October 7, 2006

Where's the muckraking spirit?

Reading over Katy's latest post, I'm struck with a mixture of exasperation and despair over the state of Venezuelan journalism. Because, you see, I'm in no doubt that the horror stories about corruption she tells are true - and that other cases out there must make the ones she tells seem vanilla. Given all that, I just can't work out why nobody in Venezuela takes the time to investigate, document, and publish the evidence on this stuff.

I mean, poor Iris Varela: she goes to all the trouble of finding a Merc SUV without tinted windows specifically so that people will see her in it and nobody has the decency to take a photo of it. And what would it take to dig up some documentary evidence on JR's Margarita hangout? One or two marginally competent reporters with enough institutional backing to spend a couple of weeks on the story, that's all.

Too scared to print it under your name, or in your newspaper? Hell, what's Noticiero Digital for? (Or, for that matter, Caracas Chronicles?) Somehow, though, these stories never seem to get commissioned. It's infuriating.

October 6, 2006

"Que se me quemen las manos ... "

Katy says: This news item made me chuckle. In it, they quote Chávez saying that when he leaves Miraflores he'll be "as poor as when he came in." Since he is planning on leaving after he's dead and dead men don't carry cash, technically he'll leave even poorer than when he came in, but never mind. His collaborators and close confidants can't say the same thing.

While in Caracas, I heard horror stories from eyewitnesses to the ill-gotten wealth of chavistas. From direct sources, I learned, for example, that when a famous congresswoman known for her bright red hair bought her Mercedes Benz SUV in cash, the dealer asked her if she wanted tinted glass on her windows, and she said she did not because she wanted everybody to see her in that car. I learned about the brother of a chavista mayor of a large municipality who lives in a posh four-story penthouse in eastern Caracas (yes, four-stories). He has ten bodyguards waiting for him in the parking lot, and he owns a fleet of cars that includes 3 Hummers, a Porsche SUV and a BMW SUV. He is the head of appropriations of the municipality.

I heard stories about former presidents of the CNE building themselves multi-million dollar homes in Margarita designed by renowned architects. I heard stories about congressmen I am acquainted with who walk around wearing $5,000+ tailor-made suits and gold Rolex watches, dining at Caracas' poshest restaurants while doing business with the Italian government. I learned of acquaintances of mine who, by virtue of being related to PDVSA's higher management, have become "toll booths" for getting into the business of exploiting gas in our country.

People aren't stupid. Corruption is everywhere in Venezuela, and the fact that Chávez feels the need to address the issue means that it's becoming a big liability for the government.

The picture of the week

Katy says: Alek Boyd deserves some sort of award for this spontaneous shot of Manuel Rosales on the campaign trail. Have a good weekend everyone!

October 5, 2006

Bolivian court blocks Morales

Katy says: I don't typically comment on stuff from other countries, but this news item about Bolivia is tangentially related to Venezuela.

For those who can't read Spanish, Bolivia's Supreme Court has denied a request by the Morales government to grant "supra-constitutional", "originarian" powers to Bolivia's Constitutional Assembly. In other words, the Court says that Bolivia's Assembly must work within the bounds of the current Constitution because "originarian" powers can only be given to an Assembly when "a State is being created", such as when Bolivia itself was created in the 1820s. It clearly said this was not the case right now.

This strikes me as a major blow to the Morales administration's attempts to establish a revolution in the mold of Hugo Chávez. Let's recall that the beginning of the process in Venezuela did not come about when Chavez was elected. The process really began when the Supreme Court at the time decided to grant the Constitutional Assembly all-encompassing powers, causing justices such as Cecilia Sosa to resign in disgust.

This decision paved the way for a Chávez-controlled Assembly to do away with all existing powers, including the recently-elected Congress, the Prosecutor General and the Supreme Court itself. As a result, we have had to put up with the unchallenged powers of the Ivan Rincons, Isaías Rodriguezes, Clodosbaldo Russians, Francisco Carrasqueros and other assorted yes-men.

The Bolivian Supreme Court seems to have learned something from our histoy.

PS.- Speaking of Chávez's yes-men, I was surprised to learn while I was in Caracas that Jorge Rodríguez's wife works in Miraflores. She is Chávez's chef. That's some bond the three of them have.
Final de la Marcha - Discurso de Manuel Rosales

October 3, 2006

Cocoplums and the State

Katy says: A trip to Venezuela is a homecoming. Something about waking up and seeing dilapidated American cars from the 70s and 80s roaming the streets stirs my memories, awakens my saudade. Whether it's the constant honking of horns, the sight of thousands of trees with their trunks half-painted in white, the smell of my mother's lilac bushes or eating traditional, homemade Maracaibo cocoplum jam, Venezuela is a feast for my senses. My country is a place where even in the middle of any city, you have to clean the iguana droppings from your car, the loud chirping of crickets keeps you up at night and the howling of guacharacas announces the break of day.

Venezuela is also a place where sidewalks are an afterthought, traffic lights are mere suggestions and everybody, everywhere is having car trouble. People in Caracas spend two, three, four hours in traffic every day and simply assume it as "the way things are," as if everyone living in large cities had to go through the same. The country's exhuberant nature would look a whole lot better if it didn't have to be viewed through steel bars.

The first airplane I flew in was also having mechanical problems, so the airline gave me 24 hours in Panama City to compensate. Panama City is pretty nice, with impressive skyscrapers and an attractive historic downtown that is slowly reviving. There's poverty there, but I got the feeling during my short stay that it was shrinking, and that conditions were getting better. There is a real sense in the country that tourism is the wave of the future, so they take special care in presenting a clean, safe city.

One of the things that impressed me was how we were able to drive next to the Presidential Palace, which as you can see from the picture was guarded by a few soldiers and nothing else. The turnover of the Canal and the planned expansion seemed to bring about an infectious optimism to the people I spoke to, regardless of their political leaning. I left hoping to find some of that in Venezuela.

Instead of finding hope, I landed in Venezuela finding that the aesthetic of our cities says one thing only: poverty. I had trouble trying to grasp why it is that Venezuela simply looks poorer than other places in Latin America in spite of having a similar culture, similar geographies and somewhat similar standards of living. I concluded that rentism is to blame for much of the bad aesthetics of our cities, for the feeling of chaos that suggests something is not right.

For example, driving through Venezuela you can sense the neglect in public works. Sidewalks are sort of there, sort of not. Streets are full of potholes, public works take forever to complete and the general decorum of the cities is shoddy. Graffitti is common, there is garbage everywhere and the streets belong to gangs. La Chinita Airport in Maracaibo, for example, was renewed a few years ago, yet you can still see significant cracks on walls surrounding air-conditioning vents and in ceilings. Hallways are small and crowded, and even though it presents itself as a modern airport, the guy at customs doesn't even have a computer. It would seem as though anything having to do with the State is done in bad taste, without proper care, with no concern for doing things the best possible way.

One of the reasons for this is rentism. Theorists say two of the reasons States need to exist are: to provide public goods and to intervene in markets or situations where there are negative externalities. But in Venezuela the State - the Petrostate, that is - is there to dole out the wealth, to support a rentist society.

A public good is a good that continues to satisfy other people's needs when consumed. For example, when I walk on a sidewalk, the sidewalk stays there for the next person to use. Defense and justice are public goods. These are goods that are typically not provided privately, so they are one of the reasons States exist.

Externalities occur when one person's consumption causes another person's disutility. For instance, smokers cause negative externalities because their habit not only causes harm to themselves but also take up valuable health-care resources from society, be it in the form of second-hand smoke cancer or in the form of enormous health care costs the State has to cover. The control of externalities is another reason to have a State, so that somebody can tax the smoker and provide the incentives for him or her not to smoke anymore or, if they do, to have enough funds to be able to pay the extra health-care costs their smoking causes to society.

In Venezuela, it seems that the provision of public goods and dealing with externalities are simply not a priority for the State. When crime rates soar, traffic jams sink entire cities into gridlock and lakes suffer from horrendous pollution, one would expect a normal government to care, to do something about it. But neither the current nor previous Venezuelan governments cared about this stuff. All they care about is rents - how to hand them out, how to get favors from people who recieve them, how to produce more of them. The government's entire structure is built around this notion, one of the consequences being that there is total chaos on the streets. Other places in Latin America don't seem to suffer from this.

Some entrepeneurs are beginning to get around this idea. For example, I found out about CruzSalud, a private company that sells insurance to people in the barrios. For a monthly fee of 18 to 40 thousand bolívars, customers in barrios have access to house calls, emergency care, as well as complete health-care kits should they have to go to a public hospital which includes syringes, cotton and scalpels.

A normal State would do its best to have functioning hospitals, since proper health care provides positive externalities for society as a whole. But when the State's attention is turned to creating and distributing rents, some privates see opportunities. It's too bad the CruzSalud can't figure out a way to solve Caracas's traffic problems.

Other entrepeneurs take advantage. One of the most shocking things I learned was that street vendors in highway traffic jams are now selling ice-cold beer to drivers. I confronted a friend who happens to be the President of an entrepeneurial association, asking him whether beer manufacturers didn't feel the need to control the illegal sale of their product. He simply shrugged, telling me it was the role of the State to control that and the company could do nothing about it.

Part of that may be true, but the whole argument goes against modern business ethics. Large private beer companies usually control the shelf where their product is placed on, in every supermarket they sell to. They even control things like the temperature of the refrigerators that hold their products. Surely, I told him, they can control the five or six guys selling beer in the most popular traffic jams. Selling beer in highways causes enormous negative externalities, but neither the State nor the company seem to care, since both are focusing their efforts on their rents.

So think about it the next time you walk around the streets in Venezuela and see people race by at double the speed limit or you trip on a poorly constructed sidewalk. In countries with similar income levels as Venezuela, public goods are not so poorly provided, externalities are taxed. And while you're at it, appreciate the good things around you, like the cocoplums. Luckily there are some things the State hasn't been able to screw up yet.

October 2, 2006

Your tax bolívars at work

Katy says: I'm back from my trip and I've updated the other blog with my own pictures of the use of government funds in the campaign. I'll be posting some more this week on my impressions of Venezuela, but I leave you with the pièce de résistance, which hangs from the former building of PDVSA Chuao. This pic manages to offend on four levels because:
  1. It's funded with taxpayer money;
  2. It's hanging at the UNEFA, which I believe is a military building;
  3. It portrays part of Guyana as belonging to Venezuela, something that is still being disputed and something the military should be more careful about; and
  4. It's a political ad featuring a small child which may or may not be legal, but is certainly disgusting.

Selling Mi Negra

You can think whatever you like about Mi Negra, but electorally what's relevant is not so much the proposal itself but how it's communicated to the voters. Rosales starts with one hand tied behind his back on this one: CNE regulations allow only 2 minutes of paid advertising per TV-station per day: just four ads. (But, of course, that doesn't apply to cadenas.)

So Rosales has to make the most of his very limited paid TV time. How's he doing on this? Have a look at these two TV spots:

So, whaddayathink?