Archive for February 2nd, 2007

A dark day that will enable Chavismo to legislate at will without regard for the principles of democracy

February 2, 2007

Two days ago the Deputies of the National Assembly simply gave up their jobs and their own mandate in order to enable Hugo Chavez to rule by decree for an unheard of period of 18 months in areas that not even the Deputies knew about in detail the day they voted on it. It was indeed a sad day for democracy and freedom in Venezuela.

There is no justification for this. Neither for Chavez to rule by decree, when his party has absolute control of the National Assembly, nor for him to get an Enabling Law like the one he has received. Enabling Bills have traditionally been given to Presidents so that they can initiate their Presidential terms with some degree of flexibility to impose their views on where the country should go in quick fashion and allow them to give priority to the main areas they want to impact strongly. Hugo Chavez has not only been in power for eight years, but he already has total control of the political system, so that the Enabling Bill seems largely unnecessary, least of all for such a long period of time.

Moreover, never in the country’s history was an Enabling Bill approved without specifying the Laws that were covered by it. What was approved this week gives Chavez too much power to change things at will and is in clear violation of the 2000 Constitution, as the new Laws will be approved without any consultation with anyone. Only the President and those at the top will know what will be in them and only the Organic Bills will have go to the Supreme Court, to be checked for Constitutional consistency.

One has to question what are Hugo Chavez’s intentions with these maneuvers. Throughout the discussions in the Assembly, a text of the Bill was discussed and approved which was not the one that was eventually approved in Plaza Bolivar on Wednesday. The whole affair was so secretive that the Deputies of the Assembly actually approved the Enabling Bill on Tuesday, without even having the text for it or knowing what would be in it. The text is an expanded version of the Hidden Enabling Bill published here, which shows that this is an autocratic Government, which does not discuss anything with anyone. But some fools still think this is a democracy.

The Bill defines such broad areas that almost any initiative, however absurd, could be approved within it, with absolutely no checks and balances. This is the anti-democracy, have an elected body yield legislative power to a man elected by the people, who never told the people that he would either do this or what would be included in it. In fact, we don’t know yet and might not know what the plan is until 18 months from now, when the final Bills are all decreed.

Think about it. A President is elected under the banner of XXIst. Century Socialism, that even Hugo Chavez claims is still an undefined concept. He then asks an elected body of 163 National Assembly Deputies, that they give up all their power to allow him to legislate in very broad areas of the social, political and economic structure of the country and allow him to do so, without telling them why, how or what he plans to include in it. Even worse, without the possibility of anyone at any stage questioning or debating it, except for the case of Organic Bills, which the Supreme Court will have to approve for Constitutional consistency. (But Chavez will in any case change the Constitution during the period!).

Let’s look at just two articles to give you an idea of the level of absolute dictatorial power to legislate given to the President and how much damage the lack of discussions on these Bills could have for the country for years to come:

—In the financial and tax sector, the Enabling Bill gives Chavez power to legislate on:

“Regulations that will deepen or adapt the financial system, both public or private to the (unknown!) Constitutional principles and as a consequence, modernize the regulatory framework in the monetary, banking, insurance and tax sectors”

Think about what this does NOT apply to. Chavez can change the Central Bank Law, the Banking Laws, the Insurance Laws and the Tax laws and we have heard the announcement that he plans to completly overhaul the commercial code, which regulates all commercial transactions. Of course, we have not heard why he wants to do it; just that it is “old” and has not been changed in a while. We do know that he wants to eliminate the independence of the Central Bank, which given how dependent it has been in the last few years, makes you wonder if they will simply disappear international reserves altogether or eliminate the only economic statistics which can still largely be trusted.

The financial sky is the limit…

–In the area of territorial organization Chavez will be able to legislate on:

“To issue regulations that will establish a new distribution and occupation of sub national spaces, in order to establish a new regionalization of the country to optimize the action of the State and which regulate the creation of establishments of communities in the national territory, which stimulate endogenous development.”

What this means is that Chavez will reorder how the country is run and organized at the State and municipal level in anyway he wants and can redraw, yes redraw the States, municipalities and its borders, locations an the like. Think about the fact that this means he can now make Zulia state, where he is not as popular, as small as he wants by biting chunks of the state off at will and adding them to other states. Similarly he can redraw every electoral district in the country to guarantee that his party will not lose his “hegemony”, using one of Chavez’ favorite words, in elections to come. We have heard little about this proposal, except that Chavez thinks we should do away with Governors and Mayors, allowing local communal councils to make all decisions. This means removing all possible sources of political power which may give rise to alternative political ideas and leaders.

Of course, Chavez never mentioned any of this during his campaign and the details are still quite fuzzy, but we are led to believe that the voters knew this and cast the ballot so that Chavez could do all this, even if today they still have no clue what it will mean or how to evaluate it. Even worse, in classic dictatorial style, this will not be discussed, argued about, defended or justified, we will wake up one morning and will be participated the how, who, where and when of all of it. And none of it will be subject to change improvement, complaint or modification. The Autocrat/Dictator would have ruled and some fools will stay claim Venezuela is a democracy because there was an election in December.

In eighteen months, Venezuela will be whatever goes through Hugo Chavez’ mind (or Fidel’s!) in the upcoming months. This bodes badly for the country as he will invent, improvise and create a monster, which will likely destroy this country much in the way it has been damaged both economically and politically for the last eight years.

It was indeed a dark day for Venezuela when the Enabling Bill was approved nd the Deputies that allowed this should never be forgiven for it. And those that still claim this is a democracy should simply be ashamed of themselves.

Fuerte aumento de la inflación en Enero

February 2, 2007

(English version here)

Cuando oí que la inflación en el mes de Enero había sido “solo” 2%, que anualizado se convierte en 30%, el numero me pareció algo sospechoso e inconsistente con mi experiencia personal en las ultimas cuatro semanas. Pero después leí que la categoría “Alimentos y Bebidas” había aumentado 4% (60% anualizado, 29.2% desde Mayo 2006 y 31.1% en los últimos doce meses) y entonces si me pareció consistente. Es necesario recordar que la inflación “oficial incluye rubros como azúcar, caraotas negras y leche en polvo, los cuales no se pueden comprar en ninguna parte a precios regulados. Es importante recordar que cuando la inflación era de mas del 20% a mediados del 2006, el Ministro de Finanzas de esa época explicó el aumento debido a la escasez “temporal” de tomates y cebollas.

Inflation jumps sharply in January

February 2, 2007

(Version en espańol aqui)

When I first heard that inflation for January was “only” 2%, which annualized would become 30%, I was very suspicious as it was not very consistent with my personal experience in the last four weeks. But then I read that the category “Food and Beverages” had an increase of 4% (60% annualized!, 29.2% since May 2006 and 31.1% in the last 12 months) and it seemed consistent. Remember this is “official” inflation which includes items like sugar, black beans and powdered milk which can’t be found anywhere at regulated prices. Recall that the 20+% inflation in this category last year was blamed by the previous Minister of Finance on “seasonal” shortages of onions and tomatoes.

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