AC Nielsen is a very reputable firm for surveys and marketing research so these numbers are certainly very credible (as is one of their sources Datos).
The last slide was surprising (even without the bold type
). Not only was I surprised by the magnitude by which class E's income had improved, but also by the fact that C and D are doing worse - inequality must have gone way down. C and D are doing this badly in the middle of an unprecedented oil fueled economic and consumption boom? Weird.
It is not news that Venezuela is enjoying a wild consumer boom and that this is behind much of his support. It is also not news that this is one of the main reasons Chavez won big on 3D.
It does make me wonder about this: Did Chavez win mostly because of the consumer boom and despite his pledge to introduce radical socialism? Does class E identify with his vague 'socialism of the 21st'? Do they think '21 socialism'is more of the same i.e. precisely the policies that lead to the last slide? or are they commited to more radical policies?
Most likely Chavez won because class E interpreted his 'vague pre-3D'promises as a rebranding exercise. He will just continue the policies that lead to that lovely 130% increase in income (and consumption), they probably reasoned. Will they stay on board for more radical stuff? Only as long as income and consumption keep rising.
In addition, is this increase for this class likely to continue? and more importantly will it be sustainable if economic circumstances get more adverse?
The post would be more interesting if it attempted to answer these questions instead of offering:
"The opposition can twist, turn, squirm and lie all they want but they can’t escape this fact: this is a government that has helping the poor as its central mission."
Tor, the good thing is that the 05 to 06 numbers were positve for class C- and D....I think they may have taken a large hit during the 03 to 04 time frame.
Tor, thanks for those comments. Chavistas do not want to answer those questions because for them they are too theoretical...as long as the oil is enough, everything else is so theoretical and we are just "bad losers".
I remember a time when the chavista bosses were talking about the proportion of GNP Chavez was spending in education.
Aristobulo Isturiz said one day it was X%, then Chavez said it was Y, another one said W and another one Z. The thing is: they did not even bother to meet one day and say "hey, folks, let's agree on how much we are spending (FROM THE OIL REVENUE) in education".
In Germany or Canada, you would say that if the public is % more optimistic, that is definitely a proof things are going fine. But then in Germany and Canada they do not live mostly from oil revenues (even if Canada does export oil), so the extra money people spend is actually spent in many things that are produced in the country (apart from empanadas or hamburgers).
I would like some statistics about how industrial export is increasing and how it is doing so as opposed to import of industrial stuff (that is: there is no real gain if we are anyway becoming more and more dependent on Chinese nails, Peruvian skirts, Taiwanese batteries, US tampons and Thai radios).
I think Ow will keep posting us with how happy people are spending all the windfall coming from our petrodollars (because I am Venezuelan and now Venezuela is de todos nosotros, right?). It does not matter if that means people are becoming more and more dependent on imported stuff being delivered to them.
Perhaps he will try next time to give us a report about how Iranian-Venezuelan car assembly plants or Chavez-face t-shirt factories or the BBC-known city-gardens are changing all that.
Let's see.
I wonder if chavistas ever read or heard of the Biblical story of the 7 fat and the 7 thin years...even if you are an atheist, the story IS interesting. We are going to get something worse than 7 thin years for the simple fact that we will be not only many more, but we will have more debts, people will be used to buying their new cars, the national industry will not be prepare to produce what they should and those who have the power (whether they are the IV Republic rich or the V Republic pseudo-communist rich) will increase prices on other things so that they can keep buying their luxuries as they are doing now.
The the people who voted for Chavez are going to be very mad.
Kepler
Kepler,
As usual you are off base. It turns out industrial production is up in Venezuela. Want to make a guess by how much before I do the post? I'll give you a day or so to try to figure it out.
Anyways, you sure are coming across as rather "apatriado". Would you prefer that Venezuela was in the situation from say, the 1990's? Was the country industrializing back then? Did it have "sustainable" development? Or was it just going down the tubes in every respect as all the numbers seem to show.
Chavez hasn't fixed everything but he has fixed some very important things. And that means he has fixed a few more things than his predecessors fixed.
Off topic:
Here is an excellent article on the enabling law:
http://www.opednews.com/
articles...2_a_false_p.htm
Turns out it isn't so novel at all - previous governments have turned to its use on more than a few occasions.
Also, the author didn't even point out that from 1961 to 1998 under the old consitutions constitutional guarentees were actually suspended more than they were in effect, something Chavez has never done.
BTW, the hat tip for the article goes to the excellent BovRevNet blog:
http://www.borev.net/
What is fun about the oppos high pitch screaming about the enabling law is their very newfound love for the AN. The all chavista AN was rubber-stamp, worthless, illegimate or even illegal. Now they are REALLY REALLY worried that AN might lose some power and that some VALUABLE and HIGHLY IMPOERTANT debates in the AN will not take place. 
I tend to agree with this type of statistics. Yes, his policies have improved the income of the lower classes. However, does his policies guarantee long-term benefits for those classes? The answer, to me, is a clear no. PDVSA is getting more inefficient by the minute. This is the one company that has to run to perfection. Even PDVSA employees -off the record, of course- will admit to being a bit disorganized. New projects are not being executed.
They are spending all the money and not reinvesting enough. It will catch up with them guys. Once again, mark my words.
Actually,
I think most of the opposition acknowledges that the only reason an enabling law could even pass is that the AN is STILL a "rubber-stamp, worthless, illegitimate or even illegal" body.
But it was an interesting game of semantics.
What are you, elliv, 12?
_______________
I've got say OW: your silence on the issue coupled by your desparation to find some source, ANY SOURCE, which can put this in favorable light, is highly amusing.
You realize that the OP ED you link is written by Eric Wertinger, right? He's actually the same PSF douchebag who publishes BovRevNet blog.
So, in his blog, he's citing his own editorial in rebutal of those critical of the enabling law.
And you're giving him a hat tip for finding his own article.
(Don't your handlers do ANY coordination at the embassy level?)
BTW - regardless of the general buffoonery committed by the paid shills of the revolution, you're both still full of crap.
EW: "It is important to note that this type of power-transfer is allowed under the Venezuelan constitution of 1999, which expressly permits the President to issue executive orders specifically within these issue areas."
Um, precisely.
The Venezuelan president doesn't need any legislation at all to issue executive orders. Neither does ours.
And that has what to do with the enabling law? Does that bill simply propose to authorize the president to issue executive orders? How very strange that would be...
The powers that CAP, Lusinchi, and Velasquez got back in the day did represent a surrender of power to the executive beyond the constitutional norm... but they were narrowly prescribed, and granted in order to deal with national crises evident to everyone.
The current powers don't seem to be, and the crises... well, if your blog is any measure, things are going great in Venezuela!
So why turn everything over to the King? As you point out, the AN is simply a rubberstamp anyways... so why not just keep stamping away?
It's starting to smell a little bit like Denmark!
Really, what national crises was CAP dealing with - too much oil revenue? 
OW, Congratulations!
What's your point man? It is a FACT that there's a lot of cash in the street, due to oil. Yes, we know, it's an oil country, oil prices are high. I though you were gonna impress me, really.
So, the real question that I want you to answer me is how are you gonna translate this cash consumption (maybe rev up by all those hummers that Chavistas are buying) into real development?? Long lasting development that can turn Venezuela from a 3rd world mediocre country to a develop country?
When OW answer me, he will also answer your question, Tor:
"The opposition can twist, turn, squirm and lie all they want but they can’t escape this fact: this is a government that has helping the poor as its central mission.""
Long lasting development that can turn Venezuela from a 3rd world mediocre country to a develop country?
Through socialistic planning feathers. State planning. This will be the motor in the economy that will solve basic needs and create growth, also with private capital.
Why is it that anyone who disagrees with the dominant view is automatically part of the opposition? Fascinating how more than a few comments made by people LIVING IN VENEZUELA are blown off and ridiculed- even though they make a hell of a lot of sense.
In terms of increases in income for the different social classes, you guys need to take a trip to Puerta La Cruz and look at some of the Chavista mansions being built. 10 to 15 bedroom Villas on the water with a dock in front to park the yacht.
People with the connections necessary to get the government to buy dollars for them at 2150 Bs. per dollar are becoming millionaires rather quickly because they're bringing the money back in through the market in Caracas at over 4000 Bs. per Dollar. The cycle is repeated a few times, and it only takes a short time to become a millionaire.
I watch all this, and because I'm fairly well connected in Caracas (on both sides of the political divide) I see things happening that don't make the papers... and all I see is that the old (rich) ruling class is rapidly being replaced by a new (rich) ruling class who's slogan is "it's our turn now!" Socialism????? C'mon.
Look how many Chavistas have their own private planes now... how many are building mansions in Puerta La Cruz or buying apartments in the Morro de la Mar or the Bahia Dorada (the two most expensive buildings on Margarita- where the apartments sell for at least $1800 per meter), and look at what kind of cars they're driving today compared to maybe 2 years ago.
These are just observations from someone who lives in Venezuela... which is a different world from the US and Canada. What we're seeing now is a repeat of the la dolce vita period after the Cuban revolution.
The December election means that the good times are going to roll for years to come, and they're making the most of it. I'm glad to see that the social classes on the bottom are getting an increase in income... but that needs to rapidly be followed by creation of jobs that will employ these people at a living wage. Right now it appears that the people who are well-placed in the Chavez government are interested solely in their own enrichment.
There are a lot of people in this country who want and need a future, and government programs are a only a stop-gap measure that will get them up to speed and able to compete. After that, they need to do productive work and produce things that have value, something that gives them a future. I don't see it yet.
Sure, the capital investment in infrastructure is great, but you couldn't pay me to place industry in this country given the crime and labor laws as they are now, and without some kind of reality-injection, this country is going to go from one boondoggle to another... and that's a shame.
"Through socialistic planning feathers. State planning. This will be the motor in the economy that will solve basic needs and create growth, also with private capital."
Be more precise. What exactly should the state do and what role will private capital play. You seem to claim that the state will play and domiant role in the economy ('create growth'). Do you have any development models in mind?
"In terms of increases in income for the different social classes, you guys need to take a trip to Puerta La Cruz and look at some of the Chavista mansions being built. 10 to 15 bedroom Villas on the water with a dock in front to park the yacht."
This evidence is hardly scientific. Its ancedotal compared to the slides ow posted....you may be seeing some irrelevant details while missing the big picture. Some mansions go up in Las Villas. So what? and how to you know they are Chavista?
"The cycle is repeated a few times, and it only takes a short time to become a millionaire."
In theory this works. Exchange controls and Cadivi type organisations have historically been breeding grounds for corruption and misuse. However, do you have any concrete evidence of this? I do agree that this is probably going on (and is likely to get worse - this happens to most state run things), but there is no evidence that this happens on a wide scale.
"I see is that the old (rich) ruling class is rapidly being replaced by a new (rich) ruling class who's slogan is "it's our turn now!" Socialism????? C'mon."
Maybe, but Chavez seems willing to take on the 'plasma screen Chavista'. He seems willing to radicalize this 'revolution' business by increasing taxes, increasing MVR accountability, grass-root type communal councils etc. Some people have profited immensely, but this may now change (???).
"look at what kind of cars they're driving today compared to maybe 2 years ago."
There is plenty of ancedotal evidence of this, but is it widespread? Is it worse than in the 80s and 90s? Remember Venezuela is a very corrupt country with weak institutions and almost inexistent checks and balance, so this type of behavior is likely to occur especially during an oil boom.
"and government programs are a only a stop-gap measure that will get them up to speed and able to compete. After that, they need to do productive work and produce things that have value, something that gives them a future. I don't see it yet."
I don't either. Chavez seems to lack an economic development strategy besides increasing state spending. He needs to answer this question.
"Sure, the capital investment in infrastructure is great, but you couldn't pay me to place industry in this country given the crime and labor laws as they are now"
True, and this is a problem if Venezuela wants private capital and investment. In addition, the overvalued exchange rate and political uncertainty are other problems. Don't forget that these were big problems in the 80s and 90s too.
"and without some kind of reality-injection, this country is going to go from one boondoggle to another... and that's a shame."
A reality check will come in the medium term (1-3 years) from lower or stagnant oil prices. What is sad is that for all, 'revolutionary' rhetoric Chavez does not offer much that CAP did not offer in the late 70s. Good times, high spending and high oil p
A reality check will come in the medium term (1-3 years) from lower or stagnant oil prices. What is sad is that for all, 'revolutionary' rhetoric Chavez does not offer much that CAP did not offer in the late 70s. Good times, high spending and high oil prices all coincide in Venezuelan history. I see no evidence that this cycle is being broken. Spending on social programs for the poor is great, but the goal is to be able to spend the same of more in the future. CAP failed. In what ways does Chavez differ that would avoid a CAP style hangover? Besides oil price luck?
Ow, I see your point:
"whoever rejects Chavez supports the governments that were before Chavez."
This kind of reasoning seems very Bush-like:
"if you are not with me, you are a terrorist".
so:
"if you disapprove Chavez, you support CAP, you supported the Carmona coup, you are an old capitalist filthy neo-liberal".
I support what expaticus americus says. The problem is that if your family lives in Venezuela, you are not going to say that general X Y stoled so many millions in contract W or that contractor Q got away with so many, because if you do, you get in real trouble and worse with your family.
You can call this anecdotal material again, but it is more concrete than your all-are-USA-murders-in-Iraq-hypothesis.
As for Elliv, I would very much like him to mention one example where a country has gone from Third-World to a "developed country" through socialist planning.
Tor- Yes, it's all anecdotal evidence. You want empirical studies? C'mon. You know as well as I do that they don't exist, and won't exist.
However, PLC and Margarita have historically been highly desirable locations for the wealthy classes of Venezuela, and those who know where to look can see a lot. How does one know if it's a Chavista? Ask. You can bet that the realtor's and developers ask, and they talk.
As to the market transactions, I'm rather involved in the permutos de bonos market and I know a lot of the brokers in both the legal and "free" market for Dollars. Many of the people who are doing the circular money-machine business make no attempt to conceal what they're doing. They're well connected and that's all there is to it. Who cares? "It's our turn now!"
My point is that the old guard is being replaced by new people, and I don't see a lot of lasting change in the wind. That's it. As you put it, there is a lot of corruption and almost non-existent checks and balances: a recipe for abuse. Of course it's likely to happen during an oil boom: the money has to come from somewhere. It happened during previous administrations, and it's happening now... and the point is that regardless of the guy at the top, the nature of the people in the government hasn't changed, and their behavior proves it.
Let's face it. Things are going very well in Venezuela and will continue to do so. Of course a lot depends on the oil price but it also depends on tax collection as well. SENIAT is doing a good job.
Back in 2003, oppos were predicting doom and gloom and just by looking at the slides OW posted, proves how wrong they were.
Their track record in abysmal and if only for this reason, their comments should be treated with extreme caution due to the nevy evident behind the words.
Most "evidence" they present is anecdotal.
Rubén
"What is fun about the oppos high pitch screaming about the enabling law is their very newfound love for the AN. The all chavista AN was rubber-stamp, worthless, illegimate or even illegal. Now they are REALLY REALLY worried that AN might lose some power and that some VALUABLE and HIGHLY IMPOERTANT debates in the AN will not take place."
That spectaculary misses the point. Sure, in reality the enabling law will not change much. The AN is mostly full of sheep that follow the shepard anyway. In addition, the enabling law is legal.
the point is that if you survey democracies enabling laws of this nature do normally not get used. In some sense the point of democracries is to have checks on executive power. If the constitution allows for this type of law then the constitution should be changed in my view.
The comparison with the past is also misplaced for two reasons. First, in the past enabling laws were narrow and more specific in nature. Typically the powers were merely economic. Also they tended to be given for shorter periods and during periods of crisis. This is different. The powers and complete, long and are given during the best economic times in many years. Second, the previous Venezuelan governments were hardly great governments. Because they did it is not a good excuse. If you like Chavez just because he is better than previous leaders and better than the alternative, then you are measuring him against a very low standard. you can still support him, but ask hard critical questions.
Many opposition figures display an acrobatic knee-jerk tendency to portray everything Chavez does very darkly. One day they complain about huge inefficient state subsidies and the next about Chavez cutting these subsidies (gas prices). But Chavez types are sometimes worse. There is a positive spin on everything Chavez says or does. Critical thinking and the ability to ask hard question about stuff Chavez does, does not mean you cease to be Chavista. In fact, you would hope the AN would ask these questions. But in reality they are a bunch of incompetents tagging along in Chavez's slipstream, not leaders who stand on their own merits. It really is a one man show with or without an enabling law and in the long run this is dangerous for the 'bolivarian revolution'.
I also find it funny how everyone who opposes Chavez is right-wing. Rosales is right wing?? Not really. Did you read his proposed policies? Caldera. Right wing? Come on the guy campaigned and governed as a populist (despite reluctantly doing some IMF reforms when be was desperate).
"Let's face it. Things are going very well in Venezuela and will continue to do so. Of course a lot depends on the oil price but it also depends on tax collection as well. SENIAT is doing a good job."
Chavez has done a great job with the SENIAT. However, although the SENIATs contribution is important it pales compared to the boost from oil prices. In addition, higher taxes also reflect the oil-indiced boom (although Chavez has also increased the proportion of GDP which is taxes)
"Back in 2003, oppos were predicting doom and gloom and just by looking at the slides OW posted, proves how wrong they were."
The opposition has frequently exaggerated their case. But their main point about vulnerability to oil is well-taken. In 2003 who could have predicted this oil bonanza? In 2003 Venezuela was doing terribly and Chavez's opinion poll rating were much lower (although he may have won an election anyway due to the lack of alternatives); he would have lost of RR in 2003 though. Oppos predicted doom and gloom if oil prices did not soar. Oil prices soared. Did that mean they were wrong? No.
Feathers, and EA.
The point the post clearly makes is the people who are benefiting from this boom are the those who have the least. The notion that it is those well off who are benefiting is simply not true - it is those who have the least who have seen their income more than double. Did this happen before? I highly doubt it.
"However, PLC and Margarita have historically been highly desirable locations for the wealthy classes of Venezuela, and those who know where to look can see a lot. How does one know if it's a Chavista? Ask. You can bet that the realtor's and developers ask, and they talk."
Evidence on corruption is hard to come by. You'd wish that Venezuelan (supposedly anti-Chavez) tried harder to dig for dirt and connect the ancedotal dots and make a case. The good times are also likely to conceal much of the corruption and abuse until times get worse. People are skimming off the top? Who cares, we are all partying.
If real estate brokers talk, why not report it?
btw. what are the exchange brokers saying about the new talk from the government about closing the legal black market?
"Did this happen before? I highly doubt it."
Maybe, but it would be interesting to see this type of evidence for those periods. I'd love to see a similar presentation for CAP I and other periods.
Are there any slides on how the income is broken up and what is included?
"However, although the SENIATs contribution is important it pales "
Not true. Remember I gave a link in the comments a few threads back - they are almost even with oil only being a bit more or maybe 60/40. So taxes are quite significant.
Tor,
If they had real evidence of corruption they would report it.
So maybe this is just a case of there being no smoke and no fire. All this anectdotal BS about corruption is just that, anectdotal BS until they come up with real information.
OW said:
The point the post clearly makes is the people who are benefiting from this boom are the those who have the least. The notion that it is those well off who are benefiting is simply not true...
Yes, the people on the bottom are benefiting... but to say that the ones at the top aren't is at best severely misguided and at worst a bald-faced lie. Move down here and you'd get a whole new view of the country that you don't get living in the US, and can't get with short trips.
Why should I stick my neck out and report corruption, especially by members of government? Remember the saying from the fourth republic? "You have the right, but you're still going to jail"
Anyone who wants to get in front of the train and get run over can go right ahead. I'm not doing it, and most sane people wouldn't consider it. It's easy to get killed in this country, and nobody makes powerful enemies without a damn good reason... and ideology isn't enough.
As to the government closing the legal market, they won't. Possibly they can't, but they won't because it's an important "safety valve" for an extremely inefficient and corrupt agency- CADIVI. Besides- there are too many Chavistas making a hell of a lot of money to end the gravy train.
Of course hardly anyone is going to talk about the corruption cases if she has any family in the country.
A government that was capable of producing a
lista Tasco can be capable of much more. And before Ruben tells me the Tascon list was just
to prevent people to sign instead of another person, what are you going to tell me about the many open declarations by the big chavistas about firing the people who did sign? And the time when Chavez said "those who sign, they will pass into history...because we will have not only their signature, their id, their name, but their finger prints?" (this is not anecdotal, I recommend you to see the film La Lista, which contains a lot of stuff you cannot deny happened. At the end Chavez said: Let's bury the list, it already fulfilled its function".
Come on! Whereas Aristobulo Isturiz said that in his ministry no one was fired because of signing (which is bullocks), other ministers of Chavez were declaring in front of the press that yes, people would be fired because they were traitors. And I am not talking about PDVSA, but any jobs. If someone in a developed country were to be fired from a state job because of signing against the president, even people in normal jobs (say, not an ambassador or the like), would you say that is kosher? Do we in the third world have other "rights"? Bullocks!
http://www.youtube.com/watch?v=j...h?
v=jS_4TLvphW8
OW,
"Did this happen before? I highly doubt it."
I don't know if you knew a country named Venezuela existed in the 70's but I am gonna tell you something, I lived there on those days and I can tell you that lower middle class can afford vacation trips to the Caribbean Islands, USA and Europe on a regularly basis. Kids on private education if that was a concern for the parent was very much a choice of preference and not an economical hardship. Good, expensive cars were also regulars among middle class and lower middle class. And food, imported delicatessen and finest liquours were part of the Venezuelan regular household.
The cash flow was the same, even greater. There was non stop high end brand consumption like today's, the only difference was that the ruling political class were adecos and not chavistas.
Not only of propaganda live the very poor. The very poor, still are the very poor... living on the same cerros, and living with the same needs. And they are still the target of populist irresponsible leaders like Chavez and Cap in his time. Nothing has change.
This is by Time magazine, nov 29, 1968
"Undeniably, Venezuelans have never had it so good. During ten years in power, Acción Democrática has poured the country's ample oil revenues into schools, highways and public works. The economy is growing at an annual rate of 5.1%, and the benefits have spread through much of the population. Venezuela's per capita income, $745 a year, is the highest in Latin America. Unemployment is down to less than 7%, and the bolivar is one of the world's strongest currencies."
http://pmbcomments.blogspot.com/...search-
for.html
The boom of Chavez is not because of Chavez but due to high oil prices:
"Venezuelans moved from the countryside to the cities, they developed a modern urban lifestyle; large middle-class neighbourhoods developed alongside burgeoning poor ranchos. Many middle- and upper-class Venezuelans acquired wealth from oil in the 1950s–70s, which enabled them to travel easily, especially to the United States, and to own cars and houses. "
http://www.britannica.com/eb/art...32733/
Venezuela
Sad thing is that Chavez is making the same mistakes of the previous presidential clowns.
"If they had real evidence of corruption they would report it."
About corruption under Chavez:
http://blogs.salon.com/0001330/2...1/
02.html#a3256
And http://cato.org/pubs/dpa/dpa2.pdf
Elliv,
I subscribe to Tor's words:
"Be more precise. What exactly should the state do and what role will private capital play. You seem to claim that the state will play and domiant role in the economy ('create growth'). Do you have any development models in mind?"
I am all ears for your answer dear...
Yes, please, one example! Or two, if you don't mind!
For the record, there has never been a democratic
Sorry I f-up...
Again..
For the record, there has never been a democratic right wing government in Venezuela. All have been socialist (tip for Elliv).
I have to go but come back later for more of this enchanting time of discussion with you guys...
Cheers,
Very strong central government combined with grass root organisazion. Little power to governors and mayors. This to plan the economy more efficient. National plans for agriculture, housing, infrastructure, telecom, energy, education, security. Private capital can be involved in national planning to. Industry with mixed capital also foreign capital.
Elliv, like what country? I am very interested.
And I would like to know from Ow his answer to the question about rejecting Chavez: do everyone who rejects Chavez' government is a supporter of the previous governments Venezuela had?
Offcourse also international economy (oil price) and the the ability to avoid hostile isolation through LatAm integration is important. But Venezuela have clear chance to restruct it's economy to secure basics needs for it's population. Chavez goal is to eradicate critical poverty within i think 10 years and i think it's possible.
now it would be interesting to also see c+,b, and a. I bet their numbers how gone up as well (considering, among other things, the economic growth from 2003 to 2006 is hard to account for with only a 130% jump in consumption by the lowest 58% of consumers).
Elliv-
How does one eradicate poverty without a functioning economy that provides full employment? With government handouts? How does one create hope for the future if it's dependant on the caprice of future government handouts that depend on the price of oil and a stable to shrinking population?
Oh- historical models of some kind of success to justify your answer would be nice.
Venezuela needs checks and balances. But not from forces want to use their power to regime-change or counter-revolution, but from people who wan't to make the system work better (corruption, ineffiency). REAL independent grassroot media (not oligarch-media). Same for courts etc. Honest people who belive in the national project. "Bolivarian" domination in the radio electric media and in the education system. This way the project will be more successful.
"Very strong central government combined with grass root organisazion. Little power to governors and mayors. This to plan the economy more efficient. "
Are you serious?
Well Miss Sweden, I a afraid to tell you that that´s the type of government who has been ruling in Venezuela since the 1959...
Maybe it works for Sweden but certainly not for Venezuela.
Maybe copying the Norwegians ... see, they are an oil country too. They make number one of best places to live in the world... Why not stopping the fixation with Cuba and turn the eyes to a country like Norway? Because the guy is a nutcase.
http://hdr.undp.org/hdr2006/statistics/
Do I see Venezuela on that list? YES, Number 72, just in between Saint Lucia and Albania. Nojo&% vale!!... Colombia, with all their wars is above Venezuela. Cuba is 50!! (That might be is if you are not homosexual or political dissident, gee and thanks to Venezuela´s oil which he sells for profit btw) How come Venezuela is at place 72 OW? With so rich human and natural resources. Such a rich country makes number 72. I promise to you guys... If Chavez make of Venezuela another Norway, I become a Chavista.
"Honest people who belive in the national project. "Bolivarian" domination in the radio electric media and in the education system. This way the project will be more successful."
This is not how checks and balances work. If only people who are with the project can be part of providing critiscm and checks and balances how effective will these be?
feathers - HDI refers to 2004. I believe that Vzla is now above .81 for 2006.
Rubén
In addition, it's the rating that counts not the position in the list. Vzla has been improving its HDI rating since 2000.
Rubén
Hey,
Apart from the country example,
could you provide me with a definition of what Bolivarian is? (not an examples as in "what X is doing). I am specially curious
taking into account things like this: http://www.marxists.org/archive/.../01/
bolivar.htm
And there is MORE that Marx wrote about Bolivar.
I also wonder...as Bolivar was mostly a liberal, at times a conservative..definitely at the end of his life rather more...
Please, I would love to have a DEFINITION of what "Bolivarian" revolution is.
Also: what kind of "revolution" are we talking about?
I see adecos replaced by chavistas, I see crime higher than before (that IS a revolution indeed, but I reckon you do not mean that).
"Why not stopping the fixation with Cuba and turn the eyes to a country like Norway? Because the guy is a nutcase."
It is hard to copy Norway. Norway had strong institutions before getting oil (late 70s) so oil did not have the chance to corrupt institutions and government. However, it is much better to strive to be Norway than Cuba.
Also Norway has much more oil per capita than Venezuela (exports especially). But even Norway struggles with an overvalued exchange rate (helpfully restrained some by the stabilization fund - which is now about one year of GDP). Where would Venezuela ever find the institution maturity to accumulate a FIEM without plundering it (Chavez in 2002)?
"In addition, it's the rating that counts not the position in the list. Vzla has been improving its HDI rating since 2000."
Ruben's right, but it also useful to compare Venezuela to its peers (Columbia, Brazil) since medical advances may boost the HDI of all countries. I did not think the 2006 HDI was out yet.....
"Not true. Remember I gave a link in the comments a few threads back - they are almost even with oil only being a bit more or maybe 60/40. So taxes are quite significant."
I remember our discussion. I was referring to the incremental impact of the SENIATs increased collection efforts. My point was that these incremental efforts (more taxes as a proportion of GDP) are much less important than the oil boom in explaining total government revenues lately.
The SENIATS actions certainly helped, but compared to oil's contribution.....
"If they had real evidence of corruption they would report it."
They don't except for CAAEZ and some other ancedotes. Another is Plan Bolivar 2000 which was never really investigated.
The best source says the general level of corruption is about the same as under Caldera (TI). Remember that the number of corruption convictions is a bad proxy of corruption (why? it could just indicate better enforcement).
As for hard evidence of corruption high up? There is none. Interestingly Chavez (and everyone else) claimed Caldera/CAP Venezuela was very corrupt, but there have been almost no trials or investigations. Does that mean that there corruption was not rife under Caldera (I mean there is no evidence right, just ancedotal BS)?
Also: what kind of "revolution" are we talking about?
I see adecos replaced by chavistas, I see crime higher than before (that IS a revolution indeed, but I reckon you do not mean that).
Thats what im saying there need to a national project with everything from education to media to consejos comunales to partido unido. Enforced by strong state. There need to be cultural revolution. For the common good. Socialistic ethics needs to be implemented and every society implement values.
OR there might be new ADECO class mergin with economic elites that still exists and people lose hope and everybody just try to get their peace and there you are.
Look Venezuela are still very POOR and have the largest oil reserves in the world and with a U.S. superpower and capitalistic world structures. Venezuela need a strong state and a national project with a national unity.
Look if you have media dominated by US capitalistic values like RCTV it will not kill the project in short term but make everything more difficult. And im talking so much about anti-Chavez bashing but the commercial individualistic message that is much more harmful for a poor country that need to unite in a project and values or they will be dominated.
Ruben, the report is from 2006 even though seems that all the data they are using is from 2004.
You can download it and study to the letter here:
http://hdr.undp.org/hdr2006/
Thanks for your explanation about Norway Tor. I insist, Venezuela should look after the model of Norway. It can be done.
In other word guys, the index is from 2006 using data from 2004.
"Interestingly Chavez (and everyone else) claimed Caldera/CAP Venezuela was very corrupt, but there have been almost no trials or investigations. Does that mean that there corruption was not rife under Caldera (I mean there is no evidence right, just ancedotal BS)?"
Tor, there is plenty of evidence. The main evidence is the banks actually collapsed and the bankers fled (taking money with them). The banks were hollowed out shells just like Enron that ultimately imploded just like it did. So that was the evidence.
There were lots of investigations at the time but all the people were politically connected (Pedro Tinoco and the Cisneros family) so nothing happened.
All the legal proceedings were dispensed with before Chavez came to power so if people were cleared or charges were dropped back then I'm not sure Chavez could legally do anything which would explain why he hasn't.
In any event, evidence of corruption was crystal clear then, now it is just rumors.
Feathers, you are going to have to do better than Coronels peice at Cato. There is no evidence of corruption in that. Half the non-sense he calls corruption (buying weapons for example) isn't corruption. The other half is unsubstantiated. And much is just plain false like PDVSA no longer being audited and presenting financial statements.
"Yes, the people on the bottom are benefiting... but to say that the ones at the top aren't is at best severely misguided and at worst a bald-faced lie. Move down here and you'd get a whole new view of the country that you don't get living in the US, and can't get with short trips."
Sure the people higher up are doing ok - the economy is booming. But as the data shows, it is the poor who are disproportionatly benefiting which shows how well Chavez's programs are working.
As far has having to be somewhere to observe what is really going on. That is not at all true - that is just relying on anecdotal evidence which can be highly misleading. You can't tell how an economy is doing and who is benefiting the most in a whole country by just your own observations. For that you need data of the sort I posted here. Observation is nice but it is no substitute for hard data.
My question is: when this bubble Chavez is creating bursts, who will he blame? I do not think he will have a lot of options since he is soon to have total control over every move the government makes.
ow, you made a great case for why I looked into investing in Venezuela to begin with. There is no doubt that from 2004 to 2006, the economy has been on a tear, and Chavez has done a good job of spreading around the wealth.
But you are looking in the rearview mirror. I was shocked to read it costs Venezuela on average $30 a barrel to produce its oil. That means the fall in price of oil will have devastating effects. I even read today that Fitch, the bond ratings service, may declare a default of $4 billion in Venezuelan debt. Look at all the problems since 2007 began: a declining oil price, a falling currency, foreign disinvestment, possible loan defaults, high inflation, the stock market tumbling. I cannot blame you for looking at the good news for the last 3 years because there has been absolutely none for 2007.
As far has having to be somewhere to observe what is really going on. That is not at all true - that is just relying on anecdotal evidence which can be highly misleading.But it definitely helps. For example, I read official inflation rates at 17.1% per year, yet most of the everyday products I buy have increased much more than that in the past year. Why is that? What measures are they using and why does it seem so skewed?
"I was shocked to read it costs Venezuela on average $30 a barrel to produce its oil."
I don't know where the hell you are getting those numbers from, but they are not right.
You would also need to explain, how, if it costs Venezuela 30 bucks a barrel to produce their oil, their budget for 2007 is based on a $29 per barrel price.
I was shocked to read it costs Venezuela on average $30 a barrel to produce its oil.
No wonder Venezuela was doing poor when the price was around $10.
ow,
So the Caldera evidence boils down to the banking crisis? Clearly the banking system was rotten (mostly due to flawed regulations and lax lending). Some of this was connected to politics, but lots of it was also simply bad business (banks borrowed too much money to bad projects (and to friends)).
This from 3/25/95
"MEXICAN and Argentine bankers struggling under a pile of bad debts should spare a thought for their Venezuelan counterparts. The banking sector there has been in chaos since January 1994, when the government closed Banco Latino, the country's second-largest bank. Although they have spent about $7 billion on bail-outs so far, or around 13% of GDP, government officials have done little to contain the disease.
The problems can be traced back to 1989, when the government freed interest rates and lifted other restrictions on banking, but did not provide the beefed-up supervision that a deregulated system requires. Powerful bankers with ties to the ruling party stifled half-hearted attempts to fix this flaw. Even in 1993, the banking supervisor's budget was just 173m bolivars ($1.2m). The watchdog did not even own a computer.
The results were predictable. Venezuelan banks expanded wildly, frequently lending to companies they already owned. According to official figures, their loans and investments in property, shares and much else besides, soared from 288 billion bolivars in 1988 to 2.3 trillion bolivars by the end of last year. Unofficial growth was probably even higher; loans booked off the main balance sheet escaped detection.
When the economy started shrinking in 1993, banks ran swiftly into trouble. The government made matters worse. Its first mistake was suddenly to close Banco Latino's doors. This led to panic as depositors drained bolivars from other banks and converted them to dollars. Antonio Casas, the boss of Venezuela's central bank, reckons that capital flight siphoned roughly $3.5 billion from the country's reserves before the government imposed exchange controls in June 1994.
Other mistakes were made as well. The bank supervisor attributed the problem to insufficient liquidity rather than deeper flaws. Fogade, the state-run bank guarantee fund, attempted to help by pumping roughly 800 billion bolivars into ailing banks. But it did not oust the managers who had created the problems in the first place, and it failed to ask for enough collateral. Eight more institutions were shut down in June, and there was a third wave of government interventions in August. "There was no real plan," admits Mr Casas.
The fall of Banco Progreso in December, along with three small banks taken over in another bail-out last month, means that the state now controls 58% of all bank assets, along with big chunks of other financial businesses. The latest victim is Banco Union, the country's fourth-largest bank. A panic cost it 30% of its deposits in the first two months of the year, and only a proposed takeover
A panic cost it 30% of its deposits in the first two months of the year, and only a proposed takeover by Banco Ganadero, a Colombian bank now poring over the accounts, helped to prevent another state intervention."
Note that this happened mostly due to lax regulation of banks (think: S&Ls in the US) and bad business practices (and it was exacerbated by clumsy government actions. It was all triggered by a recession and economic problems. Good times tend to hide bad practices and corruption.
Later in 1995:
"The Mexican and Argentine governments must be hoping that their banking systems can avoid the fate of Venezuela's. It has been in chaos since January 1994, when the government closed the second-largest bank, Banco Latino. Since then, many other banks have had to be bailed out or taken over by the state. Venezuelan officials have tried to bring to justice dozens of bankers whose crooked ways, they allege, caused the crisis.
In particular, the government is keen to punish the former top brass of Banco Latino, whose new bosses claim ran up some $2 billion in losses. In March 1994, 83 of its former executives were charged in a criminal suit in Venezuela. Yet some of the bankers have managed to slip away to southern Florida, a traditional playground for Venezuelans.
On June 19th the new managers of Banco Latino--out of receivership, but still owned by the state--filed suit in a federal court in Miami against Gustavo Gomez Lopez, the bank's ex-president, and other former employees. The bank's Miami affiliate, Banco Latino International (BLI), also joined in the suit.
Mr Gomez Lopez's supporters insist politics is behind all this. They say that officials have made such a mess of bailouts that they need scapegoats. As proof, they point out that Ricardo Cisneros, a politically powerful Venezuelan magnate, was not charged in the suit last week. Yet Mr Gomez Lopez has said that Mr Cisneroswas the biggest beneficiary of soft loans from the bank. Mr Cisneros's spokesman says that the loans to his companies were at market rates and have been repaid. "
Don't see how this involves the Caldera government. They seem to be trying the crooks (incompetent bankers who gave soft loans to friend etc.)
Article from 1997:
"IN JANUARY 1994 Venezuela's second-largest bank, Banco Latino, collapsed out of the blue. By the following January, more than half of the country's 47 commercial banks had needed bailing out by the state deposit-guarantee agency; 16 had been either nationalised or closed. This sorry tale is instructive in two ways. It shows how not to liberalise a banking system, and how not to manage a crisis. Fortunately the clean-up has been better handled. However, once it is completed, much of the banking system will no longer be owned by Venezuelans, but by foreigners with banking experience and deep pockets.
The mayhem should not have come as a big surprise. Venezuela's long history of negative real interest rates
subsidised lending to state companies favoured by the government, and severe restrictions on foreign banks all fostered inefficiency. On top of this came political and economic turbulence. Two attempted coups in 1992 and a presidential impeachment the following year, which put pressure on the bolivar, were followed by a sharp rise in interest rates, multiplying banks' bad-loan problems. But the most important cause was sloppy liberalisation. From 1989 banks had been allowed to bid freely for deposits. Many grew rapidly by offering suspiciously high deposit rates and lending for risky ventures, all under scant supervision. Predictably, the banks clobbered hardest were those that had expanded most in the early 1990s.
Instead of acting decisively to contain the trouble, the authorities dithered. Throughout the three months that Banco Latino was closed, its depositors were told nothing about the fate of their money. This caused attacks of nerves and led to runs on other banks, sick and healthy alike. The government further undermined confidence by announcing that there would be no more bank closures-and then changed its mind. In a singularly ill-timed move, it also introduced a tax on all bank withdrawals, which chased away even more depositors."
No mention of widespread allegations of corruption against the government. Government incompetence? Sure. Close ties between banks, politicans and business? Most likely. But was the crisis caused by massive corruption within the government as you seem to claim? No.
At least the Caldera did a good job of cleaning up the mess and building a solid banking sector (after initial mistakes and blunders).
Sorry about the long posts, but this articles about waste, corruption and other problems from 1996 is a great read:
"CARACAS--BUILDING the short road in mountainous terrain some 500 kilometres (300 miles) from Caracas was the easy part. The real trouble for the young self-employed civil engineer, working under contract for Venezuela's Ministry of Transport and Communications, was coping with officialdom. And not just the paperwork and delays. Getting the ministry's regional inspector to check the work, for example, meant tracking him down at his superior's house, which he happened to be painting--on the taxpayers' time--with a little help from a crate of cold beer.
The recent annual report of the comptroller-general says practices like these are endemic in the bloated public administration. Pay-offs, commissions, overpricing and dubious awards of contracts are commonplace. Worse than corruption, petty or grand, is the pure waste caused by poor budgetary control and, often, non-completion of projects. The state, as such, says the report, is "so disorganised, it is on the verge of disappearing, if it has not already."
Like Lewis Carroll's Cheshire cat it may indeed disappear. Right now, it is highly visible. Its inefficiency is matched by its size: 1.3m public employees for a population of only 20m. Something, says Teodoro Petkoff, the vigorous new planning minister who recently nudged President Rafael Caldera into a deficit-trimming, free-market economic U-turn, must be done.
The budget will profit from a hefty increase in tax revenues. As for the structure of the state, Mr Petkoff says he is about to produce a plan to rid it of some excesses. He paints a picture of bureaucracies flourishing fourfold where one would suffice, of "phantom foundations" embedded in every ministry, each with its budget, each protected by its own patrons. Payrolls too are under scrutiny: a recent check at the Health Ministry and the Social Security Institute uncovered 2,000 workers not actually at work but still turning up for their pay on the 15th and 30th of the month (hence their nickname: "forty-fivers").
There was a time when, thanks to oil revenues, Venezuela could afford an all-pervasive state and its abuses without suffering the consequences. This engendered an easy-going tolerance, among people and politicians alike, of what was seen as a national idiosyncrasy. But tough economic times have brought a change of mood. Arturo Uslar Pietri, a prominent intellectual and Venezuela's one-man national conscience, chose his 90th birthday in mid-May to decry the state's extent and its profligacy. Sixty years ago, he said, he called on Venezuela to "sow" its oil riches in order to secure a prosperous future for its people. Instead, he says, the state, not the people, reaped the harvest, and over 20 years "Venezuela has received the equivalent of 18 Marshall Plans in oil income, only to end up in the catastrophe we're in today."
Wh
What went wrong? Just what you would expect. Critics describe the public administration as a cardboard empire, where control of the payroll offers ample scope for self-enrichment and patronage alike. Economic considerations, they say, have long been subjugated to politics.
For example, in the 1970s, a social democratic government packed the now disbanded National Ports Institute with 20,000 of the party faithful. In came a Christian democratic government. Did it sack them? No, it squeezed in 20,000 of its own. Today, the state-run racecourses, even though they pay out far less of their take to winning punters than the international average, record heavy losses that have to be covered by special credits from the public coffers. Sceptics call them the administration's petty-cash box.
Not, as one self-defensive minister points out, that this was or is a one-way street. Venezuelans did not reject the bounty from above and, if they now want such dubious practices to stop, they must accept that the bounty will stop too.
And more than the bounty. As Venezuela returns to reality and harsh economic adjustment, public health and education are crumbling. Such money as is available is likelier to go into administration than medical equipment or textbooks.
What is to be done? The comptroller-general wants a local version of Italy's "clean hands" drive against corruption. Mr Petkoff is likely to propose deep cuts in public jobs. Will it happen? Union backing is much needed, and most unlikely. Severance pay for the entire public-sector workforce would cost well over $2 billion. Even a quarter of that, as Mr Petkoff's figures suggest, is plenty. One investment banker suggests that, with poverty widespread and further hardship in store, it might be safer to have the surplus workers loafing at official desks than on street corners.
No, says Mr Petkoff: if the state does not change, Venezuela will get nowhere. Those Venezuelans not under the state's wing would hate to see their new sacrifices go up in smoke. But can he and they defeat those who will fight for their state jobs? This week's public-sector strike was about money. But more is at stake than that. "
It also illustrates what can happen it an oil bonanza ends and the government fails to adjust and suffers a massive hangover.
Tor, there was massive corruption in the banks. You just aren't doing a good job of looking up the events of those days.
Start here:
http://oilwars.blogspot.com/2005...d-old-
days.html
Most of the best stuff isn't on the internet because the internet didn't really exist yet. So if you want to read up on it is time to start using the microfiche machine at your local library
"now it would be interesting to also see c+,b, and a. I bet their numbers how gone up as well (considering, among other things, the economic growth from 2003 to 2006 is hard to account for with only a 130% jump in consumption by the lowest 58% of consumers)."
Nick, I posted the Datanalysis numbers on that a while back. They were a little different from the Datos numbers but through 2005 they showed only social class E had been making big gains in real terms. So clearly it is those who have the least who are doing the best.
And remember this is more than doubling their income (the economy itself is nowhere near doubling) and that these are the majority of the population (58%). So it probably is consistent with the countries overall growth.
Here is the link on Venezuelan oil costs:
http://energy.seekingalpha.com/a...m/article/
25485
A second hypothesis to consider would a be a substantial drop in world oil prices. PdVSA figures suggest that cost price for crude oil production in Venezuela averages around U$28bbl. Thus any drop to below $40bbl for crude oil would severely dent the economic power of the Chavez administration, and therefore stall his grand plans. Short term adjustments in the price of oil [POO] have recently seen the benchmark WTI crude oil price under $50 a barrel, but the rebound was sharp and quick to $55. This is not the place for a full rundown of the world oil market, but we would concur with the market view that $40 oil is now very much confined to history.
"Feathers, you are going to have to do better than Coronels peice at Cato. There is no evidence of corruption in that. Half the non-sense he calls corruption (buying weapons for example) isn't corruption. The other half is unsubstantiated. And much is just plain false like PDVSA no longer being audited and presenting financial statements."
There's a lot of evidence in that report OW, 24 pages of it.
"Tor, there was massive corruption in the banks. You just aren't"
I agree the banks were badly managed (there was corruption in the banks). But can you link this to the government? The mere fact that the banking system collapsed certainly indicates that the government (especially previous governments) were incompetent when liberalizing (the way it was done without an appropriate regulatory regime) and supervising the banking sector, but does this imply they were corrupt?
I need to read more to answer these questions.
That is not to say there was not massive corruption under Caldera, just that the banking scandal by itself does not prove that corruption was worse back then. The number of convictions by itself is a bad proxy (just read the TI methodology section as to why they use survey and not conviction rate etc.). For example, a huge scandal - like the banking crisis - naturally leads to a hunt for the guilty and corrupt. Thus, the number of corruption investigations will increase due to increased scrutiny and enforcement.
I'm research this some more when I have time. I have access to some databases online that go way back to the 80s for some publications...
I'll read your post too...
Also did you read the Cato Instit. article on corruption? I did. It was very one-sided, poorly written and researched and essentially worthless despite containing a couple interesting ancedotes.
"There's a lot of evidence in that report OW, 24 pages of it."
I missed this - obviously given my last comment.
I disagree with this. The report is not totally worthless, but it presents no hard evidence. Also many the corruption events are not really corruption. Weapons sales may be incompetence or bad policy, but if they are done by normal codes of conduct they are not corruption.
More importantly the interesting ancedotes it presents (which were better presented in El Nacional a couple months ago) are overshadowed by the writer's tendency to jump from ancedotes to concluding grandly that there is massive corruption. Maybe there is massive corruption. TI rankings certainly suggest this and I know no better source - Venezuelan rankings are low in all 8 surveys TI uses and the range is narrow. But the evidence in the Cato report is insufficient to prove this claim and in any event TI concludes that corruption is no worse under Chavez (but not better) - but remains at very high levels.
In fact, the report would be much more convincing if it (1) dropped its wilder claims, (2) toned down its conclusion and rhetoric and (3) was more suggestive.
jz, your oil production costs are insane. It is nowhere near $20 per barrel.
It is about $3 for regular oil and about $10 for the extra heavy stuff. Look at PDVSA's financial statements.
I think the widespread corruption is one reason Chavez has tended to put new money into new, parallel institutions rather than building up the old ones. Hence the Missiones, which do an end run around existing bureaucracies, and the money going to local, locally run projects--the Bolivarian circles, communal councils, co-operatives and so on and so forth. There has been a strong emphasis on bypassing existing bureaucracies which may be inefficient, corrupt, resistant to Chavist policies, and predisposed by their hierarchical structures to deliver services in a paternalistic, client/patron sort of way that would not be effective. I suspect that had Chavez not worked hard at channeling the money directly down to the poor for them to decide how to use, had he instead depended on existing bureaucratic channels, that 130% increase in group E income would not have happened.
This approach also suggests to me the main way that Chavez and "el proceso" are hoping to overcome cyclical oil price issues and create real, fundamental economic strength: By putting the decisions, the money, and ultimately the economy in the people's hands. Popular ownership defeats the globalization problems caused by high capital mobility; people in a co-op have motivations to be efficient, but not by sacrificing jobs; if they are to prosper, they have to do the development right there where they live. The intent would seem to be to give the people the education, the skills, the access to credit or startup money, and the social and institutional framework to develop from below.
Tor, read the article then lets discuss. There was corruption in both the government and the banks and the two were inter-related.
BTW, it was CAP that did that, not Caldera. Caldera got stuck with the mess.
Sure, OW, but we all know that those 58% are sonsuming much, much less than 58% of GDP
And, how could C+ be going down with all those increases in minimum wage?
Have you got any slides of the incomes for the 2 highest classes?
Erik
Not with this post. I'll go back to try to see if I have the one from Datanalysis.
Thing is the Datos and Datanaysis numbers are different to begin with.
But I'll let you know if I have it.
ok, found it guys:
http://i6.photobucket.com/albums...n-
ingresosg.jpg
Its difficult to compare because the years and amounts are different but you can see that the higher up you go on the scale the smaller the income gains.
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heer keppler,what about the 40 or more past T H I N years of the pacto de Puntofijo years ? You proudly states of beeing a Venezuelian too, I am a Dutch born and feel proud of your President. Sorry to tell you this bit. Your President by now is a President of much more people than the 26 million Venezuelians. He also is somewhat my President even if I am Dutch born. Help out and give a hand in the forming of a new nation and happiness of your people.
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