Sunday, February 28, 2010

Chavez - Power Failure Ends Press Conference Explaining End of Power Failures

Irony abounds.... While giving a televised press conference - power goes off live!!!. He was railing against Bush, in the course of explaining away how the Venezuelan power grid is being fixed. The failure is explained away as being the power plant in the presidential palace. So, basically, the guy can't even run a good power plant in his own domain. While some deluded souls might argue that the pain of electrical failure is shared at the top of the government, others might see it as symptomatic of a wasteful and inefficient government.

Anyways, this is hilarious.

Monday, February 22, 2010

Venezuela - Chavez Deals With His Thieving Friends -at least some of them

Total hilarity in Venezuela as Chavez finally deals with some of the unrestricted corruption and massive theft that have occured under his rule, as pointed out by the New York Times Simon Romero, Purging Loyalists.


The rise of a shadowy group of pro-government tycoons had for years been an embarrassment to Mr. Chávez as he was promoting anti-capitalist values. Included in the Bolibourgeoisie (another name for the so-called Bolivarian moneyed class) were men like Arné Chacón, a former navy lieutenant who took part in Mr. Chávez’s failed 1992 coup attempt.

In newspaper photographs back then, Mr. Chacón, like Mr. Chávez, looked like a skinny idealist. But Mr. Chacón amassed a banking fortune, appearing in newspaper photographs here with more girth and a selection of the more than 40 purebred racehorses he owned.

Now Arné Chacón is just another jailed magnate, joining Mr. Fernández and eight other imprisoned bankers and state regulators as investigations into their activities slowly advance. Mr. Chávez himself announced that officials had seized Mr. Chacón’s properties, including his prized horses. The justification for the imprisonment of Mr. Chacón and other tycoons involved accusations of irregularities in bank acquisitions.

Petro-Kleptocracy - No Transparency

This lack of transparency and increase of corruption has all happened under Chavista rule - or misrule. The Lieutenant-Colonel has total control of the State, and has done away with separation of powers between institutions. the fact that the Legislature and Courts are controlled by one party means little or no checks and balances, and political oversight of what is being done by the executive and state administration. Two-party rule before 1999 at least restrained some of the most blatant corruption, which in Venezuela was pretty bad to begin with. Weakening of independent or autonomous entities (i.e. like a Central Bank or regulatory agencies) within the state means there is little oversight or control.

Chavez has presided over a huge expansion of the state, increasing the payroll and creating many new state enterprises. In many cases paralell institutions and power centers have emerged. Government functions which had been decentralized in the 90's have been brought back under central control. Civilian and military loyalists have been placed at all levels of state administration. Chavez' ideological obsession has also meant that many politicized appointments lack administrative skills necessary, and a de-emphasis on fiscal discipline and competence. Those are considered "capitalistic" or "neo-liberal" criteria. End result, a large cronyistic administration which is poorly run, and wasteful.

Boliburgesia - And Rentism

Add to the incompetence, cronysim and lack of transparency, a parasitic private sector, entwined with the corrupt Chavista ruling class. To some point Chavez tolerates private enterprise, and Venezuelas traditional elite tolerates the government because they can make fortunes by importing all sorts of goods, by speculating on government bonds, or by helping the Boliburgesia export its misgotten gains abroad. Chavez' ideology and poor policies have only driven this parasitism by discouraging private initiative in areas that actually add value to an economy like manufacturing or food production. But act as contractors for the State, set up banks, or import goodies, that any revolutionary businessman can do!

This kind of "friendly" business- has a long history in Venezuela - Venezuelas wealthiest families clustered around Venevision and Grupo Polar emerged out of "friendly" arrangements with the COPEI and AD parties. Chavismo has arguably taken it to a new level. That is because of the oil bonanza that has brought something like 600 billion dollars in revenue, a bonanza unseen in Venezuelas history. You have a perfect storm of opportunity for graft and private gain for some friends of the regime. A mix of statist incompetence and crony capitalism, in a resources boom.

One such friend - the newly imprisoned Ricardo Fernandez Barrueco

Mr. Fernández rose from obscurity to put together a web of 270 companies in industries as diverse as tuna-fishing and banking, amassing a fortune of about $1.6 billion by 2005, according to study by the Caracas affiliate of the KPMG accounting firm. He thrived in rural Venezuela, where Mr. Chávez’s dominance goes largely unchallenged, acquiring an interest in a pro-government newspaper in Barinas, a state that is a Chávez family bastion.

1.6 billion, that is insane!!!!

And not uncommon.
Lets look at one area that has come under scrutiny. The energy crisis in the country is at least partially attributed to lack of investment in upkeep and expansion of the country's hydroelectrical system.. But apparently over 700 million dollars -over the ordinary budget - were allocated by the legislature between 00 and 09. Turns out, less than 200 were spent, and no one knows where the difference went. With this kind of loose control, lack of transparency, and huge budgets it is no surprise there are obscure characters with billion dollar fortunes.

This kind of wild corruption and extravagance seems out of the reign of early 20th century tyrant Juan Vicente Gómez who created an almost perfect example of a rentitst economy. The two-party "pacted democracy" merely continued this type of corruption, and Chavez ironically, was elected in part because he promised to end it. So much for that.

Colombia and Chile Trade is Booming

Semana has an article on Chile's economic relationship with Colombia.

According to the article the main "detonant" has been the Free Trade agreement signed between Chile and Colombia last year, which is a "latest generation" type treaty, that includes "more than commerce" into areas like "services and state purchasing".

As a result Chilean companies have entered Colombia, with Colombia becoming one of the main "destinations for Chilean direct investment in the world displacing Argentina, the past two years.." In 2008 "Colombia was the third recipient" of Chilean direct investment and in 2009 the fourth after Peru, Brasil, and Uruguay" according to Semana. It estimates the amount of FDI from Chile at 6141 million dollars, 13 percent of Chiles total external investment according to the article. And it says it in such varied areas as financial services, health, transport, forestry, paper manufacturing.

Bilateral commerce "has doubled annualy in the past three years reaching 2800 million dollars in 2008, though it decreased in 2009 due to the global crisis."

After the US, "Chile was the second destination of Colombian exports", supplanting Venezuela.

Goes Both Ways..

Colombian companies have also made the leap into Chile. Colombian companies include retailers, health care operators, transportation companies. Just recently Colombian state owned ISA "bought 60% of CINTRA Chile which operates and maintains highways in Chile, from Spanish-owned Ferrovial. In communications, Internexa, whose acquisition of a Chilean company Comunicaciones Intermedias, has given it the "largest fiber optics network in South America".

It seems pretty logical that two countries with relatively large and sophisticated business sectors would increase their trade.

While official "integration" in the continent seems pretty dead on the surface, the truth is that a lot of activity is happening under the radar. Investment, goods and services are flowing out of - and between- Chile, Brazil, Peru, and Colombia, with attendant economies of scale being created. It also shows a healthy diversity of sectors.

Friday, February 19, 2010

Global Warming, Science, Scientists, Sceptics and Silliness

Global Warming deniers and sceptics have managed to get their opinions aired in major media, mainly in the UK, including such papers as the UK's Times. Some of the reports have been downright sensationalistic, as this article, Climategate U-turn Astonishment as scientist at centre of row admits: There has been no global warming since 1995, , from the Daily Mail.

The claims made by sceptics - dubbed "Climategate" concern, the fourth report of the UN's Intergovernmental Panel on Climate Change (IPCC), as well as the contents of emails hacked from East Anglia University, and a group of scientists and skeptics involved.

And these claims end up being cited erroneously by press and politicians, as casting doubt on the entire body of work done by scientists on global warming, which is nonsense.

You Down With IPCC?

Exhibit 1 is the controversy over IPCC report concerning the melting of glaciers in the Himalayas, which is 2 PARAGRAPHS FROM 1 PAGE OUT OF THOUSANDS OF PAGES, on the chapter on Glaciers which you can read here. That conclusion that the Himalayan Glaciers would melt by 2035 was bogus and had no business being in the report, period end of story. But, world-leading experts in the area had listed an up to date and scientifically reached conclusion on that same topic in another chapter of the report..

AS broken down further in this article, the wrong prediction was included in Volume 2, based on work done by a group of researchers and scientists who were biologists and/or social scientists. It was not from the working group, Working Group 1, of hardcore climatologists who assembled the hard data, and did the climate modelling.

Himalayan glaciers: In a regional chapter on Asia in Volume 2, written by authors from the region, it was erroneously stated that 80% of Himalayan glacier area would very likely be gone by 2035. This is of course not the proper IPCC projection of future glacier decline, which is found in Volume 1 of the report. There we find a 45-page, perfectly valid chapter on glaciers, snow and ice (Chapter 4), with the authors including leading glacier experts (such as our colleague Georg Kaser from Austria, who first discovered the Himalaya error in the WG2 report). There are also several pages on future glacier decline in Chapter 10 ("Global Climate Projections"), where the proper projections are used e.g. to estimate future sea level rise. So the problem here is not that the IPCC's glacier experts made an incorrect prediction. The problem is that a WG2 chapter, instead of relying on the proper IPCC projections from their WG1 colleagues, cited an unreliable outside source in one place. Fixing this error involves deleting two sentences on page 493 of the WG2 report.

That does nothing to discredit the science of global warming, it is simply one small error in mountains of data no pun intended.

Emails and Mental Snails

The so-called Email scandal concerns issues that are being raised from about 20 years of work by the group of scientists around the University of East Anglia's Climatic Research Unit (CRU). The controversy seems to center on emails containing discussions going back and forth related to one paper that relied on chinese weather stations, and warming trends going back, to the medieval period.

And again, the specific data questioned, do not amount to a smoking gun, that if removed would invalidate conclusions reached from data and scientific work.

Fred Pearce
from The Guardian puts it succintly here:

The emails stolen from the University of East Anglia in November have cast an uncomfortable light on the behind-the-scenes actions of some of the most senior and respected climate scientists in the world. The affair raises serious questions about access to data and the way scientific peer review can be used to stifle dissent. But is the science of climate change fatally flawed by the climategate revelations? Absolutely not. Nothing uncovered in the emails destroys the argument that humans are warming the planet.

None of the 1,073 emails plus 3,587 files containing documents, raw data and computer code upsets the 200-year-old science behind the "greenhouse effect" of gases like carbon dioxide, which traps solar heat and warm the atmosphere. Nothing changes the fact that carbon dioxide is accumulating in the atmosphere thanks to human emissions from burning carbon-based fuels like coal and oil. Nor the calculations of physicists that for every square metre of the earth's surface, 1.6 watts more energy now enters the atmosphere than leaves it.

And we know the world is warming as a result. Thousands of thermometers in areas remote from any conceivable local urban influences tell us that. The oceans are warming too. And we have the evidence of our own eyes. The great majority of the world's glaciers are retreating, Arctic sea ice is disappearing, sea levels are rising ever faster, trees are climbing up hillsides and permafrost is melting. These are not statistical artefacts or the result of scientists cherry-picking their data.

Equally, many of the most widely publicised claims from sceptics about what is in the emails are demonstrably unfounded. There is no conspiracy to "hide the decline" in temperatures. Nor that a lack of warming in the data is a "travesty" – still less of attempts to fix the data.

The Guardians counterpart on the right The Economist, takes essentially the same line on the Emails. And that seems to be that some prominent scientists behaved like jerks, dismissed valid points raised by opponents, and got sloppy, but overall the science stands.

More heat than light

Some e-mails suggest the criticisms made by sceptics outside academic climate science may have had more support within it than might be expected. Comments on the tree-ring section of the IPCC’s latest report by John Mitchell, director of climate science at Britain’s Met Office, raise issues very like those highlighted by perhaps the most prominent critic of the hockey stick, Steve McIntyre, who runs a blog called Climate Audit. An e-mail apparently from Dr Mann refers to an aspect of some statistical testing he did not want discussed widely as “dirty laundry”. Those worried that undue weight is being put on data from the tree rings of a dozen larches on the Yamal peninsula in Siberia, a topic that exercises Mr McIntyre, will be interested to see that some climate scientists shared some of their worries.

None of this is evidence of fraud. Looked at broadly, the e-mails seem to show a pretty workaday picture of scientists, with frustrations and sloppinesses, disagreements, opponents badmouthed, and cultural differences bridged (for example, explaining to an American colleague not just why a particular person is a prat, but what a prat is in the first place). Some of the e-mails may, looked at in a context not currently available (those posted were a selection), add weight to previous criticisms by Mr McIntyre and others. But that, in itself, is not dramatic. Many of these issues were aired in the most recent IPCC report, though not particularly thoroughly. And the idea of anthropogenic climate change rests on a great deal more than just tree-ring records, useful as they are for providing context to the current warming.

A spate of recent claims of global cooling, for example, rely on comparing 1998, the second-hottest year in the modern record (going to 1880), with 2008, which was relatively cooler. Yet, according to the Goddard Institute for Space Studies, a part of NASA, America’s space agency, 2008 was the ninth-hottest year on record. 2009 is shaping up to be the sixth-hottest. All of the ten hottest years recorded have come since 1997. And retreating Arctic sea ice provides even more visible data to support conclusions of warming.

This entire row is over skeptics picking at small pieces of the puzzle, and using that to make outlandish conclusions which get picked up by sensationalistic media, fellow travellers with vested interests in industry and politicians. It isn't about science, that is clear.

Monday, February 08, 2010

Brazil cuts Bolivia Gas Purchases, Invests in Peru

While Evo Morales is praised by his usual international apologists for his dominant re-election and inaguration, the consequences of his disastrous econommic policies and ideological stupidity continue to ruin Bolivia's long term prospects.

Brazil - Bolivia's largest gas customer - has announced it will cut back on purchases of Bolivian natural gas.

Meanwhile Brazilian president Lula was conspicuously absent from buddy Evo's inagural ceremony. Lula happened to be in Peru with his ministers and top Petrobras officials, negotiating an energy pact which includes Brazilian investment for exploration of Peruvian oil and gas fields, and to help develop its petro-chemical sector.

As Bolivian writer and analyst, Humberto Vacaflor, wryly observed also absent was Christina Kirchner who was negotiating with Toyota. Over what? Over Argentine lithium, and the Japanese automaker cut a deal with the Argentinians. Bolivia, has the largest lithium reserves in the world, but in large part thanks to Evo and his silly ideology it looks Bolivia is again seen as an erratic and unreliable source.

While Bolivias government continues its self-defeatist anti-capitalist policies, its neighbors, with less reserves of things like gas and lithium, are able to get the investments and markets needed to help its people. Morales talks about industrializing natural gas and lithium. Meanwhile, it is Peru that is getting the know-how and foreign investment for its petro-chemical sector, and Argentina that is getting Toyota's investment. Socialism rocks!!


Ironicamente, el modelo "progresista" Suramericano, no es nada mas que una version nueva del "extractivismo" tradicional de las epocas coloniales y mercantilistas. Una economia semi-estatizada que depende de exportaciones de materias primas.

El neo extractivismo
Domingo, 07 Febrero 2010
2010-02-07 07:50:51 Hernán Zeballos H. La plataforma energética, promovida por CEDLA, en debate los días 27 y 28 de enero, congregó a un conjunto de especialistas, para tratar el tema “Crisis...