Archive for July 1st, 2003

HRW writes tough letter to Chavez

July 1, 2003

In the past I have been critical on the softness of Human Rights Watch on the Chavez Government. Indeed HRW was soft on Chavez and at times too tough, in my opinion, with the opposition. But with time HRW has come to see Chavez and his Government for what they are. In the interest of fairness I have to say that the turnaround has been amazing, as witnessed by the letter sent to Hugo Chavez by that organization. In the letter, HRW after some pleseantries on the agreement between the Government and the opposition, is very tough on the Chavez administration on freedom of speech and calling for investigation on the attacks on reporters. HRW also questions whether the recall referendum can take place without freedom of speech being guaranteed by the Government. Good for HRW!

To refinance is not to rip off

July 1, 2003

 


For the last four days (excluding weekends) Tal Cual, the afternoon newspaper, has been carrying a series of investigative pieces on transactions done between the Ministry of Finance and Government institutions. Thursday and Friday were devoted to a peculiar transaction by which the Government Development Bank, Bandes, swapped Venezuelan sovereign bonds maturing mostly in 2007, which are highly liquid in exchange for Ministry of Finance Notes, which are not only illiquid, but may even be questionable from the point of view of whether they are authorized or not by the National Assembly. The bonds were worth US$ 600 million. Now, to make this even more interesting or suspicious, the swap is done through a small New York broker, owned by Venezuelans. From the perspective of credit risk the operation made little sense, since the broker likely had to sell the bonds in the open market, to pay the finance Ministry with cash, that broker was the least likely market-maker you would go to. Moreover, it would also be the least likely credit risk either side would or should assume in such a transaction. Today, the Minsiter of Finance, Tobias Nóbrega, in El Nacional indirectly accused Tal Cual of making this political. Well, this is Teodoro Petkoff’s response to the Minsiter under the pseudonym “Simon Boccanegra” in page 2 of today’s Tal Cual. (Note: Not only are El Nacional and Tal Cual only readable by subscription, but even if you have a subscription, you can not link to individual stories):


 


Tobias Nóbrega responded with the proverbial argument of all of those that are caught with their hands in the dough: The criticism is “political” and are only looking to “aggravate fiscal problems” and torpedo the refinancing operations with national debt. This mini-reporter believes that refinancing debt is an entirely valid option and that to postpone reckoning is what all debtors in the world do. But what is not valid is to take advantage of the fiscal tribulations of the Republic to obtain personal gains. One thing is to refinance and another is to rip off. Some of the operations that have been made, have been performed using a triangulation, introducing a third actor which was completely unnecessary, who makes money and makes a commission that God knows how afterwards, how it is split, but to which should not be foreign to the Mephistopheles who prepares the pot for this stew., I want to correct the Director in his Editorial where he explained the case, because the profit, while large, is not as large as it was said. The consideration of the “amortization factor” was obviated, which reduces the current price of the DCB’s and Flirb’s and thus the profit. But a robbery is a robbery, no matter how big the bag. This will be explained tomorrow.


 


What an elegant way of calling people corrupt!

Picture from Tal Cual

July 1, 2003


Some people got up on a statute and put a cloth over Bolivar’s mouth symbolizing the Governemnet’s effort to block freedom of speech. (From today’s Tal Cual newspaper)

Picture from Tal Cual

July 1, 2003


Some people got up on a statute and put a cloth over Bolivar’s mouth symbolizing the Governemnet’s effort to block freedom of speech. (From today’s Tal Cual newspaper)

A quiet loss for Chavez’ integration policies

July 1, 2003

 


 The Chavez Government suffered another quiet loss at the recent summit in Colombia. Chavez has been speaking against both the Andean Pact (CAN) and the ALCA pact proposed by the US. He has however been speaking in favor of Venezuela joining MERCOSUR. The reasons are simply political. Chavez has argued that Venezuela is not ready to compete within ALCA. True. But Venezuela is not ready to compete against Brazil or Argentina either, so the argument is moot. The explanation is simply that while the US is the promoter of ALCA and the main trading partners in the Andean Pact are the pro-US Presidents of Colombia and Peru, MERCOSUR leading countries are Brazil and Argentina whose Presidents’ are more in tune with Chavez’ left-wing policies.


 


What was interesting at the Colombian summit was that Brazilian President Lula da Silva, suggested that Andean Pact countries together join MERCOSUR as a step prior to having the whole community join ALCA. Thus, in one stroke Chavez’ initiatives were dealt a severe blow. In fact, the final declaration called for the CAN countries to join MERCOSUR and the signing of the free agreement of ALCA no later than December 2004. A much different path than Chavez’ wish of unilaterally having Venezuela joining MERCOSUR and outright rejection of ALCA.


 


This all came after Colombian President Uribe publicly scolded Hugo Chávez in his opening speech, saying that “ countries should examine their conscience..that it was a shame not to fulfill CAN agreements….joining MERCOSUR can be done but respecting the CAN agreements and that it was a grave error to talk about integration while simultaneously trying to destroy it because of violations of the regulations”. Maybe that is why Chavez went to Cuba this weekend; he is trapped in his contradictions and the realpolitik of integration in Latin America.

The phantom public works

July 1, 2003

 


As usual Luis Egana does a fantastic job in his article today entitled “Public works of the revolution?”. I will not translate it is quite long, but essentially he points out that all of the public works announced by Chavez in the nationwide address with the Minister of Infrastructure, are actually works initiated by the Fourth Republic, which his Government simply removing the financing. On Thursday, Chavez personally handed out checks and contracts for these “public works” to individual and companies in a flashy program, carefully choreographed and orchestrated. Among the public works presented as new were the Caracas-Tuy railroad, the Caruachi dam, line 4 of the subway and the Guinche housing project. The best part of his article however was pointing out that in July 2001, Chávez also held a nationwide press conference to “present” almost the same list of public works. Egana then says: “later he got enthusiastic about other doings. In any case, we hope that these public works which represent the continuity of the state can be continued. The National reconstruction which Venezuela will have to embark in will need it”. Hear Hear!

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