Tag: Sidor

Nationalization and Military Dissent

Richard Barnes

In the late 1970’s, I took an extended leave to visit the country of my birth. During that most memorable trip, I had the joyful pleasure of meeting countless individuals and families, who, in true Venezuelan fashion were not shy in sharing their opinions about the direction the country was taking at the time. 

That direction was, in a word, “nationalization” or forced divestment, principally of the iron ore and petroleum industries. This phenomenon was worldwide at the time, especially in Africa and Latin America, and it had devastating consequences. 

What I saw — gargantuan enterprises with protean manufacturing plants, power centers, chemical processors, and assorted buildings and dormitories, accompanied by massive hirings of blue and white collar workforces and countless foreign workers, some of whom were housed on cruise ships docked on the Orinoco — did not “pass the sniff test”.

I had a number of vigorous but mostly friendly debates on the merits of government-run versus privately run operations. Already the mining camp where I was born had shown deterioration. One lady expressed sincere surprise at this, “How is it that now that this belongs to us, we haven’t managed to maintain it, let alone improve it?”

“Could it be that when something belongs to ‘us all’ it actually belongs to no one?” was one refrain I found myself repeating throughout the trip. 

At my expressed concern about the immense power and wealth being concentrated in the Venezuelan government, something usually seen in Communist or Socialist regimes, the usual reply by those who disagreed with my concerns, was along the lines of, ‘it’s about time that “our” wealth remained here instead of being transferred to the United States.'”

Conversely, the reply by those who somewhat agreed with my concerns was along the lines of, “the Venezuelan military would never allow the government to devolve into outright Socialism or Communism.”

Interestingly, neither camp was concerned about what all this nationalization activity would lead to. In one heated and less friendly exchange, a more recent acquaintance at the time ridiculed my concerns, expressing disdain that I would question the massive wealth now owned by the Venezuelan people. He mocked my assertion that the people actually “owned” nothing. It was all owned by the state.

According to a scholarly analysis by the Federal Reserve Bank of Kansas City in 2013, “Nationalization brought considerable declines in productivity in the oil industries of the sample countries. Productivity fell by more than 70 percent in the Venezuelan oil industry. Despite enormous efforts put into expansion, it took Venezuelan’s nationalized industry about 20 years to return to its early 1960’s productivity levels.”

Sadly, shortly after the 20 years, another, more serious wave of nationalization was launched with even more catastrophic results. To take just one example, the enormous Venezuelan steelworks, Sidor, the crown of Venezuelan heavy industry, saw its production go from 4 million tons of steel in 2007, the year before its nationalization by the Chavez Socialist government, to 1.5 million in 2014, with triple the number of employees. Between late October, 2013 and August 2014, it had operated for only 90 days. I have no access to more recent figures nor would I trust them if I did.

Well, the wealth is gone for the most part; other than the billions in the private foreign bank accounts of a relative handful of Socialists. As for the massive mineral and petroleum reserves, those await the capital and the expertise to extract it. That explains the intense interest and activity in Venezuela on the part of both China and Russia.

As to the military, in later trips, friends were more subdued as they told me of the heavy Cuban influence in the Venezuelan forces. Why was this not being reported, they wondered.

Fidel Castro ruthlessly applied the tactic of buying or otherwise coopting the military. A tactic he taught Hugo Chavez and Nicolás Maduro. Hence, the failure of the Venezuelan military to “never allow the government to devolve into outright Socialism or Communism.”

To read more about the emasculation of the Venezuelan military, refer to the Reuters article linked below, “How Cuba Taught Venezuela to Quash Military Dissent”. The article is appreciated, but why did it not appear a decade ago when it might have made a difference?

https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=CEF2014&paper_id=90
The macroeconomic analysis of the negative impact of nationalization on productivity

https://www.yahoo.com/news/special-report-cuba-taught-venezuela-121454933.html

Madrina

Richard Barnes

In today’s quick-paced Western world, hand-written letters are a lost art. Why would anyone write a letter when email…no, wait! That’s just as anachronistic. Texting is more efficient. And, for good measure, be sure to use acronyms AMAP!*

Over a recent weekend as I was going through some old documents searching for Bethlehem Steel correspondence, I found a less ancient recent letter that I had inadvertently filed among them.

The letter is dated March 21, 1995, but was actually completed about two weeks later, as it was written over a space of over ten days. It was from my godmother, known as madrina in Spanish, who wrote me after she had received our 1994 Christmas letter and photo. She lived in the interior of Venezuela and passed away a few years ago; an event which saddened me deeply.

The letter is written over eight pages in beautiful, flowing longhand script. It is thoughtful, funny, sincere, and, most importantly, loving. The letter writer had schooling: three grades. Plus six months’ secretarial school. I mean no offense or disrespect to my fellow college-educated friends but she was more educated — truly educated — than most of us.

Her nephew was one of my best early childhood friends. Whenever I think of him, I think of the classic carousel humming top. He and I would dedicate much time of play spinning that thing. We each had one and “competed”. Not sure on what basis we kept score. But we did.

As a child, I addressed her as “Tía C__L__”. And I addressed her thusly the very last time I visited with her in 2005, when her mind had begun to noticeably fail. She lived another nine years after that, passing away in 2014.

The perceptive reader will note how loving and also how prescient she was. 

Here are some excerpts:

“My dear nephew….

“I pray to the Lord that you are well and in union with your family and I also ask God that He might bless you with good health, peace, and wellbeing in this new year that began not too long ago. Amen…..

I’ll tell you that I received your letter in mid-February and it was stamped in Texas in December, 1994. Almost two months to arrive in my hands. This happens all-too-frequently in our country; mail arrives in Venezuela quickly, but there is far too much neglect….”

“Ricky, my dear son, this aunt of yours would so much like to … and know all that happens in your family. The mischiefs, anecdotes, and the rest of the acts of the “gang’ and in general of every one of you all.”

“I believe my memory is beginning to fail me. I think I’ll have to consult with a doctor to see if he can help me with a given medication. Sometimes I have difficulties maintaining a conversation because I forget a word or two or the name of a person or thing. This worries me and makes me feel bad. But I am fully conscious that this is the work of the ‘almanac’ which promotes havoc as time goes by.”….

“Ah! Lillian, a little birdie told me that, soon, God willing, another baby will arrive. Is it true? If so, may it please the Lord God that all goes well and that a little sister may arrive to accompany Elizabeth… [to Elizabeth’s dismay, it turned out to be another boy, Nathan. But the next birth was indeed a sister, Esther — RMB].”

“The truth, daughter, is that children are a blessing from God and are the joy of life for loving couples. That’s how I see it.”….

“Today, the third of April, I have heard on the noon news that a major embezzlement was discovered in SIDOR [the large steel works operation in Guayana, Venezuela’s interior. Refer to post, Guayana The Reverse Miracle — RMB]. I will be following this event. Our country fell into disgrace ever since the [mining industry was expropriated] during the time that Colombian [his opponents denied he was born in Venezuela — RMB], Carlos Andrés Pérez ruled, and the fanaticism of the political masses re-elected him [twenty years later] so he could finish the job of destruction. Now the people … expect the new administration to perform miracles in little time.”

[She, like many Venezuelans, was very frank in her assessments of all political leaders and parties — RMB]….

“Please forgive me for commenting on all this…. It hurts me that my country, so beautiful and with so much treasure in its soil, a country which should be at the top of the list of the world’s industrialized and developed countries is in such a disastrous condition. How far from today’s conscience are the writings of our Libertador, Simón Bolivar. No one even considers him or hearkens to him…. Unfortunately, in my thinking, none of those who have governed Venezuela have loved her in truth.”

In my godmother you can see and hear “the Spain” in the people of Venezuela — the courtesy, the simple erudition, the warmth, the transparency — and, in her regard for Bolivar, you can also sense “the France”. Finally, in her recognition of the corruption of her country’s leaders — “none … have loved her in truth” — you can see the inchoate recognition that something was wrong and had been wrong for a long time. These thoughts will be developed as we continue posting over the coming months.

I miss you, dear Tía.


*As much as possible.

Guayana: The Reverse Miracle (Guayana: El Milagro Al Revés)

Richard Barnes

The book is in Spanish, but richly deserves translation into other languages, especially English. However, those of you who read Spanish and have an interest in the massive industrial works of Venezuela’s interior and their catastrophic decline in recent decades, or have an interest in understanding how seemingly eternal, gargantuan enterprises can indeed be short-lived, will find this book of great interest.

Although its subject matter includes pretty technical themes (lots of engineering and mining, and capacity and waste, etc.), the author has a certain talent for making such esoterica comprehensible for those of us who are not versed in those professions but who do have an interest in Guayana (southeastern Venezuela, mostly the Venezuelan state of Bolivar) either because we were born there, or because we love Venezuela, or we simply want to understand what has happened in an area so critical for the well-being of a country

A few excerpts from chapter 11 will have to suffice to give an idea of the treasures inside, which will amply reward the interested reader:

“Sixty years ago, in what today is the industrial emporium of Guayana, all we had [there] was what Venezuelans would refer to as ‘bush and snakes’. Old San Felix was a small, ramshackle embarcadero for cattle driven from southern villages like Upata and Guasipati, to be shipped across the Orinoco to Ciudad Bolivar and from there to Trinidad, Carupano, or La Guaira [Caracas port]. Puerto Ordaz did not exist….

“From the years of [Medina Angarita and Perez Jimenez] steps were taken to conceptualize and realize a massive steel project with an experienced and renowned Italian enterprise and to begin construction of a small hydroelectric dam, today’s Macagua I, with 360 MW generating capacity….

“Later, towards the end of the 1960’s, a major expansion and modernization, Plan IV, were launched.

 “Those who have never visited Guayana have no idea of the magnitud of the wondrous Sidor. A look at the data at the end of the 1990’s, taken from one of the brochures that were then handed out to visitors who in those years engaged in ‘industrial tourism’ will give the reader an idea: ‘CVG Siderúrgica of the Orinoco, C.A., located on the right riverbank of the Orinoco River, in the Matanzas Industrial Zone, in Ciudad Guayana, Bolivar [state], 200 nautical miles from the Atlantic Ocean, sprawls over an area of 2,838 hectares of which 87 are covered. It includes 17 KM of perimeter fencing: 2 KM along the Orinoco River; 70 KM of paved roads; 132 KM of internal railroads; 13 mess halls; 19 production plants; 1 port with all modern facilities. For perspective: 2,838 hectares are about 28 square kilometers, which is double the municipality of Chacao [one of the larger municipalities of the Caracas area, the federal district]. It’s internal roads and highways covered 70 KM in length. Placed linearly, this would cover two round trips from Caracas to La Guaira [the capital city, in the northern mountains, to the major port on the coast]. Its 132 kilometers of railways would be enough to travel from Caracas to Maracay and some 20 kilometers beyond that. Or to go from Ciudad Bolivar [the state’s capital] to El Tigre [in another state]….

“All schools, hospitals, commercial buildings, manufacturing plants, universities, housing, buildings, stadiums, museums, theaters, and transportation infrastructure that exist in Venezuela and which were built in the last 50 years, were erected with rods supplied by Sidor or Sevensa-Sidetur [the private venture associated with Sidor]. That datum alone indicates how important Guayana is to Venezuela; but there is much more….”

The book is: Guayana: El Milagro Al Revés: El fin de la soberanía productiva (Guayana: The Reverse Miracle). I found it in Amazon.