Bashing the consumer

Once again we are in the midst of a debate about the allocation of a concession for a cellular telephone operation. One part of this debate is relative to whether the law to be applied in this case is the Telecommunications Law of 1941 or the Concessions Law of 1994.

As usual, most of the arguments are a direct function of the commercial interest involved. In this particular case, however, it is even more surprising to find that the General Director of the National Telecommunications Commission (CONATEL) is of the opinion that neither of the two apply, holding the singular view instead that cellular communications are not to be classified a public service.

Again, as is tradition, the debate does not cover the entire communicational spectrum. Once again, the end user of the service is conspicuously absent.

In 1991 Israel bid and allocated a cellular telephone concession to the investor that offered the most amount of lines and agreed to charge the lowest tariff. In Venezuela, however, concessions and privatizations are designed to maximize the income for the State. Results come fast and hard. Recent calculations support the fact that one minute of cellular communications in Venezuela costs ten times what it costs in Israel.

Quality and low tariffs for public services such as electricity, water, communications and transportation are some of the critical elements that must be present in order to maintain the country’s competitiveness. This fact should be taken into consideration by entities such as Fedecamaras and other influential groups that, like any court jester, have in the past applauded a privatization process that must, for all intents and purposes, be classified as fiscally oriented.

The Telecommunications Law, as no other, is evidence of this trend. There is absolutely no mention whatsoever of any obligation or duty of an operator or carrier to provide a good public service at a reasonable tariff. What’s more, when the moment comes to address the regulation of tariffs, apart from the fact that the Law calls for respect for existing agreements, it establishes with utmost clarity that any regulation must consider the “interests of the National fiscal system”.

Don’t think that the Concessions Law is much different. While it logically states that “the concessionaire must be allowed to obtain sufficient income to cover costs and that is fair and equitable”, there is no mention about the need, or even the intent, to structure the concession in such as was so as to minimize the cost to the end user of the service to be offered.

It is high time that we begin to differentiate in a more rational manner between sane economic policies and those that, simply because they are being applied to what has been loosely classified as a “market”, are believed to be the quick road to an economic miracle and are consequently implemented indiscriminately. Much care must be taken when a “market” simply does not exist. This is specially true in the case of public services, which are mostly structured as monopolies, public or private.

Public service companies traditionally offer workers employment stability and therefore also pay salaries that are below the average. Recently, faced with the threat of a national strike, a representative of the national monopoly identified by the initials CANTV, expressed surprise, arguing that the latter was paying salaries over and above the national average. Without wishing to belittle the individual aspirations of its workforce, I remember asking myself who had authorized CANTV to pay its employees salaries above the national average, probably at the expense of a higher tariff for the service offered.

The government, as well as many of the Presidential hopefulls, has announced a new wave of privatizations, specifically in the energy sector. As a result, it is of utmost importance that they remember that a high price obtained for the sale of a publicly owned company like SIDOR is beneficial for everyone, while a high price obtained from the sale or concession of a public service is simply a tax paid in advance to the State, which all of us must then repay via unnecessarily high tariffs for per secula seculorum.

I have read about the supposed “advantage” of tendering and allocating a few megahertz (50 to be exact) at which any investor must then throw an additional US$ 200 million in project development funding. First of all, Conatel hopes to land a US$ 180 million windfall. Then the State wishes to obtain US$ 325 million in income taxes and US$ 470 million in sales taxes between now and the year 2009.

In other words, the tariff structure needed to award the investor a “fair and equitable” income must contemplate not only the US$ 200 million development cost, but also the payment to the State of US$ 975 million. Where the dickens does this leave the end user?

Daily Journal, Caracas, November 11, 1998

Let's, all whakapohane!

I remember having read a few years back about one particular method used by the Maori of New Zealand to protest about something that bothered them. This method consists of lining up a group of Maori tribesmen, turning their backs towards the person or persons that are the target of the protest, dropping their trousers and showing them their naked backsides. This rite is named Whakapohane. 

Without delving further into this tradition, and in spite of the fact that it seems primitive and is most certainly an ugly spectacle, I think it could be also classified as a civilized and most efficient way to protest. Civilized because it does no damage to anyone or anything (except to those people with a well-developed sense of esthetics) and efficient because it manages to consolidate into one single act and gesture all the sense we could possibly assign to a real social sanction.

There is no doubt that we are often frustrated at not being able to find a way to vehemently protest about the stupid, naive and criminal behavior that negatively affects our country on a daily basis.

The idea of putting together a group of citizens, family men, professionals and white-collar workers with briefcases and ties and heading out to the street to shamelessly whakapohane any deserving person is appealing. Consider the following:

What has been demonstrated without doubt over the past decades in Venezuela is an utter incapacity by government to manage its resources. The International Monetary Fund, for example, predicates that the solution to Venezuela's problems can be found by giving government even more resources to squander by way of increased taxes (as if our oil income wasn't enough taxation).

Clearly, the IMF deserves an act of Whakapohane from our citizens. 

Banking charters are usually awarded in order for them to participate actively in the development of the country's economy.

It is not enough for them to simply return the funds they have received on deposit, since if this were so, it would be better to simply buy a good mattress and put it into a large safe.

There are still many who think it is best to be puritan and to simply continue to tighten the screws on financial solvency of banks without paying attention to the real purpose of banking institutions These people deserve a solid Whakapohane.

There are many national authorities that evidently are aware of the damage to economies that short-term capital flows can cause, and also know that other countries have put workable legislation into place to limit these damages.

They cannot be bothered to take the 48 hours required to simply copy this legislation and enact it in Venezuela. There is no doubt that these authorities deserve to be Whakapohaned.

Those people related to the oil sector that have not been able to either see or warn the country about the possibility of a fall in world oil prices, who, in spite of arguing in favor of conquering new markets, run for cover behind OPEC's skirts when confronted with adverse situations, and who continue to invest scarce resources in projects of low significance such as the expansion of our gasoline stations' capacity to sell snacks, should certainly be offered a great Whakapohane.

Many illustrious representatives of the private sector applauded the privatization of CANTV, without realizing that it was all an elaborate trick perpetrated by the government to collect taxes in advance which we now have to cover through exaggerated service charges. These guys are due a good Whakapohane.

Those die-hard defenders of free trade who simply do not understand that in a globalized world economy each country must, when the chips are down, defend itself and guarantee a minimum internal level of employment should be urgently Whakapohaned.

The entire political and economic system is based on centralized income and decentralized personal apparatchiks.

Members of this system have not been able to come up with a real solution to our problems and should be considered traitors.

They should all be paraded to La Carlota Airport and given the Mother of all Whakapohanes .

We have heard that one of the people most clearly and widely questioned in our recent history is due to return to Venezuela after statutes of limitations have expired.

Just imagine what a marvelous message a small delegation of our "notables" dispatched down to Maiquetía to receive that person with a mini-Whakapohane would send. 

We should definitely not lightly discard the possibility of introducing an ancestral aboriginal custom from New Zealand in to the Venezuelan political scheme . 

Whakapohaners of the world, unite! The alternative are much worse.

Spanish translation

The first version was a blue one

Then, I don't know when... some applied the original concept