As a bare minimum the real Venezuela should now create a Recovery Inc., to get back what’s been stolen from it.

Sir, I read John Paul Rathbone’s and Shawn Donnan’s “Markets urged to prepare as IMF weighs exceptional Venezuela rescue” October 17. Sadly it misses some important points.

Suppose that there is a new government… because with the current one there is nothing to be done, there should be nothing to be done.

Then you can initiate a worldwide recovery effort of what was stolen from Venezuela and that could, should, yield let us estimate at least $50bn, and that after the bounty hunters or whistleblowers have been paid their commissions.

If you stop giving away gas in Venezuela, something I am trying for the World Bank or the IMF to declare as a punishable economic crime against humanity, then you would release, in a sustainable way, billions in resources year after year. Look at it this way, Venezuela sells gas (petrol) at less than $1 cent per gallon, Norway sells it at $2.07 a gallon.

Also, just clearing the air of the current bandits, would release the energies of at least a million of Venezuelans full of initiatives that are dreaming of returning to their country.

And, if there is not a new government, then an exiled government, like De Gaulle’s French government in London during World War II, and which counts with a legitimate National Assembly, and a legitimate Supreme Court (in exile), could, should, at least get going with Venezuela’s Recovery Inc.

Of course, at the end of the day, the oil revenues must begin to be shared out directly to all Venezuelans, instead of being manipulated by the chiefs of turn, because a tragedy in waiting like Venezuela’s current one, should never be permitted to happen again. 

http://radicaldelmedio.blogspot.com/2009/10/recuperadora-inc.html

https://perkurowski.blogspot.com/2017/10/world-bank-please-dare-tackle-issue-of.html

https://www.carnegiecouncil.org/publications/archive/policy_innovations/commentary/000083

@PerKurowski

To better help the environment and fight inequality, get rid of the profiteers, and give the citizens the incentives

Sir, after a price increase of 6.000% last year, gasoline is currently being sold a US$ 1 cent per liter in Venezuela, a country in which people are dying because of lack of food and medicines. Can you imagine how much better it would be to sell that gasoline at international prices, and perhaps even adding some carbon taxes to it, and then share out the new revenues obtained among all Venezuelans? I have been fighting for such a solution for soon two decades.

That is why I jump of joy reading Ed Crooks’ report about a proposal in the US for “a tax on carbon dioxide emissions, starting at $40 per tonne, with all the revenue recycled in dividends paid back to the public.” It is being introduced by the "Climate Leadership Council" “Republican grandees propose carbon tax” February 9.

In May 2016 you also kindly published a letter of mine in which I proposed something similar as a tool to fight pollution in Mexico. 

I pray the referred to proposal gets to be approved in the US. It would set up a great example for the world on how one can effectively align the fights against environmental damages and against inequality. It would serve as a great appetizer for a Universal Basic Income scheme.

That said we could reasonably assume that, since it reduces the value of their franchises, the usual green movements and redistribution profiteers will fight it tooth and nail.

PS. Venezuela’s domestic gasoline prices should in fact be considered a violation of economic human rights, but I have found little interest, for instance in OAS, for pursuing such matter.

@PerKurowski

Do not odious debts derive directly from odious credits or odious borrowings?

I refer to Jonathan Wheatley’s, Andres Schipani’s and Robin Wigglesworth’s FT: Big Read on the finances of Venezuela “A nation in bondage” November 11. I am taken aback by its distant coolness to what are life and death issues. “revenue-to-payments ratio”?

Sir, I have often asked, and not only in reference to Venezuela: does not what is being financed have anything to do with financing… is it only a matter of risk premiums being right? Let me go extreme to make my case. Should a bond issue that financed some extermination chambers be repaid? And should it then matter whether those chamber use Zyklon B, or the lack of food or medicines. Of course, whether those responsible for any deaths did it with intent, or only because of sheer ineptitude, matters a lot. But for informed financiers? How much “We didn’t know” can you really claim these days?

Sir, the world would be well served by having a Sovereign Debt Restructuring Mechanism but, for such a SDRM to also serve We the People well, and not only governments and their financiers, it would have to start to identify very clearly what should be considered odious debt derived from odious credits and odious borrowings.

And it should also define very clearly how much financiers could aspire to have their cake and eat it too. The article quotes Siobhan Morden, a Latin American strategist at Nomura saying “Investors who this year bought a PDVSA bond maturing in April 2017, for example, have made a 70 per cent profit, thanks to coupon payments and a price rise of 50 cents on the dollar as the bond approaches maturity” 

Two questions stand out: The first: should these bondholders be repaid the same as those who purchased the issue originally and held on to it? Perhaps yes, perhaps no. 

The second: Anyone out there thinks this 70% profit over a short period was just a result of a strict financial analysis, or did it contain some inside information that could affect its legal validity.

FT, yes I am Venezuelan, and so I might very well be too much on the crying side on this issue, but what would you in FT say if UK fell into the hands of a totally inept government and this one is kept in place by financiers out for a quick buck?

Sir should only a non-payment cause a default of sovereign bonds? Are there not implicit moral negative covenants that could be called on by the world, such as not letting your people starve only to serve the debt?

PS. Just to make my arguments clearer and therefore hopefully stronger in Venezuela I have been on this issue long before the Chavez/Maduro times.

@PerKurowski

FT, where’s the real hurdle? In PDVSA’s debt swap, or in PDVSA and Venezuela’s government?

Sir, Eric Platt and Jessica Dye write: “Analysts and bankers remain optimistic that a deal will be clinched, as a default would cut both Venezuela’s and PDVSA’s credit lines with lenders and deepen the country’s recession.” “PDVSA debt swap plan hits hurdle” October 11.

Really? Could it not be so that helping to finance one of the demonstratively most inept governments ever could only deepen and prolong a recession that, right after a huge oil boom, in a country that states it holds the largest oil reserves in the world, has its citizens starving and without access to medicines?

Venezuela is in utter disorder, and its people in utter despair, and still its government sells gas at less than US$ 4 cents a gallon, thereby allowing some to smuggle it out and make juicy profits. That, no matter how you look at it, is a de facto economic crime against humanity.

So “T Rowe Price owned $274m worth of the 2017 bonds”. Does T Rowe Price really think that its clients, though they might make huge speculative profits in the short term, are truly benefitted long term by financing an entity as mismanaged as T Rowe Price knows PDVSA is? Would T Rowe Price’s investors have liked it if Venezuelans had financed a PDUSA and thereby helped keep a hypothetical authoritarian regime in power? When is what is being financed going to be an issue? Or is it really that you can finance anything at all, as longs as the risk premiums are juicy?

Sir, to be clear, I am not writing this solely in “opposition” to the current Venezuela government. For decades, long before the Chavez years, I have been opposed to odious debts, odious credits and odious borrowings… anywhere.

PS. I am supposing no one would dare to expose such naiveté as arguing that lending to PDVSA is distinct from lending to the Venezuela government.

@PerKurowski ©

In Venezuela there’s much human suffering because of lack of food and medicines; but petrol is 1 US$ CENT PER LITER!

Sir, I refer to your editorial "Venezuela’s problems can no longer be ignored" August 19.

Of course as a Venezuelan I pray for my country to get out of that tragic black hole into which crooks or naïve fools has submerged it controlling 97% of its export revenues. 

When we get out of it, which we will, we must see to never to fall into it again. And what we must do for that is to share out all oil revenues directly among the citizens, so to have our governments operate solely with the tax revenues provided by We the People.

But for the rest of the world, there also are important lessons to be learned. One is that stupid and irresponsible economic policies can cause just as much violation to human rights than any of those other sources usually identified. And when those economic crimes are especially grievous, those responsible for them should be prosecuted in international courts.

For instance, right now when there is huge human suffering in Venezuela, because of the lack of food and medicines; petrol (gas), even after it was raised a mindboggling 6.000 percent in February this year, is still being sold at less than ONE US$ CENT PER LITER - FOUR US$ CENTS PER GALLON.

That petrol should be sold, as a minimum, at its world price as a commodity. And the resulting revenues shared out equally to all, so that its citizens could be better positioned to deal with the de-facto state of emergency that exists; and petrol consumption would go down, and more petrol could be exported, and more food and medicines imported.

@PerKurowski ©

http://theoilcurse.blogspot.com

In the midst of the Venezuelan pandemonium, is not selling petrol at less than $2 cents a liter a crime?

Sir, Daniel Lansberg-Rodriguez, describing Venezuela’s current plight writes: “Food and medicine are scarce. Anemic oil prices and a heavy debt load leave scant foreign exchange for the import sector. “Venezuela sets the stage for a chaotic and tragic exit” May 30.

What’s worse, within the pandemonium, few react to that petrol, even after it was raised a 6.000 percent in February this year, is still being sold at less than $2 cents per liter. Perhaps the most serious problem in Venezuela is not Maduro, but the lack of a responsible elite, that is willing to speak up on what is wrong and right.

If the price of petrol sold domestically was raised to its world value, and the resulting revenues all paid out in cash, to all citizens, that could provide them with what they might need to cover the basic food needs. And, to top it up, that would free a lot of petrol for exports.

I myself have tried for long to have the Organization of American States to look into if whether giving away petrol almost for free, while there is lack of food and medicines, does not qualify as an economic crime against humanity. Seemingly OAS/OEA prefer to look the other way.

@PerKurowski ©