Maybe the French Agriculture minister had a point after all. Chuck Grassley, the powerful head of the US Senate's Agriculture Committee, has just said the US Congress is unlikely to approve the deal being hammered out in Hong Kong. After 48 hours of intensive, sleep-deprived negotiating, his comments did not go down well here.
Credit where it's due: a lot of European delegates (off the record) and lefty NGOs (on the record) here have been questioning US Trade Representative Rob Portman's ability to deliver the kind of deal he's been promising, noting that he seems to have been going well beyond his Fast-Track negotiating mandate and making promises to the developing world the US congress would never agree to.
It's a slightly bizarre argument, however, because the draft Grassley is pledging to kill in Congress is not likely to even be signed here. Peter Mandelson - Hong Kong's Dr. No - spent the night taking shots at it, and taking the EU's isolation here from "near-total" to total.
If nothing else, this week has made me incredibly cynical about the EU. These bastards spin with such brazen disregard for the truth, it's staggering. A lot of their statements are just near-Orwelian reversals of what happened - Eurasia has always been at war with Eastasia and the meeting is failing due to developing country intransigence. Right.
If the Euro chingo doesn't get us, the US congressional sin-nariz will. Meanwhile, Portman keeps making concessions. One interpretation is that he is so confident the EU won't sign anything like what they're talking about, he feels emboldened to make "concessions for free" - knowing he won't really have to take them to congress. Hey, why should the US share the bad-guy spotlight when the EU is willing to hog it all to itself?
Beyond all the tactical posturing, the big losers from all of this will be West Africa's cotton producers. A group including Burkina Faso, Mali, Chad, and Niger - really the poorest of the poor countries on earth - came excruciatingly close to reaching a hard fought for agreement with the US on cotton subsidies. To these countries Cotton is a bit like oil is to Venezuela - 70% of their export earnings, basically their only export commodity. Their producers' inability to compete with subsidized US producers had become a kind of symbol of the iniquities in the trade regime: millions and millions of desperately poor Africans shut out of world markets by the US determination to keep paying subsidies for 50,000 gringos to farm cotton. This week, Brazil, India and the G110 went to bat for the West African cotton producing countries, pressuring the US as a block to make cuts in cotton subsidies faster than cuts in any other sector.
They were just about there...the US had just about conceded the point...they were so, so close. But no cigar, cuz the EU won't sign.
December 17, 2005
Fussing over ag subsidies...
Confused about what the big WTO fight over agriculture is all about? Pietra Rivoli writes a lucid little summary of the main issue and the way it's gotten distorted in negotiations. She exaggerates when she says the talks have become "single issue", but other than that her exposition is flawless...
December 16, 2005
Mandelson's Straightjacket
[Sorry to stay stuck on the Hong Kong thing, everyone, but I thought it was time to demonstrate I can be obsessed with more than one thing at a time!]
It's day four of the Hong Kong WTO Ministerial and the conference has officially entered the tired-and-cranky stage. Hey, it's not me saying it, that's how the Deputy US Trade Representative put it at her press conference today. In her view, you need to get to this point before people start negotiating in earnest. If so, we're primed for some earnest negotiatin', cuz tired-and-cranky fits the atmosphere here to a T.
Fact is, nobody is really expecting a breakthrough here today. It's now painfully clear that the EU is just not going to improve its offer, and its offer is very far from acceptable to the developing country block. It's not that Peter Mandelson, the EU Trade Commissioner, doesn't want to sweeten the deal, it's that he can't: the whole institutional structure of the European Union conspires against it.
See, unlike all the other negotiators here, his crankiness Peter Mandelson is not a minister. He's more like a gofer for the 25 EU trade ministers, who are the ones who ultimately get to set EU trade policy. The ministers meet, they set out a harmonized EU negotiating mandate, and they hand it to him. The EU mandate itself is the outcome of a long, difficult, involved negotiation between 25 very different countries with very different interests. By the time the 25 have worked out a common position, there's basically no wiggle room left. Mandelson can't change even the details of the EU's offer without upsetting the delicate balance embodied in the mandate: take out one comma here and the French throw a fit, switch a "shall" to a "should" there and the Hungarians go ballistic.
So there's a strange imbalance between the way the EU "negotiates" at a WTO ministerial and the way everyone else does. When the Australians and the Americans sit down to discuss State Trading Enterprises, for instance, both sides have leeway to explore creative solutions to their disagreement. They can haggle, they can give and take, they can explore different possibilities. But the EU can't do any of that. When Mandelson walks into the negotiating room, all he's really allowed to do is restate his mandate. Which is why I put "negotiate" in scare-quotes above: the EU doesn't really negotiate at all at these things. It reiterates. Often at great length, and with some top grade spin, granted, but its underlying position never changes. As I'm sure you can imagine, this is incredibly frustrating for all the other delegations.
Certainly, things have come to a head when the Financial Times, the FT ferchrissake, is running stories about the EU facing "near-total isolation" in the talks.
At one of the press conferences today, one journo who'd obviously reached the tired-and-cranky stage asked the French trade minister what the point is of even having ministerials if the EU can't and won't change its offer. The guy answered, a bit lamely in my view, that at least the other countries know that it's a credible offer since it's been pre-approved by all the EU member governments, whereas anything the US offers could still get shot down when it goes up for congressional approval in Washington. Perhaps. But it remains hypothetical because, as long as the EU remains lost in its own private bureaucratic laberynth, there won't be a trade agreement for the US congress to vote on.
It's day four of the Hong Kong WTO Ministerial and the conference has officially entered the tired-and-cranky stage. Hey, it's not me saying it, that's how the Deputy US Trade Representative put it at her press conference today. In her view, you need to get to this point before people start negotiating in earnest. If so, we're primed for some earnest negotiatin', cuz tired-and-cranky fits the atmosphere here to a T.
Fact is, nobody is really expecting a breakthrough here today. It's now painfully clear that the EU is just not going to improve its offer, and its offer is very far from acceptable to the developing country block. It's not that Peter Mandelson, the EU Trade Commissioner, doesn't want to sweeten the deal, it's that he can't: the whole institutional structure of the European Union conspires against it.See, unlike all the other negotiators here, his crankiness Peter Mandelson is not a minister. He's more like a gofer for the 25 EU trade ministers, who are the ones who ultimately get to set EU trade policy. The ministers meet, they set out a harmonized EU negotiating mandate, and they hand it to him. The EU mandate itself is the outcome of a long, difficult, involved negotiation between 25 very different countries with very different interests. By the time the 25 have worked out a common position, there's basically no wiggle room left. Mandelson can't change even the details of the EU's offer without upsetting the delicate balance embodied in the mandate: take out one comma here and the French throw a fit, switch a "shall" to a "should" there and the Hungarians go ballistic.
So there's a strange imbalance between the way the EU "negotiates" at a WTO ministerial and the way everyone else does. When the Australians and the Americans sit down to discuss State Trading Enterprises, for instance, both sides have leeway to explore creative solutions to their disagreement. They can haggle, they can give and take, they can explore different possibilities. But the EU can't do any of that. When Mandelson walks into the negotiating room, all he's really allowed to do is restate his mandate. Which is why I put "negotiate" in scare-quotes above: the EU doesn't really negotiate at all at these things. It reiterates. Often at great length, and with some top grade spin, granted, but its underlying position never changes. As I'm sure you can imagine, this is incredibly frustrating for all the other delegations.
Certainly, things have come to a head when the Financial Times, the FT ferchrissake, is running stories about the EU facing "near-total isolation" in the talks.
At one of the press conferences today, one journo who'd obviously reached the tired-and-cranky stage asked the French trade minister what the point is of even having ministerials if the EU can't and won't change its offer. The guy answered, a bit lamely in my view, that at least the other countries know that it's a credible offer since it's been pre-approved by all the EU member governments, whereas anything the US offers could still get shot down when it goes up for congressional approval in Washington. Perhaps. But it remains hypothetical because, as long as the EU remains lost in its own private bureaucratic laberynth, there won't be a trade agreement for the US congress to vote on.
Venezuela electoral results watch, Day 12 or how I stopped worrying and learned to love the CNE.
Venezuela has no final electoral results so far. This, despite the fact that the Venezuelan Ministry of Electoral Affairs, which is controled directly by the Vice-President's office, touts the Venezuelan Electoral system as being the safest, most transparent, fastest and fairest of them all worldwide. This, despite the fact that the Venezuelan M.E.A. (the artist formerly known as CNE) spent Millions of dollars on machines the SENIAT (another one of the new weapons of mass coercion the government has put in use against who oppose it) deemed too unsafe to be used as lottery terminals. This, despite the fact that by Sunday Dec. 4th at night the M.E.A. had supposedly tallied 75% of the vote. This, despite the fact that only one faction was disputing seats in the Assembly. This, despite the fact that the first round of Chilean elections had tallied a national final result by the evening of the very same day the election took place.
The Minister of Electoral Affairs, the Spa-loving, massage-receiving, objective-criticism-only-accepting 'straight arrow' Dr. Jorge Rodríguez, has made miryad public appearances these days. He has even given press conferences where he has attacked the EU/OAS observator mission report as biased, and has left possibilities open to accept "objective" criticism. He has yet to give final, final numbers.
The Minister of Electoral Affairs, the Spa-loving, massage-receiving, objective-criticism-only-accepting 'straight arrow' Dr. Jorge Rodríguez, has made miryad public appearances these days. He has even given press conferences where he has attacked the EU/OAS observator mission report as biased, and has left possibilities open to accept "objective" criticism. He has yet to give final, final numbers.
Celso Amorim's Ministerial
Brazilian foreign minister Celso Amorim is having the time of his life this week. After a quarter century of grandiose but empty declarations of developing country unity on trade issues, Hong Kong has finally sealed the deal. Amorim is acting as the de facto leader of the Brazil-India alliance, which is at the heart of the G20 group of developing nations, which has roped in the G33 and G90 groups of developing nations and includes 110 countries and 80% of the world population. India and Brazil have been deliberate about working out common negotiating positions with the other developing country groups, and they seem to have overcome the poorest countries' initial reticence in this regard.
The outcome of all this coordinating is that for the first time the developing countries really are negotiating as a block...and Amorim is at the center of it all. More and more, he speaks not for Brazil but for the whole of the developing world here. And, having gotten control the agenda, Amorim is driving one hard bargain. He's not giving an inch to the EU, and he has outflanked the EU so comprehensibly in the PR war surrounding the negotiations that when the meeting fails, it'll be the Europeans who take the fall. Honestly, I think it's marvelous...
Again, the outcome of this will not be a development-friendly agreement, at least not immediately. There's no chance for "full negotiating modalities" to be agreed here and there may not even be any agreement at all. The difference this time around is that the EU is going to take the blame, not the developing countries. It's never happened before, and it sets up a very different atmosphere for the rest of the Doha Round. The developing countries will keep the initiative while Europe take a defensive position, making increasingly unconvincing excuses for blocking progress. Given that that the ministerial was never really likely to succeed in producing a complete outline agreement, this is the best outcome the developing world could have hoped for. And Amorim deserves a lot of the credit for that.
December 15, 2005
The WTO Turned on its Head
It's day 3 in Hong Kong and I have to say this conference is full of surprises. Figuring I'd been spending enough time with third world types, I decided to go to the International Manufacturers' Association press conference. I walk into the room and realize I am the only "journalist" who's turned up. So I sit down and there they all are, the heads of every major employers' federation in Europe and North America, lined up in front of me. Undeterred, the chairman launches straight into the "press conference" except, well, there are about 20 of them and only one of me. So I get to ask all the questions, these guys just take turns answering.
It was totally bizarre, really: a press conference in reverse. Still - and even though I was totally unprepared to be put on the spot like that - it's not a chance you pass up. So I started asking questions. And let me tell you, I got a lot of frustration in response.
See, these guys came to Hong Kong to talk about industrial tariffs, about service liberalization, about the stuff giant multinationals care about. But nobody's talking about that. All the negotiations are focused on agriculture. The big employers' federations are totally sidelined, and seemingly at a loss as to how to get a handle on the agenda again. It's definitely not a good sign when they call a press conference and the only news organization that turns up is VenEconomy.
It's symptomatic, though: what we're seeing is the WTO turned on its head. All the old cliches about the WTO as multinational conspiracy look more and more out of touch. When I started researching this stuff, one of my professors told me that 90% of the trick to multilateral negotiations is taking control of the agenda. The multinationals used to have it, but they lost it, and they seem totally bewildered about what went wrong. In Hong Kong, the big developing countries have taken hold of the agenda and they're just not going to let go. It's fascinating.
The big story of the day is definitely the increasing isolation of the EU, though. More and more the US position on agriculture sounds like the developing countries' position. You can see this in the language negotiators are using when they talk to the press: Brazil and India have been describing agriculture as the "key that could unlock the negotiations" and, this morning, US Trade Representative Rob Portman used exactly that phrase. Brazil and India insist that the first priority is establishing 2010 as a definite deadline for eliminating all agricultural export subsidies. Portman agrees emphatically.
The Europeans, meanwhile, keep insisting on "balance" between agriculture and other issues, and they keep dithering on a deadline on agricultural export subsidies. Thing is, nobody's biting.
All of this is unprecedented. Never had developing countries taken the lead in a WTO ministerial like they're doing this week. Never had the big developed countries looked as divided as they do now. And, certainly, never had we seen the US take sides - in general terms, if not on the details - with the developing countries rather than with Europe.
At the same time, India and Brazil are very much aware that many developing countries - and especially the least developed countries - are worried they'll get sold out. In 2004, the US and the EU clearly tried to engineer an agreement that took on India and Brazil's concerns, but nobody else's. India and Brazil are not playing along this week. India's trade minister, Kamal Nath, is spending a lot of time coordinating with the other developing countries to make sure they present a unified position. The LDC delegates I've spoken to seem, if not exactly comfortable, at least reasonably reassured that India and Brazil are not going to cut a deal without consulting them first.
In the end, it doesn't really change anything, because the EU is totally entrenched in its stance and it's not going to budge without big concessions. So nobody really expects a deal on full negotiating modalities to come out of this, which was supposed to be the point. What's clear, though, is that when it's all said and done the EU is going to have to take the fall for the failure of the talks.
Which is why Celso Amorim, the Brazilian foreign minister, is one happy camper in Hong Kong. The Europeans thought they could divide the developing country block, picking them off with selective concessions. A lot of LDCs see their offers on "aid for trade" in just that light. It's emphatically not working. If nothing else, Hong Kong is decisively consolidating the joint Indian-Brazilian leadership of the developing country block.
It was totally bizarre, really: a press conference in reverse. Still - and even though I was totally unprepared to be put on the spot like that - it's not a chance you pass up. So I started asking questions. And let me tell you, I got a lot of frustration in response.
See, these guys came to Hong Kong to talk about industrial tariffs, about service liberalization, about the stuff giant multinationals care about. But nobody's talking about that. All the negotiations are focused on agriculture. The big employers' federations are totally sidelined, and seemingly at a loss as to how to get a handle on the agenda again. It's definitely not a good sign when they call a press conference and the only news organization that turns up is VenEconomy.
It's symptomatic, though: what we're seeing is the WTO turned on its head. All the old cliches about the WTO as multinational conspiracy look more and more out of touch. When I started researching this stuff, one of my professors told me that 90% of the trick to multilateral negotiations is taking control of the agenda. The multinationals used to have it, but they lost it, and they seem totally bewildered about what went wrong. In Hong Kong, the big developing countries have taken hold of the agenda and they're just not going to let go. It's fascinating.
The big story of the day is definitely the increasing isolation of the EU, though. More and more the US position on agriculture sounds like the developing countries' position. You can see this in the language negotiators are using when they talk to the press: Brazil and India have been describing agriculture as the "key that could unlock the negotiations" and, this morning, US Trade Representative Rob Portman used exactly that phrase. Brazil and India insist that the first priority is establishing 2010 as a definite deadline for eliminating all agricultural export subsidies. Portman agrees emphatically.
The Europeans, meanwhile, keep insisting on "balance" between agriculture and other issues, and they keep dithering on a deadline on agricultural export subsidies. Thing is, nobody's biting.
All of this is unprecedented. Never had developing countries taken the lead in a WTO ministerial like they're doing this week. Never had the big developed countries looked as divided as they do now. And, certainly, never had we seen the US take sides - in general terms, if not on the details - with the developing countries rather than with Europe.
At the same time, India and Brazil are very much aware that many developing countries - and especially the least developed countries - are worried they'll get sold out. In 2004, the US and the EU clearly tried to engineer an agreement that took on India and Brazil's concerns, but nobody else's. India and Brazil are not playing along this week. India's trade minister, Kamal Nath, is spending a lot of time coordinating with the other developing countries to make sure they present a unified position. The LDC delegates I've spoken to seem, if not exactly comfortable, at least reasonably reassured that India and Brazil are not going to cut a deal without consulting them first.
In the end, it doesn't really change anything, because the EU is totally entrenched in its stance and it's not going to budge without big concessions. So nobody really expects a deal on full negotiating modalities to come out of this, which was supposed to be the point. What's clear, though, is that when it's all said and done the EU is going to have to take the fall for the failure of the talks.
Which is why Celso Amorim, the Brazilian foreign minister, is one happy camper in Hong Kong. The Europeans thought they could divide the developing country block, picking them off with selective concessions. A lot of LDCs see their offers on "aid for trade" in just that light. It's emphatically not working. If nothing else, Hong Kong is decisively consolidating the joint Indian-Brazilian leadership of the developing country block.
Is there anything he can't do?
In his spare time from trying to save the World Trade Regime, WTO Director General Pascal Lamy is blogging the Ministerial...
Beginners' Guide to WTOese: "A Balanced Agreement"
I think a big part of the reason people find the WTO so hard to understand is that trade diplomats refuse on principle to speak plain English. Now, I know every specialized organization breeds its own specialized lingo, and the more specialized it is the more convoluted it gets...but at the WTO this dynamic has gone totally haywire.
Some of it is downright oxymoronic. It takes some immersion in this absurd little world before you realize that "most favored nation" (MFN) status means exactly the opposite of what it says: you're allowed to treat a given trade partner better than MFN (by signing a free-trade agreement with that partner, for instance) but you're not allowed to treat a partner worse. So actually, your most favored nation trade partners are the ones you favor the least.
Some of it is just mystifying: I have no clue at all why they have to say "full negotiating modalities" when what they mean is "an agreement."
Other elements of WTOese are really just bureaucratic euphemisms: "sensitive products" means roughly "whatever I'm being lobbied not to liberalize." "An ambitious agreement" means "you liberalize what I want you to liberalize but I get to protect my sensitive products." "Frank discussions" seems to mean "ministers tiresomly reiterating positions they've held for years." So if you see a WTO talking head on the news saying "ministers held frank discussions on full negotiating modalities for sensitive products aimed at reaching an ambitious agreement" you can just throw your hands up in utter despair.
But the particular linguistic deformation that caught my eye today is that most slippery of WTOese formulations: "a balanced agreement."
Every single delegation here claims to be working towards "a balanced agreement." Needless to say, no two ministers mean the same thing by the phrase. For the rich countries, "a balanced agreement" means "you liberalize your manufacturing markets and we'll liberalize our agricultural markets." For developing countries it means "we already liberalized our manufacturing markets last, so now you have to liberalize your agricultural markets." They use the exact same phrase, but they mean diametrically opposed things.
The reason I think, is something I alluded to yesterday. During the last round of trade negotiations - the famous Uruguay Round that dragged on from 1986 to 1994 - developing countries made major concessions on a whole range of issues and got pathetically little in return in terms of agriculture. The rich countries considered the Uruguay Round agreements "balanced" just because, for the first time, they introduced some (weak) rules on agricultural trade. More or less all the developing countries now believe the Uruguay Round agreement was seriously unbalanced - "forced consensus" at its worst.
Now the consequences of that unbalance are being worked through the system. Call it Uruguay Overhang. From the developing countries' point of view, the whole point of the current round of negotiations is to "balance" the iniquities of the previous round. Really, what the developing world wants is not so much a "balanced agreement" as a "balancing agreement"
Initially, the rich countries implicitly agreed, officially calling the current round the "Doha Development Agenda" in recognition that Uruguay was not exactly development friendly. But in the four years since Doha, calls for a "balanced agreement" have come back with a vengeance, especially in the EU. Sure, they still talk in terms of development, but more and more they're demanding a quid-pro-quo.
India and Brazil put the developing countries' position pretty succinctly yesterday. What they say, in paraphrase, is "hey, every time we meet them, the Europeans ask us what price we're willing to pay in exchange for them to stop doing things they shouldn't be doing in the first place."
The EU is desperate to spin its way out of this bind. Every time Peter Mandelson, the EU trade commissioner, comes anywhere near a microphone he says "balance" at least once sentence. The developing countries have to balance their demands for better agricultural market access with concessions on manufacturing tariffs. The US has to balance its call for dramatic farm tariff cuts by reforming its Food Aid programs. Canada, Australia and New Zealand need to "balance" by reforming their State Agricultural Trading Enterprises.
"Balance", in this context, means roughly "what's in it for me?!" Fluffy development rhetoric aside, the EU won't seriously consider farther farm trade concessions until they've extracted their pound of flesh on other issues. Some of the US delegates I've met put it even more bluntly: "they know if the conversation is about agriculture they're screwed, they're desperate to change the subject."
The funny thing is that the US is arguably closer to the developing countries' position than to the EU on all of this. The reason is not any newfound philanthropic thrust to the Bush administration: it's just that American agribusiness is big enough and efficient enough to compete in a low-or-no tariff world. European farmers, by and large, are not. For the US, a liberal farm market is a business opportunity. For the EU, it would be a bureaucratic dust bowl.
Which, I think, is pretty interesting. Most people tend to assume that the US is the baddie at the WTO. Bush country and all that. But the reality is that if anyone looks isolated in all this it's Europe. The difference between the US and the Brazil/India proposals are mostly technical in nature - if it was up to them, they could sit down and work out a compromise in half an hour. The real, substantive gap in agriculture is between the US/Brazil/India on the one hand and the EU on the other.
Some of it is downright oxymoronic. It takes some immersion in this absurd little world before you realize that "most favored nation" (MFN) status means exactly the opposite of what it says: you're allowed to treat a given trade partner better than MFN (by signing a free-trade agreement with that partner, for instance) but you're not allowed to treat a partner worse. So actually, your most favored nation trade partners are the ones you favor the least.
Some of it is just mystifying: I have no clue at all why they have to say "full negotiating modalities" when what they mean is "an agreement."
Other elements of WTOese are really just bureaucratic euphemisms: "sensitive products" means roughly "whatever I'm being lobbied not to liberalize." "An ambitious agreement" means "you liberalize what I want you to liberalize but I get to protect my sensitive products." "Frank discussions" seems to mean "ministers tiresomly reiterating positions they've held for years." So if you see a WTO talking head on the news saying "ministers held frank discussions on full negotiating modalities for sensitive products aimed at reaching an ambitious agreement" you can just throw your hands up in utter despair.
But the particular linguistic deformation that caught my eye today is that most slippery of WTOese formulations: "a balanced agreement."
Every single delegation here claims to be working towards "a balanced agreement." Needless to say, no two ministers mean the same thing by the phrase. For the rich countries, "a balanced agreement" means "you liberalize your manufacturing markets and we'll liberalize our agricultural markets." For developing countries it means "we already liberalized our manufacturing markets last, so now you have to liberalize your agricultural markets." They use the exact same phrase, but they mean diametrically opposed things.
The reason I think, is something I alluded to yesterday. During the last round of trade negotiations - the famous Uruguay Round that dragged on from 1986 to 1994 - developing countries made major concessions on a whole range of issues and got pathetically little in return in terms of agriculture. The rich countries considered the Uruguay Round agreements "balanced" just because, for the first time, they introduced some (weak) rules on agricultural trade. More or less all the developing countries now believe the Uruguay Round agreement was seriously unbalanced - "forced consensus" at its worst.
Now the consequences of that unbalance are being worked through the system. Call it Uruguay Overhang. From the developing countries' point of view, the whole point of the current round of negotiations is to "balance" the iniquities of the previous round. Really, what the developing world wants is not so much a "balanced agreement" as a "balancing agreement"
Initially, the rich countries implicitly agreed, officially calling the current round the "Doha Development Agenda" in recognition that Uruguay was not exactly development friendly. But in the four years since Doha, calls for a "balanced agreement" have come back with a vengeance, especially in the EU. Sure, they still talk in terms of development, but more and more they're demanding a quid-pro-quo.
India and Brazil put the developing countries' position pretty succinctly yesterday. What they say, in paraphrase, is "hey, every time we meet them, the Europeans ask us what price we're willing to pay in exchange for them to stop doing things they shouldn't be doing in the first place."
The EU is desperate to spin its way out of this bind. Every time Peter Mandelson, the EU trade commissioner, comes anywhere near a microphone he says "balance" at least once sentence. The developing countries have to balance their demands for better agricultural market access with concessions on manufacturing tariffs. The US has to balance its call for dramatic farm tariff cuts by reforming its Food Aid programs. Canada, Australia and New Zealand need to "balance" by reforming their State Agricultural Trading Enterprises.
"Balance", in this context, means roughly "what's in it for me?!" Fluffy development rhetoric aside, the EU won't seriously consider farther farm trade concessions until they've extracted their pound of flesh on other issues. Some of the US delegates I've met put it even more bluntly: "they know if the conversation is about agriculture they're screwed, they're desperate to change the subject."
The funny thing is that the US is arguably closer to the developing countries' position than to the EU on all of this. The reason is not any newfound philanthropic thrust to the Bush administration: it's just that American agribusiness is big enough and efficient enough to compete in a low-or-no tariff world. European farmers, by and large, are not. For the US, a liberal farm market is a business opportunity. For the EU, it would be a bureaucratic dust bowl.
Which, I think, is pretty interesting. Most people tend to assume that the US is the baddie at the WTO. Bush country and all that. But the reality is that if anyone looks isolated in all this it's Europe. The difference between the US and the Brazil/India proposals are mostly technical in nature - if it was up to them, they could sit down and work out a compromise in half an hour. The real, substantive gap in agriculture is between the US/Brazil/India on the one hand and the EU on the other.
December 14, 2005
Not your grandfather's WTO
Well, I know most of you don't come here looking for WTO news, but I'm in Hong Kong now so WTO news is what yer gonna get! Sorry to the ghosts for this, but this stuff is too interesting, I can't hold back.
I spent the morning hanging out with a group of Least Developed Country delegates. It didn't take long to realize the dynamics have changed dramatically for them since the last WTO Ministerial Conference in Cancun two years ago. What's remarkable is that you don't hear any more complaints about process from the LDCs. This is definitely new. In Cancun, the poorest countries were furious about the process: the Mexican organizers presented drafts for agreement at the last minute, texts negotiated behind closed doors by the big trade powers that uniformly ignored LDC concerns and bore no relation to what had been negotiating in the months before the conference. The bad blood this "forced consensus" tactic generated had a lot to do with the collapse of Cancun. India, Kenya and Brazil refused to play along and just walked out. It was a fiasco.
The contrast this time around is startling. The Bangladeshi Trade Minister spoke glowingly of the "bottom-up" approach now in place - the texts presented for agreement this week are the same ones they have been negotiating since July 2004. The question is no longer whether to substantially liberalize agriculture at all, but how much, and how fast. "Trade for aid" has received a lot of attention in the first two days - with the US, the EU and Japan all offering substantial new sums of money to help LDCs take advantage of the new market opportunities an agreement would offer.
This doesn't mean the LDCs are thrilled about the way the negotiations are going: there are still very wide differences with the rich countries on basically all the issues, and some LDCs are suspicious that the trade for aid stuff is just an attempt to buy them off. But it does mean that LDCs no longer feel railroaded into signing stuff they've barely read. This is a lot different from the situation two years ago.
One sign of the improved atmosphere is the relatively small scale of the demonstrations outside. While there have been some protests, and a couple of fairly rowdy ones, the city itself feels normal. Certainly there's been nothing like the disruptions in Cancun or the utter chaos in Seattle. As the Zambian trade minister said, a big reason for this is that, this time around, most of the pro-south NGOs are inside the negotiating hall lobbying delegates rather than outside protesting - a shift that's both substantive and symbolic.
Most of the credit for this goes to Pascal Lamy - the former EU Trade Commissioner who's now the Director General of WTO. Lamy is one smooth operator, obviously way more competent than his predecesors. The conference is teeming with NGOs big and small, north and south. A lot of LDC ministers seem to genuinely appreciate the way he's handled the issue.
Unfortunately, Lamy tiene razon pero va preso. Trouble is, as soon as you stop trying to "manufacture consensus" you're left with the uncomfortable fact that there isn't really an underlying consensus - Europe and Japan are just not willing to liberalize their agricultural market to anything like the extent developing countries want to see, and developing countries are not willing to re-edit their mistakes from the last round, when they made specific commitments to liberalize manufacturing trade before securing specific commitments on agriculture.
Cancun showed that forced consensus is just not acceptable to developing countries anymore. Lamy deserves credit for understanding that much - but that doesn't magically shift the negotiating positions closer together somehow. The paradoxical result is that at the same time that LDCs praise the new, more transparent process, there's universal gloom about the prospects of signing anything meaningful this week - and a real sense that the Doha Round as a whole could fail. The alternative to forced consensus is not genuine consensus - it's deadlock.
Lamy, the sneaky frog, is determined to avoid a repeat of the embarrassment in Cancun. Counting the mess in Seattle back in 1999, a collapse this week would be the third WTO fiasco out of the last four ministerials. There's real concern that the WTO system would not recover from yet another P.R. disaster on that scale, so Lamy's watchword is "recalibrating expectations" - meaning he wants everyone to agree on something, even if it's not the "full modalities" they were originally supposed to hammer out in Hong Kong. ("Full modalities" is WTOese for "an outline agreement that resolves all the really difficult issues.") Given Lamy's near rock-star status around here, I bet he'll get his way. Come Sunday, you'll probably see ministers lining up to sign a piece of paper. It won't be the piece of paper they came here to sign, but it'll be something.
I spent the morning hanging out with a group of Least Developed Country delegates. It didn't take long to realize the dynamics have changed dramatically for them since the last WTO Ministerial Conference in Cancun two years ago. What's remarkable is that you don't hear any more complaints about process from the LDCs. This is definitely new. In Cancun, the poorest countries were furious about the process: the Mexican organizers presented drafts for agreement at the last minute, texts negotiated behind closed doors by the big trade powers that uniformly ignored LDC concerns and bore no relation to what had been negotiating in the months before the conference. The bad blood this "forced consensus" tactic generated had a lot to do with the collapse of Cancun. India, Kenya and Brazil refused to play along and just walked out. It was a fiasco.
The contrast this time around is startling. The Bangladeshi Trade Minister spoke glowingly of the "bottom-up" approach now in place - the texts presented for agreement this week are the same ones they have been negotiating since July 2004. The question is no longer whether to substantially liberalize agriculture at all, but how much, and how fast. "Trade for aid" has received a lot of attention in the first two days - with the US, the EU and Japan all offering substantial new sums of money to help LDCs take advantage of the new market opportunities an agreement would offer.
This doesn't mean the LDCs are thrilled about the way the negotiations are going: there are still very wide differences with the rich countries on basically all the issues, and some LDCs are suspicious that the trade for aid stuff is just an attempt to buy them off. But it does mean that LDCs no longer feel railroaded into signing stuff they've barely read. This is a lot different from the situation two years ago.
One sign of the improved atmosphere is the relatively small scale of the demonstrations outside. While there have been some protests, and a couple of fairly rowdy ones, the city itself feels normal. Certainly there's been nothing like the disruptions in Cancun or the utter chaos in Seattle. As the Zambian trade minister said, a big reason for this is that, this time around, most of the pro-south NGOs are inside the negotiating hall lobbying delegates rather than outside protesting - a shift that's both substantive and symbolic.
Most of the credit for this goes to Pascal Lamy - the former EU Trade Commissioner who's now the Director General of WTO. Lamy is one smooth operator, obviously way more competent than his predecesors. The conference is teeming with NGOs big and small, north and south. A lot of LDC ministers seem to genuinely appreciate the way he's handled the issue.
Unfortunately, Lamy tiene razon pero va preso. Trouble is, as soon as you stop trying to "manufacture consensus" you're left with the uncomfortable fact that there isn't really an underlying consensus - Europe and Japan are just not willing to liberalize their agricultural market to anything like the extent developing countries want to see, and developing countries are not willing to re-edit their mistakes from the last round, when they made specific commitments to liberalize manufacturing trade before securing specific commitments on agriculture.
Cancun showed that forced consensus is just not acceptable to developing countries anymore. Lamy deserves credit for understanding that much - but that doesn't magically shift the negotiating positions closer together somehow. The paradoxical result is that at the same time that LDCs praise the new, more transparent process, there's universal gloom about the prospects of signing anything meaningful this week - and a real sense that the Doha Round as a whole could fail. The alternative to forced consensus is not genuine consensus - it's deadlock.
Lamy, the sneaky frog, is determined to avoid a repeat of the embarrassment in Cancun. Counting the mess in Seattle back in 1999, a collapse this week would be the third WTO fiasco out of the last four ministerials. There's real concern that the WTO system would not recover from yet another P.R. disaster on that scale, so Lamy's watchword is "recalibrating expectations" - meaning he wants everyone to agree on something, even if it's not the "full modalities" they were originally supposed to hammer out in Hong Kong. ("Full modalities" is WTOese for "an outline agreement that resolves all the really difficult issues.") Given Lamy's near rock-star status around here, I bet he'll get his way. Come Sunday, you'll probably see ministers lining up to sign a piece of paper. It won't be the piece of paper they came here to sign, but it'll be something.
December 13, 2005
Casualties of War
I got an email today summarizing violence statistics in Venezuela and figured they were worth running with. See, the Chávez administration claims to care much about people dying overseas in US-led wars, but yet the deaths of tens of thousands of Venezuelans in unexplained ways does not even cause a blip in El Comandane's radar. It is so not an issue for the Bolivarians that there is not even a Mission to address the issue of crime. But numbers speak louder than words.
Crime is the second problem in the minds of Venezuelans after unemployment.
Government statistics say that between 1999 and 2003, 58,519 people were murdered.
In 2003, there were 15,738 murders, an average of 43 murders per day, almost 2 per hour.
Projections indicate that by 2005, the total number of murders since Chávez came to power will number 95,570 people. Say that out loud: 95 thousand murders.
By 2003, the increase in the murder rate was 244.11% relative to 1998. By 2005, the same increase is projected to be 301.76% relative to 1998's rate.
Murders are the third cause of death in Venezuela. Among adult males, they are the first cause of death. Think about that: Venezuelan males are more likely to die murdered than by heart disease or automobile accidents.
Of the 58,519 murders committed, 23,606 (roughly 40%) of these were of people between 15 and 24 years of age.
94.03% of the 23,606 young people murdered were young men.
6 out of 10 people between 15 and 24 who die in Venezuela are murdered. 7 of every 10 young men between the ages of 15 and 24 who died were murdered.
Of all the murders committed between 1999 and 2003, 82% of them were caused by firearms. Think about this: Faced with this context, Mr. Chávez has decided to purchase hundreds of thousands of weapons to arm his personal militias.
Now, I challenge any PSF to convince me this is something the government is actually doing something about. Well, something other than blaming the CIA.
(Thanks to Raul Fatarella for the numbers)
Crime is the second problem in the minds of Venezuelans after unemployment.
Government statistics say that between 1999 and 2003, 58,519 people were murdered.
In 2003, there were 15,738 murders, an average of 43 murders per day, almost 2 per hour.
Projections indicate that by 2005, the total number of murders since Chávez came to power will number 95,570 people. Say that out loud: 95 thousand murders.
By 2003, the increase in the murder rate was 244.11% relative to 1998. By 2005, the same increase is projected to be 301.76% relative to 1998's rate.
Murders are the third cause of death in Venezuela. Among adult males, they are the first cause of death. Think about that: Venezuelan males are more likely to die murdered than by heart disease or automobile accidents.
Of the 58,519 murders committed, 23,606 (roughly 40%) of these were of people between 15 and 24 years of age.
94.03% of the 23,606 young people murdered were young men.
6 out of 10 people between 15 and 24 who die in Venezuela are murdered. 7 of every 10 young men between the ages of 15 and 24 who died were murdered.
Of all the murders committed between 1999 and 2003, 82% of them were caused by firearms. Think about this: Faced with this context, Mr. Chávez has decided to purchase hundreds of thousands of weapons to arm his personal militias.
95.28% of the murders of young men between 15 and 24 were caused by firearms.
Now, I challenge any PSF to convince me this is something the government is actually doing something about. Well, something other than blaming the CIA.
(Thanks to Raul Fatarella for the numbers)
Hong Kong Chronicles: Damn farmers
Well, it's day 1 of the WTO ministerial conference, and my first Hong Kong insight comes in the form of a question - how did farmers get so damn powerful?
It's really strange...we're here in this super high-tech city, surrounded by ultramodern skyscrapers, chips, factories, computers, and you gather 149 of the most powerful people in the world to talk about the sparkling, gleaming hyperglobalized world economy of the 21st century and what do they talk about? They talk about Cain and Abel's profession! They talk about a business that's reached maturity roughly 3000 years ago!
The whole organization has been stuck on the agriculture issue for years. Big agricultural producers in the third world want much better access to first world markets - particularly Europe and Japan. Europe, Japan, and to a lesser extent the US want to continue protecting their farmers with subsidies and high tariffs. The issue has been festering in the trade negotiating world for at least 30 years...but only since 1999 has it become clear that big third world food producers are willing to block everything until the rich countries liberalize their food markets.
The silly thing is that food makes up a small and shrinking portion of world trade. Think about globalization and you think computers! Biotech! Information technology! New, shiny things made in fancy factories and flown all around the world. Not a sack of potatoes! Alas...the sack of potatoes is what the negotiations are about.
What's clear is that farmers worldwide are incredibly powerful in their own countries. Coming into the conference I'd assumed that countries that import most of their food would not be particularly interested in being allowed to continue agricultural subsidies. Wrong! This morning I went to a press conference by the G10 group of net-food importing countries. The Mauritius trade minister made an impassioned speech against moves to liberalize the sugar market, describing the role of sugar cane farming in traditional society. This is Mauritius we're talking about, a bunch of tiny islands in the middle of the Indian Ocean that imports virtually all its food...even their delegation is basically held hostage by the farm lobby. The Norwegian and Swiss delegates made similar arguments about dairy farming.
The funny thing is that, in the end, all countries take more or less the same position on farm talks: lets liberalize everything...except my traditional sector! It's a sort of twist on NIMBYism...Not in My Traditional sector! Of course, every agricultural market is a market in the product of someone's traditional sector, and ministers are amazingly touchy on proposals that threaten their ability to protect their traditional producers. Not surprisingly, the overall result of so much aggregated touchiness is inaction.
How did it come to this? I think the reason is that agriculture has always been the most difficult issue, and since the Tokyo Round, back in the 70s, negotiators have been avoiding it. For thirty years now, serious negotiations on liberalizing agriculture have always run into major trouble, and the fall-back position has always been "well, farm issues are hard, so lets set them aside for now and concentrate on issues we can agree on."
The problem is that, by now, they've dealt with the whole rest of the agenda! Manufacturing tariffs are low worldwide, anti-subsidy and anti-dumping agreements are well developed, Intellectual Property Rights has its own side agreement, even Investment Measures proved easier to negotiate. There are still negotiations on each of those issues, but clearly those markets are nowhere near as distorted as farm trade. When it comes to major liberalization opportunities, agriculture is all that's left - and the mismatch between the general liberalism in most markets and the massive distortions still in place in farm trade are increasingly glaring. But every delegation here seems to be totally under the foot of its domestic farm lobby...so nobody here seems to think the meeting is going to succeed...
It's really strange...we're here in this super high-tech city, surrounded by ultramodern skyscrapers, chips, factories, computers, and you gather 149 of the most powerful people in the world to talk about the sparkling, gleaming hyperglobalized world economy of the 21st century and what do they talk about? They talk about Cain and Abel's profession! They talk about a business that's reached maturity roughly 3000 years ago!
The whole organization has been stuck on the agriculture issue for years. Big agricultural producers in the third world want much better access to first world markets - particularly Europe and Japan. Europe, Japan, and to a lesser extent the US want to continue protecting their farmers with subsidies and high tariffs. The issue has been festering in the trade negotiating world for at least 30 years...but only since 1999 has it become clear that big third world food producers are willing to block everything until the rich countries liberalize their food markets.
The silly thing is that food makes up a small and shrinking portion of world trade. Think about globalization and you think computers! Biotech! Information technology! New, shiny things made in fancy factories and flown all around the world. Not a sack of potatoes! Alas...the sack of potatoes is what the negotiations are about.
What's clear is that farmers worldwide are incredibly powerful in their own countries. Coming into the conference I'd assumed that countries that import most of their food would not be particularly interested in being allowed to continue agricultural subsidies. Wrong! This morning I went to a press conference by the G10 group of net-food importing countries. The Mauritius trade minister made an impassioned speech against moves to liberalize the sugar market, describing the role of sugar cane farming in traditional society. This is Mauritius we're talking about, a bunch of tiny islands in the middle of the Indian Ocean that imports virtually all its food...even their delegation is basically held hostage by the farm lobby. The Norwegian and Swiss delegates made similar arguments about dairy farming.
The funny thing is that, in the end, all countries take more or less the same position on farm talks: lets liberalize everything...except my traditional sector! It's a sort of twist on NIMBYism...Not in My Traditional sector! Of course, every agricultural market is a market in the product of someone's traditional sector, and ministers are amazingly touchy on proposals that threaten their ability to protect their traditional producers. Not surprisingly, the overall result of so much aggregated touchiness is inaction.
How did it come to this? I think the reason is that agriculture has always been the most difficult issue, and since the Tokyo Round, back in the 70s, negotiators have been avoiding it. For thirty years now, serious negotiations on liberalizing agriculture have always run into major trouble, and the fall-back position has always been "well, farm issues are hard, so lets set them aside for now and concentrate on issues we can agree on."
The problem is that, by now, they've dealt with the whole rest of the agenda! Manufacturing tariffs are low worldwide, anti-subsidy and anti-dumping agreements are well developed, Intellectual Property Rights has its own side agreement, even Investment Measures proved easier to negotiate. There are still negotiations on each of those issues, but clearly those markets are nowhere near as distorted as farm trade. When it comes to major liberalization opportunities, agriculture is all that's left - and the mismatch between the general liberalism in most markets and the massive distortions still in place in farm trade are increasingly glaring. But every delegation here seems to be totally under the foot of its domestic farm lobby...so nobody here seems to think the meeting is going to succeed...
Is that fear I smell?
In my first ghost blogger collaboration in a long time, I thought I'd keep it short and sweet:
Is it just me, or has the abstention (admittedly as high as 75%, although final numbers have yet to be released) really scared chavismo shitless?
Hugo was nowhere to be found for a couple of days after the election, same as every time he is facing a reversal of fortune. Then he pops up in Montevideo for the Mercosur thing, and again BAAAM canceled "Aló Delincuente".
And then today, this?
Exactly how scared is he by what happened, and how far is he willing to go to discredit any hint of criticism? Weren't PSF's and chavistas everywhere using this same report Chávez is in arms about to prove how free and how fair elections were?
Silbando en la oscuridad para espantar el miedo, dicen por ahí, huyendo hacia adelante.
Is it just me, or has the abstention (admittedly as high as 75%, although final numbers have yet to be released) really scared chavismo shitless?
Hugo was nowhere to be found for a couple of days after the election, same as every time he is facing a reversal of fortune. Then he pops up in Montevideo for the Mercosur thing, and again BAAAM canceled "Aló Delincuente".
And then today, this?
Exactly how scared is he by what happened, and how far is he willing to go to discredit any hint of criticism? Weren't PSF's and chavistas everywhere using this same report Chávez is in arms about to prove how free and how fair elections were?
Silbando en la oscuridad para espantar el miedo, dicen por ahí, huyendo hacia adelante.
December 12, 2005
Chilean elections, or a contrast in style
(My apologies to Quico for this CNE-related guest post...)
Chile held Presidential and Parliamentary elections this Sunday, and I wanted to take the opportunity to highlight differences with our current Venezuelan system which, quite frankly, leaves the chavista-led CNE without many arguments.
I don't want to dwell on the results (check Chilean newspapers like El Mercurio or La Tercera), but I can't continue without saying that, while the Parliamentary elections gave a big win to outgoing (and very popular) Pres. Ricardo Lagos' ruling coalition in both chambers, there will be a Presidential runoff in January. This election will be quite an anomaly for Latin-American politics, pitting the front-runner, Michelle Bachelet, a member of the not-so-Socialist Party, an agnostic, single mother and former victim of human rights abuses (and a woman, in case you're wondering), against center-right businessman and former Senator Sebastián Piñera, owner of a big chunk of LAN Airlines and TV station Chilevisión. What makes this election curious is that it pits two types of politicians that have made inroads the world over but had yet to make an appearance in LatAm politics in quite this way: a woman and a self-made billionaire.
But I digress. What is interesting about these elections for Venezuela is the process itself.
1. In Chile, everyone voted with a pen and a piece of paper, deposited their ballots in glass urns, and in the end, all votes were counted. If you believe Chávez and the CNE, you would think that this means that elections in Chile are rigged, that ballot-stuffing is common and that the system has all the problems the old system in Venezuela allegedy had. Think again. So far, there is not a single credible claim of fraud presented. The vote count was done in public, in front of numerous witnesses from all sides, with minimal interference from the Armed Forces and it was even televised nationally before the government announced any results. In other words, Chilean media was not submitted to any gag rule and the actual vote counting was broadcast to the entire country. (Granted, it made for boring TV since they could only transmit one voting table at a time, with zero representativeness).
The ballots themselves were quite simple and austere. It listed the names of all the candidates in an order that was previously determined by a public random draw. All the voter had to do was scratch a vertical line next to their candidate's horizontal line. Ballots themselves were small and understandable.
2. Final results were given by 11:30 PM. Given the complexity of this election, in which 120 deputies, 20 Senators and a President were selected, you would think the results would have taken days to come in. I mean, if the CNE, with the super-high-tech Jorge Rodríguez and the Tramparent Francisco Carrasquero could not give partial results until 5 am for a simple referendum in which the only options were "yes" and "no", surely Chileans would be counting votes until March. Not the case. As soon as tables were done with their tallying, which by the way began at 5 pm (no suspicious extension of the voting schedule to benefit government candidates like in Venezuela), they transmitted their results to the central government who then performed a simple duty: counting the results and announcing them to the country promptly.
Compare that to Venezuela, where in spite of having spent tens of millions of dollars on machines that few people believe in and even fewer know how to operate, the official tally of "results" takes several days to come in and the audit of 129 boxes takes up to a week to do.
This is important because one of the reasons the CNE argues that machines cannot be done away with is that this is the only way results can be given in time. Yet the Chilean experience proves this is not the case. But, it your intent is to cheat and/or you're incompetent, both qualities in abundance with our current CNE board, then you probably need some sort of gadget to fall back on.
3. All voters used their identity cards, which were created using a high-technology system that everyone trusts. Contrary to the quasi-rudimentary voting process, ID cards in Chile incorporate the latest technology to ensure nobody has duplicate ID cards and that voter rolls are not misteriously altered or sold on the streets. Aside from that, it takes three weeks to get your ID card and you can obtain one (providied you meet all requisites) in more than 300 offices nation-wide. Although there were problems with voters not appearing in actual rolls, none of them were significant enough to merit cries of fraud from anyone participating.
Contrast that with Venezuela, where ID cards are handed out without a proper backup of documentation, mysterious voter registration is commonplace and clandestine Colombian irregulars are free to vote at will. Every year, government after government promises to fix the Identification procedure to make it transparent, safe and quick, and every year we continue to have the worst ID system in the continent. The Chávez administration, for example, has created something called "Misión Identidad" which literally means issuing ID cards, Venezuelan nationalities and voter registration from the back of a pickup truck in selected spots that shift around from day to day (provided, of course, that you did not sign for recalling Chávez, in which case you get nothing).
4. The participation of the government, as well as candidate's advertisements, are strictly monitored. When Pres. Ricardo Lagos went to vote yesterday, he did not say who he wanted people to vote for. He basically said this was a great democratic feast in which everyone was free to express their opinion. In fact, the only times the President ventured into the electoral debate, he was sharply criticized. Basically, he took an institutional pose, not a blatantly propagandistic one like Mr. Chávez.
Advertisement only began in earnest a couple of months ago, but it had practically disappeared last Friday, in accordance with the law. Political parties were alloted free air time on TV every day to transmit their messages, but aside from that most publicity was in the form of signs out in the streets and paid advertisement in newspapers. In fact, even Chilevisión, Piñera´s TV station, was remarkably impartial during the campaign. (Note: Piñera has vowed to sell all of his holding, including LAN and Chilevisión, if he is elected. Take that, Berlusconi).
Contrast that with Venezuela, where... well, this is so obvious, I will not even expand on it.
What the Chilean process proves is that a Latin American democracy can thrive without needing to resort to highly-questionable high-tech voting gadgets, shabby ID systems, delayed announcements of results that create unnecessary tension or blatant use of government funds for the promotion of a single option. The current system espoused by the CNE is not credible for a large chunk of the population and does not even protect the secrecy of the vote, as has been correctly pointed out by international observers, and yet none of the excuses provided by the CNE to maintain its existence are necessary. The system is broken, and it has to go if we are ever to have fair elections again.
Chile held Presidential and Parliamentary elections this Sunday, and I wanted to take the opportunity to highlight differences with our current Venezuelan system which, quite frankly, leaves the chavista-led CNE without many arguments.
I don't want to dwell on the results (check Chilean newspapers like El Mercurio or La Tercera), but I can't continue without saying that, while the Parliamentary elections gave a big win to outgoing (and very popular) Pres. Ricardo Lagos' ruling coalition in both chambers, there will be a Presidential runoff in January. This election will be quite an anomaly for Latin-American politics, pitting the front-runner, Michelle Bachelet, a member of the not-so-Socialist Party, an agnostic, single mother and former victim of human rights abuses (and a woman, in case you're wondering), against center-right businessman and former Senator Sebastián Piñera, owner of a big chunk of LAN Airlines and TV station Chilevisión. What makes this election curious is that it pits two types of politicians that have made inroads the world over but had yet to make an appearance in LatAm politics in quite this way: a woman and a self-made billionaire.
But I digress. What is interesting about these elections for Venezuela is the process itself.
1. In Chile, everyone voted with a pen and a piece of paper, deposited their ballots in glass urns, and in the end, all votes were counted. If you believe Chávez and the CNE, you would think that this means that elections in Chile are rigged, that ballot-stuffing is common and that the system has all the problems the old system in Venezuela allegedy had. Think again. So far, there is not a single credible claim of fraud presented. The vote count was done in public, in front of numerous witnesses from all sides, with minimal interference from the Armed Forces and it was even televised nationally before the government announced any results. In other words, Chilean media was not submitted to any gag rule and the actual vote counting was broadcast to the entire country. (Granted, it made for boring TV since they could only transmit one voting table at a time, with zero representativeness).
The ballots themselves were quite simple and austere. It listed the names of all the candidates in an order that was previously determined by a public random draw. All the voter had to do was scratch a vertical line next to their candidate's horizontal line. Ballots themselves were small and understandable.
2. Final results were given by 11:30 PM. Given the complexity of this election, in which 120 deputies, 20 Senators and a President were selected, you would think the results would have taken days to come in. I mean, if the CNE, with the super-high-tech Jorge Rodríguez and the Tramparent Francisco Carrasquero could not give partial results until 5 am for a simple referendum in which the only options were "yes" and "no", surely Chileans would be counting votes until March. Not the case. As soon as tables were done with their tallying, which by the way began at 5 pm (no suspicious extension of the voting schedule to benefit government candidates like in Venezuela), they transmitted their results to the central government who then performed a simple duty: counting the results and announcing them to the country promptly.
Compare that to Venezuela, where in spite of having spent tens of millions of dollars on machines that few people believe in and even fewer know how to operate, the official tally of "results" takes several days to come in and the audit of 129 boxes takes up to a week to do.
This is important because one of the reasons the CNE argues that machines cannot be done away with is that this is the only way results can be given in time. Yet the Chilean experience proves this is not the case. But, it your intent is to cheat and/or you're incompetent, both qualities in abundance with our current CNE board, then you probably need some sort of gadget to fall back on.
3. All voters used their identity cards, which were created using a high-technology system that everyone trusts. Contrary to the quasi-rudimentary voting process, ID cards in Chile incorporate the latest technology to ensure nobody has duplicate ID cards and that voter rolls are not misteriously altered or sold on the streets. Aside from that, it takes three weeks to get your ID card and you can obtain one (providied you meet all requisites) in more than 300 offices nation-wide. Although there were problems with voters not appearing in actual rolls, none of them were significant enough to merit cries of fraud from anyone participating.
Contrast that with Venezuela, where ID cards are handed out without a proper backup of documentation, mysterious voter registration is commonplace and clandestine Colombian irregulars are free to vote at will. Every year, government after government promises to fix the Identification procedure to make it transparent, safe and quick, and every year we continue to have the worst ID system in the continent. The Chávez administration, for example, has created something called "Misión Identidad" which literally means issuing ID cards, Venezuelan nationalities and voter registration from the back of a pickup truck in selected spots that shift around from day to day (provided, of course, that you did not sign for recalling Chávez, in which case you get nothing).
4. The participation of the government, as well as candidate's advertisements, are strictly monitored. When Pres. Ricardo Lagos went to vote yesterday, he did not say who he wanted people to vote for. He basically said this was a great democratic feast in which everyone was free to express their opinion. In fact, the only times the President ventured into the electoral debate, he was sharply criticized. Basically, he took an institutional pose, not a blatantly propagandistic one like Mr. Chávez.
Advertisement only began in earnest a couple of months ago, but it had practically disappeared last Friday, in accordance with the law. Political parties were alloted free air time on TV every day to transmit their messages, but aside from that most publicity was in the form of signs out in the streets and paid advertisement in newspapers. In fact, even Chilevisión, Piñera´s TV station, was remarkably impartial during the campaign. (Note: Piñera has vowed to sell all of his holding, including LAN and Chilevisión, if he is elected. Take that, Berlusconi).
Contrast that with Venezuela, where... well, this is so obvious, I will not even expand on it.
What the Chilean process proves is that a Latin American democracy can thrive without needing to resort to highly-questionable high-tech voting gadgets, shabby ID systems, delayed announcements of results that create unnecessary tension or blatant use of government funds for the promotion of a single option. The current system espoused by the CNE is not credible for a large chunk of the population and does not even protect the secrecy of the vote, as has been correctly pointed out by international observers, and yet none of the excuses provided by the CNE to maintain its existence are necessary. The system is broken, and it has to go if we are ever to have fair elections again.
December 10, 2005
Savage Neoliberalism Chronicles
Folks, for the next nine days I'm going to be away from the blog - tomorrow I fly off to the one shindig PSF's love to hate the most: the WTO Ministerial Conference in Hong Kong. I'll be covering it for VenEconomía, and doing some networking for my dissertation research.
I'm actually really looking forward to it. Oh to be at the epicenter of the world economy! A WTO Ministerial is a trade policy researcher's shangri-la. 148 ministers along with their delegations and thousands upon thousands of lobbyists, journalists and NGOs...everyone who is anyone in trade politics all in one place at one time. Lemme tell you it was a MESS trying to get a hotel room!
But never fear: Pepe Mora and Katy have agreed to ghost blog while I'm away. Now, you two...don't blog anything I wouldn't blog...
I'm actually really looking forward to it. Oh to be at the epicenter of the world economy! A WTO Ministerial is a trade policy researcher's shangri-la. 148 ministers along with their delegations and thousands upon thousands of lobbyists, journalists and NGOs...everyone who is anyone in trade politics all in one place at one time. Lemme tell you it was a MESS trying to get a hotel room!
But never fear: Pepe Mora and Katy have agreed to ghost blog while I'm away. Now, you two...don't blog anything I wouldn't blog...
December 9, 2005
Just Priceless
OAS Secretary General: The Election was fair!
Chavez: The guy is a liar and a conspirator!
oh brother...
...doesn't revolutionary discipline demand that we take our comandante at his word and conclude the election wasn't fair?!...digo yo...
Chavista Trade Policy: Something for nothing...
I can't say I really get it. Not two months ago Chavez was denouncing Mercosur as a "failed neoliberal experiment" and now we're about to join it. Though I know most of you don't believe it, I really am working on a PhD dissertation on trade policy in between breaks from blogging, so this is one issue I can claim expertise on.
Conventional economic theory tells us two basic things about what happens when you liberalize imports. First: the economy as a whole is made better off. Second, the gains are not evenly distributed. While everyone is made a little bit better off, some are made much worse off.
To see why, take a simple example. Say our farmers can produce corn for 100 per kilo. Foreign farmers can produce it for 95. When you liberalize imports, the price of corn to our consumers drops, so everyone is made a little bit better off. At the same time, our corn farmers suddenly find they can't compete, so they're wiped out of the market.
In the lingo, gains from import liberalization are diffuse, but costs are concentrated.
This explains why countries rarely liberalize unilaterally even if economic theory shows that the diffuse gains are bigger than the concentrated losses. Governments, in general, pay more attention to organized groups that mobilize to lobby for a given policy than they do to calculations of overall welfare or economics textbooks. Since each consumer is made only a little bit better off by import liberalization, consumers as a group find it difficult to organize themselves to petition the government for liberalization. But since producers stand to lose a lot, they have a much easier time banding together to lobby for protection.
Of course, that tells only half the story, because countries also have sectors that stand to gain from trade. If, say, our producers can make neckties for 95 a kilo, but it costs their producers 100 to produce that many neckties, our necktie producers obviously stand to gain a lot from access to their market. Liberalization would make neckties slightly more expensive in our country, but the costs to our necktie consumers are diffuse, while the gains to our necktie producers are concentrated. The equation is exactly reversed.
In that case, our necktie producers have every incentive to lobby our government for better access to their market. But when our government sits down to ask their government to open up their necktie market, it has to offer something in return. Since their corn producers are interested in better access to our corn market, there's a fairly obvious bargain to be struck: we'll liberalize our corn market if you'll liberalize your tie market. This, in extreme shorthand, is the reason trade negotiations happen.
The whole point of trade negotiations, then, is to overcome a problem of collective action by making sure someone in our country has a strong interest in seeing our own markets liberalized. If our government tries to liberalize corn unilaterally, corn farmers will work hard to block it, and there'll be no other group similarly organized to argue in favor of liberalization. By bargaining off access to our corn market against access to their tie market, trade negotiations set up a situation where our tie producers have a strong incentive to push our government to liberalize our corn market - as an indirect way of gaining access to their tie market. It's a pretty nifty trick.
This little framework is enough to explain why Chavez's decision to join Mercosur is puzzling to say the least. In effect, Venezuela will be opening up its market to Argentina and Brazil's world-beating agricultural producers. Not surprisingly, Venezuela's agricultural producers are none too happy about this. Venezuelan manufacturers are similarly freaked out. In exchange for their sacrifice, though, we'll get access to...um...to...what precisely? Venezuela's major export commodity is oil, but we already have free access to their energy markets! If there is some Venezuelan export sector chomping at the bit for better access to Southern Cone markets, I haven't heard about it. So, in effect, Chavez proposes to give them access to our farm market in exchange for...nothing!
It's true that there are a number of sectors where Venezuela has a potential comparative advantage, and joining mercosur provides new opportunities for those sectors. However, a pile of economic research - most of it from left-leaning academics - argues convincingly that better access to foreign markets is very rarely enough to turn potential comparative into actual export success. To do that, you need a whole raft of government measures - from R&D tax credits and export credit to specialized training institutes and improved property rights - to help boost domestic producers' competitiveness to the point where they actually can crack foreign markets. Needless to say, those supply-side policies are not in place in the Bolivarian revolution.
In practical terms from Venezuela's point of view, joining Mercosur is a lot like liberalizing our imports unilaterally. Now, there's an old and venerable economic argument in favor of unilateral liberalization. I'm not going to get into that debate here, but I will point out that it's an argument one associates more with Adam Smith, Milton Friedman and Jagdish Baghwati than with Ezequiel Zamora, Jorge Giordani, or Martha Harnecker. How, exactly, the decision to enter Mercosur fits in with Chavez's whole verbal diarrhea about food security, endogenous development, land reform, etc. etc. I haven't the slightest clue. It's more like neoliberalismo del siglo 21, really...
Conventional economic theory tells us two basic things about what happens when you liberalize imports. First: the economy as a whole is made better off. Second, the gains are not evenly distributed. While everyone is made a little bit better off, some are made much worse off.
To see why, take a simple example. Say our farmers can produce corn for 100 per kilo. Foreign farmers can produce it for 95. When you liberalize imports, the price of corn to our consumers drops, so everyone is made a little bit better off. At the same time, our corn farmers suddenly find they can't compete, so they're wiped out of the market.
In the lingo, gains from import liberalization are diffuse, but costs are concentrated.
This explains why countries rarely liberalize unilaterally even if economic theory shows that the diffuse gains are bigger than the concentrated losses. Governments, in general, pay more attention to organized groups that mobilize to lobby for a given policy than they do to calculations of overall welfare or economics textbooks. Since each consumer is made only a little bit better off by import liberalization, consumers as a group find it difficult to organize themselves to petition the government for liberalization. But since producers stand to lose a lot, they have a much easier time banding together to lobby for protection.
Of course, that tells only half the story, because countries also have sectors that stand to gain from trade. If, say, our producers can make neckties for 95 a kilo, but it costs their producers 100 to produce that many neckties, our necktie producers obviously stand to gain a lot from access to their market. Liberalization would make neckties slightly more expensive in our country, but the costs to our necktie consumers are diffuse, while the gains to our necktie producers are concentrated. The equation is exactly reversed.
In that case, our necktie producers have every incentive to lobby our government for better access to their market. But when our government sits down to ask their government to open up their necktie market, it has to offer something in return. Since their corn producers are interested in better access to our corn market, there's a fairly obvious bargain to be struck: we'll liberalize our corn market if you'll liberalize your tie market. This, in extreme shorthand, is the reason trade negotiations happen.
The whole point of trade negotiations, then, is to overcome a problem of collective action by making sure someone in our country has a strong interest in seeing our own markets liberalized. If our government tries to liberalize corn unilaterally, corn farmers will work hard to block it, and there'll be no other group similarly organized to argue in favor of liberalization. By bargaining off access to our corn market against access to their tie market, trade negotiations set up a situation where our tie producers have a strong incentive to push our government to liberalize our corn market - as an indirect way of gaining access to their tie market. It's a pretty nifty trick.
This little framework is enough to explain why Chavez's decision to join Mercosur is puzzling to say the least. In effect, Venezuela will be opening up its market to Argentina and Brazil's world-beating agricultural producers. Not surprisingly, Venezuela's agricultural producers are none too happy about this. Venezuelan manufacturers are similarly freaked out. In exchange for their sacrifice, though, we'll get access to...um...to...what precisely? Venezuela's major export commodity is oil, but we already have free access to their energy markets! If there is some Venezuelan export sector chomping at the bit for better access to Southern Cone markets, I haven't heard about it. So, in effect, Chavez proposes to give them access to our farm market in exchange for...nothing!
It's true that there are a number of sectors where Venezuela has a potential comparative advantage, and joining mercosur provides new opportunities for those sectors. However, a pile of economic research - most of it from left-leaning academics - argues convincingly that better access to foreign markets is very rarely enough to turn potential comparative into actual export success. To do that, you need a whole raft of government measures - from R&D tax credits and export credit to specialized training institutes and improved property rights - to help boost domestic producers' competitiveness to the point where they actually can crack foreign markets. Needless to say, those supply-side policies are not in place in the Bolivarian revolution.
In practical terms from Venezuela's point of view, joining Mercosur is a lot like liberalizing our imports unilaterally. Now, there's an old and venerable economic argument in favor of unilateral liberalization. I'm not going to get into that debate here, but I will point out that it's an argument one associates more with Adam Smith, Milton Friedman and Jagdish Baghwati than with Ezequiel Zamora, Jorge Giordani, or Martha Harnecker. How, exactly, the decision to enter Mercosur fits in with Chavez's whole verbal diarrhea about food security, endogenous development, land reform, etc. etc. I haven't the slightest clue. It's more like neoliberalismo del siglo 21, really...
December 8, 2005
That Useless Election for the Red Caudillo
By Guido Rampoldi in La Repubblica
Translated by me
This article caught my eye for several reasons. For one thing, it's rare to see foreign journalists grasp how hollow Chavez's claim to be leading a revolution really is, and Rampoldi is unsparing on that point. For another, it's always significant when a left-wing paper turns on Chavez, and this piece appeared in La Repubblica, which is sort of like the Italian version of The Guardian.
The hot gift in Caracas this Christmas is the chavito, an action figure depicting Hugo Chavez in his movement's red uniform. The buyers are both those who love the president, who buy it so their kids will also learn to love him, and those who hate him, who buy it perhaps to skewer it with needles. Saturday night, on the eve of the parliamentary election, an entertainer on State TV showed the cameras two chavitos, and said "tomorrow, you can vote either for this one or this one" to laughter from the chavista candidates around him. They chatted about the opposition - all of it "coup-mongering and fascist," and, why not, anti-patriotic - and later about the empire, imperialism, in short, the US, the opposition's alleged benefactors. Then we saw video links from various rallies, with fireworks, patriotic and revolutionary songs and people in red shirts chanting: fascists, golpistas, imperialists, enemies of the people. Finally Chavez himself turned up, reciting a poem along with a guitar player. Then it was back to the studio, and the chants again: fasicsts, golpistas, imperialists.
Seeing all this, just hours before the start of voting, you had the impression they had just defrosted that South American left that never learned anything from its own mistakes. Tenacious, unhinged, incorregible.
Add to that the fact that in Washington you have the Bush administration and that the Venezuelan opposition is remarkably dim, and it's not hard to imagine where the sum of so much ineptitude was going to lead: to the Nth disaster.
Sunday's parliamentary elections were certainly a step in that direction. The biggest Opposition parties decided to boycot them when they discovered the electronic voting system made it possible to identify voter's choices. But a technical compromise was possible, and the choice to abandon the elections was determined by fear. They were headed for a humiliating defeat, according both to the polls and to the state of mind of an antichavista electorate that believes neither in the deformed democracy you see on state-TV nor in an Opposition lacking a coherent identity.
So Chavez will no longer be restrained by parliament. Up to now, his partisans had enough votes to govern, but not to change the constitution. After Sunday, he'll be able to get his way on the most far-fetched of projects, even becoming president for life as one of his parliamentarians has proposed. Worse yet, with the Opposition absent from parliament, the country now lacks the only institution that might mediate the conflict between two Venezuelas unable to build a single national community and convinced that the other side is a tool of foreign interests: of Cuba, or of the United States.
When you ask the red shirts how Chavez's six years in power have changed their lives, they speak first of Mercal. These are stores in poor neighborhoods where anyone can buy, at political prices, food imported by the government...with the following results: the poor finally eat top grade Argentine and Uruguayan beef, the rich pay half as much as they used to (since access to Mercal is open to all), and Venezuelan ranchers are in crisis.
In the ranking of gratitudes, after Mercal you hear about health care, which has been overhauled thanks to a massive influx of Cuban doctors, and later about schools where adults learn to read and write or get training for a job. Moreover, Chavez has given a small push to programs for refurbishing poor neighborhoods - which, however, were started decades earlier - and has restarted land reform, though not truly aggressively.
According to the propaganda, this would amount to Bolivarian Socialism, a new, revolutionary economic model. But if that's case, we would also have to consider Italy's Christian Democrats to be Bolivarian Socialists, for everything they did in the 20 years after the war, and using the same method as Chavez: privileging first and foremost their own electorate.
The fact is that it's easy to be bolivarian towards your own supporters when you govern the world's fifth oil exporter at a time when oil is above $50 a barrel. Probably, the old social democrats and christian democrats who used to rule the country would have been just as generous: the crisis that brought them down reached its peak in the late 90s, when oil sunk to $9 per barrel.
What would have made a real difference would have been deep structural reforms, especially in the public administration. Yet even chavistas admit that the public administration has not changed.
For instance, those sections of the police widely feared for their rapacity and violence. Hundreds of complaints accuse them of fighting crime with torture and premeditated murders.
This happened in the past also. But today, the atmosphere is even more favorable to such abuses. After all, a former member of the Caracas police special forces - in fact, death squads - is a chavista mayor of a part of Caracas and uses "we will take back the city" as a slogan - you can read it painted on walls just steps from the presidential palace.
The opposition didn't much care about this variable-geometry legality until it realized it was tremendously exposed. The chavistas have taken control of the Supreme Court boosting its membership from 20 to 32, and the chief judge qualifies as "revolutionary" the justice it imparts. The number of judges with temporary appointments has grown to a full 75% of the total, keeping them nice and tame.
Made public by a pro-government web site, the list of the 3 and a half million Venezuelans who signed the petitions for a referendum against Chavez has become a tool of political discriminition in the hands of the public administration. Through new laws, they've tamed the fury of the private TV stations, which until two years ago were arguably even worse than state TV, but are now either circumspect or indifferent (because they risk hyperbolic fines and shut downs.) They've also aimed straight at the journalists: they risk 30 month jail sentences if they criticize too strongly even a National Assembly member or a general, up to five years if they publish news that "disturb public order." In the new Penal Code, blocking a street can land you in jail from 4 to 8 years, and according to the Supreme Tribunal there is nothing illegal about prior censorship.
Until now, the government has resorted these pointed weapons only rarely.
But when the time comes, they'll be ready. In October, the Bush administration added Venezuela to the list of five enemies of the United States, even if it's on the third tier. In response, Chavez ordered his armed forces to prepare for "asymetrical warfare", to be taken to the enemy through "non-conventional tactics, such as guerrillas and terrorism." Whether or not he really believes in the prospect of a power play by Washington, trumpeting the possibility is extremely useful as a way to keep his country underfoot, and, in a few years time, to launch a more explicit authoritarianism: if the nation is under attack, who could protest if the president arrests the traitors, crushing the enemy's fifth column?
Translated by me
This article caught my eye for several reasons. For one thing, it's rare to see foreign journalists grasp how hollow Chavez's claim to be leading a revolution really is, and Rampoldi is unsparing on that point. For another, it's always significant when a left-wing paper turns on Chavez, and this piece appeared in La Repubblica, which is sort of like the Italian version of The Guardian.
The hot gift in Caracas this Christmas is the chavito, an action figure depicting Hugo Chavez in his movement's red uniform. The buyers are both those who love the president, who buy it so their kids will also learn to love him, and those who hate him, who buy it perhaps to skewer it with needles. Saturday night, on the eve of the parliamentary election, an entertainer on State TV showed the cameras two chavitos, and said "tomorrow, you can vote either for this one or this one" to laughter from the chavista candidates around him. They chatted about the opposition - all of it "coup-mongering and fascist," and, why not, anti-patriotic - and later about the empire, imperialism, in short, the US, the opposition's alleged benefactors. Then we saw video links from various rallies, with fireworks, patriotic and revolutionary songs and people in red shirts chanting: fascists, golpistas, imperialists, enemies of the people. Finally Chavez himself turned up, reciting a poem along with a guitar player. Then it was back to the studio, and the chants again: fasicsts, golpistas, imperialists.
Seeing all this, just hours before the start of voting, you had the impression they had just defrosted that South American left that never learned anything from its own mistakes. Tenacious, unhinged, incorregible.
Add to that the fact that in Washington you have the Bush administration and that the Venezuelan opposition is remarkably dim, and it's not hard to imagine where the sum of so much ineptitude was going to lead: to the Nth disaster.
Sunday's parliamentary elections were certainly a step in that direction. The biggest Opposition parties decided to boycot them when they discovered the electronic voting system made it possible to identify voter's choices. But a technical compromise was possible, and the choice to abandon the elections was determined by fear. They were headed for a humiliating defeat, according both to the polls and to the state of mind of an antichavista electorate that believes neither in the deformed democracy you see on state-TV nor in an Opposition lacking a coherent identity.
So Chavez will no longer be restrained by parliament. Up to now, his partisans had enough votes to govern, but not to change the constitution. After Sunday, he'll be able to get his way on the most far-fetched of projects, even becoming president for life as one of his parliamentarians has proposed. Worse yet, with the Opposition absent from parliament, the country now lacks the only institution that might mediate the conflict between two Venezuelas unable to build a single national community and convinced that the other side is a tool of foreign interests: of Cuba, or of the United States.
When you ask the red shirts how Chavez's six years in power have changed their lives, they speak first of Mercal. These are stores in poor neighborhoods where anyone can buy, at political prices, food imported by the government...with the following results: the poor finally eat top grade Argentine and Uruguayan beef, the rich pay half as much as they used to (since access to Mercal is open to all), and Venezuelan ranchers are in crisis.
In the ranking of gratitudes, after Mercal you hear about health care, which has been overhauled thanks to a massive influx of Cuban doctors, and later about schools where adults learn to read and write or get training for a job. Moreover, Chavez has given a small push to programs for refurbishing poor neighborhoods - which, however, were started decades earlier - and has restarted land reform, though not truly aggressively.
According to the propaganda, this would amount to Bolivarian Socialism, a new, revolutionary economic model. But if that's case, we would also have to consider Italy's Christian Democrats to be Bolivarian Socialists, for everything they did in the 20 years after the war, and using the same method as Chavez: privileging first and foremost their own electorate.
The fact is that it's easy to be bolivarian towards your own supporters when you govern the world's fifth oil exporter at a time when oil is above $50 a barrel. Probably, the old social democrats and christian democrats who used to rule the country would have been just as generous: the crisis that brought them down reached its peak in the late 90s, when oil sunk to $9 per barrel.
What would have made a real difference would have been deep structural reforms, especially in the public administration. Yet even chavistas admit that the public administration has not changed.
For instance, those sections of the police widely feared for their rapacity and violence. Hundreds of complaints accuse them of fighting crime with torture and premeditated murders.
This happened in the past also. But today, the atmosphere is even more favorable to such abuses. After all, a former member of the Caracas police special forces - in fact, death squads - is a chavista mayor of a part of Caracas and uses "we will take back the city" as a slogan - you can read it painted on walls just steps from the presidential palace.
The opposition didn't much care about this variable-geometry legality until it realized it was tremendously exposed. The chavistas have taken control of the Supreme Court boosting its membership from 20 to 32, and the chief judge qualifies as "revolutionary" the justice it imparts. The number of judges with temporary appointments has grown to a full 75% of the total, keeping them nice and tame.
Made public by a pro-government web site, the list of the 3 and a half million Venezuelans who signed the petitions for a referendum against Chavez has become a tool of political discriminition in the hands of the public administration. Through new laws, they've tamed the fury of the private TV stations, which until two years ago were arguably even worse than state TV, but are now either circumspect or indifferent (because they risk hyperbolic fines and shut downs.) They've also aimed straight at the journalists: they risk 30 month jail sentences if they criticize too strongly even a National Assembly member or a general, up to five years if they publish news that "disturb public order." In the new Penal Code, blocking a street can land you in jail from 4 to 8 years, and according to the Supreme Tribunal there is nothing illegal about prior censorship.
Until now, the government has resorted these pointed weapons only rarely.
But when the time comes, they'll be ready. In October, the Bush administration added Venezuela to the list of five enemies of the United States, even if it's on the third tier. In response, Chavez ordered his armed forces to prepare for "asymetrical warfare", to be taken to the enemy through "non-conventional tactics, such as guerrillas and terrorism." Whether or not he really believes in the prospect of a power play by Washington, trumpeting the possibility is extremely useful as a way to keep his country underfoot, and, in a few years time, to launch a more explicit authoritarianism: if the nation is under attack, who could protest if the president arrests the traitors, crushing the enemy's fifth column?
December 7, 2005
The EU Electoral Observation Mission's Preliminary Report
is here.
Key Findings:
Wide sectors of the Venezuelan society do not have trust in the electoral process and in the independence of the electoral authority.
The legal framework contains several inconsistencies that leave room for differing and contradictory interpretations.
The disclosure of a computerized list of citizens indicating their political preference in the signature recollection process for the Presidential Recall Referendum (so-called “Maisanta Program”) generates fear that the secrecy of the vote could be violated.
The CNE, in a positive attempt to restore confidence in the electoral process, took significant steps to open the automated voting system to external scrutiny and to modify various aspects that were questioned by the opposition.
The CNE decision to eliminate the fingerprint capturing devices from the voting process was timely, effective and constructive.
The electoral campaign focused almost exclusively on the issue of distrust in the electoral process and lack of independence of the CNE. The debate on political party platforms was absent.
Both State and private media monitored showed bias towards either of the two main political blocks.
The EU EOM took note with surprise of the withdrawal of the majority of the opposition parties only four days before the electoral event.
Election Day passed peacefully with a low turnout. While the observers noted several irregularities in the voting procedures, the manual audit of the voting receipts revealed a high reliability of the voting machines.
These elections did not contribute to the reduction of the fracture in the Venezuelan society. In this sense, they represented a lost opportunity.
This bit, in the inside pages, is just priceless:
Key Findings:
This bit, in the inside pages, is just priceless:
The use of the electoral technique known as Morochas, which allows the duplication of parties in order to avoid the subtraction of the seats gained in the plurality-majority list from the proportional list, certainly defies the spirit of the Constitution, but it is technically allowed by the mixed system of representation laid out in the Basic Law of Suffrage and Political Participation.So the morochas are legal but unconstitutional...WTF!?!??
JVR's Election
Another one for the Chavez-as-Pinky, JVR-as-The-Brain archive, this time from Phil Gunson's piece in the Miami Herald:
At times I really get the sense we underestimate JVR's role in Chavez's success. The guy is brutal but incredibly effective. The events of the last two weeks can be seen as a kind of monument to José Simiente's political instincts. Nobody on our side is anywhere near as macchiavelian or effective...
Western diplomats in Caracas meanwhile criticized what they said were last-minute changes to soften the wording of the OAS report -- and alleged that the changes were made under strong pressure from the Venezuelan government.
The Herald was told by diplomats from both EU and OAS member states that OAS observer mission chief Rubén Perina received calls from Venezuelan Vice President José Vicente Rangel and electoral council chairman Jorge Rodríguez after the draft report had already been prepared.
The OAS had planned to present its report at a news conference early Tuesday. But it canceled the conference at the last minute and the report was distributed on the Internet.
At times I really get the sense we underestimate JVR's role in Chavez's success. The guy is brutal but incredibly effective. The events of the last two weeks can be seen as a kind of monument to José Simiente's political instincts. Nobody on our side is anywhere near as macchiavelian or effective...
December 6, 2005
More on Dec. 4th as seen from abroad...
As we await the International Observers' preliminary reports on the December 4th vote (due out this afternoon), we can chew on some of the foreign media coverage of the election.
There's finally a bit of comfort for the opposition in this understatedly scathing article by Andy Webb-Vidal in the Financial Times:
But the extremely influential and unmistakably antichavista Economist runs a lead paragraph straight out of Jose Vicente Rangel's wet dreams
Meanwhile, Spain's El Pais runs a tough editorial criticizing the opposition withdrawal, but also blasting Chavez's antidemocratic tendencies. Opening graf:
There's finally a bit of comfort for the opposition in this understatedly scathing article by Andy Webb-Vidal in the Financial Times:
Hugo Chávez, Venezuela’s president, on Monday awoke to hear the type of election result usually reserved for the most power-hungry of dictators: 100 per cent of the seats.
The unofficial result, from polls held on Sunday to select the composition of the single-chamber legislature, signals a victory of sorts for the militaristic, left-leaning ruler of the world’s fifth-largest oil exporter.
But critics said it was a hollow victory that left Venezuela in a twilight zone between democracy and dictatorship - and a result that would catapult the country towards Mr Chávez’s model of “21st century socialism”.
Preliminary results from the National Electoral Council (CNE), which on Monday was still calculating the final tally, showed that only 25 per cent of eligible voters cast ballots in polls boycotted by opponents. A fifth of ballots cast were blank.
But the extremely influential and unmistakably antichavista Economist runs a lead paragraph straight out of Jose Vicente Rangel's wet dreams
A FREE and fair election in which the president’s supporters win all of the seats in the legislature? It sounds more like the kind of contest Saddam Hussein used to “win” in Iraq with 99% of the vote. But on Sunday December 4th, the party of Venezuela’s president, Hugo Chávez, and groups close to him seem to have done just that, after all but one of the opposition parties pulled out of the election. Mr Chávez’s Fifth Republic Movement (MVR) won 114 seats out of 167. Allied parties took the rest.
Meanwhile, Spain's El Pais runs a tough editorial criticizing the opposition withdrawal, but also blasting Chavez's antidemocratic tendencies. Opening graf:
The Venezuelan Opposition has made a mistake in boycotting Sunday's legislative elections, overwhelmingly won by partisans of president Hugo Chavez. The formidable abstention, at 75%, undoubtedly undermines the representative nature of the new, monochrome National Assembly, but it does not invalidate its decisions. The basic result of the vote is that the opposition has ceased to exist in politically organized form. The parties opposed to Chavez - promised an unmitigated defeat by the polls - have taken cover behind the scarce credibility of the voting procedure and the unmistakable pro-government bias of the electoral authorities to justify their boycott. As we await preliminary reports from the international observers, nothing right now suggests serious irregularities.
Opinion Duel: Day Two
Well, Alek was pretty unsparing in his first post, so I went ahead and responded pretty strongly.
Though, we obviously don't agree on much, I've always appreciated Alek's willingness to engage in proper debate. We'll see what he writes back...
Though, we obviously don't agree on much, I've always appreciated Alek's willingness to engage in proper debate. We'll see what he writes back...
December 5, 2005
Second Venezuela Opinion Duel: Alek Boyd thinks I've lost my marbles
Well, the Second Venezuela Opinion Duel is under way. Alek Boyd sent his opening salvo a while back, but I hadn't responded pending the election.
I'm writing a reply now, I'll post it tomorrow.
I'm writing a reply now, I'll post it tomorrow.
Euphoria Unhinged
I'm not just trying to bolster my credentials as official Party Poop here, but the euphoria over at Daniel and Miguel's blogs, as well as other Oppo cyberspace hangouts, strikes me as really really bizarre. Maybe it's because I'm not in Caracas - or maybe it's because it's easier to keep perspective from a distance - but I can't for the life of me figure out what the Oppo has to celebrate.
First off, suggesting that 75% abstention means 75% of the voters support the Opposition is deeply, deeply silly. In the 2000 parliamentary elections - which would tend to have higher turnout anyway, because you were electing a president as well - abstention was 44%. Out of the 56% that did vote, a little over half voted for Chavez. Say 30% of the overall electorate.
So, frankly, I don't see how 25% turnout is a terrible result for the government. Of course, we can't be sure that figure wasn't "massaged" - because CNE steadfastly refused to hand-count all the ballots as Article 172 of LOSPP mandates. But assuming provisionally that that's the right figure, it's just a 5 percentage point drop from 2000. Actually, I'd say the government did pretty well to motivate that many people to vote, considering there was no real contest, and no presidential vote.
First off, suggesting that 75% abstention means 75% of the voters support the Opposition is deeply, deeply silly. In the 2000 parliamentary elections - which would tend to have higher turnout anyway, because you were electing a president as well - abstention was 44%. Out of the 56% that did vote, a little over half voted for Chavez. Say 30% of the overall electorate.
So, frankly, I don't see how 25% turnout is a terrible result for the government. Of course, we can't be sure that figure wasn't "massaged" - because CNE steadfastly refused to hand-count all the ballots as Article 172 of LOSPP mandates. But assuming provisionally that that's the right figure, it's just a 5 percentage point drop from 2000. Actually, I'd say the government did pretty well to motivate that many people to vote, considering there was no real contest, and no presidential vote.
The Day After
If you were hoping that high abstention would "delegitimate" the government internationally, today's foreign newspapers make for some depressing reading. Chavismo's lead in the polls is the key reason cited for the Opposition pullout. The general consensus is that, faced with the prospect of humiliating defeat, the Opposition withdrew in a childish hissy-fit. Our concerns about CNE partiality, illegality, etc. etc. are given passing mention in articles focusing on the Oppo harakiri. Whether professional diplomats and others paid to track these things more closely will come away with a different perception is an open question - but hyperbolic Oppo predictions that "the world will have to open its eyes to the real nature of the regime" will have been sorely disappointed.
This is really not so surprising, considering the polling context. Choosing to abstain when you're ahead sends a strong signal to the world - just ask Alejandro Toledo. But choosing to abstain when you're getting clocked in the polls looks far too much like the weasel way out of a bind. This may be unfair - anyone following Venezuelan politics closely over the last few years knows exactly how opaque and partisan CNE has been - but then, politics is about effectiveness, not fairness. The opposition would understand this if it wasn't so obdurate about swallowing its own hype.
Just to be clear, I don't mean to criticize the Opposition's decision to abstain - a decision I share. But I do mean to bring a level of sanity to the overblown expectations some had harbored that abstaining would somehow radically overhaul international perceptions of the Chavez government. Sumate's line, that December 4th marks a critical inflection point in Venezuelan history, seems aggressively optimistic to me. The only real difference, as far as I can tell, is that chavismo will no longer need to amend the National Assembly rules of order every two weeks to do exactly what it wants.
If anything, overall international perceptions hardened yesterday. Setting aside the right and left-wing fringes - and lets face it: Carlos Alberto Montaner and Thor Halvorssen aren't really any more influential than Ignacio Ramonet and Larry Birns - the way the world perceives the political dynamic in Venezuela is that we have a charismatic (if erratic and authoritarian) leftist in power facing a comically immature, by-and-large reactionary Opposition with a tin-ear for politics and a purely defensive stance. Nothing the world saw yesterday goes against the grain of this conventional wisdom.
That's the bed the Opposition leadership made for us, and now we get to lie in it.
Fact is, there are no shortcuts. There is no way to change foreign perceptions until we start winning the political argument in Venezuela. I think this can be done. There are plenty of chavista weaknesses a smart, disciplined, optimistic, forward-looking, savvy opposition could exploit. Chavez may be popular, but his government isn't. Even in the middle of an oil boom, polls show high levels of dissatisfaction with its performance. Chavistas resent its corruption as much as we do, or more. The internal contradictions in the Chavez organization have been simmering for years, and are bound to boil over sooner or later. Popular enthusiasm for the project can't be sustained beyond sporadic spending sprees. People want an alternative.
Those of us who reject Chavez have a year to build that alternative. Now that the Oppo old guard has purged itself from parliament, we have a unique chance to do so freed from the dead-weight of Fourth Republic associations. Vamos a dale...
This is really not so surprising, considering the polling context. Choosing to abstain when you're ahead sends a strong signal to the world - just ask Alejandro Toledo. But choosing to abstain when you're getting clocked in the polls looks far too much like the weasel way out of a bind. This may be unfair - anyone following Venezuelan politics closely over the last few years knows exactly how opaque and partisan CNE has been - but then, politics is about effectiveness, not fairness. The opposition would understand this if it wasn't so obdurate about swallowing its own hype.
Just to be clear, I don't mean to criticize the Opposition's decision to abstain - a decision I share. But I do mean to bring a level of sanity to the overblown expectations some had harbored that abstaining would somehow radically overhaul international perceptions of the Chavez government. Sumate's line, that December 4th marks a critical inflection point in Venezuelan history, seems aggressively optimistic to me. The only real difference, as far as I can tell, is that chavismo will no longer need to amend the National Assembly rules of order every two weeks to do exactly what it wants.
If anything, overall international perceptions hardened yesterday. Setting aside the right and left-wing fringes - and lets face it: Carlos Alberto Montaner and Thor Halvorssen aren't really any more influential than Ignacio Ramonet and Larry Birns - the way the world perceives the political dynamic in Venezuela is that we have a charismatic (if erratic and authoritarian) leftist in power facing a comically immature, by-and-large reactionary Opposition with a tin-ear for politics and a purely defensive stance. Nothing the world saw yesterday goes against the grain of this conventional wisdom.
That's the bed the Opposition leadership made for us, and now we get to lie in it.
Fact is, there are no shortcuts. There is no way to change foreign perceptions until we start winning the political argument in Venezuela. I think this can be done. There are plenty of chavista weaknesses a smart, disciplined, optimistic, forward-looking, savvy opposition could exploit. Chavez may be popular, but his government isn't. Even in the middle of an oil boom, polls show high levels of dissatisfaction with its performance. Chavistas resent its corruption as much as we do, or more. The internal contradictions in the Chavez organization have been simmering for years, and are bound to boil over sooner or later. Popular enthusiasm for the project can't be sustained beyond sporadic spending sprees. People want an alternative.
Those of us who reject Chavez have a year to build that alternative. Now that the Oppo old guard has purged itself from parliament, we have a unique chance to do so freed from the dead-weight of Fourth Republic associations. Vamos a dale...
December 2, 2005
December 1, 2005
The Mariches Effect
by Diego Bautista Urbaneja
translated by me
It's as though a fragile equilibrium was broken. Until last Friday, the arguments for and against voting on December 4th just about balanced each other off. Some were going to vote and some were going to abstain. I don't know in what proportion. What's for sure is that the government was on the brink of achieving its goal, that is, for not everyone to vote and not everyone to abstain. That way, they would win without having to steal the election, with manageable turnout figures that could, if needed, be manipulated. CNE was ladeling out "concessions" to the opposition adequately, alongside arbitary moves and causes for mistrust, keeping the oppoosition split and allowing the government to achieve its goal without real problems. What was going to happen was not, incidentally, anyone's fault, it was just a function of the way that various opposition groups debated with one another about how they should react faced with parliamentary elections under the conditions created by CNE.
MARICHES. That "equilibrium" was broken in the now famous voting simulation in Fila de Mariches, where it was shown that the voting machines do store the sequence of votes allowing CNE to infer how each person voted, and violating the principle of the secret vote. This created a new situation.
The doubts, which for part of the electorate had been subsiding through the improved conditions that had been "achieved" (we need to keep this kind of question between quotation marks) and the arguments in favor of voting, shot up virulently. The balance of positions we talked about went up in smoke, and a psychological avalanche was unleashed in favor of abstentionism.
After Mariches, it was no longer possible to ask the voter to go to the polls, unless new conditions were met by CNE. The opposition had to ask for changes in electoral conditions, and it was in a strong position to do so.
CNE's decision to do away with the finger-print scanners, which re-established the secrecy of the vote, could have meant a significant increase in the credibility of elections. It could have translated into an unexpected increase in the number of voters.
CNE's strategy might have been broken in one of two ways: through mass abstention or mass voting. What happened in Mariches opened the doors to the first of these scenarios, a price CNE could not afford to pay. This is why they did away with the finger-print scanners. But they stopped there, making it their final "concession", to see if they could keep the opposition divided. And indeed, limited though it was, doing away with the finger-print scanners might have opened the doors to the other option: mass voting.
But it didn't work out that way. Right now, CNE is paying the price for its cynicism. Many will feel emotionally satisfied. They will feel that, for once, CNE didn't get away with it, though we do not know the price we shall have to pay for it.
But we made the wrong move. The right move would have been to take advantage of the withdrawal of the finger-print scanners to call for mass voting, breaking the government's divisionist strategy, and forcing it to either lose or try to steal the election. This didn't happen. On Monday the fifth we'll have to face the results of what we've done.
translated by me
It's as though a fragile equilibrium was broken. Until last Friday, the arguments for and against voting on December 4th just about balanced each other off. Some were going to vote and some were going to abstain. I don't know in what proportion. What's for sure is that the government was on the brink of achieving its goal, that is, for not everyone to vote and not everyone to abstain. That way, they would win without having to steal the election, with manageable turnout figures that could, if needed, be manipulated. CNE was ladeling out "concessions" to the opposition adequately, alongside arbitary moves and causes for mistrust, keeping the oppoosition split and allowing the government to achieve its goal without real problems. What was going to happen was not, incidentally, anyone's fault, it was just a function of the way that various opposition groups debated with one another about how they should react faced with parliamentary elections under the conditions created by CNE.
MARICHES. That "equilibrium" was broken in the now famous voting simulation in Fila de Mariches, where it was shown that the voting machines do store the sequence of votes allowing CNE to infer how each person voted, and violating the principle of the secret vote. This created a new situation.
The doubts, which for part of the electorate had been subsiding through the improved conditions that had been "achieved" (we need to keep this kind of question between quotation marks) and the arguments in favor of voting, shot up virulently. The balance of positions we talked about went up in smoke, and a psychological avalanche was unleashed in favor of abstentionism.
After Mariches, it was no longer possible to ask the voter to go to the polls, unless new conditions were met by CNE. The opposition had to ask for changes in electoral conditions, and it was in a strong position to do so.
CNE's decision to do away with the finger-print scanners, which re-established the secrecy of the vote, could have meant a significant increase in the credibility of elections. It could have translated into an unexpected increase in the number of voters.
CNE's strategy might have been broken in one of two ways: through mass abstention or mass voting. What happened in Mariches opened the doors to the first of these scenarios, a price CNE could not afford to pay. This is why they did away with the finger-print scanners. But they stopped there, making it their final "concession", to see if they could keep the opposition divided. And indeed, limited though it was, doing away with the finger-print scanners might have opened the doors to the other option: mass voting.
But it didn't work out that way. Right now, CNE is paying the price for its cynicism. Many will feel emotionally satisfied. They will feel that, for once, CNE didn't get away with it, though we do not know the price we shall have to pay for it.
But we made the wrong move. The right move would have been to take advantage of the withdrawal of the finger-print scanners to call for mass voting, breaking the government's divisionist strategy, and forcing it to either lose or try to steal the election. This didn't happen. On Monday the fifth we'll have to face the results of what we've done.
¿Qué está pasando, Dios mio?
With Primero Justicia's decision to pull out of Sunday's vote, four out of the six main Opposition parties are out of the race. MAS appears split, its leadership's ability to persuade anyone to vote is questionable. Only Un Nuevo Tiempo, the Zulia-state regional party and Governor Manuel Rosales' personal vehicle is still clearly in.
The political parties' leadership has been typically incoherent on this whole affair. First, they spent a year and a half convincing their supporters CNE had cheated and couldn't be trusted. Absurdly, they decided to take part in the parliamentary elections anyway. But since they'd already convinced their followers CNE would cheat, they unsurprisingly found it impossible to enthuse them about voting. In the end, they were forced to reverse their position at the last minute to avoid a humiliating defeat. You can call it "responding to the grassroots" if you want - but if the government exploits it shrewdly (which they will) the pervasive distrust in Jorge Rodriguez's CNE could demobilize the opposition for years to come.
One big question is how this will all play out in next year's presidential election. Having pulled out this time, the Oppo parties can hardly participate next year unless conditions improve considerably. But then, think how easy that makes it for CNE to allow Chavez to run virtually unopposed. Just refuse to go any further to meet opposition concerns than you went this time and...ta-da!
I have a feeling that's what's behind Teodoro Petkoff's highly critical stance against the Oppo parties' decision to pull out. How on earth will they mobilize their supporters next year having set this precedent? It's not clear to me at all - and it does look like yet another case of the Opposition planning for the next 24 hours while chavismo plans for the next 24 years.
One pedestrian reality - nearly forgotten amid the hubbub - is that we now face five years of a National Assembly made up exclusively of chavista psychophants. That's not a good prospect any way you slice it: God only knows what they'll think up.
Another almost-forgotten historic milestone is that, for the first time since Pérez Jiménez, Venezuela will have a parliament with no adecos and no copeyanos. AD and Copei will now have to spend their time outside of the National Assembly, and the experience might just imaginably push them to do some serious work on reconfiguring, reforming, and repositioning themselves for a vastly changed political reality - a task they have really put off for way too long. If they fail to do that - and lets face it, they probably won't manage it - they'll probably disappear...which wouldn't be such a bad thing, if you ask me...
Shut out of parliament, all the Opposition parties will finally get a chance to devote themselves entirely to reconnecting with a country they've been badly out of step with for years. Who knows, if they can withstand the growth of chavista authoritarianism sure to go hand-in-hand with an all-chavista A.N., it might even do them some good.
The political parties' leadership has been typically incoherent on this whole affair. First, they spent a year and a half convincing their supporters CNE had cheated and couldn't be trusted. Absurdly, they decided to take part in the parliamentary elections anyway. But since they'd already convinced their followers CNE would cheat, they unsurprisingly found it impossible to enthuse them about voting. In the end, they were forced to reverse their position at the last minute to avoid a humiliating defeat. You can call it "responding to the grassroots" if you want - but if the government exploits it shrewdly (which they will) the pervasive distrust in Jorge Rodriguez's CNE could demobilize the opposition for years to come.
One big question is how this will all play out in next year's presidential election. Having pulled out this time, the Oppo parties can hardly participate next year unless conditions improve considerably. But then, think how easy that makes it for CNE to allow Chavez to run virtually unopposed. Just refuse to go any further to meet opposition concerns than you went this time and...ta-da!
I have a feeling that's what's behind Teodoro Petkoff's highly critical stance against the Oppo parties' decision to pull out. How on earth will they mobilize their supporters next year having set this precedent? It's not clear to me at all - and it does look like yet another case of the Opposition planning for the next 24 hours while chavismo plans for the next 24 years.
One pedestrian reality - nearly forgotten amid the hubbub - is that we now face five years of a National Assembly made up exclusively of chavista psychophants. That's not a good prospect any way you slice it: God only knows what they'll think up.
Another almost-forgotten historic milestone is that, for the first time since Pérez Jiménez, Venezuela will have a parliament with no adecos and no copeyanos. AD and Copei will now have to spend their time outside of the National Assembly, and the experience might just imaginably push them to do some serious work on reconfiguring, reforming, and repositioning themselves for a vastly changed political reality - a task they have really put off for way too long. If they fail to do that - and lets face it, they probably won't manage it - they'll probably disappear...which wouldn't be such a bad thing, if you ask me...
Shut out of parliament, all the Opposition parties will finally get a chance to devote themselves entirely to reconnecting with a country they've been badly out of step with for years. Who knows, if they can withstand the growth of chavista authoritarianism sure to go hand-in-hand with an all-chavista A.N., it might even do them some good.
November 30, 2005
CNE? The government? Same difference...
One last one for today: The idea of postponing the election has been ruled out.
Who announced this transcendent decision, you ask? Vicepresident José Vicente Rangel!
Just minutes after Rangel spoke to journalists, CNE head Jorge Rodriguez was on the air ratifying his boss's decision...
Han llegado al colmo del descaro de poner a JVR a anunciar las decisiones del CNE...y después dicen que es invento que el CNE y el gobierno son la misma vaina...
(Sorry, but some things I can only express in Spanish!)
Who announced this transcendent decision, you ask? Vicepresident José Vicente Rangel!
Just minutes after Rangel spoke to journalists, CNE head Jorge Rodriguez was on the air ratifying his boss's decision...
Han llegado al colmo del descaro de poner a JVR a anunciar las decisiones del CNE...y después dicen que es invento que el CNE y el gobierno son la misma vaina...
(Sorry, but some things I can only express in Spanish!)
Hinterlaces Sez:
According to the latest Hinterlaces poll, carried out before this week's pullout by AD, Copei and Proyecto Venezuela, 71% of voters were planning not to vote on December 4th, 9 percentage points higher than in their previous poll.
Other results:
75% have little or no confidence in CNE's impartiality.
70% believe hand-counting votes is a more transparent system than automated tallying.
43% back Chavez, but only 13% are "militant chavistas."
Other results:
USA ex machina
The fidelista playbook in action: Alí Rodríguez blames the US for the opposition parties' withdrawal. See? Everything bad that happens in Venezuela is the gringos' fault...
And another one...
For those who doubt that it's viable to cheat by manipulating the Electoral Registry, it turns out that Giovanni/Geovanny/Jovany José Vásquez, the Colombian alleged paramilitary/psychiatrist and key witness in the Danilo Anderson murder case, is registered to vote in Venezuela, and actually did vote on the Recall Referendum last year, according to the government's Lista Maisanta.
Making Sense of the Oppo Parties' Withdrawal
Over at Devil's Excrement, Miguel writes a very lucid post explaining the Opposition parties' decision to withdraw from the December 4th vote. (Note that Miguel, for reasons he has explained carefully, thinks conditions were safe enough to vote.) I'll sum up the best parts of his piece:
It reminds me of that one bit in Bill Cosby, Himself. Cosby walks into his kitchen and catches his four year old daughter clambering up the kitchen cupboard to get a (forbidden) cookie. By the time she notices him, her hand is literally in the cookie-jar. Without missing a beat, in her sweetest little voice, she looks up and says "I was getting a cookie for you!"
Nothing is quite so infuriating as catching someone in the act and still hearing them deny the obvious. After the Fila de Mariches debacle, the Opposition expected some sign of contrition from a Jorge Rodriguez very evidently caught in a long-running lie - preferably his resignation, but at the very least an apology.
Instead, the overall dynamic went something like this:
Whether anger at all this is a good reason to withdraw from the vote is up for debate...but it's certainly an understandable reason.
The inimitable Weil
In the meantime, Sumate issued a tough statement. Key bits:
Imagine you have been involved in some tough political negotiations. For the last year and half (and three elections) you have seen hundreds of millions of dollars spent on voting technology you disagree with, but you've come to believe a few things about it. One thing you believe, because you have been told with a straight face, time and time again, is that it is impossible to know how people voted. Then the following things happen:
1) A group of technical people tell you that this is not the case. The sequence of votes is easily known by inspecting the hard drive. They not only tell you, but proceed to show it and prove it in front of the international observers and the CNE.
You bring this up and the reaction from CNE head Jorge Rodriguez is: Impossible! Smartmatic, my people, my technical people, have all told me this is simply not possible. This is simply an attack on the CNE, you people are trying to boycott the whole process.
2) Another meeting is held with the head of the CNE, showing him the evidence that the sequence can indeed be known. On the advice of his technical people he offers to erase the hard dives within 72 hours of the vote removing all evidence and traces of it.
You go back to your technical people and they laugh at you.
3) At this point Rodriguez offers to disconnect the machines, which certainly does not seem to help much, since even if they are disconnected they keep the sequence which can be used later to know the votes.
4) Finally you get him to accept the removal of the fingerprint machines. This eliminates the problem unless they somehow manage to keep a precise record of the order in which people vote in 27,000 voting centers. This seems acceptable, until the annoncement is made publicly and Rodriguez says this is simply a concession to lower abstention and threatens that even if they are being graciously removed in this election, they will be there a year from now for the 2006 Presidential election.
How would you feel?
It reminds me of that one bit in Bill Cosby, Himself. Cosby walks into his kitchen and catches his four year old daughter clambering up the kitchen cupboard to get a (forbidden) cookie. By the time she notices him, her hand is literally in the cookie-jar. Without missing a beat, in her sweetest little voice, she looks up and says "I was getting a cookie for you!"
Nothing is quite so infuriating as catching someone in the act and still hearing them deny the obvious. After the Fila de Mariches debacle, the Opposition expected some sign of contrition from a Jorge Rodriguez very evidently caught in a long-running lie - preferably his resignation, but at the very least an apology.
Instead, the overall dynamic went something like this:
1-CNE breaks the law and lies about it.
2-The Opposition proves CNE broke the law and lied about it.
3-CNE grudgingly accepts to stop breaking the law (for one election only,) while continuing to lie about it and attack the Opposition parties.
4-(and this is the part the Opposition really can't swallow) CNE presents step 3 as a concession!
Whether anger at all this is a good reason to withdraw from the vote is up for debate...but it's certainly an understandable reason.
The inimitable Weil
In the meantime, Sumate issued a tough statement. Key bits:
CNE lied to the country
For more than a year (and three elections,) CNE gave assurances that the voting machines did not store the sequence of votes. Now they have to accept:
1-Political responsibility for having lied to the country.
2-Administrative responsibility for having used public funds to buy machines that violate Venezuelans' political rights.
Sumate will keep fighting for the truth
We have consistently demanded minimum democratic conditions for the Parliamentary vote to be a Clean Election... That's why we demand compliance with the Constitution and the Electoral Laws:
A. Publishing the electoral registry with addresses
B. Doing away with the finger print scanners and the electronic voter rolls nationwide once and for all; reprogramming the voting machines and auditing the source code again
C. Hand-counting all the ballot papers
...moreover, the "morochas" are unconstitutional.
November 29, 2005
Opposition Logic
Ten days ago, the Opposition parties had no problem going to a vote despite all the well-known CNE irregularities.
Last week, Opposition technicians demonstrated that one of those irregularities - the finger-print scanners - could indeed be used to track who voted for whom.
The Opposition then asked CNE to suspend the use of the scanners.
Two days ago, CNE chief Jorge Rodriguez agreed.
The Opposition response? To withdraw from the elections!
Quien los entiende?
Whether you think going to elections is wise or not, the timing of the decision is just baffling. There's no imaginable reason to think conditions were safe enough to vote 10 days ago, but not today. If anything, conditions improved a notch over the last 48 hours. So, painful as it is to say it, I think JVR has it right for once: the opposition saw the writing on the wall, realized they can't mobilize their own supporters, noticed they were on the verge of a humiliating wipe-out, and cut their losses.
Last week, Opposition technicians demonstrated that one of those irregularities - the finger-print scanners - could indeed be used to track who voted for whom.
The Opposition then asked CNE to suspend the use of the scanners.
Two days ago, CNE chief Jorge Rodriguez agreed.
The Opposition response? To withdraw from the elections!
Quien los entiende?
Whether you think going to elections is wise or not, the timing of the decision is just baffling. There's no imaginable reason to think conditions were safe enough to vote 10 days ago, but not today. If anything, conditions improved a notch over the last 48 hours. So, painful as it is to say it, I think JVR has it right for once: the opposition saw the writing on the wall, realized they can't mobilize their own supporters, noticed they were on the verge of a humiliating wipe-out, and cut their losses.
IranMania!
Iran and Venezuela are to sign a contract to produce two Iranian passenger car models - the "Samand" and the "Pride" - in this Latin American country, the Persian service of the Iranian Students News Agency (ISNA) reported.
November 28, 2005
We're being played...
More and more, I have the sense CNE is playing the opposition like a fiddle. Today's concession, agreeing not to use finger-print scanners on December 4th, looks very much like another carefully calibrated move to fulfill CNE's twin goals of providing international electoral legitimacy to an autocratic regime while dividing and demobilizing the opposition.
The tactical retreat on the finger-print scanners makes perfect sense in the context of this two-pronged strategy. There was a real threat of Opposition parties withdrawing en masse from Sunday's vote given last week's finger-print scanning debacle and Zulia governor Manuel Rosales's ultimatum on pulling out of the election if the finger-print scanners were left in place. An election without the Opposition is not much use for international legitimation. CNE needs the parties to play ball if it wants chavismo to keep the "democratically elected" label, and if it needs to throw the finger-print scanners into the pyre to achieve that, it's more than willing to do so.
But the retreat was also partial, and certain to rekindle the near civil-war between opposition participationists and abstentionists. For every Blyde arguing that there are now enough safeguards to vote, there'll be a Toro pointing to the farcical "hot" audit as a reason not to. Prolonguing the internal squabbling in the Opposition works brilliantly to achieve CNE's other goal: keeping the opposition divided and demobilized.
Does anyone else have a feeling that José Vicente Rangel is behind all this? I don't have any proof, just a vague feeling that only JVR is quite smart and macchiavelian enough to think up something like this...
The tactical retreat on the finger-print scanners makes perfect sense in the context of this two-pronged strategy. There was a real threat of Opposition parties withdrawing en masse from Sunday's vote given last week's finger-print scanning debacle and Zulia governor Manuel Rosales's ultimatum on pulling out of the election if the finger-print scanners were left in place. An election without the Opposition is not much use for international legitimation. CNE needs the parties to play ball if it wants chavismo to keep the "democratically elected" label, and if it needs to throw the finger-print scanners into the pyre to achieve that, it's more than willing to do so.
But the retreat was also partial, and certain to rekindle the near civil-war between opposition participationists and abstentionists. For every Blyde arguing that there are now enough safeguards to vote, there'll be a Toro pointing to the farcical "hot" audit as a reason not to. Prolonguing the internal squabbling in the Opposition works brilliantly to achieve CNE's other goal: keeping the opposition divided and demobilized.
Does anyone else have a feeling that José Vicente Rangel is behind all this? I don't have any proof, just a vague feeling that only JVR is quite smart and macchiavelian enough to think up something like this...
Pre-Election FAQ
With less than a week to go to the December 4th Parliamentary elections, I thought it was time for a nice FAQ...
Does Venezuela's National Electoral Council (CNE) follow the law?
We know for a fact that CNE violates important elections laws and constitutional principles. They include the constitutions's Article 63 on secret voting, and Article 186 on proportional representation in parliamentary elections, as well as the Framework Law on Suffrage and Political Participation's Article 172 on the need to manually count all the ballots and Article 120 on CNE's duty to publish the electoral registry.
Does the CNE tell the truth?
We know for a fact CNE lies. CNE produced repeated assurances that the finger-print scanning machines could not be used to match particular voters to their votes. The voting simulation carried out in Fila de Mariches last week proved conclusively this was a lie...
Is CNE partisan?
Well, duh...
Will CNE steal the election?
Probably not. The pro-Chavez parties CNE openly favors are ahead in the polls. In part, this is because many (most?) opposition voters are planning to stay away from the vote on Sunday. Under such circumstances, CNE has no need to cheat numerically for chavismo to win the election.
(Note: this is a point about numerical fraud. I mean only that CNE will not need to tamper with the automated results for chavismo to win. That there has been a host of other irregularities - from the Electoral Registry manipulations to gerrymandering, voter intimidation, and use of state resources to favor pro-government candidates - is too well-established to merit much discussion.)
If CNE has no need to cheat numerically, why does it keep lying and breaking the law?
Well, ask yourself this: what's the purpose of having a docile CNE from the point of view of Chavez's overall political strategy?
As far as I can see, a chavista CNE has two overriding goals. The first is to provide international legitimacy to an autocratic regime by making sure the government can continue claim the "democratically elected" label. The second is to ensure Chavez's grip on power by dividing and demobilizing the opposition.
So CNE has to perform a delicate balancing act. It needs to persuade the Opposition that it can cheat if the need arises, and that there is nothing the opposition can do about it. At the same time, CNE needs to convince international elections monitors that it does not steal elections.
The easiest way for CNE to achieve both goals is to convince the opposition not to trust it. Better yet, it can work to convince the more radicalized parts of the opposition not to trust it. By doing that, they depress opposition turnout and add fuel to the fire of the opposition civil war on whether to vote or abstain. And if large chunks of the opposition don't vote, CNE doesn't have to actually steal the election...which, of course, helps enormously in meeting the goal of international legitimation.
So CNE's flouting of important electoral laws is not in contradiction with the argument that they will not steal the election. Just the opposite - by flouting the law, CNE increases intra-opposition bickering and depresses antichavista turnout, which makes it unnecessary to cheat numerically.
By manipulating the system just enough to keep the opposition in a state of permanent demobilized frustrechera - frustration mixed with anger - but not quite enough to bring on strong condemnation from abroad, CNE manages to square the circle. Chavez gets to have his cake and eat it too.
How well is CNE doing on attaining its twin goals?
Brilliantly.
What will happen on December 5th?
The government will win 115-130 or more of the National Assembly's 167 seats. The international elections monitors will note a series of irregularities, but will be forced to concede there was no overall numerical fraud. The Opposition will sink further into immobilism. The new government supermajority will announce plans to ammend the 1999 constitution to allow Chavez to be re-elected indefinitely.
We know for a fact that CNE violates important elections laws and constitutional principles. They include the constitutions's Article 63 on secret voting, and Article 186 on proportional representation in parliamentary elections, as well as the Framework Law on Suffrage and Political Participation's Article 172 on the need to manually count all the ballots and Article 120 on CNE's duty to publish the electoral registry.
We know for a fact CNE lies. CNE produced repeated assurances that the finger-print scanning machines could not be used to match particular voters to their votes. The voting simulation carried out in Fila de Mariches last week proved conclusively this was a lie...
Well, duh...
Probably not. The pro-Chavez parties CNE openly favors are ahead in the polls. In part, this is because many (most?) opposition voters are planning to stay away from the vote on Sunday. Under such circumstances, CNE has no need to cheat numerically for chavismo to win the election.
(Note: this is a point about numerical fraud. I mean only that CNE will not need to tamper with the automated results for chavismo to win. That there has been a host of other irregularities - from the Electoral Registry manipulations to gerrymandering, voter intimidation, and use of state resources to favor pro-government candidates - is too well-established to merit much discussion.)
Well, ask yourself this: what's the purpose of having a docile CNE from the point of view of Chavez's overall political strategy?
As far as I can see, a chavista CNE has two overriding goals. The first is to provide international legitimacy to an autocratic regime by making sure the government can continue claim the "democratically elected" label. The second is to ensure Chavez's grip on power by dividing and demobilizing the opposition.
So CNE has to perform a delicate balancing act. It needs to persuade the Opposition that it can cheat if the need arises, and that there is nothing the opposition can do about it. At the same time, CNE needs to convince international elections monitors that it does not steal elections.
The easiest way for CNE to achieve both goals is to convince the opposition not to trust it. Better yet, it can work to convince the more radicalized parts of the opposition not to trust it. By doing that, they depress opposition turnout and add fuel to the fire of the opposition civil war on whether to vote or abstain. And if large chunks of the opposition don't vote, CNE doesn't have to actually steal the election...which, of course, helps enormously in meeting the goal of international legitimation.
So CNE's flouting of important electoral laws is not in contradiction with the argument that they will not steal the election. Just the opposite - by flouting the law, CNE increases intra-opposition bickering and depresses antichavista turnout, which makes it unnecessary to cheat numerically.
By manipulating the system just enough to keep the opposition in a state of permanent demobilized frustrechera - frustration mixed with anger - but not quite enough to bring on strong condemnation from abroad, CNE manages to square the circle. Chavez gets to have his cake and eat it too.
Brilliantly.
The government will win 115-130 or more of the National Assembly's 167 seats. The international elections monitors will note a series of irregularities, but will be forced to concede there was no overall numerical fraud. The Opposition will sink further into immobilism. The new government supermajority will announce plans to ammend the 1999 constitution to allow Chavez to be re-elected indefinitely.
November 26, 2005
Another hole in CNE's Swiss Cheese-style Credibility
For months, Sumate has been saying that the combination of the finger-print scanning machines CNE has decided to use and electronic voting machines would allow CNE to deduce who had voted for whom, by matching up the sequenced records from the two machines.
Just to be sure we're all on the same page, I'll illustrate precisely what this is about. Say, at a given voting table, Juana Catalina is the first person in line. She gets her finger-print scanned first, which identifies her as indeed being Juana Catalina. Pepe Barrigón is in line right behind her, so he gets his finger-print scanned second. At the end of the day, the finger-print scanner machine's record shows:
1-Juana Catalina
2-Pepe Barrigón
etc. etc.
Juana then goes on to vote. She chooses MVR. Pepe Barrigón goes in second, he chooses Primero Justicia. The voting machine record shows:
1-MVR
2-Primero Justicia
etc. etc.
If CNE gets to look at both sequenced records, how hard would it be to figure out who voted for whom? Not very. Sumate has said again and again that this system does away with the constitutional principle of secret voting. In light of the dark history of political discrimination behind the Tascon List, the opposition has been alarmed about this.
For months now, CNE chairman Jorge Rodriguez has openly mocked the allegedly artificial "opinion current" Sumate has created over the secrecy of the vote, saying it was simply not true and just an attempt to discredit CNE.
Except, two days ago, when CNE carried out a voting simulation in front of International and Venezuelan elections monitors, Opposition technicians who were given access to all records were able to tell each person who participated in the simulation which party they had chosen. The machines do store sequenced records, it is possible to infer who voted for whom by looking at them, and the Opposition proved it.
The funniest thing about this whole affair - if funny is the right word here - is that when the whole scheme was laid bare for all to see, CNE and Smartmatic technicians declared themselves shocked, shocked! that the system they had spent years designing, developing, and implementing could do such a thing! Heavens, we never knew!
...sigh...all I can do about it is add another CNE Illegality du Jour...
Just to be sure we're all on the same page, I'll illustrate precisely what this is about. Say, at a given voting table, Juana Catalina is the first person in line. She gets her finger-print scanned first, which identifies her as indeed being Juana Catalina. Pepe Barrigón is in line right behind her, so he gets his finger-print scanned second. At the end of the day, the finger-print scanner machine's record shows:
1-Juana Catalina
2-Pepe Barrigón
etc. etc.
Juana then goes on to vote. She chooses MVR. Pepe Barrigón goes in second, he chooses Primero Justicia. The voting machine record shows:
1-MVR
2-Primero Justicia
etc. etc.
If CNE gets to look at both sequenced records, how hard would it be to figure out who voted for whom? Not very. Sumate has said again and again that this system does away with the constitutional principle of secret voting. In light of the dark history of political discrimination behind the Tascon List, the opposition has been alarmed about this.
For months now, CNE chairman Jorge Rodriguez has openly mocked the allegedly artificial "opinion current" Sumate has created over the secrecy of the vote, saying it was simply not true and just an attempt to discredit CNE.
Except, two days ago, when CNE carried out a voting simulation in front of International and Venezuelan elections monitors, Opposition technicians who were given access to all records were able to tell each person who participated in the simulation which party they had chosen. The machines do store sequenced records, it is possible to infer who voted for whom by looking at them, and the Opposition proved it.
The funniest thing about this whole affair - if funny is the right word here - is that when the whole scheme was laid bare for all to see, CNE and Smartmatic technicians declared themselves shocked, shocked! that the system they had spent years designing, developing, and implementing could do such a thing! Heavens, we never knew!
...sigh...all I can do about it is add another CNE Illegality du Jour...
CNE Illegality du Jour
From the Constitution of the Bolivarian Republic of Venezuela
Artículo 63. El sufragio es un derecho. Se ejercerá mediante votaciones libres, universales, directas y secretas...
Article 63. Suffrage is a right. It shall be exercised through free, universal, direct and secret voting...
Artículo 63. El sufragio es un derecho. Se ejercerá mediante votaciones libres, universales, directas y secretas...
Article 63. Suffrage is a right. It shall be exercised through free, universal, direct and secret voting...
November 24, 2005
The Secret Life of Foreign Reserve Dollars
From the comments forum:
Is it really correct to say they haven't saved? They have $30 billion in foriegn reserves. A few years ago it was only $12 billoin.
Marc | 11.24.05 - 1:17 pm | #
Marc,
This is a common misconception. But foreign reserves are not government savings. Ni es lo mismo ni es igual.
It gets a bit abstract, but I think the easiest way to grasp this is to follow the path of a dollar from a foreign consumer's pocket into the Venezuelan economy.
When you buy gas at a Citgo station, you give PDVSA a dollar. PDVSA has to pass your dollar on to the Venezuelan government. But the Venezuelan government doesn't spend dollars, it spends bolivars. It has no use for your dollar until it's been turned into bolivars.
So what happens? PDVSA takes your dollar to the Venezuelan Central Bank and exchanges it for 2150 bolivars. PDVSA gives the 2150 bolivars to the government, and the government spends them.
What happens to your dollar? The Central Bank puts it in the Foreign Reserves account so that holders of bolivars who want to buy that dollar in the future can do so. This, actually, is the economic sense of having dollars in foreign reserves - they're the asset that backs the value of the bolivars in circulation.
The point here is that the dollars in the Central Bank's Foreign Reserve account represent bolivars the government has already spent.
That's why you can't think of them as government savings.
FIEM dollars are something else altogether. The point of FIEM was to keep some dollars obtained when oil prices are high from becoming bolivars until the price of oil drops again.
In high-oil years, the Central Bank was supposed to set aside part of the dollars PDVSA earned. Instead of issuing bolivars against those dollars right away, the Central Bank was supposed save them in a special fund designated FIEM. Only when oil prices dropped was the Central Bank supposed to issue bolivars against those dollars so the government could spend them.
At that point, the dollars would be moved from the FIEM account to the Foreign Reserves account.
Incidentally, this framework also explains why traditional economists were aghast at Chavez's call to spend "excess foreign reserves." Though details were murky for a long time, the government seemed to be asking the Central Bank to hand your dollar back to PDVSA so PDVSA could turn right around and buy bolivars from the Central Bank with your dollar again.
In effect, Chavez was asking the Central Bank to issue bolivars against the same dollar twice.
When you think it through, you realize that, if you do that, the total number of dollars in Central Bank Reserves stays the same, but the total number of bolivars in circulation grows.
Economist after economist had a conniption trying to explain that this was just a fancy way of asking the Central Bank to print new bolivars that weren't backed by anything to finance a government spending binge.
As every economist knows, this is how hyperinflations start.
Because once you start down that path, there is nothing to stop the government, six months down the line, from saying "well golly gee, look at those foreign reserves, they're still mighty high! We want to spend them again! Come on, Central Bank, cough up some more bolivars!..." Once you've set that precedent, that's a game you can keep playing again and again and again...
The last I heard of this absurd little spat is that the Central Bank and the government reached a compromise on "excess reserve" spending. The government agreed to use existing Foreign Reserves only for dollar-denominated purchases (to import food, for instance, or to fund Chavez's various foreign allies), and not to issue new bolivars against old dollars.
This is a fudge, since under normal circumstances foreign reserve dollars aren't free: the government has to buy those dollars from Central Bank using the bolivars it has. The compromise is the mirror image of the situation described above - by spending "excess reserves" this way, the number of bolivars in circulation stays the same, while the number of dollars in foreign reserves will drop. You're still fiddling with the ratio of bolivars-in-circulation-to-dollars-in-foreign-reserves in a pretty dubious way. But it's probably less damaging than flooding the domestic economy with lots of new bolivars created out of thin air.
Is it really correct to say they haven't saved? They have $30 billion in foriegn reserves. A few years ago it was only $12 billoin.
Marc | 11.24.05 - 1:17 pm | #
Marc,
This is a common misconception. But foreign reserves are not government savings. Ni es lo mismo ni es igual.
It gets a bit abstract, but I think the easiest way to grasp this is to follow the path of a dollar from a foreign consumer's pocket into the Venezuelan economy.
When you buy gas at a Citgo station, you give PDVSA a dollar. PDVSA has to pass your dollar on to the Venezuelan government. But the Venezuelan government doesn't spend dollars, it spends bolivars. It has no use for your dollar until it's been turned into bolivars.
So what happens? PDVSA takes your dollar to the Venezuelan Central Bank and exchanges it for 2150 bolivars. PDVSA gives the 2150 bolivars to the government, and the government spends them.
What happens to your dollar? The Central Bank puts it in the Foreign Reserves account so that holders of bolivars who want to buy that dollar in the future can do so. This, actually, is the economic sense of having dollars in foreign reserves - they're the asset that backs the value of the bolivars in circulation.
The point here is that the dollars in the Central Bank's Foreign Reserve account represent bolivars the government has already spent.
That's why you can't think of them as government savings.
FIEM dollars are something else altogether. The point of FIEM was to keep some dollars obtained when oil prices are high from becoming bolivars until the price of oil drops again.
In high-oil years, the Central Bank was supposed to set aside part of the dollars PDVSA earned. Instead of issuing bolivars against those dollars right away, the Central Bank was supposed save them in a special fund designated FIEM. Only when oil prices dropped was the Central Bank supposed to issue bolivars against those dollars so the government could spend them.
At that point, the dollars would be moved from the FIEM account to the Foreign Reserves account.
Incidentally, this framework also explains why traditional economists were aghast at Chavez's call to spend "excess foreign reserves." Though details were murky for a long time, the government seemed to be asking the Central Bank to hand your dollar back to PDVSA so PDVSA could turn right around and buy bolivars from the Central Bank with your dollar again.
In effect, Chavez was asking the Central Bank to issue bolivars against the same dollar twice.
When you think it through, you realize that, if you do that, the total number of dollars in Central Bank Reserves stays the same, but the total number of bolivars in circulation grows.
Economist after economist had a conniption trying to explain that this was just a fancy way of asking the Central Bank to print new bolivars that weren't backed by anything to finance a government spending binge.
As every economist knows, this is how hyperinflations start.
Because once you start down that path, there is nothing to stop the government, six months down the line, from saying "well golly gee, look at those foreign reserves, they're still mighty high! We want to spend them again! Come on, Central Bank, cough up some more bolivars!..." Once you've set that precedent, that's a game you can keep playing again and again and again...
The last I heard of this absurd little spat is that the Central Bank and the government reached a compromise on "excess reserve" spending. The government agreed to use existing Foreign Reserves only for dollar-denominated purchases (to import food, for instance, or to fund Chavez's various foreign allies), and not to issue new bolivars against old dollars.
This is a fudge, since under normal circumstances foreign reserve dollars aren't free: the government has to buy those dollars from Central Bank using the bolivars it has. The compromise is the mirror image of the situation described above - by spending "excess reserves" this way, the number of bolivars in circulation stays the same, while the number of dollars in foreign reserves will drop. You're still fiddling with the ratio of bolivars-in-circulation-to-dollars-in-foreign-reserves in a pretty dubious way. But it's probably less damaging than flooding the domestic economy with lots of new bolivars created out of thin air.
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