August 16th., 2010

              The meeting between Santos  and Chavez

Local newspapers as well as several others in great part of the world opened up their first pages with a photo of Juan Manuel Santos and Hugo Chavez.   In less than four hours both heads of state agreed to re-establish diplomatic and commercial relations. At the closing of the meeting they signed a new statement of principles. Chavez, who for years sustained hard controversies with the new ‘’neogranadino’’ head of state, affirmed that his purpose was to ‘’turn the page’’ and Santos commented ‘’I am extremely pleased with this meeting’’.                    The statement signed by both is a manifest whereby the creation of five commissions was announced that will work on sensible issues; 1. Payment of pending debts with Colombian exporters superior to $ 800 millions and re-boosting commercial relations; 2. An agreement on an economic complement; 3. Social investments in the border (2,200 kilometers); 4. Development of a complex of infrastructure Works, and 5. Security. The guerrilla issue is difficult for Santos. The press conference was cordial and prudent. Chavez made some statements that drew attention. The international press does no longer give importance to his announcements that the US military bases in Colombia are part of a war Project against Venezuela. At Santa Marta he declared ‘’the military agreement between the United States and Colombia is an internal matter belonging to Bogotá´´.  As to the support of his government to the FARC, he was more emphatic: ‘’The Venezuelan government does not support nor allows or will allow the presence of guerrilla or terrorists in Venezuela’’.  Chavez insisted on that the Bolivarian revolution going on in Venezuela does not constitute a menace to Colombia, to what Santos replied: ‘’We have maintained for some hours a frank and direct dialogue… trust is one of the basic conditions to good relationships’’.

At San Pedro Alejandrino Chavez said ‘’I am committed before President Santos not to allow the presence of armed groups in our territory’’. The Colombian President stated: ‘’It’s an important step taken to maintain relations on firm bases’’.   Without doubt, Colombia and Venezuela want to improve their relationship and in part they will, but the impeding stone on the road is the guerrilla problem.

Businessmen of both countries applaud the meeting at Santa Marta but have doubts as to the re-launching of the bilateral relationship. They are of the opinion that recuperating normality regarding the bi-national commerce will not be an easy task since the freezing of the relationship between Caracas and Bogota in 2009 planted distrust. Maria Angela Holguin, the Colombian Secretary of State declared: ‘’…to us the payment of the debt is more important than re-establishing commercial relations because there are many entrepreneurs who do not want to export to Venezuela since the payment mechanism is not clear’’.  But distrust is not the only obstacle on the road, Noel Alvarez, President of Fedecamaras, affirmed: ‘’we are not only worried that we will not receive goods from Colombia, but that we may be able to recover competency to be able to export and this leads to a fundamental issue as is juridical security for investments and that we might recover the Venezuelan productive apparatus’’.

THE AGREEMENT’S DIFFICULTIES

The problem caused by the Colombian guerrilla on the Venezuelan border is part of the commitment made at San Pedro Alejandrino. Juan Manuel Santos discreetly raised the term as security, since he does not ignore that Chavez’s condemnation of the FARC and the ELN is just rhetoric.  Santos has been categorical as to the conditions he demands: give up the weapons, free all hostages and abandon the zones they occupy. Most of the guerrilla members have Venezuelan identity cards, are a part of the communes and lead them from the border. Santos on the other hand, receives Uribe’s heritage even if during the presidential campaign they used a sober language. Nobody ignores in Colombia that Uribe’s goodbye to Chavez was unfriendly: filing a complaint before the International Criminal Court (ICC) and another before the International Commission of Human Rights (ICHR). According to Efe, the complaint and claim before these international organisms answers to the violation of human rights by Chavez as a person and Venezuela as a State.  

Chavez has called Uribe a ‘’coward, a liar, a planter of discord and expert of maneuvers’’ and has said: ‘’such a man does not deserve to be the president of nothing, much less a country’’ he also said ‘’he only deserves to be the boss of the Mafia’’.  He ordered the closing of the Colombian Embassy after declaring that Uribe is ‘’a criminal, paramilitary, a drug dealer and a lackey of the empire’’. ‘’Uribe let his pants down when he subscribed the military agreement with Washington’’. To Chavez, Juan Manuel Santos, presidential candidate ‘’might generate a war in this part of the world, abiding to Yankee instructions’’.     On the same day of the presidential elections, Chavez stated: If Santos is elected I will not receive him and it would be extremely difficult, almost impossible to re-establish relations, Santos would turn into a greater menace than the present government’’. Never the same, the first thing Chavez did after Santos took possession, was to say that he was prepared to receive him in Venezuela or to travel to Colombia, and three days later he was at San Pedro Alejandrino.  

We have founded the chronology of the controversies between Chavez and Uribe on Venezuela Today data base. This information is trustworthy.  As can be appreciated, Santos as President of Colombia will have to handle himself as a great statesman and from Uribe, his countrymen expect restraint. The new host of Nariño Palace knows Chavez, whose cordial phrases contradict his normal epithets on Hello President.  Will Uribe constitute a problem for the success of Santos plans to improve bilateral relations? If affirmative, journalists say that for the new president, his antecessor might turn into an obstacle for the work of the commission in charge of the hard Security issue, agreed on at San Pedro Alejandrino. Santos is enjoying the first hundred honeymoon days. A columnist of El Tiempo writes: ‘’To Santos, due to the progress made by the prior government, security has a predominant place, it is substantial’’.  

An  analyst says that ‘’Santos is a person who has a lot of political sound judgment and willingness to attain successful dialogue situations, besides, Colombian social political context puts him in a very favorable position’’. He adds that Chaves lacks such sound judgment and also lacks a political favorable context to maintain a dialogue because he is afraid to confront the parliamentary elections in a climate as the present one of a hard conflict with Colombia.  He knows that polls show that 80% of the populations do not agree with this confrontation.

 COLLAPSE OF THE ECONOMY?

The Venezuelan economy may be near collapse, according to local experts and international analysts. According to Pdvsa, 2.5 million barrels are exported daily, including 700,000 barrels per day under ‘’financing mechanisms of a doubtful value recovery’’. Besides that, an adjustment is made due to the fact that oil exports to China ‘’might not be at the price of the market, but might be at a discount’’. Using prices into the future to estimate such discount reveals that the total amount of oil income in 2010-2011 would reach $43,000-45,000 million.

Since 2007 the industry has been receiving resources from the National Treasury. In December of that same year it issued a draft for $6,000 million and in December 2008 another one for $4,000 but the pressing needs of the oil company forces it to deal with other instruments. In December 2009 it received a draft for $4,400 millio9n from the National Office of the Treasury. According to financial sources, the assets in currency of the BCV include Pdvsa’s drafts. Analysts are warning that Pdvsa’s collapse is driving the BCV into an extremely dangerous situation. Political factors have had very negative consequences. In 4 years Pdvsa’s payroll rose 87% and its main business, production, has suffered a sustained fall.

Due to the intimate connection between the oil income and Chavez’s social policies, Pdvsa’s situation has notably affected these. The Missions have gone down and some do not work anymore. Several did not receive resources last year. The transfers to Misión Barrio Adentro, possibly the ones with the best political effect in poor sectors, came down 94% at the end of last year, going from $13,000 million in 2008 to $7,000 million in 2009. To the political commentators, Pdvsa is the prisoner of Chavez’s elections program, who, convinced of the deterioration of his popularity, continues to demand financial support for the campaign, thus neglecting it primary activity. ‘’ The game is on hold because the resources the regime imposes for the political campaign makes it impossible to reduce operational expenses to compensate the fall of the income’’.  The political contributions were consistently raised to make the most of the price bonanza reaching a record of $53,000 million in 2008. ‘’The dreadful business environment in 2009 forced him to reduce the 43% contribution to $32,000, revealing the instability of the expense, putting in check Chavez’s attractiveness’’.   Analyst James Williams said to BBC Mundo: ‘’Pdvsa’a equipment is old, falling to pieces and the company fired high technological experts. Pdvsa is an example of how things are done when Chavez is in charge; milk the cow but do not feed it’’.

Another element nurtures the pessimistic affirmation of the economic collapse. In his last Hello President, he qualified as impossible that Larry Palmer be the Ambassador in Venezuela, exhorting Obama to find another candidate. Palmer, at his ratification before the US Senate, warned that the Venezuelan Armed Forces had a low morale and were under the influence of Cuba. According to commentators this is just another one of Chavez’s show-offs.