October 20, 2006

What's the UNSC vote really about?

Those of us focused on Venezuelan affairs will tend to examine the UN Security Council election this week for clues about Chavez's international standing. Probably, though, the vote tells us more about the way the world's governments feel about US hegemony. In a way Venezuela has done the world a service this week by giving states a chance to vote on the overarching strategic issue of the day:

Is international peace and security advanced if you counter the power of the United States at every turn, or does it make more sense to work pragmatically with the hegemonic power, at least sometimes? Is US power a purely negative force in the world? Or is the US, at least on some matters, a benevolent hegemon, one able to work constructively towards international peace and security?

These were the questions states were answering when they chose between Venezuela and Guatemala this week, and the answer has been clear: about 80 countries want a voice in the UN Security Council that will oppose the US on everything, always, and about 105 countries do not.

Certainly that such a lot of countries stand ready to back a policy as radical as Chavez's gives a strong indication of how badly the Bush administration has damaged the US brand in world affairs. A bigger group of countries, though, feels less threatened by the US than by the forces the US is trying to contain. Which is why they prefer a functioning UN Security Council to one bogged down by rhetorical grandstanding by a rotating member.

When you elevate "anti-imperialism" to the status of sole principle underpinning your foreign policy, you jump in bed, ipso facto, with forces far, far scarier than the US. How many UNSC votes did Venezuela lose to Chavez's flirting with North Korea? To his embrace of Ahmadinejad? To his solidarity with FARC? Certainly more than a few, probably more than he gained.

When anti-imperialism is interpreted, Chavez-style, in the most primitive and unreflexive way possible - as an imperative to side with every enemy of Washington, all other considerations be damned - some governments may line up to applaud, but many more will write you off as an ideological zealot.

Because it should be clear that it's Chavez's lack of sophistication, his utter tin-ear for the sense of the ridiculous that ultimately doomed Venezuela's bid. A loud and firm voice meant to balance US hegemonic power? Probably most countries in the world would love a country like that in the UN Security Council. But when you call George W. Bush the devil, a genocidal drunk, when you say he makes Hitler look like a suckling baby etc. etc. you cross that fateful border between the corageous and the ridiculous. Reducing diplomacy to the level of vaudeville act, you manage only to discredit the cause you claim to champion.

Ironically, by intensifying the link in international policy-makers' minds between "anti-US hegemony" and "comedically unhinged lunacy," Chavez has probably bolstered the legitimacy of US power more than he has undermined it. In a world where "only folks as nutty as Chavez" strike anti-imperialist postures, posing a strong challenge to American power makes you look like a nut. In the wake of Chavez's "devil" speech, the perception that Venezuelan foreign policy is just not serious has hardened. And that's an own-goal Chavez has scored all on his own, with no help at all from his myriad enemies, real or imagined.

October 19, 2006

The Dignity of Venezuela's UN Security Council Bid

This gobsmacking tidbit courtesy of the UK daily The Independent:
Not content with building runways in the Caribbean, sending aid to Africa and striking an oil deal here and there - not to mention calling George Bush "the devil" - Venezuelan President Hugo Chavez has resorted to more conventional means of convincing foreign statesmen that his country deserves a seat on the UN Security Council.

Venezuela gifted chocolates to delegates, and has now imported a crack team of Latin lovelies to charm those in need of a little gentle persuasion.

"They're not quite scantily clad," says a bag-carrier in the corridors of power, "but there is a bit of brushing of thighs with the older delegates.

What remittances tell us about Mi Negra

One important question in considering Manuel Rosales' plan to distribute a portion of oil revenues directly to poor families is how much of the money is likely to be invested and how much to be consumed. Some intriguing clues can be found in a recent Inter-American Development Bank report on how Latin American families spend the money their relatives in the US send back.

The research finds that 73% of Latin American immigrants in the US regularly send money back to their families. The average remittance - $300 per month - is actually at the low end of what Rosales proposes to give poor families each month (Bs.600,000/month.) Remarkably, the IADB finds that some 15-20% of the money sent back is invested rather than consumed, most of it on housing.

In some ways, remittances are a good approximation to the likely impact of Mi Negra. Like oil money would be under the Mi Negra plan, remittance money originates from economic activity abroad and is delivered directly to poor families.

The parallel also suggests some caution about the development potential of Mi Negra. In El Salvador - nobody's idea of an economic powerhouse - 22% of households receive remittances totalling $2.9 billion each year. It's the country's biggest source of foreign exchange earnings, and for a country with a population under 7 million, a hefty chunk of cash (17% of GDP, to be precise.) Yet, while remittances have doubtlessly made life much more comfortable for many Salvadoreans with relatives working abroad, there's little sign that remittance money is leading to the kind of productive transformation of Salvadoran society that could really end poverty there. And, I think, the same goes for Mi Negra-type proposals.

October 18, 2006

Venezuela after December 4th: Working out the Scenarios

One way or another, Venezuela will enter a new phase after December 3rd's presidential election. But what are the most likely scenarios for 2007 and beyond?

How about working out some scenarios colaboratively in the Comments' Forum? What do you see as the most likely post-election scenarios? Why?

October 17, 2006

Reading the UN Security Council Vote

Long-time reader, first-time poster Sentil shares his experience of how things really happen at the UN in this one-time guest post.

Yesterday's vote for the Security Council seat was really something, wasn't it? After 10 rounds of voting, neither Guatemala nor Venezuela reached the 2/3rds majority needed to capture the seat, and a third country option looks increasingly likely when the voting restarts at 10 a.m. today.

In the first round of voting, Guatemala had a decisive lead, although Venezuela edged back up in subsequent votes, even tying by the sixth round.

None of this was unexpected by either side, and actually may have less to do with with Venezuelan carrots or U.S. sticks than with longstanding committments between countries.

Everyone expected Guatemala to have more support in the early voting due to obscure deals made between member states. There's nothing exceptional about that: everything at the U.N. is a horse trade. Deals are sometimes struck years before a vote. A country may vow to support Guatemala's eventual bid for a Security Council seat in exchange for Guatemala's support for a particular project or vote. Delegates have long memories at the UN.

While some members are committed to voting for a particular country, their commitment is precisely calibrated in the original deal. For example, a country may have promised to support Guatemala through the first 10 rounds, while another may have pledged their support through 15 rounds. After those committment have been met, they are free to vote their minds.

A number of people have asked how these commitments could be enforced, since the vote is secret. Trust me, experienced U.N. delegates are skilled vote counters, and come away from each vote with a pretty strong idea of who voted for whom. If a member state breaks an earlier committment, it can seriously jeopardize support for their key projects down the road.

Between each round of voting, you can be sure that the pressure was on to capture "swing" votes. While there were likely negotiations on behalf of Venezuela and the U.S., I imagine that the heaviest push was coming from the contingency planners - those looking to promote a third, less controversial country like Uruguay or Costa Rica. Most delegates have no strong allegence toward either side, and would frankly be relieved to get the voting over with and the vote out of the spotlight. The fact that no third party emerged yesterday is an indication that the base for both sides is pretty strong, which hindered the rise a third-country coalition.

Still, most of the arm twisting likely happened after the vote adjourned yesterday evening, so the first couple of rounds of voting this morning will be indicative of where things stand. If a third country receives a good chunk of the vote early on this morning, it's probably all over for Venezuela and Guatemala. If there are only a few scattered votes for a third country, it means that both Guatemala and Venezuela are holding on to their base and we'll be in for a protracted battle. If Venezuela sees a spike in support in the early votes, they will push to go all the way. Ditto for an early Guatemala lead.

If you have LOTS of time to kill...you can follow the UN vote live on this UN Webcast Page.

Bonehead Populism

This article about the first day in operation of the Caracas-Cúa rail line in today's El Universal could be used as textbook material in a first year microeconomics course. I can just see it in the chapter on the Price Mechanism, a little side-bar on the unforeseen (but far from unforeseeable) consequences of making costly things free:

None of the new train users were surprised to find long lines outside the stations in Cúa and Charallave, even before 5 in the morning this Monday. The cause? The start of operations came with the delays typical of a brand new system, and user demand outstripped expectations, due to the last minute decision to make rides free.

People from Urdaneta County waited at their station until 5:20 am to take the first railroad, while the second only got there at 6:40. The delays meant that wagons arriving at Cúa - the start of the line - were already pratically full, since some passengers from Charallave-Norte and Charallave-Sur who wanted to go to Caracas opted to get on the southbound trains to Cúa so they could find seats and enjoy a more comfortable trip. This situation generated a vicious circle that led to total congestion all through the system.

The wait was in vain for many users who could not get to the train platforms before 9 a.m. in any of the three stations. Though they had paid Bs.1,100 (US$0.50) to get to Charallave-Norte or Charallave-Sur on minibuses, they ended up having to ride buses to Caracas as usual because they missed the last morning train.
21st century socialists can't seem to understand that price is a rationing mechanism - the way you make sure that no more of a scarce good or service is demanded than can be supplied. You can take away the price signal, remove any incentive not to over-consume, but that does not magically increase supply. Encourage over-consumption of rail services and you don't strike a glorious blow against the ideological superstructure of savage neoliberalism: you just create a shortage.

Which, of course, gets back to JayDee's point yesterday. Everybody wants a society where people can afford to move quickly and comfortably from home to work and back again. But if you try to bring it about in the most primitive, least thought-through way possible (free train for everybody!) you don't advance social justice, you just make an all around mess.

October 16, 2006

The Little Shopkeeper That Couldn't...

JayDee says: Of all the neighborhoods I have explored in Caracas, El Valle is one of my favorites. There is always something interesting going on in the area.

A few months back, I had a fascinating conversation with a shopkeeper whose little bodega is situated right in between the working class high-rises of El Valle and the Calle 13 barrio.

The first time I met José, I'd stopped for a cold Polar after a long afternoon touring the various misiones in the neighborhood. His storefront is surrounded by what many Chávez supporters would regard as the crowning achievements of the Bolivarian Revolution. Free soup kitchens, adult literacy programs, grass roots community radio stations, all gracias a Chávez, can be found within blocks of his bodega. From the rooftop of the man’s store, you can throw a rock and hit the front door of the house where Caracas Mayor Juan Barreto was born.

The area is almost all Chávista, of course.

José’s bodega is modest. His sales consist mostly of beer and cigarettes, though children often pass through with a handful of change to buy candy, and he carries some basic groceries - fresh bread and sandwich meat, a few canned goods and milk.

His store is the only source of revenue for both himself and his family, and he has been in this spot for approaching two decades. His shelves used to be stocked with a wide variety of groceries, though since the Mercal (subsidized supermarket) opened down the street a few years back, his inventory and his income have slowly dried up.

One small shopkeeper can’t vie for business with the government. It is financially impossible for the man to offer competitive prices, and as his earnings have slowed, the goods he is able to stock have dwindled. Selling beers and cigarettes one at a time is all that's keeping him afloat.

“Anyone but Chávez,” he said when I asked him how he planned to vote in December.

“His government has benefited many in the area, definitely, and I understand why people like him. But his policies aren’t very well thought through. I am not of the oligarchy, I was never rich; but I put my children through college with this store. And now...” he trailed off as his arm swept over a mostly empty shelf.

José’s story illustrates just how complex governance is, and shows a major shortcoming of the Chávez administration.

You would be hard-pressed to find someone who is opposed to the principals behind many of the misiones. Who is going to argue that a father living in Petare shouldn’t learn to read, or that a mother living in 23 de Enero shouldn’t be able to afford a carton of milk for her kid?

Too often the debate on what is going on in Venezuela is side-tracked into a meaningless caricature of an argument.

Jose’s problem with Mercal doesn’t stem from the fact that he is an elite from El Country Club who hates the poor, but from the fact that the government’s dismal planning has actually made it more difficult for him (a working class man from a working class neighborhood) to eke out a living.

And then people wonder why the percentage of those working in the informal economy is so high...

Let the spending binge begin!

Two news items struck my eye over the weekend:

  1. Chavez announced that public sector workers will get their yearly aguinaldos (Christmas bonuses) on November 1st this year.

  2. Chavez announced the new Cua-Caracas railway will be free for the remainder of this year.

In big ways and small, then, the pre-election spending binge is on.

If petrostate populism is the art of turning control of the state's oil money into control of the state in a self-perpetuating cycle, the ability to manipulate the timing of state spending for political purposes must be one of the most potent weapons in its arsenal.

Pre-election spending boosts are, of course, a feature of most democracies. In Venezuela, though, with the huge weight of the state-monopolized oil industry in the economy, the potency of such tactics is magnified.

Pre-election spend-a-thons work in incumbents' favor via two different channels. Directly, by making recipients of state handouts grateful and symbolically indebted to the government in power, with the understanding that they will reciprocate at the voting booth. But also indirectly, by boosting aggregate demand, making money circulate in the streets, and engineering the short-run feel-good factor associated with every keynesian boomlet.

It wasn't hard to guess that the government would manipulate the timing of state spending to coincide with the run-up to the election. Sadly, my guess is that the spending spree will more or less cancel out the advantage Chavez has been giving Rosales by running an unfocused, confused and contradictory campaign.

People vote their pocket books, folks, and Chavez has the power to determine when they're empty and when they're full.