Chávez on the decline: Links to FARC, resistance to new school curriculum, even Petróleos de Venezuela in trouble?

[yllus]

Hugo Chávez does a somersault

It is a remarkable turnaround. Back in January Venezuela?s president, Hugo Chávez, told a startled world that the leftist FARC guerrillas in neighbouring Colombia should be recognised as an insurgent army and granted belligerent status. Then, on Sunday June 8th, he generated surprise afresh when he reversed his position and called on the FARC?s leaders to lay down their arms, release their hostages and recognise that guerrilla warfare in Latin America ?is history?.

What is going on? Mr Chávez is doing his belated best to distance himself from what most of the world regards as a terrorist organisation. Three months ago Colombia?s army captured a cache of compromising documents in electronic form, during a raid on a FARC camp inside Ecuador. That proved to be a painful blow to Mr Chávez?s standing. As well as containing evidence of possible material and financial support for the guerrillas from the Chávez government, the documents suggest that, as many had suspected, the proposal to grant belligerent status was part of a strategy agreed by the FARC leadership in alliance with Mr Chávez.

Venezuelan spokesmen are denying all: they have dismissed the computer files as a fabrication. But it seems that few believe them. Foreign governments have been queuing up to request access to the files for their own intelligence services.

Things have also been going badly for Mr Chávez on the home front. In December voters narrowly rejected his proposal to redraft the 1999 constitution along ?socialist? lines (including a provision for indefinite presidential re-election). That was his first significant electoral defeat in a decade and he has struggled to regain his composure. Since December he has sought ways to reintroduce elements of the rejected constitution using existing powers, including a far-reaching enabling law that was passed last year, which gives him the right to legislate by decree.

But Venezuelan society has proven remarkably impervious to these efforts. Teachers, parents and students have resisted the implementation of a politically inspired school curriculum and attempts to abolish university entrance requirements. The private media forced a retreat on attempts to charge them exorbitant fees for material from state television. And a decree law setting up a new spy system, dubbed the ?Getsapo law??a play on Gestapo and on a local word for snitching?is to be revised after an outcry from human-rights groups.

Mr Chávez faces a fresh electoral test later this year. On November 23rd the country will vote for new state governors and mayors. Crime rates are dreadfully high?successive interior ministers have failed to do anything effective to tackle the problem?and the economy is slowing. Now inflation is surging towards 30%. A big defeat for Mr Chávez?s supporters looks increasingly plausible.

If he were to lose in November, that would, in turn, render all but impossible the revival of his plan to flout the constitutional ban on his re-election to the presidency in 2012. And if his re-election is not going to happen, then the race to find a successor could get under way in earnest.

Some of the people in the oil industry near where I work have been mentioning that something is up with Petróleos de Venezuela (PDVSA) lately, which is sort of stunning - an oil company in trouble in this day and age? But it really does seem that something is up:

But there are many signs that the once-mighty PDVSA may be running short of cash. Since January 8th, for instance, its customers have been required to settle their bills eight days after shipment, rather than 30 days after receipt, as is customary. By the end of the month it was offering eight super-tanker loads of fuel oil at below market price for cash. In 2007 the company's debt burden rose from under $4 billion to over $16 billion. The uncertainty caused by the Exxon dispute means its borrowing costs may rise.

Petroleumworld.com reports more:

State-run oil holding Petróleos de Venezuela (Pdvsa) has not caught up with its payments against invoice to contractors since last August.

According to contractors, the delay has escalated, to such an extent that some companies accrue four months without collecting the amounts payable by the holding for their services. The usual term under the agreements and Pdvsa internal regulations is of 30 days.

The chair of the Venezuelan Association of Contractors of Oil and Related Companies (Acopav) Reneiro Contreras said that Pdvsa managers attributed the delay to troubles with SAP, the program used by the company to pay online to the suppliers of goods and services.

Under Chavez, PDVSA has branched out into involving in social projects, education, housing and foodstuffs. Local oil consumption is on the rise, and deep cuts to reinvestment in its oil business are starting to affect production. Unbelievably, PDVSA may literally be nearly out of cash.

As the Economist notes, further defeats of Chavez's political agenda at home are starting to look more and more plausible. Is the grand Bolivarian experiment nearing its climax?

 

[CPA]

PVDSA should be used as the posterchild for what's wrong with nationalizing the oil industry. Congressional Dems are you listening?

 

[Genx87]

This is good news for the people of VZ. Socialism for the 21st century fails just like its brand in the 20th century.

 

[StageLeft]

Originally posted by: CPA
PVDSA should be used as the posterchild for what's wrong with nationalizing the oil industry. Congressional Dems are you listening?

No.

Once oil prices go back down this pressed national company will be crushed. Chavez' vast social nonsense is only sustainable with unmaintainably high oil prices. How silly that even with oil where it is now he's having a hard time making ends meet.

 

[Skitzer]

Originally posted by: Skoorb

Originally posted by: CPA
PVDSA should be used as the posterchild for what's wrong with nationalizing the oil industry. Congressional Dems are you listening?

No.

Once oil prices go back down this pressed national company will be crushed. Chavez' vast social nonsense is only sustainable with unmaintainably high oil prices. How silly that even with oil where it is now he's having a hard time making ends meet.

What makes you believe oil prices will decline to a level much less than they are now?

 

[CPA]

Originally posted by: Skitzer

Originally posted by: Skoorb

Originally posted by: CPA
PVDSA should be used as the posterchild for what's wrong with nationalizing the oil industry. Congressional Dems are you listening?

No.

Once oil prices go back down this pressed national company will be crushed. Chavez' vast social nonsense is only sustainable with unmaintainably high oil prices. How silly that even with oil where it is now he's having a hard time making ends meet.

What makes you believe oil prices will decline to a level much less than they are now?

Personally, I don't. Regardless, it's obvious in Venezuala, Mexico, Russia and many other countries that nationalizing your oil industry is a horrible idea. There's a reason why Exxon, Shell and other private companies are used by nations to do the actual drilling and refining. They understand the risk/reward, the capital costs needed and the fact you must reinvest to stay on top. Venezuala and it's ilk only look at the dollars currently flowing in and how to spend them to "help" their citizens, overlooking the long-term negative effects of what they're doing.

 

[EagleKeeper]

Chavez could easily be "broken" by the US refusing his oil.

The hardship on us would be less than on him.
His oil is such that it can not be easily procesed in large quantities by Europe or Asia.

Revenues go down and he is in trouble when he promises of wealth and equality can not be met.

 

[Arkaign]

Chavez : Clever, but not smart. Generous, but not kind. He will be remembered as an interesting failure.

 

[StageLeft]

Originally posted by: Skitzer

Originally posted by: Skoorb

Originally posted by: CPA
PVDSA should be used as the posterchild for what's wrong with nationalizing the oil industry. Congressional Dems are you listening?

No.

Once oil prices go back down this pressed national company will be crushed. Chavez' vast social nonsense is only sustainable with unmaintainably high oil prices. How silly that even with oil where it is now he's having a hard time making ends meet.

What makes you believe oil prices will decline to a level much less than they are now?

My grasp of reality.

 

[Fern]

The chair of the Venezuelan Association of Contractors of Oil and Related Companies (Acopav) Reneiro Contreras said that Pdvsa managers attributed the delay to troubles with SAP, the program used by the company to pay online to the suppliers of goods and services.

They're 4 months behind on their bills?

Bwuhahahaha, and they're blaming it on a piece of software (SAP)? Lord that's funny.

This guy is a case study in how to fsck up an economy. Jeebus, screwing up an oil production based economy in these times of record high prices requires real talent.

What a boob.

Fern

 

[Craig234]

Originally posted by: Common Courtesy
Chavez could easily be "broken" by the US refusing his oil.

The hardship on us would be less than on him.
His oil is such that it can not be easily procesed in large quantities by Europe or Asia.

Revenues go down and he is in trouble when he promises of wealth and equality can not be met.

Boy, it sure proves your ideals are right when you abandon them and use your far greater wealth to squash someone, and 'prove' they're wrong.

 

[Craig234]

I don't recall seeing one post here about the nationalization of the oil industry in Bolivia, announced in 2006 by Chavez ally Evo Morales.

Every company continued operating as the government obtained majority control. From what I've read, the jury is out on how well it'll go, as this poor and small nation tries to figure out the right way to run things, but they are now already getting a much higher share of the revenue for use for the people of the country.

Whatever the right or wrong of that policy, Bolivia seems to me to largely have a healthier democracy than the US now, as evidence by when the government entered one of those corrupt contracts, for 'privatizing' water, with Bechtel secretly hiding behind a front company, which made the water needed for basic needs too expensive for the poor to pay, the public had large protests which were powerful enough to force the government to rescind the contracts.

Meanwhile, the US public has been unable to stop unpopular Bush policies from the economy to the war in Iraq to other issues.

 

[EagleKeeper]

Originally posted by: Craig234

Originally posted by: Common Courtesy
Chavez could easily be "broken" by the US refusing his oil.

The hardship on us would be less than on him.
His oil is such that it can not be easily processed in large quantities by Europe or Asia.

Revenues go down and he is in trouble when he promises of wealth and equality can not be met.

Boy, it sure proves your ideals are right when you abandon them and use your far greater wealth to squash someone, and 'prove' they're wrong.

When a government takes over private interests just to redistribute it to those that feel they deserve it and do not have to work for it, I have no sympathy to breaking the government.

The same goes for taxing wealth just so some one else can benefit from it because they do not want to put in as much effort as the person that is creating the wealth.

If the liberal and/or government wants to given away wealth, then let them reach into their own personal pockets and leave others alone.

 

[Mill]

Originally posted by: Craig234
I don't recall seeing one post here about the nationalization of the oil industry in Bolivia, announced in 2006 by Chavez ally Evo Morales.

Every company continued operating as the government obtained majority control. From what I've read, the jury is out on how well it'll go, as this poor and small nation tries to figure out the right way to run things, but they are now already getting a much higher share of the revenue for use for the people of the country.

Whatever the right or wrong of that policy, Bolivia seems to me to largely have a healthier democracy than the US now, as evidence by when the government entered one of those corrupt contracts, for 'privatizing' water, with Bechtel secretly hiding behind a front company, which made the water needed for basic needs too expensive for the poor to pay, the public had large protests which were powerful enough to force the government to rescind the contracts.

Meanwhile, the US public has been unable to stop unpopular Bush policies from the economy to the war in Iraq to other issues.

Yeah, you are obviously right. That's why two seperate Bolivian areas have voted to seperate from the country in the last few months. That, and the many current lawsuits against Bolivia and the state oil company for refusing to buy out the companies that were nationalized.

I still do not understand why you comment on situations you know nothing about.

 

[Fern]

Originally posted by: Craig234

Originally posted by: Common Courtesy
Chavez could easily be "broken" by the US refusing his oil.

The hardship on us would be less than on him.
His oil is such that it can not be easily procesed in large quantities by Europe or Asia.

Revenues go down and he is in trouble when he promises of wealth and equality can not be met.

Boy, it sure proves your ideals are right when you abandon them ....

What ideals would those be?

We have some ideals about helping dictators or something?

Fern

 

[dphantom]

Originally posted by: Mill

Originally posted by: Craig234
I don't recall seeing one post here about the nationalization of the oil industry in Bolivia, announced in 2006 by Chavez ally Evo Morales.

Every company continued operating as the government obtained majority control. From what I've read, the jury is out on how well it'll go, as this poor and small nation tries to figure out the right way to run things, but they are now already getting a much higher share of the revenue for use for the people of the country.

Whatever the right or wrong of that policy, Bolivia seems to me to largely have a healthier democracy than the US now, as evidence by when the government entered one of those corrupt contracts, for 'privatizing' water, with Bechtel secretly hiding behind a front company, which made the water needed for basic needs too expensive for the poor to pay, the public had large protests which were powerful enough to force the government to rescind the contracts.

Meanwhile, the US public has been unable to stop unpopular Bush policies from the economy to the war in Iraq to other issues.

Yeah, you are obviously right. That's why two seperate Bolivian areas have voted to seperate from the country in the last few months. That, and the many current lawsuits against Bolivia and the state oil company for refusing to buy out the companies that were nationalized.

I still do not understand why you comment on situations you know nothing about.

Becasue he can. Anyone can blab all day without knowing what they are talking about.

Nationalization does not work. Government cannot efficiently allocat capital - they are beholden to too many interests competing for the money.

Companies are efficient allocators of capital and they should be allowed to do so. By allowing companies to invest their capital as they wish, the companies (in general) gain a higher rate of return for their investors and by extension increase the wealth of suppliers, employees and even the government via taxes.