Posted: Friday, March 21, 2003 By: dburnett1@nyc.rr.com

Date: Thu, 20 Mar 2003 07:02:57 -0500 From: Daniel Burnett dburnett1@nyc.rr.com To: Editor@vheadline.com Subject: The real wealth of Venezuela

Dear Editor: “Venezuela has not lost its competitive advantages …. There is no other country in Latin America with such great natural reserves … oil, tourism potential, minerals, and a youthful population as well as its geographic position … Venezuela has tremendous advantages.”

I am sure that anyone who has spent time in Venezuela, or anywhere else in Latin America, has heard similar sentiments expressed many times. I've lost track of how many times I have heard Venezuelan acquaintances express utter bewilderment at Venezuela’s poverty when it is so richly endowed with natural resources. I have spent endless evenings in Guayaquil listening to Ecuadorians assert with great certainty that Ecuador should be amongst the worlds wealthiest countries given it’s cash crops of banana, coca, mango, and shrimp.

Of course, the natural wealth of South America is tremendous, and South Americans should be grateful for that. That Venezuela posses tremendous natural wealth, is made clear by the tens of millions of dollars invested in scouring its countryside with satellite imagery and seismic testing in search of black gold and other millions invested in extracting true gold from the Guayana.

There is, however, tremendous irony in these efforts to find quick wealth in Venezuela.

I have no access to the fancy technologies of these large oil and mineral corporations, but I believe I can easily find more wealth in Venezuela than they ever will. It is in plain sight all along the highway from Maiquetia in to central Caracas. It is all over the place in Petare, Chacao, and Catia. And where my relatives live, on the outskirts of Barquisimeto, you can’t walk 10 feet without bumping into it. Of course the “wealth” that I am referring to is the people of Venezuela.

Of all the false ideologies that have taken root in Latin America the most pernicious is the idea that wealth is something that comes from the land or what is beneath it ... all countries that have truly become modern, realize that the fundamental source of wealth is the human mind.

This should be clear from looking at the world around us. How many advanced countries can you think of that don’t have excellent educational systems? Germany, France, Canada, Japan, Korea, and Australia have a lot of differences in terms of what their histories have been and how the developed economically. At least two countries on that list have no natural resources to speak of. But one thing they all have in common is a very well-educated population and a superior educational system.

And what of the United States?  You know, the country whose public education system is often criticized by its own politicians as being deficient. Well, not only does the United States have a well-educated population, but its university system has no rival. When it comes to technical education (engineering, mathematics, and the natural sciences) US universities are the gold standard -- the best students from the world over strive to gain entry to US universities.

Conversely there are numerous countries that are well-endowed with natural resources but mired in poverty ... Nigeria, Sierra Leon, Zaire, and Venezuela are just a few of many such countries.

Of course, there are many historical reasons why some countries are economically advanced and others are not. A well-educated populace alone will not guarantee prosperity. But, while a well-educated population may not be a sufficient condition for development, it clearly is a necessary one.

In my previous letter I laid out what economic policies I believe need to be followed for Venezuela to develop. But, based on what I have shown above, it should be clear that improving the educational level of the Venezuelan population is equally vital for development.

So if we accept that, the question becomes what can Venezuela do to improve its educational system?

First the good news. By Third World standards Venezuela already has a relatively well-educated population. Over 88% of the Venezuelan population is literate, and the vast majority of its youth are enrolled in educational institutions. Hence, mass literacy campaigns like those of Cuba or Nicaragua are not what is needed.

However, no one should be satisfied to be good by Third World standards ... for Venezuela to create industrial corporations that can compete in the world economy, Venezuela must posses a population that is educated to First World standards. At present it is nowhere near possessing this.

Lets take this problem one step at a time.

First we must find a way to improve primary and secondary education. As most people, even in advanced countries, never receive a university level education, it is the quality of primary and secondary education that determines the overall educational level of the country. Further, it is not possible to have quality universities if the students coming into the universities (i.e. the product of the primary and secondary schools) do not already posses a good basic education.

The biggest problem in Venezuela is the same one faced by educators the world over. Namely, that most people’s educational attainment does not surpass that of their parents. For a country like Venezuela, where most of the parents are poorly-educated themselves, this is significant obstacle that must be overcome.

Here are several ideas that may contribute to solving this problem.

First, one must make schools a place where students will voluntarily attend and spend much of their time. One way of accomplishing this is providing three free meals per day for all students. Given that a large percentage of the Venezuelan population is always wondering where its next meal will come from, this will be a very important incentive for many families to make sure their children attend school.

It would also help if school hours were extended ... this serves an important pedagogical function in that the extra hours would be used as time for studying. Does anyone believe much studying takes place when students return home to the poorer areas of Venezuela?

Of course, once we have the students in the schools, we must have ways of making sure that real education takes place. To accomplish this, I propose adopting an idea that is near and dear to George W. Bush’s heart ... standardized testing. I would propose that there be nationwide exams for all grades and all subjects at the end of each school year. This would necessitate Venezuela having a standardized nationwide curriculum. Further, as the goal is to raise academic standards in Venezuelan schools, it is imperative that these exams be rigorous.

The purpose of these tests would be two-fold. First and foremost, it would measure the progress of the students. Students who did not pass these exams would not be allowed to proceed to the next grade. This allows educators to be sure that students are mastering the required material.

It also allows for evaluation of the teachers. If students of a given teacher perform poorly relative to similar students who have other teachers, there is clearly a problem with that teacher. If the teacher can remedy that problem fine ... if not, they can seek another line of work.

This kind of standardized testing is not without its drawbacks. It has, for example, been criticized as stifling creativity and independent thinking. However, these concerns can be largely addressed by making these tests emphasize problem-solving skills as opposed to simple rote memorization.

More importantly however, standardized testing ensures that a high level of education is taking place. I can personally attest to value of this method. I attended public schools in the State of New York which had exactly this type of standardized testing. This has led to New York State having schools that are consistently ranked higher than those of most other states in the United States.

While these tests were administered for most subjects, they were not administered for all subjects in all years. There was a significant increase in the quality of instruction and the seriousness of the students when everyone knew that there would be a state exam at the end of the year. It bears further noting that New York has population of approximately 19 million, which shows that this type of testing can be done on the scale of a country the size of Venezuela.

Given that these improvements in primary education that I am proposing would be costly, it is imperative that this sort of testing regimen be used to ensure that the precious ... and all too scant ... resources of the Venezuelan government are not wasted.

Similar initiatives can be taken with respect to university level education. A good first step would be for the government to follow up on one of Chavez’s campaign promises from 1998. That is, university level education should be restricted to subjects that will be economically beneficial to Venezuela. This would mean restricting the university studies of students to technical fields, some business subjects, and ... to a limited extent ... medicine.

Of course, there will be an outcry by some regarding this limitation on students “freedoms.” However, given that Venezuela is subsidizing the educational system it has, the prerogative of subsidizing only those activities that it feels will produce the greatest returns. While it is certainly true that, in a perfect world, everyone should be free to study what they please, circumstances in Venezuela are anything but perfect. It is therefore the moral imperative of the Venezuelan State to see that its resources are used in a way that will yield the greatest benefit for society. Restricting fields of study would allow universities to focus their resources on fewer areas of study and thereby improve their academic level without requiring additional resources.

Another step to improve the academic level of Venezuelan universities would be the imposition of rigorous entrance exams. The scarce resources available for higher education in Venezuela must be focused on those who are talented and industrious, not on those who are mediocre or indifferent. As an extension of this, to continue their university studies, students will have to show sustained academic success. Those who do not take advantage of the opportunities offered them should not be offered further opportunities.

Many will object that these measures are very harsh ... indeed they are.

However, we must keep in mind what the overriding goal is ... the goal is to create a highly-educated population and workforce that will be capable of creating the more prosperous and modern Venezuela which is desired by the overwhelming majority of the Venezuelan population.

It is toward accomplishing this goal that all educational policies must be directed.

Venezuela cannot continue to use its higher educational system as a social welfare program where large numbers of young people are to be “stored” until they are finally turned loose, poorly-educated, into a society where they will find no productive employment.

Allowing higher education to continue in such a poor state is a crime against both the youth who are poorly served by it, and the larger society which loses the benefits of having its youth’s talents fully developed.

There are other policies that could be of tremendous benefit to the Venezuelan educational system and economy. One such policy would be for the government to ensure that any Venezuelan student who is accepted for graduate study in a technical discipline in any university in an advanced country has the financial means to pursue those studies.

At first this may seem like a bad idea. After all, won’t it mean that Venezuela will be wasting precious resources funding a “brain drain” as a significant number of those people may not return after completing their studies? The answer to that question is no.

First, it is important to realize how valuable this education will be. Virtually all leading universities in science and technology are located in the advanced countries of North America, Europe, and Asia. If Venezuela is ever to rise to the level of the advanced countries, it must have people who have mastered the science and technologies of the First World. To do that they must study at the universities of the First World.

It is true that many will not return Venezuela upon completion of their studies. Instead they will obtain jobs with companies in the countries where they studied. But that is not something that should be viewed as bad. Rather, it is very good in that it will greatly increase their exposure to the best technical and managerial practices of the developed countries.

Yes, it is certainly true that some of these people will never return to Venezuela and that will be a loss. But keep in mind that education is a form of investment and there are always losses with all types of investment. Having the government provide cheap capital to companies, as I advocated in my previous letter, will also result in losses as some of those companies will never be successful. However, it is expected that the gains that come from those that are successful will more than compensate for those losses and make the investment a worthwhile activity.

In the same way, the people who return from abroad after going through this process will be an invaluable asset that will more than compensate for those who do not return.

And rest assured, large numbers of them will return.

• As I am sure most VHeadline.com readers are aware, anyone who is born and raised in Venezuela remains a Venezuelan for the rest of their life, regardless of how many years they live abroad.

If good economic policies are implemented, and there is productive use for their skills in Venezuela, many of them will return to their homeland. When they return, they will staff and lead Venezuelan companies, and in many cases serve as the entrepreneurial talent behind new companies that wouldn’t otherwise be created.

This process is already at work with other countries, notably China. Many Chinese students with advanced degrees and years of experience in US industry are now returning to China and founding high tech companies. This process, the great benefits that are accruing to China from it, was the subject of an article in the Wall Street Journal on March 6. I urge those who have access to that periodical to read it.

Just as with the economic policies that I put forth in my previous letter, these reforms to the educational system will cost a significant amount of money ... probably several billion dollars annually. Increasing teachers salaries, extending school hours, providing free meals in schools, and paying for university studies overseas will require resources above and beyond what the educational system currently receives ... but this is an investment that cannot be avoided.

It is to these tasks that the petro dollars that Venezuela generates must be dedicated. If there are less important tasks that are consuming government resources, they may need to be pared back. This is also why it is imperative, as I have mentioned before, that the foreign debt be dealt with ... either by suspending payments on it entirely, or restructuring it so that those payments are significantly reduced. The income from petroleum, combined with good economic and educational policies, is Venezuela’s ticket out of poverty.

Venezuela cannot continue to use so much of it just to pay for the failed governments and policies of the past.

These ideas are but a few of the many which could greatly benefit Venezuela. Notice that they incorporate ideas that are normally thought of as coming from the Left, and others normally thought of as coming from the Right. Venezuela doesn’t have the luxury of endless polemics regarding ideology ... the only criteria that should be used in determining what ideas to use are what works. Ideas that prove effective should be adopted and expanded ... those that prove ineffective discarded.

Demonstrated success is the key metric against which everything will have to be measured.

I cannot emphasize enough how difficult the improvement of the Venezuelan educational system will be ... importing machines and technology from abroad to build a factory is child’s play compared the task of making sure the factory is staffed with highly trained and competent Venezuelan employees.

It will cost much ... reforms may be opposed by many ... and, not least ... it will require much work.

But developing and fully exploiting Venezuela’s true wealth ... the abilities of it people ... is the only path to the prosperity and true independence that Venezuela has long sought, but never known.

Daniel Burnett dburnett1@nyc.rr.com

www.boston.com By Alexandra Olson, Associated Press, 3/21/2003

CARACAS - An appeals court yesterday ordered the release of a businessman who has spent nearly a month under house arrest for leading an unsuccessful strike to oust President Hugo Chavez.

The Caracas court ruled that prosecutors have not presented enough evidence to keep Carlos Fernandez in custody on charges of rebellion and instigation, Judge Luis Lecuna told Globovision television.

Fernandez, 52, was arrested by secret police on Feb. 20. He was placed under house arrest three days later in the city of Valencia, about 70 miles from Caracas.

Fernandez helped organize a two-month strike to demand Chavez's resignation or early elections. The strike paralyzed the world's fifth-largest oil exporting industry and cost Venezuela $6 billion. But it fizzled last month with Chavez firmly in power.

The United States and other countries have criticized Chavez for cracking down on opponents after the strike. Chavez told the United States not to meddle in Venezuela's affairs and insisted that independent judges had ordered the arrests.

Chavez has demanded 20-year prison sentences for strike leaders, accusing them of subjecting the population to shortages of gasoline and food. The government had no immediate comment on the court ruling.

Albiz Munoz, vice president of the Fedecamaras business chamber, said Fernandez and other opposition leaders were victims of political persecution and have received death threats from armed civilian groups allied with the government.

Another strike leader, Carlos Ortega, slipped into the Costa Rican Embassy last week after weeks of hiding from charges of rebellion, treason, and instigation. Costa Rica granted him asylum, and Ortega is waiting for Venezuelan authorities to give him safe passage to the Central American nation. Venezuela's government has indicated it would grant the safe passage. Ortega heads Venezuela's biggest labor union.

icca.webportalasp.com by Wessel Satter

We sincerely hope that the current problems in Venezuela will cease rapidly so that it will be back to business as usual. It is frustrating to know that there is so little we can do to help them.

Together with the Metropolitan Corporation of Tourism (who have applied for ICCA membership) and ICCA member Ecuadorian Tours, ICCA Americas organised a very successful Marketing & Events Organisation Seminar in Quito, Ecuador. It attracted 35 participants from the whole country.

I also visited Panama again to tighten bonds with the Panama Convention and Visitors Bureau, a professional example for the Central American region. We have discussed a possible strategy to approach the neighbouring countries, Costa Rica, Nicaragua, Honduras, El Salvador and Guatemala for future international involvement and hopefully ICCA membership.

ICCA Americas will be attending COCAL at the end of March in Curitiba, Brazil. COCAL is the best occasion in Latin America to inform the professionals gathered about the international business opportunities. The Latin American Chapter will have its first biennial meeting linked in with the event.

Finally Luis Roberto Rodriguez and myself are organising a very interesting forum on Standardization and Norms on Meeting Facilities which will take place on 31 May 2003 at the Real Intercontinental Hotel, San Jose, Costa Rica. It is aimed at meeting site managers (fair, congress and convention centers, hotels with meeting rooms), professional fair and convention planners, architects and engineers, Constructors, consultants and all other interested parties. If you are interested, please contact me for a copy of the programme, email: amerICCA@adinet.com.uy

www.vheadline.com Posted: Friday, March 21, 2003 By: Robert Rudnicki

Venezuelan Executive Vice President Jose Vicente Rangel has criticized the US-led war on Iraq insisting "those who believe in peace and international law cannot agree with this act of war." Rangel's comments came during his trip round Latin America to explain Venezuela's political situation to the country's regional neighbors.

President Hugo Chavez Frias also called for peace a respect for the United Nations "we call for peaceful resolution to international conflicts and for respect of international institutions such as the United Nations." The President made his comments during a ceremony where he handed out land titles to poor Venezuelans as part of the government's latest campaign to reduce poverty.

Foreign (MRE) Minister Roy Chaderton Matos also commented on the war hoping that it would end quickly "all that is left is to hope that it ends as soon as possible, there are no good wars."

www.kansas.com Posted on Fri, Mar. 21, 2003 Eagle staff and news services

Wichitans expecting to wake up Thursday to higher gasoline prices because of the war with Iraq got a pleasant surprise.

Prices at the pump actually came down some as the price of crude oil dropped.

The average price for a gallon of regular unleaded in Wichita on Wednesday was $1.667, according to AAA Kansas.

On Thursday, many stations were offering gasoline for less than $1.60.

Amanda Millard, spokeswoman for AAA Kansas, said she drove to work on Thursday in Topeka and noticed prices were down from $1.63 to $1.59.

"I think that's a considerable drop for the changes that went on overnight," she said.

Dennis O'Brien, director of the Institute for Energy Economics and Policy at the University of Oklahoma, started to say that the industry will be "nervous" as the war progresses.

But then he stopped himself.

Nervous, he said, doesn't begin to describe what likely will happen with gasoline prices.

"It's going to go berserk," O'Brien said.

Oil well fires in Iraq will "cause the market to jump around," he said.

Indeed, reports of oil fields burning in Iraq sent oil prices jumping and then falling on the first full day of the war, with traders eventually heaving a sigh of relief that only a few wells had been set ablaze.

By the end of the day, oil prices dropped more than 4 percent -- topping off a decline of more than $9 a barrel in six trading sessions.

"Every bit of news is going to get the market moving one way or another," said Allen Mesch, president of PetroStrategies Inc., a consulting firm in Plano, Texas.

"Until reservoirs are destroyed and irreparably damaged, we're dealing with speculation, we're dealing with uncertainty, and we're dealing with people reacting on the basis of very little information," Mesch said.

Crude oil for April delivery hopped between $28 and $30.60 a barrel during regular trading, before closing down $1.27 to $28.61 on the New York Mercantile Exchange's last day for the contract. Oil for May delivery settled at $28.12 a barrel, down $1.24.

The market's largest concerns have been oil-well fires in Iraq and damage to neighboring Middle East countries that could disrupt oil supplies.

Amid those fears, government and industry officials spent the first day of war trying to reassure markets and consumers that global oil supplies would be adequate.

The Organization of the Petroleum Exporting Countries has pledged to cover any shortfalls from a war, even as Iraq's 1.7 million barrels of daily exports dropped to a trickle this week. Iraq pumped about 3 percent of the world's oil last month.

Saudi Arabia, the world's largest producer, started pumping more oil in January to cover a drop in supplies from the Venezuela strike and meet global demand. "All preparations have been undertaken to ensure the flow of supplies," Oil Minister Ali Naimi said in a statement.