, and was chief executive of the capital for a term during the 1990s. He won last November's election for city Mayor by beating former education and sports minister Aristobulo Isturiz of Chavez' ruling United Socialist Party of Venezuela (PSUV).

The municipal Mayor of Libertador, who wields political control over Policia de Caracas, is Jorge Rodriguez, a former head of the electoral body, vice president and key player in the PSUV. He is the only surviving pro-Chavez Mayor in the city after the opposition's near clean sweep at last year's elections. Ledezma has been the target of disruptive and at times violent conduct by groups of chavistas since becoming Mayor. Furthermore, there's suspicion that the security forces in downtown Caracas are in cohorts with the disorderly elements ranged against Ledezma. He accused the government of trying to "destabilize" the run-up to the referendum on February 15 on Chavez' proposed reform of the constitution to remove a ban on successive re-election.

When Ledezma first arrived at his offices as Mayor, he was prevented from entering by men claiming to be municipal workers who were smashing windows and damaging other property. Days later, the National Guard barred Ledezma from entering a building which used to house the old Supreme Court but where city council meetings had been held for the last eight years. Ledezma had called the first meeting of the newly elected council, which is now under opposition control. With the old Supreme Court still barred and bolted, the council at present assembles wherever it can.

Apart from the Prefecture, several other premises used by departments under Ledezma's control have been taken over by unruly individuals, some of them with firearms. Employees have been threatened and told to get out. The Libertador municipal police, the Metropolitan Police and the National Guard have done curiously little to rein in these clearly unlawful activities. After the Carrillo incident, Ledezma vowed that he wouldn't be provoked or distracted from doing his job as Mayor.

"Somebody who's winning doesn't play with violence," he said. "We are armed with patience. This is a provocation, what they're looking for here is for people to lose their tempers. I call on all the civil sectors for us to continue going forward, taking part on February 15 to ratify what was decided on December 2, 2007."

That was the date of a referendum which rejected an earlier attempt by Chavez to lift the ban on repeated re-election. His proposal lost by a margin of about two percentage points of the votes cast, in what was his first electoral reverse since first coming to elected power in 1999.

Students aligned to the opposition held a "consultation" on Chavez' proposal at universities in the capital on Friday. Ricardo Sanchez, a student leader at Universidad Central de Venezuela (UCV), said the turn-out had been "massive."

Chavez blames on "the oligarchy" a raid on Caracas synagogue

El Universal:
"Does who benefit from this or these violent acts? Neither the government nor the people or the revolution benefit from this. Efforts are under way to disturb the climate prevailing in Venezuela," stated President Hugo Chavez on Sunday referring to an attack early on January 31st against a synagogue located in Mariperez, north Caracas.

"They are trying to change the dynamics that is under way; they are trying to break a trend that is under way, and you exactly what I mean. They are trying to cast a shadow over a people's victory whose date has actually been set on the calendar," Chavez said in a mandatory radio and television address.

"It's them! It was them!," stressed the ruler. "I am making this statement before the country. Mr. Minister (of the Interior and Justice) Tareck El Aissami, we will do everything in our power, everything possible under the law, to demonstrate the real causes behind this act," the Venezuelan ruler added. "The oligarchy is violent. Oligarchy kills, plots, threatens to set Caracas ablaze, burns Avila mountain (a mountain range north Caracas), and uses some soulless youth as cannon fodder, by driving them to violent acts."

Sunday, February 1, 2009

Karl Marx: "The crowing of the Gallic cock in Paris will once again wake up Europe”

VHeadline commentarist, University of Los Andes political sciences professor, Dr. Franz J. T. Lee writes: In a previous article here, I wrote: "Progressively, as it is nearing its universal, finite end, our world order, our mode of production inexorably is converting itself into a mode of self-destruction."

We indicated how world imperialism was destroying capital, labor forces, infrastructures and wealth in a desperate attempt to overcome a cataclysmic situation, to rescue itself. To crown it all, in the 'Telegraph' Edmund Conway in Davos reported that during the past five quarters, the global crisis has already destroyed "40% of the world's wealth ... and business leaders expect the global economic crisis can only get worse."

What does it mean to 'destroy 40% of the world's wealth'?

It means, that after the physical and intellectual exploitation and destruction of thousand millions of workers, now also that what they produced, ... the goods, foodstuffs, wares, arms, use values, exchange values, capital and profits ... all are being destroyed, not because of scarcity or want, but because of structural, systemic contradictions, of mega-overproduction, are converted into wastage, into nothing, while millions and millions die of hunger, poverty sicknesses and misery.

Hence, contrary to the myopic great expectations of some participants of the World Economic Forum that "the crisis will endure for some time," I warned that 'for some time' could result for everybody in the following existential dilemma: "Imperialism can't offer any lasting solution to the global crisis without annihilating itself."

This even News Corp chief executive Rupert Murdoch is beginning to note, that
"the atmosphere was worsening -- despite global economic confidence plumbing the
lowest depths on record."
Although the economic experts warned that "another crisis at some point in the future was inevitable," they did not study Marxist political economy and Hegelian dialectical objective idealist philosophy, else they would have known that capitalist corporate imperialism is neither infinite, nor absolute; like anything else on this globe, eventually space and time will also devour it, as such, its horror and terror will and can not last forever.

Let us take a quick politico-economic stroll down scientific, socialist memory lane.

The last Great Depression of 1929, including its concomitant collateral destruction lasted till 1945, and it spilled over into global colonial wars, genocide and massacres till this very day. This global recession and depression is gigantic: it is like comparing the mole-hill of yesteryear with Mount Everest of today. It is called globalization, it is capitalism globalized, it is here to stay globally, yes, to die globally.

This is no secret; over the last two centuries. many a serious scholar, non-Marxist or socialist, Simon Bolivar or Ernest Mandel, Fidel Castro or Frantz Fanon, Rosa Luxemburg or Clara Zetkin, all of them warned about this coming structural, endemic and epidemic global terror. The capitalist economic laws of development ... as described in Marx's 'Capital' and other socialist writings, ... competition, monopolization or concentration, at the level of globalization, super technology and extra profits logically were leading towards this current chaotic and anarchic maelstrom. They also explained trans-historically why and how this capitalist system will inexorably perish.

In December 30, 2007 I explained why in 2008, a direct military invasion of Venezuela by the USA would be impossible, would be suicide, "because it could spark off that what Marx and Engels already in 1848 have predicted in their "Manifesto of the Communist Party": Globalized Chaos and Anarchy."

Furthermore, with reference to globalization, I quoted what the founding fathers of scientific and philosophic socialism were saying and predicting: "A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells."

More than ever the following is still valid in the epoch of globalization: "For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. " (Ibid.)

This is what happened in Greece the other day, and in France a few days ago.

All this the great corporate moguls, their think tanks, the Bilderberg Group, the Club of Rome, NASA, the Pentagon and NATO all know for sure, much more profound than we could ever imagine. Whom the Murdoch Empire does not inform about the real and true apocalyptic state of affairs are precisely those who still have a possible solution in their hands, not pathological consumerism, not mesmerized brains, not Gandhist pacifism, but Fanonian self-defense, but workers' class consciousness and struggles; not Orwellian global fascism (sold as democracy), not Stalinism (ideologically equated with scientific socialism), not conservatism and reform, but Permanent Global Revolution against Perpetual Global Terrorism. The opposite of imperialist violence is not world peace, it is Global, Human Emancipation.

When and where ever across the previous millennia, all along the brutal global accumulation of capital, any 'coolie', 'Kaffir', slave, peasant, serf, worker or house-wife really enjoyed 'world peace'?

In a recent article I also suggested that as toiling pack-animals we should go on global strike, go home for a month, go and play with our kids, make love and no Gaza, then we would see our reality, then we would not need Marxist literature anymore, then it will become clear that the whole globalization is an endless transatlantic slave trade, a Triangle of Bermuda World Market, for millions; yes, a daily My Lai, Sharpeville, a 'Caracaso', Fallujah and Gaza.

And yet, without the class conscious struggles of these 'wretched of the earth,' of these billions of toiling slaves, the species ma, humanity, has no future in our galaxy. These 'miserables' (Hugo), these 'speaking tools' (Aristotle), form the infinitesimal possibility of global emancipation. Two million French workers already made an excellent start; they are setting the emancipatory paradigm for our last opportunity of self-liberation.

In the early morning hours, in Gaza, defying the Israeli reconnaissance planes, with militant optimism the Palestinian cock was crowing Victory. Could it be that Marx will accomplish another scientific prediction? In 1848, Karl Marx said: "The crowing of the Gallic cock in Paris will once again wake up Europe.”

Is this what is taking on proletarian contours currently in Paris?
Franz J. T. Lee