A code for our ‘public servants’

I have in my hands a copy of the Official Gazette of the 15th of July 1998. Published in this gazette and entitled “Instructivo No. 1”, we can find the Code of Conduct for Public Servants. I have this document because someone threw it into my lap a few days ago and asked me what I thought of it. I have been at a loss for words since then. Maybe I am at a loss for words because this is one of those circumstances in which keeping quiet is exactly what is called for when having noble sentiments or simply a good code of conduct.

On Father’s Day, when my daughters come up with presents of gigantic multicolored key rings with looks on their faces that say “use it or you don’t love me”, I don’t merely hide my reservations but even am able to produce evidence of infinite enthusiasm. 

When a friend who has recently discovered his hidden talent for painting shows me his first works, I also hide my reservations with words such as “how interesting”, albeit distorted just a wee bit by a mild cough. 

When a person I don’t know commits the type of faux pas that most of us commit at one time or another, I also hide my reservations with total silence. If such a silence simply aggravates the embarrassment of that person I even, educated as I am, tend to create some diversion to ease the pain.

No way am I going to hold my tongue on this one! This “Code of Conduct” was signed, based on a 40-year-old Constitution, by an outgoing President and 23 Ministers, professionals, neighbors and of age. I don’t see why I have to hide my reservations.

I am not saying that it is wrong to require that a Public Servant be “honest, fair, polite, loyal, disciplined, efficient, responsible, punctual, transparent and clean and that he have a calling to serve”. As standards, these are so logical that they should be required even to simply aspire to a post as Public Servant.

I am also not saying it is wrong to try to define each and every one of these traits, even though I think the place and time to do this is during primary school.

What I am saying, however, is that it is a bit disquieting to see the publication of a ‘manual’ like this one in a formal vehicle such as the Official Gazette. Specially when the fact that we are going through a moment of such emotional import as is the transition to a new millenium while facing one of Venezuela’s worst crises, both structural and temporary, should merit a ‘real’ effort to push the country towards a new path or model of development.

It is disquieting because it reflects the traditional attitude of our governments that think that all our ills are a result of human frailties and cultural faults that can simply be rectified by decree.

Disquieting because it reflects the degree of shamelessness that our governments have achieved. They have thrown the first stone and preach of truth, trying thereby to tell us that those in the driver’s seat have been, are, and always will be, over and above the flagrant violations of each and every article in the new code.

It must be due to all of this that it is so difficult to remain silently discreet. For example, should the government simply have offered its excuses for the difficult market conditions in which the Brady Bond swap was executed and the recent dollar issue of 20 year bonds at 14% was floated instead of sandbagging us by selling both as great achievements, the adverse reactions would have been minimized. Luckily, this will not happen again. Paragraph (a) of Article 26 of the Norms states that “Every person is entitled to know the truth. The Public Servant must not omit or falsify .........”.

All publications in the Official Gazette are subject to occasional typographical errors. Unfortunately this must be the case in Article 17:1 in which we read: “Those persons who have occupied public office must not use information obtained during this time against the interests of the Republic for at least one year”. The statute of limitations of the prohibition to use anything at all as a tool to attack the best interests of the Nation should definitely not prescribe!

The Code frequently repeats that its contents must be made public (could this actually acquire the status of Mao’s Little Red Book?); calls for the creation of a National Board of Public Ethics; and allows Public Offices to issue complementary norms as long as these are kept “within the framework of the spirit of the Code”. We evidently have not heard the last word.

As an incentive, the Code specifies in one of its articles that the Public Servants must comply with the former in order to be eligible for “condecorations awarded on the Day of the Public Servant”. Unfortunately, the Code does not include one article, one paragraph, one letter, nor one comma with regards to what would happen should a public official not comply with the letter of the decree. This evidently renders the entire effort less credible and efficient.

However, all is not lost. This Code, published in a leather hardcover and placed in the drawers of the night tables of local hotels, could indeed become a precious souvenir for foreign tourists. Additionally, Paragraph (c) of Article 19 states that the “Public should be treated with the formal “Usted” and familiarities should be avoided ....”. Could we finally be close to getting rid of the familiar “mi amor” and “mi vida”?

 

How can we all keep quiet?

Last week Venezuela issued 20-year bonds for a total of U.S.$500 million at an interest rate of close to 14 percent per annum. This implies service outlays of U.S.$70 million. The United States would pay only 6 percent for a similar issue. This means Venezuela must annually pay U.S.$40 million more than the United States. In spite of this, government officials qualify the issue as successful. Who are we kidding?

Although I am sure these Venezuelan officials were formally authorized to contract this debt, I am certain that they were not authorized morally.

I say this based on the certainty that capable, responsible and patriotic administrators would not have rested in their efforts to develop a healthier alternative for the country. An alternative different than simply paying more, so much more, in fact, that people queued up to purchase these instruments.

I also maintain that there should be limits to the cost at which the country is allowed to subscribe new debt. There should be a limit to the cost at which we, as a failed generation, have the right to saddle future generations with. I consider we have reached that limit. What’s is our government’s limit? Is it 25 percent, 100 percent, or is there no limit at all?

What other alternatives do we have? If there were a real political will to fight for the future of our country, the alternatives are infinite. Cut costs, use reserves, achieve the consensus necessary in order to use the vast real guarantees the country possesses in order to contract debt at lower interest rates, or simply contract debt at shorter maturities. Any which way, anything other than what was actually done.

For example, if the interest rate for Venezuela’s debt drops within one year to the levels Mexico’s debt is currently traded at (9.8 percent), then, considering that there would be 19 years left to maturity and that the paper carries a fixed 14 percent interest rate, the country would have to pay U.S.$675 million to retire this particular debt issue. In other words, in one year the country would have incurred losses of U.S.175 million.

Someone could object and say that the situation could become worse and the 14 percent could actually become a bargain. I don’t believe however, that any government has the right to impose its pessimism for future decades. Should the country now actually implement some of the alternatives being discussed today, such as the partial sale of PDVSA in order to cancel existing debt, the rates the country could command would fall to the same levels as those of the United States.

In this case, the losses incurred with our most recent issue would be stratospheric (hypothetically, if this were to occur within one year from now, the losses would reach U.S.$450 million).

Some may argue that the political conditions that would allow the development of an alternative that was not of least resistance do not exist. I can’t accept this since it is the responsibility of leadership to create these political conditions or, if it fails, to resign. The governability of a country must mean more than simply being able to avoid a coup d’état. The damage caused is not limited to the fact that we must now pay higher interest rates for the U.S.$500 million.

The fact that we forced the issue upon a market with low receptivity by simply raising the interest rate, means that this will be used to measure future opportunities in Venezuela.

It is enough to note that this increase in interest rates will be reflected immediately in an increase in financing costs for the private sector and in a reduction in the income we could receive from future privatizations.

The interest rates fixed for Venezuela are approximately 3 percent higher than those applicable to Mexico and Argentina today. This means a difference of U.S.$15 million per annum.

Our official spokesman explained that the international markets unfortunately perceive a higher credit risk in Venezuela since the latter is an oil producing country. I am truly amazed by the sharpness and realism of this analysis.

As if they were rubbing salt into the wound, the announcement of the bond issue was published simultaneously with an ample, and probably costly, campaign launched by Fogade in which they exhort failed Banco La Guaira’s debtors to “comply with the payment of their obligations.”

This exhortation comes a full four years after the day this institution was intervened by the government. The tranquility with which the government went about the collection of these debts doesn’t seem compatible with the urgency reflected by the high interest rate accepted in the latest bond issue.

I have three beautiful, intelligent and talented daughters. Thank God they have had opportunity to visit various parts of the world and enjoy them immensely. Their good knowledge of languages and computers, as well as their open-minded thinking about the new realities make them ideally suited for a globalized world. My eldest daughter recently told me that, in spite of all this experience, the place she likes the most and in which she wants to live is Venezuela. How can I keep quiet?