My purpose in
posting these articles here is to enable us to have
a better understanding of what's happening in Venezuela
today. While I've had no particular desire to politicize
this website, I believe that we also need to recognize
the fact that many of our fathers worked hard in the
oilfields and corporate oil company offices of Venezuela
- they worked hard not only to provide for their families,
but they also worked hard to help improve the Venezuelan
petroleum infrastructure for the Venezuelan people.
Much of that infrastructure, along with the legacy
of so many of our fathers, is now being systematically
destroyed. So I strongly believe that we have an obligation
and responsibility to educate ourselves and to keep
ourselves informed about the tragedy that's unfolding
in Venezuela today.
Some of these
articles are somewhat lengthy, but they're also extremely
sobering. READ THEM! Remember that KNOWLEDGE
IS POWER. Refer others who lived and worked in
Venezuela to this page, or to other pages that inform the
reader about the tragedy that's unfolding there today. Inform
and educate yourself first, then inform and educate others.
The people of Venezuela deserve far better than what they're
now getting under the oppressive Chávez regime. If
they choose to walk away from Venezuela as so many Cubans
had to do when they were forced to leave Cuba under Castro,
then Chávez will not only be even more of a disaster
for Venezuela than he already has been, but he will also prove
to be a cancer for all democratic countries throughout the
region and the world for many years to come.
It's my sincerest
hope that Venezuela and her people will be able to rise to
the historic challenge that's now facing them and that they
may triumphantly overcome this profound tragedy.
As new items become
available, I'll post them here.
Saturday, May 24, 2008
This is the official Interpol
forensic report containing the statement(s) that the
files uncovered in the Colombian raid of the FARC base
in Ecuador, which detailed Chávez's flagrant
support of the Colombian rebel FARC terrorists, were
not tampered with by the Colombian government prior
to information release:
Monday, June 25, 2007
In an interview given on
Dec 5, 1998, one day before the elections that brought
him to power, Hugo Chávez boldly & unashamedly
lied three (3) times to tele-journalist Jorge Ramos
of UNIVISION, to millions of Venezuelans, and
to the world.
In this interview, in Spanish,
shown here in edited format from the archives of UNIVISION,
he makes three promises that he later broke in a big
way. The three promises made by Hugo Chávez in
this interview were:
That he would turn over power within 5 years
(& perhaps even earlier!);
• That he would not nationalize any businesses;
• That he would not take any TV stations
out of private hands.
Chávez also admits,
and states, in this interview, that “Yes,
Cuba is a dictatorship.”
Hugo Chávez has since
refused all requests to be re-interviewed by Jorge Ramos
and, in fact, won't answer nor even acknowledge Ramos'
This interview has to be seen
and heard to be believed. Click on the image below and
be amazed at how smoothly Chávez makes three
bald-faced lies with such ease.
Then, after seeing this interview,
I'd like to ask you the following question: “Would
you buy a used car from Hugo Chávez?”
Sunday, June 3, 2007
Received From Maracaibo on 02 JUN 2007
June 2, 2007
“I am sure you have been following the events
taking place in Venezuela these past weeks in regard
to the shutting down of Radio Caracas and the threats
against the last remaining anti-Chavez TV station
Globalvision. The people are very angry about the
loss of free speech which is taking place here...
“I just wanted to give you an update from inside
Maracaibo. We are returning to the US in 3 weeks and
can't wait to get out of this ticking time bomb. Tension
between the Opposition and the Chavistas is rising
rapidly. The people have become more hateful and aggressive.
They feel sickened and hopeless about the state of
their country and abandoned by the international community.
The Chavistas have become more aggressive and Chavez
is telling them not to let anyone stop his socialist
agenda. They have taken to the streets to fight the
protesters they get braver and stronger every day.
“Many people are trying to sell their investment
property such as vacation homes or apartments because
Chavez announced that if you have more than one house,"we
will take one and give it to a poor family without
a home". Rental property for the foreign workers
is very hard to find since everyone is selling to
avoid losing property to the government. The people
are buying cars to invest in instead since they appreciate
in value here and no mention of confiscating cars
has been made. One Chevrolet dealer in Maracaibo told
my friend he is selling 3000 vehicles a month and
still has waiting lists. There are so many cars on
the road now the streets are congested with angry,
aggressive drivers and traffic is very chaotic and
dangerous. I have been involved in 4 wrecks in the
past 2 years here, thankfully not major ones. In the
US I was only involved in 2 wrecks in 30 years.
“There are price controls on about 35% of the
food supply so those items have almost totally disappeared
from the shelves and are now being sold on the black
market for 2 or 3 times the price, usually by government
officials who have confiscated the goods on the grounds
they are damaged. Beef, Chicken, eggs, sugar, milk,
cooking oil, etc are very hard to find and go fast
when they do appear. Chavez has created a crisis with
the food supply and has warned that he will take over
the grocery stores because of the crisis. He is also
threatening to take over the banks. He has control
of the phone system now since he took over CANTv and
in Caracas he took the electric company. He has taken
over several private hospitals and clinics and run
the doctors out. He is advocating that any workers
who think the company they work for is not being run
correctly, demand to see the financial records of
the company and if they see fit, physically take over
the company and throw out the owners/managers. He
has created a class of people consisting of the poor
who think the rest of the country has been stealing
from them, and thugs who just want to steal instead
of work for a living, that are terrorizing the country.
Those are his followers. Hundreds of them are buying
property in Miami with the money Chavez gives them!
Look out Miami.
“Democracy is dying a painful death here and
it is sad to witness. I predict that within 18 months
the whole country will either be in riots and street
violence or the people will have given up and Communism
will rule. The new name of Venezuela is The Socialist
Republic of Venezuela. How long until it is The Communist
Republic of Venezuela?
“I know some South Americans, Brazilians and
Argentinians that work for Petroleum Service companies
and are expats here. They have children born in Venezuela
and are having problems getting visas to get out of
the country because all children born in Venezuela
now belong to the state. The state is supposedly listed
as the father on the birth certificates now and all
parents must get permission from the state to take
their children out of the country.
“Chevron and Shell have relocated the majority
of their employees out of the Country and are keeping
the least amount of people they can to oversee operations
here. The expat community in Maracaibo is very small.
There are only a few expat children at EBV now, maybe
8-10 in all 13 grades. This is a good time to be getting
“Best Regards to you and your family,”
Tuesday, August 1, 2006
& Sophisticated He's Not!
(From the Russian press, no less!)
Chavez arms himself in Russia
At this point, the meeting
could go one of two ways. One of those variants was
seen in Minsk, where Chavez became Lukashenko's brother
(in-arms and not only). Putin was taking the other
way. He freed himself from the Venezuelan president's
embrace and mumbled, “Great.”
When they were seated, Putin
addressed Chavez exclusively as “Mr. President”
in formal Russian that would not give anyone the idea
that these were two buddies meeting. Chavez appeared
to get the message.
“I'm waiting to hear
about your trip to our regions,” Putin told
him, which cheered him up again a little.
Chavez looked as though he
understood that he had to behave somewhat differently
now. But he did not look as though he knew exactly
how. “Thank you, Mr. President,” he replied
and then couldn't stop himself. “My dear friend!”
All Putin had to do now was
smile and the talks could have gone the Belarusian
way. It was not too late. Emotional embraces (and
not at the start of the talks, but in the course of
them), comradely kisses on the cheek, timid confessions
of love – it could all be had still, if Putin
would just smile. He didn't.
“It is very pleasant
to be in Russia for my fourth time,” Chavez
continued, “as I said at the State Library of
Russia… Oh, the director asked me to say hi
to you.” He gave the Russian president a questioning
glance, as if still hoping for some mutuality. Putin
gave a barely perceptible nod.
“As I said at the library,
every trip to Russia is different. As Heraclitus said,
you cannot step into the same river twice.”
If Chavez wanted people to think that the read the
pre-Socratics in the original, I'm afraid he failed.
“We felt the soul of
the Russian people even more when we visited Volgograd,”
he continued. “By the way, the governor of Volgograd
asked me to tell you hi.” Another fleeting glance
at the unmoved Russian president.
“Before that, we were
in Belarus,” Chavez continued bravely. “Alexander
Lukashenko asked me to greet you on his behalf!”
He pronounced the Belarusian president's name as Lukachenko,
which sounded sort of revolutionary.
I thought that he could not
only smile, but giggle in Chavez's face at this point,
having received a hi from Chavez's every stop, but
Putin listened attentively.
“We got acquainted and
became good friends.” That was a hint that Putin
could do the same thing with a minimum of effort.
“And yesterday we were in Udmurtia, in Izhevsk,
at the plant where they make Kalashnikovs.”
I thought the president of
Udmurtia and Gen. Kalashnikov would say hi too, but
I was wrong.
“I saw your picture with
Gen. Kalashnikov,” Chavez forged on. “By
the way, the president of Udmurtia says hi!”
Not entirely wrong. “He is getting ready to
hold the rural summer games and thinks that maybe
you could come and play soccer there.”
Putin took mercy. “I'll
think about it,” he said. “It's a good
“I was at a plant where
they make oil refining equipment,” the Venezuelan
president continued. “They told me how all of
that was restored after the terrible situation at
the beginning of the 1990s.” The Russian president
finally gave a sincere, expressive nod. “And
we found out about the huge potential that we did
not know about before. I became acquainted with new
technology for producing drilling equipment and pumping
Putin looked as though he wanted
to interrupt, but he had, after all, asked the Venezuelan
president to tell about his trip. Now he had to listen.
“Then we had time to
visit a dairy and we tried the cheese and yogurt there.”
Chavez paused for a moment to let the Russian president
imagine the taste treat, then returned to his narrative.
“After visiting a military range too, I was
filled with determination to develop relations with
Russia. This is from my heart and soul.” He
gestured to show this painful process.
He recalled Simon Bolivar,
who often said, according to Chavez, that he was not
tired and his heart and hands were not tired and would
“And we must not tire
either,” Chavez pronounced emphatically. It
occurred to me that he was far from done with his
speech. “We have agreed on how our joint projects
will proceed. LUKOIL is already operating in Venezuela.
There was a meeting in Venezuela and, thanks to the
efforts of the governor of that city, we will begin
drilling on the Orinoco River with Russian specialists
before the end of the year.”
The word “Orinoco”
sounded beautiful on Chavez's lips. I wanted to visit
it immediately. But when I thought about Russian specialists
drilling in it, the desire passed.
“We are now in the process
of determining oil reserves around that river,”
Chavez said. “We thought that there was about
270 million barrels. But after the first drillings,
we found the oil at a very shallow depth and discovered
with amazement that there is three times more oil
“And Gazprom won a tender
to produce oil in the Gulf of Venezuela,” Putin
“Yes, thank you for reminding
me!” Chavez exclaimed happily. “That is
another economic hand that Russia has held out to
us! And every time we open a well, we find much more
oil than we expected.” Maybe they have too low
expectations. “We hope that Russia will help
us with the construction of a large natural gas line
through Brazil. And I wanted to say that I fought
for the integration of Latin America for seven years
and now we are members of Mercosur [a Latin American
economic union]. Five years ago, not one country wanted
“How did you like the
aviation technology show [in Izhevsk]?” Putin
broke in suddenly, obviously unable to hear another
word about Mercosur.
“Oh! There was a Sukhoi
there!” Chavez was all enthusiasm. “It
was excellent! I almost gave in to the temptation
to get into a plane myself.” But he restrained
himself, unlike Putin once. “I am grateful to
you for freeing us from the blockade that we were
under. For the came when our F-16 planes couldn't
fly because they had no spare parts. And they took
all the radars out of them. We were practically disarmed!
Chavez obviously wanted to
tell about the contracts that had been signed (for
38 Russian military helicopters for $484 million on
July 15 and 24 Su-30MKs planes on July 17), but Putin
gave him a really expressive look.
“And now we have Kalashnikovs!”
Chavez concluded, enthusiasm withered but face saved,
and it came out that Russian machineguns have successfully
substituted for American warplanes, which might not
be far from the truth.
At the beginnings of the negotiations
in the enlarged format, stretching across the table
to hug Russian Defense Minister Sergey Ivanov, Chavez
told the Russian president that “We are happy
that we are treading a single path of development
with Russia under your firm, legitimate leadership!
We are enthusiastically following the national projects
that you are realizing.” And without even hi
from Dmitry Medvedev. “Mercosur is more than
After those negotiations, the
two presidents went out to meet with journalists.
Chavez was still ebullient. He said that the oil reserves
in his country were much larger than those of Saudi
Arabia. The natural gas reserves in Venezuela were
completely incomparable. He talked again about the
construction of a gas pipeline from Venezuela through
Brazil to Argentina.
“From Venezuela to Rio
de Plato is 8000 kilometers,” he declared proudly.
“It will cost about $20 billion! Six working
groups have already been set up! Uruguay, Paraguay
and Bolivia have joined the project!”
He did not say anything about
reaching an agreement on Stroitransgaz building a
factory in Venezuela to make pipes for the pipeline.
A high-placed source in the Russian presidential administration
told Kommersant about that yesterday evening. So it
seems that Chavez has a good understanding after all
of what shouldn't be mentioned and what can be called
a done deal.
Venezuela concluded a contract
on July 3 of this year in Caracas for the delivery
of 100,000 Kalashnikov machineguns with ammunition
for $52 million (in addition to the 2005 contract
for the delivery of 100,000 AKM machineguns). On July
12, two contracts were signed with a total value of
$474.6 million for the construction in Venezuela of
plants to produce licensed AK-103 machineguns and
Since all of that was done
behind closed doors, the Venezuelan president said
in Izhevsk that everything would happen the next day
in Moscow, as if to make the contracts official. A
high Kremlin source said that new shipments of weapons
were discussed at yesterday's talks. “Work in
that direction is continuing,” the source said.
It can be suggested with great
confidence that they are now talking about medium-range
ballistic missiles. In addition, Venezuela dreams
of conquering space. Chavez considers it his duty
to launch the first Venezuelan into space (as if he
wouldn't go himself). Russian specialists understandably
want it to be a commercial launch but, unfortunately,
it will be a political decision.
“Our people were thrilled
when two Sukhoi aircraft rose into the free skies
of Venezuela!” Chavez continued solemnly, “and
our soldiers will be imbued with particular moral
steadfastness when they are handed new Kalashnikov
machineguns to replace the old rifles from the 1940s.
Russia's support of Venezuela's candidacy as a non-permanent
member of the UN Security Council is also important
for us. Miranda and Bolivar dreamed of a world with
balance, a world with peace!” He seemed to be
saying that you have to prepare for war to achieve
The official delegation gave
him a long round of applause. That is a rarity in
the Malachite Hall when foreign heads of state give
Putin's statement consisted
of one sentence. “Our military-technical cooperation,”
he said, “is not directed against third countries,
but directed toward raising our economy and the living
standards of our population.”
That statement was probably
found deficient by those it was addressed to.
Article in English: http://www.kommersant.com/page.asp?idr=527&id=693363
Article in Russian: http://www.kommersant.ru/doc.html?docId=693363
April 17, 2006
from Caracas: The Bolivarian
Funds Buyout Of Caracas Daily Journal English Newspaper
To Spread Pro-Government, Anti-American Propaganda
By Tirso Suarez
Daily Journal, Venezuela’s
English-language daily newspaper, was losing $30,000
a month until it was purchased for $1 million on
March 3 by Julio Augusto Lopez Enriquez, who also
owns El Diario de Caracas. On March 9 the new newspaper
published a front-page photograph of Bolivarian women
protesters outside the U.S. Embassy in Caracas holding
up a banner that accused Secretary of State Condoleezza
Rice of betraying her “race and kind.” This
was, of course, typical of the vulgarity that characterizes
the Bolivarian revolution, in particular many chavista
women who stupidly endorse the Chávez regime’s
misogynist view of women.
The funds for the deal came from General Julio Garcia
Carneiro, the former Defense Minister who now has
a cabinet portfolio to eradicate extreme poverty
in Venezuela. The deal was approved in Miraflores
presidential palace, where Lopez Enriquez maintains
Lopez Enriquez is just a straw
man. Garcia Carneiro is someone else’s straw man too. Sources report
that Lopez Enriquez is drawing a salary of Bs. 10
million a month from the Daily Journal. If he draws
that much from El Diario de Caracas he’s earning
over $100,000 a year combined from both newspapers
at the official exchange rate for the Bolivar, and
just slightly under $100,000 at the current free
The old independent Daily
Journal had been languishing for years. However,
the new Bolivarian Daily Journal is flush with
revolutionary cash and was equipped immediately
with new computers. "News bureaus” have
already been opened in Bogota and Lima. Over the
next several weeks, the Bolivarian Daily Journal
also plans to open news bureaus in La Paz, Quito,
Panama City and Mexico City. It’s possible
that additional news bureaus will be opened in other
Latin American and Caribbean countries (say, Havana?),
and even in Washington, D.C.
The old independent Daily
Journal had no circulation and no advertising,
because the English-speaking expatriate community
in Venezuela has shrunk drastically in the past
decade; because several hundred thousand English-speaking
Venezuelans have left the country; and because
globalization, the Internet and the computer rendered
the Daily Journal obsolete in terms of its appeal
as a real-time news source. The new Bolivarian
Daily Journal doesn’t care about circulation
because independent journalism with integrity has
been dumped and the new editorial focus is to serve
as a hemispheric propaganda tool and English-language
cheerleading section for the Chávez regime.
We know of two new “reporters” hired
recently. Martin and Niko, we’ll call them
by their first names. They can barely speak Spanish,
and neither of them can write a decent paragraph.
However, they think Hugo Chávez is a wonderful human
being and the greatest thing in the world since Gameboy
because, get this, “Chávez doesn’t like
Bush and he helps the poor.”
Martin and Niko “por
ahora” are the new stars of the Daily Journal's
newsroom because they worship Chávez. Altruism
should never be dismissed in this world of ours,
but noble ideals do not excuse ignorance and denial
of reality. As Forrest Gump would say, "Stupid is as stupid does." The
Bogota bureau chief, recently hired, is a hardcore
leftist whose previous job was with El Tiempo in
The impetus for all this is coming directly from
Miraflores, meaning from Chávez or someone very close
to the top, like Vice President Jose Vicente Rangel.
The objective, clearly, is to project an English-language
hardcore pro-Chávez, anti-U.S. message throughout
Latin America, although the initial core focus is
the Andean region, Panama and Mexico.
With ventures like Telesur and the Daily Journal,
the Chávez regime (with a lot of advice from Havana
and many U.S. and European leftists) is weaving a
very sophisticated propaganda network with a hemispheric
reach and an agenda to promote radical Marxist revolution,
virulent anti-Americanism and hate-driven class divisions.
The U.S. government, meanwhile,
appears to have its head up its ass. Pardon the
crudity, but from where others are sitting throughout
the region there doesn’t appear to be any other rational explanation
for Washington’s fumbling foreign policy towards
Venezuela and the rest of the region.
Monday, March 20, 2006
December 22, 2005, before the bridge was closed, the
Venezuelan School of Engineering said that the viaduct
was in danger of buckling. The Government denied this
was the case, and Chávez said it was all the
media blowing it out of proportion. But shortly thereafter,
the government was forced to close the bridge down for
day before the collapse, Radio Unión
quoted the head of the engineering corps at the Infrastructure
Ministry, Guillermo Rangel, as declaring that the correct
work had been carried out and that the structure was
not going to fall down.
by the time of the collapse the next day, the Vice-Minister
of Infrastructure was saying this was “all expected”,
while Chávez was preoccupied with singing along
with cantante Reina Lucero on “Aló
Saturday, March 4, 2006
Sunday, February 19, 2006
Chávez: MiGs, SAMs and 900,000 more assault rifles
Hugo Chávez spent over $2.17 billion in 2005 to acquire
Russian assault rifles and helicopters, Spanish transport aircraft
and missile-capable corvettes, and Brazilian turboprop light
attack aircraft. In January 2006, however, the U.S. State Department
denied Spain and Brazil permission to sell Venezuela military
transport and light attack aircraft containing U.S.-owned engine
and avionics technology. The U.S. government’s action
killed deals worth over $600 million to Spanish firm CASA-EADS
and Brazil’s Embraer. It also created a major hindrance,
albeit not an insurmountable obstacle, for the president’s
military expansion plans.
The Bolivarian revolution’s
military weapons buying spree will continue in 2006. On Feb.
4, President Chávez announced plans to acquire Russian
MiGs, air defense missile systems (SAMs), and enough assault
rifles to arm an all-volunteer national military reserve that
already has over 1 million members. Chávez also plans
this year to place orders for more attack and multi-role helicopters,
and up to three diesel-electric submarines either from Russia,
Spain, or Germany. Chávez is also shopping for two heavy
coast guard and coastal patrol ships (in addition to the eight
small vessels ordered last year from Spain’s Navantia),
30 hovercraft naval transports, and up to 100 high-speed patrol
boats that can be equipped with heavy machine guns and man-portable
Russian arms manufacturers
are first in line to supply Chávez with more assault
rifles and helicopters. Russian companies also have indicated
their willingness to supply Venezuela with SAMs and MiGs, although
formal negotiations haven’t started yet. In fact, Venezuela
could be Russia’s third largest arms buyer this year,
after China and India. On Feb. 9, Mikhail Dmitriyev, director
of the Federal Service for Military and Technical Cooperation,
said that “If Venezuela wants to obtain MiGs, we are prepared
to cooperate.” Russian arms exports totaled a record $6.1
billion in 2005, and Dmitriyev said orders for another $23 billion
in weapons are already in the pipeline. Chávez ’s
military shopping list could represent billions of dollars in
additional contracts for Russian arms exporters.
While Russia tops the
list of countries that likely will sell more weapons to Venezuela
in 2006, Chávez also may go shopping for some weapons
in China, Iran, India and South Africa. It’s also possible
that the Chávez government will talk with officials of
the Democratic People’s Republic of Korea (DPRK) about
buying larger ballistic missiles. However, the majority of the
weapons systems exported by these countries are based to varying
degrees on Russian weapons designs and technologies. As a result,
Chávez will explore options with Russian arms manufacturers
and the government of President Vladimir Putin before it goes
shopping in other markets.
The Chávez government
bought ten Russian MI-17, MI-26 and MI-35 helicopters in 2005,
and could order another ten more helicopters over the coming
year. Chávez also bought 100,000 AK-103 and AK-104 assault
rifles that will be delivered in 2006. The rifles cost slightly
over $388 per weapon. On Feb. 4, however, Chávez said
that “100,000 rifles are not enough,” and declared
that many more rifles are needed to arm his one million-strong
military reserve. He didn’t mention numbers, but the rifles
he already purchased only cover the FAN’s needs. After
the FAN transfers its Belgian-design FAL assault rifles to the
reserve, Chávez still would have 900,000 reservists in
need of a basic infantry assault rifle.
A contract to buy another
900,000 assault rifles would cause geopolitical shockwaves throughout
the Americas, since 1.1 million active FAN personnel and reservists
armed with assault rifles would constitute the largest armed
force in Latin America – a force that clearly would be
viewed by Venezuela’s neighbors as a major threat to regional
economic and political stability.
said in January that the military aircraft he wants to buy would
be used primarily for regional humanitarian missions. However,
the MI-17 and MI-35 helicopters he purchased in 2005 from Russia
are designed for offensive purposes including air borne assaults,
close air-ground support of infantry units in combat, anti-tank
missions and air-to-air combat. Their addition to the FAN’s
arsenal will increase Venezuela’s offensive military capabilities
significantly in both conventional and irregular conflicts.
The MI-17 (HIP) is a
multi-role, all-weather attack/transport helicopter which can
be heavily armed with an extensive array of missiles, bombs,
small arms and cannons. It is often used to launch airborne
infantry assaults, reinforce units in combat or disrupt counterattacks.
The MI-26 (HALO) is the heaviest and most powerful helicopter
in the world. It was designed to carry large cargoes weighing
up to 20 tons. The HALO A version has no armaments, and its
load and lift capabilities are comparable to the U.S. C-130
Hercules transport aircraft. The MI-35 (HIND E) is an upgraded
version of the MI-24, which was used extensively during the
Soviet Union’s invasion of Afghanistan in the 1980s. The
HIND is an assault gunship/transport helicopter that also can
be deployed for direct air support of infantry troops, antitank,
armed escort, and air to air combat.
The Chávez government’s
shopping list for 2006 includes MiG-29 Fulcrums, possibly Sukhoi
SU-27 Flankers, and air defense missiles, including both man-portable
and vehicle-mounted SAMs. Chávez said in 2005 that he
would buy up to 50 MiG-29 Fulcrums in a deal worth up to $5
billion, by his own account. However, if any aircraft purchase
contracts are signed it likely will involve a smaller number
of Fulcrums and/or Flankers, possibly about 24 aircraft in all.
force has been test-flying Fulcrums with Cuban and Russian technical
advice since 2001. The highly maneuverable SU-27 Flanker has
an air combat radius of 1,500 km, and a maximum cruising range
of 4,000 km, which means that it could be deployed over Cuba,
Colombia or Panama from air bases in Venezuela. In 2005, reports
from Moscow indicated that the Chávez government was
interested in buying up to 24 Flankers. If the Chávez
government buys a mix of Fulcrums and Flankers, it would have
air superiority over all of its neighbors in the region, and
likely would trigger an arms race involving at least Colombia
Chávez also said
on Feb. 4 that he would purchase some “good, modern rocket
launchers.” This was not widely reported by the news media.
However, we think that Chávez meant surface-to-air missiles
(SAMs). Chávez might also seek to acquire cruise missiles
from Iran or ballistic missiles from DPRK, but most likely he
will shop for man-portable SAMs that can be deployed with infantry
units in the asymmetrical warfare tactics that now form the
pillar of Venezuela’s new Bolivarian national security
doctrine. In effect, Chávez proposes to turn all of Venezuela,
but principally Caracas, into a battlefield for irregular Venezuelan
forces operating as guerrillas in the event of a U.S. military
Russia has a variety
of man-portable and vehicle-mounted SAM systems that Chávez
may find appealing. For example, the SA-7 GRAIL (Strela-2),
the SA-14 GREMLIN (Strela-3), the SA-16 GIMLET, and the SA-18
GROUSE. Chávez also may be tempted to buy truck-mounted
SAM systems like the SA-8 GECKO, the SA-9 GASKIN, the SA-12
A and B systems (GLADIATOR and GIANT), the SA-15 GAUNTLET, and
the SA-20 TRIUMF.
claims these weapons are meant for defensive purposes against
a U.S. military invasion. However, this is nonsense. Chávez
has single-handedly provoked and goaded the U.S. government
to the point that some U.S. national security policymakers now
consider him a bigger threat to regional economic and political
stability than Cuban leader Fidel Castro. These weapons are
meant for offensive purposes, and under Chávez they likely
would have a dual use. One would be to repress internal dissent.
The other use could be to launch attacks against neighboring
Tuesday, January 24, 2006
Mobil's Exemplary Exit
Posted IBD 1/20/2006 Latin America
The pullout of Exxon
Mobil Corp. from a project in Venezuela may have marked a turning
point - not for the oil giant, but as a warning about the deteriorating
situation in that country.
Since the company's Dec.
30 exit, the business climate in Venezuela has gone downhill
fast. This is cause for concern, because the apparently normal
country, awash in malls and gas stations, is starting to sink
from general chaos into a more specialized kind known as Cuba.
Bear Stearns warns that
the effect of this may spread. “The headline effect of
adverse political news may also impair investor sentiment for
the region as a whole, even in countries where a trend toward
populism is not evident ( e.g., Brazil, Colombia), or where
the macroeconomic policy framework is not necessarily at risk
(e.g., Mexico).” For the U.S., that's getting too close.
Exxon sold its stake
in its only operating agreement in the country to its partner,
Repsol-YPF, rather than be forced into a joint venture with
the state on vague terms or - even worse - face expropriation.
Some of the vague terms
may mean turning a sharply efficient professional oil enterprise
into a worker-“owned” collective, with political
loyalty determining operational decisions.
For an oil company to
dump its stake in scarce acreage is rare. Oil producers rank
themselves by acreage and compete fiercely amid dwindling supply.
Given the frontiers in
which Exxon is used to operating - Russia, Angola, Chad, Yemen
- its decision to leave is a warning that Venezuela is an even
higher investment risk.
But in light of a wave
of new demands made on other oil companies since they agreed
to accept the joint ventures, including arbitrary new back taxes
(Shell just got a new $13 million tax bill) and new royalty
demands, Exxon didn't close its eyes.
Foreign investment, in
fact, is down in Venezuela and, more ominously, domestic investment
is down even more, particularly since 1998. As bankers at BBO
Securities in Caracas put it: “Venezuela
has simply become a place where businessmen are looking for
deals, but are avoiding investments.”
Johns Hopkins economist
Steve Hanke points out what any good economist will conclude:
“A broken contract amounts to a confiscation of private
In the wake of those
broken contracts, there's been a mudslide of property rights
violations, as well as new price and capital controls. It's
not hard to understand why. Property rights violations don't
stop at breaking contracts. They repeat into further breaches
of contact, and spread to violations of all kinds.
Since Exxon's pullout,
Hugo Chávez's loyalists have confiscated about 20 buildings
in Caracas, some with their owners still in them. That example
has prompted "spontaneous" invasions of other private
property that have terrified local owners.
In the latest instance,
an unsuccessful attack by ruffians against the Country Club,
a rare green spot in central Caracas that isn't particularly
exclusive, was triggered by the talk of officials who said they'd
like to turn it all into low-income housing to change the voter
composition of the area.
Meanwhile, Chávez himself
announced that he'll expropriate 1.5 million more hectares of
land from Venezuela's battered farmers in addition to the 1.34
million already taken from working farms in the states of Cojedes
Some of the farms, mostly
in sugar, are owned by foreigners who are not rich investors
like Exxon, but poor but industrious immigrants from Spain,
Italy, Cuba and Portugal.
Meanwhile, as the tropical
jungle slowly reclaims once-vibrant farms, weedy, irregular
Jim Jonesian rows of yucca and black beans, planted by squatters
on new collectives, are the desolate result.
It hasn't stopped there.
Like a madman, Chávez vowed to confiscate the entire coffee,
and now corn, industries if they don't continue to sell processed
products below production costs.
Price controls and inevitable
hoarding stripped grocery shelves of any supply at all. The
national guard, on orders from Chávez, was dispatched
to coffee warehouses to “take every last kilogram.”
It all bears the same
hand as the one that tried to confiscate Exxon.
Sunday, January 15, 2006
“Down Falls the Bridge -- Likewise Chávez”
In the wee hours of
Thursday, January 5, 2006, the Hugo Chávez government closed
the 11-mile, four-lane highway (Autopista) linking Caracas
to the Caribbean coast. The No. 1 Bridge (Viaduct), located
at kilometer 4, over the Tacagua Creek is collapsing! Of the
three bridges on the autopista Caracas-La Guaira, No. 1 and
No. 3 were declared in immanent danger, by Japanese experts,
in 2000. The condition of Bridge No 1 was known since 1987,
i.e., for 18 years. In 1997, two years before Chávez became
President of Venezuela, the Caldera government realized that
Bridge No 1, could not be repaired, and they needed to build
a new parallel bridge at a cost of $280 million. Now, Chávez
is promising to build a “temporary” bridge to
be completed next month, February 2006, and a permanent replacement
to be completed in 2007. As they say in Venezuela, “Si
The closing of the
Autopista from Caracas to La Guaira is a calamity. It threatens
to disrupt the Venezuelan economy. The Autopista represents
the lifeline between Caracas and the outside world. It connects
domestic and international travelers with Simon Bolivar International
Airport, and both imports and exports go through the Airport
and the Port of La Guaira. La Guaira handles about 40% of
Venezuela’s ocean shipping freight. Venezuela imports
more than half of its food. And, some 50,000 cars use the
Autopista every day, and on weekends, with the beach goers
to Vargas state, this number used to double. The small coastal
state of Vargas, surrounded by a mountain range, is now practically
shut-off from the rest of Venezuela.
Before Chávez (BC),
Venezuela was a country with a modern economy and a comfortable
life for many. Now, Venezuela is a country ranked in the repressed
category of countries, with decreasing per capita income,
lack of personal safety as criminals roam free, with increasing
shortages (even coffee, which it used to export before the
discovery of oil), a country of pot holes, with its infrastructure
collapsing. As Chávez has been overseeing all this destruction,
he has been giving away Venezuela’s patrimony and resources.
With the closing of the Autopista, Venezuelans are writing
and reciting a litany of Chávez’s gifts to other countries.
To list just a few
of his recent foreign gifts in 2005: Two days before closing
the Autopista, Chávez presented Evo Morales, the new President-elect
of Bolivia, all the diesel oil Bolivia needed. Chávez added,
“I will not accept that you pay me ‘un centavo’
in payment.” The Venezuelans took note of the “pay
me,” as if the country’s oil was his! Cuba is
at the top of the list in receiving Venezuela’s riches,
principally in the form of 90,000 barrels per day (b/d) of
oil, which amounts to a subsidy of $1.3 billion per year.
With Argentina, Chávez purchased $800 million in Argentine
bonds, with a new request from President Kirchner that Chávez
buy an additional $3 billion in bonds. Under Chávez’s
PetroCaribe agreement, he is promising to supply the Caribbean
islands with 185,700 b/d of subsidized oil, which would cost
Venezuela some $600 million per year.
Jamaica has become
of special interest to Chávez. As Bridge No 1 was collapsing,
Chávez was finalizing a $300 million loan to Jamaica to jump-start
the Ocho Rios leg of Highway 2000, as well as finance a major
island-wide road repair project.
How ironic! And, Chávez
has Petroleos de Venezuela funding (50% of $500 million) the
upgrading and expansion of Jamaica’s Petrojam refinery.
On and on it goes, in every country Chávez visits he gives
away Venezuela’s patrimony and raises Venezuela’s
national debt from $23 billion in 1999 (when he came to power),
to $50 billion, in 2006.
Then there are the
billions of dollars he is spending on arms: from assault rifles,
to helicopter gun-ships and guided-missile frigates. This
arms build-up is to be used against the United States and
the democratic governments of Latin America, utilizing multiple
military and non-military strategies. Chávez last month signed
a $2 billion military contract with Spain, to purchase air
transport planes to carry Venezuelan and Cuban troops. Where
The superhighway between
Caracas and the port of La Guaira was begun in 1950, and inaugurated
by President Marcos Perez Jimenez on December 2, 1953. The
next day, along with many Caraqueños, I rode down this
highway with my small son Todd and my husband, to marvel at
this remarkable $71 million Autopista to the seashore. That
December, Perez Jimenez inaugurated 450 projects costing $265
million. In addition to the superhighway, he inaugurated a
network of highways in Caracas including the Autopista del
Este, 63 schools in Venezuela, low-income housing projects,
and hospitals, all part of his “new national ideal.”
This is quite a contrast
to the government of Hugo Chávez, which has neglected or contributed
to the destruction of these public works, and has no credible
public work to his credit in seven years of ruling.
The most impressive
engineering project ever undertaken in Venezuela starts at
sea level and climbs gently with grades of 4% for 11 miles
to reach the valley of Caracas, 3,000 feet up. Mountains were
cut open or pierced for two twin tunnels, ravines were filled
for embankments, and creeks were spanned by three bridges,
for a 70-feet wide highway, with a 5-feet dividing central
zone, and 8 ½ feet wide shoulders. The design and execution
of the entire project was carried out by Venezuelan engineers
of the Ministry of Public Works. The tunnels were designed
by Smillie & Griffen of New York, and built by Morrison
and Knudsen of Boise, Idaho. The bridges were designed and
constructed by Campenon Bernard of Venezuela, affiliated to
Enterprises Campenon Bernard of France.
The bridges are of
pre-stressed concrete, using only 4% steel, and 96% cement.
No. 1, the longest bridge, and currently broken, has a length
of 991 feet, and a width span of 499 feet, and rises 230 feet
above the bottom of the chasm. The foundations on the southern
bank of the creek presented problems, and excavations as deep
as 88 feet had to be made, until rock stability was found.
surrounding mountains became full of shacks (ranchos), without
proper water drainage or trash removal, so tons of waste and
water weaken the rock and with the rainy season serious landslides
have weakened the bridges and the highway. Slums were even
created below the bridge, where hundreds of families live,
and now must be “re-located” by the Chávez government
to free public housing in Caracas.
When built, the three
bridges cost $5 million, and the two twin tunnels bored through
rock cost $20 million. Engineers had to open 36 miles of secondary
roads through the mountains, to supply access to the main
This marvelous engineering project was compared to the Panama
Canal and it changed our lives in the 1950s. We could zip
from Caracas down to the coast in 15 minutes. Not only our
standard of living and commerce improved, but also there were
unbelievable new pleasures. I was able to pack a lunch and
take my two small sons down to Playa Grande, enjoy an empty
beach in the middle of the week, and be back home in Caracas
by 3 or 4 P.M.
After January 5, Caraqueños
no longer can go to their favorite beaches or to their condos
on the coast. Previously, Caracas on weekends was desolate,
because everyone with a car or bus ticket was at the beach.
For the past 50 years, since the Autopista opened, the beach
has been the family outing. With the deterioration of this
remarkable highway and the heavy traffic, however, the trip
took 30 minutes or more..
Venezuelans and foreigners
alike will have to use the Old Road, which the Autopista replaced.
This curving road -- with 395 curves -- 19 miles of dangerous
12% grade, only 22 feet wide road was completed, in 1845.
It takes two hours or more to drive, and winds over the mountains
through some of Venezuela’s most crime-ridden slums.
It is so dangerous that taxi drivers triple their fares to
take passengers from Caracas down to the airport. This Old
Road will add heavy costs to transportation costs on goods
going up from the airport or port to the Caracas Valley. There
are several other longer routes but often impassable and difficult,
like the rustic Galipan route over the Avila Mountain, when
it does not rain; or the Carayaca--El Junquito road that is
very narrow and takes 4 hours. There is the La Carlota airfield
in Caracas, but Chávez closed it for personal reasons. This
leaves the Old Road, with its many landslides and criminal
attacks, and all the Crosses along the road for all the people
who have died on this road.
It is going to be a
nightmare that is going to bring down Chávez. He and the Venezuelans
will remember Los Reyes Magos (Three Kings) 2006 in history,
as “down falls the Bridge -- likewise Chávez.”
(Abajo el Viaducto, tambien Chávez) Hugo Chávez’s days
of stirring up revolutions and violence throughout Latin America
will end, and Venezuela’s oil will no longer fund Chávez’s
friends and partners. Who would have thought? Maybe soon those
in charge will start to pick up the mountains of garbage in
the streets of Caracas.
Ph.D. is well known for her work in the oil industry in Venezuela
and her writings, her book "Power and Petroleum: Venezuela,
Cuba and Colombia, A Troika? " was published in late
2001, and another book on Venezuela's think tank, "Intevep
The Clash of the Giants", in 1993. Between 1985 and 1994,
she was an adviser to the Presidency of PDVSA and its affiliates.
Petroleumworld not necessarily share these views.
Editor's Note: All comments posted and published
on Petroleumworld, do not reflect either for or against the
opinion expressed in the comment as an endorsement of Petroleumworld.
All comments expressed are private comments and do not necessary
reflect the view of this website. All comments are posted
and published without liability to Petroleumworld.
Petroleumworld encourages persons to reproduce, reprint, or
broadcast Petroleumworld Editorial articles provided that
any such reproduction identify the original source, http://www.petroleumworld.com
and it is done within the fair use as provided for in section
107 of the US Copyright Law
Internet web links
Petroleumworld News 01/10/06
Copyright©2006 Emma Brossard All rights reserved
Sunday, January 15, 2006
New Tehran-Caracas Axis
By MARY ANASTASIA O'GRADY
January 13, 2006; The Wall
Street Journal Online, Page A13
With Iranian nuclear
aspirations gaining notice this week, it's worth directing attention
to the growing relationship between Iran's President Mahmoud
Ahmadinejad and Venezuela's President Hugo Chávez. The
Reagan administration repulsed Soviet efforts to set up camp
in Central America. Iranian designs on Venezuela perhaps deserve
similar U.S. attention.
The warmth and moral
support between Ahmadinejad and Chávez is very public.
The two tyrants are a lot more than just pen pals. Venezuela
has made it clear that it backs Iran's nuclear ambitions and
embraces the mullahs' hateful anti-Semitism. What remains more
speculative is just how far along
Iran is in putting down roots in Venezuela.
September, when the International Atomic Energy Agency
offered a resolution condemning Iran for its "many
failures and breaches of its obligations to comply"
with its treaty commitments, Venezuela was the only
country that voted "no." Ahmadinejad congratulated
the Venezuelan government, calling the vote "brave
Three months later, in a Christmas
Eve TV broadcast, Chávez declared that "minorities,
the descendants of those who crucified Christ, have
taken over the riches of the world." That ugly
anti-Semitic swipe was of a piece with an insidious
assault over the past several years on the country's
Jewish community. In 2004, heavily armed Chávez
commandos raided a Caracas Jewish school, terrifying
children and parents. The government's claim that it
had reason to believe that the school was storing arms
was never supported. A more reasonable explanation is
that the raid was part of the Chávez political
strategy of fomenting class hatred -- an agenda that
finds a vulnerable target in the country's Jewish minority
-- and as a way to show Tehran that Venezuela is on
board. Ahmadinejad rivals Adolf Hitler in his hatred
for the Jewish people.
Three months later, in
a Christmas Eve TV broadcast, Chávez declared that "minorities,
the descendants of those who crucified Christ, have taken over
the riches of the world." That ugly anti-Semitic swipe
was of a piece with an insidious assault over the past several
years on the country's Jewish community. In 2004, heavily armed
Chávez commandos raided a Caracas Jewish school, terrifying
children and parents. The government's claim that it had reason
to believe that the school was storing arms was never supported.
A more reasonable explanation is that the raid was part of the
Chávez political strategy of fomenting class hatred --
an agenda that finds a vulnerable target in the country's Jewish
minority -- and as a way to show Tehran that Venezuela is on
board. Ahmadinejad rivals Adolf Hitler in his hatred for the
It's tough to tell whether
Chávez is a committed bigot or whether his anti-Semitism
and embrace of the mullahs are simply a part of his calculated
efforts to annoy the Yanquis. But it doesn't make much difference.
The end result is that the Iranian connection introduces a new
element of instability into Latin America.
In his efforts to provoke
the U.S., the Venezuelan no doubt hopes that saber rattling
against imperialismo can stir up nationalist sentiment and save
his floundering regime. That view argues that the U.S. would
do best to ignore him, but it's not easy to ignore a Latin leader
who seems intent on forging stronger ties with two of the worst
enemies of the U.S., Ahmadinejad and Fidel Castro.
That Chávez is
making a hash of the Venezuelan economy while he courts international
notoriety is no secret. There are shortages of foodstuffs that
are abundant even in other poor countries. Milk, flour for the
national delight known as "arepas" and sugar are in
short supply. Coffee is scarce because roasters say government
controls have set the price below costs, forcing them to eat
losses. The Chávez response this week is a threat to
nationalize the industry.
Property rights are being
abolished. This week, authorities invaded numerous "unoccupied"
partments in Caracas to hand them over to party faithful, part
of a wider scheme to "equalize" life for Venezuelans.
A bridge collapse last
week on the main artery linking Caracas to the country's largest
airport, seaport and an enormous bedroom community is seen as
a microcosm of the country's failing infrastructure. Aside from
the damage to commerce, it has caused great difficulties for
the estimated 100,000 commuters who live on the coast, Robert
Bottome, editor of the newsletter Veneconomy, told me from Caracas
on Wednesday. The collapse diverted all this traffic to an old
two-lane road with hairpin turns and more than 300 curves. It
is now handling car traffic during the day and commercial traffic
at night, with predictable backups.
With Venezuelan oil fields
experiencing an annual depletion rate on the order of 25% and
little government reinvestment in the sector, similar infrastructure
problems are looming in oil. In November, Goldman Sachs emerging
markets research commented on a fire at a "major refinery
complex" in which 20 workers were injured: "In recent
months there has been a string of accidents and other disruptions
[of] oil infrastructure, which oil experts attribute to inadequate
investment in maintenance and lack of technical expertise to
run complex oil refining and exploration operations."
Chávez is notably
nonchalant about all this, as if the health of the economy is
the last thing on his mind. His foreign affiliations are more
important to him. The Iranian news agency MEHR said last year
that the two countries have signed contracts valued at more
than $1 billion. In sum, Iranians, presiding over an economy
that is itself crumbling into disrepair, are going to build
Venezuela 10,000 residential units and a batch of manufacturing
plants, if MEHR can be believed. Chávez reportedly says
these deals -- presumably financed with revenues that might
be better employed repairing the vital bridge -- include the
transfer of "technology" from Iran and the importation
of Iranian "professionals" to support the efforts.
Details on the Iranian
"factories" -- beyond a high-profile tractor producer
and a widely publicized cement factory -- remain sketchy. But
what is clear is that the importation of state agents from Hugo-friendly
dictatorships hasn't been a positive experience for Venezuelans.
Imported Cubans are now applying their "skills" in
intelligence and state security networks to the detriment of
Venezuelan liberty. It is doubtful that the growing presence
of Iranians in "factories" across Venezuela is about
boosting plastic widget output. The U.S. intelligence agencies
would do well to make a greater effort to find out exactly what
projects the Chávez-Ahmadinejad duo really have in mind.
Almost certainly, they are up to no good.
Saturday, January 7, 2006
Shutdown -- Closes Caracas Road, Spurs Criticism
photo 20 MAR 2006 after Viaduct fails completely
Autopista in happier days - 1953 postcard
celebrating the opening of the Autopista showing
Viaducto N° 1. When it was first opened,
a one-way trip could be accomplished in as little
as 15 minutes.
of a deteriorating bridge (Viaducto N° 1) has
closed the main road from the capital Caracas to the
coast and the city’s airport, spurring criticism
of President Hugo Chávez for failing to maintain
the country’s infrastructure. “This is
a disaster for me,” said Juan José Hidalgo,
whose 25-minute commute to work at a cleaning company
has become a three-hour ordeal over a potholed mountain
among tens of thousands who relied on the bridge,
part of a four-lane highway linking Caracas to the
Caribbean coast, to get to work in the city.
With no exits in between, the bridge closure in effect
shut the entire 17-kilometer (11-mile) highway. Signs
of imminent collapse forced the government Thursday
to shut the 50-year-old span.
may also be a public relations disaster for Chávez
as he kicks off his re-election campaign. Political
opponents criticize Chávez for neglecting infrastructure
spending as he uses the country’s oil riches
to provide aid to Cuba, Bolivia and even low-income
residents in some U.S. cities.
countries are getting Venezuelan money while we’re
having to shut this bridge,” Julio Borges, the
presidential candidate of the First Justice party,
said in a statement.
are paying the consequences of the government’s
year reported that the bridge was buckling. This week,
one end of the span moved sideways about 25 centimeters,
cracking the road surface.
“Rains have been eroding the earth at the base,”
Infrastructure Minister Ramón Carrizales said
in an interview on Jan. 3. “We are trying to
save the bridge until we can build another one.”
was inaugurated in 1954, reducing the trip between
the coast and capital to about 30 minutes from more
than an hour. The four-lane highway, used by 50,000
vehicles a day, includes two tunnels and three bridges.
bridge, designed by French engineer Eugene Freyssinet,
was an engineering marvel when it was completed.
Built of pre-stressed
concrete in an arc, it was called the most challenging
engineering feat in Latin America since the Panama
said a new bridge would take at least a year to be
has spent about Bs.30 billion ($14 million) trying
to save the existing structure.
Engineers tried to build new support pillars, while
cutting free the old damaged ones, hoping to push
the bridge back into place. The week’s rains
weakened the new support pillars.
The bridge has a history of neglect. Venezuela a decade
ago granted a 30-year concession to a Mexican-Spanish-Venezuelan
group, Autopistas Concesionadas de Venezuela, to operate
and maintain the highway, which was then a toll road.
tried to raise tolls 10-fold in 1996 to finance highway
repairs and build a new bridge in a $214 million investment
program. Protests led to the fare increase being revoked
by the government of then-President Rafael Caldera,
leading the company to stop investing.
subsequently canceled the concession in 2000, charging
that the operator had failed to fulfill the contract.
government didn’t live up to its side of the
agreement,” said Robert Bottome, an analyst
with research company Veneconomy in Caracas. “And
since 2000, the government has not done anything to
improve the bridge or highway.”
The shutdown threatens to disrupt the national economy,
in addition to inconveniencing the 5 million residents
of the Caracas region and every visitor who passes
through the international airport.
closure will add to transportation costs on goods,”
Bottome said. “Goods will have to be sent to
other seaports. Airlines will likely have to direct
their flights to other airports.”
The La Guaira
port in Vargas state handles about 40 percent of Venezuela’s
ocean-going freight, Bottome said. The country’s
largest port, Puerto Cabello, is about two hours by
road from Caracas and is already close to capacity
after a surge in imports.“They
don’t want to understand that Vargas depends
on transportation, on the airport and on the seaport,”
Emilio Polumbo, president of the transportation association
in Vargas state, said in an interview on Unión
The old two-lane
highway adds hours to the commute and passes through
some of the capital’s worst slums where robberies
than tripled their fares to Bs.150,000 ($70) from
Bs.40,000 to take passengers to the airport from the
old highway is just too dangerous,” said Angel
Acosta, a taxi driver. “Thieves are smart, and
we’re like sitting ducks there if we’re
behind a truck and forced to stop.”
information about the deterioration & lack of
maintenance on Viaducto N° 1 can be found
at this excellent websitee:
Sunday, November 6, 2005
TV2 Norway Is
Not Fooled By The Demagoguery of Chávez
These are 3 interesting
videos from channel TV2 of Norway, which is the most-watched
station in Norway. Click on each image to see the video:
1: Where is the petroleum money going?
This video shows the corruption that exists under Chávez today
and the fact that the money certainly isn't improving medical
services for the poor as Chávez so righteously claims &
despite the massive influx of Castro's doctors (23
OCT 2005) - 6.8 Mb;
2: Despite Venezuela's oil wealth, unemployment,
chaos, & misery have increased under Chávez (28 OCT 2005)
- 8.6 Mb:
3: This video shows Chávez's extreme
paranoia and how he uses his imagined "threat of assasination"
to his advantage as a political tool with the uninformed masses
(FEB 20, 2005) - 8.5 Mb:
Thursday, November 3, 2005
and Danny Glover Promote Racial Conflict In Venezuela
October 8, 2005
As a happy adolescent in the small town of Los Teques (20
miles west of Caracas) two of my best friends were Federico
Escobar and José Landaeta. Escobar was known as El
Negro Federico, because he was ebony black. Landaeta was called
El Chino Landaeta because he had strong Chinese features.
They are long dead now but I still remember both with great
love. All my life in Venezuela I have freely interacted with
people of all shades of color without ever giving too much
thought to the racial issue. After all, Venezuelans are almost
all brown; very few are pitch black or snow white. My first
conscious encounter with race came when I was traveling from
New York to Tulsa in a Greyhound bus to enter university,
in 1951. My traveling companion was a black soldier and we
had been talking non-stop when, at a point in time, he stood
up and moved to the back. I thought I had said something to
offend him but the reason was different: we had crossed the
border into Missouri and blacks could no longer ride in the
forward section. Many years later, while living in Lafayette,
Louisiana, I was asked to fill out a form for the school of
my children, stating their racial composition. I wrote: "white
27%, black 18%, Indian 50%, other 5%." The day after,
I was asked to go and talk to the Principal. She wanted to
meet the person who had written such an unorthodox description.
Back in Venezuela,
in the oil industry, I worked side by side with blacks, browns,
whites and considered most of them friends and even family.
Those I did not get along with had ideas or attitudes I did
not share but not a color I did not accept. As a typical member
of the Venezuelan middle-class and living in a country that
for many decades, from the 1940's to the 1990's, was a wonderful
example of social mobility and fluidity, race played no role
in my life. Negrito, mi negra, were and are words of endearment
in our Venezuelan social dictionary. We are used to attach
descriptive nicknames to people without a pejorative meaning.
El flaco means the thin one. El gordo means the fat one. El
camello, the camel, refers to someone slightly stooped. El
gato, the cat, is usually someone light on his feet or with
yellow eyes. We never mean to say that those so called are
brutes or animals.
In mentioning this,
I just wanted to illustrate the atmosphere that prevailed
in Venezuela for many decades . . . until Hugo Chávez
took over in 1999. Then, things changed.
In a very long and
sugary article by Nicolas Kozloff for CounterPunch ("Hugo
Chávez and the Politics of Race") Chávez
is described as a "pardo . . . someone of mixed racial
roots." The article adds: "Chávez's features
are a dark-copper color and as thick as clay; he has protruding,
sensuous lips. . . . His hair is black and kinky. . . . With
a long, hatchet-shaped nose and a massive chin and jaw."
When he arrived at the military academy Chávez had
an Afro. He was poor and he married a poor woman. His education
was not good, his economic situation not so bright. Chávez
had limited possibilities to move up in the Venezuelan social
scale, not because he looked the way he looked but because
he did not have the required skills. People like him, of modest
origins, but who attended the university and graduated as
medical doctors, lawyers or geologists made it up the social
end economic ladder in a much more fluid manner. As he could
not do this, Chávez became resentful. He blamed the
social system or his looks for his lack of success. This started
him on the way to become a traitor to his oath as a soldier,
on the way to use the guns given to him to defend the constitution
and democracy to try to overthrow the democratic government
of Carlos Andrés Pérez. He failed in his attempt,
although he caused hundreds of innocent deaths, due to his
military ineptness and his personal lack of courage. However,
the desire of Venezuelans for political change brought him
to power, through elections, six years later.
Once in power Chávez
decided to get even. He started to promote social and racial
hate, attacking the "Oligarchs" (the white and rich
minorities) and incorporating racial components into his arsenal
of hate words. In doing this Chávez has become the
top racist in Venezuela. His presidency has become a war against
the rich, the educated, and the ones who are high in the social
ladder. To claim, as he does, that racism and social exclusion
are only exercised against blacks and Indians is stupid. In
fact, they are being exercised in Venezuela, today, against
the light skinned and the upper and middle-classes.
In following this strategy
of racial hate Chávez has found several willing partners
in the U.S., people who are either looking for money from
him or share the social resentment and psychological deformations
that Chávez has brought to the Venezuelan political
and social scene. Two of the most prominent Chávez
allies, according to the article by Kozloff, are Jesse Jackson
and Danny Glover?. What Kozloff fails to add are the motivations
behind this alliance. I think that what mostly moves Jackson
is money and what mostly moves Glover is resentment. Jackson
has a long record of using racial conflict as a means to extort
money from large U.S. corporations and now figures that the
Venezuelan scene could be a new gold mine for him and his
Rainbow/PUSH coalition. Glover is a bitter man who wears his
blackness as a cross, in spite of his success as a Hollywood
actor and his buoyant economic status.
This alliance of Chávez,
Jackson, and Glover should not be underestimated. They seem
to have agreed on a rather perverse and hypocritical plan,
already in motion at this moment in time and promising to
bring great confusion to U.S. society and more poverty to
Venezuelan society. The plan has two main components: one,
handing out to U.S. poor citizens and racial minorities, cheap
oil, as a means to "prove" that Venezuela is generous
and Chávez is good and, of course, that the U.S. is
mean and Bush is a monster ("Venezuela promises cheap
oil to poor Chicagoans," The Chicago Tribune, October
13, 2005 and "Rainbow/PUSH event draws actor Glover,
Venezuelan ambassador," Chicago Defender, October 14,
2005). The other, to intensify the racial hate in Venezuela,
to convert the revolution into an all-out fight between the
colored and the whites. Let us consider these two components:
1. Venezuela giving
cheap oil and free medical attention to poor U.S. citizens,
members of the black and Indian communities, might sound like
a wonderful idea to those who might benefit from this plan
and to those who hate the U.S. and love any initiative that
promises to antagonize their favorite enemy. But the actions
by Chávez are not only self serving, a strategy to
gain sympathy among the U.S. poor but also criminal since,
whatever help is given by Venezuela to foreign citizens, has
to be done at the expense of the tragedy of the 85% of poor
Venezuelans who are worse off today under Chávez than
before he arrived in power. You see, Venezuelans today are
dying for lack of proper medical attention and medicines in
State hospitals, they are not being educated to become self
starting citizens, they are being subjected to a policy of
handouts which has already converted them into a parasitic
society. Venezuelan streets are full of garbage, crime is
rampant, and corruption is at an all time high. Venezuelan
society is in ruins. Is it logical to believe that Chávez
would be bringing relief to the U.S. poor as an altruistic
initiative? No one should be fooled into believing that this
is an altruistic initiative. This is fraudulent political
propaganda, one that will only benefit Chávez and whoever
assumes the role of "distributing" the oil among
the poor. We suspect that Jesse Jackson would play a big role
in this "distribution," due to his strength in the
Chicago area, although TransAfrica Forum, the organization
where Glover is Chairman, also wants to participate.
2. Promoting racial
strife and hate into Venezuela. Bill Fletcher, the president
of TransAfrica Forum, said to Kozloff: "I feel that black
issues need to be injected into [Venezuelan] politics."
Fletcher has been in Venezuela only once, for a few days,
invited by Chávez all expenses paid. During his brief
visit to my country, Harvard educated Fletcher, hardly a New
Orleans evacuee, did not lose anytime to compare Chávez
with Martin Luther King (when, in fact, he is closer to the
dark side of Malcolm X). I have to ask Bill Fletcher, who
is a very civilized person: Why do you feel that racial issues
have to be injected in a society that never had the type of
racial tensions that you might have experienced in the U.S.?
Why do you have to export to my country your bitterness, your
hates, your frustrations, and your inferiority complexes?
I have to warn Bill Fletcher and his colleagues that, by intervening
in Venezuela with their imported racial hang ups, they might
be doing the equivalent of what European travelers did, bringing
small pox into the New World. With one difference: Fletcher
and his friends will be doing it consciously.
I am seriously worried
about the degree of criminal intervention that foreigners
are practicing in my country: Cuban mercenaries, Nicaraguan
rapists, Bolivian cocaleros, U.S. social and racial profiteers,
European and Latin American ideologues and fanatics, fascist
relics, communist fossils, Muslim extremists and radical Islamics,
Colombian narco-terrorists. All the intellectual refuse of
the globe seems to be descending on my country, invited by
a grotesque, semi-illiterate dictator, with their travel expenses
paid with the money that is not Chávez's but ours.
I say to Jackson, Glover
and all the rest: hands-off my country. Have the decency to
leave us Venezuelans sort out our own problems. Do not try
to make a buck at the expense of our tragedies. Concentrate
on the problems that you think you have at home.
Sunday, October 9, 2005
The Oil Bubble
October 8, 2005
We keep hearing the
word “bubble” to describe industries with rapid
and unsustainable rising prices. Hence, the Internet bubble,
the telecom bubble, stock market bubble, and now, some analysts
believe, a housing bubble. Yet for some mysterious reason
no one speaks of the oil bubble -- though prices have tripled
in two years to as high as $70 a barrel.
Reviewing the history
of oil-market boom and bust confirms that we are in the midst
of a classic oil bubble and that prices will eventually fall,
perhaps dramatically. Despite apocalyptic warnings, the world
is not running out of oil and the pumps are not going to run
dry in our lifetimes -- or ever. What's more, the mechanism
that will surely prevent any long-term catastrophic shortages
in energy is precisely the free-market incentive to make profits
that many politicians in Washington seem to regard as an evil
pursuit and wish to short circuit.
The best evidence for
an oil bubble comes from the lessons of America's last six
energy crises dating back to the late 19th century, when there
was a great scare about the industrial age grinding to a halt
because of impending shortages of coal. (Today coal is superabundant,
with about 500 years of supply.) Each one of these crises
has run almost an identical course.
First, the crisis begins
with a spike in energy prices as a result of a short-term
supply shock. Next, higher prices bring doomsday claims of
energy shortages, which in turn prompts government to intervene
ineffectually into the marketplace. In the end, the advent
of new technologies and new energy discoveries -- all inspired
by the profit motive -- brings the crisis to an abrupt end,
enabling oil and electricity markets to resume their virtuous
longterm downward price trend.
crowd has predicted the end of oil since the days when this
black gold was first discovered as an energy source in the
mid-19th century. In the 1860s the U.S. Geological Survey
forecast that there was "little or no chance" that
oil would be found in Texas or California. In 1914 the Interior
Department forecast that there was only a 10-year supply of
oil left; in 1939 it calculated there was only a 13-year supply
left, and in 1951 Interior warned that by the mid-1960s the
oil wells would certainly run dry. In the 1970s, Jimmy Carter
somberly told the nation that "we could use up all of
the proven reserves of oil in the entire world by the end
of the next decade."
We can ridicule these
doom and gloom predictions today, but at the time they were
taken seriously by scholars and politicians, just as the energy
alarmists are gaining intellectual traction today. But as
the late economist Julian Simon taught, by any meaningful
measure oil (and all natural resources) has gotten steadily
cheaper and far more bountiful in supply over time, despite
periodic and even wild fluctuations in the market.
* * *
If gasoline cost today what it cost a family in 1900 (relative
to income), we would be paying not $3 but $10 a gallon at
the pump. Or consider that in 1860 oil sold for $4 a barrel,
or the equivalent of about $400 a barrel in today's wage-adjusted
prices. The first of a continuous series of innovations, in
this case the invention of modern drilling techniques in 1869,
cut the price by more than 90% -- to 35 cents a barrel.
Fifty years ago people
would have laughed out loud at the idea of drilling for oil
at the bottom of the ocean or getting fuel from sand, both
of which were technologically infeasible. The first deep-sea
oil rig went on line in 1965 and drilled 500 feet down. Now
these rigs drill two miles into the ground -- and miraculously,
the price of extracting oil from 10,000 feet deep in the sea
bed today is approaching the cost of drilling 100 feet down
from the richest fields in Texas or Saudi Arabia 40 years
This spectacular pace
of technological progress explains why over time the amount
of recoverable reserves of oil has increased, not fallen.
Between 1980 and 2002 the amount of known global oil reserves
increased by 300 billion barrels, according to a survey by
British Petroleum. Rather than the oil fields running dry,
just the opposite has been happening. In 1970 Saudi Arabia
had 88 billion barrels of known oil. Thirty-five years later,
nearly 100 billion barrels have been extracted and yet the
latest forecast is that there are still 264 billion barrels
left -- although the Saudis have never allowed independent
auditors to verify these numbers.
In this industry, alas,
bad news tends to crowd out the good. When Shell announced
earlier this year that its oil and gas reserves were down
by 30%, there was a global outcry. But when Canada announced
in 2004 that it has more recoverable oil from tar sands than
there is oil in Saudi Arabia, the world yawned. There is estimated
to be about as much oil recoverable from the shale rocks in
Colorado and other western states as in all the oil fields
of OPEC nations. Yes, the cost of getting that oil is still
prohibitively expensive, but the combination of today's high
fuel prices and improved extraction techniques means that
the break-even point for exploiting it is getting ever closer.
The energy Malthusians
counter that China, India and other nations will satisfy their
growing appetite for oil by driving demand and prices ever
higher. In the short term, yes. But over the longer term,
as the Chinese become more prosperous through free markets,
China will become vastly more fuel efficient and also help
discover new sources of energy.
America produces twice
as much output per unit of energy consumed as it did 50 years
ago. Liberals who say we need government to intervene in the
energy markets, to patch the alleged failings of the free
market, fail to comprehend that the command-and-control economies
of the last 50 years have been far and away the biggest wasters
of energy (and the biggest polluters). South Korea produces
about three times as much output per kilowatt of electricity
as North Korea does.
This is no call for
complacency or inaction in the face of very high energy prices;
it's a call for realism. Higher prices for gas and fuel for
home heating have cost the average U.S. family about $1,500
to $2,000 a year. (Thankfully the Bush tax cuts have given
back about precisely that amount in lower tax payments to
the IRS.) The tax on the American economy from higher oil
prices has reached $300 million a day and has chopped nearly
a percentage point off GDP growth.
* * *
Our point is that the constraints on our ability to find and
extract new oil are not geologic or scientific. The real constraints
on oil production are barriers created by government. Myron
Ebell, an environmental analyst at the Competitive Enterprise
Institute, notes that roughly 90% of the oil on the planet
rests under government-owned land and these resources are
In the U.S., environmentalists
have erected myriad barriers to drilling for new sources of
oil. The American Petroleum Institute estimates that there
are at least 100 billion barrels that are fairly easily recoverable
in Alaska and offshore that oil companies are not permitted
to exploit. Once, we could afford the luxury of not drilling
there. Now, thanks to a witch's brew of unforeseen circumstances
-- political turmoil in the oil producing countries, China's
surge in demand, and hurricanes that have knocked out Gulf
refineries -- it's an economic and national security imperative
that we do.
Here's one simple idea
to increase the domestic supply of oil: Have Uncle Sam share
its oil-drilling royalties with the California government.
If Californians realized they could go a long way to solving
their deficit and overtaxation problems by raising billions
of these petro-dollars, the aversion on the left coast toward
offshore drilling might well begin to subside.
We will assess at another
time the many dreadful ideas -- price controls and "windfall
profit" taxes -- that Congress is considering to deal
with the energy crisis. But for today it is sufficient to
note that the free market will deliver oil, electricity and
other forms of energy at declining prices in the future, if
only the government will let the market's benign and productive
forces work their magic.
Tuesday, July 19, 2005
Bold Move: Politicizing The Armed Forces
Jul. 14, 2005
By ANDRES OPPENHEIMER
The most lasting impact
of Venezuela's leftist President Hugo Chávez's self-proclaimed
revolution may not be his incendiary speeches against U.S.
“'imperialism” nor his daily praise for the Cuban
dictatorship, but something that has drawn much less attention
-- the politicization of Venezuela's armed forces.
On Tuesday, at the
swearing-in ceremony of his new defense minister, Orlando
Maniglia, Chávez proclaimed that Venezuela's armed
forces are “anti-imperialist and anti-colonialist”,
and thus opposed to U.S. policies in the region. “The
Venezuelan armed forces are at the heart of the revolution
-- alongside the people”, he added.
At another ceremony
days earlier, in which he decorated 96 Cuban “internationalist”
teachers, Chávez stated that “The Cuban and Venezuelan
revolutions are already one and only”, and will defend
one another against a potential U.S. invasion, the daily El
Universal and the Reuters news agency reported Saturday.
U.S. officials deny
any plans to attack Venezuela, and say the idea exists only
in Chávez's mind. While
Chávez's increasingly belligerent rhetoric is nothing
new -- in fact, his revolutionary fervor seems to be directly
proportional to the price of oil, which has risen from $9
per barrel when he took office in 1999 to $61 today -- he
is taking dramatic steps to restructure the Venezuelan armed
forces, which may haunt what is left of Venezuela's democracy
for decades to come.
take him seriously, but he has been doing everything he said
he would do”, says Alberto Garrido, a Venezuelan writer
specializing in military affairs. “Chávez has
tried to give this process a folkloric connotation, but it
isn't folkloric at all.”
Consider the most recent
• On July 5,
on Venezuela's Independence Day, Chávez announced creation
of a “Territorial Guard”, a force that will be
made up of armed civilians fighting clandestinely who will
report directly to the president. Pro-Chávez legislator
Néstor Leon Heredia was quoted by the Venezuelan press
as saying that the new force is modeled after the Iraqi resistance.
• Last month,
Chávez announced expansion of the military reserve,
currently up to 100,000 civilians, to 500,000 civilians in
the short run and eventually to 2 million people. The military
reserve reports directly to Chávez. Armed forces commander
Armando Laguna has said the Navy conducted its first military
exercise with civilians June 15.
has resumed wearing a military uniform after nearly three
years. He had ended the practice at the request of his former
high command, who had asked him to don civilian clothes after
a 2002 aborted coup. Those generals have since been retired.
has recently changed the armed forces' traditional camouflaged
uniform to adopt a Chinese-style one-color garment. He has
incorporated the red beret -- the trademark of a 1992 coup
attempt he led -- in elite units.
Chávez has purchased 15 Russian Mi-17 attack helicopters,
more than 100,000 Russian AK-103 rifles, 10 troop transport
aircraft and eight navy patrol boats from Spain, and 24 Super
Tucano light attack planes from Brazil. Venezuela is also
reportedly negotiating the purchase of up to 50 Russian-made
Garrido says Venezuela
is embarked on a continental revolutionary project, shared
with Cuba. “Under this new military doctrine, the traditional
armed forces no longer have the monopoly of the right to wear
weapons. Instead, that monopoly is shared by three different
levels: the traditional armed forces, the civilian reserve
and the armed citizens' Territorial Guard”, he said.
While Garrido thinks
Chávez may have reasons to believe that a U.S. attack
may be coming, most Venezuelan and U.S. critics of Chávez
say his motives are totally different: creating a police state.
Guard is being created as a death squad, a terrorist and killing
apparatus, covered up by the impunity it would get from its
direct dependence from the head of state”, said Oswaldo
Alvarez Paz, one of the few remaining opposition state governors.
My conclusion: If Chávez
means to do half of what he says, his transformation of Venezuela's
armed forces -- and distribution of weapons to civilians --
will haunt Venezuela for decades to come, no matter how long
he stays in power or who succeeds him.
Friday, May 20, 2005
Oil Wells Refuse
to Obey Chávez Commands
May 20, 2005
“We have a little
problem,” Venezuelan President Hugo Chávez reportedly
told Venezuelans on May 3, “and we are fixing it.”
is the drop in output by the Venezuelan state-owned oil company
known as PdVSA. The Chávez fixes, thus far, have entailed
sending military troops to the oil-rich west of Venezuela
to investigate "management errors" and allegations
of sabotage, while in Caracas the government is threatening
foreign oil companies with contract cancellations and tax
For most chavistas
this may suggest that the whole stink about Venezuela's oil
industry's underperformance is about to be resolved. Yet it
is likely that the magnitude of the drop in petroleum output
is a lot bigger than what Chávez has described. It is equally
probable that a military invasion of PdVSA and property confiscations
in the private sector won't fix it. Statist economic policies
have a sorry productivity record and in this case that record
is highly unlikely to be improved.
The big trouble is
that Chávez has put Venezuela on a centrally planned economic
path not much different from the failed experiments of the
20th century. Indeed, last year he declared that Venezuela
was preparing for "the great leap," a seeming reference
to Maoist China's 1950s agricultural policies that spread
famine. Maybe his books about Chairman Mao never mentioned
Closer to home, Chávez
emulates Fidel Castro, who once commanded that a 10-million-ton
sugar harvest spring from the soil. Fidel also promised to
clone a prolific wonder-cow called "Ubre Blanca,"
so that Cuba would promptly rival Switzerland in cheese yields.
Almost 50 years into the revolution, Cuba still isn't Switzerland
and milk is a luxury. Venezuela is on the same trajectory.
Chávez has at least
one thing right: Tight control of the country's political
agenda requires tight control of the country's economy. In
Venezuela , that means controlling PdVSA.
PdVSA was born in 1976.
Until the Chávez government came to power in 1999, the company
made some effort to be politically nonpartisan. Getting a
job at PdVSA required business, engineering or technical know-how,
not political connections.
That has changed. Not
content with just the golden eggs, Chávez wanted the goose.
As he began to consolidate his power, he began politicizing
both the management and labor arms of the company. That prompted
a 66-day strike by employees on Dec. 2, 2002, which brought
production levels as low as 150,000 barrels per day (b/d).
When the strike ended on Feb. 4, 2003, 18,000 workers were
let go, taking the skills and knowledge necessary to run the
company with them. PdVSA has never fully recovered.
Today Chávez claims
that production is down by a mere 200,000 b/d for a daily
output of 3.1 million barrels. Industry experts dispute this
and this month critics grew more vocal.
On May 4, Alberto Ramos,
an analyst for Goldman Sachs' Emerging Markets Economic Research,
noted that since the strike local and international oil analysts
have consistently put PdVSA production some 500,000 to 600,000
b/d below government claims. “Such level of production
is also corroborated by production statistics published by
OPEC and other international energy agencies.”
Nacional (a daily newspaper) Web site issued a similar
report on May 15 -- according to a translation by BBC Monitoring
Americas: “An extensive survey of oil industry engineers,
geologists, geophysicists and experts indicates that corrective
measures have not been taken and the decline in Venezuelan
oil production is nearing 1,000,000 b/d. This drop, coupled
with a shortfall of associated natural gas, creates an alarming
situation with the foreseeable consequence of diminishing
crude oil extraction.”
In his report, Mr.
Ramos also noted that “several oil analysts” attribute
the company's inability to return to pre-strike levels of
production to “corruption, mismanagement, inadequate
investment levels, sloppy maintenance, and lack of qualified
and qualified personnel can be traced to the strike and the
layoffs. It is also possible that disgruntled employees are
not toiling as they did when they felt they were measured
by their work, not their politics. Yet human capital is but
one factor of production. Investment is also scarce and likely
to grow scarcer as Chávez puts the squeeze on foreign oil
Since being named president
of PdVSA, Chávez ally Rafael Ramirez has been working to expand
the company's control of the entire industry. On May 6, the
research firm Oxford Analytica reported the government is
arm-twisting to force the conversion of 32 foreign company
contracts into joint ventures that will give the government
51% ownership. The newsletter also said that the government
wants -- as prescribed by Chávez -- to raise income taxes
on foreign oil companies to 50% from 34%. On Tuesday, Reuters
reported that Venezuelan tax authorities "held a second
round of talks with seven foreign oil companies, including
units of Chevron and Shell" on the matter. The government
has also said it will no longer pay foreign oil firms in dollars.
Added to the drain
on human and financial capital, are serious internal problems
that this power grab is producing at PdVSA. Oxford Analytica
writes that Mr. Ramirez fired 30 “Chavista managers”
on corruption grounds soon after he took over his post --
although he did not present proof.
Oxford Analytica said
that the move was “interpreted inside the Chavista movement
as Ramirez settling old scores with high-ranking executives
of the previous PDVSA administration.” This has provoked
an increase in job insecurity among chavistas who thought
their politics gave them security. Analytica says that, “crossed
accusations of corruption based on leaked internal documents
have increased among different Chavista factions.”
Mr. Ramos notes that
“aggressive” policies toward the private sector
and weak investment in PdVSA “raise serious risks of
a further gradual decline in oil production,” making
Venezuela all the more vulnerable to a drop in world oil prices.
It's quite possible that Chávez will have no more luck commanding
oil out of the ground than Fidel had getting cows to give
more milk. The “great leap” is looking more and
more like a great flop.
Saturday, April 9, 2005
Arms Deals, Big
April 6, 2005
Hugo Chávez announced the planned expansion of his Bolivarian
military reserve force from its current level of 80,000 members
to nearly 2.3 million armed volunteers. Reportedly, he also
hosted a quiet visit by a delegation from North Korea the
week of March 27 to April 2. As Chávez weighs the costs of
arming and equipping his military reserves, he could be thinking
about buying fewer MiGs in favor of adding a North Korean
missile deterrent to Venezuela's national armed forces.
Hugo Chávez said April 3 on his nationally televised weekly
program, "Hello President," that he plans to expand
the military reserve he created less than a year ago from
its current total of 80,000 members to as many as 2.3 million
volunteers, or 10 percent of the Venezuelan population. Chávez
said this reserve would be trained and equipped militarily.
Separately, sources close to the Venezuelan Foreign Ministry
said April 1 that a North Korean delegation visited Caracas
quietly last week for meetings with senior Chávez government
and military officials.
Chávez already is committed
to buying more than $2 billion worth of infantry, naval and
air force weapons, radar systems and transports from Brazil,
China, Russia and Spain. Arming a military reserve force of
2.3 million members with assault rifles at a price of approximately
$500 per rifle would cost the Chávez government approximately
$1.15 billion -- about 20 percent of the reported $5 billion
cost of purchasing 50 Russian MiG-29 Fulcrum fighters. As
a result, Stratfor believes that Venezuela's government is
rethinking plans to buy the 50 MiG-29s and is instead considering
the possibility of purchasing missiles from North Korea to
create a strategic deterrent against external aggression from
Colombia and the United States. The Chávez government could
use the savings achieved by purchasing cheaper North Korean
missiles instead of MiG-29s to arm and equip its Bolivarian
The MiG-29s theoretically
would give the Chávez government air superiority over neighboring
countries such as Colombia. However, in an armed confrontation
with the United States -- which Venezuela's new national security
doctrine portrays as the Chávez government's greatest enemy
-- most of Venezuela's MiGs likely would be destroyed on the
ground by U.S. cruise missiles, which would strike without
warning. The handful of MiGs that might get into the sky likely
would be shot down by U.S. fighters before the Venezuelan
pilots could locate and engage U.S. targets.
The Chávez government
knows this because it has studied U.S. strategies and tactics
in the Iraq war with the help of its expanding military links
with China, Cuba and Russia. Venezuelan military strategists
know their radar, communications and air force assets would
be the first targets of a U.S. military strike. In fact, Eliecer
Otaiza, president of the National Land Institute and a key
figure in the Chávez government's militia defense networks,
said April 1 that the government knows the national armed
forces (FAN) would be obliterated "in two days"
if the U.S. military ever invaded Venezuela.
However, the purchase
of a few dozen North Korean missiles with the capability to
strike targets hundreds of miles away would give the Chávez
government a strong strategic deterrent against attack by
the U.S. or Colombian armies. Moreover, North Korean missiles
would be easier to conceal and more difficult to destroy.
Pyongyang would not
sell nuclear weapons to the Chávez government. However, Stratfor
believes North Korea would happily sell Scud missiles to Caracas
for profit, or to gain political leverage in its confrontation
with the United States. Pyongyang might even consider selling
a few Nodong-1s to the Chávez government, which would give
the FAN the ability to launch missiles armed with large conventional
explosives warheads at targets deep in Colombian territory,
The North Korean government
has both practical and strategic reasons for negotiating the
sale of missiles and other weapons systems, such as minisubmarines
and armored vehicles, to Venezuela. Besides the hard-currency
earnings from selling arms to Caracas, Pyongyang could be
seeking some political leverage in the stalled six-nation
talks on dismantling its nuclear weapons program. If North
Korea is just looking for a fast profit, it likely will try
to keep the deals quiet for as long as it possibly can. However,
if Pyongyang wants to pressure the Bush administration, it
will intentionally leak any deal it reaches with Caracas.
If Venezuela's government
decides to go for missiles instead of MiG-29s, Pyongyang has
a menu of options that likely would meet Chávez's political
and strategic requirements. The likeliest options include
the Scud-B, which has a range of about 200 miles; and the
Hwasong-6/Scud-C, with a range of about 300 miles. However,
Pyongyang also produces the Nodong-1, with a range of about
800 miles, and the Nodong-B missile, with a range between
about 1,700 miles and about 2,500 miles.
Pyongyang's price list
for these systems is highly classified. However, in July 2000
during missile talks between the United States and North Korea,
Pyongyang offered to suspend its export of missile technology
in exchange for $1 billion a year to compensate for the loss
of export revenues; the United States reportedly counter offered
with indirect food and humanitarian aid.
The acquisition of
North Korean missiles would significantly increase Venezuela's
political leverage regionally. During his March trip to France,
India, Qatar and Uruguay, Chávez said -- in one of many speeches
accusing the U.S. government of aggression -- that his enemies
would soon be claiming that Chávez is expanding ties with
North Korea. In fact, political ties between Caracas and Pyongyang
are already being strengthened, and the impetus for closer
relations is coming mainly from the Chávez government, a source
in the Venezuelan Foreign Ministry reports.
For a force of 2.3
million volunteer reservists, meanwhile, the small-arms and
other infantry equipment requirements would be immense. Russian
arms suppliers would be first in line to sell more weapons
to Venezuela since they already have sold 100,000 AK-103 and
AK-104 assault rifles and 40 helicopters to the government.
However, the Chávez government also probably will purchase
small-arms and infantry equipment from South Africa in coming
South Africa is an
important strategic ally among the multipolar relationships
that Chávez seeks to build. South Africa also has a large
and diversified arms export industry that is hungry for new
markets abroad, and a government that is desperate to grow
the country's economy more robustly. With arms suppliers in
Russia, Spain, Brazil and China rushing to close deals with
Caracas, South Africa's arms exporters will jump into the
action as soon as they get a chance.
The Chávez government's
actions belie its claims that it is not entangled in a regional
arms race. As originally envisioned, the military reserve
under the president's direct command was to have totaled 100,000
volunteers deployed mainly in poor neighborhoods, or barrios.
A force of that size clearly had two objectives. One was to
serve as an instrument of internal repression if the government's
oil wealth vanished and popular support turned to angry rejection.
The other purpose was to defend the government if the FAN
ever revolted against Chávez.
However, a greatly
expanded military reserve of 2.3 million members is not a
force for internal repression. Strategically, it could be
conceived by the Chávez government as the foundation of a
people's guerrilla war against invading conventional U.S.
forces, but a force of even 600,000 armed reservists could
be utilized for offensive purposes. This would seriously destabilize
the balance of military power in South America, where the
largest army until now has been Brazil's with a total force
of 189,000 personnel. Moreover, it would flood Venezuela with
hundreds of thousands of new infantry weapons, some of which
likely would leak to militant groups in neighboring countries
given the high level of corruption in the FAN.
The only things potentially
standing in Chávez's way are money constraints and possible
internal resistance to major arms buys within the Chávez government.
Military and civilian leaders are locked in a power struggle
over who will have the greatest political influence -- and
thus the greatest access to the fiscal resources flooding
into the Bolivarian revolution's treasury. External pressures,
on the other hand -- like U.S. disapproval -- will not deter
That said, the Chávez
government's small-arms and conventional-weapons purchases
probably will advance more rapidly in coming years than its
acquisitions of more sophisticated weapons like Russian MiGs
and North Korean missiles. Transactions involving small arms,
armored vehicles, helicopters and similar items involve many
contracts with many foreign suppliers. These contracts are
subject to little public scrutiny. However, the purchase of
larger and costlier weapons systems like advanced fighter
aircraft and missiles invite more public scrutiny, bring greater
international pressure, and take longer to negotiate because
of the complex technological issues and large sums of money
Saturday, March 26, 2005
Selling off Venezuela´s Jewels
March 17, 2005
Recent articles on
Hugo Chávez’s proposed sale of Citgo ignore the growth
in its value since PDVSA acquired Louisiana’s second
largest refinery. The Citgo of the 21st Century is a creation
of Petroleos de Venezuela (PDVSA). When PDVSA bought half
of Citgo Petroleum Corp. in September 1985, from the Thompson
brothers of Southland Corp., they paid $290 million for half
of the Lake Charles 300,000 b/d refinery. PDVSA agreed to
provide 130,000 to 200,000 barrels per day (b/d) of crude
and feedstock for the Lake Charles refinery for 20 years.
Included in the sale were a percentage of two important pipelines,
Colonial and Explorer; a lube plant; and over 30 terminals;
and an established gasoline market of branded outlets (then
6,900, now 13,800 franchised).
By the time PDVSA announced
in November 1989, that it would buy the other half of Citgo
for $675 million, crude runs in the refinery were averaging
284,000 b/d, and because of many mothballed refineries after
the U.S. decontrol of oil, it was now a buyer’s market
for refineries. The Citgo refinery had been upgraded between
1982 and 1984 (by Cities Service and then Southland) at a
cost of $500 million, making it one of the most advanced in
the industry. And PDVSA continued to upgrade Citgo to process
Venezuela’s heavy crudes into cleaner burning gasoline.
Citgo announced in 1992, that it would spend $1.7 billion
over the next five years to comply with the Clean Air Amendments
for the new reformulated gasoline requirements passed by Congress
Citgo continued to
grow in size. Champlin Petroleum Company with its 160,000
b/d Corpus Christi refinery, including a petrochemical facility,
and distribution system was added to Citgo, in September 1990.
Citgo also acquired Seaview Petroleum Co., an asphalt refinery
in Paulsboro, New Jersey, refining 84,000 b/d of Venezuela’s
heavy crude; and a fourth refinery was added in Savannah,
Until 2001, PDVSA sold
its oil to Citgo at an arms length price, and for tax reasons,
Citgo did not pay dividends to PDVSA. Thus, PDVSA reinvested
most of Citgo’s profits in U.S.-based operations and
acquired other U.S. refineries. Under a treaty in 1999, Citgo’s
U.S. tax burden dropped from 30% to 5%, and in 2001 PDVSA
received $213.75 million in dividends from Citgo, from its
2000 earnings. Chávez continues to receive annual Citgo dividends.
Hugo Chávez not only
became President of Venezuela in February 1999, but also took
over PDVSA, changing its president and board at a whim, and
finally in January 2005 naming the Minister of Energy also
President of “Petroleos de Chávez” The former
PDVSA is effectively Chávez’s own company, and he can
sell any part of it! Well, maybe not.
in December 2003, announced that they would sell its 50% stake
in Ruhr Oel (four refineries in Germany) to Russia’s
Alfa Group. In 1983, the Ruhr Oil joint venture with Veba
Oel was the beginning of PDVSA’s “internationalization.”
Twenty years later, Ruhr Oel was also the beginning of Chávez’s
efforts to sell PDVSA’s overseas refineries. However,
in June 2004, the sale to the Alfa Group was suddenly dropped.
Why? There was no explanation. Chávez had planned to buy 50
Russian MiGs (with the sale of Ruhr Oel?); and Russia through
the Ruhr purchase would have gained a 2,000 distribution system
in Europe. Perhaps it was BP (British Petroleum) that had
purchased Veba Oel, and therefore now owned the other half
of Ruhr Oel, that quashed the PDVSA sale?
Chávez has a problem
trying to sell Venezuela’s foreign refineries because
most of them are run as joint ventures -- and their partners
in these ventures, who initially sold half of their refinery
to PDVSA, have a say in what company they will accept as a
new partner. Since PDVSA owns all of the four Citgo refineries,
and Citgo is their largest overseas affiliate, and is in the
largest market, Citgo would be expected to fetch the largest
amount of cash and procure a buyer.
However, if there is
a sale of Citgo, only with the U.S. Government’s permission,
it could be a fire sale. Chávez does not seek to realize Citgo’s
$5 billion plus worth in today’s market. He wants to
stop sending Venezuelan oil to the U.S. (to Citgo), and he
wants to prevent the possibility of the U.S. freezing Citgo’s
assets (after some foolhardy action on his part.) It appears
that Hugo Chávez is considering the sale of Citgo to foreign
buyers, i.e., the Russians (Lukoil), Brazilians (Petrobras),
or Arabs, with the Chinese now excluded by the U.S. Homeland
Security Department. Presently, there appear to be two U.S.
independent refiners, Valero Energy (CEO Bill Greehey), and
Premcor Inc. (formerly Clark USA) that are interested in one
or two of Citgo’s refineries.
of the United States and President Bush, and his need for
funds for his corrupt regime, is the driving force behind
his wish to sell Venezuela’s foreign crown jewel. Citgo
is a corporation that was carefully constructed by Venezuelan
oilmen under the Brigido Natera presidency, to conquer the
United States downstream market where Venezuela has traditionally
sold half of its oil production.
The real value of all
the nine PDVSA refineries in the United States is represented
by the opportunity of marketing Venezuela’s medium/heavy
crude oils through PDV America (which includes refinery ownership
of Citgo; Citgo-Lyondell (41%); Hovensa, St. Croix joint venture;
Chalmette, Louisiana, 50% participation; Sweeney, Texas joint
venture; and Lemont, Illinois now 100%). PDVSA also markets
Venezuelan refined oil products through PDV America. In 1999,
Hugo Chávez’s first year in power, PDV America amounted
to nearly half of all PDVSA’s market, selling over 1.5
million b/d of product. However, with the decline of 500,000
b/d in Venezuelan crude production (now 2.5 million b/d or
less); and around 100,000 b/d of oil exports to Cuba, and
other exports to new markets, like China and Argentina, PDVSA
has to purchase increasing amounts of oil on the open market,
in order to supply their foreign refineries. The Chávez solution:
sell the Crown Jewels!
Brossard grew up and worked in the oil industry in Venezuela.
Her first book, Petroleum Politics and Power was published
in 1983; followed in 1993 by Petroleum Research and Venezuela's
INTEVEP. For 18 years, Prof Brossard taught political
philosophy, Latin American politics, and energy politics,
in several Midwestern and Southern univerisities. She has
a BA from the Univ. of Wisconsin, MA and Ph.D. from Claremont
Graduate University. An energy consultant for many years.
Petroleumworld not necessarily share these views.
Petroleumworld encourages persons to reproduce,
reprint, or broadcast Petroleumworld Editorial
articles provided that any such reproduction identify the
original source, http://www.petroleumworld.com
and it is done within the fair use as provided for in section
107 of the US Copyright Law.
Internet web links
Petroleumworld News 03 17 05
Emma Brossard 2005, All rights reserved
Tuesday, March 15, 2005
Chávez Casts Himself
as the Anti-Bush
By Kevin Sullivan
March 14, 2005
-- President Hugo Chávez has recently accused President Bush
of plotting to assassinate him, made suggestive comments about
Secretary of State Condoleezza Rice, visited Fidel Castro
in Cuba, bashed the United States on the al-Jazeera television
network and traveled to Libya to receive an award from Moammar
Such bluster and anti-American
showmanship are nothing new from the fiery former paratrooper.
But concern in Washington has been rising as Chávez has worked
feverishly in recent months to match his words with deeds.
to cut off oil shipments to the United States, which buys
1.5 million barrels a day from Venezuela, Chávez has been
traveling the globe looking for new markets and allies to
unite against "the imperialist power." He recently
signed energy deals with France, India and China, which is
searching for new sources of oil to power its industrial expansion.
Chávez also has made a series of arms purchases, including
one for military helicopters from Russia.
And on Friday, Chávez
hosted President Mohammad Khatami of Iran, a nation that has
a secretive nuclear program and has been labeled by Bush as
part of an "axis of evil."
"Iran has every
right . . . to develop atomic energy and to continue its research
in that area," Chávez said at a joint appearance with
Khatami. "All over the world, there is a clamor for equality
. . . and profound rejection of the imperialist desires of
the U.S. government. Faced with the threat of the U.S. government
against our brother people in Iran, count on us for all our
Gerver Torres, a former
Venezuelan government minister who now runs a private development
agency, said such statements illustrate one of Chávez's key
goals. "His main motivation now is to do everything he
possibly can to negatively affect the United States, Bush
in particular," Torres said. "He is trying to bring
together all the enemies of the United States. He believes
the United States is the devil."
While U.S. analysts
said they doubt Chávez could afford to severely cut shipments
to the United States, which buys 60 percent of Venezuela's
oil exports, they are still paying careful attention to his
statements. Sen. Richard G. Lugar (R-Ind.) has asked the Government
Accountability Office to study how a sharp decrease in Venezuelan
oil imports might affect the U.S. economy.
Although Chávez has
suggested he would "use oil" to fight American power,
other Venezuelan officials have expressed a far more businesslike
view of the relationship. In an interview, Andres Izarra,
Chávez's information minister, said Venezuela had no plans
to stop selling oil to the United States, which he called
"our natural energy market."
The government says
it produces 3.1 million barrels a day of oil, but independent
analysts put the figure closer to 2.6 million. Izarra said
the country aimed to boost its oil production to about 5 million
barrels a day in the next five years, so there would be plenty
of oil to serve both the United States and new customers,
such as China and India.
Still, Chávez's comments
and actions, including the purchase of a substantial amount
of foreign arms, have drawn sharp criticism from U.S. officials.
In her Senate confirmation hearings in January, Rice called
Chávez a "negative force in the region."
Chávez's arms purchases
from Russia, including 100,000 Kalashnikov rifles, have also
drawn protests from the State Department. He has bought military
aircraft from Brazil and announced plans to buy radar equipment
In a recent televised
speech, Chávez described the arms purchases and a plan to
increase army reserve troops as "an honorable answer
to President Bush's intention of being the master of the world."
Chávez is the most
vocal and visible symbol of a rising tide of anti-American
sentiment in Latin America. Leaders in the region are increasingly
disillusioned because a decade or more of the Washington prescription
-- democracy and free-market economics -- has failed to alleviate
poverty and economic inequality.
Six Latin American
nations, most recently Uruguay, now have presidents whose
views clash, in varying degrees, with Washington's. Another
politician with sharp anti-Washington views, Mexico City Mayor
Andres Manuel Lopez Obrador, is the early favorite in next
year's presidential election, which could bring the trend
to the banks of the Rio Grande.
After soundly defeating
his domestic opposition in a recall referendum last August,
and flush with soaring profits from record-high global oil
prices, Chávez has increasingly been making deals with countries
in Latin America, Europe, the Middle East and Asia, positioning
himself as something of an anti-Bush.
In a recent interview
on al-Jazeera, Chávez called for developing nations to unite
against U.S. political and economic policies. "What can
we do regarding the imperialist power of the United States?
We have no choice but to unite," he said. Venezuela's
energy alliances with nations such as Cuba, which receives
cheap oil, are an example of how "we use oil in our war
against neoliberalism," he said.
Or, as he put it on
another occasion, "We have invaded the United States,
but with our oil."
Izarra, in the interview,
accused the United States of "systematic attacks and
aggressions" against Chávez, repeating allegations that
the United States was involved in a failed 2002 coup against
Chávez and a crippling 2002-03 oil strike. Rice and other
U.S. officials have repeatedly denied those allegations.
Chávez has saved some
of his most biting sarcasm for Rice, whom he refers to as
"Condolencia," which means "condolence."
In speeches, he has called her "pathetic" and illiterate
and made oblique sexual references to her. "I cannot
marry Condolencia, because I am much too busy," he said
in a recent speech. "I have been told that she dreams
about me," he said on another occasion.
Chávez asserted on
television last month that Castro had warned him that Bush
was planning an assassination attempt. U.S. officials called
this ridiculous. But Chávez said that if he were killed, the
United States "can forget Venezuelan oil," threatening
to cut off the fourth-largest source of U.S. oil imports.
Chávez's government has begun exploring the sale of parts
of Citgo, the Venezuela-owned retailer in the United States.
Many here say they
believe Chávez dreams of the day he can cut off the United
States and sell to countries he considers more friendly. Chávez
visited Beijing in December and signed trade deals for oil
and gas exploration, farm support and construction. He even
reached agreement with Chinese leaders to launch a telecommunications
When Chávez visited
India last week, the two countries signed an energy cooperation
agreement and Chávez said Venezuela wanted to become a "secure,
long-term" petroleum supplier to India. On his way home,
Chávez stopped in Paris and reached agreement with President
Jacques Chirac for more French investment in the Venezuelan
Some of the gasoline
that Venezuela ships to the United States comes from El Palito,
a refinery about 200 miles west of Caracas. People who live
next to the refinery in a little cluster of brightly colored
beachfront homes said they did not believe Chávez would ever
cut off exports to the United States. But in a country bitterly
divided over Chávez's rule, they agreed on little else.
the country," said Carlos Rodriguez, a shopkeeper. "Oil
prices are higher than ever, but there's more poverty and
more crime. Then he flies off to other countries and offers
them things he doesn't offer to us."
But a few yards away
on the beach, Jaime Mendez, a fisherman, said: "We are
all with Chávez because he helps the humble people. He doesn't
want problems with the United States. He is just trying to
do things, but they won't let him work."
Tuesday, February 8, 2005
CANADIAN OIL SECTOR
Wednesday, February 2, 2005
|By ANGEL GONZALEZ
- When Pedro Pereira-Almao flew to Calgary, Alberta,
to visit his daughter in December 2002, he didn't realize
he had already begun his transition to a new life.
A manager with Venezuelan National
Petroleum Company Petroleos de Venezuela SA, or PdVSA,
Mr. Pereira-Almao timed the holiday to coincide with
an oilfield strike that was intended to force the resignation
of President Hugo Chávez. But when the 50-year-old petrochemist
returned to Venezuela that January, Mr. Chávez was still
president - and Mr. Pereira-Almao was out of a job.
One of 18,000 workers ousted in a PdVSA
purge of Chávez critics, Mr. Pereira-Almao quickly landed
in Calgary, where he has become part of a growing contingent
of former colleagues who are adapting their expertise
to Canada's oil sands.
The miniexodus is helping to lift Canada's
oil-field hopes, as the industry pumps in $32 billion
to double heavy crude production by the end of the decade
to two million barrels of oil per day.
Leading Canadian oil producers have
been actively recruiting from Venezuela's idle pool
of talent. Calgary-based Suncor Energy Inc. recently
hired 24 Venezuelans for its oil-sands upgrading facility
near Fort McMurray, a Suncor spokeswoman said. Canadian
Natural Resources Ltd.'s new vice president of upgrading
also was sacked by PdVSA after the strike. And the Academy
of Learning, an Edmonton, Alberta, vocational college,
is getting up a recruitment and training program in
Caracas, Venezuela, over the next couple of months to
instruct prospects in English language skills.
In, Canada, "there's a great need
for the upgrading expertise we developed in Venezuela
in the 1990s, " said Mr. Pereira-Almao, who helped
manage PdVSA's research division.
Made to Order
The Venezuelans are a good fit because
of the similarity between the heavy-oil projects of
the Orinoco Belt in southeastern Venezuela and the Canadian
oil sands, which contain a comparable low-grade brand
of crude. Unlike conventional crude, which is sent directly
to refineries,heavy oil must first go to an upgrading
plant, where the tar-like goop is processed into a lighter
synthetic that is then refined into gasoline at a conventional
Canadian oil-industry officials see the need for more
than 8,600 new oil-sands jobs over the next decade,
with as many as 2,000 needed this summer. The Venezuelans'
experience makes them exceptional candidates, said Chris
Culshaw, the Academy of Learning's director of international
programs, who figures Canada's labor crunch would be
much worse if Venezuela's political environment was
"Venezuela has similar characteristics
to Alberta in all respects except for the weather,"
Mr. Culshaw said. "So if the workers might tolerate
working at minus 30 degrees, there's a fit."
Persona non Grata
A chemist who trained in France and
at Lawrence Berkeley National Laboratory in Berkeley,
Calif., where he did postdoctoral work, Mr. Pereira-Almao
joined PdVSA in 1990 as a researcher, rising to lead
the company's petroleum upgrading research in 2001.
Mr. Pereira-Almao's banishment from
PdVSA is surprising in that he considers himself a child
of Venezuelan democracy. His father was a night watchman
and his mother a school-cafeteria supervisor. For a
while the family lived in a shack in a western Caracas
working class neighborhood, but later moved into an
apartment when the last Venezuelan dictator, Marcos
Perez Jimenez, was overthrown in 1958.
"I was always critical of some
what I thought were elitist attitudes in the company,"
Mr. Pereira-Almao said.
But he never agreed with Chávez supporters
within PdVSA, considering them professionally mediocre
and intolerant. "I sympathized with some of those
people's ideas, but I'd never be able to work with them,"
When the strike came, Mr. Pereira-Almao
was too busy presenting upgrading projects to PdVSA's
foreign partners to join. But he was spotted on TV while
at one of the opposition's public meetings. "The
'chavistas' told me that was the reason I was sacked,"
Mr. Pereira-Almao wasn't entirely surprised.
Expecting a confrontation, he had already expatriated
his savings and contacted friends abroad. He left Caracas
in March 2003; six months later, he got the grant to
start the upgrading-research center at the University
of Calgary, which received $1.2 million in grants from
the Alberta Ingenuity Fund.
Mr. Pereira-Almao has since brought
in eight former PdVSA colleagues who are working to
boost efficiency in the processing of oil sands, a capital-intensive
process that now consumes huge amounts of natural gas.
The group is working on developing catalysts to help
separate bitumen from solid minerals while it sits in
The Second Wave
As more Venezuelans join Mr. Pereira-Almao
in Calgary, there are increasing signs of a critical
mass, said Venezuelans active in Canada's oil industry.
Carlos Sosa, spokesman for the Venezuelan-Canadian
Association of Calgary, reports a consistent flow of
inquiries from Venezuelans about jobs there and at Fort
McMurray, an isolated town 800 kilometers north of Calgary,
where most of the oil sands production takes place.
"I tell them to
come first without their families, as the winter is
very harsh here," Mr. Sosa said. "And I tell
everybody to improve their English at whatever the cost.
That's key to landing a good job."
The association has begun posting information
about jobs, in addition to serving as a liaison for
Canadian companies interested in recruiting abroad and
for Venezuelan companies seeking contracts in Calgary.
The group's membership has swelled to 400 from 60 at
the start of 2003.
Postgraduate students, who in previous
eras would have gone back to a cushy job back home,
are now considering staying in Canada.
"Alberta is a paradise for engineers
of all kinds," said Eli Viloria, one of eight Venezuelan
Ph.D. students at the chemical engineering department
of the University of Alberta in Edmonton. "Ideally,
I'd like to help in the transfer of technology between
Alberta and Venezuela. Use the fact that I'm Venezuelan
and I know the language and the culture there, to look
for some sort of synergy."
While the long-term impact of Venezuela's
outflow of skilled workers on that country's production
can't be quantified, most independent experts consider
the brain drain to be an impediment, at least in the
Venezuela produces about 2.6 million
barrels a day, down from 3.4 million barrels a day just
six years ago. Although PdVSA's leadership has outlined
plans to double production by 2010, many energy insiders
are skeptical that will happen.
PdVSA workers "were the real asset
of the Venezuelan oil industry," said former PdVSA
chief Luis Giusti, who left the company in February
1999 when Mr. Chávez took office.
The growing community of Venezuelan
professionals in Calgary eases the transition for newcomers,
said Mr. Viloria. They socialize, help each other and
form political organizations to state their opposition
to Mr. Chávez from far away.
From his northern refuge, Mr. Pereira-Almao
hopes that the brain exodus will somehow make its way
back to Venezuela. But it will be difficult for him
to return, especially since his three adult children
also live abroad. He still logs on to Venezuelan newspapers
on the Internet, but less and less.
"It's what happens when a regime
tries to, impose its point of view by force," said
Thursday, February 2, 2005
Exposé on the Chávez Administration
It was refreshing to finally see American
media pay some attention to the threat the Chávez administration
poses to the Americas. FOX NEWS
presented three news shorts on the Chávez administration,
and they were by no means flattering. If you missed them,
these videos can be seen here:
Friday, October 1, 2004
Jimmy Carter, Observed
By A. M. Mora y Leon, The American Thinker
2004 - Jimmy Carter has been acting like a grumpy
old man this week, casting somewhat shocking aspersions on
the fairness and legitimacy of the forthcoming Presidential
election in Florida. Maybe his nasty streak has something
to do with a quiet but very significant affront dealt him
by the United States Department of State, an insult which
has completely escaped the notice of the legacy media, but
which is loudly reverberating in the clubby universe of high
level diplomacy and elite NGOs.
The Man from Plains,
who has so assiduously cultivated a good-guy image, has taken
to disparaging the possibility of a fair democratic process
in his own country, in a fit of pique.
Carter's been making
a nice little side business out of observing foreign elections
for years, through the vehicle of his nonprofit Carter Center.
In the same op-ed article that he used to disparage in advance
Florida's election, he touted his role in the Aug. 15 Venezuelan
recall referendum as proof of his success. The only problem
is that evidence is mounting of massive electoral fraud in
Venezuela in the counting of votes, in the machines themselves,
in the post-referendum statistical studies showing improbable
results, in the voter rolls, and in the auditing. And that
s just for starters.
Thus, the United States
Department of State has suspended its plan to endorse former
President James Earl Carter's final report on the Venezuelan
election. Carter's report was to have been the basis for further
diplomacy with a certifiably legitimate government there.
Instead, State has only acknowledged the preliminary findings,
leaving Carter's status as a recognized authoritative certifier
of elections hanging out to dry.
This may not sound
like much to you, but it effectively disconnects Jimmy Carter's
claim to be a momentous election-certifier from its power
source: the ability to get the United States Government to
accept the word of its 39th President as dispositive. Carter
has been quietly but publicly dissed, and he is dissing back.
As they might put it in Carter's rural South, we ve got us
a dissing match!
This morning, Carter
posted a 14-page executive summary of his election certification
of Venezuela on the Carter Center website. It is a piece of
In the short summary,
Carter bureaucratically repeats his claim that he matched
paper ballots from 150 or 200 voting stations to a few sheets
of transmission data, as if that were the only way to commit
fraud in a place like Venezuela. Carter continues to muddle
the issue of whether there was a problem with the choice of
audit boxes picked by the five-member election commission,
that even he admitted was stacked for Chávez.
In an earlier report
on his Aug. 26 second audit, he admitted disregarding auditing
any boxes that had been obviously tampered with. That s certainly
one way to simplify the process and get right to the business
of approving the results.
Carter also ignores
the problem of server communications with the electronic voting
machines before transmitting final tallies, and dismisses
post-referendum statistical studies by scientists from MIT
and elsewhere, showing highly improbable coincidences. On
that, Carter's simple rebuttal reads: these patterns were
not found a basis to assert fraud.
Meanwhile, Carter skips
over discrepancies in areas showing that the number of votes
cast exceeded the number of registered voters. And his statement
on the auditing process in particular is a beauty: Carter
said everything was observed free and clear, except for what
went on in the central totalization room, and concluded that,
except for that minor matter, all was free and fair. It would
be like an Olympic judge declaring a last-place finisher a
winner - with the exception of what went on at the finish
line. For good measure, Carter's executive summary blames
Venezuela s free press for voter disillusion and recommends
more government oversight on it, as well as more public funding
for campaigns of this kind. No wonder the Bush Administration
has decided to not touch it. The State Department had trusted
Carter to give an honest, or let's say competent, assessment
of that mess that has real potential to blow into a crisis
for the U.S. Make no mistake about the depth of anger of the
Venezuelan people and what they are likely to do. Venezuela
s crucial role as a major oil-supplier role for the U.S. makes
anything happening there to destabilize the country and its
economy and matter of major immediate concern.
It s not really an
election, so we haven't said anything more than that and we
re not going to say any more, a State Department official
admitted. Since then, the Bush Administration s position has
hardened. Carter's claims of free and fair elections in Venezuela
are being shunted aside as a failure. That has denied Chávez
the recognition he had been expecting from Carter, which he
had hoped would extend into the White House. Bush is much
too savvy for that and Chávez's plan failed. U.S. officials
have pointedly refused to congratulate Chávez on his victory,
and haven t bothered to invite him to the White House or a
key United Nations reception as Chávez had hoped, prompting
him to cancel his U.S. trip earlier this month. And the result
for Carter? No kudos are coming his way after his rush to
declare the recall referendum free and fair. That s why he
must toot his own horn now, if he wants credit, in attack
editorials denigrating Bush s brother running Florida. His
vindictive streak is by now well-known. He can only try to
tear down others, now that no one is listening to his observations
after the Venezuela fiasco. And Chávez has been denied the
imprimatur of international legitimacy he desperately craves
since the reality is, he isn t going to get it at home. Score
another point for President Bush's good judgment on affairs
Tuesday, September 21, 2004
The Worst Ex-President
Commentary on the News
Saturday, August 28, 2004
Jack Kinsella - Omega Letter Editor
During his four years
in the White House, he presided over the worst economic downturn
since World War II, allowed a bunch of thugs to seize our
embassy and our citizens, and supported Philippine dictator
Fernando Marcos, Pakistani General Zia al Huq, Saudi King
Faud and many other dictators. But Jimmy Carter was a much
better president than he is an ex-president.
In fact, Jimmy Carter
holds the hands-down record for being the worst ex-president
the United States has ever known. His post-presidential meddling
in foreign affairs has cost America dearly, both in terms
of international credibility and international prestige.
He defied US law by
visiting Cuba, even addressing the Cuban public and handing
Castro a huge propaganda victory. He oversaw the elections
in Haiti, against the expressed wishes of the Clinton administration.
A coup followed.
Carter once described
Yugoslav strongman Marshal Josef Tito as "a man who believes
in human rights." Regarding North Korea's dearly departed
Kim Il-Sung, Carter found him "vigorous, intelligent,
surprisingly well-informed about the technical issues, and
in charge of the decisions about this country," adding
"I don't see that [North Koreans] are an outlaw nation."
He was similarly generous
regarding Manuel Noriega, Romanian dictator Nicolai Ceaucescu
and, of course, Yasser Arafat. He said of Ceausescu and himself,
"Our goals are the same: to have a just system of economics
and politics . . . We believe in enhancing human rights."
Virtually all of the
humanitarian activities of the Carter Foundation abroad have
been in direct opposition to US foreign policy. Carter called
Bush's description of Iran, Iraq and North Korea as an "axis
of evil" was "overly simplistic and counterproductive."
Added the man who was
once attacked by a rabbit, "I think it will take years
before we can repair the damage done by that statement."
His most recent adventure
may be partly behind the predicted $3.00 per gallon analysts
say we'll be paying for gas by year's end. Jimmy Carter went
to Venezuela to 'monitor' that country's effort to recall
President Hugo Chávez.
In 1992, a band of
army officers led by Lt. Col. Hugo Chávez Frías
attempted to overthrow President Carlos Andrés Pérez.
Although court-martialed and jailed, Chávez emerged
In 1998, he was elected
president on promises to clean out corruption and reduce poverty.
Once in office, Chávez promoted a new consitution to
consolidate his powers and began to constrain the business
community, civil society, and rival politicians.
As a presidential candidate,
Hugo Chávez campaigned against the "savage capitalism"
of the United States. On August 10, 2000, he became the first
foreign leader to visit Saddam Hussein since the Gulf War,
and he allegedly aided Afghanistan's Taliban government following
the September 11, 2001, attack on the United States.
At the same time, Chávez
said that Cuba and Venezuela were "called upon to be
a spearhead and summon other nations and governments"
to fight free market capitalism.
Venezuela is also one
of the countries upon which the United States is dependent
for oil, and has been since the US first began relying on
imported oil supplies back in 1948.
Besides supplying the
United States with 1.5 million barrels of oil a day, Venezuela
provides most of the petroleum consumed by U.S. allies in
the Caribbean and Central America.
Regional leaders know
that opposing Chávez in any significant fashion could
result in less favorable sales terms or cuts in deliveries.
In September 2003,
President Chávez accused the Dominican Republic of
harboring Venezuelans--like former President Carlos Andrés
Pérez--who allegedly might conspire against his government.
Chávez then stopped oil deliveries, prompting a temporary
energy crisis while Dominican officials scrambled for new
>From the perspective
of American economic interests, not to mention homeland security
issues, Hugo Chávez is a very bad man to have in the neighborhood.
And, thanks to Jimmy Carter, Chávez isn't going away anytime
party finally forced a recall election, with opinion polls
showing that voters favored his recall by a margin of more
than 2 to 1.
When there were questions
about possible vote tampering by the Chávez side, the opposition
called for election monitors. Chávez agreed to let Jimmy Carter
oversee the election, and the Carter Center headed for Caracas.
Under Jimmy Carter's
watchful eye, Hugo Chávez defeated the recall attempt by a
wide margin -- reflecting almost a mirror-image of the opinion
While two out of three
Venzuelans polled before the election wanted Chávez out, when
the ballots were counted, Chávez was declared the winner by
an almost exact opposite margin. "About 58 percent said
'no' to a recall, while 42 percent said 'yes,'" wrote
the Washington Post.
Carter ignored a press
release from the polling firm Penn, Schoen & Berland Assoc.
that reported, "Exit Poll Results Show Major Defeat for
Chávez." The release, dated 7:30 p.m. on election day,
said, "With Venezuela's voting set to end at 8 p.m. EST
according to election officials, final exit poll results from
Penn, Schoen & Berland Associates, an independent New
York-based polling firm, show a major victory for the 'Yes'
movement, defeating Chávez in the Venezuela presidential recall
One of the most effective
ways to monitor the fairness of an election is to employ the
use of exit polls. In a nutshell, here's how exit polls work.
After somebody has finished voting, a pollster will ask them
how they voted. In emerging democracies, about 90% of voters
By contrast, in America,
where exit polls are widely used to call elections before
the votes are all counted, less than 40% of voters participate.
polls should mirror the actual vote, within a relatively thin
margin of error.
The margin of error
between Carter's certified fair-and-square ballots and the
independent exit poll results constituted a swing of almost
forty points -- a statistical impossibility. Chávez counted
on Carter leaning his way -- Carter's history of promoting
anti-American dictators is no secret.
As Stephen Hayward
noted in a column at Front Page, "among his complex motivations
is his determination to override American foreign policy when
it suits him."
Indeed, Carter's penchant
for interfering in US foreign policy is so well known it won
him a Nobel Prize. Jimmy Carter will go down in history as
the first US ex-president ever to be awarded a Nobel Prize
for the sole purpose of conveying an insult to his country
from the Nobel committee.
Gunnar Berge, chairman
of the five-member committee, told reporters that giving the
Peace Prize to Carter "must also be seen as criticism
of the line the current U.S. administration has taken on Iraq
... It's a kick in the leg to all that follow the same line
as the United States."
("How can we REALLY
show how much we hate the Americans? I know! Let's give a
Nobel Prize to Jimmy Carter!")
Once Chávez had stolen
the election and Jimmy Carter certified the results, certain
American critics (pretty much anybody with a brain) started
questioning whether or not Jimmy Carter had just sold American
interests down the river -- again.
Carter hit back in
a Wall Street Journal Opinion piece, writing;
"We are familiar
with potential fraudulent techniques and how to obtain a close
approximation to the actual results to assure accuracy."
that Jimmy Carter is far too savvy to be conned by a mere
thug like Chávez, Carter then dismissed the results of the
exit polls, writing;
"During the voting
day, opposition leaders claimed to have exit-poll data showing
the government losing by 20 percentage points, and this erroneous
information was distributed widely."
Well, that's that!
The New York pollsters 'widely distributed erroneous information'
-- Hugo Chávez won fair and square. Jimmy Carter says so.
Penn Schoen evidently
must have cheated, although it is a reputable New York polling
firm with a 20 year track record, including working for Bill
Clinton in 1996, Hillary Rodham Clinton in 2001, Michael Bloomberg
in 2001 and many other national political campaigns.
Why would it risk its
hard-won professional reputation over an election in Venezuela?
Carter doesn't explain.
Hugo Chávez is bad
news from the perspective of US national security. He is bad
news from the perspective of homeland security. He is bad
news from the perspective of US dependence of foreign oil.
And he is bad news for America's economic security.
Which makes Hugo Chávez
good news from the perspective of the worst ex-president in
the Omega Letter Daily Intelligence Digest,
Volume:35: Issue 26
Wednesday, September 15, 2004
Eyes Russian MiGs
September 14, 2004
|Venezuela plans to acquire 50 of Russia's most advanced warplanes,
according to U.S., European and Latin American military intelligence
officials who are concerned about regional ambitions harbored
by President Hugo Chávez.
|Chávez's plans to use oil revenues to upgrade his military were
reported last May by CNN, which quoted Pentagon sources as saying
that Venezuela would spend an estimated $5 billion to obtain sophisticated
|United Press International has details of agreements being negotiated
with Russian defense contractors for a large number of super jet
fighters fitted with state-of-the-art weaponry. In letters addressed
last year to the director general of Russian Aeronautic Corp.,
Nicolai F. Nikitin, the Venezuelan air force requested the "latest
version" of the MiG 29 SMT equipped with high-tech weaponry,
including radar-guided missiles and 2,000-pound bombs.
|"The plane must have the capacity to carry no less than
4 tons of bombs," says the document signed by the Venezuelan
air force commander, Maj. Gen. Regulo Anselini Espin, a copy of
which has been obtained by UPI. Venezuelan generals have told
European diplomatic officials that they need the MiGs to protect
the Panama Canal. When asked against whom, the air chiefs wouldn't
|Venezuelan defense officials tell UPI that they are turning
to new defense partners because of deteriorating military relations
with the United States. More than half of Venezuela's 22 F-16s
are currently grounded due lack of maintenance and spare parts.
But Colombia and other neighboring countries fear that the new
arms would enable Chávez to impose his geopolitical and ideological
|The MiG purchase order asks for various types of offensive air-to-surface
missiles, including anti- radar Kh-31A, Kh-31P and Kh-29T "for
use against ships." Radar-guided KAB-500 KR bombs as well
as RVV-AE, R-27 T1, R27 R1, R27 ER1 and R-73E air-to- air systems
are also specified in the inventory, as are multifunctional Zhuk-M
cockpit radars for "over the horizon" combat operations.
|"The total quantity of airplanes provided is of 40 single-seat
planes and 10 twin-seat planes," Venezuelan air force documents
state. Defense analysts point out that two-seat MiGs are normaly
used for deep, surgical bombing missions.
|Ten aircraft are due to be delivered within 18 months of signing
the contract, which also involves setting up a MiG 29 maintenance
center in Venezuela, according to air force officials who outline
plans for long-term supply and maintenance. "Future deliveries
will be made with the participation of the specialists of the
Venezuelan air force in the joint assembly of the planes and their
test flights following their assembly on Venezuelan territory,"
say letters of intent with Russia.
|Several MiGs already are in Venezuela, according to Colombian
defense officials who have shown UPI photographs of the planes
being prepared for flight testing at the Libertador air base in
Maracaibo. A U.S. intelligence source also claims that MiGs have
been spotted flying near the Caribbean island of Curaçao.
|Members of Venezuela's military say handpicked pilots are undergoing
flight training in Cuba, which has six MiG 29s. Cuba is the only
country in Latin America, except Peru, to be equipped with the
advanced Russian model. Fidel Castro offers various types of security
assistance to Venezuela in exchange for oil.
|Russian and Cuban military officials enjoy warm relations with
the Venezuelan Defense ministry, according to American and EU
diplomatic sources who believe that Russia is prepared to sell
the full MiG package. The sources say that Russia's defense attache,
air force Col. Oleg Krajotin, holds regular meetings with Venezuelan
Defense Minister Garcia Carneiro.
|Venezuelan contracts are also being drawn up for Russian Mi-17
heavy-lift helicopters as well as radar systems from China, according
to U.S. intelligence reports.
|The arms give Chávez the military muscle to project regional
leadership following his presidency's reaffirmation through a
national referendum held last Aug. 15. He also is strengthening
ties with Iran.
|"This is battle not only for Venezuela but for all of Latin
America and the Third World," Chávez told a cheering crowd
of followers when he kicked off his referendum campaign last July.
He warned about worldwide retaliation against American interests
if the United States intervened against Venezuela's " irreversible
revolutionary process" and called on all Latin Americans
to unite against the "empire from the north."
|Domestic political opponents accuse Chávez of using fraud to
win last month's referendum. The Organization of American States
is investigating the allegations.
|Speaking before the Senate Foreign Relations Committee last
month, U.S. Deputy Secretary of State Richard Armitage conditioned
improved American relations with Venezuela on a "toning down
of anti-American rhetoric" and a "modification of policies
prejudicial to U.S. interests".
|Chávez has granted American oil companies important offshore
oil drilling concessions. But his foreign minister was in Tehran
just two weeks ago to arrange a state visit, which would be Chávez's
second official trip to Iran since 2001. He also enjoyed close
relations with Saddam Hussein before the Iraqi regime was toppled
by a U.S. invasion.
|Colombian officials fear that a Venezuelan military buildup
might embolden Colombian Revolutionary Armed Forces (FARC) guerrillas
who hailed Chávez's referendum victory as "a stimulus for
liberation movements in all of Latin America".
"FARC forms part of our Bolivarian Revolutionary
Army," says Ileana Ibarra, a local leader of the Circulos
Bolivarianos in Caracas. "We are forming the Great Colombia"
she says, referring to a project for integrating both countries
that was proposed in the 19th century by Venezuela's independence
hero, Simon Bolivar.
Colombia has received billions of dollars in
U.S. military assistance for counterinsurgency operations, including
a fleet a of Blackhawk helicopters. But Colombia has nothing
to match the MiG 29s, which would give Venezuela "the largest
and most potent air force in Latin America," according
former Colombian air force chief, Gen. Nestor Ramirez.
|The Colombian government alleges that Venezuelan aircraft have
flown incursions to support leftist FARC guerrilla units along
border areas. Chávez, in turn, accuses Colombian right-wing paramilitary
groups of conspiring with domestic opponents to destabilize his
|Other longstanding territorial disputes have caused Bogota to
raise a protest against Caracas this week. According to the news
agency EFE, the Colombian government has complained that Venezuelan
offshore concessions just granted to international oil companies
infringe on Colombian territorial waters.
|"We are heading toward a war with Colombia," said
a Venezuelan military intelligence officer who claims that contingency
plans are being drawn up for a potential conflict with the neighboring
|Venezuela also is backing Bolivia's historical claims on Chilean
Pacific ocean ports. At a meeting of Latin American presidents
held last year, Chávez called for the return of a stretch of coastline
annexed by Chile during a war in 1879. He just gave 11 armed T-34
jet trainers to the Bolivian air force and has offered to train
its combat pilots.
|Bolivia's main leftist opposition leader, Evo Morales, who is
a close friend of Chávez, has been heading a campaign to block
gas exports to Chile. U.S. intelligence sources maintain that
Venezuela's ruling Revolutionary Movement channeled $15 million
to Bolivian leftist organizations that toppled a pro-U.S. government
© United Press International
- CARACAS, Venezuela, Sep 14, 2004
Sunday, September 12, 2004
China Filling U.S.
Vacuum in Latin America
September 13, 2004
|There's a powerful new player in Latin America and its aggressive
presence south of our borders spells trouble for the U.S. in this
politically sensitive region
|Writing about "The Middle Kingdom in Latin America"
in the September 3 Wall Street Journal,
Mary Anastasia O'Grady explained that China is "inching into
the void" created by U.S. failure to pay attention to what's
happening among our neighbors in the Caribbean and Latin America.
|"U.S.-Latin America policy is now defined by a costly drug
war of doubtful effectiveness, persistent and damaging International
Monetary Fund meddling, harassment of Latin militaries at the
behest of left-wing NGOs, an intelligence network that counts
coca plants for a living and a naïve attitude toward bullies
like Venezuela's Hugo Chávez," O'Grady wrote.
|"This has left Latins scratching their heads about Dubya.
Of course, these are not Bush values. But they are the priorities
of his State Department and other agencies and by default have
become the U.S. agenda in the region."
|Into this delicate situation steps China, with money and markets
to offer to an area in need of both, making the Asian powerhouse
a political and economic rival of the U.S. in its own backyard.
|And it's not just Latin Americans who are feeling China's presence
in their midst - the islands of the Caribbean are also targeted
by Beijing's growing presence and influence , O'Grady reveals,
citing the deployment to Haiti of a 130-man Chinese riot-control
police unit, scheduled to arrive in mid-September to join the
United Nations stabilization mission as "A relatively minor
but interesting example."
|Noting that it is true that while the "U.N. needs peacekeepers
for this thankless job in Haiti, it is at least mildly ironic
that China's police, notorious for their high-handed and sometimes
brutal treatment of Chinese citizens, are now charged with protecting
human life in Haiti."
|As NewsMax.com reported in "Chinese
Company Completes World's Largest Port in Bahamas", Hutchison
Whampoa, a Hong Kong-based conglomerate with close
ties to China's People's Liberation Army that has taken operational
control of the Panama Canal was then in the process of completing
construction of the largest container port in the world in Freeport,
Bahamas – just 60 miles from Florida.
|Turning to Cuba, she notes China's military relationship with
Castro's Communist regime. She quotes a chilling staff report
from the Institute for Cuban and Cuban-American Studies at the
University of Miami as reporting that:
"In February 1999, [China's defense minister] Chi [Haotian]
visited Havana to finalize an agreement with Cuban counterpart
Raul Castro to operate joint Sino-Cuban signals intelligence and
electronic warfare facilities on the island, equipped (at China's
expense) with the latest telecommunications hardware and fully
integrated into Beijing's global satellite network. By March 1999,
[Chinese Army] officers and technicians began monitoring U.S.
telephone conversations and Internet data from a new cyber-warfare
complex in the vicinity of Bejucal, some 20 miles south of Havana."
|The report adds: "A second installation, capable of eavesdropping
on classified U.S. military communications by intercepting satellite
signals was also constructed on the eastern end of the island,
near the city of Santiago de Cuba."
Rounding out the Chinese Caribbean trifecta, O'Grady notes "is
Venezuela, where an anti-American demagogue, Hugo Chávez,
delights in the kind of Yankee-baiting his hero, Fidel Castro,
has long practiced."
|O'Grady quotes Cynthia Watson, a professor of strategy at the
National War College in Washington who
has just spent a year studying China's influence in the region
as writing that. while Latin America is still below Africa in
terms of Chinese strategic interest it is getting more attention.
|"China has a targeted need to find energy resources,"
says Watson, who emphasized that her comments are her own. "They
are interested in oil contracts in Venezuela, Ecuador and Colombia.
That's why Jiang Zemin went to Caracas in 2001. They want to cultivate
a relationship that would put them in a more favorable situation
and they want to show Latin American nations that they will treat
them as sovereigns, that they won't preach to them and they will
act as partners."
|The idea that China offers an alternative to dealing with the
U.S. in both economic and political terms O'Grady suggests is
likely to appeal to the likes of Hugo Chávez, Brazil's
President Luis Inácio "Lula" da Silva and Argentina's
|"The growing relationship between Brazil and China is viewed
as two emerging powers that can benefit each other vis-à-vis
the U.S," Watson adds noting that for China, "there
is the possibility of utilizing Brazil's space program which is
on an equatorial path. And Beijing would like to be the major
market where Brazil goes when it wants to sell its agricultural
products. Lula has not embraced the FTAA
[Free Trade Area of the Americas] and
may go to Beijing instead."
|China's fixation with conquering Taiwan and the fact that six
Central American nations have diplomatic relations with Taipei,
O'Grady suggests may be why "China reportedly has made a
generous offer (some say $10 billion or more) to Panama to fund
an enlargement of the Panama Canal.
"The effort to shut out Taiwan also explains
why China is dropping big bucks into the Caribbean, where the
14 independent English-speaking nations are always hungry for
handouts. The latest Chinese victory in what policy wonks call
"yuan diplomacy" came in March when Dominica dropped
its recognition of Taiwan in favor of Beijing."
Summing up, O'Grady warns that China's rising influence in the
region "could complicate U.S. efforts to control illegal
immigration, weapons shipments, the drug trade and money laundering
because China is cooperating with Latin countries that are not
especially friendly toward those efforts. Some of these nations
may try to use the Chinese alternative to challenge U.S. hegemony.
"Given China's view of liberty, this cannot
be a positive development for the Americas. To counter it, the
White House would do well to take a hard look at the crippled
diplomacy the State Department has been practicing. It needs
an agenda defined by American values that will foster growth,
sound money and open markets. As importantly, it needs to re-examine
whether the war on drugs, as currently waged, is doing more
harm than good."
© 2004 Associated
Press. All Rights Reserved.
Wednesday, May 26, 2004
would make for an interesting "Under Construction"
graphic for a website: