Venezuela - The Economist Forecast

Mar 22nd 2006
From the Economist Intelligence Unit

The Economist Intelligence Unit expects the president, Hugo Chavez Frias, to be re-elected in December 2006. Beyond the election, a lack of checks and balances could bring the problems of corruption and inefficiency to the fore, while emerging internal divisions within the government, centring on whether and how to radicalise economic policy, have the potential to erode governability. Fiscal profligacy will keep the public finances in deficit, despite record high oil prices in 2006. In 2007, although oil prices will remain high by historical standards, we do expect some retrenchment from the extraordinary levels of fiscal spending in 2006. Investment inflows to exploit Venezuela’s abundant energy reserves will be maintained, even in the face of more difficult operating conditions. Much non-oil investment will continue to be put off by the uncertain legal and regulatory regimes and by price and exchange controls, which will be maintained through the outlook period. Fiscal spending will help to underpin economic activity, but growth will soften more markedly from 2007 as investment falls.

Key changes from last update

Political outlook
Recent opinion polls suggest Mr Chavez’s popularity is falling. With the presidential election due in December, this may prompt the government to pause in its expansion of the state-led development model, so as not to alienate undecided voters.

Economic policy outlook
A significant upward revision to our oil price forecast for 2006 and 2007 (to US$60/barrel and US$55/b respectively), implies higher fiscal oil revenue, but we expect any extra income to be spent rather than saved, and still project a fiscal deficit in 2006.

Economic forecast
Oil price revisions have had a significant impact on our forecasts for the external balance and for growth. Most significantly, we have revised GDP growth for 2006 up to 8%, from 6.5% last month, based on the extremely large fiscal stimulus, which will help to maintain private consumption at levels similar to 2005.

Venezuela Today is Back!

I noticed that Venezuela Today is Back online! It was taken offline for a about a week and I must say it was sad to see it gone for that time. But it is back up and running now!

Thanks, ED!

The Heritage Foundation-Executive Summary Report

On March 13, 2006 The Heritage Foundation released an Executive Summary outlining what in their opinion should be the commitment of the United States towards Latin America. I highly recommend reading it:

U.S.-Latin America Ties Need Commitment and Strategy" by Stephen Johnson - The Heritage Foundation.

Some key points in the report include:

- Strengthening the Organization of American States
- Strengthen citizen control of political parties
- Foster free markets
- Improve security through regional cooperation

To meet these objectives the United States should:

- State clear objectives and goals
- Eliminate barriers to better ties : introduce reforms so agencies can be more effective in providing aid and awards to countries to boost the beneficial impact in these countries.
- Revive public diplomacy efforts : creating people-to-people diplomacy by creating Academic exchange program for working class and indigenous students, books for libraries, and civic education teaching material.

On Venezuela it would behoove politicians to listen to this particular statement in the report:

"U.S. diplomats must avoid responding to Hugo Chávez’s provocations, which he uses to show followers that he can bully other countries."

Personally I think any US policy engagement with Latin America will not take hold easily, for the simple reason that Bush is not very popular in the region. Hence they are going to avoid him and the US like the plague, so any overt and public engagement will likely have to wait until the next president in 2008. At the same time Chavez is becoming ever more unpopular among Latin American governments (also here). Is Latin America becoming a new pro/anti-communist battle ground? Unfortunately most countries and people are uninterested in this battle that is being sparked by Chavez and Fidel. So again:

"U.S. diplomats must avoid responding to Hugo Chávez’s provocations, which he uses to show followers that he can bully other countries."

On an interesting note:

Venezuelans have often wondered what is the role of Chavez once Fidel dies, in other words who will rule Cuba? Well I will end this post with this interesting bit that I did not know, although it has been widely rumored:

"Anticipating that eventuality, Fidel has named his brother, First Vice President and Minister of the Armed Forces Raúl Castro, as his successor. However, Raúl is uncharismatic, aging, and reportedly an alcoholic. Cuban Vice-President Carlos Lage suggested a curious alternative during a visit by Hugo Chávez in October 2005—co-rule of Cuba by Venezuelan President Chávez—but that seems unlikely given Cuban national pride."

Join TAC Today!!

TAC= "The Anglo-Venezuelan Connection"

See more on TAC "here" and "here"

Some of you may notice some new info on the side bar it includes an email address you can contact me at and my new TAC membership (thanks Miguel O.). The membership is open to all who want to join, there is no fee, there is no headquarters, and no president. You will likely receive no financial gain for your time or much glory, just the simple satisfaction of exposing the bullshit the Venezuelan govt. tries to feed us 24 hours a day 7 days a week.

North American Opinion Research

On Feb. 18th 2006 Vcrisis.com published an interesting investigation on the Venezuelan governments favorite polling agency North American Opinion Research. In this investigation it was discovered that the company is in fact registered in Florida, not Delaware or Pennsylvania. In addition, it was discovered that it shares the same office and phone number as PetroTulsa, a company which has its main office in Caracas but a branch in Florida.

North American Opinion Research
Alirio Valbuena - President
Kaysa - Makarem - Secretary

PetroTulsa
Julio Makaren - President
Kaysa Makarem - Secretary

As a side note NAOR accurately reported the outcome of the recall referendum in 2004 (contrary to all other polling agencies). Moreover, its current poll suggests that 66% of Venezuelans will vote for Chavez in the 2006 presidential elections. Coincidentally this is about the 10 million votes Chavez says he will get (66% times ~14.5 million registered voters = 9.57 million; but remember the CNE plans on increasing the number of registered voters by 2.2 million by then). Again these poll numbers are contrary to some of the most respected poll numbers and even results for the national assembly elections which showed an abstention rate above 75%.

Looking on PetroTulsa's web site they list the following companies as their associates:

Technical Well Services Inc.
Vatra Environmental Inc.
Vatra Cintec C:A:
SCC Environmental
Plantas Móviles de Tratamiento del Lodos de Perforación

Out of curiosity I decided I would look for these companies in Florida. Interestingly enough this is what I found:

Vatra Environment Inc.
Julio Makarem - Secretary, Director, VP, and President
Monica Grijalba - President
Ricardo Valbuena - Director

Industrial Equipment Supply Inc.
Kaysa B. Makarem - President, and Director

Vatra Cintec Inc.(formerly known as Vatra Sintec Inc.)
Julio Makarem - President, and Director
Layla Makarem - Secretary, and Director

Do Note that Petrotulsa, NAOR, Vatra Cintec, and Industrial Equipment Supply all share the same address of 1549 NE 123Rd Street North Miami, FL 33181. While Vatra Environment Inc. has the address of 2525 Eagle Run Dr. Weston, FL 33327.

addendum below

The question then becomes why do these companies have interrelated board members and some with the same address. Moreover, why don't the above mentioned companies have a web site or even result in a google search result (excluding PetroTulsa).

In the article published by Vcrisis it was stated that the Makarem family have been involved in drug trafficking and arms smuggling. It was also stated that Julio Makaren and Juan Carlos Escotet, owner of the Banesco bank, continue in partnership in different ventures. If this is the case than what are the links between the two if any. Looking in the business registry again in Florida, it was found that Escotet recently expanded the bank he heads into Florida with the approval of the FDIC to open a BBU bank.

Curiously back in 2003 Juan C. Escotet was reported to have said that military deposits account for around 10% of the bank's total deposits.. However, I nor anyone else really knows the current actual figure especially after the revelation of huge corruption scandals involving military officials. But I would bet money on the fact that this number is a lot more now than 10%.

Therefore, it is no secret that the banks in Venezuela are making a lot of money in the Bolibanana Revolution, including with the buying and selling of Argentinean bonds. So are some banks in cahoots with less than law abiding individuals, as are members of the Makarem family are reported to be, and the military? Is this a symbiotic relationship to keep Chavez in power by all means necessary even by creating fake polling agencies such as NAOR so that both can siphon money out of Venezuela where one group does it more "legally" than the other? Personally I find all these facts much more than mere coincidences.

Note: There is also a company headed by a Nidal Makarem called NM Services, INC. I am unsure whether this Makarem is related to those mentioned above. Perhaps someone could consult the Maisanta list on this one.

addendum

It was brought to my attention that the president of Vatra Cintec Inc. a Matteo Pasquale and the VP/administrator a Antonio (Tony) Cinquino have a criminal record (Vatra Cintec of Canada is part of Vatra-Cintec Venezuela hence Vatra-Cintec Inc. (USA)) you can read more here and here:

Matteo Pasquale has no prior criminal history but has relations with Mike Strizzi Italian organized crime)

Antonio (Tony) Cinquino has close connection to organized crime and has been charged with trying to import drugs in Canada, in 1990 with drug possession by the FBI, and again in 1994, and has ties to Italian organized crime (Mike Strizzi). What's more, an alumni newsletter of the Law faculty of McGill university in Montreal indicated the following in 1999 "Franco Pacetti, BCL/LLB ’89, has left
Ogilvy Renault to become vice-president (Latin America and Caribbean) for Vatra-Cintec Inc., an environmental
engineering and consulting firm. He lives in Venezuela and Barbados." (sic). Pacetti has been quoted as related with a scam worth more than €60 million in Romania. The Romanian Centre for Investigative Journalism has a most interesting entry on the Franco Pacetti: "The Pacetti Connection Our investigation got out to light several connections of the Cianciminos in Romania with Italians involved in international scandals, accused of relationships with Casa Nostra. We're talking about the Romanian company LFG, owned by Ecorec, controlled by the Pileri brothers, and co-associated with an offshore company from the Barbados Islands . LFG is managed by Franco Pacetti. The activity object is the production of industrial gas. Pacetti has also founded another company in Romania , Cindesol, who tried to take control of the Glina waste park before the Pileri brothers. Moreover, Cindesol is associated with Eco Gold Invest, a sanitation company active in Mangalia.

Cindesol and Pacetti have several things in common. The company is registered at the same address in Barbados as the company CINTEC, where Pacetti is secretary-administrator. The name of Pacetti and CINTEC appeared in several investigative articles in San Salvador . The journalists from “El Diario de Hoy” discovered that behind the business with waste recycling in San Salvador by CINTEC there were Casa Nostra families from Canada and the United States . Alongside Pacetti, the name of Matteo Pasquale was also mentioned, the latter being also associated with Cindesol from Romania and the president of CINTEC in San Salvador . Pacetti's connections through CINTEC lead to persons convicted for drugs traffic and to groups involved in international drugs traffic – the Bonanos from New York and the Cinquinos from Canada." Pacetti has had issues with the Venezuelan justice.

In addition I was informed on this about Petrotulsa which was published by TalCual in 2000.

Translation:

In the Credival Tower, in the offices where the newspaper Crítica worked, now operates the Cooperative Association Petrotulsa, that is directed by Julio Makaren, ex- proprietor of the now missing zuliano newspaper, and Ricardo Valbuena, a man who was tie to the Bank of the Workers of Venezuela, BTV, and to its intervention. The two people are related to the businesses of the past [pre-Chavez] but they have known how to disguise themselves under the revolutionary rules.... By El Rosal [where Petrotulsa is located] they say that high ranking officials of the regime [Chavez govt.] are frequent visitors. They mention Luis Miquilena, Eduardo Semtei, Pablo Medina, the son of the minister of Energy. And more.

So based on this info. I think we can now see how Julio Makaren and Juan C. Escotet might have be associates or at least friends. Makaren has ties to the bank of the Workers of Venezuela and Escotet to Banesco. I guess being rich in the revolution isn't that bad.