Chávez's achievement

Quico says: It's a question people seem to ask me a lot outside Venezuela, and it came up again the other night, in a conversation with an old and dear friend of mine:

"Now, I know you hate the guy, and probably for good reason...but if you had to pick out one achievement, one virtue in Hugo Chávez, what would it be?"

I've known my friend too long and respect him too much to fall back on the old, Teodoresque bromide about how Chávez put poverty at the top of the political agenda, yada yada yada. I'm sure there's something to that, but it feels like a cop-out at this oint. The mood was more reflexive than that, so I tried a more real riff.

"Chávez's real achievement," I said, draining the last of that bottle of wine, "the thing that sets him apart from any other charismatic leftie autocrat I can think of, is that he's put himself in the position he's in today without the massive use of state violence. It really is unprecedented, when you take the long view. Countries just don't get to where Venezuela is today without mass graves ...but we did."

"Think it through: Venezuela today is a society controlled from top to bottom, with practically no spaces left for meaningful independent political action, with a hyper-ideologized army and public administration responding unflinchingly to the orders of one man. The media? Neutered. The priests? Irrelevant. The bourgeoisie? Either cowed, fled or co-opted. The state's power? Virtually unchecked. And all this in a country that was a warts-and-all democracy as recently as a decade ago."

"It took Lenin a pile of bodies from here to Siam to get to this level of political control over Russia. Mugabe had 20,000 Ndebele bodies to bury before he had Zimbabwe by the cojones like Chávez has Venezuela. Tito's secret police had to keep shooting up people on 3 continents for decades to keep Yugoslavia nice and docile for forty years. That's what it takes, normally, to stamp your control over a country in the kind of total way Chávez has."

"But Chávez, what kind of body count does he really have? Juan Carlos Sánchez, from the Danilo Anderson case? Danilo himself? A dozen others, maybe, on the lower end of Avenida Baralt on 11A? And fifty more in jail? A disgrace, certainly, by the standards of a proper democracy...but measured against the kinds of deliriously murderous regimes Chávez loves to praise and lionize, almost embarrassingly little."

"Che Guevara had these many scalps under his belt within a week of the revolution taking Havana. Idi Amin, Khadafi, the Iranian mullahs, the Kims in North Korea these are rulers who pile up body counts and fill up prisons with a speed and efficiency Chávez both clearly admires and absolutely refuses to replicate. So far, anyway."

"And that's the real enigma, because to be sure Chávez's pantheon of leaders-to-be-emulated all have one thing in common: they're on an entirely different plane of murderousness than he is. That's the anomaly, man, the real headscratcher."

"A lot of it, I think, has to do with timing: the revolution's just moved much more slowly, much more gradually than any of the regimes I just mentioned. Classical dictatorships come in by force of arms and keep right on using those arms to maintain their control. Within a year or two, they've spilled all the blood they needed to spill to convince people not to fuck with them. And so people don't fuck with them. That's normal."

"What your normal dictator does in a year Chávez has done in ten. Ten long and miserable years, yes, but also ten years of a bark that far outstrips the bite."

"Maybe our problem is that we keep measuring him up against the standard of the normal democratic regime we'd like, rather than against the bar of the blood-soaked tyrannies he holds himself up against. Chávez has, to his own mind, made a lot of compromises over the last ten years, eaten a lot of shit to get the kind of control over Venezuelan society he has without a spasm of fratricidal violence."

"No other revolutionary that I can think of has been more willing to let opponents stay and grow rich under his watch, so long as they agreed to go-along and get-along. Khadafi had no Gustavo Cisneros, Idi Amin did not rule over a Blackberry boomlet, and Fidel certainly had no Pedro Torres Ciliberto. So the extension of political control here has gone hand in hand with the kind of softly-softly approach to 'class enemies' - in fact, if not in rhetoric - that, while shot through with insecurity, has also seen a huge number of bank accounts bulge very significantly."

"In a way, I think Chávez understands power better than almost any of his historical predecessors. More subtly, more finely. Chávez grasps that you can set up a society where even people who hate your guts get the message that they have no choice but to go along with what you say, and do go along with what you say, without having to shoot up the place until it looks like a Swiss cheese."

"And in that sense, if in no other, I think there really is something to the whole idea of 21st Century Socialism. In the 20th century, all left-wing tyrannies were baptized in rivers of blood. The first 21st century left-wing tyranny has dispensed with all that..."

Por ahora...

The people get shoved under the table

Juan Cristóbal says: - A few days ago, Venezuela's opposition announced with much fanfare it had finally reached an "agreement" on how to select candidates for the looming parliamentary elections. The announcement, praised as a positive development, instead sucked the air out of the room. The agreement amounts to the death knell of a nationwide opposition primary next year.

The text was put together by the opposition parties' quasi-umbrella group, unhappily named the Mesa de Unidad (literally, "Unity Table"...). Careful about its comas and couched in language that could only stir a vogon, the text centered on solving the problems of the opposition political class, not of their voters.

As much as it claims to represent the opposition universe, this "table" lacks a few important things: a webpage, a coherent image, and, more importantly, an important group of civil society groups led by Leopoldo López, among others. So right off the bat, serious players in our opposition fauna are not included, putting a big fat question mark over the table's legitimacy and the impact of anything it does.

What this incomplete assembly has done is approve an unwieldy compromise where some parliamentary candidates will be chosen via smoke-filled room haggling consensus, and those that can't be haggled over successfully will be put to a primary vote next year.

What that means is that the mesa's announcement kills the one truly transformational idea on the table, the one proposal able to not just settle the opposition's unity and organizational problems but to re-brand it as a modern, forward-looking, even daring and innovative force in National politics: a nationwide primary.

Instead of viewing popular participation in decision-making as a matter of principle, the agreement relegates primaries to the status of "last resort", just the thing you do when you've argued yourself hoarse and aren't getting anywhere. Voters like you and me are denied a voice, but parties-in-paper-only such as the MAS get a seat at the table. It's clear primaries are the last thing on the mesa leaders' minds, a mechanism they'll be dragged to kicking and screaming after all else has failed rather than an opportunity they'll seize with any kind of strategic vision.

Primaries are to the table like divorce is to a marriage.

What about the rest of the agreement?

Well, there's nothing there. After weeks of talks, most of the important decisions have been postponed. The rules for the fabled "consensus" have yet to be established, and they're giving themselves 15 days for the fifty (yes, 5-0) political organizations around what must be a truly massive table to agree them.

They claim that, by February, they'll have a clearer picture of where they've reached agreements and where they'll need to go to primaries. The actual primaries would take place in April at the latest, and they vow to have a complete roster of unity candidates by April 30th.

The table seemed rather pleased with itself over this agreement, or at least tried its best to present it as some kind of breakthrough. But they're sadly deluded. They're confusing a timeline with a deadline, establishing no enforcement mechanisms and giving no sign of real commitment by the table's players. They provided no details on progress regarding the rules and no hints as to how the table plans to incorporate those who have so far not participated.

The table's spokespeople asked for our trust, reminding us that in 2005 they reached a unity roster, but then gingerly papering over the fact that the 2005 parliamentary election was a disaster and that, had we not refused to participate, we would have lost by a huge margin. And let's not even touch how those agreements panned out at last year's regional elections, when picking unity candidates was a simpler proposition and much less was at stake.

The hazy deadlines, the blind faith in mechanisms that haven't worked in the past and the little consideration given to the idea of primaries are all hugely disappointing.

Worst yet, they've again failed to show the slightest hint of imagination or daring, the least shred of strategic vision, or any hint that they're aware of the need to drastically rebrand, reposition and relaunch a movement that even Venezuelans who detest Chávez have come to see as sclerotic and almost allergic to the idea of a strategic vision.

The principle-driven primary, where the people themselves take ownership of the movement to re-establish democracy in our country, has been sacrificed for the benefit of the smoke-filled-room-failure primary, where the voters are frog-marched out to clean up the messes their putative leaders leave in various bits of the Venezuelan map.

Así seguro ganamos...

PS.- Reader GTAC tells me Leopoldo López is on board with this, and he actually met with the Table. So maybe their decisions are more legitimate - but they are still not the right ones.

The view from your window: Miami

Miami, FL, USA. 3:13 pm.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

Alleged news agency allegedly strips the word "alleged" of any meaning whatsoever, sources allege

Quico says: I almost choked on my breakfast burrito this morning when I read Ian James's write-up for the AP of Chávez's lunatic little dithyramb to Carlos the Jackal the other day:

Hugo Chavez has defended the alleged terrorist mastermind Carlos the Jackal, saying the Venezuelan imprisoned in France was an important "revolutionary fighter" who supported the cause of the Palestinians.

Wait a minute: alleged?! ALLEGED?!!!? Is this some twisted joke?

Calling Carlos the Jackal an "alleged terrorist" is like calling Barack Obama an "alleged US president" and Ian James an "alleged AP hack"!

We're talking about a guy who's not just been convicted in open court of killing two French police officers, but who's publically taken responsability for any number of notorious terrorist acts, including classics like kidnapping eleven OPEC oil minister all at once, and who's publicly defended such acts not only at the time, but also in retrospect, in a prison-cell book that accepts responsibility for and stridently vindicates his multi-decade campaign of threats, murders, kidnappings and bombings; a virtual compendium of terrorist acts.

I'm no ranting critic of the gringo MSM, but this article shows it at its spineless worst. Whatever editorial guideline it is that landed that adjective before that word makes no sense at all. The AP's decision to qualify the only profession Ilich Ramírez has ever known drains the word "alleged" of any meaning whatsoever, and tends to cast a patina of respectability on Hugo Chávez recent, full-throated defense of his brand of terrorist tactics.

Inexcusable, guys. Just inexcusable.

Fernandez Barrueco Busted...but why?

Quico says: On the day after Bolibourgeois operator extraordinaire Ricardo Fernández Barrueco got shuffled off to a prison cell at Disip - Venezuela's secret police - the questions far outnumber the answers. It's easy to guess that Fernández Barrueco - head of such bankruptrrific banks as Banco Confederado, BanPro and Banco Canarias - did something serious to displease his higher ups. Suspicions will fall most heavily on Infrastructure Minister Diosdado Cabello who, as far as we can tell (which isn't very far at all), is very much the man behind the curtain on these matters.

Part of me wants to imagine Fernández Barrueco sharing a Disip cell with his little banking empire's also imprisoned-without-trial former boss, Eligio Cedeño. Seriously, those banks are jinxed...

Yet beyond that broadest of outlines, there's no real way to discern the power politics at play here. Chalk it up to the lethal combination between the regime's opacity, its willingness to silence the media, and the pathetic disinterest that most Venezuelan media have always shown towards investigative journalism in general. Even if somebody in the Venezuelan media had the capacity and the budget you'd need to do justice to the story of Fernández Barrueco's downfall, nobody would dare to.

So no, I don't really know why he went to jail. If you do: dish!

Caracas Chronicles 2.0: Help us Test the Beta

Quico says: So the new software for Caracas Chronicles 2.0, including its custom-coded, state-of-the-art Community Powered Comments system, is now in testing. And we're looking for volunteers to tell us what they like about it, what they hate about it, what needs to improved, and what needs to be flushed altogether.

If you're interested in spending some quality time playing around with the interface and writing us some feedback on it, please send me an email: caracaschronicles at fastmail dot fm

The Collected Wit and Wisdom of Nelson Merentes

Quico says: One day after Venezuela officially went into recession with a harsh 4.5% decline in 3rd quarter GDP amid alarming signs of stagflation, let us pause to reflect on the wisdom of the man in charge of the nation's money, Central Bank chief Nelson Merentes.

January 14, 2009:

"In Venezuela there is no and there shall be no recession because the world financial crisis has had no impact on the Venezuelan economy."

"If the financial crisis lasts some five or six years, Venezuela could be affected and suffer its consequences."

31st August, 2009:

(on third quarter growth) "We won't end up very high up, we'll come in just above zero. Nonetheless, I believe we'll come out in positive territory."

"There was an inflection point, upward, and that means that it's going to be better than in the second quarter, but so far we don't know how far that point will go."

November 12th, 2009:

(on how to spur economic growth) "It's like economic accupuncture, where you have to touch the launching points so as to guarantee lift off."

"...the country is reaching a point of deflation."

Well, lets count our lucky stars we dodged that deflation bullet, at least...

I think a recession on this scale would be a big deal anywhere. But in a normal country, you could just spend your way out of the hole. Run the Keynesian playbook, the way the Americans and Europeans have been doing. You pile up a lot of debt doing that, yes, but it tends to work.

Thing is, the US and the EU could do that because they went into the crisis with their macroeconomic houses more or less in order: low inflation, credible central banks, no massive imbalances lurking just beneath the surface ready to sabotage any attempt to run the Keynesian playbook.

Venezuela, on the other hand, is going into its recession with core inflation running at 36%: i.e., facing a clearly stagflationary scenario. That means that any attempt to run the Keynesian playbook will yield not growth but, instead, more inflation.

In any event, the government doesn't really have that option because even with oil flirting with $80 a barrel they can't find enough money - or enough people crazy enough to lend them money - to try to inflate their way out of the crisis.

So, instead of countercyclical demand management, Chávez's 2010 budget calls for a brutal 33% spending cut in real terms, suggesting that, instead of Keynes's, the playbook they're really looking to run is Paul Volcker's: wringing the inflationary expectations out of the economy through a series of spending cuts, in the middle of a recession!

Just to dwell on the ironies involved here, notice that this means Chavismo is going to get forced to apply precisely the kind of harsh, pro-cyclical fiscal policy that chavistas have spent a decade criticizing the IMF for forcing countries like Argentina to apply!

Pause to take stock of what this means: what we're looking at here is Chávez making a recession deeper, on purpose, to get rid of inflation! And all on his own innitiative, not because some IMF apparatchik forced him to! Fin de mundo!

In fact - and this here is my candidate for least likely sentence ever written in the English language - on one point I do agree with Jorge Giordani, Paul Volcker, Nelson Merentes, Milton Friedman, Alí Rodríguez, Margaret Thatcher, Hugo Chávez and Ronald Reagan: purposefully cutting aggregate demand even though you're in the middle of a recession is the right fiscal response to Stagflation.

"Right", that is, in the same way that amputation is the "right" medical response after you've shot yourself in the foot, dallied for a week trying various voodoo remedies, and allowed gangrene to develop.

[Hat tip: LV]

Chavismo's Crazy New PR Strategy: Telling the Truth

Quico says: OK, people, we're through the looking glass here. Just when we thought chavismo had exhausted all the rhetorical curve-balls it could possibly throw at us, they pitch us the ultimate change-up: the truth.

Late last week, we had Arias Cardenas just come out and say Chávez would pipe down about the Colombia-US military deal if Obama would just give him an oval office audience. At the weekend, Chávez told the truth again, saying the opposition didn't have the balls to run primaries. And now, Alí Rodríguez just about busts the truth-o-meter with this neocortex-scrambling statement, which defends the government's exchange rate policy noting that "the overvalued bolivar is a mechanism for economic redistribution."

Oh wow. Turns out that the government doesn't see keeping an insanely overvalued currency as a problem in need of a solution. Just the opposite: they see it as a key means calculated to bring about a cherished end.

La vaina es a proposito!

Make no mistake about it: Alí is speaking unvarnished truth here. An overvalued currency is a mechanism for economic redistribution. Any econ undergrad could tell you that.

It's just that our esteemed Minister of the People's Power for Finance left out one small detail: redistribution from whom, precisely, and to whom?

An overvalued currency redistributes wealth from people who produce stuff in Venezuela to people who buy the same stuff abroad and then import it. That's the main effect of a policy that, in layman's terms, could be rendered as "making sure a bolivar buys more stuff abroad than at home."

Or, to be a little bit more exact, an overvalued currency means a currency that buys more once it's turned into a foreign currency (at the official rate, bien sur) than it buys internally. After all, what would you rather find when you're rooting around between couch cushions, two bolivars and fifteen cents or four quarters?

If we're going to be precise about it, it's not imports that overvaluation makes cheaper, it's the currency that imports are priced in. So overvaluing a currency is a way of redistributing wealth from people without access to those official-rate-dollars to people with access to them.

Not, of course, that you need a degree in economics to explain that to any of the thousands of poor, connectionless saps banging their heads against a keyboard in frustration that Cadivi won't release their official dollar requests while Chávez's army of Crony Socialists make off with the nation's petrodollars at bargain basement prices.

For the third time this week, we can fault chavismo for many things, but not for dishonesty. Alí Rodríguez got at a core truth here. Keeping the bolivar deliriously overvalued is no mistake; it's a cherished policy goal.

Those Hummers don't come cheap, y'know?

Chávez shoots at an open goal, scores

Quico says: Noting that "sovereignty" starts from the bottom up, Chávez today challenged the opposition to follow PSUV's lead and hold internal elections for important party posts. For once, the guy has it exactly right, calling the oppo leadership on its simply inexcusable paralysis on the issue of primaries.

In fact, one of the frustrations of the endless opposition debate on how to choose its candidates for next year's parliamentary election its the way it tees Chávez up for this kind of attack, which is exceptional only in the sense of being totally justified.

Come to think of it, it's something of a novelty to hear Chávez slamming us for something that's real rather than a paranoid delusion. Odd feeling, actually. But the oppo's never-ending bickering on the issue leaves him shooting at an open goal.

Of course, his criticism is not without its ironies: PSUV may be holding internal elections for delegates for its upcoming party congress, but nobody could be under any illusion that the delegates elected will have any substantive say over the way the party (or the country) are run. Jefe es jefe, y'know. It's easy enough to guess that the moment any of the delegates goes rogue and issues any kind of substantive criticism of the hyperleader is the moment Disip discovers his previously unnoticed paramilitary connections, or the contraloria dusts off some corruption allegation or other hanging over him.

In PSUV, what party members ultimately compete for when they stand for election is the right to agree with Chávez from a better spot on the tarima.

And yet, it's also easy to guess that if there's one thing Chávez fears is the kind of reinvigorated, relegitimized opposition that could only imaginably emerge out of primaries. In a wacky, reverse-double-dare kind of way, you could see his attack today as a ploy to prevent opposition primaries. After all, nothing delegitimizes an idea more effectively among antichavistas than presidential support. How long can it be until anyone on our side who calls for primaries is slammed as a collaborator who "backs Chávez's position" on the issue?

Sneaky SOB, he is...

Chávez names his price

Juan Cristóbal says: - This buried little nugget in state-owned wire service ABN is startling in its honesty.

In it, Under-Secretary Francisco Arias Cárdenas very clearly declares what Chávez wants in exchange for returning relations with Colombia to a semblance of normalcy: a face-to-face meeting with Barack Obama.

According to Arias, the region's diplomats should not waste their time organizing summits with Uribe. The OAS, Lula and the rest are all barking up the wrong tree, Arias says, because Chávez's beef is no longer with Uribe but with Obama. Only Obama, he claims, can give Venezuela the guarantees it needs regarding the military agreement between Colombia and the U.S.

In criollo, "yo no vengo a hablar con los payasos, vengo a hablar con el dueño del circo."

After much huffing and puffing, after declaring wars and announcing troop movements on national TV, after $4 billion+ in weapons purchases, we now know it was all the price we needed to pay to get Chávez his much-desired photo-op in the Oval Office.

Remarkable, ain't it?

Not red enough for VTV: Squalid media and revolutionary discontent

Juan Cristóbal says: Many of Venezuela's public servants are mad. They, the red-wearing base of the Revolution, are mad because they don't get paid, because their places of work are under-equipped and they don't have benefits. Mostly, they're mad because they've been promised collective bargaining that never materializes and because their dignity is being trampled on.

But if you didn't watch Globovisión, you probably wouldn't know this.

The list of ironies and internal contradictions of the Bolivarian Revolution is long. One of the more notable recent additions is the fact that Globovisión, one of chavismo's most overused scapegoats, has become the outlet of choice for rank-and-file chavistas with an itch to bitch against the government.

A brief scan of what's been in the news lately could give you a flavor of massive dollop of irony involved.

Here we see a video of the very angry employees of the government-run Hotel Alba Caracas (what used to be the Caracas Hilton before Chávez ... never mind). The employees, more than 400 of them, are incandescent because they haven't been paid and are being harassed by management. They complain about their appalling working conditions - chefs decry the lack of butter, laundry attendants fret over washing machines that don't work. And Globovisión is the only channel there, listening and reporting.



Government oil workers in Anzoátegui State, in eastern Venezuela, are also causing a ruckus. They denounce the government for not signing a new collective bargaining agreement. Union leaders are quick to point out that they will defend their rights just like they "defended the industry during the oil strike of 2002-2003." Globovisión is there to air their frustration.



The government's postal service is also in upheaval. Workers carp that their rights are being trampled upon, saying that "socialism is not being applied here." Unions are being harassed and so they are sending a message to "Comrade Hugo Chávez" ... in case he's watching Globovisión. The union leader interviewed rues that all media has been invited, but only Globovisión came, bitterly singling out a State media that won't air their views.



Apparently, chavismo has not grasped just how dangerous a disgruntled postal worker can be.

Workers from the El Algodonal hospital, west of Caracas, also criticized the government recently for their terrible working conditions. They talk about the crime spree inside the hospital, the lack of doctors and the scarcity of supplies. The person interviewed alerts us that the hospital's Emergency Room has been shut for a year. Another group of workers says they haven't been paid in more than two months, that there's no water, and that sewers run openly next to the hospital.



Retired National Assembly workers also aired their beef in downtown Caracas recently. More than a thousand former workers made a fuss because their pensions haven't been paid. Again, Globovisión carried it prominently.



Even in far-off Portuguesa state, Health Ministry workers use Globovisión as a vehicle to air their grievances about the capacity of their manager and their working conditions. At least these workers managed to get the attention of a chavista Assembly-woman.



And this is just a flavor from the past few days.

But scan VTV's web page and there is no mention of the hotel maids, the oil workers, the El Algodonal ladies, or any of the other government employees who are up in arms. Off-script revolutionaries are strictly verboten on "the channel of all Venezuelans".

The workers' gripes stick to a well-defined script. Worker says she is "with the process", a necessary qualifying statement in order to keep her job. Worker then pledges allegiance to Comrade Chávez and to socialism. Worker goes on to complain that the government is a mess and demands a piece of the petro-pie. Worker reminds the viewer that she and her compañeros are with the process - just in case it wasn't clear. Worker hands it off to fellow worker with a different gripe. And so on...

Once in a while, the worker on the screen will express their surprise and disappointment at the fact that Globovisión is the only channel willing to listen. In a way, Globovisión has become the de facto voice of the proletariat. One would hope the proletariat would ask themselves where they will take their grievances if their beloved "comrade" fulfills his pledge to shut down the only TV channel willing to take them seriously.

This bizarre pattern underscores the vital role that independent media plays in a well-functioning society. On VTV, revolutionaries are useful as props, as abstract tokens of support for the whim of the leader. The second those revolutionaries transcend that role and acquire any depth, any complexity, any individuality, they become dangerous provocateurs to be silenced rather than citizens to be served.

We've been very critical of Globovisión's harsh, strident anti-Chávez content on this blog. But when the channel does what it should - report the news and tell the stories nobody else is telling - it plays a pivotal role in the preservation of what little democratic space we have left.

Villa del Tukiti

Quico says: Don't miss Mac Margolis's epic mauling of Villa del Cine, Hugo's vanity movie studio, in the current issue Newsweek. To wit:

Just inside the studio gates, a man-made canal leads to an artificial stream and lakebed—but there was no water in them when I visited recently. Indoors, the corridors and edit bays are vacant except for one or two stray techies in jeans and tennis shoes. Rows of sewing machines lie idle under dust covers in the costume atelier. An electrical fire earlier this year knocked out most of the studio's work-stations, forcing producers, editors, seamstresses, carpenters, and engineers to relocate. "Here is Studio 1. Six to eight different film sets can fit in here," a perky Cinemaville PR aide chirps, opening the door to an empty warehouse.

The entire thing is couched in this kind of hyper-acerbic tone. Just brutal. Great fun.

[Hat tip: EC]

The Universal Yawn

Quico says: The really remarkable thing about the reaction to Chávez's latest obscene little warriorist hissy fit against Colombia is the sheer universality of the disinterest it elicited. You'd think that when the head of state of a country that's just come out of a five year weapons buying orgy openly announces imminent war on his neighbor people would worry, at least a little bit. What's bizarre and, in a way, heartening, is the extent to which that didn't happen following Sunday's loon-a-thon.

With the exception of this alarmist little rant from no-less-discredited-a-figure than former president Carlos Andrés Pérez (still, remarkably enough, alive and kickin'...his foot into his mouth) reaction to the war that-exists-only-in-Chávez's-head has been remarkably clear-eyed: the equivalent of a national roll-of-the-eyes, swiftly followed by speculation that the guy must be really hurtin' for a way to rally the faithful if we've entered the Rhetorical Galtieri phase already.

This is certainly Teodoro's reading, and the main vibe I get from scanning oppo responses. Nobody seems to be in any doubt that this is a smoke-curtain: what passes for an official response to the overlapping water/electricity/crime crises now buffeting the country.

The whole narrative about a virtual US occupation of Colombia and the imminent threat of gringo-prodded invasion is too weird, too unhinged to take at face value. This may, indeed, come to be remembered as one of the most catastrophic misreadings of a declared presidential intention in the Chávez era, but I really don't think so.

Instead, what I'd say to my Colombian friends is this: Hugo Chávez has decided to cast you in the role of villain.

He's been pushed into it for lack of a better alternative: Barack Obama doesn't really make a credible bogeyman, and the Venezuelan opposition is too disjointed and threadbare to really work in that role anymore. That's a real problem for Chavismo. By its nature, chavismo needs an enemy: an external threat it can vilify and rail against and use to justify any and every authoritarian excess at home. (How long until protesting students are arrested on suspicions of working for DAS?)

Chavismo's internal logic demands an enemy: a totally evil other to put flesh on the bones of the little Manichaean melodrama inside Huguito's head. And now, you're it.

It's not a pleasant fact, but it's a fact.

For Chávez, it's not important that an enemy be real, or recognize itself as an enemy, or even be much interested in what happens in Venezuela at all. The only thing really required of you in this role is that you be - that you exist long enough and semi-plausibly enough to play Dr. Moriarty to his Sherlock Holmes...at least in his supporters' eyes.

As we in the Venezuelan opposition can certainly tell you, it's not a nice role to be cast in. And yet, it's a role. He can't force you to really inhabit it, and the only way you can lose is if you take the bait. So try to grasp the dynamic at work here, and take a deep breath. A very deep breath. In fact, for your own sake, my advice is to join us...in the universal yawn.

The view from your window: Parque Central

Caracas, Venezuela. 11 am.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

War games

Juan Cristóbal says: - Once in a while, Quico and I get emails from readers in Colombia asking about Hugo Chávez’s latest antics vis-a-vis their government. Since yesterday Mr. Chávez decided to up-the-ante on the war talk and spent several minutes saying everyone should get ready for war, I assume Colombians' anxiety over their neighbor to the East is on the rise. The question that begs asking is where this is headed. Are we going to war with Colombia?

The short answer is no.

It's easy to talk about war when you don't bother explaining the specifics of how that war is supposedly going to take place.

In the modern world, there are many ways you can wage war. You can wage a war the old-fashioned way like Saddam did in the early '90s, or the modern way, a-la Donald Rumsfeld. You can do what the VietCong did, or what Al-Qaeda is doing now. But whether by air, by land, by sea, by the Internet or by an army of renegade militants willing to blow themselves up, there is one thing all these tactics require: a plausible course of action.

As it stands, it's hard to conjure up a plausible scenario where all these winds of war translate into an actual, palpable guerre between the two sister countries. Because, what exactly is it that Chávez is telling us to prepare for? And after we're ready, what next?

An air war? Really? Venezuela doesn't have the air power to make a serious dent in Colombia's military infrastructure, and if it did, Colombia has the US covering its back. Starting an air war with Colombia would be suicidal.

A ground war? Most Venezuelan generals have a hard time summoning the strength to stir a glass of 25-year old Scotch with their pinky. The Colombian army is much larger and better equipped than the Venezuelan army.

A guerrilla war? Yeah, like that's gonna work. The Colombian army has been waging a guerrilla war for almost fifty years now. They triple us in experience. As the saying goes, cuando tú vas, yo vengo.

Militant war? Check. Technological war? Check.

The only plausible reason to take the President seriously is if the government expected Colombia to invade Venezuela. But really, does anyone outside the Kool-Aid drinking left believe Colombia (and the US) are going to invade Venezuela any time soon?

Think of the headlines - Nobel Peace Prize-winning US President launches invasion of Venezuela. Makes perfect sense, right?

The only question that remains is why The Fat Warmonger in the Palace would be talking about this.

Easy - the more you talk about war, the more you get the Evos and Lulas of the world to worry about you. Cheap talk of war keeps the talking noggins at Globovisión busy for a couple of days and provides a welcome respite from all the talk about flashlights and buckets. Firing up the guns of war gives you insight into the barracks, and may ultimately provide clues as to who is with you and who is not.

It's understandable that Chávez's words cause discomfort in Bogotá's political circles. Cachacos are, after all, a cultured lot, genetically programmed to be repulsed by the ordinary antics of Veneco power players. But you shouldn't let your prejudices guide your perception of what is real and what isn't.

So my message to my Colombian friends is this: ignore him. It's not about you. When un certain bouffon starts talking crazy about war, the only war that should concern you is the shouting match between the voices in his head.

Chávez is part crazy, part astute political animal. So while the crazy voice may be asking for a war, the rational one knows that would be his doom, just like it was for Videla and Galtieri. That's the voice that is likely to prevail, the only one you really need to pay attention to.

The view from your window: Chicago

Chicago, Illinois, USA. 4 pm.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

The expected begins to happen

Juan Cristóbal says: - Courageous Cuban blogger Yoani Sánchez was briefly kidnapped from the streets of Havana by unidentified thugs and beaten. Her harrowing account is here, in Spanish.

PS.- Alek Boyd has met the woman and has a unique take on this.

Owning up to one's bad calls

Juan Cristóbal says: - Barely a week after we were declaring the Honduras crisis all but over, we get news the agreement has collapsed.

Not only that, a US Senator and leading Micheletti supporter is claiming the US will recognize the outcome of the election, with or without Zelaya.

This takes a ton of pressure off of Micheletti's shoulders and severely diminishes US bargaining power. It also hurts the notion that the US is playing a new ball game in the region.

Somebody pass me a towel.

Game Over

Quico says: Over on BoingBoing, loyal reader and one-time avid gamer Guido Nuñez Mujica has this lovely, meaty rant on the government's just approved ban on video games it deems violent.

As a non-gamer myself, it's easy to overlook how sensitive the gaming-ban is for some people, so I especially liked Guido's passionate description of the way gaming burrows its way into people's identities. It made me realize that gaming may not matter to me, but it definitely matters:

This situation is painful to behold. Even if I barely game at all these days, I am a gamer at neocortex. I spent countless hours solving puzzles, riddles and fighting monsters in dungeons. I rescued Toadstool many times, only to be told that thanks, but my Princess was in another castle, later I joined Link and rescued Zelda from Agahnim and Ganon, using the Master Sword and the Silver Arrows. I got the Zantetsu sword and cut metal, I summoned Ifrit, Odeen and Behemoth. From Dragoon, I became a Paladin. I sneaked on Big Boss' fortress in Zanzibar and stopped doomsday with Solid Snake. I fought along a Double Dragon trapped on a Final Fight, using my Killer Instinct in a Mortal Kombat in which only the greatest Street Fighter would come alive. I was Linked to the Past by a Chrono Trigger, my Soul Blazing, as I lived my Final Fantasies, Wandering from Ys, arriving to a Lagoon, to learn about the Secret of Mana, and finally understood that there is Ever More to life.

These games are a cherished part of my life, they helped to shape my young mind, they gave me challenges and vastly improved my English, opening the door to a whole new world of literature, music and people from all around the world. What I have achieved, all my research, how I have been able to travel even though I'm always broke, the hard work I've done to convince people to fund a start up for cheap biotech for developing countries and regular folks, none of that would have been possible hadn't I learned English through video games.

Now, thanks to the tiny horizons of the cast of morons who govern me, thanks to the stupidity and ham-fisted authoritarianism of the local authorities, so beloved of so many liberals, my 7 year old brother's chances to do the same could be greatly impacted.

Killer fact: in Venezuela, giving a child a toy gun is now more heavily punished than giving a child a real gun.

Be sure to read the whole thing.

The view from your window: Asunción

Asunción, Paraguay. 1 pm.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

Loser boasts of taking from winner

Juan Cristóbal says: - This video, secretly taped, shows the loser in last year's election for Caracas Metropolitan Mayor, chavista Aristóbulo Istúriz, explaining the raison d'etre and the modus operandi through which they simply took the winner's budget, and reassigned it to chavistas.

In other words, it's as if John McCain took away most of Barack Obama's budget and gushed about it.

(Hat tip: Pelao)

The view from your window: Addis Ababa

Addis Ababa, Ethiopia. 2:30 PM.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

The Huffington Post ...

Juan Cristóbal says: - ... discusses harassment of gays and lesbians at the hands of Venezuelan government goons. Check it out - I wonder what Sean Penn thinks about this.

BCVSA and The Exchange Rate that Must Not Be Named

Quico says: Two and a half years ago, when Chávez announced PDVSA would start manufacturing shoes and selling beans and I wrote this snarky little post about the acute outbreak of role confusion in Venezuela's institutions, I could not have imagined that the trend would reach the extremes it has. As the decade comes to a close, Venezuela faces a macroeconomic reality that is bizarre on so many levels that it seems almost normal that our oil company is now, effectively, our Central Bank.

It all goes back to this blog's favorite hobby horse: the dual foreign currency market.

Your economics textbook will tell you that a country's Central Bank is the public entity charged with issuing the nation's currency and preserving its value. Operationally, that usually translates into a mandate to fight inflation by keeping the money supply from growing too much, too quickly.

But in a port economy like Venezuela's, where the vast bulk of consumption goods are imported, inflation is driven as much by the price of foreign exchange as by the absolute amount of money in circulation. The reason is easy to grasp intuitively: if you eat a lot of imported rice at $1 per kilo, and the price of that dollar rises from Bs.2 to Bs.4, you've just imported 100% rice inflation via the exchange rate.

Which is why, in import-dependent economies like ours, managing the foreign exchange market is one of the Central Bank's main tools as it seeks to control inflation. After all, if you want to control the price of dollar-denominated goods, you would be well advised to control the price of the dollar.

Enter Venezuela's Alice-in-Wonderland exchange-rate system, where the gap between government-speak and reality gets wider every passing year. While the Central Bank controls the official exchange rate, this rate is increasingly irrelevant to the Venezuelan economy. Everybody knows that in Venezuela, the price of imported goods tracks the Voldemort Exchange Rate - you know, the one that must not be named.

Which makes the Central Bank an ever more marginal player in the management of the Venezuelan economy: its control extends only to the de mentirita exchange rate, not to the real one.

Over time, even the nullities that govern us were forced to come to grips with the obvious: that prices in Venezuela are highly sensitive to an exchange rate that's not supposed to exist. The policy of wishing it away was not sustainable. The catch is that there wasn't an evident way to intervene the other market without acknowledging its existence.

To come to grips with the no-kidding exchange market, the authorities needed to find some highly opaque, politically docile institution with lots and lots of dollars on hand that it could spend off-budget and off-adult-supervision and with an upper management greedy enough to jump at the chance to manage the Voldemort market...and, well, in Venezuela that brief describes just one entity.

For months now, PDVSA has been more or less openly intervening the parallel dollar market, sporadically stepping in to keep the Voldemort Rate from climbing too high. But...that kind of macroeconomic management is supposed to be the Central Bank's job...ergo, PDVSA is, in all but name, the new Central Bank: BCVSA.

What we have in Venezuela is an all-but acknowledged dirty float, a system where the government accepts that the currency's fluctuations are beyond its control but nonetheless steps in now and then to manipulate the exchange rate.

The problem with this - aside from the whole "illegal", "unconstitutional," yada yada boring counter-revolutionary stuff people like me always write - is that it's insanely, incredibly opaque. Billions of dollars are at stake in a market that the government actively fosters and periodically intervenes, but whose existence it can't acknowledge.

Maybe a "self-loathing float" is a better description: what we have here is a heavily meddled with float that the government refuses to even talk about, subject to interventions it sure as hell won't let anybody audit. The truly remarkable thing would be if such an extraordinarily cash flush, deliriously opaque arrangement didn't breed a mass of corrupt practices.

Take a moment here to think through the possibilities. If you have the inside information to accurately time the fluctuations of the Voldemort Market, you suddenly put yourself in a position to make genuinely obscene amounts of money off of that information. Say you know that BCVSA plans to intervene tomorrow, selling $200 million to operators to take 20 cents off of the Voldemort rate. You just go to your bank, borrow some dollars, use them to buy bolivars, sit tight, and sell the bolivars tomorrow, when each of them is 20 cents more valuable. Then you pay back your bank and you pocket the difference. Money for nothing and chicks for free, no risk involved.

Sure, 20 cents may not sound like much, but do this kind of thing on a big enough scale and you can make millions and millions of dollars. Which is why I'm convinced that every time the secret dollar ticks up or down 20 cents, another batch of Bolivarian millionaires is made.

Now, imagine you're working in BCVSA and you're in a position to directly decide when you're going to step in to inject dollars into the Voldemort market. In that situation you're not just able to profit for yourself handsomely, but you're also in a position to make or break fortunes all around you.

One call to your friend with that tip and you've turned him into an instant millionaire. The same call, recorded by spies in Miraflores, earns the Executive Power the unwavering loyalty of the civil service reaping the benefits of the Revolution's discretion.

That's the stuff power is made of in the Chávez era.

There is simply no way a system that works on such levels of secrecy and opacity and that handles the kinds of sums BCVSA handles is anything less than writhing, heaving cesspool of corruption. The benefits from diving in are too strong, and the disincentives are practically non-existent.

Reproduced Verbatim

The North Korean State (what other kind is there?) News Agency says:

National Seminar on Juche Idea Held in Venezuela

Pyongyang, November 1 (KCNA) -- A national seminar on the Juche idea and the Songun politics took place in Venezuela on October 17 on the occasion of the 64th birthday of the Workers' Party of Korea.

Omar Lopez, chairman of the Venezuelan National Society for the Study of the Juche Idea, explained the essence of the Juche idea founded by President Kim Il Sung, saying that the idea is fully displaying its vitality in the Venezuelan people's efforts for building socialism.

Diego Antonio Rivero, chairman of the Venezuela-Korea Friendship and Solidarity Association, said that Kim Il Sung was the great leader of the Korean people and the world people as he led the socialist revolution and construction in Korea to victory and devoted himself to the cause of global independence. That is why the progressive people are still highly praising his immortal exploits, he added.

A professor of Bolivar University stressed that all the achievements made by the Korean people are a brilliant fruition of the Songun politics pursued by General Secretary Kim Jong Il. The cause of the Korean people facing down imperialism gives strength and courage to the world revolutionary peoples including the Venezuelan people and it has become a model of anti-imperialist struggle, he stressed.

A message of greetings to Kim Jong Il was adopted at the seminar.

Hat tip: SG

Update: In the comments section, GTAC adds:

This is not really a fringe group, even if they are small in numbers.

The Venezuelan far left splintered during the Guerrilla experience in the 60's-70's because of many tactical and strategic disagreements. The monolithic PCV, which was pro-USSR (a country which did not support guerrilla warfare by the late 60s), was then divided in a number of factions: pro-PRC, pro-Albania, pro-Cuba, Eurocommunist, School of Frankfurt types, and so forth.

Of course, there had to be a pro-Juche idea faction. This group was led by, among others, former guerrilla and philosophy professor Jose Rafael Nuñez Tenorio, who in 1969 published a book called “Bolivar y la Guerra revolucionaria”, basically creating the final blend of the Bolivar-as-antiimperialist-guerrilla-leader trope (already stated by Cuba and Juan Bosch in the Dominican Republic), stating that liberal democracy was in fact a dictatorship which had to be violently toppled, just as the Spanish Colonial power needed to be defeated. As the guerrilla failed, he was among the advocates of an alliance between civilians and ideologically oriented leftist members of the military.

This could mean nothing, unless you take into account that Núñez was founder of the Vth Republic Movement, a member of its National Tactical Command, and one of the men inside the board of the Chávez’ 1998 presidential campaign: he gave an interview with Duno and Mieres to El Nacional’s revista PRIMICIA, which exposed the mid-to-long term plans of a potential Chávez presidency: the dismantling of congress and the Judicial power through the constituyente; the penetration and eventual dissolution of the Armed Forces, Central Bank, and the de-technocratization of PDVSA.

As member of the MVR, he was posthumously elected as Senator for Caracas in 1998, unable to serve as a congressman because of his death in October. During his funeral, which I attended as a curious UCV student and which was held at the Patio Cubierto del Rectorado, the late professor Núñez’ coffin was draped with… a North Korean flag!

What's happening in Táchira?

Juan Cristóbal says: - The border is closed.

Two National Guardsmen were murdered.

Nine Colombians were murdered last week.

What's going on? Is this related to the government's crackdown on the illegal smuggling of gasoline?

If you're on the ground or have relatives in the Land of Presidents, tell us what you know.

The view from your window: Montreal

Montreal, QC, Canada. 31 October 2009, 5:00 pm.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

Is Iberdrola scamming Venezuelan taxpayers?

Juan Cristóbal says: Why does it cost 39% more than average for a Spanish company to build a power plant in Cumaná than anywhere else in the world? Why does it cost 12% more than its next most expensive project anywhere in the world? And what does it take these days to get anyone in Venezuela to take a hard look at these numbers?

These are just some of the questions arising from the deals now being struck between the Spanish government, Spanish multinationals and the Chávez administration. Using estimates from the International Energy Agency, I've argued there is no way the 1,000 MegaWatt (MW) combined-cycle electric plant being built in Cumaná for 1.4 billion Euros is being purchased at market rates. The multi-million dollar overcharge is out in the open.

Of course, whether or not you believe you're being overcharged depends entirely on how reliable you think the benchmark is. If you believe the IEA is a questionable benchmark, then on the face of it, there is no way of knowing whether the Iberdrola project is based on real costs or whether something far more sinister is at hand.

As it turns out, there is another set of benchmarks available: Iberdrola's combined-cycle projects in other parts of the world.

As we said in the previous post, Iberdrola's project costs Venezuelan taxpayers 1,400 Euros per KiloWatt (kW) of installed capacity. To get that number, simply divide 1.45 billion Euros by the 1 million kW capacity the plant will have (1 MW is 1,000 kW, so 1,000 MW is 1 million kW).

The question that begs asking is: what were the costs of Iberdrola's other combined-cycle projects? Let's see.

- In Lithuania, it is building a 440 MW plant for 330 million Euros. The cost of the Lithuanian plant is 750 Euros per kW.

- In Algeria, it is building a 1,200 MW plant for 1.47 billion Euros. The cost of the Algerian plant is 1,225 Euros per kW.

- In Russia, it is building a 403 MW plant for 311 million Euros. The cost of the Russian plant is 771 Euros per kW.

- In Qatar, it is building a massive 2,000 MW plant for 1.63 billion Euros. The cost of the Qatari plant is 815 Euros per kW.

- In Latvia, it is building a 420 MW facility for 300 million Euros. The cost of the Latvian plant is 714 Euros per kW.

The numbers don't lie. The Cumaná project is, by far, the most expensive combined-cycle power plant in Iberdrola's investment portfolio.

There may just be a perfectly valid reason for all of this, but I doubt it. What possible explanation, other than corruption, can there be for such a difference? Are Iberdrola's stockholders aware that, because they list their ADRs in the New York Stock Exchange, Iberdrola would fall under the jurisdiction of the U.S. Foreign Corrupt Practices Act? What does European legislation say about this? Why aren't European MPs looking into this?

And why are Venezuelan journalists simply ignoring this issue?

Venezuelan taxpayers deserve an answer.

Headline of the Year

Quico says: I dare you to click on this and not laugh.

Go on, click.

You laughed, didn't you?

Oh sure, a second later you caught yourself. You realized this isn't actually funny at all. You felt vaguely guilty that you couldn't contain that chuckle. The man is dead, for god's sake. It's no joke.

But admit it, before all that, you chuckled.

[Hat tip: CL.]

The Real Winner in Honduras

A longer version of this post appears on The New Republic's blog, The Plank.

Juan Cristóbal and Quico say: The Honduran tragicomedy that has consumed the hemisphere's diplomats for months is at an end (read the details here). Barring the unforeseeable - which is always an iffy thing to do in Honduras - Micheletti is out, Zelaya is in (pending a face-saving vote by Congress and the Supreme Court), and an election to replace him will be held on November 29, as planned.

In light of all this, who was the winner in the Honduran crisis?

Certainly not Zelaya. He's back in power, but is significantly weakened. He will not be allowed to push for the Constitutional Reform that precipitated the crisis in the first place. He'll be forced to head a "unity government" (a.k.a., an "amarren-al-loco government") and he'll have to find himself another job in January.

Certainly not Micheletti. By giving up power to Zelaya, he loses a massive amount of face and may face criminal charges down the road. In spite of having stopped the illegal referendum Zelaya was pushing for, his fate is up in the air.

Certainly not Chávez, who can say goodbye (for now) to his main objective: ensuring Zelaya remained in power through indefinite re-election and permanently adding Honduras as an ALBA satellite. His intervention in the crisis, which went from ridiculing Micheletti to threatening to ignite civil war, was as hyperbolic as it was ineffectual; it left him sounding like a clown. Count on Chávez to ignore reality and call this a heroic, historic, glorious triumph of the Revolution, though.

Certainly not the OAS. In a futile attempt to compete with Chávez's maximalist rhetoric, the regional body let its presumed power get ahead of its actual leverage, effectively sidelining itself from the negotiations that eventually brought the crisis to an end. The hypocrisy of the organization's scorn toward the Honduran Supreme Court became overwhelming when Daniel Ortega of Nicaragua pushed an illegal, clearly unconstitutional Supreme Court ruling giving him the power to be re-elected indefinitely and the OAS erupted in silence. The region's heavyweights (a.k.a., Brazil) showed that, without US influence, they have little to no leverage.

No. The real winner in this drama is the power broker, the top diplomat for the key power who quietly, patiently pushed for this settlement all along.

If this deal leads Honduras away from crisis and toward a legitimate Presidential election, if it leads Zelaya and Micheletti to the dustbin of history - I think we have the lady in the picture to thank.

The view from your window: Reading

Reading, Pennsylvania, USA. 10 AM.

Send us the View from Your Window: caracaschronicles at fastmail dot fm, or nageljuan at gmail dot com.

Please ensure the window frame is visible, and tell us the place and time the picture was taken. And don't try to "pretty it up" - just show us what you see when you look up from the seat where you typically read the blog. Files should be no bigger than 400 KB.

Iberdrola and Elecnor supply the electricity to cook the books

Juan Cristóbal says: - Venezuela is in the grips of an unprecedented electricity crisis, and much of it has to do with festering corruption and boundless incompetence.

Since Hugo Chávez nationalized the electricity sector, blackouts have become the norm in much of the country, and the President has gone so far as to threaten shopping malls and love motels - Miraflores not included - with cutting their power. Our Commander-in-Chief is now our Conserje-in-chief, quite literally looking to pull the plug on the undeserving.

The corruption that seeps through all levels of the chavista administration and its international allies is a big part of the problem here.

Take the deal, announced last July, by Spanish companies Elecnor and Iberdrola (IBE in the Madrid Stock Exchange). The companies said they had signed an agreement with the Venezuelan government to build a power plant in Cumaná, in eastern Venezuela. The plant, which is being built for PDVSA and will use combined-cycle gas turbines (CCGT), wasn't tendered. As has become usual, the contract was just assigned, a dedo, on a presidential whim.

(We'll leave it to far more cynical minds than ours to wonder whether the Spanish government's longstanding reticence to criticize any aspect of chavista governance had anything to do with the fact that this deal went to Spanish firms...)

So what do we know about the particulars of the deal? Sadly, little, and mostly what the companies themselves - rather than the government - has chosen to make public.

Funny detail, Elecnor's press release curiously left out a key component of this deal: the plant's capacity. They only disclose the plant will cost 1.4 billion Euros, roughly $2 billion at current exchange rates.

However, Iberdrola's press release goes all chatty Cathy. It proudly pegs the plant's capacity at 1000 MW. It also goes into great detail, boasting about who was in on the deal. The agreement was signed in Miraflores Palace by high management of both Elecnor and Iberdrola, and by the President of PDVSA Gas, Mr. Ricardo Coronado. Present in the signing ceremony: Spanish Foreign Minister Moratinos and Hugo Chávez himself.

So far, so kosher, right? Not so fast.

It turns out that the 2008 World Energy Outlook, an annual publication put out by the International Energy Agency, says that the typical construction cost for a CCGT plant in Latin America is on the order of $750 per kW. It's right there, in Table 2.

In other words, the estimated cost of a 1000 MW CCGT plant in Latin America should be in the order of $750 million, not $2 billion.

Now, some may say that the World Energy Outlook estimate is an average, that there is a lot of variation between Latin American countries. Others might argue that the contract may include other things, such as maintenance or the actual operation.

Baloney. The gap between $750 million and $2 billion is too large to reconcile. Any of these considerations should have, and would have, been made public. They haven't been. Google the cost per kW of building a CCGT plant and the figures vary, as they should. Nowhere do they reach the astonishing figure of $2,000 per kW the Venezuelan government is paying.

Assuming $750 million is the true cost, can anyone doubt that if the government had run a proper public tender, we would collectively be $1.25 billion richer than we are? At what point do the crimes against public coffers reach the tipping point when people realize their country is being pillaged from the inside out?

Of course, Chávez has a few madre patria enablers in this deal. And while it is impossible to claim they are in on it, they are hardly innocent bystanders.

The irony reaches pitch level when you find out Iberdrola is listed in the Dow Jones Sustainability Index, scoring highly on, among other things, "social responsibility." One has to wonder: are Iberdrola's and Elecnor's shareholders aware of these shenanigans?

What do episodes like this one say about Chávez's priorities? If the Venezuelan government was worried about the electricity sector, it would spend more time thinking of ways to increase investment in this vital industry, and doing so in an efficient manner. Instead, it spends its energies currying favor with foreign governments by paying their firms for an electric plant three times the going price.

It's not about the people. It's all about staying in power and keeping the cronies happy.

Dear Editor

Quico says: I was about to send this as an email to an editor who asked me to write something about Chávez's hypertrophied presidential office budget. But as the rant took shape, I found myself thinking... "hmmmm, did I just write a post without meaning to?"

Dear [Name withheld],

Thanks for getting in touch. It's always a bit funny getting to realize which kinds of stories about Venezuela pique a foreign editor's interests: if you'd asked me a week ago, I wouldn't have guessed that a largely bureaucratic story about the Presidential Office's budget allocation would get so many papers abroad interested, though in retrospect I guess I can sort of see why it's a resonant theme. My blog partner, Juan Nagel, sure got into it.

I don't think I can write it, though, for two reasons. The first is a bit technical and has to do with the way the budget process works in Venezuela, or rather, doesn't work. The second goes more to the heart of the issue...

First, the technical bit: Venezuelans who follow these things all know that the official budget the Finance Minister presents to our National Assembly each year is more like an opening gambit than a finalized statement of what the state expects to spend in the following fiscal year. For as long as anyone can remember, Venezuelan law has allowed the government to go back to parliament in the course of the fiscal year and ask them to top up whichever accounts have run dry earlier than expected, a handy little procedure known as an "additional credit" ("crédito adicional").

On some abstract plane, I guess having some mechanism in place to make sure the budget is flexible enough to adjust to changing realities is a good idea. But as with most good ideas in Venezuela's political system, this one has been abused out of any semblance of good sense over the years.

I'm not blaming Chávez here, this is one of those old-regime vices the revolution just sort of forgot to revolutionize. But the long and the short of it is that initial budget figures are an extremely misleading thermometer of how much a given government office in Venezuela will spend at any given time, because actual spending is often many multiples of the original figure, thanks to "additional credits."

In this case, in particular, the amount the government is budgeting for Chávez's office in 2010 is several multiples what they had budgeted for 2009, but I doubt very much it's what they actually spent this year: take the time to go through the additional credits and I bet the rise looks a lot less scandalous.

So it seems likely that what we have here is a kind of accounting mirage: the government deciding to ask for more of what Chávez will spend up front rather than returning to the parliamentary teat again and again over the course of next year. If you were so minded, you could even see this as an advance in terms of monetary transparency. (Though, of course, to make Venezuelan budgets genuinely useful as analytical and planning tools they would need much tighter controls over the "additional credit" mechanism overall, and the government sure isn't about to consider such a thing.)

I tried to think of a pithy way to explain all that in 3 sentences in a way that would make sense and wouldn't put your readers to sleep, but couldn't really think of one.

But beyond the accounting angle, there's this thing that's been gnawing away at me about the way the presidential budget is being reported abroad: when you're talking about a political system like the one we have, the whole notion of a "presidential office" budget that's somehow separate from the rest of the budget seems quaintly out of place. In Venezuela, every ministry and every agency's budget is at the president's unrestricted discretion...that's what petrostate autocracy boils down to!

You could multiply the examples here. I could tell you about Chávez's explicit threat to private shopping mall owners last week to get their own power generators or face power cuts from the public utility companies: a guy who micromanages the operations of even parastatal agencies like the utilities like that doesn't need a ringfenced private budget to spend as much as he wants on whatever he wants, he can just pick up a phone, call any agency head, issue a direct order and get his way, pre-existing budget commitments be damned.

I could go into the details of Fonden, the government's hyper-opaque "national development fund" which hasn't presented a balance sheet in public in over a year, whose actual holdings are a matter of simple-conjecture, but which by most accounts has at least several billion dollars and, according to some government spokesmen earlier this year, as many as $50 billion at its disposal: all money that's spent at Chávez's discretion, with simply no oversight, no previous budgeting, no form of outside accountability or control whatsoever.

I could go into the way the New PDVSA's management also spends money discretionally, on Chávez's orders, before handing that money over into the finance ministry's budgeting stream, such that that nearly endless money-stream is also, in effect, part of Chávez's no-oversight, no-controls budget.

When you think through the realities of the way money gets spent in a country like ours, where no public institution is ever able to put a check or a balance on the president's whim, getting upset over a $341,000 allocation for the president's clothing seems grotesquely out of place. I mean, what we're focusing on here is the fig leaf, the part they had the decency to declare, the equivalent of the profits Vito Corleone reported through Genco Olive Oil.

It's the millions upon millions of dollars they're spending off the books, to fund FARC or Iranian uranium exploration in Bolívar state, or extremist groupies' presidential campaigns in the rest of the hemisphere that I'm worried about. It's the unbudgeted, unreported, unaccounted for and officially non-existent billions flowing from PDVSA through various financial intermediaries and into the accounts of Ricardo Fernández Barrueco and Pedro Torres Ciliberto and Arné Chacón that I'm concerned about. It's the whole black underbelly of the parallel, off-the-book Chavista Second (and Third, and Fourth) Budget that we need to focus on, not the vanilla $1.4 billion they had the modesty to own up to!

In conditions like these, writing a story about the presidential office's official budget allocation is, in itself misleading. A first world reader looking into is bound to read the story and think, "so...they have budget debates, we have budget debates, they have controversies about particular budget items, we have controversies about particular budget items, they have venal politicians who make a grab for the sweet life while in office, and so do we!...hey, Venezuela seems like a pretty normal country!"

But it's not like that, my friend...it's just not like that at all...

cheers,
ft