Venezuela’s undernourished children urgently need a huge public debt into oil extraction conversion plan

Sir, Colby Smith and Robin Wigglesworth report that Venezuela’s “opposition government plans to hold all its foreign creditors to the same terms no matter the kind of debt held, which public entity issued it, and whether or not the creditor had previously gone to a courthouse and received a judgment.” But also “Claims connected to the alleged corruption of the Chávez or Maduro regimes will be excluded” as will be those presenting “pricing inconsistencies or pending arbitration claims [until] would investigated further” “Venezuela’s opposition sets out debt restructuring plans” July 4, 2019.

On that I agree, 100%. And Venezuela presents a golden opportunity for the citizens of the world, to be able to reach a clear definition on what should be considered odious credits, and to agree on their consequences.

But, what I do not see yet, is the real understanding that Venezuela’s most urgent problem is not debt restructuring, it is that its people are dying and foremost that its young are growing up undernourished.

Let’s face it; no matter how much humanitarian aid can come to Venezuela, the problems with lack of food, medicines and basic day to day needs will not be solved, until sufficient oil extraction generates sufficient oil revenues. And of course until sufficient oil extraction generates sufficient oil revenues, neither will there be enough money to pay off creditors.

So all my gut instincts, acquired by having actively and frequently participated in large debt restructurings in the private sector, but also by having promoted and completed projects of Venezuelan public debt to equity conversions into industry and tourism projects, tells me the following:

Venezuela needs to sit down with its creditors, today, and come up with a plan of how to convince qualified oil extractors to put their money into Venezuela and begin extracting oil as fast as possible. Of course for that to happen there would have to be a reasonable agreement on how to share the net oil revenues between oil extractors, creditors and the Venezuelan citizens.

I do not mention the Venezuelan government since I am convinced that the only way we Venezuelans can end up living in a nation, and not in somebody else’s business, is to have our government work exclusively with what we citizens provide it with by means of taxes. And because I have learned to utterly dislike redistribution profiteers, of all sorts.

That said of course I understand the need for some type of transition agreement, like a period in which more and more of those net oil and other natural resource revenues are turned over by the government to citizens. Like reaching 100% of it in ten years.

Sir, here's a tweet I have been sending out now and again for about two years: “So Venezuelans can eat quickly, hand over Pdvsa (and Citgo) to Venezuela’s creditors quickly, to see if they put all that junk to work quickly, to see if they collect something quickly, and pay us Venezuelans, not the bandits, our oil royalties quickly.

https://perkurowski.blogspot.com/2017/06/a-simple-but-complex-question-from.html”

PS. Instead of oil production I prefer to use the term oil extraction, since I feel that to be more respectful and grateful to that hand of the providence that placed oil under Venezuelan land.

PS. “Living in somebody else’s business” was how a woman from a Uganda described to me in 2013, her and our case.

https://theoilcurse.blogspot.com/2013/04/we-oil-cursed-citizens-we-do-not-live.html

@PerKurowski

When compared to Venezuela’s oil reserves, Citgo is nothing.

Sir, Colby Smith refers to Citgo as “the last-remaining crown jewel of Venezuela” “Stakes rise for Venezuelan assets stateside” Alphaville May 17.

Frankly, Venezuela has what has been reported as the largest oil reserves in the world. What is Citgo compared to that? Absolutely nothing!

What’s valuable for Venezuela is its oil, but the value of it has been greatly diminished, first and foremost because the government handles the redistribution of all net oil revenues, but then also because way too many have wanted to profit from doing something with our oil, for instance refining it, abroad.

In 2000, in an interview in the Daily Journal of Caracas I said:

“Until someone convinces me of something different, I insist that anything else the Venezuelan state tries to do with oil, means a loss or a net reduction of the benefits brought by the first phases of the operation, [its extraction].

Because of that and the fact that I have seen the corporation's reports, I still can't understand the economic reasons for having bought and kept Citgo. There is evidence in the reports that it is being subsidized by PDVSA. 

And, for those who argue so much in favor of privatizing PDVSA, I challenge them to make an IPO for Citgo, subject to their obligation to purchase oil products at market prices."

Sir, we have millions of our young growing up undernourished and still some try to hang on to a very high hanging fruit as Citgo, so my current tweet sized proposal is: 

So that Venezuelans can eat quickly, hand over Pdvsa (and Citgo) to Venezuela’s creditors quickly, to see if they can put all that junk to work quickly, to see if they can collect something quickly, and pay us Venezuelans, not the bandits, our oil royalties quickly.

The Iraq Study Group established by the U.S. Congress, reported in 2006 the following: "There are proposals to redistribute a portion of oil revenues directly to the population on a per capita basis. These proposals have the potential to give all Iraqi citizens a stake in the nation's chief natural resource." Sadly it came to nothing

Sir, if that were to be implemented in Venezuela, then Venezuelans would live in a truly independent nation, and not just in somebody else’s business.

PS. A couple of years ago I gave a speech to transfer price specialists in Washington recounting the very curious thing of Venezuela´s state PDVSA that sold petrol at lower than market prices to their then recently acquired refinery subsidiary in the US, CITGO, paying unnecessary taxes to another than their own tax man, probably just because they wanted to show the Venezuela public that Citgo was such a good investment. Crazy? Yes of course, but that´s life in a tropical country.

@PerKurowski

It suffices for one single nation to set a high tax on carbon emissions and share out its revenues among all its citizens, to really begin saving our pied-a-terre.

Sir, Martin Wolf, whether it is true or not, is absolutely correct calling out: “It is five minutes to midnight on climate change”. We have no right to ignore that threat, even if its possibilities were low. “Inaction over climate change is shameful” October 23.

Wolf asks and answers: “So what needs to change? Net global CO2, methane and nitrous oxide emissions would need to fall to zero” though he also observes. “This is very unlikely to happen. That is no longer because it is technically impossible. It is because it is politically painful.”

It should not be! If only one nation went ahead and placed a big tax on carbon emissions, and shared out all resulting tax revenues equally, unconditionally, among all its citizens that would be a game changer… many would be politically pressured to jump aboard saving the planet that way.

Why does it not happen? Quite simply, the redistribution profiteers, those who profit from negotiating conditions, won’t touch with a ten feet pole an unconditional pay like this, less it spreads to other areas of their franchise, for instance by means of a Universal Basic Income.

Do I know? I come from Venezuela where nothing similar to its current tragedy would have happened had its oil revenues been shared out equally to all Venezuelans, and yet that possibility is rarely mentioned by the opposition, because there’s always an infinite pool of aspirants to be the next redistributors on turn.

Paris Accord? To me it was just a great photo-op for redistribution and fight against climate change profiteers that would do little to improve the chances for my grandchildren to live better.

More than a year ago the Climate Leadership Council proposed a carbon tax along the lines of what I describe here… seemingly they were silenced!

PS. For Mexico City, to combat pollution, I proposed just that..

@PerKurowski

The prime element of a Universal Basic Income is its unconditionality, and that’s why redistribution profiteers hate it the most

Sir, John Dizard titles“Sorry, but the world is not yet ready for universal basic income” October 11, but then he writes an article exposing exactly why we need a Universal Basic Income. Clearly he has not understood the real implications of UBI’s most important principle that of its unconditionality; never to be paid out because you are something different, like in jail.

I came to Universal Basic Income by means of my long fight for having all Venezuela’s net oil revenues shared out equally among all Venezuelans. That would have saved my homeland from its current tragedy. Instead those revenues fell into the hands of odious, besserwisser, corrupt redistribution profiteers… who paid it out generously to themselves and their friends… and with especially bad cheese to the rest of Venezuela.

“UBI…cannot be done within the bounds of the existing social contract in advanced countries.” Absolutely, as long as we allow redistribution profiteers to define those bounds.

Those redistribution profiteers who, circling their wagons in order to defend the value of their franchises, convinced Dizard of that “big tax rises and reductions in other benefits would be needed, even for a modest basic income”. Their most usual tool is using very high figures for that basic income. There is absolutely nothing that would stop advanced countries from beginning by paying out some US$ 200 per month to all its citizens. That would help oil the economy much more than a tax cut.

We urgently need something to help create decent and worthy unemployments in time, before all social order breaks down… and redistribution populists like Hugo Chavez and pals take over. 

@PerKurowski

To stand a real chance, Venezuela needs a solution that inspires at least a million of its emigrants, to immediately return to their homeland.

Sir, Ricardo Hausmann writes that for Venezuela “there is no road to recovery without the freedoms that underpin the market mechanism and without international financial assistance to kick-start imports and output. That will only happen after Mr Maduro leaves and this regime ends” “Maduro will not reverse an unprecedented economic collapse” August 24.

Indeed, but since so many of our landsmen are dying because of hunger and medicines, and the country is losing so much of its educated youth and that might find opportunities in other nations and never return, we need something much faster, much more drastic.

Hausmann states “by over-borrowing during the [oil] boom years: at over 600 per cent, Venezuela has the largest foreign public debt to export ratio in the world." If we include all the accounts payable hanging around it could even be much worse than that. 

My proposal is to capitalize on our creditors weaknesses. After excluding all those who clearly have no legal enforceable claims, and there are many of them, I would call all Venezuela’s creditors and tell them:

“Here, take all Venezuela’s oil extraction and refinery assets. Put these to work as fast as you can, so you have a chance to collect something of your credits, as fast as you can; and pay out all royalties that will be due for any oil extracted, directly, in equal parts, to all Venezuelans living in Venezuela, as fast as these can be deposited in their respective debit cards.

Then the Venezuelans would, with that money demand what they most want and need, and the market forces, in a country so blessed with so many other resources than oil, and freed from the interference of its odious redistribution profiteers, would respond, almost instantaneously.

A dream? Perhaps, but also the last thing I want for my country is a bailout a la Greece, one that leaves all our youth indebted forever.

And who knows, perhaps then even Ricardo Hausmann would leave Harvard Kennedy School and return home. I sure would!

http://theoilcurse.blogspot.com

http://unsustainabledebtsustainability.blogspot.com

http://petropolitan.blogspot.com

@PerKurowski

A Universal Basic Income has much more to do with being able to say, “Yes, here I come!” than with a freedom to say, “No, I prefer to stay in bed”.

I refer to Tim Harford’s conversation with Rutger Bregman on the subject of a basic income, while bouldering. “Rutger Bregman: ‘Basic income is all about the freedom to say no’” March 20.

Sir, look at Venezuela. Believe me when I say that 40% of the poorest of my homeland received less than 15% of what they should have received the last fifteen years, had our net oil revenues just been shared out equally among all Venezuelans. And then you might beguine to understand my deep resentment with any redistribution profiteers. To bypass this kind of profiteers, in abundance all over the world, is in itself a reason more than enough to justify a Universal Basic Income.

That said, in 2012, before I was censored in Venezuela, and based on the lack of jobs I had begun visualizing in 2003, I also wrote an Op-Ed titled “We need decent and worthy unemployments”. That de facto calls out for a UBI, before it is too late and our social structures break down in favor of the many aspiring Hugo Chavez and Nicolas Maduro of this world.

But Bregman argues: “OK, so basic income is all about the freedom to say no. That’s a privilege for the rich right now. With a basic income, you can say no to a job you don’t want to do. You can say no to a city in which you no longer want to live. You can say no to an employer who harasses you at work . . . that’s what real freedom looks like.”

And there I have to say no! That sounds to me like a spoiled brat’s view about what a basic income should mean. Such a Universal Basic Income becomes, almost by definition, financially unsustainable. I argue instead for a UBI that provides you with an assistance to get out of bed in order to reach up to whatever the spreading Gig economy has to offer you; but not so large so as to allow you to stay in bed, because that will sure make others refuse to pay for what the UBI might take.

Sir, every time I hear someone offering more than what a UBI can sustainably offer, I feel I we could be in the presence of a redistribution profiteer out to sabotage it, all in order to defend the value of his franchise.

PS. The article has that “A basic income [could be handed out] through the tax system as a negative income tax.” Not so. A tax credit that you start losing the minute you step out of bed to work, is not an unconditional Universal Basic Income.

PS. When Rutger Bregman opines “What’s the biggest injustice in the world right now? It’s pretty easy to see. It’s borders: apartheid on a global scale.” I would have asked. If there are no borders, how much in UBI do you think your homeland would accept to pay to any immigrant?

http://myubi.blogspot.com/2017/01/my-universal-basic-income.html

@PerKurowski

What would you as a bare minimum call creditors knowingly financing a government that in itself constitutes a brutal violation of human rights? Odious?

Sir, John Paul Rathbone, Robin Wigglesworth and Jonathan Wheatley, with respect to the surrealistic debt-restructuring initial steps in Venezuela quote Hans Humes of Greylock Capital, who is forming an investor committee with “Ultimately, there is going to be more money made in Venezuela than even in Argentina”. But the authors also rightly conclude in “The geopolitical and humanitarian consequences are likely to be larger still”, “Caracas plays its last cards” November 22.

Sir, “Food is in short supply” does not even begin to describe the tragedy.

Look at Venezuela as a prison. The food and medicines supplies it receives should be more than enough to keep all inmates healthy, but, since the guards have stolen so much of it, many prisoners, many children among them, are dying. And, in order to be able to steal more, the guards also took on huge debts in the name of the prison. And now the original creditors, or those who bought in at a later stage, and who all had all the possibilities of knowing very well what was going on, but that turned a blind eye to it when the interest rates offered by the guards were so irresistibly juicy, they want to be repaid. Will the guards do so? Will the prisoners allow that?

I have for decades called for Venezuela’s oil revenues, lately around 97% of all Venezuela’s exports, to be shared out to all its citizens, as the only way to guard against any odious or just plain dumb exercises of centralized statist power.

So what would happen if now the Venezuelans agree, in a referendum, on doing just that and then proceed to carry out the necessary changes in its constitution; and asks the IMF or the World Bank, with the assistance of other banks, to set up an oil revenue distribution system that keeps all oil exports invoiced in the name of Venezuela’s 30 and so million citizens? I am no lawyer but would a judge in New York approve the embargo of Simoncito’s part of oil, that if received would help to feed and keep Simoncito healthy?

Desperate times calls for desperate solutions, but perhaps some desperate solutions carry the potential of turning into magical solutions. For an oil cursed nation like Venezuela, that might just be what opens up its future to a much better tomorrow.

But the rest of the world could also benefit immensely. We quite frequently hear about the need for a sovereign debt restructuring mechanism, SDRM. If such mechanism started by clearly establishing the fact that most odious debts have its origins in odious credits. There often is prohibition against usury, but even more important for all us citizens all around the world, and especially for those generations of citizens coming after us, to have some sort of mechanism that disincentive the award of odious credits to governments.

In reference to that I am begging Venezuela’s National Assembly to request that Venezuela’s Supreme Court of Justice in exile initiates a process destined to carefully revise the origin of all Venezuela’s credits to see if they can be deemed legitimate or not.

https://perkurowski.blogspot.com/2014/05/risk-premiums-and-ethic-ratings.html

@PerKurowski

What if the Norwegian citizens had had the chance to manage their own individual oil funds or share of oil revenues?

Sir, I refer to David Sheppard’s “Norway fund to sell off oil shares” November 17

At first sight we are of course all impressed with that the Norwegian Oil Fund has been able to accumulate US$200.000 per Norwegian. 

The question is though, had the Norwegian oil revenues been paid out to and invested directly by the Norwegians, would they in average have more or less than US$200.000, and would the Norwegians, in average, have been stronger citizens as a result of having to take on that responsibility on their own?

And when we read that what we always thought as the Norwegian Oil Fund or the Norwegian Government Petroleum Fund, is now known officially as the Government Pension Fund Global, the natural question we have is if all that money is now only to go to pensioners? If I was a young Norwegian with ideas of my own and in need of capital, I am not sure I would look too favorably at that possibility.

And let’s be honest about the results. Much of it, or perhaps even most of the financial returns obtained, which are perhaps more than the oil proceeds injected, have been direct consequences of US and Europe having kicked the 2007-08 crisis can down the road, injecting huge amount of liquidity with QEs which, together with the ultralow interests maintained, have inflated all financial assets.

Sir, I was appointed the first diversification manager of the Venezuelan Investment Fund created in 1974, basically a fund very similar to the Norwegian Oil Fund. It took me only two weeks to become convinced it would not work, and so I left.

All this sort of centralized accumulations of wealth sooner or later loose contact with the final beneficiaries and with their original purpose and fast (Venezuela) or little by little (Norway) begin functioning more in terms of the wants and needs of those managing it.

When we now start reading about how that Norwegian fund begins to assign more and more value to issues like sustainability and ethics, which of course is good, we do wonder though how much of that is more based on managerial show-off than on a real mandate from its final beneficiaries.

Again, if I was that young Norwegian in need of capital, or just wanted to construct my own retirement nest, I can easily hear me saying… Great, you do all that but, before you start, give me my share. 

And let’s face it. One reason Norway’s government have been able and willing to set aside oil revenues in the fund is that they receive other type of compensations, like gas/petrol consumption taxes. Norway has the highest gas prices in the world, about $2.40 per liter (Venezuela less than $1 cent per liter)

I hear you Sir. “Here is just a Venezuelan being envious of the $200.000”.

Of course I am envious but, believe me when I say, that as a defender of oil revenue sharing, I would much have preferred my fellow citizens to have only a tenth of that amount, but in the process have learned more of how to stand on their own, and freeing themselves from having to depend on redistribution profiteering governments or fund managers.

PS. What about the Norwegian Fund selling off oil shares? Sounds reasonable but their current 6 per cent invested in the oil and gas sector is not that exaggerated either. Can you imagine what the Norwegians would say if Norway runs out of oil and the Fund stands there with no investments in oil?

@PerKurowski

What stops a Supreme Court of Justice of Venezuela in exile, to request the embargo of oil unduly received by Russia?

Sir, you suggest that one of the few ways the Maduro regime could manage the restructuring of PDVSA’S bonds, is that “Moscow might… extend the cash Caracas needs to service PDVSA debt in return for cut-price stakes in local oil ventures”, “The geopolitics of Venezuela’s debt” November 5.

You really think Moscow would throw its relative scarce good money at this?

The Venezuelan Constitution in its Article 12 establishes: “Mining and hydrocarbon deposits, whatever their nature, existing in the national territory, under the territorial sea bed, in the exclusive economic zone and on the continental shelf, belong to the Republic, are the property of the Public domain and, therefore, inalienable and imprescriptible.”

And so, though I am not a lawyer, it would seem that any negotiation that assumes that local or foreign oil ventures receive an ironclad guaranteed access to Venezuela’s oil might be very naive.

I ask, if Russians end up taking oil from Venezuela under a shady deal not approved by its real General Assembly, that which is recognized by so many countries, what stops its Supreme Court of Justice in exile to request international courts to embargo it?

As I see it the best thing to happen would be a constitutional reform in Venezuela that decrees all net oil revenues belonging equally to all its citizens. What judge will then order the embargo of oil that belongs to citizens who at this moment need it to avoid death from starvation?

And the biggest benefit of doing so would be freeing the Venezuelans from having to live under the powerful thumb of a government that centralizes all that oil revenue, 97% of all the nation’s exports, in very few hands… sometimes even the hands of outright bandits.

Sir, those who awarded odious credits, should not be able to negotiate behind the back of Venezuela’s people, with those who contracted odious debts.

https://perkurowski.blogspot.ca/2017/06/a-simple-but-complex-question-from.html

http://theoilcurse.blogspot.com

@PerKurowski

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

The only real game changer for Venezuela would be sharing out all its net oil revenues equally to all Venezuelans

Sir, I refer to John Dizard’s “Russian oil group looks to Venezuela’s opposition in search for fresh collateral” July 29.

If Venezuelan oil revenues had been shared out equally to all Venezuelans, the current Venezuela tragedy would not be happening. It is as easy as that. To centralize those revenues in the hand of the government is an invitation to, sooner or later, have these to be managed by well-intentioned fools, outright bandits, or a poisonous combination of both, like now.

One sole change in the article 12 of Venezuela’s constitution, in order to declare the Venezuelan citizens to be the owners of all oil reserves, instead of the government, would be one of the biggest game changers ever.

In such a case could Venezuela’s creditors go after the oil belonging to about 32 million Venezuelans and not one government? How would a judge decide if he knew that creditors were trying to go after each Venezuelan’s US$30-40 per month, that which could help stop millions of human beings from starving or dying from the lack of medicine?

http://theoilcurse.blogspot.com

@PerKurowski

If Venezuela’s social compact shared out all oil revenues directly to citizens, it would better resist lower oil prices

Sir, with respect to the possibilities of lower oil prices you write: “The real dangers… lie in emerging markets that rely heavily on oil exports and have large young and restive populations. Austerity will strain the social compact between rulers and ruled in the Gulf states. It will inflame existing conflicts in Nigeria and Venezuela.” “A sustained oil glut can have unsettling effects” June 23.

No! To refer to lower prices inflaming conflict in Venezuela is to ignore the true origins of the problem. The higher the oil prices the less do oil-regimes take notice of citizens… when oil revenues are large the citizens are mostly a nuisance to those in power… and the citizen’s mind-frame is set on how to get the largest share possible out of those revenues. That only guarantees a rotten to the core social compact. That only guarantees that sooner or later the nation fall into the hand of rotten to the core regimes, like the current one.

So in fact lower oil prices could help is it forces real changes. For instance if the net oil revenues were shared equally among all Venezuela’s citizens, we would have a much better and sustainable social compact. Not only because the real source of needed austerity would be more easily identified, but also because the decisions of millions about what to do with their share of the oil revenues, responding to their private and individual needs, would allocate resources more efficiently than what the well-intentioned or dark interests of some few would do.

Venezuela has the immediate need to get rid of its current government. But when that happens, then, immediately, its immediate interest becomes how to rebuild a devastated nation… before the next conflict breaks out. Nothing better than to completely rearrange how the natural resources not produced by granted to Venezuela by the providence is shared.

PS. Britain too would do better sharing out all revenues derived from taxes on petrol equally to all its citizens.

@PerKurowski

http://theoilcurse.blogspot.com

http://petropolitan.blogspot.com

Venezuelan creditors, what if from now on oil belongs in equal parts to the citizens and not to the government?

I refer to Jonathan Wheatley’s and Robin Wigglesworth’s “Venezuela’s Russian debt tangle heightens risk of default” June 10.

Sir, had Venezuela not have had oil, there would be no so much financing of its plain lousy governments.

Equally, had the oil in Venezuela belonged to Venezuelan private citizens and not to the government of turn, its governments would not have had access to as much credit.

Venezuela’s current constitution states: “Article 12: Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental shelf, are the property of the Republic, are of public domain, and therefore inalienable and not transferable.”

What if there was a change in the constitution to: “Article 12: Mineral and hydrocarbon deposits of any nature that exist within the territory of the nation, beneath the territorial sea bed, within the exclusive economic zone and on the continental shelf, are the property in equal shares of all Venezuelan born and alive citizens, and therefore inalienable and not transferable.”

Then all the oil revenues would belong to Venezuelan citizens and be distributed to them by means of an oil revenue sharing mechanism.

Then those who current creditors of Venezuela, and who must have been perfectly aware of how lousy its government was by only looking at the risk premiums paid, would have those risk premiums to reflect the reality of the risks of lending to such lousy governments as Venezuela’s

In such circumstance could a tanker that carries oil owned by all the Venezuelan private citizens be embargoed?

Would a judge order that embargo knowing that, as a direct result of it, many Venezuelan citizens, old and young, with real names and faces, would then die because of lack of food and medicines?

http://perkurowski.blogspot.ca/2014/04/creditors-of-venezuela-read-our.html

@PerKurowski

Venezuela’s constitution has de facto decreed that 97% of its exports, is to be managed by some few in the government.

I refer to Daniel Lansberg-Rodriguez’ “Venezuela’s broken system cannot fix itself” April 24

Sir, Venezuela’s constitution has de facto placed 97% of its exports to be managed by some few in the government of turn.

I ask: if that were the reality of your country, would you as a citizen prioritize changing the government or changing the constitution?

I do not think my homeland has a sustainable good future, unless we dilute the excessive powers of our government, by sharing out all oil revenues directly to the citizens.

A government that is not sustained, frugally and solely, by taxes paid by the citizens, will never act sufficiently responsibly in favor of the citizens.

@PerKurowski

http://petropolitan.blogspot.com

http://theoilcurse.blogspot.com

Whether Norway Fund should be free to invest without government intrusion is not really the most important question

Sir, I refer to Richard Milne’s discussion of how imposed investment limitations caused the Sovereign investor to miss out on billions of dollars over past decade, “Ethical stance crimps Norway oil fund” March 22.

The real question is: if Norwegians had been allowed to decide on their own per capita share of the net oil revenues, like for instance spending it now or picking their own investment advisors, would they have been better off or not? Long term, I believe they would.

What now exist are some millions of Norwegian expecting to be recipients of whatever the central managed oil revenues can provide them, without having had to take any responsibilities for it. By allowing a Fund to manage it all, Norwegian have missed a great learning opportunity, and have less idea about where all oil revenue came from, and where all oil revenues went.

If something goes wrong with the Fund, something that can always happen, they will show little understanding. Also, the sole existence of a huge amount of centralized savings is something that can attract the attention of dangerous redistribution profiteers/populists.

I recently sent a similar letter, also commenting on the Norwegian Fund. Seemingly that Fund is a fund that shall not be questioned, too much, at least not by FT.

@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

The worst we could do, is to treat a structural unemployment as a temporal one.

Sir, Gillian Tett writes: “If there is one thing on which almost all economists agree, it is that digital technologies are performing many jobs once done by humans… [and so there’s an] urgent need for a bigger policy debate about how to prepare workers for this new world”, “How robots make humans indispensable”, December 23.

Absolutely, but in this respect, if we face structural and not temporal unemployment then, as I wrote in an Op-Ed in 2012, “We need worthy and decent unemployments”.

For that we must rid ourselves of the negative bias that current unemployment benefits carry. The best alternative in town seems to be a Universal Basic Income, namely the unconditional payout of a fixed amount per month to all citizens, whether unemployed or not. That would help the economy by keeping up consumer demand, and signify a good stepladder for everyone who wants to reach up to a temporary job, a.k.a. a gig job.

How to fund it? There are many alternatives but, in the context of this article, a payroll tax on robots, driverless cars and similar substitutes for humans, seems the way to go, since that would also create a more level playing field when competing for jobs.

Who will be against it? Naturally the redistribution profiteers as that decreases the value of their franchise.

PS. In my homeland I have for decades wanted my nation's net oil revenues to fund such UBI, in this case a variable one, so as to help free us citizens from living under that servitude that 97% of all the nation’s exports going to central government signifies.

PS. In other places UBI and carbon taxes could be a great way to harmonize the incentives for the fight against environmental problems and the fight against inequality.

PS. Ask Trump, what’s worse losing your job opportunity to outsourcing, migrants or robots? If robots, where does he suggest we build the wall and who’s going to pay for it?

@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

“With a basic income, the numbers just do not add up” Do not add up for whom, for the redistribution profiteers?

Sir, John Kay writes: “With a basic income, the numbers just do not add up” June 1, and the first question that pops into my mind is, does not add up for whom?

For instance if in my country Venezuela, all net oil revenues were shared out using a “variable” Universal Basic Income scheme, it would definitely not add up to Maduro and friends, but it would sure add up a lot to most other citizens, especially to those poor who have only received a very small fraction of what should have been their per capita share of those revenues.

If we go the Universal Basic Income route, then we can also better separate the redistribution function from all government functions, bringing heightened transparency, and which clearly would add up to a chance for better governments.

I favor paying that Universal Basic Income to all citizens, with no question asked, as a Societal Dividend. It should be a citizen-to-citizen affair so that there is no need to thank any bureaucrat or politician for special favors.

And a UBI could signify a decent and worthy partial solution to that future structural life term unemployment of millions that we can already begin to detect.

How much should the amount be? Let each country explore what it can, and lets take it from there. There are better times and there are worse times; and you sure do not want to de-capitalize that society paying you dividends, much less put it in debt in order for those now to collect income from the future generations.

And let us not forget that the Universal Basic Income is in much re-injected into the real economy, which could help it to grow and generate jobs.  

And you could fund Universal Basic Income from different sources in ways that help to solve problems… like with carbon taxes, so as to align the incentives of the fight against climate change with the fight against inequality.

Kay ends writing: “Social welfare systems everywhere make use of both types of information — contingent and income-related — to balance cost and effectiveness. That is why they are, inevitably, complex” The truth is they are much more complex than need be, precisely because that’s the business of the redistribution profiteers.

@PerKurowski ©

Hugo Chavez did not empower the poor, he empowered himself with the poor… pas la même chose

Sir, John Paul Rathbone refers to Hugo Chávez of Venezuela as a “gifted politician who, however wasteful, empowered the poor” “Nicolás Maduro Venezuela’s leftist lord of misrule” May 21.

What? Chávez might have been a gifted populist, a gifted demagogue, but he did not empower the poor, he empowered himself with the poor... pas la même chose. Just look at photos of the poor in Venezuela… do they really seem empowered?

The poor of Venezuela never got more than about15 percent of what should have been their fair per-capita share of the fantastic oil revenues that drowned the country during the Chavez years. It was just that Chávez masterfully talked and walked the leftist discourse. Which caused so many in the world to drool in admiration.

If we are going to understand how nations develop, all research needs to control for how much of fiscal revenues are received directly from citizens, how much are received indirectly from citizens, and how many of those revenues have never ever passed through a citizens pocket. But why is such research not conducted? You tell me! I advance the possibility there are just too much profits to be made redistributing.

For instance for decades I have begged that the net oil revenues of Venezuela should be distributed directly to the citizens, a sort of variable universal basic income; but the opposition to such idea from those who want more than their fair share is immense.

As for Maduro, before I was censored in Venezuela, in May 2013 I wrote “3 years until the recall referendum… Mamma Mia!” It was crystal clear from the very start that Maduro would be an unqualified disaster.

@PerKurowski ©