November 7, 2009

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.

November 6, 2009

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.

November 5, 2009

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.

November 4, 2009

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.

November 3, 2009

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.

November 2, 2009

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.]