November 1, 2008

Bizarro World: Petroleum Sovereignty Edition

Quico says: That's it. I officially no longer understand anything that happens in Venezuela anymore.

This week, Chávez moved to nationalize Helvesa, a company that makes pipes for the oil sector, on grounds of "full petroleum sovereignty," while at the same time starting the process to auction off rights over fields holding 62 billion barrels of extra heavy crude to foreign oil companies: a kind of "stealth apertura" with participants including BP, Chevron, ENI, Mitsui, Shell, StatoilHydro, Total, and Vinccler.

For chavistas, the pipelines are strategic. The oil they carry? Not so much...

And another thing: bizarre as the government's actions are, the foreign oil companies baffle me even more. Some reaction from the Petroleumworld write-up:
After the presentation of the project, Petroleumworld talked to various CEOs of the local operations of the majors oil companies and they all were impressed with the project.

Wes Lohec, president of Chevron's Venezuela told Petroleumworld "I think it looks to be very successful.''

"An outstanding project, we are looking to evaluating the data," Luis Prado, president of Shell Venezuela told Petroleumworld.
Erm, ummm, Wes, to put this delicately?...are you out of your fucking minds?!?

You're going to sink a bunch of money into these projects and then you're going to get expropriated...again!

It's not even subtle what they're doing.

October 31, 2008

Annals of Suggestive Headline Writing

ABN: Venezuela and Cuba Exchange Animals.


Quico says: One nice thing about living in Holland is that I'm close enough to England to pick up the BBC's radio and TV broadcasts.

It's a balm. With its fixation on high production values, its fanatical refusal to take any BS from politicians, ever, its parallel dedication to very silly comedy and devil-make-care-if-this-comes-across-as-elitist cultural programing and (of course), David Attenborough, the BBC really is a kind of shining beacon on a hill, a day-by-day demonstration of what can be done with public sector broadcasting when professional standards are continuously tended to and political independence jealously guarded.

These days, as the crazy US presidential race lures me back to more and more US-American news sites, the contrast between the two broadcasting cultures has hit me upside the head all over again. Seriously, a few years of dedicated beeb listening left me totally unprepared for the tsunami of nattering idiocy that passes for political coverage in the US.

(Not, of course, that the BBC doesn't step on its own testicle every now-and-then, witness this furious row-cum-editorial pogrom over some deliriously bad-taste prank calls to Andrew Sachs (a.k.a., Manuel from Fawlty Towers) about his granddaughter's pulchritude...but I digress...)

The reason I bring up the BBC is that yesterday, in one of its signature we-don't-actually-care-if-this-is-too-high-fallutin'-for-you radio programs, the beeb ran a forty minute crash course on Simón Bolívar on its History of Ideas series, In our Time. Like most things on Radio 4, it's well worth a listen.

I've long had this feeling that the Real Bolívar is oddly inaccessible for present day Venezuelans. Mythologized and re-mythologized and then mythologized s'more by 178 years' worth of hucksters, dictators and wannabes of the left-right-and-center, the actual flesh and blood man behind the avenida, the plaza, the bank note, the bank and, hell, the name of the damn country, has more or less vanished.

Sucked dry by the legitimacy-vampirism of Guzmán Blanco, of Gómez, of Betancourt and of él que te conté, Bolívar-the-man has entered a weird kind of cultural netherspace. We know nothing about the person they're meant to all agree personifies our nation. The average Venezuelan probably hears the word "Bolívar" (or its derivatives - Bolivia, bolivarian, bolibourgeois, etc.) fifty times a day - often enough for the referent to fade entirely out of sight.

In Venezuela, Bolívar is the ultimate Empty Signifier.

When the historical Bolívar is acknowledged, it is almost always in vague, reverential (if not deifying) tones. Critical appraisal is limited to a broad acknowledgement of the inhumanity of his War onto Death decree and the execution of Piar, themselves highly ritualized as "safe" territory for Bolívar criticism. It is criticism within the cult; criticism divorced from insight.

Which is why, paradoxically, in order to gain some sense of the man behind the myth, you're almost forced to go outside Venezuela, and why this BBC show is so valuable. How often have you heard it acknowledged that Bolívar stayed in his room sulking rather than actually attending Napoleon's coronation? How often have you heard the Monte Sacro Vow placed in the strategic context of great power competition around Spain's ongoing war with England? Or that some of the British volunteers in the Campaña Admirable were so disgusted with his leadership they preferred indentured servitude in the Caribbean to continuing to fight for him? As Manuel himself might say...¿Qué!?

These facts fall outside the heroic arc of the official Bolívar narrative, they've been written out of the myth. They do not feature in our consciousness of the man, and couldn't. Paradoxically, it takes escaping to a foreign source, an English-language source, for these things to become sayable. Which is why this In Our Time show is worth listening to.

(Hat tip: Paul)

October 29, 2008

Get a grip!

Quico says: The government could barely contain its collective orgasm today over the launch of "the first Venezuelan satellite."

Venezuelan?! Se fumaron una lumpia...Chinese design, Chinese engineering, Chinese manufacturing, Chinese testing, Chinese software, Chinese rocket, Chinese launch control...the only thing that's Venezuelan about Venesat-1 is the money that paid for it.

If the electrons oppose us, we shall fight against them and force them to obey us

Quico says: The revolution's Woody Allenesque extremes of paranoia reached a weird zenith last week with this story about the three Edelca engineers who took the rap for the last Sunday's massive blackout and ended up in jail on vague charges of sabotage.

In the event, the three were released fairly quickly, as there was no evidence whatsoever to pin the blame on them for the problems of a grid that's been groaning for years under the strain of under-investment and neglect.

Still, that didn't stop chavismo from spreading intelligence operatives throughout Edelca and Cadafe facilities to try to flush out the imperialist saboteurs they see lurking at every corner.

Some deeply cynical part of me can't stop laughing at the thought of these goons, rifles slung over their shoulders, hanging around menacingly around Cadafe, sporadically lurking uncomprehendingly over the shoulders of these highly trained technical personnel, implicitly threatening to throttle the first guy they see if anything goes wrong. Must do wonders for employee morale, that one!

The part I really can't figure out is, if you're just an regular Disip/DIM Joe, how would you even know if the electrical engineer directly in front of you has just sabotaged the grid? I mean, short of them taking a sledgehammer to some Lost-in-Space looking control panel - all flashing lights and beeping beeps - surely all you'd see was a guy pushing some combination of buttons and then the grid going down.

The whole electrification through the barrel of a gun thing would be really really funny, if it wasn't because Honny Vásquez, Rodolfo Ortega and Adán Ramos are real people with real families and real careers to worry about, who've now been forever branded as unreliable elements by the revolution's commisars. What future could those three have?

Not much of one, is my guess, at least not inside Venezuela. Cuz finding solutions is hard...but finding scapegoats? Dead easy...

October 28, 2008


Quico says: That's the proportion of Venezuelan voters who still like Hugo Chávez. Datanalisis dixit. Granted, just 35% have confidence he can help solve the country's problems. But 58% still like him.

Ten years out, riding on a discourse that's equal parts Monty Python and One Flew Over the Cuckoo's Nest, this is simply an astonishing figure. The kind of reality check that'll send me scrambling for the nearest whiskey bottle.

But it is what it is. No use trying to wish it away.

October 26, 2008

Known unknowns

"There are known knowns. There are things we know that we know. There are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns."
-Guru Rumsfeld

Quico says:
It was interesting reading through the comments to Juan's latest post. Everyone seems to think Chávez will announce a currency devaluation sooner rather than later - sometime between November 24th and the February 2009 seems to be the consensus.

I find it bizarre that the range of guesses was so compact. People seem to be recklessly ignoring the wisdom of Guru Rumsfeld here. When it comes to forecasting the next devaluation, we're mired in known-unknowns land.

Personally, my sense is that Chavez'll do the Lusinchi thing and draaaaaaw things out as long as he possibly can. How long is that? Well, that depends on two things: how much money oil brings in next year and how much money the government has on hand for a rainy day.

Thing is, we don't know either of those numbers!

What we know for sure is that the Central Bank is holding $39 billion in currency reserves (about 10 months' worth of imports) and that the central government keeps $800 million in a rainy-fund FIEM account at BCV. Those totals we can be reasonably sure about of because they're reported daily.

Trouble is, the rest of the government's rainy day cash stashes - Bandes, Fonden and PDVSA's cash and accounts-payable (plus, imaginably, other kitties we don't even know about) - report bi-annually, if at all.

Which means that whenever you see an "independent analyst" putting a date to a devaluation or an oil-price threshold to the government's fiscal viability, these people are working off of data that's almost 5 months old, un-audited, impossible to verify and incomplete.

Depending on who's doing the counting, the government's rainy-day funds might come to anything from $12 to $75 billion. (That's not including foreign currency reserves which, as I keep stressing, are made up, by definition, of dollars the government has already spent and are, therefore, not "government savings" in any meaningful sense)

$12-75 billion. That is a wide range. A ridiculously wide range, actually. A range wide enough, in fact, to make a mockery out of any attempt to forecast what's going to happen.

If oil stays north of $70/barrel and the real rainy-day funds figure is in the upper part of the range, it could be years before Chávez devalues. If oil drops to $50 or less and the state's reserves are towards the bottom end of the range, we could well be looking at devaluation within 3 months.

Everyone in the opposition seems to be taking it for granted that we're heading into the second scenario, rather than the first. People point to PDVSA's aggressive borrowing in the last two years as a sure indication that the company must not have big piles of hundred dollar bills laying around somewhere waiting to be spent. Certainly, it would be senseless, irrational and bizarre for PDVSA to be paying steep interest rates to borrow money to finance its investments while, at the same time, holding big hoards of cash.

El detalle is that "senseless, irrational and bizarre" might as well be chavismo's fiscal management motto. These days, mere senselessness is weak grounds for excluding something as a possibility.

If we're honest, we should aggressively hedge any forecast. Fact is, the government's financial reporting is so deliriously opaque, we can't really speak with confidence about the key variables at play.

We might be on the edge of a precipice, or we might be a comfortable distance away from it. One way or another, when the time comes, count on Chávez to take that step forward.