I have been extremely busy this week. A lot has happened that should be posted about, but I had little time to do it. Thus, a short wrap up of important news this week:
-Chavez shakes up military authorities. President Chavez changed the Minister of Defense, removing retired General Prieto and replacing him with his buddy, classmate and soul mate General Garcia Carneiro. Garcia Carneiro’s position as Chiefs of Staff will be filled by General Raul Baduell. Baduell is the General that single-handedly forced the return of Hugo Chavez in April 2002. there have been many interpretations as to the meaning of the move. Some think Baduell was weakened by going to an administrative post. Others think Baduell is outright pro-Chavez and it is irrelevant. My understanding is that Baduell not only feels that the Constitution has to be followed by Chavez, but that he has told the President so. Baduell has political ambitions of his own and Chavez knows it. To me Baduell is dangerous because in any conflict he could come out on top and forget about the law if he can grab power. For the same reason he will not allow Chavez to grab absolute power if he tries. He thinks he is much better.
-While Chavez keeps complaining about the fact that banks don’t lend to the agricultural sector the amounts required by law and prefer to pay fines, Banco Industrial de Venezuela, the largest state-run bank, has the smallest agricultural portfolio in the banking system.
-All major and minor political parties, except Primero Justicia and Proyecto Venezuela, have informally told the Coordinadora Democrática that they will join the movement to field single unity candidates for all Governorships and Mayoral races. Primero Justicia is likely to join the effort putting the pressure on Proyecto Venezuela to join. This effort, if successful, would according to polls win most Governorships in the country.
-Despite the fact that it is illegal to declare candidacies until February 25th. now that the date for regional elections ahs been set for July 25th., Chavez’ MVR party announced its fourth candidate for Governor. This time Ramon Machuca declared his candidacy for Governor of Bolivar state.
-Venezuela issued a 30 years bond at a yield to maturity of 10.25%. The US$ 1 billion issue was oversubscribed by a factor of four. With this issue the country has a very well defined yield curve for the first time in its history. The Minister of Finance, who knows what he is doing, said that the funds would be used to pay Bolivar denominated debt. If true this is positive, but I suspect that political pressure will in the end prevail and new local debt will be issued anyway.
-Both Colin Powell and Condoleezza Rice, separately called on the Chavez administration to stop throwing stumbling blocks in the path of the recall referendum and allow the process to continue.
-The Caracas Stock Exchange rose 15% in the first five days of the year. A combination of cheap valuations, expectations of change and a strong devaluation of the currency in the last two weeks of 2003 were the main reasons.
-A report from Chavez MVR party to the President leaked to the press. In it, it is recognized that the opposition gathered more than three million signatures but 400,000 less than it claimed (just over three million according to the report). The report continues by saying that 30% of them “can” be invalidated, which would stop the referendum.