Idiot Media Watch (I)

“Venezuela may provide a useful first test for Obama’s pledge to engage rather than isolate antagonists,” Bloomberg correspondent Indira Lakshmanan reports from Caracas in a story datelined January 6. “While President Hugo Chavez is one of Washington’s noisiest critics, frayed relations would likely be easier to mend than those with nations such as Iran and Cuba, whose leaders are even more hostile toward the U.S.”
Before joining Bloomberg, Lakshmanan, a veteran international reporter, worked in Bogota for the Boston Globe, so she is not a newbie on issues relating to Venezuela and Colombia. However, besides pitching not-so-new “new” story ideas to higher-up Bloomberg editors in an effort to generate a “fresh” look at Venezuelan issues, the article’s purpose is unclear to say the least.
The article leads with a comment by Bernardo Alvarez, Venezuela’s former Ambassador to Washington, who says the Chavez government “is ready to accept Barack Obama’s offer to talk with U.S. adversaries — if the president-elect scraps George W. Bush’s division of the world into friends and foes.”
“Why do nations have to be friends? What we have to do is sit down and discuss issues,” says Alvarez. What issues? The article says “Some Obama advisers privately suggest the president-elect might reach out to Chavez, proposing cooperation on a few issues of mutual interest — drug enforcement, energy, poverty — while asking Brazil and other neighbors to encourage the Venezuelan leader to negotiate in good faith in the interest of regional harmony.”
Let’s examine these issues.
Drug enforcement: Venezuela under Chavez has become the No. 1 trans-shipment country for Colombian cocaine and heroin exports worldwide. Since 1999, US drug enforcement authorities have annually tracked hundreds of clandestine flights originating in Venezuela to Caribbean, Central and South American destinations which are believed to be transporting illegal narcotics to drug traffickers active in Mexico, the US and European Union. This dubious distinction is entirely the work of the Chavez government, which arbitrarily suspended counter-drug cooperation with the US in 2001, and ever since has deliberately turned a blind eye to the drug trafficking activities of terror groups like the Revolutionary Armed Forces of Colombia (Farc). The “Cartel del Sol,” a Venezuelan drug trafficking organization created and commanded by army and National Guard generals, is responsible for shipping hundreds of tons of Colombian cocaine worldwide. Colombian, Brazilian, US and EU counter-drug officials say very senior members of the Chavez government’s intelligence and national security entities, including past and current heads of military intelligence (Dim) and the Interior and Justice Ministry’s political police (Disip), are actively involved in narcotics trafficking.
Energy: Venezuela owns the largest crude oil and natural gas reserves in the Americas, but those resources are worthless while still underground. State-owned Petroleos de Venezuela (Pdvsa) used to be a world-class national oil and gas company. In 1998, the last year before Chavez was elected president of Venezuela, Pdvsa was truly unique among state-owned energy companies worldwide in that it was professionally managed, consistently produced profits(and paid taxes) even when oil prices were in the cellar, was almost completely free of corruption, and possessed a coherent long-term expansion plan which sought to integrate Venezuela’s crude from well-head to end user through companies in which Pdvsa – meaning the Venezuelan state and people – controlled majority stakes.
But Chavez killed Pdvsa in early 2002 when he launched a political takeover of the company’s presidency and board of directors in a deliberate effort to trigger a violent confrontation with his political foes. Moreover, Chavez’s efforts were successful. His assault against Pdvsa was the last step in a months-long campaign by Chavez to provoke a bloody showdown with his opponents, which occurred on April 11-14, 2002. Pdvsa’s implosion climaxed in the December 2002-January 2003 “paro” which shut down production and exports for two months. The “new” Bolivarian Pdvsa emerged in 2003 when Chavez fired nearly 20,000 veteran oil engineers, production and refinery experts, etc.
In 1998 Pdvsa was producing over 3.4 million b.d of crude oil. A decade later, in 2008, Pdvsa’s production had plunged to about 2.34 million b/d, a net loss of 1.06 million b/d. Energy minister and Pdvsa President Rafael Ramirez is lying outrageously when he claims Pdvsa produces over 3.4 million b/d. Excluding the new crude production capacity added by foreign oil companies in the late 1990s-early 2000’s, Pdvsa by itself has not added even one barrel of new crude production capacity since Chavez has been president of Venezuela. Moreover, since 2004 Pdvsa has not achieved even one of its annual production and investment targets. Instead, crude and gas production have collapsed, the company’s refineries are falling apart, and all of its planned investments are running at least a decade behind schedule.
Speaking of investment plans and foreign oil companies: Pdvsa’s “Siembra Petrolera” expansion plan, announced with great fanfare in second –half 2005, is a carbon copy of the pre-Chavez Pdvsa expansion plan unveiled in 1997-1998. In effect, if not for Chavez, Pdvsa’s crude production capacity in 2005 would have been over 6 million b/d instead of the roughly 2.34 million b/d the company is producing as of January 2009. As for foreign oil companies: from 2006-2008 President Chavez systemtalically expropriated the Venezuelan production assets of more than 36 foreign oil companies. ExxonMobil and ConocoPhillips chose to abandon Venezuela and seek international legal action in pursuit of compensation against Pdvsa and the government of Venezuela, rather than submit to Chavez’s unilateral violation of their legitimate property and contractual rights. (In fact, every company expropriated by Chavez including Electricidad de Caracas, CANTV, Ternium Sidor, the cement producers, etc. are losing money in ever-growing quantities since the revolution took over management, which is something a financial news agency like Bloomberg ought to be looking at instead of speculating if Obama would be advised to engage Chavez.) Meanwhile, the new oil companies Pdvsa is presently allied with are, in the main, conspicuously unqualified financially, operationally and technologically to undertake the major investments needed to save Venezuela’s oil and gas industry.
Poverty: The Chavez government’s National Statistics Insitute (INE) claims the Bolivarian revolution has reduced poverty significantly. But INE’s data are cooked across the board. We engage daily with “cerro” dwellers, poor Venezuelans who live in barrios, and their prosperity is fictitious, due entirely to billions of dollars in Chavez government subsidies doled out through some 27-30 social missions. When the government cash for these social missions dries up (social outlays started falling dramatically in first semester 2008), the illusion of barrio prosperity will vanish and the reality check will be harsh. In fact, the Bolivarian prosperity bubble will pop by second quater 2009, which explains Chavez’s haste to obtain a constitutional amendment allowing his indefinite re-election. There’s no telling what the “cerro” people will do after the prosperity bubble pops, but Chavez is obviously scared.
So what do Chavez and Obama have to discuss with regard to these three issues? Clearly, everything that is criminal, crooked, corrupt, incompetent and failing lies on Chavez’s side of the table. The best Obama can contribute is to urge Chavez to reverse his worst excesses, which of course won’t happen during the life of the Bolivarian revolution.
So what, then, was the point of the Bloomberg article besides filling space with recycled old ideas?
Some issues which Obama definitely should raise with Chavez include the Venezuelan government’s explicit political and financial support for terrorist organizations like the FARC; the use of state-owned Conviasa commercial aircraft to transport Iranian-made missile parts to Syria in violation of UN Security Council resolutions; the official protection which the Chavez government provides in Venezuela to senior members of the Farc and National Liberation Army (ELN) of Colombia, ETA, Hezbollah and Hamas, among other terrorist organizations; the Chavez government’s alliances in Peru and Paraguay with radical Marxist groups in those countries; the Chavez government’s secret cash contributions (via Pdvsa) to Latin American leaders like Cristina and Nestor Kirchner of Argentina, and Nicaragua’s Daniel Ortega, among others.
Did Bloomberg reporter Lakshmanan even raise these issues with Alvarez? We suspect not. Reporters who pose difficult questions to Bolivarian officials lose access immediately and even get threatened with expulsion from Venezuela.

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About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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