The sad decline of Caracas

By Nathan Crooks:

Living in Caracas has never been easy. While the oil boom that started in the 1950s turned the city into one of the most sophisticated capitals in the western hemisphere, growing socioeconomic imbalances and increasing political tension that existed long before Hugo Chávez have always made Venezuela a challenge to navigate.

One glance at the US Department of State's travel fact sheet on Venezuela - which in the first paragraph warns of murders, express kidnappings and armed robberies - is enough to scare away even the most seasoned traveler. The city, however, maintains a magnetic draw on anyone who has lived there before.

Blessed with year-around spring-like weather, Caracas is within hours of some of the best beaches in the world. The shopping is probably the best in South America, and world class restaurants have always pleased the palates of the most discerning diners. With all its problems, the city has been able to retain even those opposed to Chávez's Bolivarian Revolution. Despite the crime, political black lists and social instability, few Venezuelans that live well in Caracas have found a better life elsewhere.

But that could all be changing. Three key events this year have pointed to a decline which may be irreversible. While every aspect of Chávez's project can be debated, it's possible to run any kind of government in a way that works or in a way that doesn’t. And Venezuela is simply not working anymore.

First, Caracas is becoming prohibitively expensive because of Chávez's exchange rate controls and import-dependent economy. According to consulting firm Mercer's 2009 cost of living report, Caracas is now the 15th most expensive city in the world, ahead of famously pricey metropolises including London, Rome and Dubai. When a box of Froot Loops in a Caracas grocery story costs US$54, authorities should realize they have a real problem on their hands.

Venezuela's electric power problems come second. The country nationalized its power industry in 2007 and consolidated generation, transmission and distribution activities under state oil company PDVSA and the newly created state power company, Corpoelec. It's been nothing but downhill since, and El Niño has pushed the power industry to the brink of collapse this year because of low rain levels. Demand, meanwhile, is continuing to increase, despite pleas from the government for power conservation.

Isn't it ironic? One of the most energy endowed countries in the world can no longer provide enough power for its own citizens. Even if you agree with the Bolivarian Revolution, it's hard to argue that the government ministries or political operatives running the state companies are doing their job well.

But the biggest sign of Bolivarian incompetence is the water rationing that started in Caracas on November 2. Entire zones of the city are being cut off from water service for 48 hours at a time. Both public hospitals and five-star hotels alike are having to make plans for the weekly 48-periods they will be without water.

El Niño is affecting many countries across the region, and hydro levels are giving more than one government headaches. But don't the authorities realize that programmed water rationing will only increase demand as everyone will hoard water the days before the scheduled cuts? The fact that water rationing has to be implemented in a major city because of a recurrent weather event is evidence of criminal bad planning.

Power and water service are the basic fabric of any civilized city. One expects problems with such basic services in a war zone or in some other far off locale where Westerners sometimes go to escape modern life. But in Caracas? In a capital city of five million? In a global energy hub? No. It's not something even those most ardently opposed to Chávez would have expected a few years ago. Venezuela's inability to guarantee such basic services takes one's breath away. It was mildly humorous when shortages of eggs and milk complicated daily life in Caracas, but being without reliable power and water service is an entirely different matter.

Without debating the merits of socialism or the Bolivarian Revolution, without even talking about democracy or politics, it's obvious that Chávez's government is doing something wrong. There won't be much to debate anymore in Caracas. One will only have to flick a light switch or turn on a faucet to realize that something is not working.

Caraqueños are used to putting up with crime, political instability and a government bureaucracy that seems schizophrenic at best. The well-off can still eat their Froot Loops, even if a box costs US$50. What remains to be seen, however, is if they will want to do so in the dark. And will even the most loyal Chavistas want to endure Caracas without taking a shower or flushing the toilet for 48 hours?

bnamericas

Bahamas Blog Bahamas

'CSME not answer for region'

Denyse Renne drenne@trinidadexpress.com:





Former Barbadian prime minister Owen Arthur says the rise of trade liberalisation and globalisation was making a massive impact in the world, and less developed countries within the Caribbean are forced to face more challenges.

Arthur was one of many speakers who addressed the final session of the inaugural symposium on ’Current Developments in Caribbean Community Law’ at the Hyatt Regency hotel, Port of Spain, on Wednesday.

Arthur said the cost of restructuring an economy as a result of the information age can have its challenges, especially in terms of security.

Stating no Caribbean country is in a position to look at Caricom or the Caribbean Single Market Economy (CSME) for immediate solutions for several matters, Arthur said the CSME does not offer governments ample opportunities to deal with fiscal issues.

He advised that issues such as the Caribbean Single Economy should be forgotten for the time being, and the issue of sovereignty should be dealt with through a single market, and emphasis should be placed on getting rid of restrictions.

’The CSME has always been conceived with the intention of a well-integrated system for global economy. We must go forward in the Caribbean. We must see the CSME for what it is, it will not yield over solutions. There must be political commitments to allow it to yield the course,’ Arthur said.

Noting the power of advocacy can bring about change in the Caribbean, Arthur said the concept of the CSME needs reviewing and, also, countries need to ask themselves where they stand. ’Are we seen as Caribbean people or are we seen as individuals?’

St Lucian Opposition Leader Dr Kenny Anthony also addressed the function, saying the collapse of Clico and the revamping of British American Insurance Company saw governments scrambling and relying on other resources.

’I think we are in very dangerous times. There is an economic crisis facing nations...,’ he said

He said there needs to be clarity among countries and their purposes known, as well as a display of political courage and as far as he is concerned, ’I am yet to see any evidence of this.’

Declaring that the leadership of the region needs to resolve issues of movement of nationals across countries, Anthony said the fear of Haiti becoming involved in Caricom integration is a sore point for countries since there is the fear of the Haitian invasion of nationals.


November 13th 2009

trinidadexpress

Bahamas Blog Bahamas

Afro-Brazilians and indigenous groups face serious bias, says UN rights chief

Many of Brazil’s biggest problems are rooted in poverty and discrimination, and a truly universal secondary education system is essential if there is to be major improvement in these areas

While Brazil has an “impressive” set of laws and policies to promote human rights and improve socio-economic well-being, indigenous groups and Afro-Brazilians face serious discrimination, injustice and violence, the United Nations human rights chief said today.

Wrapping up her week-long visit to the South American nation, High Commissioner for Human Rights Navi Pillay noted that millions of Afro-Brazilians and indigenous people are “mired in poverty” and lack access to basic services and employment opportunities.

“Until that changes, it will hamper Brazil’s progress on many other fronts,” she told a news conference before departing the country, urging officials to focus on fully implementing existing laws, plans and policies to address discrimination.

She lauded the country’s Constitution and legal framework, saying they “form an impressive foundation of human rights protection,” and noted a number of important measures taken by the Government, including this week’s passing by the Congress of a constitutional amendment designed to provide free universal education to children aged 4 to17.

“Many of Brazil’s biggest problems are rooted in poverty and discrimination, and a truly universal secondary education system is essential if there is to be major improvement in these areas,” she said.

At the same time, she noted a number of issues of concern, including the situation of the country’s indigenous people. The fact that she had not seen a single indigenous person among all the many officials she had met during the visit was “very indicative of their continued marginalization,” she stated.

Ms. Pillay stated that, for the most part, Brazil’s indigenous people “are not benefiting from the country’s impressive economic progress, and are being held back by discrimination and indifference, chased out of their lands and into forced labour.”

In addition, there are very few Afro-Brazilians in positions of authority, and this was particularly striking in the country’s northern Bahia state, “where three-quarters of the population are Afro-Brazilian, but hardly any of the top administrators.”

Turning to the issue of violence, the High Commissioner acknowledged that Brazil’s police had a tough task in trying to maintain law and order. She said the Government needs to establish a clear policy to combat impunity, adding that all allegations of rights violations need to be promptly and thoroughly investigated by independent authorities. Perpetrators must be prosecuted, irrespective of whether they are gangsters or policemen, she added.

“The astonishingly high rate of homicides in Brazil’s overcrowded prisons, and allegations of widespread torture and inhumane conditions are alarming and unacceptable,” she said. “Equally disturbing is the fact that the vast majority of those incarcerated are Afro-Brazilians.

She also pointed to the “very high levels of violence directed at Brazilian women,” and said she hoped more could be done “to help women all across the country make use of the laws and projects designed to protect them.”

Ms. Pillay, who met with President Luiz Inácio Lula da Silva and several ministers and officials, noted that Brazil is “the only country in South America not to have taken action to confront abuses committed during the period of military rule.” There are ways of dealing with this “which avoid reopening the wounds of the past and help to heal them instead,” she said.

“Torture, however, is an exception,” she said. “International law is unequivocal: torture is a crime against humanity and cannot be left unpunished. The fact that the torture that took place in the military era has still not been dealt with by Brazil means that the proper, clear disincentives to commit torture now and in the future are not in place.”

While in Brazil, the High Commissioner also attended the annual national conference on human rights defenders and met with a wide range of civil society representatives in three cities –Salvador, Rio de Janeiro and, the capital, Brasilia.

She also visited an isolated community of Afro-Brazilian descendants of slaves in Bahia state, and one of Rio de Janeiro’s poverty-stricken favelas.

13 November 2009

UN News

Dumped: A blueprint for Caribbean salvation

By Sir Ronald Sanders:

Government representatives of all the countries that now form the Caribbean Community and Common Market (CARICOM), except the Bahamas and Haiti, were present at a meeting in Montego Bay, Jamaica when “majority opinion was clearly in favour of a Federation”.

They made concrete and visionary decisions and adopted resolutions that they anticipated would help their small countries individually and collectively. The overarching resolution recognized “the desirability of a political federation” in which “each constituent unit retains complete control over all matters except those specifically assigned to the federal government.”

Knowing from experience that any form of deeper integration would need transportation between their countries to move goods and people, the representatives expressed their belief that “the provision of adequate inter-regional and external shipping services and other communication is essential.”

They were wise enough to know that trying to maintain individual markets, individual currencies, as well as bargaining individually in a competitive global market is not practicable. In this connection, they decided that they should appoint a Single Trade Commissioner with “a well qualified staff of assistants” and “adequate funds” to bargain internationally for the region.

They boldly stated, “immediate, direct representation in negotiations affecting overseas trade and commerce is essential to the economic achievement of the countries”.

They also recommended the creation of a Committee “composed of delegates appointed by the Legislatures” of each country to make recommendations on “the assimilation of the fiscal, customs and tariff policy” and “the unification of the currency” of the countries. Not content with that, they also recommended the appointment of a Commission to examine in consultation with the governments of each country “the establishment of a Customs Union”.

And, these Caribbean leaders justified a Customs Union as follows: “the encouragement of inter-regional trade which would naturally be duty-free within the Union; the encouragement of local industries; the establishment of uniformity in tariff rates and customs administration; and the strengthening of the position of the Caribbean territories as far as bargaining power is concerned in relation to international trade agreements.”

They were also mindful that there would be disruption to some countries arising from a Customs Union. Therefore, they were careful to say that a suitable tariff should be prepared “having regard to the fiscal problems of the Governments whose revenue would be affected by the introduction of a Customs Union”.

On the matter of the single currency, they declared themselves “in favour of the early establishment of a uniform currency throughout the Caribbean”, and insisted on recording the view that “this measure is of very great importance to trade and commerce and it would also have advantages in strengthening the currency and the credit of this region”.

Food security was also very much on their minds. Thus, they recommended that “immediate steps be taken for setting-up of a central body of primary producers (representative of all the countries) with a view to accelerating the development of agriculture throughout the area on a sound economic basis”.

A special Committee dealt with the matter of debt and how it could be handled in a Customs Union and a Federation. The Committee held the opinion that the debt position of each country “would have to remain as at present until the comparatively advanced stage of federation is reached” when the major revenues are centralized in a federal exchequer. The Committee envisaged that the Federal government should assume responsibility for the remaining debt less accrued sinking funds.

Quite remarkably, the Committee of all governments also agreed that “the Federal government should be the sole authority for raising loans on the external market, although it would be both feasible and desirable to permit local loans to be raised for approved purposes by individual governments subject to the sanction of the federal finance authorities”.

Unfortunately, this conference of Caribbean government representatives did not take place in 2009. It took place in September 1947. It was attended by VC Bird of Antigua and Barbuda, Grantley Adams of Barbados, Alexander Bustamante of Jamaica, Albert Gomes of Trinidad and Tobago, A M Lewis of St Lucia, J B Renwick of Grenada, S F Bonadie of St Vincent, M H Davis of St Kitts-Nevis, C A Dupigny of Dominica, Dr J B Singh of Guyana and W H Courtenay of Belize. Also attending as a member of the Caribbean Commission was Norman Manley of Jamaica.

“The Conference on the Closer Association of the British West Indian Colonies”, as it was called, laid down the blueprint not only for Caribbean integration and development, but also for strengthening the region’s capacity to bargain in the international community.

In the end personal political ambitions and misplaced nationalism fostered by misinformation hijacked this regional project. A federation was formed, only to fall – not because it would not serve the Caribbean’s people; but because it did not suit some of its more influential politicians.

Thus, a customs union and a common currency were discarded, only to rise again as the Caribbean Single Market and Economy fifty-nine years later. In the meantime, experiments with individual independence and ‘going it alone’ economic policies have done nothing more than emphasize these are impossible dreams.

The present Regional Negotiating Machinery (RNM), now involved in negotiations with Canada after the disappointment of an unequal Economic Partnership Agreement with the European Union, is a half-sister to the more robust single Trade Commissioner the leaders had in mind in 1947 to negotiate for their one Caribbean state.

As for debt, almost all of the CARICOM countries now have a debt to GDP ratio of well over 100% and their economies are in deep trouble; the notable exception being Trinidad and Tobago which has been saved by its oil and gas resources. The Caribbean people could have been spared this situation had the Federation survived, implementing the rules for incurring debt that the 1947 Conference had envisaged, and implementing the blueprint for development it had laid out.

A single Caribbean state, drawing on the resources of tourism, financial services, agriculture, bauxite, gold, diamonds, oil, gas and the capacity of its tertiary educated people (75% of whom now live abroad) would have been far more viable today. It is time, the Caribbean learns from its own history and stop repeating its mistakes.

caribbeannetnews

Bahamas Caribbean Blog International

Populism in Venezuela

It's a familiar tale. A new leader emerges in a poor country that has lots of wealth but a highly unequal division of income. He pledges to transform the society with generous social programmes, and by using the state to take much of the economy out of the hands of private capitalists, orienting it to the people's needs. But within a few years, the economy stutters, shortages spread, and those goods which can be obtained sell at inflated prices. Poor people suffer. Disappointed by the revolution, they turn against it.

This time, it's Hugo Chávez's Venezuela. But the story has played out countless times before elsewhere, and no doubt will play out countless more times in other lands. Indeed, some readers might even have read the narrative of Jamaica in the 1970s in this story.

Venezuela is a country rich in oil, riding the commodity boom. But try telling that to residents of Caracas, where water is now rationed and power cuts are common. President Chávez is telling his compatriots just to be snappy in showers, saying he can do it in only three minutes. He blames the water and electricity shortage - Venezuela has the world's third-largest hydroelectric dam - on El Nino. That seems a bit rich in a country with such a large river system.

There are probably more banal forces at work. As I once argued in one of my books, stable political systems are founded on two overlapping regimes: an accumulation regime, and a distribution regime. The first refers to how an economy's output is generated, the second to how it is distributed.

Citizens expect to get their fair share out of the system - distribution. But that means the system must deliver a growing economy, to satisfy a growing population's rising demands - accumulation.

Balance

Chavez

Too much investment means too little spending and vice versa. A balance has to be struck. When it breaks down, a political crisis develops.

One could argue that Venezuela was ripe for the Bolivarian revolution because years of rising oil prices hadn't translated into popular gains. The regime was too focused on accumulation. But Mr Chávez has arguably bent the stick too far in the other direction. By distributing oil-price windfalls in the early years of his revolution, he certainly made himself popular. But the resultant under-investment in capacity and infrastructure (previously, profits were being reinvested) has created a situation in which supply can't keep up with rising demand. There results inflation, and shortages.

Defenders of such revolutions will often blame capitalist scheming for undermining a socialist revolution. That's often too crude an analysis. Socialism concerns itself primarily not with the management of distribution, but with the management of accumulation itself. At its heart lies the belief in some form of common ownership.

Noble though the intentions may be, rushing to distribute the profits of a capitalist economy arguably does not amount to socialism, but populism. It is inherently unstable as a political strategy. Ultimately, it fails the very people it is intended to benefit. Not surprisingly, Mr Chávez's approval ratings are falling.

With legislative elections due next year, Mr Chávez may face a dilemma. Should voters turn against his party, he could accept their verdict. Or, as is often the temptation for populist leaders in these circumstances, he could stiffen his resolve and harden the revolutionary stance of his government. The last stage of a doomed revolution is all too often authoritarianism.

One can only hope that if, and when, that moment comes, Mr Chávez will prove to be as good a democrat as Michael Manley was when his electorate terminated his revolution.

jamaica-gleaner

Bahamas Caribbean Blog International

Newly selected Haitian Prime Minister Jean-Max Bellerive vows to further Haiti's pro-business stance

PORT-AU-PRINCE, Haiti, November 11, 2009 - Newly selected Haitian Prime Minister Jean-Max Bellerive has vowed to further Haiti's pro-business stance, as the country looks to capitalise on the domestic and international outpouring of business interests looking at investment opportunities in Haiti.

That's according to the newly-formed Haitian Economic Development Foundation.

And President Youri Mevs says the business community is pleased with Bellerive's focus on continuing to further the pro-business direction encouraged by President René Préval.

"Humanitarian assistance to our country is indeed crucial, but expansion of the business sector in order to create jobs is the long-term solution that will most impact the future of our people," Mevs said.

Haiti has recently seen an up-swell in both domestic and international investments, with organisations such as Royal Caribbean Cruise Lines increasing their visibility on the island and announcements from local major enterprises such as WIN Group, which in coordination with the Soros Economic Development Fund, plans to build a US$45 million new Free Zone.

The capital was also recently the host of a conference organised by the Inter-American Development Bank, aimed at encouraging investment in the garment, agricultural and energy sectors. The conference was attended by hundreds of potential investors, including companies of the stature of Gap, Levi Strauss and American Eagle Outfitters.

A major catalyst to this activity has been the involvement of US President Bill Clinton, whose tireless work as the United Nations Special Envoy to Haiti has not only brought awareness to the country's plight, but has manifested itself in actual investments.

"We believe that the opportunity before us with the international community as it relates to investment in Haiti is unprecedented," Mevs said.

"We want to let the world know that Haiti is truly open for business."

The Haitian Economic Development Foundation was designed to foster economic growth throughout Haiti. It is comprised of some of the nation's most influential enterprises and individuals, with the singular goal of attracting and fostering business in Haiti.

caribbean360

U.S. bases threaten Latin America, confirms Evo

COCHABAMBA, November 9.— Bolivian President Evo Morales affirmed that the installation of U.S. military bases in Colombia is an open provocation to Latin America and, particularly, to those countries that are starting to bring dignity to their peoples and governments.

According to PL, Evo told the press that U.S. bases in Colombia are a threat to revolutionary social movements in the region and the governments of the Bolivarian Alliance for the Peoples of Our America (ALBA), and against Colombia itself, given the total impunity and immunity enjoyed by U.S. soldiers who are not charged according to the laws of the country if they commit a crime against that nation.

For Morales, the empire is looking to establish worldwide hegemony and crush revolutionary countries that are fighting for their liberation, independence and development.  He refuted the claim that said bases have the essential mission of combating drug-trafficking, as the governments of the two signatory countries have tried to justify.

In the face of this danger, he called on all social sectors who believe in dignity and sovereignty for Colombia and Latin America to organize and fight against the presence of these bases in the region.

Translated by Granma International

granma.cu