www.vheadline.com Posted: Tuesday, January 28, 2003 - 6:29:56 PM By: K.D. Willke

Gustavo Coronel - Quacks like a Duck, Walks like a Duck

Date: Tue, 28 Jan 2003 16:14:26 EST From: K.D. Willke WILLKE42@cs.com To: editor@Vheadline.com Subject: Gustavo Coronel - Quacks like a Duck, Walks like a Duck

Dear Editor: I think it is unfortunate the Gustavo Coronel continues to ignore the basis for the current problems in Venezuela. I congratulate him on being so erudite on many worldly matters and for showing some creativity in how he presents his case.  However, for some reason he continues to demonstrate a naivety (not stupidity as some people would accuse) about the realities of the situation in Venezuela and the solution to this situation.  We have several sayings in the US which are also pertinent to the situation in Venezuela.   Two that are particularly relevant are:

• what goes around, comes around; and
• you reap what you sow.

Forgive me for repeating the obvious, but the current problems in Venezuela are the result of decades of corruption, greed, and abuse of the working class and poor, not only by various governments, as Gustavo Coronel likes to point out, but by a large segment of the business community (including Gustavo Coronel's pride and joy - PDVSA).

• It is this corruption and abuse that generated the need for President Hugo Chavez Frias.

By electing  Chavez Frias as President, by large percentages on two separate occasions, the people spoken ... enough is enough.  President Chavez has drawn the line and has put the perpetuators of this corruption, greed and abuse on notice.  They must either rein in their greed and give greater consideration to the needs of Venezuela and its workers and poor, or risk the possibility of loosing everything.

Those in the opposition that control many of the businesses, the media or that are wealthy, can posture all they want ... but the honest reality is that most have brought this upon themselves.

Rather than fighting to preserve business as usual, by disrupting the country's economy and imposing further hardships on the workers and poor, they should help solve the problems they have created over the past 40 to 50 years.

Gustavo Coronel makes it clear in some of his past editorials that he thinks that the problems of the poor are mainly due to improper education and training.  As a result they do not have the skills, proper work ethic, and drive to succeed.

Undoubtedly, this is part of the problem.

Another part of the problem, structural poverty, I have addressed in a previous letter.  A more fundamental problem that Gustavo Coronel does not address is the human need for recognition, achievement, security, respect, identity, and fair play.

Providing education is certainly important ... however, unless the poor are giving the opportunity to appropriately apply this education and are compensated accordingly, it can have quite the opposite affect on work ethic and drive.

In the US, and other countries, where quality education is more affordable and readily available, there are still major inequities in income distribution.  One has only to look at the huge disparity between salaries and benefits at the upper management level and the middle management and non-management levels in most corporations for a vivid example of this inequity. The magnitude of this disparity has been documented in the press and various studies.

Consequently, the educated workforce is aware of this inequity, but feels helpless and frustrated due to its inability to change the system.   As a result, these workforce levels become disenchanted with upper management and have been forced change their ideals and attitudes toward work and life in general.

Instead of the loyal and dedicated workforce that existed in the past, it is now a very fragmented workforce with attitudes such as:

• • do unto others what is being done to you 
• • just put in eight hours and nothing more
• • fight the system, the hell with the work
• • getting even by sabotage or retaliation.

In other words, education plus inequitable income distribution equals trouble.

In all his attacks on the Chavez administration and proposed solutions to the problems in Venezuela, Gustavo Coronel fails to comprehend these fundamental human needs.

These considerations are of prime importance.  Education should be built on these considerations and not just on training people to perform certain tasks or to behave in a prescribed manner.  People must have the opportunity to utilize their education, talents, and skills and be properly recognized and compensated regardless of their social standing, race, or sex.  It is through helping its people achieve their basic needs, and thus opening the door for attention to other needs such as creativity and self-motivation, that countries are able to achieve greatness through its people.

• Therefore, Venezuela not only has to provide quality education to all its citizens, it must provide an opportunity for its people to contribute meaningfully to society and to be appropriately compensated for their efforts.

As history has demonstrated over and over and over again, countries do not achieve greatness as a result of a chosen few amassing wealth and power through greed and abuse of others ... this is the major problem in Venezuela, and it lies predominately with the opposition ... they control most of the wealth and resources in the country and it is their social responsibility, as human beings and citizens of Venezuela, to use these to the benefit of the country and all Venezuelans.

The Chavez administration recognizes the problem and is trying to deal with it.  President Hugo Chavez Frias has stepped up to the plate, at grave risk to himself, and confronted the problem ... he has focused attention on this problem and the international community is starting to get the message.

If Gustavo Coronel and the opposition don't like his methods, then they must make a better case for themselves by coming up with a meaningful and realistic alternative to the problem.

So far, I only see a lot of belly-aching and finger-pointing coming from the opposition.

They created the problem and they should  take the lead in helping to solve the problem ... getting rid of President Chavez through organized strikes, work lockouts, capital flight, etc. are not meaningful solutions.

Now that President Chavez has "set the bar," and lit the flame of hope for the majority of Venezuelans, the cat is out of the bag.

This situation will not go away if President Chavez leaves ... someone else will take up the torch and that person may truly be a dictator.

I enjoy Kay Onefeather's poetic pieces and would like to end this letter with a modest poetic attempt to put a more positive spin on Gustavo Coronel's demeaning comment.

Quacks like a Duck Walks like a Duck Proud as he can be Head held high for all to see

Quacks like a Duck Walks like a Duck Leading his ducklings in a row So they know where to go

Quacks like a Duck Walks like a Duck Nurturing his ducklings all Till they grow tall

Quacks like a Duck Walks like a Duck Head held high for all to see Proud his ducklings will be

Sincerely, K.D. Willke WILLKE42@cs.com

Posted: Wednesday, January 29, 2003 - 1:37:17 PM By: Oliver L Campbell www.vheadline.com

The poor: a problem that will not go quietly away!

Date: Wed, 29 Jan 2003 12:35:17 -0800 From: Oliver L Campbell oliver@lbcampbell.com To: Editor@VHeadline.com Subject: Mr Willke's Letter

Dear Editor: I refer to Mr. Willke’s interesting e-mail of 28 January where he expounds the problems of education and inequitable income distribution in Venezuela ... I would, however, have liked him to suggest some solutions as well.

I passionately believe that a lack of sellable skills is main problem of the poor in Venezuela. In a recent article I wrote “It is essential these people (the poor) are brought into the economy by learning useful skills. This means reforming the education system so more technical institutes are created which provide practical instruction and training to those who are not cut out for an academic education. A technical qualification will be given the recognition it deserves and carry its own prestige. At the same time, a host of young people will acquire the dignity and intense satisfaction that come from being employed and doing a worth while job.”

I do not disagree with Mr. Willke that inequitable income distribution is a problem in Venezuela as, indeed, it is in many countries. The trouble is how do you reduce it?

Venezuela already has a progressive system of income tax and an inheritance tax of 40% ... we all know that value-added taxes hit the poor more than the rich. The only thing I can think of is a wealth tax of some kind, and that certainly would be difficult to introduce.

The centrally-managed economies had some success because they could dictate salaries. The result was, for instance, that a medical doctor with years of training did not earn substantially more than, say, an electrician. However, this type of economy proved to be very inefficient and most countries that had it (including Russia), have now moved to a market economy.

My point is, that in a market economy, it is very difficult to reduce inequitable income distribution. For instance, how do you lessen the large differentials in salaries where the general manager earns, say, twenty times what one of his manual workers does?

The only practical way to eliminate this is through education or ... as I prefer to put it ... through the acquisition of skills required in the market place. Those countries that have tried to introduce an incomes’ policy, like the United Kingdom, have soon abandoned it as unworkable.

You can, of course, throw money at the problem of the poor by giving them hand-outs, allowing them to use public services free of charge, and improving the infrastructure of the sectors where they live e.g. the 'ranchos' of the large cities ... this has all been done, but it is only a temporary palliative (panitos calientes), and the aim surely must be to enable them to earn a reasonable living.

The Chinese have a saying "Give a hungry man a fish and he will be hungry again ... teach him how to fish and he need never be hungry again." If money has to be thrown somewhere, it should be at the construction of technical schools all over the country. This will mean increasing taxation ... but it is the cost of rectifying the indifference of governments over the last 50 years.

I agree with Mr. Willke that whichever government is in power, it will have to address the problem of the poor: it is not a problem that will quietly go away.

Oliver L Campbell oliver@lbcampbell.com

www.granma.cu Havana. January 29,  2003

• The Organization of American States (OAS) backs opposition proposal for a new public referendum outside of the timeframe stipulated in the Constitution

BY RAISA PAGES –Granma International staff writer –

THE national and international conspiracy against Hugo Chávez’ government is weakening as its arguments to topple the leader – a head of state whose only crime since taking power has been to submit all the decisions he has made to public referendums, fall apart.

The leader is acting in accordance with the rules of the Constitution, supported by more than 80% of the population in a popular referendum.

Perhaps one should ask who is behind these desperate efforts to bring down Chávez’ government? According to a report by Patrick J. O. Donahue, Joe García, president of the Cuban-American National Foundation (CANF) has hinted that his organization intends to use its powerful lobby in Washington to make life difficult for the Venezuelan president.

The public announcement regarding the close relationship between the CANF and the Democratic Coordination of Venezuela, the newly baptized opposition alliance, confirms accusations of this terrorist organization’s part in the conspiracy to topple President Chávez. It also confirms suspicions about secret meetings between opposition ringleaders and CANF executives, who last weekend organized a march against the Venezuelan leader on 8th Street, Miami.

Carlos Ortega, president of the Confederation of Venezuelan Workers and one of the main leaders of the opposition movement, took part in the Miami march. Last week Ortega traveled to the United States for talks with representatives of George W. Bush’s government and the United Nations, in search of support for his conspiratorial schemes. But Ortega wasn’t alone in Miami; other important figures, such as former mayor Antonio Ledezma, journalist Patricia Poleo and high-ranking Captain José Manuel Bellabeen accompanied him on the trip.

COUP ATTEMPTS FRUSTRATED

Monsignor Baltazar Porras, president of the Venezuelan Episcopal Conference and a fierce critic of Hugo Chávez, said that since the reactionary sectors called for a general strike last December 2, the domestic crisis was a disaster.

By regaining control of the oil industry, the state has foiled attempts by strikers at the Petróleos de Venezuela Corporation (PDVSA). Venezuelan oil exports are regaining their former sales figures and almost one million barrels a day are being processed, according to government reports (before the strike, more than 3 million barrels were extracted daily). ANSA reports that before the strike Venezuela, the fifth largest crude oil exporter and a member of the Organization of Petrol Exporting Countries (OPEC), provided 13% of the oil consumed in the United States.

The National Association of Private Education Institutes announced that classes are to resume next week, although there is disagreement with the Chamber for Private Education, which remains in favor of maintaining the suspension of classes, reported Prensa Latina from Caracas.

The vast majority of state-run public schools are still operating and at a number of centers, where principals and teaching staff have refused to give classes, parents and pupils have taken control.

Meanwhile, shopping centers and industries that had joined the conspiracy are re-opening for business, proving that their pockets are getting emptier and Chávez’ government is growing stronger.

The private media channels in Venezuela are still united in their efforts to bring down the government, and have been broadcasting new conspiratorial campaigns such as the recent "firmazo" (petition), a new maneuver to demand early elections. That has already been ruled out by the Supreme Court of Justice, which announced preventative measures ordering the suspension of a consultative referendum due to take place on February 2.

The attitude of the Organization of American States (OAS), headed by former Colombian president César Gaviria has remained true to form in the way that it deals with problems in Latin America. In an interview with the daily Folha de Sao Paulo, Gaviria maintained that all possible extra-electoral accords had been tried and supported the opposition’s demand for a public referendum, totally disregarding all the popular consultations organized by Chávez from the start of his mandate right up to the last demonstration of public support for his anti-neoliberal position.

He also stated that even with the creation of the Group of Friends of Venezuela, a Brazilian initiative, "we are still no nearer to a solution."

OUTSIDE FORCES CONSPIRING

The president of the Bolivarian Republic of Venezuela condemned the "integral sabotage" planned and carried out on PDVSA orders, causing losses in the region of $3 billion USD in December and January. Chávez’ government has introduced another measure to implement a control of food prices.

According to VENPRESS, the government will put in place a system to control prices and instigate a national, integral and full distribution system to avoid shortages of medicines and foodstuffs, measures to be accompanied by others of a social, political and economic nature.

Chávez also confirmed that external forces are intent on toppling the Venezuelan government, comparing the situation to that of Chile 30 years ago. He went on to say that those forces have forgotten that whereas in Chile, if Pinochet gave an order the armed forces carried it out, in Venezuela, those generals and admirals who are aligned with the oligarchy were given orders to stage a military insurrection and ended up as prisoners of their subordinates.

He recalled that during last April’s coup-d’état, some eight million people took control of military installations and the Parliament building and, with the support of the armed forces, managed to defeat the attempted coup.

He attested to the fact that there is a crisis in Venezuela because in the four years of his government, the economic elites have generated the undue exit from the nation of $35 billion USD – by means of a financial war unleashed by minority interests – and for 30 years have enjoyed undeserved benefits.

He went on to say that the anti-neoliberal nature of the Bolivarian Constitution is frightening those elite groups by removing their privileges. They have been relying on the support of the private media stations to carry out their campaign against the will of the people.

GENERAL STRIKE BY PRIVATE BUSINESSES

April’s coup attempt, he pointed out, allowed the Venezuelan government to reinforce its relationship with the National Armed Forces in accordance with the Constitution and now the attempted oil coup will give it the opportunity to nationalize this vital resource and lay off 3,000 PDVSA executives.

He underlined that in four years of government, they had been unable to touch this sector’s elite, but now Venezuelan nationalists were in a position to achieve this. He continued by saying that "those who attack Venezuela’s economic heart and sabotage milk-processing plants and those of the PDVSA, should be labeled terrorists. In Venezuela, the workers are not on strike, the bosses decided to shut down their workplaces, denying everyone the right to work¼ "

He emphasized that a group of PDVSA bosses had used remote control and satellite devices to sabotage the plants by changing the opening hours of pumping valves and blocking employees’ bank accounts to freeze their wages. Chávez thanked the workers, affirming that because of them "the country has not come to a standstill and nor will it." 

URL: www.thestreet.com By Melissa Davis Staff Reporter 01/29/2003 04:32 PM EST

The marriage of Conoco and Phillips is off to a bit of a rocky start.

The Houston-based energy giant, now known as ConocoPhillips (COP:NYSE - news - commentary) , recorded a slew of restructuring charges during its first full quarter as a united entity. The company also weathered setbacks in Venezuela, where a crippling oil strike continues to chomp away at the company's bottom line.

After taking more than $1 billion in restructuring charges -- part of a big-picture plan to capitalize on synergies -- ConocoPhillips posted a fourth-quarter loss of $410 million, or 60 cents a share. Excluding special items, ConocoPhillips reported fourth-quarter profits of $1.10 a share that fell a penny shy of analysts' lowest expectations.

Nevertheless, ConocoPhillips CEO Jim Mulva declared the company's honeymoon quarter an overall success, and investors appeared to agree, boosting the stock 4%.

"We're making good progress executing our strategic plan," Mulva told analysts during a conference call on Wednesday. "We're building a new company with very high expectations to improve our competitive positions."

But for now, the company must fight through some unexpected challenges as it pursues that long-term bliss. Namely, it's trying to overcome a Venezuela strike that could slash future earnings by up to $50 million a month.

ConocoPhillips expects to make no money in Venezuela -- normally a top international producer -- during the first quarter of this year. Even if the strike there ends shortly, as some are optimistically predicting, the company would need a month or two to ramp up production to normal levels. In the meantime, the company's refinery margins -- tied to oil supplies and prices -- could also take a hit.

Analysts on Wednesday were fixated on the situation in Venezuela. But more broadly, they were hunting for signs that the ConocoPhillips merger will prove to be a successful one.

In spite of the challenges -- and some lingering skepticism from analysts -- ConocoPhillips promised to deliver.

"We are moving forward with our plan to improve the returns of each of our business lines," Mulva stated. "We will report our progress in capturing synergies beginning in our first-quarter 2003 results."

Mulva promised an initial update next month.

In the meantime, shares of ConocoPhillips surged ahead $2.10, to $48.01 in Wednesday trading. The stock is selling at the low end of its 52-week range of $44.03 to $64.10.

reuters.com Wed January 29, 2003 04:20 PM ET By Carolyn Koo

NEW YORK (Reuters) - ConocoPhillips COP.N , the No. 3 oil company, on Wednesday posted a fourth-quarter loss after more than $1 billion in charges wiped out the benefit of a sharp rise in crude oil and natural gas prices.

The hike in energy prices did, however, lift profits at smaller oil companies Occidental Petroleum Corp. OXY.N and Unocal Corp. UCL.N and should make for a solid round of fourth-quarter results from others in the energy industry.

Crude oil prices in the quarter were up more than 40 percent from a year-ago, driven by fears of a potential war in Iraq, a strike in Venezuela, the world's fifth-largest exporter of oil, and increasing U.S. demand for petroleum products during a frigid winter.

If oil prices continue to rally, first-quarter earnings could be even stronger. "The first quarter is going to be exceptionally strong versus the first quarter last year," said Gene Gillespie, an oil analyst at Howard, Weil, Labouisse.

"It should also make pretty good reading relative to the fourth quarter."

Houston-based ConocoPhillips -- formed by the $15.4 billion combination of Conoco and Phillips last year -- reported a net loss of $410 million, or 60 cents a share, reversing a year-ago profit reported by Phillips as a stand-alone company.

The results include $1.2 billion in charges to account primarily for the planned sale of a substantial portion of its 3,700 company-owned service stations.

The company, which still ranks behind Exxon Mobil Corp. XOM.N and ChevronTexaco Corp. CVX.N in terms of stock market value and revenue, is in the midst of selling assets in its upstream and downstream, or refining and marketing, businesses as part of a plan to shed properties that do not bring in adequate returns.

ConocoPhillips also forecast an impact of about $30 million to $50 million a month as long as the shutdown in Venezuela continues, less than many analysts expected.

"People had been fearful the impact would be greater," said Jacques Rousseau, an analyst at Friedman, Billings, Ramsey, who rates the company an "outperform" and does not own its shares.

He added: "The key thing is they provided some flavor on what's going on in Venezuela, with an estimate of what the strike is costing them."

KERR-MCGEE HURT BY CHARGES

Los Angeles-based Occidental Petroleum said fourth-quarter results swung to a profit of $322 million, or 84 cents a diluted share, from a year-earlier net loss of $247 million, or 65 cents a share. Year-ago results included a $240 million charge for the sale of its interest in the Equistar Chemicals joint venture.

Independent oil and gas explorer Unocal also a reported a fourth-quarter profit -- posting net income of $96 million or 38 cents a share. That reversed a year-ago net loss of $29 million or 12 cents a share.

It also forecast better-than-expected 2003 earnings per share of $2.45 to $2.75 and first-quarter earnings per share of 60 cents to 70 cents, which is in line with expectations. The company expects production for this year at the lower end of a range of 480,000 to 495,000 barrels of oil and gas a day.

Kerr-McGee Corp. KMG.N reported a wider net loss after taking hefty charges for a poorer-than-expected performance at a North Sea oil field and other asset write-downs.

asia.cnn.com Thursday, January 30, 2003 Posted: 2:26 AM HKT (1826 GMT)

The Venezuelan strike has caused long lines for gas stations and banks.

CARACAS, Venezuela (Reuters) -- Venezuelan private banks decided on Wednesday to restore normal working hours, opening another crack in a faltering 8-week-old opposition strike against leftist President Hugo Chavez.

But striking oil workers at the heart of the opposition campaign stayed firm in their shutdown, which has battered Venezuela's fragile economy and rattled energy markets by slashing oil output in the world's No. 5 petroleum exporter.

Private banks, which make up nearly 90 percent of the Venezuelan financial sector, had been operating for limited daily hours and restricting transactions since December in support of the strike to pressure leftist Chavez from office.

"The National Banking Council and the Venezuelan Banking Association decided at a meeting by a two-thirds vote to restart normal operating hours from Monday," association president Ignacio Salvatierra told reporters. The two associations represent most financial institutions.

Chavez, a populist former paratrooper whose fiery rhetoric is peppered with class warfare slogans, had threatened to seize striking banks, schools and factories to break the strike.

As the strike nears the two-month mark, backing for the protest in non-oil sectors has begun to fray as private businesses and stores reopen to fend off bankruptcy. Traffic in Caracas, famous for its brutal gridlock, has begun to choke the streets of the capital again.

Banks don't belong to their presidents but to their deposit holders.

Opposition leaders, who brand former paratrooper Chavez's rule as dictatorial, inept and corrupt, offered on Tuesday to ease their strike by exempting food production and education. But they have vowed to keep up the shutdown until Chavez accepts elections. The president's term ends in 2007.

The shutdown stoked tensions as it forced Venezuelans to line up for cash, dwindling supplies of gasoline and some basic foodstuffs. At least seven people have been killed in rival street protests and shootings since the strike began.

Bankers cited pressure from the public and account holders for lifting the stoppage.

"This is the result of demands from the public and deposit holders ... banks don't belong to their presidents but to their deposit holders," said Nelson Mezerhane, president of the Federal banking group.

Looming economic woes

With the strike cutting off oil exports that account for half of the government's revenues, the government plans to slash its budget and suspended foreign currency trading while it prepares a fixed exchange rate to protect its reserves.

Graffiti covers a McDonald's in Caracas.

Battered by economic uncertainty, the local bolivar currency has plummeted more than 28 percent since the strike began. Venezuela's international reserves fell 7.3 percent to $11.05 billion as the Central Bank burnt through as much as $60 million a day to shore up the currency.

Economists say exchange rate controls will help the government stem capital flight in the short term. But restrictions could later squeeze the private sector and force the government to defend its fixed rate from black market exchange rates.

Chavez, who was elected in 1998 and survived a coup last year, has dismissed opposition calls for him to resign. Though his popularity has fallen sharply this year, he maintains a solid base of support among poorer voters who believe his left-wing reforms are the key to a better life.

The Venezuelan leader, who led a botched coup himself six years before his ballot box victory, has fought back against the strikers by deploying troops and replacement crews to oil installations. But oil production still remains only at around a third of the usual 3.1 million barrels per day.

The international community will intensify its efforts to break Venezuela's political deadlock this week when representatives from six nations arrive in Caracas to lend their weight to peace talks. The negotiations chaired by the Organization of American States have so far failed to break their impasse.

Representatives from the six nations, led by the United States and Brazil, are scheduled to arrive on Thursday in Caracas for talks that start Friday.