June 29, 2004

Flying Fish & Chips

The islands of Trinidad & Tobago (T&T) form a small republic just off the Venezuelan Coast at the bottom of the Lesser Antilles, an Island Archipelago arcing north-south through the Caribbean from just below Cuba in the north to the Venezuelan coast to the south. The sea borrowed it’s name from the Carib tribe. Based out of mainland Venezuela the Carib controlled much of the Antilles until their new enemies from Europe arrived. There are about 100 true Carib left on the islands of T&T. Nowadays the word Carib has the status of a brand name. Mention Carib to the predominantly Black & Indian population of T&T and they’ll think you are referring to the brewery in Port of Spain with the local Guinness franchise. The owners of the Carib brewery are struggling to keep the business open battling their poorly paid and striking employees. The islands are facing beer shortages as the strike progresses. When you can find one a Guinness Export is considered exclusively a man’s drink and is marketed to the majority black population as somewhat of a sexual aid. Often drunk with milk, Carib brewed Guinness Export has 7.5% alcohol by volume.

When you pass through migration checks in Trinidad there are two lines, one for nationals and CARICOM visitors and the other for the rest of us. As the EU expands to the northeast, the US pushes its armies and its currency to the south into El Salvador, Panama and Ecuador, the Caribbean states are not being left behind. CARICOM, their economic community has not yet adopted a common currency, but does ease trade and travel restrictions on people and goods from neighbouring nations.

In many of the other CARICOM nations to the north tourism banking, fishing and agriculture are the major industries. That is not to say that T&T doesn’t produce some of it’s own food and rum, many goods are locally produced. Tourism too has its place mainly in Tobago and money laundering is an important if somewhat low-key industry. These all pale into insignificance when compared with T&T’s main exports: Oil, Gas and Asphalt. T&T is an energy economy through and through and one feels that it is somewhat living in the glorious past of free and cheap hydro-carbons till death do us part.

The T&T government are making some attempts to diversify their industrial base to create value add further down the production chain. Alcoa is sniffing around trying to set up another massive aluminium smelter in the Caribbean as they close some of their existing plants in the US due to high electricity costs. Aliminium is a simple product to produce if you have a lot of electricity and it is a popular metal with an excellent future. It is also relatively eco-friendly as it is very recyclable While Geologists recognize that most rocks on the surface of our planet contain aluminium the source of choice is bauxite.

The T&T government is ready to take the plunge, signing a memorandum of intent and preparing to sign the deal and build the factory? They believe that their stake in the factory will be profitable and are intent to encourage downstream industries.

No industry comes without its problems and the Aluminium industry has two major problems which is why Alcoa would consider the logistics of another island-based Caribbean plant requiring product shipment over water. Aluminium smeting has twofold problems: energy cost and waste.

T&T is becoming very savvy as regards the first problem, they realize that for the next few decades much of their wealth and trade with the world will be based on their wealth of oil and gas deposits. Alcoa are interested in Trinidad because it has a few decades worth of gas supplies and cheap gas is a rare commodity these days especially in a western English speaking country with a cheap labout force. There are also some bauxite deposits on the island though this is of secondary importance and some local geologists suggest that they are marginal or inappropriate. What interests Alcoa in T&T is a cheap electricity supply.

They are looking for countries with adequate energy supplies at prices they can negotiate up-front and lock in before they invest the hundreds of millions in building their plant. Trinidad offers a gas supply which though tiny in comparison with that of its neighbour Venezuela, is adequate for it’s current exports and for domestic use for a few decades to come. Current studies suggest that buiding this Alcoa plant will halve the lifetime of their domestic supply shortening its life by about twenty years.

So there’s the tradeoff Trinidad faces, an opportunity at a cost. Twenty years of productivity of a useful raw material consuming close to half their supplies of another raw material. Burn vast quantities of their precious gas supplies to produce electricity in the vast quantities necessary to produce aluminium ingots for export.

Or is it that simple?

The other part of the equation is the environment and this has not been discussed much here. One would expect an island paradise to consider it’s environment of primary importance but this does not seem to be the case. The government has been reluctantly discussing the sensitive topic of gas costs but it has not been discussing where an island as small as Trinidad might store the massive quantities of waste that is produced as a by-product of the smelting process. Various environmental effects should be obvious to the T&T people. The extraction and burning of tens of millions of cubic tonnes of their own gas each year to produce electricity is one obvious factor. The by-products of this process: the heat, the CO2 and the other waste products will present an environmental stress. Add to this the transportation of vast quantities of raw materials and end product never mind the construction of the plant itself and the infrastructure that will require and you have quite a challenge. Such costs are normal and should be discussed with the local population before a go-ahead decision is given.

What is not being discussed is the waste products produced by the smelting procedure which are both toxic and voluminous. In the US in the fifties Alcoa’s smelting waste was simply buried in unlined sites and the damage done then is still being paid for by the environment and the US tax-payer. Since then the environmental laws of the US have been toughened to prevent future disasters. But the US has vast deserts for such stuff, where on such a small island as Trinidad, are these lined waste disposal sites going to be placed and who will pay for them? This crucial question needs to be discussed before a decision is made. The government of Trinidad and Tobago owes that to their constituents to bring this crucial issue to the fore before signing the deal.

Maybe there might be more exciting things that they can do with their gas supplies?

Posted by Tony Phillips at 06:41 AM | Comments (1)

Mind The Gap

There is no way to drive from Central America to South America because the Darién jungle separates the southern tip of the Panamanian isthmus from Northern Colombia and no road passes through. Though insignificant when compared with the tens of thousands of miles on both the Alaskan and the Patagonian extremes, the Pan American is missing a critical 200 mile stretch and this gap is quite a barrier.

Commonly referred to as the Darién gap; nature, geography, war and drug-running combine to make this border region phenomenally dangerous. The Darién’s mountains, rivers, and jungle swamps are populated by indigenous peoples and armed groups from all ends of the Colombian political spectrum. Not infrequently, their numbers are supplemented by frightened adventure tourists chained to local trees for weeks on end, anxiously awaiting an international money transfer.

The gap creates a logistical challenge that has meant that few road travelers see Central and South America in the one trip. This is especially true for those who travel in their own vehicle. Indeed selling a vehicle in one sub-continent and buying a replacement on the other can prove to be simpler and at times, more cost effective. Add to that the wide availability of diesel vehicles, black market cash rates and the anonymity of local plates in South America and the argument becomes even stronger. Project Allende has accumulated too much ‘stuff’ to be taken on flights as luggage, too much time and effort has been spent rebuilding the vehicle so we were trapped. We needed to cross the gap with our vehicle!

Basic How-Tos of Car Shipments
Although air freighting a vehicle is an option for those with deeper pockets; as a general rule cars travel by ship and people by plane. People can also travel by boat but we failed to hook up.

A little research revealed two simple ways to ship a car by boat: in a container or break bulk. Containers come in two metric unfriendly sizes; twenty and forty foot. A dedicated twenty footer is the preferred method and simplest from the point of view of paperwork. However, twenty footers are also the most expensive option. Cars are rarely twenty foot and the width of a container is quite adequate for all but those foolhardy enough to travel in super-sized vehicles. Arnold of California with his penchant for the ludicrous Hummer springs to mind. Still there’s a lot of wasted space, a twenty footer can hold an average sized car with about six to eight usable feet to spare at one end. Thus, you could squeeze one or two motorbikes in there if you need to!

Most containers are forty footers. Though twice as long they cost less than double and so it can work out much cheaper to shared them, typically with another car. Again we didn’t hook up so we hunkered down to shopping for economy transport for just one vehicle.

The other common shipping option is called “break bulk”. Break bulk is more primitive but even cheaper than sharing a forty footer. Cars are simply chained to the deck in the open or below. From a security perspective, this method is frowned upon. Often travelers note parts missing or new dents or scratches on their beloved vehicles upon arrival. On longer trips some suspension damage happens to vehicles with lighter suspension systems. This results from to and fro motion as well as the car slipping left and right with the motion of the waves. A well stuffed container minimizes this motion.

The Ins and Outs of Shipping Cars
Containers are lifted on and off by cranes and require storage, packing and unpacking at both ends. This is costly and time consuming. Break bulk however, can also be Roll-On Roll-Off (RORO). This means that the car can be driven On and Off the boat, which is cheaper and can be simpler from a customs perspective. Break bulk shipping is not always available from every company or on every route whereas containers are ubiquitous.

In the past, shipping lines offered the savvy traveler a chance to travel with the vehicle and usually only with specific permission from the head office. In these cases, travelers could go with their vehicles on the cheap, experiencing the beauty of an exclusive poor man's cruise, hanging out and playing football with the crew. Sadly, that superb option is all but unavailable now. The nebulous threat of 'terror' means that the US has pressured ports worldwide to comply with new shipping security rules; port authorities and shipping companies are scrambling to comply as we speak. Even Panama’s ultra-modern ports are behind schedule, but the threat of blacklisting non-compliant ports has activities at frenzy levels worldwide. Scratch one more low-price transport option.

Once the preferred method of car transportation is chosen you will need to see whether it is available at the destination of your choice, and, if so, from whom and at what price, and the schedule. Don’t make the mistake of thinking that your options are restricted to those companies with suitable sailings. Just because Maersk has a ship and CGA-CGM does not, doesn’t mean that CGA-CGM cannot offer a container on that Maersk ship for a reasonable cost. Once you have chosen your shipping firm you’ll need to check whether they have alliances with shipping agents at the destination port. Shipping companies often list their preferred agents on their Web sites but it is best to ask. Be sure to check for optional firms, if available, and make absolutely certain that all of the services offered to you by these firms are genuinely necessary to you.

Import & Export
One major cost saving is avoiding a customs agent. An astute Spanish-speaking traveler can save coin by expediting their cargo alone. Among other ways to spend less is avoiding freight forwarders and consolidators. A consolidator is probably unnecessary unless they can help you cut costs by sharing a container and a freight forwarder is usually not required at all. WE found companies which specialized in vehicle freight forwarding , their services were excessively expensive when compared with doing it yourself, more expensive still than a moving company.

A good shipping agent and an ally in customs is all you need. With their services, vehicle importation formalities can be easily accomplished but the choice of avoiding the services of a customs agent will be fought at every turn. You are not only breaking protocol and possibly risking delay; No most importantly you are doing their mates out of their cut!

Exporting a vehicle is simpler than importation and does not require help with customs either. In general, one needs to get the customs agent at the port to stamp both passport and temporary importation papers so that you and your vehicle can depart separately. Panama requires an extra step though…

Exporting a car from Panama
The Panamanian authorities require a separate document that could be considered an exit visa for your car. The logic being that the car could have had an accident or may have outstanding tickets, the car's temporary tourist importation might have expired, or taxes might be owed so they need to certify that this is not the case.

To get this form you’ll need to drive your car to a special police office in Panama City called the Policía Téchnical Judicial (the PTJP) allowing a half-day; we did ours on our way to Colon port but we were cutting it fine. The procedure costs nothing but time and the price of the obligatory photocopies in duplicate. You will need to have an inspection of your car and they take an impression (with tape and pencil) of your VIN plate. They also conduct inspections similar to those conducted by the Mexican special drug police, such as checking for extra body compartments and solids (presumably cocaine) in the radiator etc.

Once the physical inspection is complete, the police search for your VIN and plates on their computers. If you come up clean then they’ll give you a form. Take this to the secretary general’s office in the same building and they’ll type up your certificate. The form is valid for eight days so you have this long to get to the port with the car. It helps to have a copy of your bill of lading before you go to the technical judicial police so that the police can see how you plan to export the car from Panama. They should write the export method and destination on the comment section of the form.

Choosing a Destination
So where do you and your vehicle want to go in South America? This may seems like a simple question but let me assure you it is not. Destination countries are listed in the order of their popularity with overland travelers but keep in mind that the number of drivers who travel from Central to South America is small and there are no simple solutions since the RORO car ferry to Colombia packed up it’s operations.

In most cases people need to travel by plane. Flights are not cheap and carrier choices are limited in this region. Cars travel by boat and unless you use the services of an international moving company you are going to have to be present when the car leaves and when it arrives so you need to sync up your tickets with your car’s shipment! If you have a restricted budget, you are going to have to do a lot of research, take your time and plan ahead. Remember each day you are waiting is also time and money burned, but there is plenty to do in Panama, so you shouldn’t be bored. It also helps to speak some Spanish (or Portuguese for Brazil). You could take a course!

There is no road-most-traveled, no obvious route. Budget is an issue as is time but destination is key!

Ecuador, Peru, Chile
Ecuador is popular, close, reputedly simple (from the point of view of paperwork), and a relatively safe choice. It also includes options for the popular Galapagos island trips from its shores. Passage is available using both RORO and container service; this popular route is relatively cheap. Passage onward to Peru or Chile is also available (often on the same ship) and arrival in Chilean ports is not that much more expensive.

Naturally, one departs from a Pacific port such as Balboa port in Panama and the car arrives west of the Andes. From there, one can drive south to Peru or east to Colombia where the border is relatively uncontested. Travel and shipping to Ecuador is relatively cheap and easy; the downside is that if you want to see the Amazon region you are on the wrong side of the Andes. Still, if your plan to religiously follow the Pan-American Highway, you’re set. For speed, economy and simplicity, Ecuador is likely to be an excellent choice. It was not ours.

Colombia was the destination for a regular RORO passenger and car ferry service up until the 1996. However, traffic to the most dangerous destination country in Latin America has fallen off and that ferry service no longer exists. Don't rule out Colombia though! Multiple destinations are operating both private, such as Cartagena, and public ports. Huge quantities of goods travel to Colombia from the north and vice versa. On the plus-side, Colombia is a high traffic (read: cheap) destination with RORO available and shipping by all the major carriers and some smaller ones. For a list of Panama shipments consult the Monday Panama newspaper supplements which list upcoming sailings of nearly all ships. If you want to avoid Panama, you can ship to Caribbean ports in South America from Puerto Limón in Costa Rica.

On the less-positive side, Colombia is now, and has been, at war for quite some time. War is expensive so the lucrative business of kidnapping thrives in Colombia with more than three thousand persons a year finding themselves on the receiving end of the forced hospitality of their captors. Furthermore, the complexity of the Colombian political situation makes it very difficult for an adventure traveler with foreign (especially US) license plates to avoid contact with the wrong people. In Colombia it is not just a matter of the good guys and the bad guys, there are lots of guys and girls with guns and they can be difficult to identify and very difficult to avoid.

The omens are not good for Colombia. The country is unfortunate enough to offer the world a lethal cocktail of exports: energy and drugs. Oil and drugs often attract the negative attention of US foreign policy and Colombia has fallen victim to its own productive success. Recent peace efforts by Mexican President Fox offering to conciliate between the warring parties have not been well received by Washington. US President Bush replied by slapping an extradition order on Juvenal Ovidio Ricardo Palmera, also known as Simon Trinidad, the leader of the FARC currently jailed in Colombia. Thus, complicating any trips to Mexico for negotiations.

Excellent T-shirts are available from a Scottish publisher called AK Press printed with the logo: "If you like Vietnam you'll love Colombia". They show US helicopters flying over drug-infested jungles. Says it all, really.

On the brighter side, Colombia is a cheaper destination. The country is beautiful and has an advanced infrastructure. Furthermore, Cali and Medellin are reported to have some of the most beautiful women in the world. If you intend to travel to Venezuela, you might note that the border continues to exhibit an explosive charm. The Chavez junta expects a US backed land-based invasion from Colombia at any time. One expects this may not be delayed long after al Sadr is dealt with in Iraq.

Further to the east lies the huge country of Venezuela with its gasoline at 2 US cents a liter (or ten gallons to the dollar for you metric unfriendly folk). Venezuela is not (currently) at war and the country has reasonably good infrastructure, excellent food, rum and coffee. It also has a safe and legal currency black market, so is advantageous to travelers carrying hard cash.

Many Caribbean ports are available, the two largest being La Guaira near Caracas (our eventual choice) and Puerto Cabello further west. There is also a Venezuelan freshwater port in Ciudad Bolivar. Traffic to and from Venezuelan ports from Northern and Central American ports is sparse for the country's economic importance but available and not overpriced.

Flying to Venezuela is not cheap. From Panama exclusive operations are offered by Copa airlines; Lacsa and Copa operate from Costa Rica. For those of you interested in visiting Trinidad & Tobago, Copa also has an arrangement with Aeropostal which makes onward trips from Caracas to Port of Spain essentially for free.

Mr. Chavez recently rewrote the Venezuelan constitution so import law books are relatively new and some procedures may seem a little naïve if simplistic. Interestingly enough many laws are published in small book form available on the streets of Caracas from vendors and in bookstores. The law books governing importation of goods in this new Bolivarian Republic are called the "Organic" law. You don’t need to buy a book but for $2 it wouldn’t hurt and you can practice your Spanish.

The Lower Antilles
Smaller destinations include Trinidad & Tobago and other Caribbean islands. Some, Trinidad included, offer ferry services to the mainland. Shipping your vehicle to these islands is however expensive and complex. Freight forwarders who are vultures at the best of times are used to dealing with tourists with big budgets for luxury destinations such as Barbados and St. Lucia. They are happy to offer incredibly expensive options to non-Spanish speakers. No, speaking Spanish won’t help either! Even shipping companies such as Maersk have to add a freight-forwarding levy to their shipping charges to these islands so as not to compete with their freight-forwarding customers.

Another interesting option is Brazil where sea and Amazonian ports are both available. There are few roads in the Amazon regions of Brazil so arriving by boat is quite an excellent option. Ocean going vessels can go deep into the Amazon and they do so with surprising regularity.

Suriname, British & French Guyana
Along the South East reaches of the Caribbean where the sea opens up to the south Atlantic lie the Former Dutch, English and French colonies of Suriname and the Guyanas. We spent very little time researching these options as the infrastucture of these countries when it comes to roads to the Amazon are less than primitive. South-bound access is to northeastern Brazil only and many access routes are via water. We have spoken with some travelers who have passed these ways, Suriname being popular with adventure tourists from Holland and British Guyana being an interesting tourist spot for the monoglots of Trinidad and Tobago, and Britain for that matter. We shall leave it to other adventure tourists to suss them out.

Time to Decide
We decided to opt for La Guaira, Venezuela so it was time to go shopping. After an abortive attempt at shipment from Limón, Costa Rica, we headed for Panama telling the border guards that we planned to return to Costa Rica so as to avoid the return or onward ticket problem. Shipping is difficult at the best of times. Shipping a car to a country that is not particularly familiar with car shipments is a further challenge, such is the case with Venezuela, but nothing is impossible.

The Project Allende car was retrieved from the port of La Guaira (near Caracas)! Here is how we did it:

We found our own shipping company in Panama City by requesting quotes from all the main shipping lines over email then visiting likely candidates. Maersk was the least expensive and is one of the largest lines, so we decided to use them. However, when we went to the office to complete the paperwork, we discovered that they had no available containers on their own ship and the next sailing wouldn’t be for over a week. The woman helping us called some colleagues in other firms and found us a container leaving within a few days on their own the Torbin Maersk.

The incredibly helpful Maersk agent organized the quote and sent us over to CMA-CGM, French Shipping to complete the formalities. The quote from French Shipping was $892, about $100 more than Maersk. The actual shipment costs $600; everything else is tax, services, etc. We negotiated out some of the stuff, but you can’t get around taxes!

We drove the car to the port of Manzanillo, Colon (the Caribbean side) and then had to pay another $192 for container services: packing the container, sealing the container and then loading the container on the ship. You cannot pack your own container, so this fee is also non-negotiable.

Since we left Panama before our car did, we were sent the Bill of Lading in Caracas via DHL; this was expensive and avoidable. The car and the Bill of Lading papers arrived on the same day, so the first day (Wednesday) was a bust. CGA-CGM uses Intershipping to process all of its containers in La Guaira, so we contacted them. The head of Intershipping, La Guaira, met with us Thursday morning and we began the process of importation.

First, we went to Aduana (customs) to find out exactly what we would need to drive out of the port legally. They do not have much experience with a temporary car import, so the customs official referred to the Book of Organic Law. Articles 107, 146 and 147 define what is needed for temporary tourist passage.

Referring to these laws explicitly, our agency wrote a letter to Aduana, which stated the car owner’s name, passport number, requesting permission to introduce the car into Venezuela, in accordance with Articles 107/146/147. This letter also listed the details of the car, including the make, model, color, year and VIN and finally, the ship number, container number,reason for the visit (touring this beautiful country), and when and where we would be leaving (which border town). In our case, south to Brazil.

We returned with the letter and presented it to the Aduana. There was a small glitch – the car owner had written down that he’d be in VZ for ten days on his tourist card, because we were going to park the car and fly to Trinidad for a few weeks and then return to VZ. The Aduana guy could not wrap his head around this, and his boss was out for the afternoon, so could we come back tomorrow. I explained that it was the same as extending a airplane ticket within the allotted period, but he was looking for a bribe so we walked away to pay less another day.

We then drove to the airport and explained the situation to the Head of Immigration. He signed our passports, wrote ‘90 days’ in them and told us tourist cards don’t matter as long as you don’t overstay the 90 days allotted to you upon entry. We returned to Aduana to show him the signature, and tell him what the Head of Immigration said, but he asked us to return in the morning anyway. Naturally we did.

The next day we were in the Aduana office at 9am; our guy was there along with his boss. They accepted our documentation and wrote up an official document on SENIAT letterhead, signed and dated it, allowing us to import the car. A small bribe was necessary for him, his boss and an associate (approximately USD$8 each).

We went to the yard (Almacen) to have the container ready to be opened. The second glitch was a container deposit. Most storage facilities expect you to come and collect a container. Customers usually send a truck to pick up the container, empty it, and then return it. The container is inspected for damage and you get your deposit back. The deposit for a twenty foot container is USD$500. The deposit is paid before the container is released by the shipping yard. In order for the deposit to be refunded, you will need an address and/or an account in a Venezuelan bank into which the refund can be credited when you return the container returns. We explained that we only had to open the container and drive out and as such, they could keep the container in the yard. This was puzzling to them, but we were finally able to sidestep this process with the help of a call from an accomplice in accounting in our shipping agent’s office.

Glitch number three was next; the jefe (boss) at the almacen (shipping yard where the containers are kept) all of a sudden realized we did not have a declaration of the contents in the car, i.e. our personal effects. We told him that Tourists were allowed to import personal affects with the car to an official value of up to USD$1000 as stipulated in the law and explained by our Aduana friend. This is similar to the non-declaration exemption for people arriving by airplane. The shipping yards live in fear of the National Guard to whom the Aduana papers are surrendered on exit from the port so the jefe insisted that we should have another document for this which would have to be prepared by a importation agency, at extra cost. Such a list of items was on our Bill of Lading required for packing the container, hence we argued, we could use the Bill of Lading instead, albeit misspelled and in English. The jefe insisted that would not suffice; he suggested a return to Aduana to have them sign and stamp our Bill of Lading as a declaration of personal effects. We protested, then relented and went back to the Aduana, where our guys from the morning said, we absolutely did not have to declare our personal effects. And refused to sign any more documentation.

We were sandwiched in Latin confrontation between officials, we couldn’t win so I asked for the Aduana employees mobile phone number. He gave it and told us to tell the jefe to call him to confirm. People who run shipping yards love to get the cell-phone numbers of Aduana executives so, in the end everyone was happy. The jefe called, the Aduana guy confirmed and the jefe relented. By this time, we were up against the clock, as the Almacen closes at 4.30 pm and Aduana at 5pm. It was 4:15pm.

The Almacen had our container ready and we opened it in the pouring rain, breaking the numbered seal with lots of smiles. They then inspected the car to release it to us. We signed off on it and we paid the charges: $102 for removing the container ship to yard, bringing it down off the heap, inspection and, as always, tax on top.

Our final fee was to Intershipping. Their staff were extremely professional, helpful, and personable; a total of $45. We had at least one of their employees with us at all times, sometimes two or three. We drove out of the port at 5:35 with no problems. The National Guard stamped our paperwork and wished us a Buen Viaje. Our total cost including taxis to and from Caracas, a DHL waybill with the Bill of Lading, and all services and tips was $1350 not including our air tickets.

We intentionally shipped the car low on gas because we knew prices were less expensive in Venezuela. The first thing we did was gas up, for a whopping $1.75 (yes, for the whole tank!) This is going to be a fun journey!

So we didn’t need a carnet nor did we need a libretta. They were never mentioned by the aduana and are not in the Book of Organic Laws so save your money for gasoline.

Co-written with Clare Gross

Posted by Tony Phillips at 06:02 AM | Comments (3)

June 06, 2004

Caracas Marches

Updated (postscript below: 2004/6/28)

The results came back from the voting commission and the independent observers Thursday as promised. Over 2,500,000 signatures were shown to be valid. That number is sufficient to launch the recall referendum, a vote planned for the eighth of August. Yesterday the middle classes were out to celebrate and they formed a formidable crowd but they were not to be outdone today by the Chavistas!

This weekend has been a weekend of marches. Saturday was the contra-Chavistas, a predominantly middle class suburban group that passed peacefully with many political banners present for the right wing candidates which will stand against Chavez in the recall. The numbers were impressive but the numbers this afternoon of the Chavista supporters were larger. I shall leave it to the authorities and the pundits for both sides to provide the counts but to my mind the Chavez supporters today outnumbered the Contra-Chavez opposition in the streets by a conservative three to two.

As the Venezuelan flags flew high (with at least one large Cuban flag) on the skyrise slums in Parque Central above Bellas Artes Metro Station, tens of thousands of Chavistas entered the main plaza via freeway intersections past the Caracas Hilton. The only traffic passing through downtown Caracas are the helicopters overhead. The streets are chock-a-block with rural buses which have transported the loyal and happy Chavistas to recover their capital.

Safe in their suites above the few western journalists that had bothered to come had their tripods and video cameras out on the Hilton balconies. From above the sea of red was spectacular but the people were in the streets happily cohorting with their army (all sporting red berets).

Today is party time in Caracas, Chavez still can expect to take the rural vote and much of the working classes but he needs to do more to ensure his victory. One can expect that the government might be spending some of the extraordinary war chest of thousands of millions of US dollars on the kinds of projects he should have been funding all along. Rebuilding the infrastructure of Caracas would be a start. The main freeways passing through the city are a disgrace. With Caracas the capital city of the country that supplies much of the asphalt that covers the streets of Washington DC, the streets here are full of deep potholes.

August shall be a tight and much scrutinied race.

Post-script 2004/6/28

The newspapers report today a warning from Hugo Chavez to his opponents that the recall referendum should be an end to it. This thinly veiled threat that direct action will result if they do not desist after the recall referendum is counted an over. The announcement showed that Chavez is confident of victory in August when the country will go to the polls to see whether ot not he should be allowed to complete his term. In order for Chavez to be defeated in the recall referendum his opponents need to attain more votes than he himself received in the election which elected him.

In a further show of strength F-16's drowned out traffic noise and set off car alarms in downtown Caracas today. The 'training' for the July 5th celebrations were unusually loud, the jet fighters flying low and loud.

Posted by Tony Phillips at 12:06 PM | Comments (1)

June 02, 2004

Tense Week in Caracas

It is Wednesday and all is quiet on the Western front; the Eastern front is quite another matter. Caracas, the divided city, is in a state of suspended animation; the silence eerie, the tension tangible. The black market still functions as do the city transport systems but there are many unexplained closures, many phones left unanswered. Though the army and police are in full force, anarchy is evident in the streets. The system is falling apart at the seams. Opposing factions: the affluent anti-Chavez people in Caracas’ Eastern suburbs and the Bolivarian circles in the slums are preparing for a showdown. In a matter of days the die will be cast.

Last month the Chavez government finally gave in to intense global pressure and allowed a third phase of the Presidential recall process to take place. On Sunday, the polls closed after three days of ‘signature repair’. It is hoped that this will be the last step in a prolonged signature collection procedure. The world will know tomorrow whether the Venezuelan people will have a chance to choose an alternative to Chavez before his Presidential term is complete.

This week I visited a consular office in the Commercial Centre of the Caracas Municipality of Tamano (the CCCT). The office has an excellent view of the military runways below in the Miranda Aerodrome. Once a civilian airport, Miranda is now exclusively in government use. As we spoke, we both cast a wary eye over his shoulder as the jet engines roared below. The conversation revolved round the oil economy of Venezuela; as an economist with over thirty years experience in Venezuela, he said things had never been worse.

The nationalized government oil company the Petróleos de Venezuela (Pvdsa) was recently run by military ex-General Guaicaipuro Lameda Montero . In the recent strike thousands were sacked from their posts in the Pvdsa, replaced with loyal Chavez people. The new regime is tasked with running an industry responsible for thirty billion dollars worth of business annually (at last year’s prices). The challenge has proven immense and the strain is showing; the Pvdsa is a shambles held together by expensive international contractors including Schlumberger and Halliburton. As the New York markets pushes the price of crude to an all time high of $42 a barrel the Caracas downtown looks almost as rundown as Detroit. Where are the $30 Billions in nationalized oil-revenues being spent?

Just this week Chavez donated “about eight” Venezuela air force trainer planes to the new Bolivian government. Meanwhile the city slums encroach and subsume much of downtown Caracas. High rise nineteen seventies boom-time architecture lie partially or totally vacant. The currency markets are voting with their pocketbooks offering a 50% premium for convertible currencies such as USD or Euros. The government is debating making such currency exchange illegal. Two dollar exchange rates are published in the daily newspapers “El Nacional” for both dollars and Euros there is an official and a CANTV rate. The so-called CANTV rate is more than 3000 Venezuela Bolivars to the US dollar, the official rate about 1900.

CANTV is the state phone company. Its stocks list locally on the Caracas Stock Exchange and also lists on the NYSE as Alternative Deposit Receipts (ADRs). Such a listing is not unusual, many non-US firms use ADR’s as a mechanism to increase the liquidity of their public stock. However, what is unusual is the pricing variations seen in CANTV stock. Protective exchange controls have pumped the value of CANTV stock to unreasonable highs as Venezuelan’s buy the stock in Bolivars locally and sell the ADR’s in New York for hard dollars. In the process, the dollars bought at an apparent loss reflecting the discrepancy in the official and the black market currency exchanges.

The CNE (Venezuelan voting commission) has been under strict international scrutiny for this third phase of the long, drawn out recall campaign. When the polls closed Sunday night, international overseers such as the Carter Foundation pronounced the unusually democratic process of vote repair valid and above board. The CNE had found many votes questionable in previous rounds, vote repair offered those whose votes had been discounted a last chance to prove them valid. If the CNE counts enough valid signatures, the recall referendum will go ahead soon. This will offer the Venezuelan nation a chance to decide whether Chavez should complete his six-year term as President. He may find himself in the shoes of Californian ex-Governor Gray Davis, replaced by a populist right-winger. Then again, he may not!

The real intention of the anti-Chavez camp is unclear. Even if the opposition manages to activate the referendum, it is quite possible Chavez might win. It is difficult to select a credible popular presidential candidate. One theory is that that this long, drawn out campaign is about buying time to prepare for a second coup attempt (for both sides). Chavez has been putting by an extraordinary war chest, his opposition include some of the richest people in South America.

Chavez claims that insurgent guerrillas have already infiltrated from neighboring Colombia preparing for a second coup. These claims have yet to be proven false. The newspapers print photographs of the group allegedly captured in the ranch of a leading contra personality. The government presented a stool pigeon who testified about covert meetings of contra leaders in the Country Club city park in central Caracas. Government troops have searched the houses of leading luminaries of the right and rich industrialists. The accusations of human rights abuses are serving only to further polarize this extremely polarized society.

As the population awaits the results of the final count tomorrow tensions mount. Venezuela may have a referendum or, as seems equally likely, they may not. Either way what might Chavez face during the rest of his term if he continues with his populist Bolivarian revolution? Assassination? An external threat backed by powerful internal elements possibly utilizing those new tanks just purchased by the Colombian army? Or, is the US government about to open another front in its global oil wars — this time lead by Southern Command?

Posted by Tony Phillips at 07:35 PM | Comments (5)