Friday, January 29, 2010

"Terrorist" Twitter Threatens Hugo Chavez's Stranglehold on Media

By Joseph Abrams

Venezuelan President Hugo Chavez is tightening his grip on the country's media. The greatest threat to Hugo Chavez's future just might be the World Wide Web.

Fierce and growing protests over media freedom have left at least two students dead in Venezuela, and graphic images depicting violent tactics employed by the police there have started to flood the Internet.

Police armed with tear gas and rubber bullets have left students bloodied and battered in Caracas and other cities during a week of protests over President Hugo Chavez's tightening gag on the opposition press.

On Sunday, Chavez ordered five cable stations shut down for refusing to broadcast his frequent speeches, setting off nationwide demonstrations in a country already wracked by water shortages, electricity rationing, alarming crime rates and the plummeting value of its currency, the Bolivar.

Student protesters have organized their efforts by planning their demonstrations on Twitter, which is serving as both a public message-board for activists and a storing house for images of the worst of the violence.

Follow news of the protests on Twitter.
#Venezuela #Estudiantes #FreeVenezuela

Elsewhere online, more than 80,000 people have joined a Facebook group, "Chavez estas PONCHAO!" taunting the increasingly unpopular president with a slang term meaning "Chavez, you struck out."

Chavez has fought back by declaring that "using Twitter, the Internet (and) text messaging" to criticize or oppose his increasingly authoritarian regime "is terrorism," a comment that recalls the looming threats of his allies in Iran, whose bloody crackdown on physical and electronic dissent may be blazing a trail for the Latin strongman.

Venezuelan journalist Nelson Bocaranda told El Nuevo Herald that the government has launched an army of Twitter users to bring down online networks and try to infiltrate student groups.

"They are scared by Twitter,'' he told the paper, noting that Chavez fears that the social networking system will allow students to follow the model of Iran and spread their protests by coordinating them online.

As the opposition seethes, Chavez has threatened a "radical" response to student activity, promising to "deepen the revolution" and "impose authority" wherever flashpoints occur.

"There are some attempting to set fire to the country," Chavez said in a televised address on Thursday. "What are they seeking? Death."

University students began their protests on Sunday after government pressure led cable TV services to drop Radio Caracas Television (RCTV), which has long been critical of Chavez's socialist policies.

"We are not going to allow continued shutdowns of media outlets that tell the truth, and we are not going to allow ineptitude and inefficiency to continue," said Nizar El Sakih, a student leader.

Chavez's attempt to silence RCTV set off similar protests in 2007, when it was barred from network broadcasts and put on cable. But that has not deterred viewers, said Michael Shifter, a Latin America analyst at the Washington-based Inter-American Dialogue.

"If he kicks (RCTV) off the regular station and puts them on cable (Venezuelans) are going to watch cable.... If he kicks them off cable they'll find another medium," he said, adding that Chavez has underestimated the thirst for information in his country.

Internet analysts say Twitter, which blossomed before the protests but has exploded since they began, could change the face of politics in Venezuela, where hotly contested elections are approaching in September.

Using Twitter as an example, tech consultant Doug Hanchard wrote on Jan. 12: "The Internet might be what changes ... the political landscape in Venezuela.

"Make no mistake," wrote Hanchard, an adviser who covers the intersection of information technology and government, " Latin American cyberspace will be a busy place this year.

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Twitter photo venezuelan protest

Wednesday, January 27, 2010

Hugo Chavez's presidential Strikeout

Hugo Chavez's presidential strikeout

Wednesday, January 27, 2010

VENEZUELAN STRONGMAN Hugo Chávez is having a bad month. He's been forced to devalue the currency and impose nationwide power cuts, steps that will worsen a serious recession and Latin America's highest inflation. The U.S.-led humanitarian intervention in Haiti has undercut his propaganda about an evil American "empire." As his baseball-crazy country watches its annual championship series, a new slogan has gone viral: "Chávez -- You Struck Out."

So it should surprise no one that Mr. Chávez has taken new steps to tighten his authoritarian grip. On Sunday, without so much as a hint of due process, his government ordered cable systems to drop six television channels -- including RCTV, the country's oldest and long its most popular station. The alleged offense was failing to broadcast Mr. Chávez's live speeches -- of which there have been more than 140 in the past year alone, lasting up to seven hours each.

This is not the first attack on RCTV, which produces Venezuela's most popular entertainment programming as well as news programs with an opposition bent. In 2007, Mr. Chávez ordered the channel off the public airwaves, also without the due process nominally required by law. That action prompted the birth of a student movement that under the slogans of free speech and democracy helped defeat the caudillo's attempt to rewrite the constitution, and propelled opposition candidates to victory in Caracas and other major cities and states last year.

The students have returned to the streets of Caracas and at least four other cities this week, with violent results -- two were killed and dozens injured in the town of Merida in clashes with security forces and pro-regime thugs. On Tuesday, Mr. Chávez's vice president and defense minister resigned, along with the environment minister. International criticism is raining down on his government, most of it considerably stronger than the milquetoast reaction of the State Department, which observed that "any time the government shuts down an independent network, that is an area of concern."

Mr. Chávez may calculate that all the turmoil is worth it. Later this year, an election for the National Assembly is due, and what is now a rubber-stamp body could fall into the hands of the opposition if the vote is free and fair. The currency devaluation will, at least, allow Mr. Chávez to spend far more in the domestic market in the coming months; the attack on RCTV will eliminate a major opposition platform. The student protests may provide a pretext to arrest key organizers, or even to declare an emergency and put off the elections.

If Mr. Chávez were a right-wing leader or an ally of the United States, Latin American governments and many Democrats in Congress would be mobilizing to stop his latest abuse of power, and to encourage peaceful and democratic opposition. But he is not, and they are mostly silent. The Obama administration, too, has done next to nothing to defend democracy or encourage the opposition in Venezuela. Now -- when Chávez's regime threatens to disintegrate into chaos and violence -- would be a good time to start.

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PMBComments | US Senate Committee Staff Weighs in on Insulza's Mess at the OAS

I think that Insulza has done nothing on the favor of Venezuelans. The situation in Venezuela have gone worse. I want the new Chilean presiden: Mr. Pinera kick him out of the OAS, he also has a strikeout.
vdebate reporter
PMBComments Attached you will find the US Senate report (drafted by Republican Staff of the very important Committee on Foreign Relations) titled "Multilateralism in the Americas: Let's Start by Fixing the OAS" that is the subject of the following Miami Herald and La Nación (Argentina) stories (read below).


Not that many people in the world, or even in our hemisphere, care for the OAS, an organization that has become disjointed and inconsistent under the leadership of its seemingly cowered Secretary General El Panzer (1), Jose Miguel Insulza. Nevertheless the study is brief enough to be worth a read by those of us who instinctively believe in the power, or the ultimate need, of multilateral mechanisms.

The conclusions of the report are reasonable and should be implemented ASAP. In addition to the need to focus SERIOUSLY on democracy and human rights, it calls for improved financial controls, and it ends chastising Insulza for his selective actions on behalf of democracy in the region it (highlights - as I have done on previous PMBComments - his repeated blunders in Honduras, his cowardly silence on Nicaragua and Venezuela, and his obsession with playing domestic politics in his native Chile). The report ends with a call to the member states to get their collective act in shape and worry about the kind of leadership that they elect on March 24th. While not calling outright for Mr. Insulza to abandon his hopes for a second term it states that his first term was a real disappointment.

Will this report hurt Insulza as the Miami Herald implies? Who knows? Countries - actually governments - like Brazil, that are die hard supporters of both Hugo Chávez and a weak OAS might actually redouble their efforts to give El Panzer 5 more years to graze in DC. Chileans - outgoing and incoming - might rally around him even though his misdeeds have lessened the country's well deserved influence and moral standing in the region. An then we have Venezuela which seems intent on a now farcical candidacy of its own making (let's remember Insulza was their darling in 2005. many still wonder why that was the case; What did Chávez and his acolytes know about Insulza that gave them comfort to have him at the helm of the OAS?). Putting these, and other considerations and calculations aside, it would benefit the OAS that Insulza does not push his luck and further traumatize the organization by pursuing a reelection he has most definitely not earned. PMB

(1) According to a top Chilean political analyst, Insulza loves the moniker El Panzer, which would seem to denote ruthless strength as in German tank, or armored military force, but in fact the this Congressional report highlights his sloppy management of the organization and his less than forceful resolve when it comes to facing the thugs that are really bullying democracy in the region. You can see the joy when he insults Honduras' Roberto Micheletti, and we have all witnessed his less than muscular response to Hugo Chávez 24/7 shenanigans. There is no panzer there.

Miami Herald
Congressional report could hurt OAS leader's reelection efforts


The head of the Organization of American States' campaign to win reelection took a hit Tuesday from a report complaining the OAS has failed to stop elected presidents from eroding democracy in the region.

``Given the challenges described in this report, no reelection should be rushed or rubber stamped,'' the U.S. congressional staff report said. ``Any reelection should involve a deliberative evaluation of the incumbent's first term in office.''

OAS Secretary General José Miguel Insulza, a Chilean socialist whose five-year-term ends in May, has said he wants to be relected, and so far is the only candidate. The 34-nation OAS is scheduled to vote Wednesday on holding the election in March.

But the report's withering criticism of the OAS and his performance may bolster opposition to Insulza's candidacy. Some Obama administration officials view him as too soft on leftists such as Venezuelan President Hugo Chávez.

Washington provides 37 percent of the OAS' total budget.

Commissioned by Sen. Richard Lugar of Indiana, the ranking Republican on the Senate Foreign Relations Committee, the report was written by Carl Meacham, his senior staffer on the committee.

The report noted the OAS acted decisively when a military coup briefly toppled Chávez in 2002 and when Honduran President Manuel Zelaya was ousted and expelled from the country last summer. The organization also is strong on election monitoring, cooperation on counter-drug and counter-terrorism and the protection of human rights.

But the hemispheric body did little as Chávez and Zelaya slowly undermined democracy in their respective countries, the report added, arguing that those maneuverings in essence sparked the efforts to topple the two presidents.

``In both cases the OAS reacted forcefully to the [presidents' ousters] . . . yet it had demonstrably failed to respond to the erosion of democratic institutions by elected presidents that preceded the coups,'' it noted.

The report also said Insulza's strong support for Zelaya following his ouster complicated efforts to resolve the crisis, and that the OAS has failed to act as Chávez cracks down the Venezuelan news media and as Nicaraguans complain of massive fraud in elections last year.

The OAS also faces a $9.6 million budget shortfall in 2011, the report added, and will have to either raise members' contributions or tighten its belt and cut back on activities, the report added.

``The OAS requires a renewed effort to make it effective and financially solvent in the coming decade,'' Lugar wrote in a letter submitting the report to the Senate Foreign Relations Committee.

Insulza, a former interior and foreign minister in Chile's socialist governments, was elected secretary general in 2005 after a string of 17-17 votes against the U.S.-backed candidate, Mexican Foreign Minister Luis Ernesto Derbez.

Washington helped break the stalemate by throwing its support behind Insulza after he publicly promised to make the OAS a strong protector of democracy in the region, specifically mentioning Venezuela and Cuba.

His reelection prospects were complicated earlier this month when Chileans elected center-right candidate Sebastian Piñera as their next president. Without his own country's endorsement, Insulza's chances for reelections would be diminished.

Piñera has not yet said whether he will support Insulza, who campaigned for the center-left candidate in the presidential race, Eduardo Frei.

La OEA, en la mira del Congreso de EE.UU.

Críticas a Insulza en un informe republicano
Martes 26 de enero de 2010 Publicado en edición impresa

WASHINGTON (De nuestra corresponsal).- La crisis de Honduras parece haber sido el disparador. Pero lo cierto es que, tras meses de marchas y contramarchas, la habilidad de la Organización de los Estados Americanos (OEA) para intervenir en crisis institucionales está en la mira en esta ciudad. Parte del descontento apunta contra su titular, el chileno José Miguel Insulza.

"La OEA tiene que resolver una cuestión crucial de liderazgo. El secretario Insulza no ha cumplido con las promesas que hizo al asumir y, por la salud de la institución, es conveniente que los países miembros consideren las condiciones que debe tener su titular y no den por garantizada ninguna reelección", dice un durísimo informe del Congreso norteamericano.

Titulado "Multilateralismo en América. Empecemos por arreglar la OEA", el documento , al que tuvo acceso LA NACION, fue elaborado por la oficina del senador republicano Richard Lugar, uno de los hombres más influyentes en la Comisión de Relaciones Exteriores del cuerpo.

De 27 páginas, el informe, sumamente crítico sobre la situación de la OEA y la gestión de su actual titular, será formalmente difundido en los próximos días.

Si bien destaca la trascendencia de la organización americana, el documento pone en duda su eficacia a la hora de trabajar en la promoción de la democracia en la región.

"Tiende a reaccionar cuando hay una situación clara de golpe de Estado, pero no cuando hay un deterioro gradual de la democracia por culpa de gobiernos que abusan de sus poderes constitucionales", subraya.

También señala la grave crisis financiera que atraviesa la organización, con dinero siempre insuficiente, lo que se traduce en incapacidad real para operar. Estados Unidos es el país que carga con la mayor parte del sostén económico de la entidad. Y a la luz de los refuerzos presupuestarios que deberían hacerse, el impacto del informe podría ser crucial.

La nota es especialmente crítica en lo que se refiere al manejo de la organización y de su secretario general en la reciente crisis de Honduras, donde, entre otros puntos, reprocha la falta de capacidad para lograr "un compromiso" entre las dos partes en juego. Y el hecho de que esa incapacidad motivara la intervención de otros actores internacionales.

En el tramo final, el texto carga especialmente contra Insulza, a quien cuestiona por haber estado "más atento al destino político de Chile", con una situación especialmente complicada en lo personal por haberse manifestado "públicamente" a favor del derrotado aspirante Eduardo Frei.

En el informe se acusa a Insulza de aplicar una "política selectiva de defensa de la democracia", en referencia a las situaciones en Venezuela y Honduras. "La asociación del secretario general con el abortado intento de retorno del presidente Manuel Zelaya, el 5 de julio, dañó seriamente la imagen de la OEA como un agente honesto", afirma.

"Desafortunadamente, la OEA está fallando en su misión. Hoy por hoy, si más gobiernos del hemisferio se vuelven poco democráticos, la OEA será aún menos capaz de reforzar, colectivamente, los procedimientos para reforzar la democracia", afirma el texto, que lleva como carta de presentación una nota firmada por el senador Lugar.

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Hugo Chavez calls using twitter "terrorism"

Hugo Chavez calls using Twitter “terrorism”
January 27, 2010

For a man intent into taking Venezuelan into the Dark Ages, it was a remarkable admission that modernity can be a threat to Hugo Chavez and his fake revolution. As students used the Internet and its tools like Twitter as wel as other modern tools like SMS messaging to mobilize and communicate strategy instantly, Hugo Chavez made his second attack on the Internet in a single week, calling the rumors and use of this technology “terrorism”:

A week ago Chavez had said that his supporters had to watch out for the Internet and tonight he came on TV wearing a suit, rather than his usual red garb and began reading messages (which were too long to be from Twitter), calling it terrorism (right at the end, minute 3:50 or so)

Can Chavez really expect that his trusted friend and confidant resigns as Vice-President and Minister of Defense for “personal reasons” (and his wife as Minister of the Environment) and there will be no rumors?

Chavez repeated again his wish, which the opposition has paid absolutely no attention to, that to get rid of him his opponents had to call for a recall referendum, a tool that would not only be distracting, but quite difficult to achieve as the recall votes would have to exceed the number of votes he got in his Presidential reelection in 2006. (Chavez has made such a call four times in the last three weeks and seems frustrated by the lack of even a response) This would be difficult given the resources of the Government as well as the difficulty of mobilizing the voters at this time. The opposition wants to concentrate in the legislative elections in September, letting Chavez ride the harvest of his own incompetence until 2012 when his term expires.

The truth is that it is the Government has the weapons in this fight and is the one that has sponsored the violence against the students, who in turn have managed to use peaceful means to stop the violence like today at Government’s TV station VTV. But it was the Tupamaros who caused most of the violence in Merida, aided by the local law enforcement agencies. And it was Chavez who was seen mingling with Lina Ron in his Saturday rally, a woman that has led armed attacks on marches and was imprisoned in January 2009 for leading a violent attack against Globovision. Chavez can’t attack the opposition on the protests as the students have led the protests and do not respond to the political leaders of the opposition parties.

In the end it is ironic how Chavez evokes the fundamentalism of his Iranians buddies, who have also referred to the Internet and Twitter as terrorists, which is mocked in this hilarious cartoon below:

But in the end, besides feeling the threat from a weapon Chavez does not control or understand totally, maybe his key problem is that he could never make adequate use of it. For a man accustomed to uninterrupted speeches of six to eight hours, it must be simply impossible to even consider the possibility of communicating anything in 140 characters.

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Tuesday, January 26, 2010

Cadafe's thermoelectric power plants running at fifth of capacity


Cadafe’s Thermoelectric power plants running at a fifth of capacity
January 26, 2010
Today’s El Nacional has this table compiled from the country’s Electric Corporation which shows the performance of the different thermoelectric power plants managed by CADAFE:

As you can see, of the total generation capacity of 4,507 MW installed, barely 941 MW or 20.9 % of the installed capacity, demonstrating that the problems we are having have little to do with the level of the Guri dam or the atmospheric phenomenon El Niño, but have more to do with the sheer incompetence and the lack of investment in maintenance of “Er Niño Chávez” and the people he has surrounded himself with, mostly mediocre military who can not tell the difference between a MW and a MHz.

But the sheer incompetence of the robolution can bee seen right there in that table, the Josefa Camejo plant in Falcón State was started and built by the Chávez administration, but it only produces a fraction of its potential because someone forgot to build the associated transmission lines. Thus, the plant produces too much for the nearby cities and is not part of the interconnected system, running at a lower capacity. Way to go Hugo!

The remarkable thing is that Chávez continues to blame the problem on the Guri dam and on the projects for hydroelectric power plants that he stopped in order to favor thermoelectric projects that either don’t exist and/or work as well as the table above shows.

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Sunday, January 24, 2010

Another day of abuse of power, censorship and resentment by Chavez

Government shuts down RCTV cable programming
January 24, 2010

In an act of revenge, censorship and just sheer personal vendetta, the Venezuelan Government shut down the cable signal of RCTV tonight, because the broadcasting company refused to carry Chavez’ “cadenas”, which force all TV stations to carry Chavez’ speeches whenever he so desires. (Today, he forced a few minutes of “cadena” while holding a rally for his party PSUV in Caracas, in a clear illegal act of abuse of power and Government resources)

Recall that RCTV had been shut down as a local broadcaster and its equipment confiscated in 2007, when Chavez “decided” he had to shut down the TV station locally. Its equimpent and property has yet to be returned to its rightful owners, while another Government media outlet uses it in its programming (Even if very few people watch it!)

A couple of months ago the Government issued a decree taylor made for RCTV International which managed to keep afloat via cable TV and satellite TV. According to this decree, if 70% or more of the programming was made in Venezuela, the cable system and satellite system would have to carry Chavez’ speeches.

As I arrived back at home tonight at midnight, I was surprised to hear a loud pot banging in my nighborhood as I entered my home, RCTV’s signal had been shutdown at midnight and Twitter was very active talking about the news (#freemediave).

Another day of abuse of power, censorship and resentment by Chavez and his cronies. Another day in which the rights of Venezuelans have been trampled upon.

And some still dare call this a democracy.

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Friday, January 22, 2010

Gandhi: Whenever I despair

In all the countries where the are little Human rights, we should think:

GANDHI: Whenever I despair, I remember that the way of truth and love has always won. There may be tyrants and murderers, and for a time, they may seem invincible, but in the end, they always fail. Think of it: always.


Justice fallen into the wrong hands

"In other words, the processes being administered by the Chinese leadership against its dissidents, by the Iranian regime against its protesters, or by Hugo Chavez in Venezuela against the opposition, should no longer be described as trials. "
The very grammar of justice has fallen into the wrong hands.

Human rights are under attack, and language is the weapon. The very grammar of justice has fallen into the wrong hands, instrumentalized in the elaborate and sensational theaters of due process. A trial without any rights of defense is still called a "trial," a conviction ordered down from an autocratic president rather than a judge is still called a "conviction," and there continues to exist an overwhelming and damaging perception that the law and courts work just fine—an assumption eagerly embraced by the financial community looking to toss heaps of capital into subprime judicial environments.

When Mikhail Khodorkovsky, a Russian political prisoner whose case I am involved in, was put on trial for the first time in 2004, the government applied all its media powers to project the language of justice: They held him in shackles, placed him in a cage on television, and put on a good show trial where a judge pretends to listen to the defense as though the verdict would not arrive via a call from the Kremlin. This is what the Russians call "telephone justice."

It looks like a trial; to detached observers it might even smell something like due process; but underneath all the familiar language, there is the rot of corruption, political fiat and arbitrariness. We have seen it with China's 11-year sentence handed down to the dissident Liu Xiaobo, which was met by stone silence in the White House. We can read the borrowed grammar in the mysterious death of Dr. Ramin Pourandarjani in Iran, who was arrested after testifying before parliament that he refused pressure to sign false death certificates of fatally tortured protesters. Even the Burmese junta has become a master of bureaucratic process, extending Aung San Suu Kyi's house arrest after a sham trial.

In another case I am involved with in Venezuela, President Hugo Chávez goes on national television to attack a recently released political prisoner, Eligio Cedeño, and then demand a 30-year sentence for the judge who ordered his conditional release, which was supported by international expert opinion. Chávez called both Mr. Cedeño and the judge "bandits," despite the fact that neither of these individuals had committed any crime nor ever been convicted of any offense. For these countries' leaders, it is much more important that the media adopt their narrative and language to portray their enemies as criminals than it is to administer actual justice or prove a real case.

When the vocabulary of criminal justice is hijacked, we rarely can get the media to present an unbiased account of events that considers the fact that the charges may be incoherent, or the evidence nonexistent, or that the procedural games of prosecutors might be completely outside the law. For these governments, the application of the charge is more of a goal than any conviction, because they can count upon their authority to erase the presumption of innocence in a trial. They know that by simply labeling dissidents or dissenters as criminals, the public will come to see them as such.

Once someone is charged, very few observers are interested in the possible motivations of those bringing the charges. All processes are deemed regular and included within the same grammar, whether or not the investigation has been independent or the prosecution politically motivated.

My self-help remedy is a very simple one. I propose that journalists reconsider their liberal use of the word "trial," unless it is used to describe a process of relative equality of arms between defense and prosecution, before a fair and independent tribunal as envisioned by a plethora of international conventions and treaties. In other words, the processes being administered by the Chinese leadership against its dissidents, by the Iranian regime against its protesters, or by Hugo Chavez in Venezuela against the opposition, should no longer be described as trials. I say this because the presumption of innocence is also enshrined in these same conventions. This concept alone is something that autocratic leaders, in particular, fail to comprehend and regularly abuse.

So why should we provide these leaders with the presumption of regularity by trusting that their institutions operate in an independent and legitimate manner? Why should we not claw back the vocabulary and grammar of human rights, so that we become less fixated on a given government's narrative of events and more focused on their motivation for bringing the charges described?

Stokley Carmichael, the famous 1960s civil-rights activist, once wrote, "We have to fight for the right to invent the terms which allow ourselves to define our relations to society, and we have to fight that these terms will be accepted. This is the first need of a free people, and the first right refused by every oppressor."

In human rights, language is everything, and it's time that we take it back.

Mr. Amsterdam is an international lawyer specializing in the politics of business and the rule of law in emerging markets.

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Chavez Watch II

Chavez is the worst president Venezuelans have had. He is destroying the fragil Venezuelan economy........ I am so glad that the new Chilean government won't follow Chavez thinking.
vdebate reporter
Chávez Watch II
BY Jaime Daremblum
January 21, 2010 12:00 AM

In case you were wondering what U.S. military forces are doing in Haiti, allow Hugo Chávez to explain: “I read that 3,000 soldiers are arriving, Marines armed as if they were going to war,” the Venezuelan leader said Sunday on his national TV show. “They are occupying Haiti undercover.”

It gets worse. Chávez has also accused the U.S. military of causing the Haitian earthquake by testing a weapon. Really. We’ve come to expect such risible comments from Chávez, but that doesn’t make them any less outrageous.

Given the deteriorating situation in Venezuela, the buffoonish autocrat should be more humble. His country has been rationing water, electricity, and health care services. Its government finances are a mess, its public health system is falling apart, its physical infrastructure is crumbling, its capital city (Caracas) is the most dangerous in Latin America, and its inflation rate is surging. (Morgan Stanley projects that Venezuelan inflation will hit 45 percent this year. That would be its highest level in 14 years.)

Chávez has always been more concerned with cultivating his ideological allies abroad than with tackling Venezuela’s domestic economic troubles (which own disastrous policies created). He is now planning to visit Nicaragua and give $130 million to his close friend Daniel Ortega, another radical leftist who is busy trying to turn his own country into a mini-Venezuela. The money will reportedly be spent on agribusiness. However, considering Chávez’s track record of announcing grand investments that never materialize, not to mention Venezuela’s shaky finances, Ortega may ultimately be disappointed.

Jaime Daremblum, who served as Costa Rica’s ambassador to the United States from 1998 to 2004, is director of the Center for Latin American Studies at the Hudson Institute.

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Tuesday, January 12, 2010

The Chavez Spiral

The Chavez Spiral
Roger Noriega, 01.11.10, 3:21 PM ET

Venezuelan dictator Hugo Chávez is losing altitude fast. Since his election in 2008 he's proved a deft manager of chaos--an oil strike, fierce political opposition, an army rebellion, food shortages, etc. He has been kept aloft by doling out oil revenues to satisfy the poor majority that forms his loyal base, to blunt the effects of economic mismanagement and to buy off the military and collaborating oligarchs, who reap the benefits of government sweetheart deals.

With petroleum prices down around $71 a barrel from a high of $147 the Venezuelan government is struggling to make up for the revenue shortfall to save programs that placate the poor by providing cheap food, fuel and other government giveaways. Making matters worse, the once mighty Venezuelan petroleum industry has been laid low by politicization, corruption and mismanagement; rather than producing 3.3 million barrels per day, industry analysts believe the production is closer to 2.3 million. Instead of maximizing profits by producing its quota, Venezuela's state-run oil fields are either underperforming or have collapsed altogether. Refining capacity also is in steep decline so Venezuela must import gasoline to meet internal needs--buying it at the market rate, selling it to domestic consumers at the much lower subsidized price and eating the difference.

Since late November, the Venezuelan state has had to intervene in about 10 banks, several of which were operated by Chavista cronies. These banks were favored by the regime to handle billions in Venezuelan government deposits. According to published accounts, these alleged crooked bankers were supposed to squirrel away these billions for Chávez, his family, government ministers, loyal military officers and other accomplices of his criminal regime. Instead, they stole and squandered the funds and came under the watchful eye of international regulators who have begun to freeze accounts in foreign banks. Chávez has moved in to scrape what is left of the cash and control the damage to the banking sector.

These related crises are mounting; the economy shrank 3% last year, inflation has risen to at least 25% today and the regime is running out of band-aids.

On Saturday, Chávez was forced to order a drastic devaluation in the national currency, which he hopes will relieve the government's budget woes. Under his plan, some basic necessities are supposed to remain available at a lower exchange rate, with other goods becoming twice as expensive. Critics say this dual system invites corruption and distorts the marketplace, while inflation is expected to rise another 3% to 5% and consumers will find it increasingly difficult to obtain imported goods.

Adding to the economic crisis is a drastic shortage of electricity. Last month Chávez ordered a rationing scheme after the state-run power company predicted a "national collapse" in April. He blames the crisis on a drought that has sapped the country's hydroelectric plant in the Guri Dam on the Caroní River. The problem is petroleum-fueled generators are failing too, with turbines lacking adequate fuel or shut down in disrepair. The electricity shortage is the result of gross mismanagement and underinvestment in the power sector to meet demand that has grown by 40% since 2002. Some experts say an $18 billion, multiyear modernization is required just to meet current needs.

The Venezuelan people also are enduring routine food shortages due to price controls that have discouraged domestic production and Chávez's repeated interruptions in trade with neighboring Colombia, upon which Venezuelans are increasingly dependent for consumer goods. With the blackouts disrupting domestic production and the currency devaluation, Venezuelans can expect increasing scarcity of the basic necessities of life.

As for life itself, Caracas has become by far the most dangerous city in South America; In September 2008 Foreign Policy magazine listed it among the "murder capitals of the world," noting that the homicide rate had grown by 67% since Chávez took power, even according to suspect official statistics. Chávez governs through cronyism and corruption to reward his friends and harass his opponents. His regime also conspires with drug traffickers who fuel criminal gangs that prey on innocent Venezuelans. This culture of lawlessness has gutted the police force and courts and undermined the quality of life of every citizen, rich or poor.

In the past, Chávez has been able to throw money at problems--to placate a restless public, suborn the military, turn out loyal mobs or overwhelm an opposition campaign. However, it is impossible to rebuild massive power generators, a professional police force, honest courts, crumbling roads and bridges from one day to the next. It also would take years to restore private food production and transportation capacity, even if the regime were to reverse its relentless hostility to the free market.

Although the Venezuelan people have found life increasingly unbearable, many of them have come to depend on the patronage of a strong state or remain suspicious of the traditional political leaders who have yet to present a viable alternative to Chávez.

While the regime scrambles to deal with the crises of its own making, this would be an opportune time for the democratic opposition to issue a pledge to restore Venezuela:

--The rule of law must return, beginning with an offensive against crime, the professionalization of the police and the courts and accountability of the state before the people.

--International giveaways to Chávez's client states must end, and funds should be returned to the Venezuelan people.

--Billions in stolen revenues must be recovered, which shall be used to rebuild the nation's crumbling infrastructure and to restore the oil industry.

--Collusion with drug traffickers, terrorist groups and criminal gangs that are waging war against Venezuelans and their neighbors must stop.

--Military and other security officials must be loyal to the nation rather than a destructive political project.

--Cubans, Iranians and other foreigners who are exploiting Venezuela must leave the country.

--No young Venezuelan should lose his or her life to wage war with Colombia, and peaceful ties will be cultivated with all democratic nations.

--A government of national unity, reconciliation and reconstruction must be built upon free and honest elections, beginning with election of a new National Assembly this year.

The only thing worse than a dictator is an incompetent one. Every day, more Venezuelans must recognize that that the current systemic crisis is unbearable, unsustainable and, if they say so, unnecessary. Chávez's engines are sputtering--the only question is whether Venezuelans are prepared to crash and burn with his regime.

Roger F. Noriega, a senior State Department official from 2001 to 2005, is a visiting fellow at the American Enterprise Institute and managing director of Vision Americas LLC, which represents foreign and domestic clients.

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