Man(uel) of the hour

Katy says: Manuel Rosales, two-term governor of the state of Zulia, in Western Venezuela, has just been confirmed as the single presidential candidate of a substantial portion of the opposition to Hugo Chávez's pseudo-socialist revolution. The announcement was made today in Caracas, after Venezuela's CNE decided yesterday that Rosales did not need to resign from his governorship but rather take a temporary leave of absence.

Zulia (where I am from, by the way) is Venezuela's most populous state. It is the home of a big chunk of Venezuela's oil wealth, as well as some of the best agricultural land in the country. It is also the home of some of Venezuela's most distinctive cultural manifestations, such as gaitas and the cult of the Virgin of La Chinita. Maracaibo, the state capital, is Venezuela's second-largest city. Once a sprawling big town riddled with problems, it has sort of come of age, and the city looks cleaner and more prosperous than many other places in the country.

Both Quico and I have expressed our misgivings about Rosales on several occasions. Both of us have come forward in favour of other candidates, such as Rausseo or Borges. However, today is not the time to dwell on these issues. I think it is a good moment to pause and reflect on all that is positive about this announcement.

Rosales' announcement is the product of intense political negotiations that began several months ago. This process involved lengthy discussions between three main candidates, several less popular ones, and Venezuela's NGOs. The fact that these people could sit down, see the urgency of what is coming to us, understand that unity is of the utmost importance, and come up with a reasonable solution at the right time is an enormous step forward for the opposition. Long gone are the extensive deliberations of the extinct Coordinadora Democrática, where nothing was ever solved, nobody had the lead voice, there was no vision and the message was never clear.

Some people have expressed misgivings about Rosales being the product of negotiations and not the product of primaries. There are several reasons why this criticism rings a bit hollow:
a) It was well known that the organization of the primaries was facing numerous logistical problems;
b) enthusiasm for the primaries was dwindling;
c) voters were afraid of participating in the primaries and ending up in some government list where they would be punished;
d) Súmate was being distracted from its role by the government's continuous harassment; and
e) the primaries would have probably yielded a Rosales victory anyway.

The way that Rosales was selected is a positive development. It is possibly the first time that different factions in the opposition have sat down, discussed what the country needs and come up with a solution. It is a big step toward proving that the opposition is capable of governing Venezuela in spite of its heterogeneity.

It was also refreshing to see the way Teodoro Petkoff, Julio Borges and the rest of the candidates came out and supported Rosales. Special mention goes to Borges, who was Rosales' main challenger and who has immediately put his party's logistical and intellectual resources at his disposal. There are rumours Rosales will announce in the next few days that Borges will be his vice-president should he win, but the fact that Borges' support did not come with a quid pro quo is certainly positive for the future.

What does Rosales bring to the table? His two main assets are an efficient record as a public servant and two electoral victories over Chávez and his barrage of tricks. His record is evident in Zulia's improvements in roads and public services. Rosales has also shown political deftness, working with both the federal government and, especially, with Maracaibo's chavista mayor. All over Maracaibo, you see a healthy competition between the public works sponsored by city hall and the works sponsored by the governor (the competition reaches somewhat tacky levels, given the enormity of the colourful signs announcing this or that sidewalk is being brought to you by either the mayor or the governor).

Rosales has skilfully hung on to his job in spite of the CNE's tricks and opposition voter apathy. He is very popular in Zulia, and it is likely he will carry this state in the election, tricks or no tricks. Zulianos are Venezuela's most region-proud bunch, and we tend to be more pragmatic in our ideology. It's my impression that, as a whole, Zulianos seem to be less prone to left-wing populism. We believe in entrepreneurship and in private property more than the rest of the country, and we can be sure that Rosales will bring these issues to the table.

As for Rosales' proposals, we'll have more time to discuss these later. From what he has already said, they combine most of the proposals brought forward by Petkoff and Borges, including a direct mechanism to hand out oil rents and the improvement of the misiones. He has also come forward against the war-like mentality that seems to pervade in the government lately, even borrowing some of Rausseo's lines by saying that airplanes will be changed to schools and missiles will be changed to hospitals.

Finally, Rosales is the product of decentralization, a complex political process started in the late 80s that has not quite achieved as much as promised in spite of its popularity. Decentralization has come under attack from the current administration. Chávez, as all good military men, hates independent subordinates, and he has implemented numerous initiatives destined to take away what little power regional and local governments had. Rosales is sure to propose further decentralization as a way of bringing power back to the communities and the states.

As I said before, today is not a day to criticize. The opposition is showing great maturity in coming up with a concerted solution at this stage of the game. Let's wait and see what happens with other candidates such as Rausseo or Smith, as well as what AD decides to do. In the meantime, let's celebrate the hope of putting a zuliano in Miraflores for the first time in our history.

Holy bus drivers, Batman!

Katy says: Nicolás Maduro is apparently going to be named Foreign Secretary. Comments thread is now open...

Not Rosales, pleaaaase!

From the road, Quico says: I don't know that much about Manuel Rosales - in itself a bad sign, given what a political junkie I am - but here it goes all the same: I think the guy is hopeless as a candidate, worse even than Borges.

Here's why: There's one message that comes through loud and clear in all the public opinion research that's been done over the last few years: no volveran - they shall not return - is one chavista slogan that has legs. It's the one thing that chavistas and NiNis concur on, this deep seated disgust with the pre-Chavez political system. But it's a message Rosales seems not to get at all.

By all accounts, Rosales is a retread adeco. His discursive style is as much a throw-back to 70s style AD populism as is his political organization. Isn't it fair to presume that if the guy looks like an adeco, sounds like an adeco, smells like an adeco and talks like an adeco, voters will conclude he's an adeco?

His campaign launch line about Chavez's misiones being basically the same as the social programs of the pre-Chavez era underlines the basic problem with his whole approach: while, substantively, he may be right, the line catastrophically fails to realize the way Chavez's discourse of radical popular empowerment have changed the rules of the political game. As everyone knows, el pais cambio, ...everyone, that is, except for Manuel Rosales.

The key political fact is that even if the misiones are just souped-up social programs, they don't feel that way to their recipients. That makes all the difference, because in politics perceptions are realities. Chavismo has moved the goal-posts of Venezuelan politics not just by mobilizing oil resources for the poor, but by going all out to ensure that the poor feel that state resources are mobilized on their behalf. I just don't see how a politico who doesn't understand that has a chance in December.

People tell pollsters again and again that they want an alternative to chavismo that is, at the same time, an alternative to the legacy of puntofijismo. Rosales seems very far from being channelling that desire. As a candidate, I can't see how he could reach out beyond the traditional hardcore anti-chavez vote and win over the broad, politically homeless center that's so clearly the key to mounting a credible challenge in December. To say nothing of winning over wavering transactional chavistas.

So, we'd be stuck with the same 40% that keeps voting against Chavez - and that's a best case scenario, because we know many of them will abstain on principle.

This is not what the opposition needs. What the opposition needs is a candidate able to turn this race upside down, one able to innovate discursively, to mount an anti-Chavez discourse that is clearly, patently distinct from the pre-Chavez political tradition, that has a chance to make a serious bid for NiNi and wavering transactionals' votes. I don't think I need to spell this one out any further...

The accidental candidate

Katy says: Zulia Governor Manuel Rosales is in a bind. He is mulling whether to be or not to be the opposition's main presidential candidate. Many people consider Rosales somewhat of an enigma. A man of few words, he has managed to be an effective local governor without the benefit of traditional political alliances. However, the thing that says most about the presidential aspirations of this Zulian Hamlet, is the fact that this is a dilemma at all.

Rosales is in the position he thought he wanted. Polls show him leading (by a razor-thin margin) Julio Borges as the opposition's main hope. Teodoro Petkoff has cleared the race, and Borges himself has hinted that he is ready to work for Rosales should he decide he wants the banner. Rausseo has, so far, not become the overwhelming phenomenon that people feared he would. And yet Rosales still wonders.

Venezuela's Supreme Tribunal said a few days ago that Chávez would not have to resign in order to run for President, but that other public servants would. However, in yet another judicially obscure ruling, it seems some people are still doubtful whether or not Rosales would have to resign or simply detach himself from his Governorship temporarily. Rosales seems to have the faint hope that the government would let him go back to his governorship should he run for President and lose.

Rosales is now in the position of deciding whether he wants the Presidency enough to renounce everything he has achieved so far. The decision to run carries lots of risk: he risks losing control of the Zulia Governorship, losing the Presidency and, ultimately, losing his freedom because of the government's open case against him for signing the Carmona decree. And yet... the fact that he is mulling this issue when many cards are lined up in his favor says tons about his commitment to the cause, or lack thereof.

If he is still doubting, perhaps he doesn't want it badly. Perhaps he is an accidental candidate, someone who is called upon to fill the void but has never really had Miraflores as his goal. Perhaps Venezuelan voters deserve better. If he really is that scared to lose his governorship, perhaps he should step aside and let Borges be the candidate. At least we know he really wants it.

A closer look at fingerprinting machines

Katy says: Loyal reader and fellow blogger Bruni (I assume those are her eyes at left) has a great post today regarding the accuracy of fingerprint scanning machines used by Venezuela's CNE. I recommend it!

Here is the Spanish version, and here is The Devil's Excrement's English translation. Thanks to both!

Facts of the day

Katy says: Did you know that, according to Prof. Marino González of Simón Bolívar University, the total spending on weapons Chávez has announced in the last year and a half (more than US$3 billion) is equivalent to a year and a half's worth of the budget assigned to the Ministry of Health?

Did you know that, according to the same source, 57,607 children between the ages of 0 and 1 died between 1999 and 2004?

Did you know that roughly 80% of these deaths (or 46,086) were preventable?

46 thousand Venezuelan babies have died during this administration because their families lived in deplorable conditions. Their parents' education probably did not reach third grade. Their houses did not have basic services such as sewage or running water. Medical attention before or during childbirth was probably inadequate, and pediatric care was probably not available to them.

Of the 7,400 children between 0 and 1 who died in 2004, more than 2,000 of them died due to complications from childbirth, complications that could have been prevented with greater control during the pregnancy. 986 of these children died due to generalized infections, probably due to lack of access to antibiotics. 686 died due to diarrhea. 300 of these children died of infant malnutrition.

Will the primaries go the way of Jorge's Audi?

Katy says: Several things from the news this morning that are worth commenting.

1. If it's bad to be rich, Jorge Rodríguez is one baaaaad MFer. Former CNE President Jorge Rodríguez totalled his brand-new Audi yesterday. The circumstances of the crash are not yet clear. However, it is known that Mr. Rodríguez was giving a ride to one of José Vicente Rangel's staff members. It is also known that Rodríguez was in the process of starting a news program in Chávez's TV station, Telesur. And finally, Chávez's vice-minister (and Rodriguez's sister) Delcy Rodríguez claims privately-owned Clínica El Ávila refused to give Rodríguez treatment, something the Clinic denies. We wish Rodríguez a speedy recovery. We always enjoy his public appearances, specially because it reminds us that, contrary to what the Constitution says, he has never been impartial in the political debate. We also hope he can buy himself another car that 99.5% of the Venezuelan population could never afford. Go Jorge!

(side note: Rodríguez managed to smash into yet another Audi - imagine that, things are going so well in Venezuela, that there is no space on Caracas' streets for so many Audis)

2. Confusing signs regarding the Primaries. Despite Súmate saying that everything is A-OK with the primaries, Julio Borges is announcing for the first time that he has doubts about the procedure. Negotiations between Borges, Petkoff and Rosales are ongoing, but one wonders if the primaries have the momentum to be carried out. Whatever the outcome, let's hope the resulting candidacy brings together all forces fighting toward the same objective. Unidad!

Opinion Duel: Last Salvo

In the last salvo in our Opinion Duel on Benjamin Rausseo, Quico says that Katy makes her case as if chavismo had never happened.

The Duel is now complete. Read it all:

1. Katy's opening post.
   
2. Quico's reply
   
3. Katy's counterargument
   
4. Quico's retort.

We interrupt our debate...

Katy says: Fidel Castro is undergoing intestinal surgery and has handed over power to his brother.

Round two...

... has begun.

Katy says Quico is just another desperate blogger.

Stay tuned for Quico's response.

Conde del Guacharo Opinion Duel is on...

It has started.

Katy wrote there is no spoon for her in this sancocho.

Quico replies that Katy is giving a gift horse a root canal...

Throwing down the gauntlet...

Alright, Katy - if that is indeed your real name - things have gone far enough. I shall suffer your Guacharophobia in silence no more.

The time has come for an Opinion Duel.

Er Conde en Er Guachinton Pos

The Guachinton Pos picks up an AP story about Rausseo...

"He's ugly, I'm ugly ... I talk, he talks. But the difference is I live in Venezuela," he quipped, in a gibe at the frequent overseas travels of the Venezuelan leader, who has been on a three- continent tour since last week.

Rausseo, who is also a successful businessman with hotels and other enterprises, grew up poor and left school at 11 to support his family as a shoeshine boy, street vendor and taxi driver.

On Friday he told supporters that even if he cracks jokes on the campaign trail, he's serious about combatting crime, creating jobs, winning the trust of foreign investors and healing a divided nation.

The Sancocho Test

Ask yourself this: what drives people's voting in the TV age? Is it experience? "Preparation"? A government program? Ideology?

It's none of these things: in a media-saturated age, voting is driven by primal identification.

A generation ago, before media saturation had reached the extreme levels we see these days, voting was mediated by formal party structures built on long-standing allegiances. An adeco was an adeco hasta que se muera. Party identifications were passed down within the family from one generation to the next.

The rise of ubiquitous media, and the collapse of party affiliations, has dissolved these easy certainties. Today, the mediating structure between candidate and voter is no longer the political party, it's the TV camera. And the sense of intimacy TV creates sets up a whole series of new challenges for candidates, challenges that are more psychosocial than political.

In this reconfigured arena, a candidate needs to stir voters' primal identifications to compete. He needs to give people the sense - on some pre-rational, pre-verbal, entirely emotional, gut level - that he gets it, that he is like them, that they can feel comfortable with him because he understands them, and that he understands them because he has been through the same experiences they have been through.

One way to think about this ability to connect on a pre-rational, non-political level is the Sancocho Test. (OK, in the US, it's the Barbeque Test - but lets Venezuelanize it.) Gringo pollsters have taken to asking voters which candidate they would rather invite to a barbeque. Or which candidate they would rather drink a beer with. In one variant, they ask which candidate they would prefer to sit next to on a long flight.

These are powerful questions because they get straight to primal identification issues. They drive at the entirely apolitical sense of emotional comfort with the candidate that drives voting decisions in a media-saturated age. They explain why a barely literate recovering alcoholic and failed oil-man could beat two of the smartest, best prepared democratic pols in a generation: too many gringos couldn't begin to imagine themselves chatting with Al Gore over a burger or hanging out, beer in hand, with John Kerry.

Which, of course, is a roundabout way of explaining why I think El Conde del Guacharo is actually a pretty promising candidate. Because as a candidate you can say all the right things, but you can't BS your way past the Sancocho Test, and if you can't pass it, you're toast. (Hell, just ask Roberto Smith.)

Now, who do you think the average guy trying to sustain a family on one minimum wage and one misión scholarship in Acarigua, or Maturín, or La Vega would rather eat a sancocho with ? Petkoff, Borges, Rosales or Er Conde del Guacharo? It's simply not a contest.



And then, who do you think these guys would rather drink a beer with? Rausseo or Chavez? That's where this whole thing gets interesting...

The Schemel-Morris-Musipán Axis

...or: method to the madness.

As Condemania grips the nation, the question looms ever larger: who exactly is behind Benjamín Rausseo?

Frankly, I don't know. I do know who's polling for him: Oscar Schemel, of Hinterlaces, together with the Gringo Prince of Polling Darkness Dick Morris, the legendarily smarmy, ruthlessly effective DC-operative.

If so, Chavez has something to worry about: Morris is not a man to be messed with, and Oscar Schemel is an extremely savvy pollster in his own right. Schemel has spent years building the case that the only way to beat Chavez is to take a sharp turn away from politics as usual.

Just last week, he was telling IPS:

“The only candidate who can confront Chavez successfully with some sort of margin of success, according to this study, is an ‘outsider,’ someone outside of the current political scheme and who still has not emerged.”

In his opinion, an ample spectrum of the population, up to 49%, can be located in a “ni-ni” (neither-nor) space, since they like neither Chavez nor the opposition. Among the other half of the country, 33% is clearly Chavista and 16% is oppositional.

Schemel said that in his research the population transfers to a hypothetical leader strengths that encapsulate their values, such as that he be young, humble, comes from below and has suffered, that he has a concrete governing program and is not part of any political extremes.

Is this ringing any bells yet?

For years Schemel has been arguing that the Chavez era has produced deep changes in Venezuela's political culture and that the opposition got stuck fighting the last war. Schemel has argued to anyone who will listen that perceptions of the Traditional Opposition political class were so overwhelmingly negative, no challenge from the existing cohort could have a chance against Chavez. His polling bears this out clearly:

Click to enlarge.
And so, for years, Oscar Schemel has been out hunting for an outsider able to take the fight to Chavez in a way no traditional pol possibly could.

Last year he argued:

A new culture is emerging, and it's resignifying and deactivating our received ideas about politics, amidst a social and symbolic struggle to redefine democracy, development and social relations.

The current political struggle is chiefly over interpretations and meanings. While the elites and the middle class fight to impose their own notions about democracy and citizenship, the poor majority, chavista and non-chavista, is refuting and resignifying those same ideas.

While chavismo has an important influence on the new interpretation that arises from this unprecedented political experience of the excluded, it is far from imposing its hegemony as a shared vision able to bring together the different interests of Venezuelan society.

The challenge is to build a new hegemony based on the demands of the majority for reconciliation, unity, equality, efficiency and new leaderships.

Seen in the context of Schemel's longer-term vision, the Conde del Guacharo experiment makes perfect sense. Benjamín Rausseo incarnates all the characteristic of the Perfect Oppo Candidate Schemel's research shows people are looking for:

Click to enlarge

Rausseo seems to be Schemel's answer to the question of how to launch a radical symbolic contestation of chavismo that has legs in the population at large. How to fight back effectively at Chavez's attempt to impose a new definition of Democracy in Venezuela.

The perfect outsider to unleash the perfect electoral storm.

Can he pull it off?

Amanecerá y veremos...

Anti-politics taken to its logical conclusion...

Well, it had to come to this: Benjamín Rausseo, much better known as El Conde del Guacharo, has launched his presidential bid.

It's a bit of a challenge to explain who Mr. Rausseo is to foreign readers. Basically, he's a stand-up comedian who long ago launched a wildly successful, unabashedly ribald act as "El Conde del Guacharo" - a fast talking, obscenity-spewing, tell-it-like-it-is everyman from Oriente. Love his comedy or hate it, Er Conde is just about as far from a traditional politician as it's possible to imagine.

Not surprisingly, the question that dogs Rausseo at this stage is whether he is, you know, actually serious about this. It sure seems like he is: wearing a suit, making a gargantuan effort to contain the stream of utter obscenity that is the cornerstone of his comedy act, and fielding questions (mostly) seriously, he's making every effort to convey that this is not a joke.

Alarmingly, Rausseo seems to be the most talented campaigner the opposition has come up with so far. Making the most of his humble begginings, but also wasting no opportunity to talk about his successful career in business (the guy built and owns a Theme Park in Margarita,) his soon-to-be-earned law degree and his polyglotal abilities, Er Conde is packaging himself as the no-nonsense alternative to Chavez. He's the one opposition guy able to talk to regular Venezuelans in a language they can understand, able to level with them without condescending or patronizing, and able to stake out a dissident position that's solidly grounded in good old, popular common sense. When it comes to connecting with regular people on a gut level, he's just light-years ahead of Borges, Petkoff and Rosales...which is not surprising, since connecting with regular people on a gut level has been his job for 20 years.

Can his candidacy attain the Electoral Tsunami status he aspires to? Only time will tell. For now, I'll just note that his strategic positioning is excellent. Rausseo is selling himself with Roberto Smithesque marketing savvy, but without Smith's hoity-toity East-side-Caracas-via-Harvard baggage. His pitch is solidly centered on Chavez's polling weak points ("se acabó la regaladera de plata! primero los de acá, los demás que se pongan en fila!") and what he lacks in experience he more than makes up in charm, street cred, and chispa.

Other positives? Absolutely everyone knows who El Conde del Guacharo is - and almost everyone seems to like him: he is one candidate with no name-recognition problems, and low negatives. Moreover, he is one guy Chavez just can't run his usual playbook on: Rausseo's outsider aura and popular touch makes him the only candidate with a real chance to out-Chavez-Chavez, to out-feel people's pain, and to out-flank any personal attack. Actually, with his legendary, acerbic wit, trying to attack him would be a distinctly risky proposition for Chavez...who else could bitch-slap the guy the way El Conde could?

Remember how people said Teodoro was a good candidate because Chavez could not credibly dick him around? Well, it turned out that Chavez didn't have to dick him around, because Teodoro is such a hopeless campaigner Chavez can just ignore him. Rausseo, though, is the real thing: a guy who can't be ignored and can't (safely) be attacked.

It's amazing, alarming, depressing, just plain sad that it's come to this, but...I'm sort of excited about it.

[Rausseo's Globovision appearance is here. His campaign website is here.]

Housekeeping Note: New Subscription Software

Those of you who've used the "subscribe" thingy to get Caracas Chronicles delivered to your inbox know that the software I was using, Bloglet, was an unreliable piece of junk.

Today, I switched over to FeedBlitz, which I'm told is substantially better. The formatting on the emailed posts should be much prettier, and the service much more reliable.

Those of you who were already subscribed with the old system don't need to do anything: I already migrated your subscriptions over to the new system. Those of you who weren't subscribed might want to give it a try. Takes two minutes.

Just enter your email, then follow the directions on the screen:

Skypecast: Jonathan DiJohn Casts Doubt on the Resource Curse

Click here to listen to the interview.

In the second Skypecast in a series on Venezuela's economic collapse, I interview Jonathan DiJohn. Dr. DiJohn is a lecturer in Political Economy and Development Studies at the University of London, and a former visiting researcher at IESA.

His explanation of Venezuela's economic collapse presents a challenge to the conventional academic wisdom on the subject. Arguing that "resource curse" arguments that highlight the role of oil can't account for Venezuela's growth collapse, Dr. DiJohn focuses instead on the shift to a "Big Push", heavy industry-led development strategy implemented in the 1970s - what we think of as La Gran Venezuela - and argues this type of import-substitution industrialization plan was incompatible with the country's increasingly fragmented and populist political system. Oil, in general, plays a minor role in an explanation that highlights the mismatch between political system and economic strategy starting in 1973.

You can download an early draft of Dr. DiJohn's paper in MS Word format here.

The 40-minute Skypecast is, once again, a non-technical review of his research that I hope will be understandable to non-specialists. I thought the interview was really interesting, but you tell me what you think: Click here to listen to the interview.

If you like what you hear, you're in luck: Dr. DiJohn will publish a book on the history of Venezuela's Development Strategy next year.

Hugo's Axis of Evil 2006 World Tour: Enough Rope to Hang Himself With

Ah, the harvest of incriminating quotes has begun. Here's Huguito on Belarus:

"I have come here to conclude a unity pact. Here we see a model of the social state that we are beginning to create."

"Here, I've got a new friend and together we'll form a team, a go-ahead team," Chavez said before one-on-one talks. "I thank you, Alexander, for solidarity and we've come here to demonstrate our solidarity."

Lukashenko, an open admirer of the Soviet Union, returned the praise, calling the president of the world's fifth-largest oil exporter "a man of extensive knowledge."

"You are versed not only in the economy of Venezuela but in the Belarus economy, as well. You know military science, the military-industrial complex, and this impresses me very much," he said. "We have many directions for cooperation. There are no closed topics for discussions in our cooperation with Venezuela."

During the 24-hour visit, Chavez was slated to tour a military academy and the "Stalin Line" - a network of World War II-era defense installations restored by Lukashenko's government.

Do note, before retorting some variation on the old "Venezuela can seek diplomatic links with anyone it wants" line, that Chavez is specifically praising the state model in Belarus and explicitly noting the similarities between what they have and what he's beginning to create in Venezuela.

First reader to find me a picture of Chavez feeling up Lukashenko good enough to put on the right-hand column wins a lollypop.

Comparative Campaign Launches

Here's a study in contrasts:

Julio Borges launching PJ's Progreso Popular plan:



Teodoro Petkoff launching his candidacy



Manuel Rosales launching his campaign (unfortunately, audio only:)

Click here.

Making a buck, the North Korean Way

The current New York Times Magazine carries this stunning feature on North Korea's super-sophisticated operation to counterfeit US dollars:

According to defector accounts, Kim Jong Il endorsed counterfeiting not only as a way of paying for covert operations but also as a means of waging economic warfare against the United States, “a way to fight America, and screw up the American economic system,” as the North Korean specialist paraphrased it to me.

In a similar vein, according to Sheena Chestnut, a specialist on North Korea’s illicit activities who has also interviewed several key defectors, counterfeiting was seen as an expression of the guiding idea of the regime: the concept of juche. Often loosely translated as “self-reliance” or “sovereignty,” the idea of juche entails an aggressive repudiation of other nations’ sovereignty — a reaction to the many centuries in which Korea capitulated to its larger, more powerful neighbors. “It appears that counterfeiting actually contributed to the domestic legitimacy of the North Korean regime,” Chestnut told me. “It could be justified under the juche ideology and allowed the regime to advertise its anticapitalist, anti-American credentials.”

By 1984, as North Korea’s planned economy began to fall apart, Kim Jong Il, who by that time was effectively running much of the government, issued another directive, according to the North Korean specialist, who told me he has obtained a copy of the document. It explained that “producing and using counterfeit U.S. dollars” was a means, in part, for “overcoming economic crisis.” The economic crisis was twofold: not only the worsening conditions among the general population but also a growing financial discontent among the regime’s elite, who had come to expect certain perquisites of power. Counterfeiting offered the promise of raising hard currency to buy the elite the luxury items that they had come to expect: foreign-made cars, trips for their children, fine wine and cognac.
...
From all accounts, superb quality is a feature of much North Korean contraband: methamphetamine of extraordinarily high purity; counterfeit Viagra rumored to exceed the bona fide product in its potency; supernotes. It’s an impressive product line for a regime that can barely feed its people. When I discussed this with Asher, he let out a sigh. “I always say that if North Korea only produced conventional goods for export to the degree of quality and precision that they produce counterfeit United States currency, they would be a powerhouse like South Korea, not an industrial basket case.”

Better yet, read the whole thing - it's always good to be up to date on what Chavez's buddies are up to.

Like Caracas Chronicles, only funny...

In his inimitable style, Harry Hutton nails a point I've been trying to make for a long time. It's just that when he does it, you laugh...

The Paleopopulist Approach

Zulia Governor Manuel Rosales finally had a proper presidential campaign launch yesterday, giving a good old fashioned, nasal-toned populist speech to a crowd of fawning supporters at the Ateneo de Caracas.

His discourse is pleasingly focused on some Chavez weak points - particularly his wildly unpopular spending spree abroad - and largely ignores the kinds of abstract questions that rile up the Noticiero Digital crowd while leaving most voters cold. That's smart politics. On the other hand, he said nothing at all about Chavez's single most vulnerable issue: crime.

As for his style...well, I'm too much of a hoity-toity intellectual to openly say I like it. Charismatic he ain't, but when he gets going, and in front of an appreciative crowd, he does a passable impression of an old-style, rabble-rousing adeco. At times, the guy sounds like he's channeling Piñerúa. Could this kind of rhetoric do the trick?

Well, judge for yourself: the podcast of the speech is here.

Hugo's Axis of Evil 2006 World Tour: Dreamin' of Pyongyang and Propagandizin' of Beirut

Turns out Hugo Chávez still wants to go to North Korea, but Pyongyang seems to be playing hard to get. Could Kim Jong Il bear to sit around a table with an even bigger megalomaniac than him? We can only hope...GOD I want that picture!

Chávez also took the chance to reaffirm his "strategic brotherhood" (?!) with Iran and, obviously, to blame the US for the latest Middle East crisis. Certainly the American refusal to make even a ritual exhortation for peace is pretty appalling. But trying to pin the entire blame for this tragedy on one side or the other is plainly childish. The US is just about as guilty of this as Chávez, with his sophomore-leftie-style rant exonerating Hamas and Hezbollah of any responsibility at all for the war they conciously provoked and his failure to notice that the missiles that have been raining on the north of the Zionist Entit...erm, Israel are made in Tehran.

Faced with a complex diplomatic situation, Chavez's instincts are tiresomely predictable: find out the US position, then argue the diametrical opposite, whatever the facts. His blithe embrace of indefensible overstatements underlines the guy's basic irresponsibility: "it's the Israeli Army," he said, "that is bombing entire cities, a real genocide, how far this madness will go only God knows."

First of all, there's this "entire cities" business. The contrast between Israel's deliberate targetting of relevant military objectives and Hezbollah's perverse pride in the indiscriminate nature of its attacks is all too evident. With the Israeli Air Force dropping leaflets to warn civilians to evacuate areas they are about to strike, Chavez's suggestion that it's the Israeli campaign that is indiscriminate must count as a grotesque reversal.

Then there's the sheer indefensibility (not to mention extreme bad taste) of the "real genocide" line. So far, 300 Lebanese civilians have died in a week of air raids. That's 300 too many - but think of it this way: Lebanon has suffered 43 fatalities per day so far, and that's just about the same number of deaths we see in Venezuela on any given day, just from street crime. Venezuelan choros don't even need military weaponry to launch their own little tropical "genocide", but somehow that doesn't get Chavez's juices flowing...

Which brings us back to an old topic: the proof of the anti-semitic pudding is in the eating. Who Chavez thinks killed Christ is a side-show. The smoking gun is Chávez's active, ongoing, diplomatic and material support of a holocaust-denying regime that espouses an ideology laden with extreme, explicit anti-semitism and looks forward with glee to the destruction of the State of Israel, whether through proxies or nukes.

The Montonera of the 21st Century

It's a point GP keeps making in my comments section, and it's a good one: for most Chavez supporters abroad, Venezuela didn't exist before 1998. Brought into their consciousness more as a screen where revolutionary aspirations can be projected than as a real place, with a real history and a real people, Venezuela remains an abstraction in PSF minds. For this reason, international philochavismo fails again and again to understand the way developments in the Chavez era fit into the long sweep of Venezuelan history.

This is the reason I like articles like the one I linked to in yesterday's post. They show the much neglected element of continuity in a regime that ceaselessly trumpets its radical novelty.

The fascinating thing about the bolibourgeoisie is how closely its rise re-enacts a socio-political pattern that was already well established 150 years ago. Without an awareness of Venezuela's long history of assimilating new moneyed elites, it's impossible to know what to make of the Wilmer Rupertis and Arné Chacóns of the world.

Venezuela's 19th century was marked precisely by a quite similar dynamic. Central governments in Caracas had access to some tax and customs revenue, but never really consolidated control of the rest of the country. Periodically, regional caudillos would cobble together little private armies - montoneras - and attack Caracas. Once every few years, a montonera would succeed and establish a new "national" government. The sordid little war that brought about such regime change would typically be described as a "revolution" by its leaders.

The financiers and logisticians of the victorious montonera then got to cash in, by trafficking on their access to the new governing elite. They would adapt to the lifestyle and spending patterns of the old moneyed elite, and, if the new government lasted long enough before the next successful montonera, they would insinuate themselves gradually into the pre-existing oligarchy.

Sooner or later a new montonera would bring a new caudillo into power and the whole process would repeat itself.

The process stood in stark contrast with the pattern in countries like Peru and Guatemala, where oligarchies were genuinely closed to new members and new money could not buy access into the upper reaches of polite society. In Venezuela, the difference between a zambo and a catire has always been the size of his bank account.

The discovery of oil merely upped the ante in this little game, but didn't fundamentally change it. The AD trienio of 1945-48 didn't last long enough to establish a new moneyed elite, but the Pérez Jiménez era did, as did - much more profoundly - the Punto Fijo regime. War was replaced by elections as a method of choosing the new governing elite, but the tenor of the relationship between the new governing elites and their financiers and logisticians carried on more or less undisturbed.

These days, amid a discourse that obsessively emphasizes change, we see these old, old patterns re-enacted for the Nth time, as though something in our cultural DNA inexorably pushed our society into playing out the same script again and again.

Revolutionaries are everywhere and always blind to the way they renew the structures of the regimes and social systems they seek to replace.

But don't be fooled: not that much has changed. Just like in the 19th century, the new moneyed elite instinctively mimics the lifestyle of the old. Just like in the 19th century, it builds its fortune out of connections rather than producing anything of real value. Just as in the 19th century, it depends on an atmosphere where back-scratching, influence-peddling, rent-seeking and the mutual dependence of politicians and financiers determines your chances to get rich. And, just like in the 19th century, in time it will grow too fat and comfortable to defend itself, too openly putrefact to enlist anyone's loyalty, and it will fall.

Reporting the Bolibourgeoisie

The Miami Herald's Steven Dudley adds one more article to a fast growing subgenre of journalism about the Chavez era: The Bolibourgeoisie Color Piece. I think this one is more snazzily written than most, though:

They drive shiny new Hummers and Audis. They wear Cartier and carry Montblanc bags. They buy up luxury apartments and fly private aircraft to and from Miami. And they almost always pay in cash.

They are the so-called Boliburguesía -- short for Bolivarian bourgeoisie -- a reference to socialist President Hugo Chávez's declared ''Bolivarian'' revolution on behalf of Venezuela's poor.

Chávez has seen world oil prices go from $10 a barrel when he was first elected in 1998 to more than $70 today. He has used these windfall billions to finance dozens of social projects on behalf of the poor at home, and provide assistance to regional neighbors from Cuba to Argentina.

But the rising economic tide has not only lifted the poor's boats, bringing back memories of the 1970s, when another spike in oil prices sparked a free-spending boom. Businessmen agile enough to ally themselves with the government have caught the gravy train. Tops on this Boliburguesía list are men like Wilmer Ruperti, one of the few businessmen who supported the Chávez government during a crippling national strike in late 2002 demanding the president's resignation.

It's easy to see why journos find it easy to sell these pieces to editors back home: they're highly visual - all that talk of Hummers and Cartiers - and appealingly man-bites-doggish - who's ever heard of socialist revolutionaries ponying up for yatchs and things?

Personally, I like them because they highlight perhaps the key theme in the Chavez Era: contradiction. There are so many contradictions running through so many aspects of so much of what the government does it makes your headspin.

Bolibourgeoisie - the weird juxtaposition that makes up the neologism itself neatly captures the taste of the incongruities that run through the Chavez era. To my mind, any reporting that helps foreign readers get a feel for the scale of the gap between the official propaganda line and Venezuela's irreducibly complicated, usually contradictory reality is to be commended.

The Extremely Abridged History of Venezuela

Hat tip to Brett...

How to win with crime...

Crime is the issue Venezuelans are most worried about. It's also the issue where they rate Chavez's performance worst. Here's Keller's June 2006 Performance-by-Issue slide:

[Click to expand. Red=Problem is getting worse. Yellow = Problem is the same as ever. Blue = Problem is getting better.]

Somehow, though, the opposition can't get any traction on it. The problem is that, today, crime is just not a politicized issue. That's because Chavez just won't join the fray. The most amazing thing about Chávez's line on the crime epidemic is that he doesn't have one. And when the other side fails to acknowledge the issue, it's impossible to establish a discussion.

How does the opposition change this dynamic? It's tough. But one possible avenue is to talk about crime as a social and economic issue. This is something Tony Blair managed to do with his now famous "tough on crime, tough on the causes of crime" campaign line. By underlining the links between poverty, exclusion and urban violence, the opposition can use the sharp rise in crime to tell a story about the overall social failure of the regime - who's ever heard a country where rapid poverty abatement and social inclusion go hand in hand with an unprecedented crime wave? The story doesn't hang together.

The opposition badly needs to make the December election about its strongest issue. It needs to grab control of the agenda, something it's catastrophically failed to do since 2003. The protests surrounding the deaths of the Fadoul brothers showed that there's an substrate of anger around insecurity, that crime is politicizable. Time to move on this.

Venezuela's Murder Rate: Click here to expand

Addendum: Some of the crimes being reported these days are just jaw-dropping in their audacity. On Wednesday, at 5 a.m. in Guatire, a group of thugs held up fourteen buses in one go in a commando-style operation.

Making Crime Pay

From a polling perspective, it's a no-brainer. The issue most people identify as the country's biggest problem is also the one where they rate Chavez's performance the worst.

According to Hinterlaces' May/June 2006 poll, 87% of voters identify crime is the biggest problem in the country. 70% say crime has gotten worse under Chavez, and 24% say it's the same as it's always been.

Keller's June poll also identifies crime as the number one issue - 76% of his respondents think it's gotten worse and 15% say it's the same.

How should a savvy oppo candidate react?

By talking about very little else.

Chavista Assembly Members Demand Dissidents be Jailed

Pro-Chavez National Assembly Members José Albornoz (PPT) and Ismael García (Podemos) are asking the Prosecutor General to jail Sumate's leaders.

Their crimes? Usurping the CNE's prerogative by seeking to organize a primary election outside the state's control and incitement for publicly airing their views on CNE.

Still more proof that chavismo, as an ideology, has no room for the idea that some matters are not the state's business - that there are spaces where citizens can and should come to make decisions without the state's interference. We already saw this in 1999 when chavismo insisted that labor union elections had to be organized by CNE, and in 2003 when they said that signature-gatherings had to be run by CNE.

The notion that citizens can use whichever method they deem best to select their candidate for election is beyond them. The concept of civil society - of a sphere of social life that is both public and outside the state's control - is deeply alien to their understanding of the good society. By this reasoning, voting for Miss Venezuela will end up having to be organized by CNE.

Extremism? What extremism?

On the nature of verbal agression

Katy says: The debate that raged in the comments section (see Quico's prior post and the discussion that followed) got me thinking about the power of words. The right words said in the right context, be they Chávez's, Quico's, Alek Boyd's or Materazzi's, can be a powerful tool. They can inspire fear, apprehension, ridicule. They can send people into a tizzy, or send them straight to the nearest airport or locker room. They can provoke a reasonable, inspired response, or they can provoke an act of violence tinged with just the right amount of honor.

But I'm not a good enough writer to talk about these things. Here's what tennis writer/blogger Peter Bodo had to say about Zidane's infamous head-butt. I think there's some truth in there for all of us.

"What Zidane did was undoubtedly stupid. It was silly. It may have cost France a most magically earned World Cup championship, and it cost Zidane himself a fair amount of the glow surrounding his name.

But I also think this: Zidane was driven to butt Italian Marco Materazzi out of a sense of personal honor (you certainly can’t say Zidane acted in the heat of the moment), because Materazzi crossed a line in the sand. And that notion of “honor” is almost entirely gone from our collective life these days.

Theoretically, we should be living in a time of civility and harmony, because we’ve managed to create powerful prohibitions against things like the good old-fashioned punch-in-the-nose. Actually, it appears that we’ve thrown open the floodgates on incivility, reckless accusation (and lying), the vilest kinds of name-calling, bigotry - the whole nine – because nobody is held accountable anymore. Therefore, a guy like Materazzi (I'm basing all this on admittedly unsatisfying press reports) feels he can say anything he wants - Zidane wouldn't dare hold him accountable. Not with millions watching! Not with all that money at stake! Not with the precious World Cup trophy on the line!

But every once in a while, somebody – today, it’s Zidane - violates the taboo. He or she in effect, says, I don’t care what is on the line, how much money or personal advantage or reward. I am not going to have the last laugh, or laugh all the way to the bank. My code of honor simply won’t allow me to let this go unanswered. It takes an individual of great (if not necessarily admirable) character to take that road, and wasn’t Mr. Materazzi surprised to learn, in the most direct manner, that he was being held accountable for his words?

I don't expect many of you to agree with me on this. But I can't deny the way I feel about this. Of course, a part of me feels badly for the French squad, which inadvertently suffered because of what Zidane felt he had to do. But a part of me condones what Zidane did and forgives him because, in addition to striking a blow for accountability, his action also demonstrated something that many people forget and that as a writer I feel strongly about: words are powerful weapons, they can cause more hurt and sorrow than fists or belts or willow switches.

...

The head butt was about the power of words, the notion of accountability, and about honor. It was not an admirable move, nor a clever or practical one; it was something that transcended those mundane considerations."

Chavista Extremism: Scarier and scarier...

Extremism is becoming the defining characteristic of the chavista movement. At no point does the ruling ideology draw the line - just the opposite: every part of the new elite seems to operate under the maxim that if a little extremism is good, a lot is better. The result is a kind of tournament within the regime, a dynamic of one-upmanship where each tries to out-extremist the other.

It's a scary thing: the phrase "that's going too far" doesn't seem to be a part of the regime's political lexicon. More and more, the regime has lost its feel for the ridiculous (el sentido del ridículo) - leaving it shorn of any way to judge how much is too much.

Examples? They're a dime a dozen. Here are a few:

• The Armed Forces' Polytechnic University awards an honorary doctorate to an aging Mikhail Kalashnikov for his lifetime contribution to the noble cause of figuring out how to kill people efficiently.
  
  
• A Cuban communist guerrillero who literally led an armed invasion against Venezuela's democratically elected government is honored in a public ceremony by regime hierarchs (handily exceeding the DDefinition of supporting terrorism") and the news is proudly splashed on pro-government websites.
  
  
• Thousands of Venezuelan kids go off to Cuba for paramilitary and ideological training, come home, and get 15,000 assault rifles bought with public money. Among their slogans - Commandante Chavez: Ordene!
  
  
• Practically alone in the world, Venezuela sets out a principled defense of North Korea's right to develop ICBMs, essentially celebrating its missile tests as an anti-imperialist move in the eve of Chavez's visit to Pyongyang.
  
  
• The National Assembly moves to further restrict the scope for NGO action, with the avowed aim of bringing them under control.
  
  
• A literally gun-toting president threatens to shut down opposition TV and radio stations, saying it is unacceptable for the media to criticize the government.
  
  
• Essentially all high-profile opposition elected officials still in office are prosecuted on trumped up charges or threatened with prosecutions if they do not behave as the regime demands.
  
  
• Even the Venezuelan Olympic Committee is taken over by a chavista aparatchik.

The point, I think, is clear: with the government firmly consolidated in power, all restraints on extremism have been lifted. The question then becomes: where does this road lead?

We need to be clear about this: Venezuela is not a totalitarian regime. But we also need to be clear about this: it is moving more and more decisively in that direction. Clearly, spaces for dissent still exist; just as clearly, the regime is working to close them down.

What's terrifying is that there is no logical limit to chavismo's power ambition. Nothing in the structure of the belief system limits its tendency to expand control into new areas of political and - more and more - social life.

There is no room in chavista thinking for the notion that some of spheres of human activity are and ought to remain outside of the political sphere. And there is certainly no space in chavista thinking for the notion that any part of the political sphere ought to remain outside the state's control. It's a way of conceiving politics that never says "enough," that has no notion of "that's not the state's business," that never sees a reason to stop expanding its reach, and that does not recognize any distinctions between the concepts of "nation", "state", "government", "party" and "Chavez." As far as the ruling ideology is concerned, to be for one of those is to be for all of them; to oppose one is to oppose them all.

What's scary is not so much where we are now, but where the internal logic of chavista thinking points us. These days people are happy buying their hummers and plasma TVs and such. But the logic of blanket politization is afoot, and with it the mechanisms first for authoritarian and later for totalitarian control.

We're definitely not there. Chavismo's myriad internal contradictions might yet cause its collapse before we get there. But it's not really possible to deny that we're heading there. Not any more.

The 2006 PSF D'Or goes to...

Envelope please...[rustle-rustle, cough]...Ladies and Gentlemen, the 2006 Pendejo sin Fronteras d'Or goes to...Chris Kraul, of the Los Angeles Times!

It's no contest, really: his piece in Sunday's LAT about the ways chavistas have been using Charlie Chaplin's 1936 classic, Modern Times, for propaganda purposes will go down as a timeless classic of slack-jawed PSFery. The story misreports, misunderstands, misconstrues and misattributes Venezuelan workers' problems with such gusto, the competition didn't have a chance.

A taste:

Since January, in a bid to expose the evils of "savage capitalism," the Labor Ministry has shown the Chaplin film to thousands of workers in places such as this rundown industrial suburb of Caracas.

Chaplin wanted his Depression-era movie to make a point, that "once inside the factory, workers had no meaningful rights," said Los Angeles-based film historian and Chaplin authority Richard Schickel. "It was very relevant in the moment it was released, a time of social unrest and the emerging U.S. labor movement."

Seventy years later, Chaplin's fable is all too relevant in Venezuela, said several factory workers who saw the film recently.

In a way, the first thing that jumps out at you is not so much Kraul's staggering ignorance as his utter lack of inquisitiveness. The piece details the way chavistas have used Modern Times to make a point about labor exploitation in Venezuela. A minimally curious writer might then ask, "hmmmm, are labor conditions in Venezuela today really comparable to labor conditions in the US during the depression? Do Venezuelan workers really have no meaningful rights? does it really make sense to describe Chaplin's film as 'all too relevant' in Venezuela?"

Well, lets see, what were workers fighting for in the 1930s in the US? First and foremost, they were worried about the right to form unions and bargain collectively...rights that have been guaranteed and widely exercised in Venezuela since 1958.

Bad start. OK, the minimum wage, then? Nope, there has been a minimum wage in Venezuela, for decades. Not only that, figured as a percentage of the average wage, Venezuela's minimum wage is the highest in the America's - fully 90% of the average, meaning that, for all intents and purposes, Venezuelan wages as a whole are decreed by the Central Government.

Not that either, then. Perhaps the eight hour work day is a good parallel? Nope, Venezuelan workers got that reivindicación decades ago. Vacation pay? Got it. Severance pay? Got it. Mandatory employer contributions to pensions? Got those too. Statutory overtime pay premiums? Check.

Hmmm...how about some more lavish perks - the kinds of things European workers protest over these days? Statutory employer-provided childcare and dining facilities, say, or an open-ended ban on layoffs, or subsidized housing, subsidized worker training, subsidized transport, or statutory profit-sharing, or paid maternity leave? Hell, these are demands that would have made US workers blush back in the 30s - but, you guessed it, Venezuelan workers have all of those as well!

In fact, Venezuela has some of the most restrictive, rigid, employment-zapping labor legislation anywhere in the world.

So restrictive is the legal framework that in the paper I wrote about yesterday, Hausmann and Rodriguez set out microeconomic evidence showing how labor market rigidities have hampered Venezuela's attempts to crack non-energy export markets, deepening our dependence on oil exports and contributing to the country's economic collapse since 1977.

In effect, with existing legislation, the legal economy can't begin to generate enough jobs for the size of the workforce we have, leaving about half of Venezuelan workers to scrape together a living somehow in the informal sector. Once there, they have no protections whatsoever. UCAB researchers have found that 90% of informal sector workers earn less than the legal minimum wage. It's hardly surprising that, for informal workers, finding a job in the "savage capitalist" economy Modern Times sends up is a universal aspiration, a wistful dream that's simply out of their reach.

Given the very high costs associated with Venezuela's hypertrophied labor legislation, it's easy to see why the informal sector has swelled. Venezuela has a plainly outsized "fiscal wedge" (cuña fiscal) - the gap between what it costs an employer to create a legal job, and the pay a worker effectively takes home. By some researchers' estimates, every Bs.100 in take-home pay for legal workers costs employers Bs.171 to generate - with the extra Bs.71 going to cover various taxes, mandatory contributions, and statutory workplace perks. These figures dwarf the notorious fiscal wedges in countries like Germany (51%), Belgium (56%) and France (47%).

For all his efforts to "even-handedly" present business viewpoints in his piece, Kraul catastrophically fails to grasp the basic ridiculousness of the way Modern Times is being used to push an extremist ideological agenda. What Kraul tragically fails to process is that Venezuela's legal labor force is a relatively privileged elite within the working class, the better-off half in a vicious insider-outsider dynamic that condemns millions of people to the atrocious poverty and total insecurity of the gray economy...and that the more legal goodies that relatively privileged elite gets, the more expensive it gets to create legal jobs, and the harder outsiders find it to crack into the legal job market.

Maybe, on his way back to the Meliá from that poultry plant, Kraul should've stopped to chat with some of the buhoneras in the Boulevard de Sabaná Grande and asked them what they think about the terrible exploitation of the quince-y-último set. The look of baffled fury he would've gotten from them perfectly mirrors my outrage at his deeply ignorant little piece.

His, dear reader, is one richly deserved PSF D'Or...

Skypecast: Francisco Rodríguez on Venezuela's Economic Collapse

Click here to listen to the interview.

This interview features Francisco Rodríguez. Francisco is Assistant Professor of Economics and Latin American Studies at Wesleyan University, and a fast rising academic star. He's currently co-editing a book on Venezuela's economic collapse with Harvard's Ricardo Hausmann. Over the next few weeks I will be publishing Skypecasts with several of the book's contributors.

Working drafts of all the book's chapters can be downloaded here.

In this wideranging, 40-minute Skypecast, Francisco describes the overall research project, and then walks us through the draft chapter he co-authored with Ricardo Hausmann. In explaining Venezuela's economic collapse, Hausmann and Rodríguez stress the fact that Venezuela didn't have an alternative export industry to cushion the blow when oil prices fell. They go on to assess five different hypotheses to explain why, unlike Mexico, Indonesia and Malaysia, Venezuela didn't develop alternative export industries.

The Skypecast sets out their research in language that (I hope) will be understandable to non-specialists. Towards the end, Francisco explains some of the policy implications of his analysis.

Click here to listen to the interview.

Talk vCrisis here...

Personally, I've been careful not to say much about the Boyd-Livingston saga. My deep disagreements with Alek are just as public as our friendship is. However, there seems to be a limitless appetite to discuss this, so I'll open this thread for that purpose.

Extra! Extra! Sanity breaks out in the comments section!

An event rare enough to merit a post of its own: Yesterday, at about 1:00 p.m., a debate broke out in the comments section that was on topic, fun, sophisticated, enlightening and cordial. Feathers, Katy, Rafael, and Amieres: you don't know how happy you made me!

Rosales's Quirky Campaign Launch - And Teo's Obstructionism

After months of sitting on the fence, Zulia's neo-adeco governor Manuel Rosales has finally made it clear that he's running for president - in the weirdest way possible, by announcing he is willing to participate in an oppo primary. What kind of a campaign launch is that?

Though Borges, Rosales and six marginal candidates have signed on, it's still unclear whether there will be a primary on August 13th, because Teodoro Petkoff is still dithering. Teo's made it clear in various ways that he's not for a primary, and would prefer a complicated polling solution to determine the candidate. Not surprising, cuz the guy is far behind in the polls.

Sumate's position, that they will only organize a primary if all main oppo candidates participate, effectively gives any one of them a veto over the whole thing. Is this really sensible?

Common Sense Meltdown Chronicles: The Chavez-North Korea Axis

In the wake of worldwide condemnation for North Korea's missile tests, Chávez's timing for a Pyongyang getaway is looking especially ill-judged. North Korea's move, which is being interpreted as a slap in the face even for its only ally, China, has placed the hermit totalitarian prison-state even farther beyond the pale than it already was.

Hell, even Argentina was horrified.

Right on cue, in step the chavistas to stick up for Pyongyang's right to develop missile technology - while, moronically, asserting that the government doesn't have an official position yet. Hm.

With Caracas now serving as the site for meetings of the Board of Directors of the International Institute of the Juche Idea and Venezuela hosting one of the very few North Korean embassies abroad, it's hard to disagree with the US State Department's judgement that Chávez is an outlier on this issue.

Chávez's ongoing flirtations with the Ultimate Rogue State merely underlines a point that should be clear to anyone who's been paying attention: the guy never met a tyranny he didn't like. But does he really understand how very, very far from diplomatically correct it is to cozy up to a state like this?

Of course, my comments section has already served as the site of impassioned defenses of the use of children as mine-clearing equipment in Iran - following Chávez's coddling up to that regime - so how long can it be until someone turns up to explain that no, really, North Korea is really a nice place?

Personally, I can't wait for him to go so I can put the picture on my right-hand column.

Would an AMLO win really favor Chavez?

Say chavistoid populist Andrés Manuel López Obrador somehow gets the Mexican vote count overturned and wins the Mexican presidency...would that really favor Chávez?

Personally, I have doubts. Chávez is happy to have fellow travellers elected in smaller, weaker, poorer countries like Bolivia, Peru and Nicaragua, places where his oil dollars carry enough weight to dictate policies. But would AMLO really play second fiddle to Chávez? Would a larger, richer, stronger country really fall into line behind our little Napoleon's fantasies of hemispheric leadership? I really doubt it.

More likely, AMLO would end up staking a challenge to Chávez's ambitions for leadership of the hemispheric left. And that's the last thing El Comandante wants.

Could the government be lying about illiteracy?

Katy says:
"Just to cite some important examples, our country had the honour in 2005 of having been declared officially by UNESCO as an illiteracy-free territory." Mary Pili Hernández, Venezuela's Vice-Minister for Foreign Affairs

"UNESCO has not endorsed or made any statement to the effect that Venezuela is free of illiteracy." Sue Williams, UNESCO's Chief of Section of Bureau of Public Information, Paris.

Source: Vcrisis - the encore.

Update: Calderón Pulls Ahead

At 5:07, Ccs time, Calderón takes the lead...

Click here for minute-by-minute updates from the Mexican El Universal.

Mexico's Nail-Biter

Nothing to be done in Mexico but nibble at your nails...


At 4:47 a.m. (Caracas time), with 97.6% of actas recorded, AMLO is ahead by 0.02%...but results are changing all the time and the latest results coming in are from the pro-Calderón north, so keep checking for updates...

Chavez's trade policy in historical perspective...

In a Working Paper, presented at a recent conference on Venezuela's disastrous economic performance since the late 70s, Ricardo Hausmann and Francisco Rodríguez put forward a sophisticated explanation for the collapse.

At the center of their interpretation is the argument that the absence of an alternative export industry left Venezuela badly exposed to energy market shocks. Unlike countries like Mexico, Indonesia and Malaysia that managed to diversify their export baskets, Venezuela's nearly complete specialization in energy (and energy-related) exports amplified the impact of sporadic oil price downturns.

From this point of view, policies that help diversify Venezuela's export basket constitute a safety net against future downturns. And few policies had achieved that goal as well as signing regional free trade agreements like the Andean Community and the G3 deal with Mexico and Colombia. As this chart shows, from the early 1990s Venezuela's non-Energy Intensive producers finally started to gain a foothold, largely thanks to those deals:

Click to enlarge. Taken from Hausmann and Rodríguez, Why did Venezuelan growth collapse?, Page 50.

As the chart also shows, since the very start of the Chavez era, misguided trade policy decisions have seriously undermined the value of those agreements. All of which we should keep in mind as we track the debate over Venezuela's exit from the G3 and the Andean Community, and our entry into the barely-functioning Mercosur.

First off, Venezuela's Andean and G3 trade was largely concentrated on its largest and most "natural" trade partner: Colombia. Tearing down our trade agreements with Colombia to enter a deal with countries whose economic center of gravity is thousands of miles away makes no sense.

Second of all, while it's clearly a bad idea to formally deny Venezuelan exporters their privileged access to the Colombian market, we need to keep the decision in perspective: the real economic damage has already been done, through things like the introduction of transshipment requirements in 1999 and exchange controls in 2003. Formally exiting the deals merely makes it official.

The Chavez Effect: Two for Two

Well, the election in Mexico is achingly close, and the legal challenges will surely mount. One thing we can say for sure, though: Andrés Manuel López Obrador's comfortable lead, which lasted for two years prior to the election, vanished the second Calderón managed to link him to Chávez.

Just like in Perú, even the perception of Chavophilia has proven an electoral poison pill in Mexico.



Imagine how different the hemispheric picture would look without the Chavez Effect. With Ollanta and AMLO in power, all the tooth-gnashing about an authoritarian backslide in the hemisphere would have some real meat on its bones. As it stands, Hugo's club is a problem for Bolivia, Venezuela and Cuba - not for the hemisphere.

Last last-ditch effort to save WTO talks fails - attention now shifts to last last last-ditch effort

This weekend's Geneva Mini-Ministerial conference failed yesterday over the same old, same old lingering deadlocks. You know things have really come to a head in the World Trade Organization talks when even the Director General, Pascal Lamy, starts using the C-word to describe the state of negotiations.

The last last last-ditch effort comes in two weeks, when the G8 meets in Saint Petersburg and the whole Doha hot-potato gets tossed up a level, from Trade Ministers to Heads of Government. Some people think that the round was so deadlocked, it was never going to move without Head of Government-level intervention anyway, and that you weren't going to get that level of attention until the Trade Ministers led the round to a near-death experience like the one it's having now.

But can the Bush administration make a dramatic overture just four months before a tough mid-term election? And can Chirac overcome the temptation to poo-poo the whole thing?

Hmmmm...

Caracas Chronicles on Restorative Hiatus

Well, you must have noticed that I've moved more or less permanently to the Futbol Blog. I can't help it - ever since España '82 my life has been running on a four-year cycle: 47 months feverishly awaiting the next World Cup followed by one month of total, fanatical immersion in the tournament.

I've gotten an inordinate amount of crap in my inbox about this. Typical emails run something like "while you're off watching grown men chasing a little ball like monkeys, Chavez is doing X, Y and Z under cover of mundial, finally enslaving all Venezuelans." I tend to roll my eyes at this sort of message: as if Chavez was going to slow down if we paid more attention. As if he gave a toss about scrutiny. As if we could actually do something about it.

We can't. And I think it's important for us to come to grips with the fact that we can't. From 1999 to 2004 we fought the good fight, and we lost. At this point, we can act as observers, as scrutinizers, as commenters. But not really as activists. Not meaningfully. Not anymore.

Yes, yes, I know. What is happening in Venezuela is unacceptable. The cruel thing is: we have to accept it. Accept its reality.

To my mind, learning to cohabit with the reality of Chavez in power is not just a sign of maturity, but actually a pre-requisite for staying sane. Getting stuck on the ongoing affront to basic decency represented by his regime does nothing beyond raising our blood pressure. Folks, if our principled anger could change the reality on the ground, Chavez would be long gone.

Faced with a reality we can't accept but have to accept, it becomes imperative to find some way to keep our wits about us. To find some joy all the same. This is why I don't apologize for a second for obsessing over futbol: the World Cup is something that gives me immense pleasure, something to hang on to faced with a reality I can neither accept nor change.

We all need our little coping strategies here. I've found mine. I strongly advice you find yours.

Trust me, I'm not happy that it's come to this. But it has.

So, all together now, y sin complejos: GO BRAZIL! God I hope Parreira sees the light and leaves Adriano on the bench...

Vcrisis on hiatus

Katy says: Catching up on the blog posts I may have missed due to an increased workload, I was surprised to see that Vcrisis, Alek Boyd's hard-hitting website, has gone on a temporary hiatus. Alek has never struck me as someone who minces his words, yet his parting editorial, while clearly heartfelt, is strangely vague.

Love him or hate him, Alek always had an opinion, and his website occupied an important role in the opposition blogosphere. Let's hope that whatever funk prompted Alek to shut down is only temporary. Even though I often didn't agree with his views or his language, his no-nonsense, investigative blog was a must-read for me. He will be sorely missed.

The colors of the new power - Part 2

The second instalment of my translation of Juan Carlos Zapata's dynamite piece in this week's Descifrado en la Calle:

What is happening with Chavez? He faces down traditional capitalists, he faces down multinational capitalists, and he won't allow new capitalists to emerge freely. The newcomers are scared. They haven't quite emerged yet. There are some new names, but the old names are still bigger players.

Chavez is an autocrat, and the state he's trying to build is not a democratic state. He fears capitalist values, but his collaborators don't. Quite a problem. Quite a problem for Tobías Nóbrega. For Wilmer Ruperti. For Omar Sarría. For Ricardo Fernández. For Pedro Torres Ciliberto. For Carlos Batisttini. For Rafael Satría. For Arturo Sarmiento.

On April 11th, a confluence of business, the church and the armed forces tossed Chavez out of power. And if Chavez returned it;s because the elites that failed in the final years of representative democracy showed their political clumsiness once again. They showed their lack of leadership, of a vision for the country, to the point that they were unable to put together a minimal plan to ensure governability. They betrayed one another, showing themselves incapable of dealing with the imponderables of power. With that mise-en-scene, they confirmed one final time why the old model was exhausted by 1998 and why Chavez won.

However, today, the problem for Chavez is worse than on April 11th. Because:
1-He doesn't have the Church's backing
2-He's still fighting with the business class
3-More than half the country doesn't accept him
4-Emerging capitalists don't trust him for the long haul
5-The most important government leaders are starting to see him as a necessary evil, but still an evil
6-The armed forces will tilt wherever events are leading.

Why do I say the situation is worse? Because Chavez has alienated small and mid-sized businessmen, small and mid-sized agricultural producers, the traditional land-owners, the people who've traditionally struck deals with the government, old and new contractors who have no long-term guarantees that they will be recognized, and old and new capitalists who once helped him make it through the oil strike and the distribution strike in 2002-03.

When the government takes a factory by assault, when the Armed Forces take-over lands, the government's financial allies, or those who simply do business with the government, reach into their pockets, look at their check books, and rule out bringing back any dollars they have abroad. Those businessmen know that cordial relations between business and the government have not been re-established. Everyone negotiates, but everyone understands that it can't be an open and transparent interchange, because they know that within the Chavista government three currents co-exist:

1-Those who want nothing to do with business, not even as a temporary ally. This current knows they are fair-weather friends, but not partners for the future. This is the current that thinks, like Chávez, that capitalism is a virus and the market a disease. It's the most cohesive current, in terms of its plans for power.

2-The capitalist current. The one that understands the necessary alliance between various social forces, including business, as a way to buoy up the economy and guarantee social and economic progress. This force is not as powerful as the first, though it has more people in it.

3-The parasite current. The one that tilts whichever way the wind is blowing, but because of its inefficiency paralizes the state, and in so doing, works in favor of the first current, which for convenience tends to protect it and keep it as an ally.

It's not a comfortable situation for Chávez's power. It's not easy or simple. Nonetheless, he is favored by the dispersion of the capitalists, who have no unity of purpose. And yet, this could happen sooner rather than later, given how aggressive Chávez's for now inhibited plans seem to be.

What will Rafael Sarría do when someone decides to investigate his companies? How will Carlos Kaufman react when they ask him to disclose Venoco's real partners? What will Wilmer Ruperti do when they try to rope him into a congressional hearing again? What will Ricardo Fernández do when Mercal stops dealing with him? What will the Khalil brothers do if they tell them that Eveba's production is only for social purposes? What will Parmigiani and governor Rodriguez do in Vargas? What will all the cooperatives do when they are forced to give away their production because they have received Chavez's money? What will the Chávez brothers do in Barinas? Will they just take it if someone tries to give away what they've accumulated? What will Mercal's private sector intermediaries do when the government tells them they've become too powerful in the distribution chain and so they've become dangerous agents infected with the virus of capitalism? What will Orlando Castro, who has been reborn as a Chavez-era businessman, do? How will Alito Uzcátegui and the Empresarios por Venezuela do when they're told to quit being capitalists? And what will Alberto Cudemus, the pork sector guru, when opportunities start to close for him? What will Luis Felipe Acosta Carles do with Carlos Batisttini and Jorge Motta? What's going to happen with Diosdado Cabello, who says that to develop the country today we need the help of private enterprise and businessmen? What's going to happen with someone who says outright that his model businessman is Oswaldo Cisneros? What will happen to his friend, Omar Camero? What might happen with him and Sarría, who at the right time saved Banesco and Juan Carlos Escotet from Chávez's wrath? And what will happen to José Vielma Mora, who says he is no communist, is a friend of Lorenzo Mendoza, and that Polar is a company that does the country good, while Chávez and the radicals set their sights on Polar? And what about Wilmar Castro Soteldo, the minister who understands the importance of private investment? And what will Acosta Carles's destiny be, given his close link with Carabobo and Caracas businessmen? And what's going to happen with all those who, from the government, help their friends, and their friends' friends, to do business with the government? And what will happen with the friends Luis Velásquez Alvaray left behind? And what's going to happen with the military officers who think only about hoarding money and stashing it away in hard currency, land, and real estate? And what ever happened to José Vicente Rangel, whose family loves the high life? What ever happened with José Vicente Rangel, Pedro Torres Ciliberto's personal friend? And what about Ismael García y the business people clustered around his party, Podemos? And when did we last hear of Alí Rodríguez, who's left the whole Utopian Socialist stage well behind him? And what about the business buddies of Monagas governor José Gregorio Briceño? And how will governor Eduardo Manuitt react, being a businessman and independent farmer by nature? And what will happen with Juan Barreto and his coterie of capitalist friends like Alex del Nogal, Ruperti, Humberto Petricca? And what will happen with former Finance Minister Jesús Bermúdez's many, many friends? And what is going to happen with the crony bankers protected by Finance Minister Nelson Merentes? And what's going to happen when Tobías Nóbregas's network of protected friends is made public? Does Alejandro Dopazo sleep easy at night in New York? And what ever happened to the former Agriculture Minister Albarrán? And what about the Cadivi intermediaries? And what about Nicolás Maduro's friends, and Pedro Carreño's, and Francisco Ameliach's? And how about those involved with Jesse Chacón, the ones incriminated by the evidence Velásquez Alvaray has?

Zapata is a serious researcher, with un-frikkin'-believable contacts in the government. He's putting a lot of names out there - now if someone would just investigate them!