Comments: Fujimori and Montesinos

Um, Tones...

I believe you linked to the wrong article though this one on Costa Rica and CAFTA was interesting...


Posted by Elena at October 18, 2007 12:08 AM

The actual translated article that Tony mentions can be found at

I had written a comment that was automatically censured with the following comment:

"Project Allende
Comment Submission Error
Your comment submission failed for the following reasons:

Your comment probably has a banned word in it and this program has a filter to block such things. Sorry! Please email me instead, TONES"

Tony, what gives? >:-(

Posted by Henry Austin at October 18, 2007 01:20 AM

Sorry a little probem with copy and paste ...
I fixed it on the site but the email may
still have the wrong link :(

Posted by TONES at October 18, 2007 02:37 AM

Enrique/Henry from Caracas is a friend who doesn't share my fondness for leftwing leaders especially his own. While Fujimori was hardly leftwing he sees many parallels with Fujimori and with his president Chavéz. Not being one for censorship I enclose his commentary:

"Curiously Fujimori's story as narrated by Raúl Zibechi parallels hugo
chavez' in many more aspects than not, specifically in his militarism,
authoritarianism, rampant and generalized corruption, manipulation of the
masses or populism, displacement of the original and legally elected
parliament through convoking a Constituent Assembly, where his more than
ample majority (minorities were inadequately represented through electoral
manipulations) produced a Constitution tailored mostly to his needs and reqs.
(to which Chavéz himself rarely adheres).
Finally his persecution and demonization of his staunchest dissidents,
includes methods from outright murder, to imprisonment on spurious or made
up charges.

The differences would be on the incapacity shown by chavez in the reduction
of crime levels (murder, robbery and kidnap have constantly and almost
expnencially risen since his government began), his unconditional support of
almost any and every left wing terrorist movement on the continent (most
notably and unquestionably towards the narco-terrorist farc colombian
group), and most conspicously his total incapacity to fuel a productive
economy (in spite of the oil dollars glut, and the consecuent monetary
liquidity, business has not thrived, apart from the banking sector which
have never had it better, but manufacturing and industry in general has seen
an almost constant decline through his regime), ineptness to stop inflation
(currency exchange controls and price controls have only fueled inflation
through economic distortion), and NO effect, or even a negative effect, on
the general poverty levels (as the constant and ever growing population of
homeless derelicts and children on city streets testifies each day).

It's almost funny how in many paragraphs of this article the references to
fujimori, Peru, Lima, etc., can be exchanged for chavez, Venezuela, Caracas,
etc., and still hold absolutely true.

So fascism will be fascism, be it left leaning or not..."

Que opinas?

Posted by TONES at October 18, 2007 05:47 PM

On the email the link is only to your page, so the error has been effectively corrected.

And Tony, my point is that he is NOT simply a leftwing leader, he is a FASCIST, period.

Posted by Henry Austin at October 18, 2007 07:06 PM

Henry my old chap,

Now I do have a little time to debate although "en fin" as you latins say it is your country, your vote, and your choice. I know you guys always say your vote is being stolen but I was there the penultimate election and it wasn't stolen it was democracy in action, the MVR candidate did win again.

But here we go:

That the Venezuelan economy is hemorrhaging to foreign shores is true. The rats probably do feel like they are leaving a sinking ship. They are definitely leaving a ship that has changed course as you should know as you are on it. That these funds are exiting at such an extraordinary rate partially because of the fact that your president Chavéz is taking some of the large strategic industries and privatizing them is also beyond doubt.

The question is not what is happening now but what will happen in the future. You argue that FDI is down or even negative in the country and it is but so what?

1st, FDI is a measure in my mind not of a positive thing but of a double edged sword: Foreign Direct Investment can have positive side effects on the receiver economy but is most likely to have positive affect for the investors abroad. An investment made from abroad in a good or service or natural resource within your borders, (i.e. they are buying something you have) is not done for your benefit.

2nd Venezuela with a barrel at 90+ does need FDI and would be in a much better position to be a donor of FDI than a poor recipient, you are donor here in Argentina and I don't think that it will turn out to be a bad investment in the end.

The question is what is this all coming to? State communism it is not but socialism, a mixed-state with a private sector and a supposedly ecological viewpoint is what this socialism of the XXI century is about. The theory s a flexible one and there is a fun little video made in Chile this year by the German responsible for the theory Dr. Dieterich has been in Latin America now for 30 years and I think he's a neighbor of yours right now.

Here is the link:

I also enclose below a very conservative review of the major state funds of the world from today's Financial times by their economist Wolf. Most of these funds invest their people's nationalized oil resources internationally for them. Maybe Chavéz should create such a fund independent of his own politics as a pension fund for your pension?

I pass the ball to you,

The brave new world of state capitalism

By Martin Wolf

Published: October 16 2007 19:55 | Last updated: October 16 2007 19:55

Ferguson illustration

Globalisation was supposed to mean the worldwide triumph of the market economy. Yet some of the most influential players are turning out to be states, not private actors. States play a dominant role in ownership and production of raw materials, notably oil and gas. Now states are also emerging as owners of wealth. This is creating widespread concern. Does that narrow focus make sense? The broad answer is No.

Fevered attention is currently focused on so-called “sovereign wealth funds”. As Standard Chartered shows in an intriguing analysis, carried out with input from Oxford Analytica*, these are not a new phenomenon: the oldest dates back to 1953. But today there are more funds, with far more money at their disposal than before. In all, they control some $2,200bn, with $2,100bn in the top 20 funds. The seven biggest belong (in order of estimated size) to Abu Dhabi ($625bn), Norway ($322bn), Singapore – GIC ($215bn), Kuwait ($213bn), China ($200bn), Russia ($128bn) and Singapore – Temasek ($108bn).

By definition, these funds exist because a country has a surplus of savings over investment that ends up in the hands of the government. In practice, this has happened for two reasons: ownership of commodity wealth (particularly oil and natural gas), and what amounts to forced savings from an export-oriented manufacturing economy, as in the cases of China and Singapore.

Where a country’s natural resource wealth is large relative to the size of its population, the fund should be seen as a different way to hold that wealth, for the long term. In the case of Russia, however, the aim is stabilisation, which implies a shorter-term horizon. China’s fund is a consequence of its massive reserve accumulations, which exceed the sums it can conceivably need for insurance. This has allowed the transfer of $200bn (maybe much more in future) to a new fund – the China Investment Corporation – with the goal of achieving a higher return than the miserably low one on the country’s official reserves.

How large are these funds? They account for approximately 1.3 per cent of the world’s stock of financial assets (stocks, bonds and bank deposits). But the total of $2,200bn is, notes the Standard Chartered report, bigger than the sums invested in hedge funds (at $1,000bn-$1,500bn) and private equity funds (at $700bn-$1,100bn). Nevertheless, it is dwarfed by the $53,000bn controlled by mature institutional investors (see chart).

Sovereign Wealth Funds

The sovereign funds remain far smaller than official foreign currency reserves (approximately $5,600bn). But the expectation is that these funds will grow rapidly, possibly to exceed official currency reserves in a number of years. If recent growth were to continue, the total value would reach $13,000bn over the next decade. This might then be 5 per cent of total global financial wealth.

How is the money used? Here the report distinguishes funds by their transparency and by the active, or strategic, nature of their approach to investment (see chart). Norway’s fund is conventionally invested (with widely distributed ownership) and transparent. Singapore’s funds are defined as transparent, but look for large ownership positions. Qatar’s fund is defined as non-transparent and strategic, as is China’s. But Lou Jiwei, chairman of the China Investment Corporation, insists that the new fund will operate on commercial lines.

Top Sovereign Wealth Funds

Is there any reason, then, to be concerned about the emergence and likely growth of such funds? As a general proposition, the answer is No. If a government operates a fund transparently and on normal commercial lines, with a wide range of investments and no dominant positions, as does Norway, one can only welcome its emergence as an investor. Questions should be raised only if a fund sought a controlling interest in a strategic company. Then two issues would arise, neither of them specific to sovereign funds: the first is whether the fund is a “fit and proper person” to control a company; the second is whether ownership might threaten a public interest.

Many sovereign wealth funds should raise no concerns whatsoever. The worrying ones are only those that do seek dominant positions or outright ownership of strategically important businesses. If the fund belonged to a government deemed potentially hostile, the concern must be bigger. It would be reasonable to keep control of companies operating in defence or high technology out of the ownership of funds belonging to any foreign government, let alone a potentially hostile one. But interesting questions arise elsewhere: what would people feel about Chinese government ownership of a big media operator?

In other respects, however, the concern with sovereign funds is too narrow. The big truth is that contemporary globalisation has brought players into the game that operate by different rules from those espoused by today’s high-income countries: vast state-owned companies, such as Gazprom; billionaires who have gained fortunes by a mixture of force and fraud; and funds owned by governments. Of these, the last may well turn out to pose the smallest problems.

My broad recommendation, then, is to consider the emergence of these funds as part of the integration of countries that accept a bigger role of the state in markets than western countries do today. So be it. It is better for such countries to prosper inside the market system than glower outside it. It is absurd to take a country’s exports of oil and refuse to allow it to buy assets, in return.

Yet not everything should be for sale. It is possible – indeed, necessary – to define a negative list of companies that are “off limits”. It is also reasonable to monitor the suitability of owners of large public companies. It would be wrong to exclude state-owned companies from bidding for such public companies. But it is quite reasonable to investigate how these have operated elsewhere. It is not unreasonable, after all, to believe that a state-owned company might not work on normal commercial lines. But it may do so, in which case no problem need arise.

Meanwhile, the owners of the sovereign wealth funds need to understand their own best interests. They should manage their money professionally and transparently. This is also the way to minimise friction with host countries. If they refuse to abide by these principles, they must expect trouble. Yet trouble should not go out of its way to look for them: far, far worse things can happen than for China to come to the west bearing the chequebook it has earned by its people’s remarkable efforts.

*State Capitalism: The Rise of Sovereign Wealth Funds, October 15 2007

VenEconomía Opina 18-10-2007
¡Ni espejo de China es!

> VenEconomia OpinaCold hard figures and facts... reminiscences of a sinking country
> VenEconomía Opina 18-10-2007
> ¡Ni espejo de China es!
> En el año 2006, China recibió $662.000 millones por inversiones extranjeras directas, lo que equivale a $510 por habitante y a un crecimiento del 54% con respecto a 2005.
> A decir de estas cifras, se puede deducir que el Gobierno comunista chino, considera que las inversiones extranjeras son importantes para el desarrollo de su nación y el progreso de sus habitantes.
> Sin embargo, quien parece que no piensa igual es su nuevo "aliado", el Gobierno comunista de Chávez. En los últimos años su sostenida política anti inversión, la inseguridad jurídica y la proliferación de leyes y decretos "socialistas" que traban la economía, han provocado un declive sustancial de las inversiones extranjeras directas en Venezuela. En la actualidad, Venezuela está a la cola de la región en materia de inversión extranjera directa, según el último informe de la Conferencia de Naciones Unidas para Comercio y Desarrollo.
> Entre 2002 y 2005, según la Superintendencia de Inversiones Extranjeras (SIEX), la inversión extranjera directa en Venezuela fue de escasamente $500 millones por año. Esto equivale a apenas $16,6 por habitante. Y en los primeros nueve meses de 2006, la inversión extranjera directa fue de unos pírricos $76 millones, monto que al ser anualizado llega a $3 por venezolano.
> En 2007, el panorama es aún peor. Antes se podía pensar que por lo menos las empresas que estaban en el país permanecerían en él. Sin embargo, los indicadores señalan que eso no es así. Ahora el problema se trata de desinversión: Por un lado, el capital no llega a Venezuela; y por otro, el capital nacional y extranjero se está marchando a galope.
> Muchas empresas se van de Venezuela por voluntad propia, buscando mejores oportunidades o para asegurar sus capitales ante la avanzada comunista que representan los cambios radicales propuestos por el mandatario a la Constitución de 1999. Algunos de los nuevos destinos de estos capitales son Colombia, Brasil o Costa Rica.
> A otras empresas (especialmente a las de países que Chávez tilda de imperialistas o que no le son sumisos) el propio Gobierno les ha mostrado la puerta de salida, al estatizarlas o cambiarles unilateral y arbitrariamente las condiciones contractuales de hacer negocios, entre ellas: AES, antes accionista principal de la Electricidad de Caracas; Verison (ex de Cantv); y las petroleras ENI, ExxonMóbil y ConocoPhilips.
> A todo esto se une, la huída de capitales de empresas medianas y pequeñas que día a día cierran sus puertas por el acoso legal, punitivo e impositivo del Gobierno dictatorial de Chávez.
> Una de las mayores fallas de este Gobierno es el empeño de aplicar un modelo económico que ha fracasado en todos los países donde se ha intentado imponer. El mejor ejemplo de ello es China, un país que estuvo sumido en la miseria cuando Mao Tse Tung, ha pasado a ser la tercera economía más grande del mundo, gracias a una política de libre mercado. Cabe señalar que la nueva Constitución de China garantiza la propiedad privada. El que tenga ojos que vea.
> Disponible en inglés en: a partir de las 4:00 p.m.

Posted by TONES at October 21, 2007 04:29 PM