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Vulture Turns to Pirate: Blocks Argentine Ship from Leaving Ghana Print
Written by Jake Johnston   
Thursday, 11 October 2012 15:07

The long-running dispute between Argentina and the “vulture funds” took a turn to the bizarre this week.  “Vulture funds” buy up defaulted debt of developing countries for pennies on the dollar then use lawsuits and other means to attempt to force repayment of the full face value. Now, the vultures have become pirates, holding an Argentine naval ship for a $20 million ransom, Reuters reports:

A court in Ghana upheld as legal on Thursday the detention of an Argentine naval vessel seized under a court order by creditors pursuing the South American nation over its 2002 debt default.

Argentina declared a sovereign default a decade ago and now faces a raft of lawsuits in U.S. courts by bondholders seeking state asset freezes to recover the value of defaulted bonds.

The Libertad, a navy frigate with 200 crew, was detained in Ghana's eastern port of Tema on October 2 under a court order sought by NML Capital Ltd, an affiliate of the investment firm Elliott Management.

Elliot Management is run by billionaire Paul Singer, who has a long history of this sort of action. Singer took both Peru and Congo to court, eventually receiving at least $140 million for debt which he paid just a fraction of that for. Even the former head of Goldman Sachs called the vulture funds’ investment strategy of targeting poor countries immoral: “I deplore what the vulture funds are doing,” said Former Treasury Secretary Paulson to the House Financial Services Committee in 2007.

The backstory: in 2001 Argentina defaulted on some $81 billion (plus interest) of debt as a result of a severe economic collapse. Argentina has since reached agreement with holders of some 95 percent of this debt.  Yet some “vulture funds” have refused to make a deal, seeking instead to use legal recourse to try to recoup the debt’s “full value”. Of course, these funds bought the debt for extremely low prices – in the case of NML, Bloomberg reported that they bought at least $182 million in debt for just 20-30 cents on the dollar. Of 15 bondholders who hold at least $25 million, nine of them are based in the Cayman Islands, including NML.

Nevertheless, they have enlisted the help of the U.S. congress to fight Argentina. The American Task Force Argentina, made up of many of the vultures, has spent over $3 million since 2007 lobbying against Argentina, while Singer himself has given over $1 million to Presidential candidate Mitt Romney. A “Stop VULTURE Funds Act” introduced in the 111th Congress by Rep. Maxine Waters never made it off the ground, and was not even introduced this legislative cycle. Meanwhile, Western Hemisphere Subcommittee Chair Connie Mack (R-FL) is the main sponsor of a bill designed to get Argentina to pay NML nearly $2 billion. While it is highly unusual for a bill to focus on a single country, it is not a surprise given that NML is Mack’s largest contributor. Fortunately, FiveThirtyEight gives Mack a 3 percent chance of winning the race for Bill Nelson’s Senate seat.

If the U.S. government wants to root out pirates in Africa, it should start with our own.

 

 
Public Sector Employment in Venezuela Is Not So Large as the Associated Press Suggests Print
Written by Mark Weisbrot   
Thursday, 11 October 2012 11:25

An Associated Press article dated October 9 states that Venezuela has

“ at least 2.4 million national government employees, making up 8 percent of the country's population. By comparison, the United States, with tenfold the population, has almost the same number of federal employees, at 2.7 million.”

If Venezuela really had 10 times as many public employees as the U.S., relative to its labor force, this would be amazing.  However it is not true.

Venezuela actually has, according to the latest statistics, 2.49 million public employees – including all levels of government.  With a labor force of about 13.5 million, this is about 18.4 percent of the labor force. (Labor force is a better denominator than total population because of different demographics between countries). 

The U.S. as of September 2012 had 22 million public employees, or 14.2 percent of the labor force.  Thus the difference in public employment between Venezuela and the U.S. is therefore about 4 percentage points.

One reason for the AP’s misleading comparison is that it does not take into account that most public employees in the U.S. (19.2 million of 22 million) are employed at the state and local level.  In most other countries, including Venezuela, the reverse is true.

Of course the U.S. has a relatively low level of public employment compared to other high-income countries.  France, Finland, Denmark, Sweden, and Norway all have public sector employment percentages in the 20s, with France at 22 percent and Norway at 29 percent.

In this article, the author is using Venezuela’s public employment to argue that Chávez had a big advantage over his opponent in the recent election.  However this is not clear.  Most of the wealth and income of the country still belongs to people who oppose the government, and several studies show that the majority of the media (pdf) was biased in favor of Capriles. Whether Chávez’s speeches on television could compensate for this overall media bias against him is not at all clear.

Political scientist Justin Delacour, who has studied media coverage of Venezuela for many years, argues that this article shows a considerable double standard on the part of AP.  He writes:  “I cannot recall one time in all my years of reading AP reports that these sorts of electoral advantages have ever been discussed by your newswire.  It is only when a left-wing party acquires significant PR resources that your newswire is suddenly so concerned about fairness on the PR front in a country's electoral process.” He notes that most media in Latin America are biased in favor of right-wing or center-right parties, but that has not been an issue in AP reporting.

 
New York Times Can’t Seem To Understand How Their Side Lost In Venezuela Print
Written by Mark Weisbrot   
Wednesday, 10 October 2012 08:09

The New York Times coverage of Venezuela’s election must have been a disappointment to anyone who, even if they don’t like President Hugo Chávez of Venezuela, wanted to find out how he managed to win yet another election, this time by an 11 percentage point margin.  In the two articles following the election, there was almost nothing about how people’s living standards had improved, or how that might have affected the election result.  As I mentioned in this op-ed yesterday in the International Herald Tribune and New York Times, the election result is similar to the re-election of left governments throughout South America.  In Venezuela, since the Chávez government got control over the oil industry, poverty and extreme poverty have been sharply reduced (see below), access to health care and education greatly increased (with college enrollment doubling and free tuition for many students), and four times as many people eligible for public pensions.  (For a first hand view from the ground on what some of these things look like, see Lisa Sullivan’s report here; and for a nice review of some of the awful media reporting on the elections, see Keane Bhatt’s blog here ).

But the Times articles on the election result are about an “ailing and politically weakened winner facing an emboldened opposition that grew stronger and more confident as the voting neared.” (In most countries an 11 point margin would be considered a landslide).  And it’s about how disaster must strike the economy soon. Hope springs eternal.  I have challenged the “unsustainability” thesis in detail here. As is customary, yesterday’s article relies heavily on opposition sources, such as economist Ricardo Hausmann, for predictions of doom and gloom ahead.  It is worth noting that Hausmann co-authored a paper claiming that the 2004 presidential recall referendum that Chavez won by a margin of 58-41 percent was actually stolen through fraud. Since the Venezuelan election process is one of the most secure in the world, he offered an unbelievable conspiracy theory as well as statistical evidence that turned out to be worthless. (See here, and links in here).

Hausmann also recommended a NYT op-ed published on Saturday, by the Venezuelan opposition blogger Francisco Toro. This is truly an opinion piece, as there are few facts; but unfortunately some of those facts are wrong. The author asserts that the Venezuelan government has been “less effective at reducing poverty than the Brazilian alternative.” But as can be seen in the table below, although the Workers’ Party government in Brazil has done very well in reducing poverty, Venezuela has done better during the same period. And these poverty rates measure only cash income; they do not count the value of free health care to the poor, which if included would show even more poverty reduction in Venezuela.

The author also asserts that “Venezuela’s child mortality and adult literacy statistics have not improved any faster under his government than they did over the several decades before he rose to power.”  Leaving aside literacy, which is poorly measured, the second table below shows infant mortality for the 12 years before Chavez, compared with the 12 years of his administration. As can be seen, infant mortality declined somewhat faster during the Chavez years.

Read more...

 

 
Gaga for Freedom of the Press? Print
Written by Dan Beeton   
Tuesday, 09 October 2012 15:39

Pop star Lady Gaga visited WikiLeaks founder Julian Assange this week at the Ecuadorean embassy while in London, meeting with him for a reported five hours.

Gaga and Assange

Perhaps Lady Gaga understands some things that seem to elude the majority of the media: Assange's importance as a defender of freedom of the press and freedom of information.

Assange remains at the embassy while the Ecuadorean government attempts to negotiate a solution to the stand off with Swedish authorities - who refuse to guarantee Assange would not be extradited from Sweden to the U.S., to face possible charges under the Espionage Act, despite appeals from the likes of Amnesty International - and the U.K. - which refuses to guarantee Assange safe passage.

Gaga dressed as a witch, in a possible reference to the "witch-hunt" against Assange, which Assange denounced in an August speech from the embassy.

 
Venezuelan Elections: Live Blog Print
Written by CEPR   
Sunday, 07 October 2012 06:10

UPDATE 11:21: CEPR press release:

Chávez Re-Election Continues Trend of Left Governments Re-elected in South America

Economic Growth, Expansion of Welfare State Likely to Continue for Many Years

For Immediate Release: October 7, 2012

 

Washington, D.C.- Hugo Chávez’ re-election to another 6-year term shows that Venezuela, like the rest of South America, prefers governments of the left that have improved living standards and greatly reduced poverty and inequality, said Mark Weisbrot, Co-Director of the Center for Economic and Policy Research (CEPR) in Washington, D.C.

“Chávez is often portrayed as though he were from Mars, but really the similarities between what he has done and what his neighboring left governments have done are much greater than the differences,” said Weisbrot. 

Contrary to many press reports, the vote was not close, as CEPR had predicted it would not be.

[More here.]

UPDATE 11:04: Henrique Capriles now making concession speech.

UPDATE 10:41: Official results: With 81 percent voter participation, Chavez - 54.43 percent; Capriles - 44.47 percent of the vote. (Remaining going to minor candidates.)

UPDATE 10:34 PM: RESULTS BEING ANNOUNCED NOW, HERE.

UPDATE 10:00 PM: Election monitors await the announcement of official results:

CNE

UPDATE 9:55 PM: An election monitor in Tachira state reports:

turnout here approached 90%, a tribute both to the CNE's preparation and organization, the dedication of the civil servants who spent long hours at the stations and, most important, to the Venezuelan people who are actively engaged in who leads their government. Despite the huge numbers, and the early difficulties with long lines and a couple of malfunctioning machines, no one reported any significant problems or concerns about the security of the process.

UPDATE 9:49 PM: An election monitor in Zulia state reports:

in Maracaibo [at] Unidad Educativa Nacional Privada Nuestra Senora del Pilar with 14 mesas and 7482 voters.  This is our largest voting place. ...but was almost empty with vote at 70- 84%. Only minor problems with one machine eating paper receipts; one could be read the other one could not. All quiet.

X vs x with 4 null were results 388 voters 433 entitled to vote. They are now doing paperwork. The null votes were because people pressed the vote button without first pressing the candidate button. Pulling ballots out one at a time and reading them off while another woman is writing results on large form.

UPDATE 9:27 PM: An election monitor reports:

Just spent almost 2 hours at a school in Pq Altagracia, a few blocks from the Presidential palace, witnessing the closing of two mesas and audit (citizens' verification) of one. To ensure all the electronic votes exactly match the paper receipts reviewed by the voters and deposited in the boxes, a random selection of 54% of the 39,000 machines are audited in an open process with witnesses from both parties and, in our case, a group of 15-20 international acompañantes.

Venezuela has "fusion" voting, where a single candidate can run for any number of parties. Chavez is running for 12 parties, Capriles for 19. When you vote you press a picture of your candidate in the box of the party you support.
...

Right now our bus is taking us down streets packed w Chavistas blowing horns, setting off firecrackers and shouting.

We're on our way the CNE headquarters to hear Tibisay Lucena announce the results. Probably we'll be there for several hours.

UPDATE 9:20 PM: Some Venezuela observers are noting that Chavez campaign head Jorge Rodriguez apparently predicted the early release of an exit poll, via the ABC newspaper in Spain, that would show Capriles in the lead, and thereby give the opposition the pretext to claim fraud if the results do not turn out that way. As we have already noted, ABC ran such a story earlier today.

Deutsche Press Agentur reported Rodriguez's prediction on October 2. (H/T to Lee Brown of the Venezuela Solidarity Campaign).

 

Read more...

 

 
Carter Center Affirms a Clean Electoral Process and Secret Ballot in Venezuela; U.S. Media Offers a Contrasting View, Without Evidence Print
Written by Dan Beeton   
Saturday, 06 October 2012 15:57

The Carter Center released its pre-election report on the Venezuelan electoral process yesterday. The response from the U.S. media has, with the exception of a few wire service articles, been silence. Instead, papers such as the Los Angeles Times, New York Times, and Washington Times have, in recent days, raised the specter of possible fraud, government recrimination against opposition voters, and possible violence that could result from people not accepting the election’s outcome. The Washington Times, for example, began an article Thursday by reporting:

With Venezuelan President Hugo Chavez facing the most serious re-election challenge of his 14-year reign, international observers are bracing for the possibility of social unrest if the outcome is close when voters go to the polls Sunday.

“I think the probability of upheaval and protests increases the closer the vote gets,” said Christopher Sabatini, senior director of policy at the Americas Society and the Council of the Americas in New York.

A close vote count between Mr. Chavez and his fresh-faced challenger Henrique Capriles Radonski may trigger a street-level clash between viscerally opposed supporters of the two.
“There are rumors that Chavista armed organizations are ready to come down from the hills should Capriles win,” said Mr. Sabatini. “The other side is that if Capriles loses in a squeaker, his supporters have some pretty good basis to claim fraud.”

The New York Times, as we noted yesterday, interviewed an opposition voter who claimed to be afraid to vote for Capriles since it might put her future career in jeopardy – despite being perfectly willing to be cited by name in the Times article, and despite making her political inclinations very clear on social media.

The Los Angeles Times, meanwhile, reported yesterday:

For Capriles to win, many voters who lean in his direction will have to overcome fear that they will lose their jobs or benefits in the event of a government change, that there will be an increase in political violence if Chavez loses, or that the government somehow will find out they voted for Capriles and take retribution.

So what does the Carter Center say about the possibility of fraud, and ballot secrecy?

Read more...

 

 
Oops! Embarrassing Quote in NYT Article Says a Lot About NYT Reporting on Venezuela Print
Written by Mark Weisbrot   
Friday, 05 October 2012 15:23

In a stunningly one-sided article two days before the Venezuelan election, the New York Times creates a frightening picture of a deteriorating society in which citizens are afraid to vote against the incumbent president, Hugo Chavez:

“I’m not going to take the risk,” said Fabiana Osteicoechea, 22, a law student in Caracas who said she would vote for Mr. Chávez even though she is an enthusiastic supporter of Mr. Capriles. She said she was certain that Mr. Chávez would win and was afraid that the government career she hopes to have as a prosecutor could be blocked before it begins if she votes the wrong way.

“After the election, he’s going to have more power than now, lots more, and I think he will have a way of knowing who voted for whom,” she said. “I want to get a job with the government so, obviously, I have to vote for Chávez.”

OK, so she is giving the NYT her name but afraid to vote in an election that international observers believe to be conducted by a secret ballot.  Strange.  This might have made an inquisitive reporter do a google search on her name.

He would have found this among dozens of opposition tweets:

obo6sxqj tw1


So, she tweets constantly against the government but is afraid to vote against it in an election process that Jimmy Carter said, a few weeks ago, was the best in the world.

The rest of the article is about as believable as this witness.  For those who don’t follow the NYT coverage of Venezuela, for years it has not been very distinguishable from that of Fox News.  Or the Washington Post.  Hence the consensus of all Very Serious People on Venezuela that it is a scary, authoritarian place to live.

The article also pretends that Chávez has an advantage in the media; however the government has only a small portion of the media, with most remaining pro-opposition.

UPDATE (5:00pm): The Carter Center has told the media that fears of electoral fraud in Venezuela are unfounded.

 
Newsweek Takes a Page from the Weekly World News in Venezuela Commentary Print
Written by Dan Beeton   
Thursday, 04 October 2012 15:03

Newsweek has a commentary piece this week by Venezuelan journalist Boris Muñoz which cites anonymous sources as suggesting that Hugo Chávez’s cancer is but a cleverly designed conspiracy meant to distract Venezuelans from the country’s problems:

As someone very close to Chávez told me (anonymously as he feared falling out of favor with the supreme commander), it was a welcome distraction from the wear and tear of years of failed policies. Chávez “has drawn attention away from the big problems of his administration such as its incompetence, corruption, and bureaucracy, and the nation’s criminal violence,” the source said. “He has created this dramatic scenario to ... seduce the masses because he knows that, terminally ill or not, this is his last chance.”

Indeed, even some members of his inner circle suspect that Chávez’s long battle with cancer is really an elaborate charade masterfully orchestrated in complicity with the government of Havana— and one that might win him yet another term, perpetuating his presidency for another six years.

Never mind for a minute the idea that someone “very close to Chávez” describes his administration as “incompetent” and “corrupt” – “members of his inner circle” suggest Chávez never had cancer at all! With the help of those ingenious Cubans, he successfully duped the Venezuelan people – and so many naïve journalists, including Dan Rather – into believing he was in a life and death struggle against illness, even appearing take on a more plaid complexion, and have his hair fall out! In publishing this article, Newsweek has moved into Weekly World News territory, ala stories such as “Dick Cheney is a Robot” or the harder to believe “Hillary Clinton Adopts Alien Baby.”

While considering this sinister plot, recall how derisively the media generally reacts to Chávez’s assertions regarding assassination plots and U.S. government subterfuge in Venezuela – even though the U.S. role in the 2002 coup, in which Chávez was removed from office is well documented.

Newsweek has never reported the Venezuelan government’s slashing poverty in half, cutting extreme poverty by 70 percent, or even Venezuela’s strong economic growth once the government got control over the oil sector. And Newsweek has barely reported (save for this 2004 article) on one of the most important stories in Latin America’s modern history, one which helps explain the region’s shift to the left: the historic and unprecedented economic failure from 1980 – 2000. But it has plenty of space for wild Hollywood-style conspiracy stories.

 
Economic Growth in Venezuela Print
Written by Mark Weisbrot   
Thursday, 04 October 2012 13:32

Some press reports have noted Venezuela’s economic growth lately, in looking at Chávez’s track record in the run-up to Sunday’s presidential election.  For example, the Associated Press wrote that “the economies of Brazil, Chile, Peru and Argentina all have expanded more rapidly than Venezuela’s since Chávez took office in 1999, recording average growth between 3 and 5 percent a year.”

It is important to have a reasonable base of comparison. It is not reasonable, for example, to include the years 1999-2003 in looking at the Chávez government’s growth record.  During these years, the government did not have control over the national oil industry; even worse, it was controlled by people who, according to the prominent Venezuelan opposition journalist Teodoro Petkoff, had a strategy of “military takeover.”  Not only the military coup of 2002, but the management-led oil strike of 2002-2003 was devastating to the economy, inflicting a loss of about 29 percent of GDP.

For an analogy, imagine that in the U.S. the Federal Reserve were controlled by people who were trying to destroy the economy so as to topple the government. Clearly it would not be reasonable to hold the executive branch responsible for the resulting state of the economy.

However, for economists it would also not be fair to measure growth in Venezuela from 2003, since that would be measuring from the bottom of a deep recession.

A reasonable comparison would be to use 2004, since by that year the economy had recovered to its pre-recession GDP.  By that measure, as seen in the table below, Venezuela has had decent growth.  If compared to the countries cited by AP, Venezuela’s growth is significantly better than Brazil and slightly higher than Chile.  Argentina and Peru are the outliers during this period, the fastest growing economies in the region.  Mexico is the outlier at the low end, the worst performing economy in the region.

Of course the better measure would be per capita GDP growth, and Venezuela would do somewhat worse there by comparison because it has higher population growth than some of its neighbors. But the press doesn’t use that figure, and the point of this exercise is just to show that if we are going to evaluate economic performance under Chávez, it’s really not fair to include the 1999-2003 years.

For Venezuelans, another relevant comparison might be to the pre-
Chávez years.  From 1980-1998, Venezuela was the worst-performing economy in South America, in a period during which the region suffered its worst long-term growth failure in a century.  Per capita income actually fell by 14 percent, and inflation was much higher (33 percent annually) than during the Chávez years (22 percent average).

vza-growth-2012

 

 
Attacks on Freedom of the Press…in Paraguay and Honduras (is anybody listening?) Print
Written by Sara Kozameh   
Wednesday, 03 October 2012 11:36

Last week, my colleague and fellow-blogger Jake Johnston, wrote a blog post on the attacks to freedom of the press in Chile, pointing out that media reports and U.S. based human rights organizations often focus on attacks on the press in countries that have elected left leaders, but somehow fail to report on attacks on freedom of the press in other countries.

One would think that the media and human rights organizations would pay specific attention to possible attacks on freedom of the press in countries that have recently suffered breakdowns of the democratic process, particularly in cases where  coup d’états have occurred, such as in Honduras three years ago, or more recently, Paraguay.

Hondurans continue to endure the harsh repercussions caused by the coup that ousted President Manuel Zelaya in June of 2009 that include widespread political repression, political assassinations and attacks on freedom of the press -not limited to the assassination of journalists- 25 of them since the coup to be exact.

So, after the parody of political impeachment, or the “parliamentary coup”, as others have called the ouster of President Fernando Lugo in Paraguay this past June, reporters and human rights organizations should have been more aware of incidents that could result in censorship and attacks on freedom of the press. Nonetheless, when workers at TV Pública, a state-owned public TV channel, denounced political persecution by the new Franco government after 27 of them were fired for having criticized the coup in June, U.S. media and human rights organizations did not seem to have taken notice. Nor did they take notice two weeks ago when the Union of Journalists of Paraguay (SPP) denounced threats, aggression and intimidation against two reporters, by President Franco and his brother and senator César Franco. In the run up to the April elections that are supposed to restore legitimacy to the government in Paraguay, the French organization Reporters Without Borders, which has noticed the attacks to freedom of the press in Paraguay since the coup, says that the climate is worsening and that pluralism in the press is likely to deteriorate.

The egregious attacks on freedom of the press in Honduras following its coup three years ago should make clear the need for international monitoring by the media and human rights organizations anytime that the breakdown of democracy becomes an issue. Let’s just hope that the situation in Paraguay improves, but in the case that it doesn’t, let’s hope that attention from the press and human rights organizations does. 

 
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