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Strategies & Market Trends : Argentine stocks

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To: Tom who wrote (203)2/19/1999 7:11:00 PM
From: X Y Zebra  Read Replies (1) of 331
 
Pancho, Any thoughts on Chavez?

Not that I am closely familiar with the situation in Venezuela, but I believe you can say that there is a pattern as to how things are done in Latin America. And also the way in which they are beginning to treat their "sacred cows" (established political parties).

It is a great thing that a leader with his charisma and somehow a romantic story behind, from being jailed to president-elect is now the leader, this will aid him to execute and "get things done".

It would be a great mistake if he turns to collectivist ideas as we all very well know that such does not work.

By the same token it might be just what the doctor ordered for a country like Venezuela, that to a degree an iron fist is needed for a while (a la Fujimori), so long so the style is not perpetuated.

The famous whining cry of the collectivist that is quick to say that the "free market system" does not work... that is not quite a complete statement.

The complete statement includes the part that says..... no of course it does not work under a system of corrupted officials and inefficient bureaucracies.

In fact, under such corruption no system has any hope to truly work.

Nevertheless.... the change may prove to be a positive provided that reason prevails, and an honestly "cleansing" periods follows, with a fair system that it is friendly to business. As we well know it, business is who produce jobs and salaries.

In Mexico, good old sacred cow Pemex, the oil monopoly, is a monument to inefficiency, apparently, as the article below shows, such is not the case in Venezuela... that is an important difference.

I believe the key rests in directing resources to education, and the education that is directed to small children, because the problem is ingrained in the hopelessness of the lack of opportunity of the masses, which in turns leads to the attitude of "who cares". Attitude that is very prevalent amongst Latin Americans.

Mexico is going through drastic changes as well, but in this case (as I am sure it could be in the case of Venezuela), There are a bunch of "fierce nationalists" that would view the privatization of anything owned by the government as evil.

Currently, the CFE (Comision Federal de Electricidad) in Mexico is getting ready to be considered for the auction block.... as it is an old PRI dinosaur fossil.... the nationalists are clamoring that it will be just another windfall for (the proverbial) "rich".

Never mind that currently it only enriches the old bosses entrenched in incredible systems of red tapes... "for the protection of the people"..... moonshine!!

The point is, that yes a radical change is needed in Latin America as to how things are run... near-dictator-style may actually prove positive, so long it is not overdone, and in a "fair manner" (forgive the oxy-moron).

But no collectivism please. Yes the free market system can achieve the miracle, provided no nepotism or corruption accompanies this system.

Again the education is key, since the change needs to take place in the "way of life", the way we do things.... Will they have the patience ? particularly when pressing basic needs are in need to be satisfied... today Hard to say, but imo there is no choice, the alternatives are more of the same.

Certainly a ROBOLUCION is not the answer as Cuba can demonstrate.

It would also help if the population growth rates could be clipped to a neutral point, otherwise, we are just spinning wheels with major centers of poor and miserable population bombs.

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Advice for a President-to-Be
How Venezuela's Hugo Chavez Frias can rule both wisely and well
By TIM PADGETT

Before heading to prison after his failed but bloody coup attempt on Feb. 4, 1992, Venezuelan army Lieut. Colonel Hugo Chavez Frias vowed that he would have "other opportunities." Now we know what he meant. Chavez won Venezuela's Dec. 6 presidential election in a landslide, with 57% of the vote, and a big reason is that his armed adventure cast him in voters' minds as the only candidate heroic enough--and ruthless enough--to tear down what Venezuelans view as a hopelessly rotten system. The worry among Latin America's democrats is that Chavez may have created a dangerous new fad in campaign strategies. But the bigger question is whether he'll fulfill his even more heroic promise: to replace Venezuela's old, jaded order with functioning democratic institutions--and not just with the rule of Hugo Chavez.

Chavez, 44, a fiery populist, plans to dissolve Congress and write a new constitution. That's not a particularly new quest in Latin America. El Comandante, as Chavez is known, surfed to power on the same wave that has brought other swashbucklers to office recently. The region is seething with anger over the failure of free-market democracies to check corruption, halt violent crime and bridge a widening gap between rich and poor. Venezuelans, whose country was once regarded as a beacon of democratic prosperity, are especially irate because they have both the hemisphere's largest oil reserves and one of its highest poverty rates, 80%. But a warning to El Comandante: while Peruvians cheered take-charge President Alberto Fujimori's re-election three years ago, after he shut down a feckless Congress to vanquish guerrilla terrorism, they are far less enthusiastic about Fujimori's autocratic ways today.

To his credit, Chavez did much in his conciliatory victory speeches last week to quell fears that he's a strongman-in-waiting. But he should reconsider his promise to scrap and redesign Venezuela's Congress. It might look despotic--especially to the military, which is deeply divided over his election--and would overshadow the democratic process he claims to champion. Instead, Chavez ought to compel the Congress he's already got to work the way an effective legislature should. He has the mandate, and he has the seats: his left-of-center coalition, the Patriotic Pole, won a nearly 40% plurality in the Chamber of Deputies and the Senate. Let that legislature go to work to realize his central campaign pledge: to dismantle the control over Venezuela's oil wealth that the country's political and economic elite, known as los cogollos, has exercised for 40 years.

Begin, for example, with genuine education reform. Cut the profligate university subsidies that bankroll diplomas for the richest 10% of the population--many cogollo children pay only $2 in annual tuition for college, including half a cent each day for three cafeteria meals--and shift the money to the country's destitute primary schools.

Chavez's call for a watchdog agency--a "fourth branch of government"--to monitor public spending is another good idea. But it could be addressed just as well by reforming Venezuela's ineffectual judicial system. Partly under pressure from foreign investors, who are fed up with epic graft, the current government of President Rafael Caldera has begun to professionalize the judiciary with financial help from the World Bank. Chavez and Congress should see that venture through to completion rather than create a new oversight bureaucracy.

Chavez also has to resist his populist impulse to butt heads with business. He often blames the state-owned oil company, Petroleos de Venezuela (PDVSA), for many of the country's woes. But PDVSA is among the world's best-run oil firms--a Venezuelan institution that works. The problem is what the cogollos have done over the years with its billions. Chavez faces an economic shambles when he takes office on Feb. 2--owing largely to a 40% drop in oil prices this year--so he needs to promote a business climate that will give him national income to share in the first place. He's on the right track when he emphasizes the funneling of capital and credit to small- and medium-size enterprises instead of cogollo monopolies. But his left-wing advisers, who know Marxist treatises better than balance sheets, won't necessarily be much help in that task.

Perhaps the key piece of Chavez's project is intangible. He hopes to push Venezuelans to drop their complacency and rediscover the purposeful spirit of their national hero, Simon Bolivar--El Libertador--who freed South America from Spain in the 1800s and urged popular government. Bolivar, like Chavez, struggled with his own authoritarian tendencies. He also died a bitterly disappointed man. But if El Comandante truly models himself on the best of Bolivar's ideals, he might help turn Venezuela into a model democracy again.END
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