Tourist Mementos

Just taking flight to Porlamar triggers reflections. Flying over Cubagua, what a good place!... to set up the mother of all "Surviving" episodes, placing 10,000 ultra pro and 10,000 ultra against Chavistas and letting them, unarmed, negotiate an islet project.

I landed at the Porlamar International Airport and speculated on the impact that a photo would have for Joe W. from Texas, a fan of adventure tourism, where “Er Arcarde” [the local mayor] gave him, for his personal use, a latest model Cavim bulletproof vest.

At the airport I confirm that the “duty free” type stores, which in the whole world mean high prices, are camouflaged and do not stand out in a “duty free” area and I remember having proposed to tax “L'Aisla” with very high taxes, to then encourage tax evasion tourism, thus reclaiming its venerable smuggling tradition. For Hans from Hamburg, there should be no antelope head that can compete with a tax evasion certificate issued by the Chamber of Commerce.

And following the same vein, imagine the shy and obedient Lisa from Birmingham, taking a photo “negotiating with the authorities”, with that fat traffic guy who always stopped me at the intersection of Rómulo Gallegos and Los Ruices.

Hans and Helga, the environmentalists from Amsterdam, will remember their protests in front of the power plants that burn oil, because of the geniuses who prefer to cross the Gran Sabana with a power line, to sell our hydroelectricity to Brazil, cheaper than the one we bought to Colombia.

Frank from Boston will be able to visit the Miss Venezuela museum, that should be built; and Moníque from Cannes, could rebuild her ego in Playa El Agua, noting that there are still those who are not indifferent to her uncovered parts.

Finally, and as a great departure gift, everyone will find in their hotel, bound in leather, a copy of the Official Gazette of July 15, 1998, which contains Instruction No. 1 for the Public Servant, which among others, in Article 19 forces the use of “You”, prohibiting familiarities, such as “my love”.

Some time ago I read the label of a soft drink, which proudly proclaimed “Guaranteed 100% artificial” and learned about the importance of mental attitude. Frankly, Margarita is too much of an Island to follow the same route as the others in the Caribbean, where, even on the souvenir flannels we can read, “Different Island...same shit....”

http://alborotandoturismo.blogspot.com/2001/08/momentos-turisticos.html

Hugo, me and the Revolution

Hugo, me and the Revolution

When I see our industrial cemeteries, where the hopes of so many Venezuelans lie due to a very poorly implemented trade liberalization and a stupid exchange rate policy, I know that Hugo and I want a revolution.

When I see the United States apply a 60% tariff on the import of orange concentrate and only allow the best quality to be imported, while Venezuela only applies 20% and allows the entry of any garbage, condemning our orange groves to die, I know that Hugo and I want a revolution.

When I observe the very unfair distribution of income in my country, the inefficiency of fiscal spending and I notice how efforts to collect an income tax are abandoned for the ease of VAT and other direct taxes, I know that Hugo and I want a revolution .

When we reflect on the decades of silence in the face of a terrible education system and the obscene and violent programming with which our television stations indoctrinate our youth, I know that Hugo and I want a revolution.

When I see my Venezuela immersed in anarchy, without an authority capable of controlling that small percentage of abusers, who exist everywhere, I know that Hugo and I want a revolution.

But, when Hugo says that his revolution is the daughter of the Chinese or Cuban revolution, I also know that Hugo and I are not talking about the same revolution.

My revolution only pursues the humble goal of achieving a good Venezuelan government for Venezuelans and that, if we ever make a mistake along the way, at least it will be in favor of Venezuela. My revolution welcomes the foreign investor happily, but it is only happy when it manages to retain the Venezuelan investor. In my revolution, except for the strengthening of OPEC (including gas and incorporating new members), a pragmatic Great-Colombianism and a rational environmental solidarity, there are no resources or time for other geopolitical considerations.

Although I consider that selling about 53 thousand barrels of oil to Cuba under overly generous conditions is a minor sin, compared to the still not so distant proposal of selling 5 million barrels to the world at a price of only 7 dollars; The fact is that as long as some Venezuelan is dying of hunger, does not receive a good education or decent health care, my revolution does not contemplate giving anything to anyone – except, a Christian solidarity in emergencies.

Hugo has an amazing ability to communicate, in a pedagogical way, Venezuelan messages to the Nation and in this sense, for those of us who know that the future requires building bridges of understanding, he represents a very valuable asset for the country. For this reason, whoever has access to Hugo, please ask him to stop with this invention and not waste his talent, speaking to the Sovereign, in Chinese with a Cuban accent.

Translated by Google from an Op-Ed in Venezuela April 26, 2001

https://radicaldelmedio.blogspot.com/2001/04/hugo-yo-y-la-revolucion.html

Beware of bank consolidation

Beware of bank consolidation

Every day there are fewer banks in the world. For those of us who have heard horror stories about those who, in order to solve problems with fraudulent withdrawals from their cards, must talk on the phone with anonymous voices and try to sound innocent, thinking about the possibility that one day we will only have one bank left, reminds us of Kafka .

But, apart from experiences worthy of a Stephen King, banking consolidation, an evolution that has been sold to us as a marvel, may contain other risks not sufficiently commented on – or happily ignored. Among these the following:

Less risk diversification. Whatever the authorities do to guarantee the diversification of banks, there is no doubt that fewer banks mean fewer baskets in which to put the eggs. When I read that during the first four years of the 1930s in the United States a total of 9,000 banks failed – I wonder what would have happened to that country if there had been just one bank.

Regulatory risk. Before, there were many countries and many ways of regulating banking. Today, when rules of global application are arrogantly dictated in Basel, the effects of any mistake can be explosive.

Excessive similarity. Encouraging banks to adopt common rules and regulations is ignoring the differences between economies, which is why some countries will end up with banking systems that are poorly adapted to their needs. Certainly, regulations whose main objective appears to be to safeguard capital come into conflict with other functions of banking, such as promoting economic growth and democratizing access to capital.

Less diversity of criteria. The smaller the number of participants, the lower the diversity of opinions and, with this, the greater the risk of misconceptions prevailing. Anyone who doubts this should read the one-dimensional analyzes published by the risk rating agencies.

Violent reaction. The development of decision-making processes has benefits but also risks. Thus we see that the speed of information itself, which promotes a rapid and immediate response, can aggravate the problems. Before, between those who took the problem home to study it and those who found out about it late, the market was provided with a buffer, which often saved it from untimely and poorly thought-out decisions.

Unclear benefits. To date we have not seen a foreign bank grant, for example, mortgage loans with globalized term terms and interests. In this sense, the benefits of a global bank are not clear, when it operates replacing local banking.

Cost of global aid. When banking in Venezuela had its last crisis, among other reasons due to buying banks at excessive prices, it was sad but logical that the cost was paid by our country. Today, with globalized banks, which are not immune to committing scams, as well as buying other banks at whatever price, who will pay the bill?

Nowadays, when the world calls for bank mergers or consolidations, I wonder if, on the contrary, the creation of special reserves based on size should not be imposed on banks. The larger the bank, the worse the fall and the greater the need to avoid it.

http://subprimeregulations.blogspot.com/2001/03/beware-of-bank-consolidation-early.html

 

Here is the energy family

Here is [my] the energy family

Dad Oil, a tough and hard-working guy, who brings the bread to the house. He is quite lonely since the family, even though they like him to earn well, ignores him, considering that marketing the devil's excrement does not have enough social status. In his work, when facing difficulties such as consumption taxes, he seeks the company of the OPEC guys, even when they also seem somewhat lacking in desire.

The Hydro breast, always present with its clean and pure energy. As long as there is good communication, he does not need praise and fulfills his duties by sowing renewable warmth in the family.

The eldest son, Carbon, [coal] a solid and conservative boy, even if somewhat boring. He doesn't complain much but, by searching for his language, we can hear him commenting on how unfair it is that he is ignored at home, while in countries like Germany and Spain, his peers enjoy such extraordinary subsidies that they even go by the same name as his father Petroleum.

The second, Heavy Oil, a man who, although he looks like his father, does not even remotely have his father's personality. He is a slow and heavy guy, but if someone only gave him some technical clinics, who knows if in the future he couldn't become a real cleanup hitter. Recently he tried to do something, putting on the Orimulsion flannel but, even in Florida, supposedly a friendly state, they wouldn't let him play.

The little boy Gas – who everyone knows as the genius of the family – but nothing he can start. Although he is a good associate of Dad Oil, helping him fill the empty spaces he leaves, he fails to assert himself when he is alone and free. However, one day he will be a star

The Aeolian female and her alternative cousins ​​are still too young to know how they will behave, but they look good.

Finally, there is a nuclear guy who, because he lives outside the country, almost no one knows him.

What's the point? It occurred to me that describing our energy family in this way could help me explain what a few of us consider to be possible errors in our energy policy as a country. Let's see.

The little Gas boy, instead of preparing him to exploit all his talents in the future and assist him in forming his own OPEG, we want to launch him onto the streets alone, because we have read that he is fashionable in other countries. We don't even realize that one of the reasons for its popularity is that since it is not organized, it is a perfect strikebreaker to be used against its father Oil. Furthermore, and even if it is not bad to generate electricity, when considering its true potential, burning it in this task is like being satisfied with it washing dishes, as long as it is in New York.

Regarding Heavy Oil, if in the Orinoco Belt we sold cheaply, for about 30 years, to various national and foreign groups the bitumen they need and in return developed on-site technologies for generating plants, we could make the boy a champion. How much better than to make him pass off today's global punishment as fat, dirty and flabby!

Finally, Carbon [coal] is not without reason. If they can use it in other parts of the world and if its value is not really seen to rise explosively in the future, why don't we allow it to be useful, generating electricity?

Obviously, all of these are only matters that a united family understands and considers.

PS. Translated by Google from  an Op-Ed in Venezuela, March 1, 2001

 

 

No, thanks

 No, thanks

The following paragraph is extracted verbatim from the UK Energy Report 1999, published by the Department of Trade and Industry of England.

“The retail price of products is largely determined by taxes, especially for fuel. The attached figures ... illustrate the increasing proportion of the price of gasoline attributable to taxes. The incidence of taxes, ...explains around 85 percent of the final price of unleaded gasoline..." Prices are expected to continue growing, given the commitment of the English Government to increase taxes on petroleum by an average of 6 % annual, above inflation.

The report's figures indicate that the price of petrol before tax fell from 15 to 10 pence per liter between 1980 and 1999, a decrease of 33%. However, for the same period in England, the consumer price went from 26 to 68 pence per liter, increasing 162%. The explanation for this phenomenon is found in the various taxes on gasoline, which rose from 11 pence in 1980 to 58 pence per liter in 1999, an increase of 427%.

Taxes, applied in a discriminatory manner to oil, which favor coal, for example, affect both the volume and the sales price of our main export product and therefore directly harm our country. All of Europe applies taxes of the same order and the other consuming economies, except the United States, are evolving in the same direction.

It was only a few months ago that the magnitude of these taxes was understood and the consequences, at least in Europe, were serious protests by consumers. It will be necessary to observe whether in 2001, countries like England and Germany, even when stripped, continue with their pre-programmed increases.

The relative silence of Venezuela and other oil-producing countries, the truly aggrieved ones, is surprising. Sometimes I wonder if such passivity has its origin in the fact that in this globalized world, everyone is still dying for the possibility that one day The Queen will invite them to have tea in her palace.

In November 2000, the president of the European Energy Foundation of the European Union, with great cynicism, announced that in the dialogue between oil consumers and producers, everything could be discussed, except taxes, since these did not significantly affect consumption.

In December 2000, the European Union announced a donation of 55 million euros for the reconstruction of Vargas, to be disbursed over two years.

In a world that preaches free trade, oil taxes are hypocrisy. I, being a Venezuelan of European descent, may react in particular, but I am convinced that we have to place our protest in its correct dimension. In this sense, and even if I had never rejected the help offered by the United States during the tragedy in Vargas, today I would not hesitate to respond to Europe: No thanks, we do not want your donation, that amount is equivalent to what Venezuela would obtain each week if You, on the basis of false environmentalism and real fiscal voracity, do not apply taxes that discriminate against oil. We will not help calm their institutional conscience by accepting some insolent barter with begging mirrors.

(Translated by Google from an Op-Ed published in Venezuela February 1, 2001)

The Oil Curse

My Plan Colombia

My Plan Colombia

In times of disagreement, it is important to draw the conveniences, which is why I firmly believe that with the people and land of Venezuela and Colombia we could build a Nation capable of competing, face to face, with the other superpowers of the world. However, given the many mental and real barriers that exist, you will probably ask me: what lumpia [eggroll) did I smoke?

Paraphrasing Carlos Zubillaga, I consider that one of the obstacles to the integration of interests of the two countries is due to the fact that Colombia seems to have developed under the influence of a ruling class, which only sought to dominate, while in Venezuela, our course was marked by a ruling class that refused to dominate.

Another impediment is the loss of self-confidence, caused first and foremost by the gospel of globalization. Normally, our geographical conditions, between north and south, east and west, would represent for a glass-half-full philosopher a cluster of fortresses, but unfortunately, for our glass-half-empty philosophers, they only constitute weak flanks to protect.

To make matters worse, even Bolívar's life cycle, his birth and death, which could unite us so much, instead of constituting a platform to launch us into a greater future, only seems to anchor us in the past.

Given these difficulties, it is understandable that prudence suggests deferring an integration effort until when more favorable conditions exist. However, the reality is that our Colombia, said with the same right and respect with which I hope they can refer to their Venezuela, faces something very close to a civil war, which we simply cannot ignore.

Of course, if we want to preserve the ambitions of achieving a future and twinned greatness, we cannot participate directly in this conflict, but I believe that this should not mean that our only alternative for action is to equip our border and avoid the splash of a Colombia Plan.

On the contrary, the moment is historically opportune to relaunch an aggressive economic integration plan that helps us, both them and us, to understand that the true obstacles to a better future are very, very far from the causes of a fratricidal conflict.

In this sense, I propose that we immediately seek to reaffirm the Andean Pact, at least as it relates to Colombia and Venezuela. To begin, we must seek to align our currencies in order to maximize Colombian-Venezuelan commercial exchange and impose significant external and common trade barriers, which will allow us to create an important internal market.

The above, like a successful angioplasty, could unblock the commercial arteries and oxygenate the economies to such an extent that both Colombia and Venezuela can observe new and better horizons and perhaps even a bonanza that allows generating new and peaceful solutions.

In so many places in the world we observe the presence of wars caused by passions that are absolutely inexplicable to a normal being. For God's sake, whatever happens, I beg you not to leave as an inheritance to our children that absolute, eternal and corrosive hatred between brother peoples, which eats away at a newborn life.

(Translated by Google from an Op-Ed published in El Universal January 4, 2001)

 

Oil, Citgo, and gov't policies

An interview by Daily Journal’s Leopoldo Taylhardat 

The DJ recently interviewed columnist Per Kurowski on his views regarding the Venezuelan and international oil industry. We caught up with him with his foot virtually on the plane's steps for a flight to Guatemala. He was committed to a week's work there for the Inter-American Development Bank (IADB).

As usual with him, his statements were clear and frank. Per has been writing well-balanced opinion articles for the DJ for several years now.

PK: "The OPEC Summit Conference results? In general, very good. Results will depend on the unity of OPEC and its decision to defend its interests in very specific areas such as the fiscal and environmental discrimination against oil.

“I hope I'm not seen as ungrateful, but it looks to me as a poor beginning when we give so much publicity to the donation by the European Union of 250 million euros, almost one year after the Vargas disaster, because we all should know that even the least discrimination against our oil will, in the mid-term, easily save the EU that amount - through volumes and prices - in one-month additional revenue. 

“The good future results for Venezuela we may get from OPEC depend mainly on how we push the organization's lazy bureaucrats, normally afraid of the risks involved in any change. Let's not forget that the high-taxes problem has been affecting us for several years. Why didn't they point it out before? 

"About the San José Pact I can't say much. I'm not familiar with the subject but-and it seems to be an international procedure -any country has, I thinkthe right to use any strength it may haveto defend its interests in any way it feelsreasonable. At least it seems politicallyproper when it's done by the world's superpowers. The New York candidate to Congress, J. Lazio said, during a debate with Hillary Clinton: ... ask our allies and those who went to bat in the Desert Storm War, to think about our needs ...'- or words to that effect. So, if someone can send some of his own people to fight and die for the oil, what's wrong with giving out some oil, out of good will or, as some people claim, because of foolishness? 

"The volume of oil involved in the San José Pact is very small, so selling it at discount to other poorer countries may be a minor sin, if anything. Except when it is used for purely political reasons - now that would be a major sin.”

"On the other hand, Venezuela need not feel guilty for the difficulties other poorer countries may experience due to increasing oil prices. We are innocent infants compared to those countries selling renewable products such as medicines at prices thousands of times their cost, including raw materials and production. Let's stop sucking our fingers ... 

“Let me elaborate some more on this subject that, after all, is in fashion. The discussion over "fair prices" is, in my opinion, irrelevant. As long as oil is needed and scarce, its price will be high. If it becomes abundant and could be replaced by some other energy source, its price will go down. Any reference or comparison to the prices of other products is irrelevant, because regularly and naturally, the prices of any product or group of them can go up while others fall.

“Fairness is, to me, a matter of participation: the products obtained from a barrel of crude oil are sold in Europe for the equivalent of $200. Laborers housewives, teachers, and so on must pull out of their pockets that $ 200 and pay in cash. So it is evident that this is the market price for it. In other words, oil has never before been so valuable.

"On the other hand, we the oil owners and producers, we do not get much for a barrel of oil. Our share is only about $30 - or 15 percent - out of the $200. The rest is shared by refiners, transporters and distributors, who get $25, and the ever-hungry European government that grabs up to $160 - 80 percent.So it's unfair for the country selling that non-renewable resource to get only percent of the market value. It's like selling our house and being obliged to pay the real estate office over 80 percent of the price." 

Will the current Venezuelan government's oil politics contribute to change the world oil panorama? 

"I'm not sure. It depends on the government's capacity to strengthen the country and to encourage the nation to defend our interests. All our interests, not only the oil. Since consumer countries do know how to defend their interests, including oil, we must be continuously defending ours. Not just spasmodically. Results will depend on the strength of will displayed by all of us. What cannot be denied is that the oil politics promoted by our current government were not only necessary, they were taken just in time, at the eleventh hour." 

Shouldn't we emphasize conservation over production? 

"We must either preserve or sell our oil. It's up to us. What we must not do is fall into the death trap of producing while the price stays above the cost of extraction and shipping – that is, accepting as valid the idea that we must be satisfied as long as the oil pays for its production and transportation. 

"I am definitely against that. The nation must obtain a higher level of added value. And that's what we have OPEC for. If we get only 15 percent on the selling price of our product, then we are such poor users of our buried-for millions-of-years-wealth that we deserve having the wells locked up so future generations can benefit from oil. That also applies to the use of oil revenues. If we continue being as inefficient as in the past, we don't deserve to benefit from the nation's oil.” 

The appointment of a Venezuelan as " Citgo president is it convenient or not? 

"A Venezuelan as president of Citgo? Why not? Of course, it depends on who that Venezuelan is. Personally, I believe the Venezuelan state must control 100 percent of the exploration, extraction and basic refining operations. This is the only way it can have the possibility for using it as a weapon for geopolitical negotiations or ensure its value via, for example, OPEC. Until someone convinces me of something different, I insist that anything else the Venezuelan state tries to do with oil means a loss or a net reduction of the benefits brought by the first phases of the operation

"Because of that and the fact that I have seen the corporation's reports, I still can't understand the economic reasons for having bought and kept Citgo. There is evidence in the reports that it's being subsidized by PDVSA. 

“And, for those who argue so much in favor of privatizing PDVSA, I challenge them to make an IPO for Citgo, subject to their obligation to purchase oil products at market prices."

PS. I am still for Venezuela getting rid of Citgo

Overprotected or not?

Overprotected or not? 

Coming from the United States, I received a small bottle of water and a bag of peanuts from the flight attendant. On the bottle, as usual, there was the comforting information that its calorie content was zero, it would be very worrying if that were not the case. However, the legend of the bag drove me crazy, when I read that to obtain its nutritional information, I had to write to the address indicated there. What was I doing at 35,000 feet, eating it or not? This made me reflect on the incredible number of regulations designed to protect the consumer.

We read that in Japan there is great concern because its people have adopted excessively exaggerated hygiene customs, which could reduce their resistance to microbes. Would a possible Darwinian evolution, forcing the Japanese to live in air bubbles, also apply to the overprotection of the American consumer?

I went to my sister, who because she was a doctor, I considered her to be the great guru of this epidemic of crazy rules and other stupidities of the gringos, being married to one of them, to ask her confidentially, without my brother-in-law finding out: What kind of society could require protecting its citizens in such a way? Are they so gross? Her answers were enlightening, so I'll tell you what I deduced from them.

In international trade, the United States is considered an open country, with the lowest tariffs in the world. Which is not necessarily true, if we consider that their average tariffs are made up of some of 0%, applied to products of little commercial significance, such as a nuclear reactor, and others very high, of 60%, applied to products, which for protect their own, they want to scare away, like orange concentrate.

Just as in commerce, reality does not coincide with common belief, in terms of regulations on quality, content and form of use, the United States does not have all the overprotection that we believe, suffering sometimes from absolute lack of protection.

In my sister's opinion, it is not that Americans are brutes (for my family history records, my brother-in-law has never seemed that way to me) the fact is that all the regulations that we observe in that country only constitute a weak line of defense, in the face of the legal uncertainty that has been created by the addiction of its judicial system to lawsuits. She tells me that the terror is so great that even in baby strollers there are instructions that recommend taking the baby out before folding him. In ironing, they insist on not ironing the clothes while they are on.

The lawsuits and their damages are not fictions. You can demonstrate this by asking any shareholder of a tobacco company in the United States what they think about legal uncertainty. You will surely get very interesting answers, in terms of monetary damages per capita. Likewise, we see that the insurance premiums, which doctors must pay to defend themselves, exceed the annual salary of many Venezuelan doctors. We know how difficult it can be for us to find a trustworthy doctor, but for American doctors, it is probably even more difficult to find a trustworthy patient.

We see in the news that in Florida they want to sue for the annulment of the electoral result, alleging that 20,000 voters were supposedly confused. Because of the difficulty they have in agreeing on who should be their next president, faced with a vote divided 50-50, I believe that those who are truly confused are many more, they are all the voters. Maybe they should outsource their government. Disney?

Speaking of legal security and trade openness, these were recently evaluated in the 2001 Economic Freedom Index of the Heritage Foundation, where Venezuela has once again earned being in the basement, with number 115 and the United States with 5. That is why, as a Venezuelan trying to get the point across, today I am spitting somewhat towards the north, instead of just straight up.

Translated by Google (and me) from an OpEd in Venezuela

The OPEC that I want to see

Towards the end of 1980, oil of optimum grade such as Arabian Light was being sold at US$ 36 per barrel. By the end of 1998, its price had fallen to US$ 12.20. The latter is equivalent to US$ 6.50 in 1980 US dollar terms, and represents only 18% of its value in 1980. This would seem to imply that whatever the strategy was that OPEC used to defend its oil was simply dead wrong.

This situation was so disastrous that at the end of 1998 the only alternatives that were ventilated publicly were either to violently increase production capacity or to simply sell or privatize the entire industry.

To limit oneself to the simple increase in production capacity would be to repeat the same errors that were committed with the other raw materials and natural non-renewable resources. It would mean to resign oneself to receiving the marginal contribution that results from being the sector’s low cost producer. It is sad that a country that has been so blessed with a valuable resource such as oil has to adopt a model that, at the end of the day, would let it to sell it at the variable cost of production. Something like receiving a valuable family inheritance and then turning around and selling it for what it costs to wrap it and ship it to the buyer.

In the same vein, the outright privatization of the oil sector would eliminate all possibility of geopolitic negotiation and the only thing we would receive as a going away present would be the resources to solve the existential problems of an entire generation of Venezuelans that have, for the last 20 years, not been able to decide if they were coming or going and that lived in a sort of Limbo State in the duty free zone of our international airport.

Today, when OPEC, for well know reasons (albeit not well recognized reasons) has received a new lease on life, it would be naughty not to wish it success in taking advantage of this second wind to build itself into a solid organization capable of facing the new challenges. If it fails, this will surely be its last breath. This is why I wish to share with you what I would consider the OPEC I want.

The OPEC I want would be able to win the confidence of all of its members in order to consolidate in one single block all the resources necessary to really defend it oil. These resources go far and beyond the simple turning of the tap.

The OPEC I want would be one that, upon observing how consumer nations have usurped the value of oil by increasing taxes (the UK, for example, increased taxes from 85% in 1980 to 456% ad valorem in 1998), would humbly accept the fact that they have lost the battle to an able opponent, but is now regrouping in order to win the war.

The OPEC I want would train the world’s100 best environmentalists in order to insure that, even though it shares the conviction and responsibility of taking care of our fragile world, the costs of defending the latter would not be laid squarely and unjustly on oil’s shoulders and that the environmentalist’s arguments will not be used for other hypocritical ends.

The OPEC I want would train the world’s 100 best experts in international commerce who would help avoid measures like direct subsidies for carbon as well as taxes that are aimed directly at oil and not at other sources of energy and that are evidently discriminatory and therefore not permitted under the norms established by the World Trade Organization.

The OPEC I want would train the world’s 1000 best scientists who would work in the world’s best laboratories and study, research and develop new uses for oil in order to minimize pollution or maximize added value as well as alternate sources of energy that could be used in the future.

The OPEC I want would not recognize the rights to intellectual property, brands and patents that, like a rabbit pulled out of a hat, generate income for the countries that own these rights which are definitely renewable, while the income obtained from the sale of a non-renewable natural resource such as oil is simultaneously being treated in a discriminatory fashion.

The OPEC I want simply would not allow a company to abscond with a hefty portion of the value of oil because it has formulated an additive that (supposedly) permits gasoline to be less polluting and based on a process that has dubiously been patented.

The OPEC I want would train the best image and marketing advisors in order to insure that the world’s public opinion does not continuously receive distorted information about OPEC and its members.

The OPEC I want would be staffed with the best team of diplomats and negotiators that would insure adequate representation at all international forums.

The OPEC I want would not allow gas and other sources of energy who’s values are not set under the OPEC umbrella to be introduced into the market like Trojan horses in order to compete with oil.

The OPEC I want knows that it counts with other resources other than oil to defend itself. The mere addition of all its international purchasing power would allow it to receive better treatment by imposing uniform special duties on all those who discriminate against oil.

The OPEC I want would not be formed by managers that think that their only objective is to perform comfortable bureaucratic tasks, but rather by soldiers that know and accept that they are on a mission aimed at improving the lot of their nations and that borders on being sacred.

The OPEC I want knows that it is not totally unimportant and is able to rally the solid support of its members and above all, of the population of its member countries.

The citizens of countries belonging to the OPEC I want know that even though their happiness and well being does not depend only on oil, it does depend on being able to defend what is theirs.

In the OPEC I want everyone prays to his respective God to give them strength to take full advantage of the meeting in Caracas.

Caracas, Venezuela, Daily Journal, September 2000

Originally published in Spanish in El Universal, Caracas, Venezuela August 26, 2000

Our economic policy suffering of complex

Protectionism, without a doubt, creates economic distortions, which means that its implementation must be continually subjected to an intelligent, creative and disciplined effort in order to reduce such distortions.

In Venezuela, an immense part of the professional elites have become “the Buddha” of protectionism; Hence today, when we find ourselves in a state of economic emergency, which requires a certain protectionism, there is a risk that it will be implemented by the least experienced.

Protectionism, whether we like it or not, managed to generate an important industrial base in the country through the import substitution policy. However, as it came to present a large accumulation of inefficiencies, the rulers in power, instead of making the corrections that, although not easy, were necessary, succumbed to the siren song of commercial opening and proceeded to burn the bridges. or to sell the sofa, destroying the little institutional capacity that existed to administer protectionism.

I have frequently argued that Venezuela seems to suffer many times from the same complex of an insecure teenager, who when he enters a party with mud on his nose, breaks down emotionally due to the certainty that everyone is watching him – when, as we well know, that never happens since everyone is busy with their own muds.

Only the existence of a complex like the one described could justify both the excessive desire to seek applause and international acceptance, as well as the presence of several of the true phenomena of misinterpreted economic orthodoxy, which have led us to the regrettable economic situation that we live currently. Below, I would like to comment on some of those orthodox phenomena that I have detected:

Commercial opening. The process of trade opening itself was carried out with all zeal and fanaticism, however, no effort was made to ensure that the country's efforts were duly rewarded; Evidence of this was that while Venezuela lowered its tariffs, the world increased those applied in a discriminatory manner to petroleum derivatives. On the other hand, it should be noted that this process began without taking into account the reality of the country, to such a degree. that the economic sectors were almost never consulted, nor informed regarding the transition or adjustment periods to be implemented. Perhaps part of the blame lay with the economic sectors themselves by ignoring the ongoing process and letting Fedecámaras represent them, knowing that Fedecámaras does not represent anyone, except its own leaders.

Fiscal policy. At the most inopportune moment of all, in the midst of the initial phase of an economic recession, the country decided to satisfy the demands of multilateral entities for fiscal balance and launched the introduction of VAT (or its substitutes, whatever they were called), with the aggravating factor, furthermore, of abandoning the function of seeking a better distribution of income, via the income tax.

Financial regulations. Banking, in addition to promoting savings, offering reasonable returns and certainty of recovery, must fulfill the functions of supporting economic growth and democratizing access to capital. In terms of banking regulation, it would seem that the country has forgotten these last two functions, accepting, without blinking, the Basel regulations, much more appropriate for the banking of an already developed country than for ours. There is nothing wrong with being a developing country, what is wrong is believing that by simply adopting different positions, you can reach another level of maturity – like a little girl who borrows her mother's lipstick to feel grown up.

Exchange policy. Without going into discussing it in detail, the truth is that in exchange matters, during the last four years, rates have been allowed to evolve in a way that threatens local productive economic activity to such a degree that its justification can only be attributable to mental health problems. Sometimes, I even think I hear our central bankers addressing their colleagues saying, "whatever it is, we will kill inflation in Venezuela, even if we have to kill the Venezuelan."

Foreign investment. In few cases is the complex, to which I referred initially, as clearly drawn as in that of foreign investments. The ones that make the most noise in this globalized world are, above all, those investment funds that represent short-term capital – swallow capital – that fly through the skies in search of opportunities to speculate. In the face of such investors, the country has bowed, offering them restrictive monetary policies with absurd differentials, to the point of having ignored the needs of our national investors or our true foreign investors, which are those companies that ensure employment with their physical presence in Venezuela.

I would not hesitate to decree strong protection measures – such as immediately closing the border to imported vehicles – of course, such a measure should be done in accordance with Colombia, given that it is currently our only and true business partner. By the way, on occasions I have suggested applying to the import of vehicles a tariff equivalent to that applied to gasoline in their countries of origin and that would mean, for example, in the case of the Mercedes Benz from Germany, a tariff of more than 400%.

I, on the other hand, would tremble at the thought of implementing protectionist measures, without counting on the knowledge of many of those who do know about the dangers of protection. To them, I beg you, even temporarily, to abandon your doubts and/or intellectual complexes and lend your shoulder to a country that needs it. (I promise you that I am not going to tell anyone, especially those multilateral entities – where perhaps in the future you will apply for a job – for whom protectionism and everything that smacks of that, is fo, fo and fo.)

Petropolitan
Finance for Development

The rights of intellectual property users

As we all know, Microsoft has been declared guilty of monopolistic conduct by a US court. What would have happened if the United States, based on the fact that Microsoft is an American company, had simply ignored these problems? Would it have been up to our humble Pro-Competencia to initiate the legal proceedings against this giant among giants?

All evidence leads us to suspect that as far as the protection of intellectual property is concerned, we are still in an embryonic stage. There is still a lot to discuss and decide upon. As an example we can cite the unilateral statements issued by President Clinton and Prime Minister Blair in which both guarantee free access to data produced by research into the decodification of the human gene. This caused share prices of firms dedicated to this research to tumble. Likewise, serious debate has been stirred up in the press about the validity of many patents issued in the world of the Internet.

When I then received (as did many others) a letter and brochure illustrated with a set of handcuffs and in which I was curtly advised I should legalize all the software I was using before the 30th of April. Should I not do so, I would be confronting severe fines, would have my hard disk sequestered and would be subject to up to four years in prison, I was galvanized into reflecting a bit more on this issue.

My first conclusion was that due to the fact that all of the legal apparatus that regulates this matter was developed by the owners of 99.99% of intellectual property rights, countries like Venezuela that only have users and royalty payers, must with urgency develop their own theoretic frame of reference. The following are some points for discussion:

Any idea produced by a human being is the result of what the latter has inherited from human civilization and makes that person simply a conveyor and official spokesman of these ideas. He or she should not expect any other remuneration other than sincere thanks for work well done or in very few cases, maybe a Nobel Prize.

Any investment in the publicity of trademarks is equivalent to investment in protectionist barriers and in this sense does not lead us towards the maximization of the benefits that can be produced by a real free market. For example, the possibility that a pirate McDonald’s could be allowed to set up right across the street from an original McDonald’s, leaving it up to the consumer to decide which is better, would dramatically expand the frontiers of free competition.

When the authorities award Microsoft the rights to ownership of a particular software, they do so with the understanding that there are other parameters and competitive elements in the market that limit the capability of this company to abuse its position of advantage. This could be valid in a domestic market, but may not be in a globalized world. Microsoft establishes its prices for software based on the American market in which it considers its prices to be reasonable. Should Venezuela have been Microsoft’s only market, I am sure the price of this software would be one tenth of the prices it currently charges. By transferring to Venezuela the protection awarded to Microsoft in the United States, we can infer that since the price is the same in both countries, what in the US is seen as reasonable protection could be seen in Venezuela as monopolistic behavior.

You may ask yourselves what could possibly stimulate the acidity of the abovementioned hypotheses relative to the rights of the Users of Intellectual Property, Trademarks and Patents. I remind you of my opposition to the abusive ad-valorem taxes that are indiscriminately being imposed on oil production by many nations around the globe.

Based on data taken from the “World Oil Trends 1999” published by Arthur Andersen and Cambridge Energy Research Associates in the UK, for example, taxes on gasoline which in 1985 were 85% have now reached an absurd 456%. Evidently, these taxes have caused the increase of the price of oil based products for the consumer. In England, the price index for these products went from 100% in 1980 to 247% in 1998. The result of this for Venezuela is clear as day. Demand for crude oil dropped and the price index of crude oil went from 100% in 1980 to a mere 18% in 1998.

The above simply means that Venezuela’s oil income was affected very negatively. This leads me to think that there is no reason for us to undersign treaties or pacts that obligate our judges to be modern day Sheriffs of Nottingham, thereby helping others to defend intellectual aspirations to intellectual income. Especially when we consider that oil is a non-renewable resource while other intellectual products are by definition renewable resources.

Human genetics made inhuman

Lately world leaders have issued statements labeling research into the human genetic blueprint as “one of the most significant scientific projects of all time.” They have also suggested that “to realize the full promise of the research, raw fundamental data on the human genome including the human DNA sequence and its variations should be made freely available to scientists everywhere.”

As of this moment, all I have read about the mapping of human genes has been so upsetting that it only brings to mind the title of the musical Stop the World, I Want to Get Off. I am very far from making my mind up about this difficult issue, but I need to share some of my initial concerns with as many people as possible.

A report cited in Reuters from the Daily Telegraph, London, indicates that “the government plans to allow insurance companies to use DNA testing to assess whether people are at risk of inheriting serious illness and should pay higher premiums.”

I believe strongly in the importance of the market as a means for the distribution of resources in society. However, I also believe that the benefits of development should accrue to all, not leaving any behind. What we now seem to be able to accomplish with research on the human genome multiplies manifold the difficulties of harmonizing these two previously contradicting objectives.

For instance, it would be great if genetics allowed the insurance companies to decide who will pay lower premiums, that is, those with less risk of developing serious illness. However, who will be responsible for those declared genetically second-class citizens, who will be forced to pay double or triple the premium, or who will ultimately be turned down altogether?

This problem is not limited to insurance. Reuters also reported on a conference to be held in mid-April in the United Kingdom in which “Genetic testing of children and testing for physical and social characteristics, as well as medical traits, would be high on the agenda.” Does this imply the possibility that even access to the university will some day be determined in part by genetic analysis?

What would parents who today limit their background search to asking their children who their friends’ parents are do tomorrow? Would they be obliged to ask about their genetic charts? The potential for discrimination is great, and would only reinforce the motivations of overly twisted Darwinists.

This genetic investigation might also represent a serious commercial threat for those countries that are not participating in this area. One of the companies racing to use information from gene mapping to make profits declared that it had hooked up with a center to find genes associated with breast cancer. If the efforts of this company are successful, it will be sitting on a patentable product and would be in a position to become a monopolist in a market with very inelastic demand. Can rationality be guaranteed within the openly declared and not unreasonable intention to obtain profit from the venture?

Many countries have signed commercial agreements that obligate them to respect patents to the extent of having to collaborate with other countries and punish unlawful use of protected discoveries. In the future, advancements in genetic science may force the revision of these accords, to decide whether they are still valid or whether, on the other hand and for the good of the common citizen, they should just look the other way.

What to do? It is very hard to say. Today, and just out of practical considerations, I limit myself to suggesting that all insurance companies design a plan which obligates them to issue policies for all of those who undertake a genetic examination. This policy should cover the negative impact and consequence that could arise from anyone getting access to such information.

I know this is only a Band-Aid, but what else can I do? I am not among those that resign and lie down to cry, even though this matter actually would justify just that.

From The Daily Journal, Caracas, March 2000

From Voice and Noise, Booksurge 2006

https://voiceandnoise.blogspot.com/2006/08/human-genetics-made-inhuman.html

Genes humanos hechos inhumanos 

A mediados de Marzo el Presidente Clinton y el Primer Ministro Tony Blair declararon in a joint statement que research into human genetic blueprint was "one of the most significant scientific projects of all time." Sugirieron también que "To realize full promise of the research, raw fundamental data on the human genome including the human DNA sequence and its variations, should be made freely available to scientist everywhere." Sonaba maravilloso. 

Desde ese momento solo he leido sobre aspectos relacionados con el mapeo de los genes humanos, tan perturbadores,.que a cada momento me recuerda el titulo del musical, Stop the world I want to get off. En la materia me encuentro muy lejos de encontrar una posición pero la angustia que me crea, me obliga a compartirla con muchos. 

Lo peor fue un reporte de Reuters en el cual, citando como fuente al Daily Telegraph de Inglaterra, se indica "The government plans to allow insurance companies to use DNA testing to assess whether people are at risk of inheriting serious illnesses and should pay higher premiums." 

Para alguien que como yo cree tanto en la importancia del mercado como mecanismo de asignación de recursos en la sociedad, como en la necesidad, objetiva y moral, que el desarrollo no solo alcance una parte de la población, y deje rezagada a la otra, las posibilidades que visualize, multiplicaron por mil las dificultades de harmonizar entre los dos algo contradictorios objetivos. 

Que bueno si la genetica permite cobrar una prima mas baja a quién no esta predispuesto a ciertas enfermedades, pero, quién se responzabiliza por el que resulte declarado ciudadano geneticamente de segunda y a quién le exigiran el pago doble, triple, o simplemente le rechazaran una cobertura. 

Lo anterior no se limita a seguros. La Reuter reporta también sobre una conferencias a mediados de Abril en Inglaterra y en la cual "Genetic testing of children and testing for physical and social characteristics, as well as medical traits, would also be high on the agenda." - lo cual dibuja en el horizonte la posibilidad de que hasta el acceso a las universidades se determine por analisis genetico. 

Los padres madres quienes hoy con toda normalidad le preguntan a sus hijos sobre quienes son los padres de sus amigos, qué harán mañana? Estarán en la obligación de preguntar sobre la carta genetica? 

Aparte de su potencial discriminatorio - que solo puede reforzar los argumentos de aquellos genéticamente desviados Darwinistas que buscan la raza suprema, la investigacion genetica también presenta una profunda amenaza comercial para los paises que hoy no tienen una presencia en esta area de la economia. 

Las primeras reacciones a las declaraciones de Clinto y Blair por parte del mercado financiero de empresas y laboratorios dedicado a la ciencia genetica fue negativa - se abre el mercado y se impide el monopolio. A los pocos dias la Casa Blanca declaraba "The whole point of this is to make raw data available so private companies can innovate, create new medicine and treatment and make a profit." y las aguas volvieron a su cause. 

Lo anterior plantea inmensos retos regulativos. Por ejemplo, Celera Genomics, one of the companies racing to use information from gene mapping to make profits, said on Monday it had hooked up with a center to find genes associated with breast cancer. Si los esfuerzos de tal empresa son exitosos obtendra un producto curativo y patentable, y se ubicara como monopolista en un mercado con una demanda inelastica. Como se garantiza la razonabilidad en la declarada y nada equivocada intención de obtener una ganancia. 

Un pais como Venezuela, ha firmado acuerdos comerciales que hoy lo obligan a respetar las patentes, hasta el grado de colaborar y perseguir el uso ilegitimo de estos. En un futuro, el desarrollo genético puede obligar a revisar estos acuerdos, para decidir si se siguen honrando o si, por el contrario, para el bien de sus ciudadanos, debe hacerse la vista gorda. 

Las reacciones emotivas que el tema produce, inspira escribir. Hoy termino proponiendo que las empresa de seguro, de inmediato diseñen un seguro, de caracter obligatorio para todo quien se haga un examen genetico, y que cubra las consecuencias negativas que se puedan derivar de poseer tal informacion. 

Reconozco que lo anterior solo es un pañito caliente, pero qué hago. No soy de los que renuncio y me hecho a llorar - aun cuando en este caso si provoca.

Oil and the Stockholm Syndrome

 Fact No. 1: In 1980 the nominal price of oil (Arabian Light) was US$ 36 per barrel. In constant dollar prices calculated using the GDP deflator with 1998 as base, this was equivalent to US$ 67. By the end of 1998 the price of oil was US$ 12.20. In real terms it means that if the price index of oil in 1980 was 100% then in 1998 it was only 18%.

Fact No. 2: The index of oil products retail prices in 1980 was equal to 100%, in the United Kingdom, it reached 247% in 1998.

Fact No. 3: The amazing difference in how the two oil-related indexes developed can only be explained by taxes. As an example, in the UK in 1980 the ad-valorem taxes on gasoline were 85%; at the end of 1998 the same taxes were 456%.

Conclusion. Oil demand and oil prices are being held hostage by the taxes levied on various oil products by most oil-consuming countries. Had it not been for these sky-high discriminatory taxes, Venezuela would today be selling more oil at higher prices, easily repaying its foreign borrowings, and not even requiring a credit rating.

Adding insult to injury, the before mentioned taxes were slammed on Venezuela's main export at a time when the country was busy reducing custom duties and opening up its economy to all type of foreign competition.

It is difficult, then, to understand why, thanks to their country’s press, radio and television, Venezuelans can only worry and feel guilty of the fact that perhaps the recent increases in the price of oil will be the detonator for inflation and worldwide recession.

Could it be that the Stockholm syndrome affects Venezuela (as well as all of the OPEC nations)? As all pseudo-psychologists and writers should know, the Stockholm syndrome is what happens when someone that has been kidnapped finally becomes sympathetic with the position of his captors and ultimately even begins to defend them.

If you doubt what I am saying, just think of how our neoliberals, while talking up the maximization of income as one of their credos, blithely forgive their foreign heroes by either ignoring the issue or by creating lame environmental excuses or by simply repeating absurdities as “being rentist is really not very good for the country”. I would specially like to see them sustain this last thesis in other countries, for example in those that do all that is possible to maximize their rent from intellectual property, to the point of turning us into their best collectors.

That’s it then. There is no doubt in my mind that the Stockholm syndrome, or something very similar, is alive and well in Venezuela’s economic policies.

We need a couple of couch sessions, this time with psychologists that are very different from those we have used up to now. Dr. International Monetary Freund turned out to be simply an unethical Dr. Fraud. While the latter was pretending to give us good advice, he would travel behind our backs throughout the world, preaching the marvels of increasing taxes on oil-based products, and when this was not sufficiently convincing, simply forcing the adoption of the policy.

With its inaction, OPEC is also a prime suspect of having come down with the same affliction. I sure hope that during their sessions next week, to be held in Vienna, they will find time to get the advice of a true Dr. Freud.

Only then will they realize that at US$ 30 per barrel, the price of oil is still less than 45% of what it was in 1980.

Only then will they be able to understand the true injustice present when a taxman of a consumer country perceives an income 4.8 times more than the producer of a non renewable asset. During February this year, premium unleaded gasoline was sold at the pump in the UK for US$ 1.18 per liter, distributed as follows: 20 cts for the producer, 5 cts for the distributor and 93 cts for the British taxman.

Only then will they know that the world is not threatened by oil prices. The world and economic growth is above all, threatened by taxes implement for the sake of easy tax collection.

Only then will they remember to ask for a reduction of oil taxes, as a quid-pro-quo for any increase in oil production.

OPEC friends, … please remember Stockholm.

Calculations based on information in World Oil Trends 1999 published by Arthur Andersen and Cambridge Energy Research Associates.

In the Daily Journal, Caracas, March 24, 2000

https://petropolitan.blogspot.com/2000/03/oil-and-stockholm-syndrome.html