Oil Wars

Today President inaugurated a new light rail system which he didn't build and which, truth be told, isn't really built in any meaningful sense. But hey, there is an election on so getting pictures like this splashed across the press can't hurt:



The rail system is in Venezuela's third largest city, Valencia. I've never really spent any time in Valencia other than to pass through its bus station so I don't know how much it needed any sort of transit system. But it is a compact city, being surrounded by mountians, and apparently does have a fair amount of traffic congestion. So back in 1994 they started building a light rail system. And note, they didn't just plan it, they actually constructed a fair portion of it. This is the one case where the usual opposition complaints that they were the ones responsible for the project actually has some truth to it.

The rail system is underground and is essentially a big "X" as you can see from the map:



Now here is the other shortcoming of this project - not much of it has been built. The part being completed now is the small section represented by the yellow dots. Worse still, not even all of those stations are open and, unbelievably, it isn't really being permanently opened at all but is only being opened temporarily and then will be shut down again while work continues.

Clearly there isn't much credit that should be handed out for this project. But being an election year it is to be expected that the government wanted to get whatever credit it could and showed it off.

Regardless, it does look like a nice system and hopefully they really will finish building this thing in the coming years. Someday I'll have to stop by and ride it. Until then I'll just enjoy the pictures:




























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Recently the Venezuelan GDP numbers for the 4th Quarter came out. I could reprint all the statistics showing how the private sector is growing faster than the public sector, I could show how manufacturing, commerce and construction are growing MUCH faster than the oil sector, and I could show how investment levels are the highest they've been in many years. But I've done all that many times before so why bother.

I could also point out how the formal sector of the economy created 350,000 jobs in the past year. Or I could mention that year to date 80,000 high quality new homes have been built by the government (not counting what the private sector has built). Again though, they are just numbers

But I think a graph can do more to illustrate just how well Venezuela is doing right now under Chavez than any simple numberss. So here is one:



This graph shows Venezuelan economic growth on a quarter by quarter basis. Note that in Venezuela statistics are calculated year over year. So when you see a 10% growth number in the last quarter of 2005 it means that quarter's economic activity was 10% greater than the last quarter 2004.

Of course, there are some dramatic swings in Venezuela's economic performance, mainly revolving around political tumult. But just look how Venezuela is doing now, as shown on the right end of the graph, versus how it was doing before Chavez came to power, as shown on the left end.

I think that sums up who is going to win the upcoming election, and why.
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Reading the Venezuelan media and watching TV these days is truly watching democracy in action. The media is chock full of advertisments, programs, accusations, and all sorts of appeals. Just like in any election one would see in the United States or any other democracy the media are making out like bandits raking in advertising money. But that is what democracy is all about and that is what Venezuela is right now, a marketplace of competing ideas.

Clearly both sides in this two horse race are making their points. Unfortunately for the opposition the economic climate of the country makes it virtually certain Chavez will win by a wide margin - silly polls with colored pencils not withstanding.

Nevertheless, the opposition is probably showing more maturity and more savvy than at any time I can recall. In particular, they are exploiting two chinks in Chavez's armor as the following ads show:



This ad attacks Chavez on one of his main weaknesses, the crime issue. From the red (read Chavez) with the words "more worry" to the blue (read Rosales) with the word "peacefullness" this ad is cleverly put together. But more importantly, it attacks Chavez where he has a true vulnerability - 8 years of out of control crime.

The second ad is even more clever:



In the blue (Rosales) part is tells people about the "Mi Negra" plan with the headline of "your opportunity to get up from the bottom". In the red (Chavez) part it carries the headline "more gifts abroad" and then goes on to say that $47 trillion bolivares have been given away overseas.

Now, this is almost certainly an absurd and false accusation. Never has the opposition presented a list of "give aways" coming to anything even remotely close to that number. Nevertheless, this theme of Chavez caring more about his foriegn policy than what is going on inside the country has resonated. Chavez does indeed travel abroad alot, does indeed speak on foriegn policy alot, and has given assistance to other countries. So even though the actual accusation, that Chavez is giving away Venezuela's wealth, may be absurd it is probably the case that most Venezuelans believe it to be true.

This may not matter when the economy is growing at 10%. But when the economy is growing at 2 or 3% it will matter. Clearly these are issues, both real and of perception, that Chavez needs to resolve. Hopefully the recent cancellation of Ken Livingstones trip to Venezuela is an indication that Chavez realizes this is an issue and is moving to correct it. Better that he fix it now, than have Venezuelans fix it a few years from now in a Recall Referendum by voting him out of office.
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The "Gringo in Venezuela" blog has an excellent article today on possible coup plans immediately following the December 3rd elections. I'm the kind of person who at first doesn't take that sort of thing too seriously. Then I watched the video he linked to. All I can say is wow. First, after watching this video of a major Venezuelan journalist accusing the government of fraud, saying they are Nazis, and calling on the military to not recognize the government after December 3rd possibly say there is no freedom of speach in Venezuela. It is so compelling I am going to post it here. WATCH IT TO THE END:



Those of you who speak Spanish - did you catch him giving away what the opposition is really all about? I hope so. He said that the government has $56 billion dollars in liquid money (reserves) and that those in power wouldn't give up access to that money without a fight. Of course, if the people had any interest in stealing that money why would they have put it in reserves in the first place? They could have just stolen it right up front.

Rather, I think it is the opposition and scum like this journalist who are looking at all that money that Chavez's oil policies (which he is getting sued for, see the previous post) brought in and are just salivating. Remember these are the same people who robbed the country blind under the previous governments by looting the banks and ripping off all the other government money they could get their hands on. Now they see this $56 billion and they have to be dying - it is so near, yet soooo far. "If only we could get power for a few months" they most be thinking to themselves.
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You gotta love this - Venezuela owned Citgo is getting sued for participating in OPEC and helping them influence prices. Sounds to be too bizarre to be true but here it is (with the really good parts highlighted by me):

HOUSTON — Companies who buy oil products from Citgo Petroleum Corp. filed a federal suit against the company alleging that the Venezuelan-owned refiner conspired with the Organization of Petroleum Exporting Countries (OPEC) to fix oil prices.
The complaint, filed this week, alleges that Citgo implemented anti-competitive supply contracts in the U.S. and manipulated the price of oil to anti-competitive levels.

The 11-member cartel determines the output of member countries at regular meetings. In October, OPEC announced plans to cut output by 1.2 million barrels a day, or 4 percent of its output at the time, and warned that it could announce more production cuts when it meets Dec. 14 in Abuja, Nigeria.

"We're studying the allegations and beyond that we have no comment," said Citgo spokesman David McCollum.

The complaint comes amid continued ill-will against the company that began six weeks ago, when Venezuelan President Hugo Chavez verbally attacked President George W. Bush in front of the United Nations.

The complaint alleges that Citgo has participated in "OPEC's illegal price-fixing conspiracy, has provided unlawful assistance to OPEC, and has implemented Venezuela's and OPEC's price-fixing scheme in the United States," according to a release from the plaintiff's lawyers.

The complaint also alleges that Citgo has provided OPEC with technical services, and with information that assists OPEC in its effort to fix the price of oil at anti-competitive levels.
The plaintiffs are seeking to recover actual and punitive damages, and are asking the court to prohibit Citgo from such behavior in the future.

The case is set for a pre-trial hearing on Feb. 2 in Houston.

The suit is not the first to be launched against OPEC. During the 1970s, the International Association of Machinists sued OPEC directly in California, also accusing the cartel of price-fixing. That suit was filed against the individual member-states of OPEC, and was dismissed after the members refused to appear in court.

But the suit against Citgo may benefit from a greater willingness to hold corporations responsible as co-conspirators with governments for violating people's rights, said University of Texas law professor Jay Westbrook.

"There's more willingness now for the U.S. courts to say that a U.S. corporation might be sue-able as somehow a co-conspirator in violating people's rights," Westbrook said.

However, even with such a presumption, the plaintiffs still have to prove that the company was responsible, or complicit with the government and with OPEC, he said.

I wonder if "guilty and proud" is a valid legal plea?

On a serious note though, it will be interesting to see where this goes. And I do wonder what is behind it. Saudi Arabia is a much more influential member of OPEC than Venezuela and has lots of assets in the U.S. yet I've never heard of anyone considering a suit against them or any other OPEC member. It would seem there might be some politics behind this.
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All the main Venezuelan polling firms show Chavez with a large lead - Datanalysis, Datos, Hinterlaces, Consultores 21, etc.

So what is a poor opposition supporter supposed to do? Simple. Invent their own polling firm. And that is exactly what they did. Not only that, but they had the new, never heard of before firm, take out a full page ad in Ultimas Noticias trumpeting their results:



This isn't the first time they've done this. I've seen these ads on the results of unkown firms before. But they seem to be stepping it up a notch now. Desperation time I guess.
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The Venezuelan electoral authorities sure are working overtime to get the Venezuelan elections to be amongst the most "observed" elections in history.

They are also trying a new tact to get the opposition to participate in the elections and stop the crying fraud non-sense. You see during the recall referndum in 2004 both the Carter Center and the Organization of American States oversaw the votes and post election audits and pronounced the results to be authentic with no indication of fraud. Nevertheless, the opposition has been crying fraud ever since.

Then for the legislative elections in 2005 it invited the European Union and the OAS (the opposition considered the EU to be more serious than the Carter Center). Nevertheless, despite the EU observers saying the electoral process was transparent the opposition boycotted the elections.

So now, trying to put an end to this non-sense, the CNE has invited all three groups. The OAS had previously decided to come. Today the European Union signed an agreement to send 130 observers. And the C.N.E. expects by next week to have an agreement for the Carter Center to also come. The C.N.E. has given those groups full lattitude to visit, review, inspect and question any and all aspects of the election.

So it will be interesting to see what the opposition cries about this time

P.D. Actually, I might be able to answer my own question. Apparently Penn & Schoenn are coming back to Venezuela to do exit polls. This is the same group that along with SUMATE released the infamous and bogus exit poll claiming that Chavez lost the recall referendum. Should we make predictions on what their "exit poll" will say this time?
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One of the more farcical aspects of the opposition, or at least parts of it, is their attempt to pretend that they are leftists, that they are the ones who care about people, and that they have more burnished leftist credentials than Chavez.

Never mind that on every concrete position they are on the right, they somehow claim to be on the left. They argue that the Iraq war began because Saddam Hussien "tricked" the U.S. into thinking that Iraq had weapons of mass destruction, that Israel was justified in leveling Lebanon because Hezbollah supposedly kidnapped an Israeli soldier and that giveaways to big companies are ok because they "attract investment" but that giving assistance to the poor is “vote buying” and “cheap populism” (unless of course the one advocating it is Manuel Rosales). All that, yet somehow they are the authentic "leftists".

And even though neo-liberal economic policies couldn’t find a more forceful advocate than Teodoro Petkoff we are supposed to believe he more a leftist than Chavez because he read the Communist Manifesto back in 1950 something. They act as though being a leftist meant belonging to some sort of “intellectual” book discussion club, not taking concrete, and often difficult and controversial actions, to help real people in need.

Part of this travesty consists of them trying to play different parts of the left off against each other. This manifests itself most dramatically in their attempt to drive a wedge between Venezuela’s Hugo Chavez and Brazilian President Luiz Inacio da Silva. Chavez is a “irresponsible populist” and Lula a “wise”, “moderate” and “true” leftist they say. In fact, they’ve gone so far as to say that Chavez was upset at Lula’s recent re-election and that Lula no longer supports Chavez because of Chavez’s support of Bolivia nationalizing gas fields owned by Brazils national oil company!

Unfortunately for the Venezuelan opposition all this non-sense exists no-where outside their imaginations. Today the former lathe operator who rose to lead Brazil’s Workers Party and then became the first President to make working class and poor people the focus of his government came to Venezuela partly to inaugurate a bridge, but mainly to visit and lend support to a good friend. They sure so look chummy in the picture don’t they.

But that is nothing compared to what Lula said:

The same people who elected me, who elected Kirchner, who elected Ortega and who elected Evo Morales with out a doubt are going to elect you (Chavez) President of Venezuela.

I have no doubt that there hasn’t been in Venezuela for many, many years a government that cares so much for the poor as you care for them.

I think that you, Chavez, proved to the Venezuelan people that it is possible to grow economically while having social justice.

In a second mandate, all of the presidents of all the countries of South America and Latin America need to work for the integration of Latin America as we have never worked.

When it comes to judging Chavez’s leftist credentials I think I’ll pass on all the non-sense emanating from the pretend leftists and liberals of the Venezuelan opposition. Brazil’s Lula is a true leftist and he recognizes Chavez’s accomplishments in the fight for social justice. And as the saying goes, it takes one to know one.

BTW, here are some more pictures of the two good friends and the spectacular bridge their countries collaborated on:












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In case you haven’t noticed although all the available polls show Chavez with a commanding lead in the coming presidential election some amongst the opposition are intent on beginning a “poll war”. Of course, when I gave them there opportunity the other day they all took a pass.

So rather than debating the contradictory polls, because there are no contradictory polls we can take a look at an interesting recent poll carried out for PDVSA by Evans/McDonough



The first slide is an interesting look at the issues that Venezuelan’s consider to be the biggest problem and second biggest problem.



Two issues far and away dominate: crime and jobs. No surprise given Venezuela’s crime rate and unemployment rates.

The next slide gives peoples perception of how the country is doing



Currently 45% of the country thinks it is doing well as opposed to 35% that think it is “going down the tubes”. If anything, I would have expected more favorable numbers here, but they are what they are. Note that the favorable perceptions have increased 5% since August 2004 when the Recall Referendum was held that Chavez won.

The next slide shows a big plus for Chavez.



This slide shows that 48% of the those asked think the country is better off than two years ago whereas 29% think things have gotten worse. This is no surprise given the booming economy and it is largely this statistic that will propel Chavez to victory next month.

This next slide is a confirmation of the previous information presented in a different way



All the different shades of contentment and discontentment are given for 2006 and 2004. It would seem the overall numbers haven’t changed much. But again we see that those who see the country in a positive light outnumber those who see it in a negative light almost 2 to 1, 64% to 34%.

The next slide reveals why Chavez is virtually invincible politically



In this slide 53% say they hope that the outcome of the next election is that Chavez stays in office versus only 40% who would like to see a change in government. Even factoring out the unpopularity of the opposition by asking if people would like a “change” most people say no.

This is again confirmed when people evaluate the government



Overall we see 53% with a positive view of the government whereas only 37% have a negative view of it. One interesting part of this slide is that the second largest group of people are those who give the government the worst rating – “pessima” or terrible. Having 19% of the population in that grouping and taking into account they are the chattering classes and own most of the media it isn’t surprising there is so much vocal anti-Chavez hysteria out there.

This slide breaks down people into Chavez and anti-Chavez groupings



Chavez clearly enjoys a significant advantage. When those who are initially undecided are forced to take a side Chavez’s advantage grows further:



Now this is very interesting. 53% of people categorize themselves as Chavistas whereas only 36% categorize themselves as anti-Chavista. Now, people may recall that the Keller polling firm came out with data claiming that 52% of people were Chavistas and 48% were anti-Chavez. Of course, Keller didn’t ask people to describe themselves. Rather he asked them a number of loaded questions “do you want Venezuela to be like Cuba”, “do you think private property should be abolished”, etc. and then based on their answers categorized people. Personally I think just asking people to categorize themselves gives a much clearer picture of people’s true feelings.

Ok, now we get to the slides where the rubber meets the road:



57% say they will vote for Chavez versus 35% who will vote for Rosales giving Chavez a lead of 22%. Of course, at this point our opposition friends will really start to squirm and say this poll can’t be right. But can’t it. Is it really different from what this, this, and this poll found? Heck is it all that different from the Penn and Schoen poll which found Chavez with a 13% lead? Unfortunately for the opposition, this is reality staring them in the face.



This slide breaks the vote down by region. The good news for Rosales? At least he’ll carry his own state if nothing else.

And here is the best, saved for last



This slide breaks down the preferences by social strata (remember “A” is the rich elite, “B” the upper middle class on down to “E” who are the working poor and poor. Notice we see exactly what we would expect. The wealthy reject Chavez at a very high rate and the poor desire his continuance in power at an almost equally high rate. The rich despise Chavez and the poor see him as their savoir – it really is almost that simple.
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Of late I have been quite busy and haven't been able to blog as much as I would have liked. Does Chavez have any sympathy? No. The bastard just keeps inaugurating massive new public works projects left and right giving me no chance to keep up.

But in an effort not to fall even further behind let me show at least a little of what Chavez will be opening today - the second bridge over the Orinoco river. So special is the ocassion that Hugo's good friend, Lula, has flown in for the occassion and to note the fact that it was a Brazilian firm that did much of the actual work.

I have more background on the significance of this project previously. So for now lets just appreciate its bueaty in these pictures just prior to its opening:





It really is bueatiful, isn't it. Hopefully they will keep it fully illuminated.

Here are some more construction pictures showing just how massive an undertaking this was. It didn't cost $1.2 billion for nothing.

























So while all the opposition blowhards have to offer Venezuelans are pie in the sky promises that will never see the light of day Chavez gives them concrete accomplishments (literally sometimes !) day in and day out. Looking at things that way it is easty to understand why on December 3rd they'll likely indicate they want him around for another six years.
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