Archive for the ‘Communism’ Category

“All communist countries revert to capitalism eventually. Some just get there quicker than others”

Tuesday, October 14th, 2014

Michael J. Totten continues his excellent reporting by going From Havana to Hanoi, and concludes,

Decades of disinformation to the contrary, Cuba never had a kinder and gentler version of communism that works. No, the island is not North Korea or Cambodia under Pol Pot, but it was never any better than Vietnam or East Germany in the 1970s and the 1980s. It just had better PR. The sorry truth is that of all the communist regimes that have ever existed—with the single exception of North Korea’s—Cuba’s is the most stubborn, the most reactionary, and the slowest to figure out how economics actually works.

Read the whole eye-opening thing.

Venezuela: “Underperformance” doesn’t begin to describe it

Tuesday, October 14th, 2014

Even when the Venezuelan government has not allowed its own numbers to be verified for almost a decade, and stopped reporting various standard economoic indicators several years ago (practices which all started during Chavez’s administration), the numbers that it does report confirm The Economist’s appraisal of the country as Probably the world’s worst-managed economy.

Right now the government,

facing deteriorating economic conditions at home, is quietly slashing imports to cover foreign debt payments amid a severe hard-currency crunch.

Carmen Reinhart and Kenneth Rogoff write on Venezuela’s Spectacular Underperformance 

Maduro, of course, rules over a major oil-exporting economy that is so badly mismanaged that real (inflation-adjusted) per capita GDP today is 2% lower than it was in 1970, despite a ten-fold increase in oil prices.

The relevant reality now is the long-term plight and dwindling standard of living of the average Venezuelan citizen. Over the past 45 years, as Venezuela’s real per capita GDP fell, US per capita GDP roughly doubled and Chile’s per capita GDP nearly tripled. And neutral observers project that 2014 will be even worse for Venezuela – not surprising, given the chaos of the country’s policy fundamentals.

Venezuela repeatedly has defaulted on the moneys it owes on pharmaceutical imports, food, airlines, oil suppliers and joint-venture partners; Reinhart and Rogoff ask

historically there have been many external defaults without domestic defaults, the converse is not true: nearly all domestic defaults are “twin defaults” that also involve external creditors. Will the Venezuelan case be different?

In other words, the two things go hand in hand, and it’s only a matter of time before Wall Street bond-holders are treated like foreign airlines.

However, Francisco Toro points out that

in the technical sense that’s relevant in market terms, Venezuela is not in domestic default.
. . .
This is the crux of the Great Venezuela Macro Debate of 2013-2014: to what extent can the government’s patent inability to meet its obligations be ascribed to a basic inability to pay, and to what extent is it just the Nth insane distortion you get when the government makes it illegal to pay a penny more than 77 cents for a $10 bill?

So, while we split hairs on exchange rate misalignments and the like, Venezuela undoubtely becomes a land of political killings and gang turf wars.

Related: Venezuela: The Left vs. reality



Why Venezuela should not have a seat at the UN Security Council

Monday, October 13th, 2014

Mary O’Grady explains,
THE AMERICAS
A Test for Obama on Venezuela at the U.N.
Cuba’s pawn wants a seat on the Security Council. We should work against it, as we did in 2008.

De facto control of Venezuela by Cuba ought to trouble all peaceable nations. Cuba violated a U.N. embargo on arms shipments to North Korea in 2013 when it put a load of weaponry on a North Korean vessel headed for Asia. The Venezuelan National Guard is a partner of Colombia’s drug-trafficking terrorists. Numerous terrorism experts warn that Venezuela is working closely with both Iran and Hezbollah to make trouble in the West and that the country has become a transit point for Iranian agents seeking to gain a foothold in the Americas.

Permanent members Russia and China would gain a reliable ally on the Security Council by adding Venezuela. It is true that the U.S. has veto power to block dangerous moves by a member. But Venezuela could influence the discussion agenda and would undoubtedly employ Cuba’s legendary propaganda tactics to do so.

Symbolically the elevation of Venezuela to the council would be a win for U.S. foes, and Venezuela knows it.

I don’t see the Obama administration doing anything about it. Instead, I say it’s very likely Chavez’s daughter Maria Gabriela Chavez will soon be sitting next to an American diplomat at the United Nations Security Council.

Venezuela: Exxon wins $1.6 billion settlement

Friday, October 10th, 2014

Back in 2005, then-dictator Hugo Chavez started to expropriate assets in Venezuela’s energy, mining and telecommunications industries under the pretext of development and sovereignty.

Energy companies were given until late-2007 to accept proposed contract and compensation terms from Chavez’s government or risk having their assets seized.•

Exxon and ConocoPhillips rejected the terms, and Exxon took Venezuela to the World Bank’s International Center for Settlement of Investment Disputes, or ICSID. The ICSID ruled for Exxon, which Chavez promptly, and predictably, rejected. At the time there were 20 other cases against Venezuela at the World Bank’s tribunal, all triggered by the wave of state takeovers.

Now Exxon Wins $1.6 Billion Settlement for Venezuela Seizure

The ICSID award includes $1.4 billion for expropriation of the Cerro Negro project, $179.3 million for expropriation of the smaller La Ceiba project and $9 million in compensation for production and export curtailments, ICSID said. It will incur compound interest of 3.25 percent dating back to June 2007.

In a similar complaint, the ICSID ruled Sept. 23 that Venezuela must pay $740 million to Spokane, Washington-based Gold Reserve Inc. (GRZ) for taking its Brisas gold and copper project in 2008. Gold Reserve said on July 23 that it was seeking $2.1 billion for the nationalization.

About 28 cases filed by mining and oil companies remain unresolved at the ICSID, including those filed by Phillips 66 and Highbury International AVV.

Venezuela calls it “a favorable end for the republic,” (h/t Caracas Chronicles)

Which tells you Venezuela has no intention to pay Exxon. The thing is, the country must honor ICSID rulings to avoid default of sovereign bonds. The only certain outcome in the short term is that a lot of lawyers are going to make a lot of money.

Just don’t expect any payments any time soon.

No More Che Day

Thursday, October 9th, 2014

Cuba: Risky business

Thursday, October 2nd, 2014

Canadian businessman Cy Tokmakjian, age 74, was sentenced to 15 years in jail, effectively a life sentence, by the Communist regime, after

Cuba offered to free jailed Canadian executive Cy Tokmakjian in return for $55-million and company assets, his company said on Monday, but the deal fell through because the firm didn’t have the money and the businessman wanted to clear his name.

Of course he was denied that chance, was convicted of bribery and other economic charges, and the Communist thugs carried on as usual,

Cuba seized about $100-million worth of the firm’s assets on the island and also sent two Tokmakjian aides[,Claudio Vetere and Marco Puche,] to prison.

Peter Foster writes about the Risky business in Cuba
After forty years of ‘constructive engagement’ with Cuba, government-backed Canadian investment has effectively propped up the regime
Read the whole article.

Among other businessmen who have been imprisoned: Krikor Bayassalian, Nessin Abadi, Sarkis Yacoubian, Stephen Purvis, Amado Fakhre.

Venezuela: Why the military won’t rise up

Tuesday, September 30th, 2014

While El Puma and a few others call for Venezuela’s military to rise up against the Cuban-run dictatorship, there’s a big reason why that’s unlikely: perks.

Perks, and the likelihood they already are running the country:

New Cars for the Army as Venezuelans Line Up for Food

The market with everything from subsidized meat to baby strollers, along with loans, new cars and apartments, are perks provided to the armed forces as the economy contracts, poverty rises and President Nicolas Maduro’s popularity sinks to a record low.

The benefits help ensure the loyalty of the military, while siphoning reserves away from the poor who have seen wage growth fall behind inflation, according to analysts, citizen activists and academics.

Since Maduro came to power 17 months ago, the armed forces have created their own television channel, housing program and bank, the only military-owned one outside Iran and Vietnam. A third of Venezuela’s 28 ministers and half the state governors are now active or retired officers, mostly companions of former paratroop commander and late President Hugo Chavez.

This echoes the Cuban model, where most businesses that cater to tourists are own by the military. In fact, Venezuela is now a military regime:

The rise in prices is not the only kind of inflation affecting Venezuela. Bloomberg reports that “its military now has between 4,000 and 5,000 generals” for a ratio of one general for every 34 servicemen (in the United States the ratio is one general per 1,490 servicemen). As expected, generals enjoy higher salaries and many other benefits. Moreover, the intelligence community believes that high-ranking army officers control most illegal activities in Venezuela, from smuggling to drug trafficking. In other words, military men are profiteering from the status quo.

Juan Cristobal Nagel:

Count the Armed Forces alongside Wall Street and China as the three groups Maduro will never default on. That´s why it pains me to read simplistic stuff such as García Mora’s latest, where he wonders out loud when the country will finally break.

Venezuela: Nothing to dance about

Saturday, September 27th, 2014

Nicolas Maduro was in NYC for the climate change summit and the UN General Assembly – ignoring protesters, but he also took the Mrs. dancing in the South Bronx, where he indulged on the congas,

Over in Venezuela, while the cat was away the mice had nothing to dance about:

The opposition are beginning to collect signatures to force a constitutional assembly and remove Maduro before the 2019 presidential elections.

Unions Confront Venezuelan Leader
Workers are increasingly striking to protest President Maduro’s Labor policies; ‘the state is the new big boss,’ complains one union leader.

The discontent has spread to unions representing hundreds of thousands of state workers. The National Federation of Public Sector Workers, which represents administrative workers and teachers, this month publicly criticized the government for delaying contract renewals. Some of them expired as long as 10 years ago, leaving workers with devalued salaries.

Venezuela’s Bolívar Currency Hits Record Low on Black Market
The plummeting Venezuelan currency breached a new, symbolic low of 100 bolívares per dollar on the black market Friday.

The central bank’s international reserves meanwhile are down 29% to $21 billion since the start of 2013.

Francisco Toro writes about The Routinization of Barbarism:

Secret public spending is fundamentally unacceptable. Public spending not approved by a legislature is by its nature unconstitutional. The routinization of secret public spending is an outrage no minimally law govern country would yield an inch to, even by implication.

Small wonder that The Economist refers to Venezuela as Probably the world’s worst-managed economy.


Just what the world needs: Eau de Hugo! UPDATED

Friday, September 26th, 2014

UPDATE

I guess Raul’s not getting a cut,
Insólito escándalo en Cuba: Raúl Castro prohibió los perfumes “Ernesto” y “Hugo” [Incredible scandal in Cuba: Raúl Castro forbids “Ernesto” and “Hugo” perfume]

Earlier post:

No, not the German designer, the Venezuelan dictator:
“Eau de Revolution”: Cuba scents honor Che, Chavez

Cuba’s biggest producer of natural products has come up with a pair of colognes for the discerning supporter of international socialism who wants something more than just the iconic “Che” T-shirt.

A woodsy and refreshing citric scent with notes of talcum powder called “Ernesto” honors guerrilla leader Ernesto “Che” Guevara. For those seeking something softer and fruitier, there’s a blend with hints of mango and papaya called “Hugo,” for the late Venezuelan President Hugo Chavez.

“Cuba’s biggest producer of natural products” ought to produce some soap and shampoo that the locals could afford, but I digress.

I can’t imagine why death would smell like “a woodsy and refreshing citric scent with notes of talcum powder” in the bottles of Che stink, but the fruitier Chavez ought to have some notes of sulfur, in honor of Hugo Chavez’s 2006 appearance at the UN and his 2009 Copenhagen speech, where he went heavy on the sulfur. In 2006 he said George W. Bush smelled of it, and by 2009 it was Barack Obama’s turn.

The sulfur scent can be easily replicated – back when I was a kid, you could buy this, and what could be more suitable for the “discerning supporter of international socialism”?

Tip of the hat to the esteemed Carlos Eire, who finds the news completely nauseating,

Creating a line of perfumes that honors dead tyrants and sociopaths is the last thing that would have ever crossed my mind, but I’m no genius and am only 1/16th French.

Clearly neither Carlos nor I are “discerning supporters of international socialism.”

And,
My late uncle Ernesto, were he still alive, would surely have made several off-color jokes about Che stinking of a “woodsy and refreshing citric scent with notes of talcum powder.” I’ll leave that to the reader’s imagination.

NOTE: If anyone has a clip of the Pinky and the Brain Calvin Brain Subjugation ad, I’d love to post it!


Maduro goes to the South Bronx

Thursday, September 25th, 2014

Carlos Eire tells us that Maduro visits Chavistas and Useful Idiots in the South Bronx

Apparently, Maduro found plenty of admirers, both among the natives and the Birkenstock-sandal-Mother Jones-and-Subaru crowd, most of whom seem to revere him as the current incarnation of the spirit of Hugo Chavez.

That, and an influx in millions of dollars in Venezuelan charity and free heating oil; Communists don’t live on Birkenstocks(*) alone.

In a dazzling display of smart diplomacy, the U.S. is copacetic,
Maduro recalls Chávez with trip to South Bronx as country makes bid for U.N. security council seat

Maduro, a year and a half into his term, arrived in New York with unanimous backing from Latin America and Caribbean nations to represent the region on the council beginning next year. The U.S. is uneasy with the nomination but says it has no plans to try to derail the bid, as it did in 2006.
. . .
Venezuela is expected to defend U.S.’ archenemies if it wins a seat on the council.

(*) Disclosure: I own Birkenstocks, too. Comfortable when you need them, and owned by capitalists.