VHeadline commentarist Carlos Herrera writes: The disinformation concerning Venezuela’s oil income, pumped out by rabid opposition writers such as Gustavo Coronel and Mery Mogollon, has to be addressed at some point.

Their arguments run as follows: The price of oil is over US$50/barrel. During Chavez “regime” the Venezuelan government has received record oil income quoting anything upwards of US$200 billion since 1999 to 2004. However, poverty is on the increase meaning that these funds have somehow been misappropriated and oil is being “given to Cuba (always the bogeyman in the minds of these incurable paranoiacs) to hold up the castro-communist dictatorship on the island.

This all sounds aceptable ... until one looks at each point and analyzes them one by one.

The real price of Venezuelan oil

The basket of Venezuelan crude sells at a substantial discount to the Brent and the West Texas Intermediate (WTI) reference prices for various technical reasons, one being its high sulfur content. For example, when WTI hit US$58/Barrel, the Venezuelan basket was around US$43 ­ US$44/Barrel. Since long term oil supply contracts are calculated on a long term moving average, the real price per barrel of Venezuelan crude is effectively around US$ 35/barrel. A huge difference.

The amount received

How much money has the Venezuelan government actually received from PDVSA since 1999? The true figure is around US$70-US$73 billion in six years. A far cry from the figures bandied around by these “experts”. Readers also have to bear in mind that since the heyday of the Saudi Venezuela of the mid 1970’s, the population has more than doubled from 12 million to 25 million in 2004. Why is this important?

• Put simply, if Venezuela as a country received US$7 billion in 1976 from PDVSA, this amounts to US$584 per capita in that year.

In 2004, Venezuela received approximately US$16 billion from PDVSA, which gives a per capita oil income of US$640: Take into account inflation in almost 30 years, and so in real dollar terms adjusted for inflation the 1976 equivalent is much less per capita -­ I estimate around half since inflation over a 30 year period is at least 100%.

Ergo, real per capita oil income adjusted to 1976 prices is around US$320 if not less.

The Venezuelan daily newspaper, Ultimas Noticias reported some weeks ago that to receive the same amount of per capita oil income as did Carlos Andres Perez’ government, the Venezuelan basket would have to be at US$73/barrel for a sustained period.

• Thus, has the Chavez government received so much money from PDVSA as Coronel wants us to believe?

Draw your own conclusions ... my conclusion is that this sort of commentary is just downright dishonest, disinformation and lack of ethics.

Poverty on the increase? Ever asked why?

The latest National Statistics Institute (INE) report on poverty in Venezuela goes up to the end of 2003. There is always a time lag in this type of statistical reporting. Opposition commentators are blowing their trumpets celebrating the fact that poverty had in fact increased from late 2001 to end 2003 (according to the government's own statistics) by 8%. Thus, the Venezuelan government is not spending the “record amount of oil money” it receives on the poor -­ so the argument goes.

Once again, by just picking one statistic out of a voluminous report is also tantamount to more disinformation. It also begs the question, why did statistical poverty increase in this period?

Most if not all Chavez supporters and all statisticians know what happened from December 10, 2001 to February 4, 2003. The fascist opposition, with help and financing from the United States of America, attempted to overthrow the Chavez government by a coup d’etat in April 2002 and by oil industry sabotage ... a bosses' lockout and economic sabotage ... at the end of the same year.

• The result was a loss in oil and industrial production amounting to US$22 billion ... without mentioning a lack of confidence in Venezuela for foreign investment.

More than 650,000 people lost their jobs ... unemployment climbed to 20.9% ... inflation took off and ended 2003 around 27%, compared to 12.1% at the end of 2001.

The country, any country, needed at least a year, if not more, to recover from this electro-shock treatment.

The INE figures reveal this quite clearly.

From 1999 to end 2001, statistical poverty declined but with the destabilization of the country and the economy, the poverty index rose from 2002 to end 2003.

If blame has to be apportioned, who is to blame?

• The answer is glaringly obvious.

Thus, the disinformation is in the contextualizing of the statistics and the fact that the opposition/USA destabilization is not mentioned by these serfs of the Northern Empire.

One interesting point from the INE report ... in the section named “Human Development Index," the rate of human development calculated during the “sabotage and coup period” did not go into reverse.

It improved. Why?

Put simply, the government's social missions improved quality of life for the broad mass of the population.

Why does Coronel not mention this fact in his misreporting?

The Index proves that oil income is being invested in the historically excluded and not spirited away to offshore bank accounts by PDVSA technocrats at the expense of the nation ... as it was when Coronel worked there.

• Consumerism does not equal well-being; Human dignity cannot be measured in dollars and cents

PDVSA Social Fund

Chavez has also had the foresight to set up the PDVSA “Social Fund” so that oil revenues over and above the budgeted figure of US$24/barrel are directed to this fund for various social and agricultural programs. This fund has received around US$6 billion so far. One of these projects is the new “Housing Mission” (Mision Vivienda).

References to the number of houses built are also misleading. It is no surprise that the house building program was virtually stopped by the events of 2001­2003 and beyond, as the country recovered from the economic sabotage outlined above. In addition, the houses built during the IV Republic were little more than “match boxes” as a palliative to the poor. “Chavez’ houses” are suitable to raise human dignity being well equipped and having all services installed, and not just an empty shell. The Housing Mission will solve the endemic problem of a shortage of decent housing for the poor and middle classes over a ten year period.

Oil supply contracts to Central America & Caribbean

The Cuban “menace” also needs to be addressed ... Cuba receives 53,000 barrels per day from Venezuela. The reiterated accusation is that Chavez is giving this oil to Fidel in exchange for doctors, sports trainers etc. This is true, to a certain extent, and what is the problem with that?

Coronel refers to this as an “invasion.” I thought invasion was an aggressive act ... these Cubans were invited here as guests of the Venezuelan people, performing vital humanitarian tasks.

• Would Coronel's fevered rhetoric have been tempered if the doctors, sports trainers etc., had been drafted in from English-speaking WASP America rather than Spanish-speaking Cuba?

The bill for supplying oil ... not only to Cuba but to other Caribbean and Central American nations ... is within the framework of the Caracas Accord, which allows for preferential payment conditions of up to 15 years at 2% interest. In fact, the final 25% of balance owed is financed up to 15 years and not the whole amount.

The contradiction in the arguments put forward by these opposition hacks is as follows: PDVSA is not being run transparently and no one has access to financial information. However, we know that Chavez is giving oil away to Cuba and not being paid.

• The question is ... if there is no information available, then how do these “experts” know that the oil is being given away to Cuba and that Cuba has not paid within the terms of the Caracas Accord?

Both the Ministry of Energy & Petroleum as well as PDVSA have strenuously denied these reports of “not being paid” by Cuba ... or any other nation receiving oil under these favorable conditions. In fact, the Caracas Accord and the San Jose  Pact give the Venezuelan government a great deal of clout in the international arena ... especially in the OAS.

Other funding for the “pueblo”

PDVSA and IRS/Seniat revenues received have been invested in a whole gamut of social missions:

• Mission Robinson I & II ­ 1.4 million people taught to read and right. Over 1 million studying to complete their primary education

• Mission Ribas ­ about a further 1 million people studying to complete their secondary education

• Mission Sucre ­ 600,000 students being prepared for higher education, all of whom we excluded by previous governments.

• Mission Mercal ­ affordable food stuffs for the people

• Mission Barrio Adentro ­ primary health care program run mainly by Cuban doctors, dentists and ophthalmologists

• Mission Housing ­ subsidy at a maximum of 11% for mortgages and funding to build over 100,000 homes in 2005

• Mission Identity ­ to ensure that everyone has an ID card so as to be able to participate in electoral processes

• Mission Guaicaipuro ­ aimed at the indigenous population to secure their rights by recognizing their culture, languages and right to health, education and housing

• Mission Miracle - joint Venezuela-Cuban program to correct ocular problems by sending Venezuelan patients to Cuba for specialized treatment

• Mission Piar ­ covers mining in states such as Bolivar and Amazonas so as to protect the rights of local miners against transnational interests exploiting Venezuela’s natural reserves of gold and diamonds, for example.

This is without mentioning around 700,000 pensioners now receiving the minimum wage, which was denied them before as pension funds were also “spirited away” by corrupt bureaucrats. This action and the Missions with 3.8 million voters participating will help guarantee Chavez many votes in the 2006 Presidential elections ... the aim is to secure 10 million votes.

This is modern day Venezuela...

The right wing want to return to the past and restore their ill-gained privileges on the basis of a neoliberal economic program to suit their masters in the North.

This is the reason for all the disinformation in the media and is part of the “dirty war” being mounted against us with the aim of taking over our oil and gas reserves by an armed invasion via Plan Colombia or by US forces.

As a good friend said yesterday: “Of course the US is looking to invade us ... we’re an oil-producing country and the US-backed opposition can never win the elections democratically in 2006.”

Carlos Herrera
Carlos.Herrera@VHeadline.com

Las Cuevas de Guacharos near Caripe
Photography: Santiago Padilla