Venezuela chooses more of the same pain

October 8, 2012 1 Comment

By FRANK BAJAK and IAN JAMES | AP | OCTOBER 8, 2012

President Hugo Chavez put to rest any doubts about his masterful political touch in winning a third consecutive six-year term after a bitterly fought race against a youthful rival who has galvanized Venezuela’s opposition.

The state governor who lost Sunday’s presidential vote, Henrique Capriles, had accused the flamboyant incumbent of unfairly using Venezuela’s oil wealth to finance his campaign as well as flaunting his near-total control of state institutions.

Still, he accepted defeat as Chavez swept to a 10-point victory margin, the smallest yet for him a presidential race. This time, the former army paratroop commander won 55 percent of the vote against 45 percent for Capriles with more than 90 percent of the vote counted.

Chavez will now have a freer hand to push for an even bigger state role in the economy, as he pledged during the campaign, and to continue populist programs. He’s also likely to further limit dissent and deepen friendships with U.S. rivals.

Chavez spent heavily in the months before the vote, building public housing and bankrolling expanded social programs.

“I think he just cranked up the patronage machine and unleashed a spending orgy,” said Michael Shifter, president of the Washington-based Inter-American Dialogue think tank.

But Shifter also noted the affinity and gratefulness Venezuela’s poor feel for Chavez. “Despite his illness, I still think he retains a strong emotional connection with a lot of Venezuelans that I think were not prepared to vote against him.”

“They still think that he’s trying hard even if he’s not delivering what he promised, that he still has their best interests at heart,” Shifter said. “That’s the political skill that he has. He hasn’t lost that touch.”

Chavez spoke little during the campaign about his fight with cancer, which since June 2011 has included surgery to remove tumors from his pelvic region as well as chemotherapy and radiation treatment. He has said his most recent tests showed no sign of illness.

Tensions were high Sunday night as announcement of the results were delayed.

Finally, fireworks exploded over downtown Caracas amid a cacophony of horn-honking by elated Chavez supporters waving flags and jumping for joy outside the presidential palace.

“I can’t describe the relief and happiness I feel right now,” said Edgar Gonzalez, a 38-year-old construction worker.

He ran through crowds of Chavez supporters packing the streets around the presidential palace wearing a Venezuelan flag as a cape and yelling: “Oh, no! Chavez won’t go!”

“It’s time now to sweep away the squalid ones,” said another elated supporter, Ignacio Gonzalez, using a description of the opposition Chavez employed during campaigning.

“It’s time to get them out of governor’s and mayor’s offices. The next battle is in December,” when state and municipal elections will be held, added the 25-year-old student, who wore a red shirt that wedded the images of Chavez, Jesus Christ and South American independence hero Simon Bolivar.

Capriles posed the strongest challenge yet to Chavez, who won by a 27-point margin in 2006 and by 16 points when he was first elected in 1998.

“I will continue working to build one country,” said the wiry, 40-year-old grandson of Holocaust survivors who unified and energized the opposition while barnstorming across the country.

He said in his concession speech that he rejects the idea of two Venezuelas divided by ideology and class.

Capriles had vowed to address violent crime that has spun out of control, streamline a patronage-bloated bureaucracy and end rampant corruption, but his promises proved inadequate against Chavez’s charisma, well-oiled political machine and legacy of putting Venezuela’s poor first with generous social welfare programs.

Yet with a turnout of 81 percent, Chavez only got 551,902 more votes this time around than he did six years ago, while the opposition boosted its tally by 2.09 million. Chavez appeared to acknowledge the opposition’s growing clout.

“I extend from here my recognition of all who voted against us, recognition of their democratic weight,” he told thousands of cheering supporters from the balcony of the Miraflores presidential palace.

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Venezuela Holds American Ship for Arms Trafficking

September 7, 2012

FORBES | SEPTEMBER 7, 2012

The Venezuelan government has seized a U.S. flagged ship and detained its captain for more than a week.

Since August 29 the ship Ocean Atlas has been at port in Maracaibo, Venezuela, where it docked to unload a cargo of equipment. Yet after four hours in port, the ship was boarded and searched by armed security personel, and the captain was detained on suspicion of trafficking in arms or drugs. The captain has been identified as Jeffrey Michael Raider, 45, of Texas.

The rest of the crew of 15 Americans has remained on board under guard. According to a well-placed source arrest warrants have been issued for all of the crewmembers, who are to be taken off the ship for questioning.

Incredibly, my Forbes colleague Jeff Bercovici has been in touch over email with one of the crewmen, Russell Macomber, who has managed to post updates to his Facebook account while under detention.

In a sardonic tone, Macomber even relayed that when Venezuelan authorities raided the Ocean Atlas they stole cartons of cigarettes, ate the crew’s ice cream and let their dogs defecate on the deck. Macomber writes that he would like nothing more than an airdrop of Budweiser. (Read Jeff’s post and Macomber’s account here.)

Officials at the ship’s operator, Intermarine, did not immediately respond to Forbes’ requests for information. Nor did officials at American Maritime Officers, which is believed to have provided the crew for the ship. A spokeswoman at the Venezuelan embassy in Washington said she would look into the incident.

A spokesman for the Seafarers Union confirmed the seizure to Forbes and said, “The SIU is working feverishly to help resolve this situation and to ensure the safety of all mariners aboard the Ocean Atlas. We are staying in touch with the crew and will continue doing so.”

A U.S. Embassy official in Caracas also confirmed the incident to Reuters earlier today.

The seizure of the ship could become an international incident if not resolved soon. A month ago Venezuela detained a U.S. citizen entering from Colombia. President Hugo Chavez accused the man of being a mercenary and part of an “imperial” plot to oust him. So far there has been no public comment from Chavez about the Ocean Atlas detention.

The 12-year-old Ocean Atlas is one of a very small number of U.S.-flagged heavy-lift vessels. Its cranes can lift 400 tons and its giant holds are ideal for hauling hauls boats, generators, and oilfield equipment. It often moves cargoes under contract with the U.S. government or for projects financed by the U.S. Export-Import Bank, which requires U.S. flagged ships to carry any cargoes it has financed.

A decade ago the ship carried oilfield equipment to Iraq. And according to a backgrounder on Globalsecurity.org, it also made a special trip to Libya:

The Department of State requested that the vessel be quietly diverted to Libya, where under special security cover, the vessel was loaded in its entirety with equipment from Libya’s nuclear and other WMD programs arsenal. They included specialized centrifuges used in the processing of uranium to weapons grade, equipment from a uranium conversion facility, and Libya’s five SCUD-C long-range missiles. The cargo was discharged at an undisclosed U.S. East Coast port. The Libyan cargo move was truly a spur-of-the-moment operation.

The ship became the first U.S. vessel to dock in Libya in 20 years.

So was Ocean Atlas carrying weapons this time, on another top secret U.S. mission? No, says Macomber; nothing but three rifles in case they needed to ward off pirates.

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Mercosur Opens the Doors to Socialism

August 1, 2012 1 Comment

The MERCOSUR alliance officially welcomed Venezuela as a permanent member.

By ALONSO SOTO | REUTERS | AUGUST 1, 2012

On his first foreign trip since undergoing cancer treatment in Cuba earlier this year, Venezuelan President Hugo Chavez hailed his country’s welcome by fellow South American leaders into a troubled regional trade bloc on Tuesday.

Ignoring criticism that Venezuela’s entry could eventually cause greater dysfunction among the Mercosur trade bloc’s members, Chavez cast the event as a continuation of his self-styled revolution and a sign of greater ascendance for South America as a whole.

“Our north is the south,” the Venezuelan president said, evoking Simon Bolivar and other revolutionaries who wrested the continent from colonial rule. “Mercosur is, without a doubt, the most powerful engine that exists to preserve our independence.”

Chavez, who recently declared himself cancer-free, stood at a podium throughout his 20-minute speech in Brazil’s capital and spoke in a clear, strong voice. Later, after a meeting at Brazil’s foreign ministry, he jigged and declared that his health “is very good, as you can see.”

The meeting was overshadowed by controversial events that enabled Venezuela’s entry into Mercosur, which also includes Brazil, Argentina, Paraguay and Uruguay. The grouping now accounts for about $3.3 trillion in combined gross domestic product, and the leaders said it would be the world’s fifth-largest economy if it were a single nation.

The expansion of Mercosur was criticized by many who see a paradox in the protectionist policies and leftist slant that increasingly have come to dominate a bloc originally created to liberalize trade.

After years of stalled negotiations with Caracas, the group hastily accepted Venezuela despite the objections of Paraguay, a marked absence at Tuesday’s meeting. The other three countries made their invitation to Chavez after suspending Paraguay in June because of the controversial impeachment there by conservative legislators of leftist president Fernando Lugo.

That move troubled critics, who said it was emblematic of the decline of a bloc that was founded in 1995, at a time when a group of free-market reformers was dominant in the region.

“What was once an economic bloc has now been reduced to a political sideshow,” said Mario Marconini, a former Brazilian trade secretary who is now a business consultant in Sao Paulo. The inclusion of Venezuela despite the veto of a full-fledged member, “is a fatal blow to its economic credibility.”

Brazilian President Dilma Rousseff said on Tuesday that Paraguay’s suspension is justified until the country “normalizes” its internal politics. Brazil and other neighboring countries have argued that Paraguay must proceed with its regularly scheduled presidential elections next year before they consider its government to be stable.

FOCUS ON CHAVEZ

Most of the other leaders present glazed over the Paraguay controversy, and focused instead on criticizing the orthodox economic policies of the developed world. They cited Mercosur as a vehicle that could further regional goals of fair trade, equitable growth and social inclusion.

Chavez said construction companies from Mercosur countries should take part in ongoing projects to build millions of subsidized homes in Venezuela. Argentine President Cristina Fernandez said the region would continue to produce all-important raw materials for the global economy, but demanded “financial stability” in return from richer countries.

Mercosur, she said, could “make this new pole of power indivisible, indestructible.”

Chavez, who has spent more than 13 years in office, has pursued a personality driven government that has scared away foreign investors and crippled productivity. His acceptance by Mercosur, opponents say, will give him one more thing to boast about as he campaigns for another six-year term ahead of Venezuela’s presidential election in October.

Officially, the leaders hailed Venezuela’s strengths as a major oil producer and an important market for everything from Brazilian machinery to Argentine wheat. In practice, though, Venezuela can’t fully participate in the bloc until it agrees to accept a common tariff adopted by Mercosur, common agreements with third-party countries and other prerequisites that Chavez has failed to embrace since talks for inclusion began in 2006.

In a statement Tuesday, Brazil’s National Industry Confederation, a powerful business group, reminded Venezuela that “the new member has obligations to fulfill.” Citing the common tariff and other existing bloc conventions, the group urged Mercosur to establish a timeline by which Venezuela must comply.

Mercosur, the group added, “should focus on reinforcing the stability and predictability of the economic bloc.”

BLOC IS ALREADY TROUBLED

Many fear Venezuela will only complicate relations in an already dysfunctional grouping. “The bloc is a mess,” said Rubens Barbosa, a former Brazilian representative to Mercosur who is now a consultant.

“Just imagine if you start adding Venezuela and others,” he said, noting recent discussions to include Bolivia and Ecuador, two countries with close ties to Chavez.

Tuesday’s ceremony was accompanied by a trickle of business as Chavez and Rousseff formalized a previously disclosed plan by Conviasa, the Venezuelan airline, to purchase 100-seat jets made by Embraer, the Brazilian aircraft manufacturer. Under the terms

of the agreement, Conviasa will pay about $270 million for six Embraer 190 jets, with an option for 14 more.

Meanwhile, Venezuela and Argentina signed an agreement for greater investment in each other’s oil sector. PDVSA, Venezuela’s state-run oil producer, will invest in Argentine petrochemicals, and YPF, its Argentine counterpart, will invest in Venezuelan oil fields, according to the agreement.

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Venezuela Bans Sales of Firearms and Ammunition

June 1, 2012 1 Comment

BBC | JUNE 1, 2012

Until now, anyone with a gun permit could buy arms from a private company.

Under the new law, only the army, police and certain groups like security companies will be able to buy arms from the state-owned weapons manufacturer and importer.

The ban is the latest attempt by the government to improve security and cut crime ahead of elections in October

Venezuela saw more than 18,000 murders last year and the capital, Caracas, is thought to be one of the most dangerous cities in Latin America.

‘Must do more’

The government has been running a gun amnesty in the run-up to the introduction of the new law to try to encourage people to give up their illegal arms without fear of consequences.

One member of the public in Caracas told the BBC: “They’re killing people every day. This law is important but they need to do more, they’re not doing enough now.”

Hugo Chavez’s government says the ultimate aim is to disarm all civilians, but his opponents say the police and government may not have the capacity or the will to enforce the new law.

Criminal violence is set to be a major issue in presidential elections later in the year.

Campaign group The Venezuela Violence Observatory said last year that violence has risen steadily since Mr Chavez took office in 1999.

Several Latin American countries have murder rates far higher than the global average of 6.9 murders per 100,000 people.

According to a recent United Nations report, South America, Central America and the Caribbean have the highest rates of murder by firearms in the world.

It found that over 70% of all homicides in South America are as a results of guns – in Western Europe, the figure was closer to 25%.

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Latin American Countries want Cuba free of Sanctions

April 16, 2012

By ANDREW CAWTHORNE | REUTERS | APRIL 16, 2012

Unprecedented Latin American opposition to U.S. sanctions on Cuba left President Barack Obama isolated at a summit on Sunday and illustrated Washington’s declining influence in a region being aggressively courted by China.

Unlike the rock-star status he enjoyed at the 2009 Summit of the Americas after taking office, Obama has had a bruising time at the two-day meeting in Colombia of some 30 heads of state.

Sixteen U.S. security personnel were caught in an embarrassing prostitution scandal before Obama arrived, Brazil and others have bashed Obama over U.S. monetary policy and he has been on the defensive over Cuba and calls to legalize drugs.

Due to the hostile U.S. and Canadian line on communist-run Cuba, the heads of state failed to produce a final declaration as the summit fizzled out on Sunday afternoon.

“There was no declaration because there was no consensus,” said Colombian President Juan Manuel Santos. He bristled at suggestions the summit had been a failure, however, saying the exchange of different views was a sign of democratic health.

For the first time, conservative-led U.S. allies like Mexico and Colombia are throwing their weight behind the traditional demand of leftist governments that Cuba be invited to the next Summit of the Americas.

Cuba was kicked out of the Organization of American States (OAS) a few years after Fidel Castro’s 1959 revolution and has been kept out of its summits due mainly to U.S. opposition.

But Latin American leaders are increasingly militant in opposing both Cuba’s exclusion and the 50-year-old U.S. trade embargo on the Caribbean island.

“The isolation, the embargo, the indifference, looking the other way, have been ineffective,” Santos said. “I hope Cuba is at the next summit in three years.”

Santos, a major U.S. ally in the region who has relied on Washington for financial and military help to fight guerrillas and drug traffickers, has become vocal about Cuba’s inclusion even though he also advocates for democratic reform by Havana.

CLINTON PARTIES IN “CAFE HAVANA”

In an ironic twist to the debate, U.S. Secretary of State Hillary Clinton went dancing in the early hours of Sunday at a Cartagena bar called Cafe Havana, where Cuban music is played.

Argentine President Cristina Fernandez, who has insisted without success that Washington recognize its claim to the Falkland Islands controlled by Britain, was one of several presidents who left the summit well before its official closure.

She missed a verbal gaffe by Obama, who referred to the “Maldives” instead of the “Malvinas” when using the name Latin Americans give to the disputed islands.

The leftist ALBA bloc of nations – including Venezuela, Ecuador, Bolivia, Nicaragua and some Caribbean nations – said they will not attend future summits without Cuba’s presence.

“It’s not a favor anyone would be doing to Cuba. It’s a right they’ve had taken away from them,” Nicaraguan President Daniel Ortega said from Managua.

Although there were widespread hopes for a rapprochement with Cuba under Obama when he took office, Washington has done little beyond ease some travel restrictions. It insists Cuba must first make changes, including the release of political prisoners.

Obama told a news conference after the summit he was “puzzled” that nations that had themselves emerged from authoritarian rule would overlook that in Cuba.

“I and the American people will welcome a time when the Cuban people have the freedom to live their lives, choose their leaders and fully participate in this global economy and international institutions. We haven’t gotten there yet,” he said.

Obama urged Cuba to look at political and economic transformations in Colombia, Brazil and Chile for inspiration.

PROSTITUTION SCANDAL

The prostitution saga was a big embarrassment for Obama and a blow to the prestige of his Secret Service, the agency that provides security for U.S. presidents. It was the talk of the town in the historic Caribbean coastal city of Cartagena.

Eleven Secret Service agents were sent home and five military servicemen grounded after trying to take prostitutes back to their hotel the day before Obama arrived.

Obama said in general his security personnel did an extraordinary job under stressful circumstances but he would be annoyed if the allegations were proven by an investigation.

“We represent the people of the United States and when we travel to another country I expect them to observe the highest standards,” Obama said of the reports. “If it turns out that some of the allegations that have been made in the press are confirmed, then of course I will be angry.”

A local policeman told Reuters the affair came to a head when hotel staff tried to register a prostitute at the front desk but agents refused and waved their ID cards.

Locals were unimpressed and upset at the negative headlines.

“Someone who’s charged with looking after the security of the most important president in the world cannot commit the mistake of getting mixed up with a prostitute,” said Cartagena tourist guide Rodolfo Galvis, 60.

“This has damaged the image of the Secret Service, not Colombia.”

The divisive end to the summit added to strain on the U.S.-dominated system of hemispheric diplomacy that was built around the OAS but is struggling to adapt to changes in the region.

“I’m not sure the next summit will even be possible,” said Carlos Gaviria, a Colombian politician and former presidential candidate.

Perceived U.S. neglect of Latin America has allowed China to move strongly into the region and become the leading trade partner of Brazil and various other nations.

Regional economic powerhouse Brazil has led criticism at the summit of U.S. and other rich nations’ expansionist monetary policy that is sending a flood of funds into developing nations, forcing up local currencies and hurting competitiveness.

Brazilian President Dilma Rousseff called it a “monetary tsunami” that Latin American nations had the right to defend themselves from.

Cheering the mood a bit, U.S. Trade Representative Ron Kirk announced that a U.S.-Colombia free trade agreement will come into force in the middle of May.

With a presidential election looming, Obama had portrayed his visit to the summit as a way to generate jobs at home by boosting trade with Latin America.

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