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VenEconomy : Red herrings

It is more than evident that the Chávez administration is facing serious problems of governance.

The first problem is the serious deterioration of PDVSA, one of the clearest signs being the tardy handing over of deficient, unaudited financial statements to the National Assembly. The oil corporation's collapse is so complete that not even the touched-up figures and verbiage of a 380-page “preliminary” report were capable of hiding the bad management and corruption that sprang to light with the discovery of thousands of tons of decaying food imported by PDVAL and the oil spills in Lake Maracaibo.

The second problem is the apparent cash crisis facing the national budget, as a result of which the government will be resorting to further borrowing of Bs.F.20 billion in the third quarter of the year. (It is thought that the government will resort to borrowing in bolivars, as it is apparently finding it difficult to get anyone to lend Venezuela in dollars.)

The third problem is the sharp decline in President Chávez's popularity on the eve of elections that will determine the makeup of the National Assembly. Opinion polls show that both the government and the President's performance are viewed with disapproval by the majority of the population.

The fourth is the discovery of fresh evidence of alleged ties between officials of the Venezuelan Government and international networks of drug traffickers.
Finally, there are several things that could point to problems that have not yet come to light. One is that this strictly militaristic government did not hold military parades on June 24, the anniversary of the Battle of Carabobo, or on July 5, the date on which the Act of Independence was signed.

Another is that the military promotions were not televised, when the President does not pass up the slightest opportunity for ordering daily nationwide networked broadcasts.

Faced with his declining popularity, Chávez is, once again, launching offensives as a way of distracting people's attention. On the one hand, he mounted a show with the symbolic remains of Manuelita Sáenz, the mistress of the Liberator Simón Bolívar, which he brought to the National Pantheon. On the other, he attacked Globovisión yet again and, on July 5, launched a savage, irrational attack on Cardinal Jorge Urosa, the Archbishop of Caracas, alleging that he was instilling fear in the people with tales of communism. He said that the cardinal is a “troglodyte” who is “unworthy to call himself a cardinal of the Catholic Church,” and claimed that, as far as he is concerned, the cardinal is Monsignor Mario Moronto (possibly with the intention of generating divisions within the Church).

Unfortunately, the government is using this marasmus it has created to make strides in weaving its “revolutionary” legal net, approving laws right and left that will turn the new parliament into an empty shell without the powers to undo the Castro-communism being imposed by Chávez

VenEconomy has been a Venezuela's leading specialized publisher on financial, political and economic data since 1982. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by Veneconomy , June 06, 2010. Petroleumworld reprint this article in the interest of our readers

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Petroleumworld News 07/08/2010

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VenEconomy : Red herrings