Maduro “Announces” New Emergency Powers Decree May 15, 2016
Last Friday, President Maduro announced that he would extend the economic emergency powers decree (The same one that the National Assembly did not approve, but the Supreme Court said it did not matter) and announced that he would also decree a state of exception to “neutralize and defeat the external aggression against our country”
Now, you would think that given the importance of such a decree, the Government would have distributed a copy by now, but, no such luck, the details of the decree are unknown. Maduro will apparently issue it taking advantage of the Supreme Court’s ruling on the prior economic power decree, in which the “High” Court simply scratched part of the Constitution (Art. 339 of the Constitution, for example) saying the Assembly did not have to approve the decree.
Some people are calling this a “coup”. I disagree. You can’t have a coup when you already staged one. I can’t even recall when this happened and one could argue when it was. It may have been when Chávez was never sworn in in Jan. 2013, as Chavismo suggested this was simply a “formality”. Or it may have been when Maduro took over from Chávez for the new term, despite the fact that the VP is named by the President and there is no proof that Chávez was even conscious at the time. Or it may have been when the Supreme Court twisted and violated the Constitution dozens of time, just to have the Government get its way.
So many coups and nobody has been counting them, but this was not it!
And the funny thing is that just last week, the Venezuelan Foreign Minister went to the UN to say there was no crisis in Venezuela, no emergency. Funny, no? the President not only extends the economic emergency decree, but also expands it to include a state of emergency.
And it just so happens that during a state of emergency, there can be no public gatherings like those the opposition has been promoting to protest the recurrent delays in the processing of the request for a recall referendum vote against none other than President Nicolas Maduro. Each step of the process has been delayed, over-interpreted and postponed, using vaporous interpretations by the Government-controlled Electoral Board. Which, of course has everything to do with trying to delay a recall vote until after Jan. 10th. 2017, when if Maduro is recalled, his personally-chosen active Vice-President would replace him and complete his term until Jan. 2019.
And thus, the threat is not from the outside, as Maduro wants you or someone to believe, but from the inside: the fear that the opposition will increasingly take to the streets to force a recall vote before the fateful date of Jan. 10th. 2017.
Thus, the guessing game begins as to who the VP will be in January. Opposition lore will have it be current VP Aristobulo Isturiz, “someone we can talk to”. Forget it! Aristobulo does not have the red credentials, nor the trust of Chavismo, precisely because the opposition can talk to him. It will likely be someone who is in the Cabinet, someone Maduro trusts. Perhaps Marco Torre, a loyal former military a perennial Cabinet member. Perhaps better a civilian, Jorge Rodriguez, loyal to Chávez and Nicolas. But who knows? There is still a lot of time before January and maybe not enough people will show up for a recall after that date*.
*Maybe I placed too much emphasis on who will replace him, but the more I think about it, the more I believe that there will not be much motivation to change Maduro for someone else. Remember that the opposition needs to get more votes to recall than Maduro got in his Presidential election.
I suspect that it is of little interest to the press outside the country and inside there is quite a bit of censorship to keep real news off the air. I know for certain that CANTV blocks certain IP addresses and with the frequent power cuts the local DNS service is extremely slow. About a month ago I reset the DNS IP addresses in my computer to stop using the local service and instead use a public DNS service in the USA. My Internet quality of service has improved and I can access Dollar Today, blocked by CANTV, directly, no problem: https://dolartoday.com
I signed the recall petition on April 29. The man on the street does not know who will replace Maduro if recalled and does not seem to care. If Maduro is recalled then the VP takes charge and that is another Chavista so there really is no change. I don't see what the opposition thinks it will gain with the recall.
There is a lot of discontent on the street but it does not go beyond a lot of muttering. People are busy trying to make ends meet. Strange as it may seem, life goes on. For over a quarter of a century no one dared increase the price of gas. The price I now pay has gone up over ten fold and nothing has happened. To me it feels like a lack of leadership. Despite the 2/3rd supermajority in the National Assembly (AN) the opposition is powerless. The supreme court is packed with Chavistas and it blocks the AN at every turn.
The Last Days of Nicolas Maduro Foreign Policy Magazine By Peter Wilson 10 hours ago
CARACAS — On Feb. 14, Venezuelan President Nicolas Maduro warned his countrymen that the economic crisis they’ve been suffering through for months could last through 2017. He spoke not long after the supreme court approved his declaration of economic emergency, justifying his need for special powers.
What many doubt, however, is whether Maduro himself will be in power to witness an economic turnaround, as the pressures mount for him to step down or be pushed aside. “Maduro is facing a crisis encompassing economic, political, social and cultural factors,” said Caracas-based political analyst Dimitris Pantoulas. “It’s a perfect storm.”
And the president seems at a loss. A former bus driver who rose to become the country’s foreign minister and then vice president before succeeding the late Hugo Chávez in 2013, Maduro is beset by infighting within his own cabinet and divisions within his United Socialist Party of Venezuela (PSUV) that have left him scrambling to survive politically.
Maduro also faces a revitalized opposition calling for his resignation, soaring crime, a possible debt default, and now, water and power rationing exacerbated by El Nino. “The government is at the helm of a sinking ship, refusing to change course, and the opposition is content to stand by and let it happen,” says David Smilde, a sociology professor at Tulane University who has studied Venezuela for over 20 years.
Even though the president raised domestic gasoline prices 60-fold on Feb. 17 while devaluing the country’s currency by 37 percent, he also raised the country’s minimum wage and pledged to revise prices on goods and services set by the government. But he forecast no easing of government control over the economy, hinting that it would only increase. Those measures “will do nothing to resolve Venezuela’s problems,” Luis Oliveros, an economist at the Central University in Caracas, said in an interview. “They will cause more inflation, and more distortions.”
Maduro has only himself to blame. For the past two years, he has promised to overhaul his government’s economic policies to deal with crushing shortages that have turned toilet paper and hand soap into luxuries, and soaring inflation that has given Venezuela the dubious honor of boasting the world’s highest inflation rate.
It all could have turned out differently. On March 15 of last year, the outgoing assembly, where the PSUV held a majority, granted Maduro the power to rule by decree, effectively allowing him to implement new laws without congressional approval. But Maduro failed to enact any economic changes, fearful of the political repercussions that a currency devaluation or cutbacks in social spending would unleash. That inaction led voters to punish Maduro and his party in December, when the opposition won a crushing victory in legislative elections, giving them control of the National Assembly for the first time in nearly 17 years.
Hoping to blunt opposition initiatives, Maduro asked the new assembly to grant him emergency powers to right the economy. Its members refused, but their decision was overturned last week by the Supreme Court, where PSUV partisans hold a majority. That body ruled that Maduro didn’t need legislative approval to declare an emergency. And so emergency it is.
Maduro now has 60 days to take steps to right the economy. Oliveros and others maintain that the only way to resolve the country’s economic woes is to dismantle state control over prices, foreign exchange rates, and to cut subsidies and social spending, all of which Maduro refuses. Instead, he seems to opt for greater state control.
“We have to regain this country and remake its production, distribution, and retail systems,” Maduro said in a televised address on Feb. 12, arguing that greater government control was essential to blunt an “economic war” allegedly being waged against his government by the country’s business elite, and exiles in Miami and Spain.
Almost everyone agrees that Venezuela, which has been unable to develop what are the world’s largest oil reserves, is in deep trouble. Economists forecast that inflation could top 700 percent this year, and that the economy could shrink by an additional 8 percent after last year’s 10 percent contraction.
The country’s currency, the strong bolivar, now trades at more than 1,045 to the dollar on the black market, in stark contrast to the official exchange rate of 10 bolivars to the dollar. Production of crude — which accounts for about 95 percent of the country’s hard currency revenue — continues to fall, and the state oil company is slashing investments to save funds. And staring the country in the face is more than $13 billion in debt payments this year that have raised fears of a default that would cut Venezuela off from capital markets.
Angela Munoz, a 52-year-old housewife in the town of El Consejo, has had enough of Maduro and his promises. She wakes up at 4 a.m. every morning to be among the first in line outside her neighborhood supermarket in hopes of buying hard-to-find items like corn meal, flour, laundry detergent, or coffee. She often wakes up to find the water to her apartment has been cut off, thanks to Venezuela’s ongoing drought.
After spending her day looking for food, she hurries home before 6 p.m. to avoid the thugs who live in her neighborhood. She and her neighbors only have police protection until late afternoon, when the security forces withdraw. The police claim that they can’t defend themselves, let alone the community, against better-armed gangs.
Munoz can no longer find medicine for her 75-year-old mother, who suffers from hypertension and diabetes. Now, she fears that the government has done nothing to confront an outbreak of the Zika virus in her town. Her husband can’t use his motorcycle because he can’t find spare parts.
“Just when I think life can’t get any worse, it does,” Munoz moaned. “I had hoped things would get better when the opposition won control of the assembly. I thought that Maduro would have to work with them to find solutions. It’s obvious that he only wants to stay in power, and we have to suffer the consequences until he is replaced.”
Venezuela’s opposition coalition, the Democratic Unity Round (MUD), has set a deadline of six months to force Maduro peacefully from office, either by a recall referendum or constitutional amendment that would shorten his term, which is currently due to end in 2019. “There is a huge majority who want change,” opposition leader and Miranda State Governor Henrique Capriles Radonski warned on Feb. 17. “This is a crisis that is accelerating each day and the government doesn’t want to do anything to change it. Our only option is to change the government.” Capriles, who lost narrowly to Maduro in a special election in 2013, says the opposition should pursue both routes — the amendment and the recall, both — to ensure Maduro’s removal.
But the MUD has moved carefully, especially after the Supreme Court ruled that three opposition legislators couldn’t take their seats, while it studied allegations of voter fraud.
Those three lawmakers would have given the opposition a two-thirds majority, sufficient to rewrite laws, replace ministers, and recall Maduro. The court hasn’t said when it will make a final ruling on the trio. In the meantime, they are waiting to see what the court rules, and may have to run again in a special election.
While the court dithers, the assembly has been concentrating on smaller projects: granting property rights to recipients of government housing, raising pensions and benefits, and freeing political prisoners, while pressing the government to advance its economic proposals. The opposition is letting “the government stew in its own juices,” Smilde said. “The opposition is essentially letting the government spend what political capital it has resisting change, in order to push for an end to Maduro’s presidency.”
The fear of a social explosion may result in an internal coup against Maduro, as PSUV activists and the military high command seek to protect their positions and the riches they have accumulated under 17 years of chávismo, the social, political, and economic movement created by Chavez that sought to redistribute the country’s oil wealth but according to the government’s dictates. “Maduro may be offered up as a sacrificial lamb, [replaced by a] new leader put in place by the PSUV,” Yorde said. “A new government then might try to work with the opposition in a unity government.”
Whatever happens, change can’t happen too soon for Munoz.“I can’t imagine any changes being worse than what we have right now,” she said. “It’s time to turn the page.”
Queues, queues, queues, people stand in line for hours not to go to a show or buy an iPhone but to buy basic necessities that are in short supply. To make matters worse, the government has implemented various types of rationing which forces people to go shopping more often.
Two things the article does not mention: 1) scalpers, "bachaqueros." The bachaco is a large ant that can be seen carrying leaves and twigs bigger than they are to their nest. These scalpers become street vendors with customers who don't wish to waste their life in queues. They charge a very large markup because they are buying at ridiculously low controlled prices. 2) While there certainly are shortages, more every day, people willing and able to pay full price don't have to queue up. The queues are for controlled price items.
But clearly the people have spoken giving the opposition a 2/3 super-majority in the National Assembly. Belatedly the government is realizing that the situation is ready to blow up, not that they can do much about it having destroyed industry, having wasted and stollen fortunes, having ignored maintenance, and with oil at record low prices.
Are Venezuelans at the Breaking Point? Foreign Policy Magazine By Daniel Lansberg-Rodríguez and Francisco Marquez Lara February 18, 2016 5:14 PM
There was a time when the word “Venezuela” conjured up oil wealth, beauty queens, and baseball players. Today all those things are overshadowed by flag-themed tracksuits, histrionically ranting leaders, and, above all else, lines, lines, lines. The dramatic collapse of the economy, thanks to chronic mismanagement and plunging oil prices, has made queues — las colas, as they are locally known — the most visible symptom of the country’s failed revolution. And they’ve gotten far worse under President Nicolás Maduro.
Since coming under government control in 2014, Ultimas Noticias, one of Venezuela’s highest circulating national newspapers, has become a wellspring of rosy observations. Last week, it published an article that succinctly sums up the tragic surrealism of everyday life in what was once South America’s wealthiest country. Noting that waiting in long lines has become an unavoidable part of everyday life (“whatever the reason”), and duly asserting that “life wasn’t made solely to satisfy our tastes, wants and preferences,” the author offered a series of helpful tips to make the best of queue-standing:
“Try to stay cheerful, friendly, and make fun conversation with those next to you in line as well as behind and ahead; read; make sure to bring an umbrella and a snack; do breathing exercises; meditate and focus creative energy on the general good…”
And if those suggestions weren’t uplifting enough, the author added a bit of advice on how to improve one’s relationship with the supernatural: “For those who are religious or philosophical, it’s a marvelous moment to take stock and gauge the advancement of your spirituality.”
Venezuela’s vigorous manufacture of such banalities is, of course, nothing new. A few years back, a well known pro-government blog argued that waiting in line is actually beneficial, because it makes people value their goods and protects them against impulsive purchases. That the tone has since changed from extolling hidden opportunity to counseling weary patience is telling: the public’s rising frustration has become impossible for the government to shrug off.
That hasn’t kept it from trying, and high-ranking regime officials increasingly struggle to manage the citizens’ exasperations. Urban Agriculture Minister Lorena Freitez recently offered a reminder that “[before socialism] we had full supermarkets but empty refrigerators” — the implication being that current shortages must be a kind of progress, if everyone has an equally limited access to food. For any Venezuelans unmoved by such interpretations, Congresswoman Jacquelin Farías from the ruling United Socialist Party responds with a call to stoicism. “Just leave your house with your little bag, and you go buy what you need, then go home,” she declared recently. “That’s revolution, and it’s what our president has asked of us, so let’s just enjoy these exquisite lines.”
Readers may be forgiven for finding hints of Kafka in such statements, but for those who actually have to stand in the lines, the situation is more reminiscent of Dante. And it’s not just the lines — the most basic services that underpin any modern society have fundamentally broken down. Even in the coddled national capital, Caracas, trash collection has been severely limited, electricity and water are heavily rationed (and often unavailable), and food and medicine are increasingly difficult to find even for those who do brave the interminable queues. Every day, social media platforms like Twitter and Facebook are peppered with desperate pleas for help in acquiring medications: often from anguished parents for their children. (Needless to say, Health Minister Luisana Melo’s recent conjecture that Venezuelans “use more medicine than anywhere else in the world,” and that scarcity could readily be solved if Venezuelan were to curb their “irrational” lust for pharmaceuticals, has not been warmly received.)
Lissette García belongs to what was once the Caracas middle class. The 48-year-old single mother of two has a steady job, but she worries she may lose it given the amount of time she spends in line each week. “Sometimes you wait in line for many hours only to find they don’t have the products you need,” she says. “It’s humiliating.” Increasingly she’s been asking her mother, 77, to spell her in the queues — though she worries about her mom braving the tropical sun, not to mention the company. “It’s frightening,” Garcia says. “You’re massed together with strangers from every part of the city, at all hours, and anything can happen.” She doesn’t just mean those standing in line with her. Caracas is, after all, one of the world’s most crime-ridden cities, and citizens stuck in slow-moving lines that stretch for blocks sometimes prove sitting ducks for the city’s many motorcycles gangs.
Aracelis Ibarra, a 74-year-old cancer survivor from a low-income part of town, has become the person sent to brave the lines for her family. “[The authorities] don’t respect one’s age in most places, so you wait there like everyone else,” Ibarra says. She worries that as scarcity has become more acute, and lines longer, people have become more aggressive. “People sell their spaces to others,” she complains, referring to the new cottage industry of professional queuers that has cropped up. These entrepreneurs sometimes even advertise their services in local newspapers. “[Other times people] cut in line or attempt to buy all the products, and that’s when fights break out,” Ibarra says. In the chaos that results from such situations, businesses are sometimes sacked and would-be shoppers injured, interactions that are sometimes caught on cell phone cameras and uploaded to YouTube.
Such frustrations represent a dangerous prospect for the government. Back in 2014, the country saw a rash of larger public disturbances that paralyzed much of the capital but were nonetheless primarily contained to middle class areas. The last large-scale citywide civil strife, known as the Caracazo riots, took place in 1989, when public resentment of IMF-backed economic reforms exploded in a burst of anarchy and looting that lasted a week, and killed many hundreds. The current government’s mismanagement of the economy and country’s subsequent economic collapse have made new reforms, similar to those that preceded the Caracazo, appear increasingly unavoidable. Given the vast supply of grenades, Kalashnikovs, pro-government paramilitaries, and narco-trafficking gangs in today’s Caracas, the damage and death toll of a new outbreak of mass violence would likely be even worse.
Meanwhile, in some ways, the misery of standing in line — which afflicts both the middle and lower classes — is uniting Venezuelans against their government. Since a particularly sought-after good may become ephemerally available on short notice anywhere in the city, desperate shoppers are often forced far outside their familiar neighborhoods. In this way las colas are bringing people from different social classes like García and Ibarra together, both physically and in shared frustration. Polls taken just before December’s legislative elections, when Venezuela’s opposition gained a congressional supermajority, showed that “scarcities” and “lines” represented the first and third highest ranked “national problems” (sandwiching “crime”) among potential voters.
So despite the government’s herculean efforts to mollify Venezuela’s frustrated people and keep class divisions high, time spent waiting in lines — useful though it may be for improving one’s spirituality — may also be forging an ever stronger and more unified consensus against an inept ruling party on its last legs.
Almost two years and ten months to the date of his election in 2013 and two months and 11 days after leading his party to an embarrassing defeat, Nicolas Maduro announced the first real economic measures of his almost three year old administration.
But the measures turned out to be miniscule…
In fact, what the Venezuelan President announced today was likely insufficient in April of 2013, when he was sworn in, when the parallel rate of exchange stood at Bs. 25 per US$, but may have had a bigger impact on the distortions in 2013 than it will have now. Chavismo continues to be trapped in its own distortion field, fearing adjusting the economy, but at the same time implementing a very meek adjustment which will likely be received badly by the population. If Maduro was going to take the blame for an adjustment, he should (and could!) have gone further than he did and the population would have not been able to measure the difference in impact on inflation and problems than this softer adjustment will have.
It took the Venezuelan President four hours of rambling to get to the real measures he proposed. He talked about the Economic War, created Productive (!!) Councils for each State in Venezuela and talked about a “new” Venezuela, as if Chavismo had recently been elected.
Some of the announcements had leaked, as Venezuela’s and PDVSA’s bonds, which had been strong in the morning, soared right before the speech, gaining as much as 12% in price for the day before the market closed, but before the detailed announcements had been made. Maybe it will be a matter of “buy on the leak, sell on the news”, now that the details have been revealed.
The first important announcement by Maduro was the first increase in the price of gasoline since Chávez was first elected in 1998. In fact, then candidate Chávez asked President Caldera to hold off on scheduled increases until after the election. Thus, the price of gasoline in Venezuela has stayed constant for over 17 years. While the rate of exchange has gone from Bs. 0.57 per US$ to Bs. 1,045 per US$, the price of gasoline had been kept constant at Bs. 0.097 per liter (US$ 0.000097 per liter or US$ 0.0004268 per gallon). So you get it, in this post in 2014, I filled my car in Caracas in 2014 with about 10 gallons of gas and paid the equivalent today of barely 4.2 cents in US$ for the ten gallons to fill up.
So, today Maduro increased the price of 95 octane gasoline from Bs. 0.097 per liter to Bs. 6 per liter, a 6,000-plus percent increase, but in the end:
Venezuela went today from having the cheapest gasoline in the world, to having the cheapest gasoline in the world.
How cheap? Well, if you consider a standard 14 gallon gas tank, at Bs. 6 per liter, you will be paying to fill up the tank a total of US$ 0.37 or all of 37 cents in US$. That is how cheap it will continue to be.
Obviously, this is a positive, but whatever positive there was in the announcement, was erased rather quickly with the announcement that the difference between the old and the new price will be placed in a “new” fund to support social programs. Thus, PDVSA will not benefit from the increase, the money will go into a non-transparent fund run by Maduro and the increase will likely be used in new expenditures, doing little to close the fiscal deficit.
And to top it all off, the 91 octane gasoline, was only increased to Bs. 1 per liter (one tenth of a cent). This gas has lead in it and currently 70% of the gasoline consumed in Venezuela is the higher no-lead grade, since it is basically free. Thus, I see two problems: One, people may start using the cheaper grade to save pennies, but damaging their car and creating more pollution. Two, the difference in cost of manufacturing the two gasoline types is small, so it makes little sense to have such a difference, if what you want is to get back some of the cost of producing it.
In the end, Maduro could have gone higher in both prices and made the two prices closer and the “people” would not have minded or would have blamed him for inflation as much as they will anyway. He would have also reduced the incentives for smuggling gas to Colombia, which remain quite high. (A liter of gas in Colombia runs around 1 US$, versus 0.6 US$ cents in Venezuela)
Next, Maduro announced that he will “simplify” the current foreign exchange system. He said there will be only two rates (There will be three, he ignored the parallel rate), eliminating one of the three “official” rates currently in effect. Thus, Maduro announced the devaluation of the Bs. 6.3 per US$ rate to Bs. 10 per US$ rate for essentials (food and medicine), while moving everything else to a floating (floating not free) which he said would start at the current Simadi rate (Bs. 202.9 per US$ today). In the end, all this does, is move the absurd travel allowance rate from Bs. 12 to Bs. 202.9 per US$, where it will continue to be a perverse subsidy for the rich that can travel.
This is probably the worst of the announcements made. With the parallel rate of exchange at Bs. 1,045 per US$ today, it simply reduces the profit of the arbitrageurs from Bs. 1,038 per US$ to Bs. 1,035 per US$, maintaining and sustaining the reasons for the huge corruption surrounding the foreign exchange office CENCOEX and the contraband of goods to Colombia and to a lesser extent Brazil and the Caribbean. This racket is dominated by the Venezuelan military.
Finally, Maduro announced a minimum salary increase of 20% from Bs. 11,557 to Bs. 13,720. (Divide by 1000 and you will gulp!) What can I say, people really need it, but in an environment of extremely high inflation and with no measures to really stop the process, in two months, another increase will be needed. And another one…
And the people will still be even further behind that they are today.
I could talk about the other non-announcements Maduro made, but by now, you have been as patient with me, as I was with Maduro today.
And that would be the antonym of miniscule. Which is that you have been enormously patient to get here! Thanks!
(Maduro also made a very vague announcement of a debit card for poor families, which sounded like Manuel Rosales’ Mi Negra card in the 2006 Presidential election, but he gave very few specifics of how much it will involve in Bolivars and who would be eligible and why)
Argentina used to be the leading economy in Latin America based on exports and industry until Peron and his wives ruined the country. Apparently economic sanity is returning to the country. Maybe to LatAm.
A morality tale in Argentina’s debt epiphany A newly elected president is near a deal to end Argentina’s long debt woes. The country’s 15-year saga provides a lesson for a world awash in red ink. Christian Science Monitor By the Monitor's Editorial Board 3 hours ago
One of the world’s longest sagas over a debt default may soon be coming to end. Argentina is nearing a final deal with foreign creditors – almost 15 years after it first defaulted on nearly $100 billion that it owed. A successful conclusion to the extended legal battle could offer a morality tale for a world awash in red ink.
What is the tale? It is that Argentines decided last year to elect a new president, Mauricio Macri, who, like a returned prodigal son, has quickly begun to shed many of the country’s profligate habits and plans to abide by the obligations of global financial rules.
“We have to be a predictable and trustworthy country,” he said. “Argentina wants to have a good relationship with the whole world.”
Largely cut off from world capital markets and foreign investments, Argentina’s economy has stagnated. Mr. Macri’s election was a turning point for the resource-rich South American nation, whose wealth per capita was once on par with Canada’s. While Argentina’s 43 million people have practical economic reasons to make good on the nation’s sovereign debts, the legal drama has also helped. Many of the creditors were able to convince a United States federal judge, Thomas Griesa, to impose tough restrictions on Argentina’s assets around the world.
It also helped that Judge Griesa labeled Argentina’s actions as “immoral.” In fact, Argentina’s snub of its creditors pushed the International Monetary Fund, which helps rescue countries in financial trouble, to stiffen its rules. “No More Argentinas” become a mantra at the IMF.
The issue of morality is often woven into today’s international struggles over debt collection or debt leniency. Since the 2008 financial crisis, the European Union has pushed Greece to curb its overspending and its lapsed tax collection before receiving loan bailouts. Greece is not alone in the EU. Many European banks remain saddled with nonperforming loans, which may total more than $1 trillion. And the official debts of Italy and Portugal are still at dangerous levels.
China could be dealing with the biggest case of moral hazard in financial obligations. The debt of its corporations, most of which are state-controlled, has risen to an estimated 140 percent of China’s gross domestic product. That is about double the debt-to-GDP ratio for US corporations. The possibility of massive debt defaults in China is a major reason for the global economic slowdown.
Argentina’s final solution to its debt may be unique but the uniqueness only shows that the legal and moral rules for debt resolution are not yet set in stone. The IMF has changed its rules in recent years as each financial crisis demands specific solutions. The IMF, for example, bent its rules to help Ukraine solve its debt woes despite the country’s apparent inability to pay. The action reflected the West’s concerns about Ukraine falling under Russian control.
This month, the IMF announced it had again reassessed its debt-rescue rules. This time the agency hoped to be able to send the proper signal to any country tempted to renege on debt obligations.
Debt is a necessary tool for individuals and countries to support each other. But it also is tied to virtues such as honor and respect. “There is a moral as well as a purely economic case for the global marketplace,” says Steven Weisman , author of a new book, “The Great Tradeoff: Confronting Moral Conflicts in the Era of Globalization.” To set rules for global commerce, he adds, requires the morality of global cooperation.
As Argentina returns to the fold of international credit markets, its story should elevate the search for the best legal – and moral – standards to honor debt obligation. It shouldn’t take a country some 15 years to figure out the right course.
Salas, a teacher with no practical experience, is a voodoo economist. Right after the election Maduro doubled down but since someone has told him to mend his ways. I wonder who the power behind the throne is, Cuba? China?
Venezuela replaces hardline economic czar after 1 month Associated Press February 16, 2016 10:28 AM
CARACAS, Venezuela (AP) — Venezuela's President Maduro has replaced his economic czar just five weeks after appointing the hardline leftist as the country grapples with increasingly bleak economic indicators and fears of default.
Maduro said Monday Luis Salas is leaving his post as vice president for the economy for family reasons.
He will be replaced with a more business-friendly figure, Miguel Perez, who had been serving as commerce minister. Perez previously led a business chamber and has said that Venezuela must simplify its byzantine exchange rate system.
Salas had sparked concern among the opposition by blaming the Venezuela's mounting economic problems on sabotage. Salas said the country was suffering from the world's worst recession and triple-digit inflation because business interests are colluding with the U.S. to sabotage the economy.
Critics of the socialist administration blame inflation on government spending without sufficient revenues, flooding the economy with currency.
Shortages and inflation have become top concerns among Venezuelan voters, many of whom spend hours each week waiting in line for goods that are increasingly impossible to afford.
Local media had reported in recent days that Salas favored suspending Venezuela's payments to foreign creditors.
Maduro, who recently secured decree powers to make economic policy, said he would deliver further news in the coming days. Rumors have been swirling for weeks that the government is about to make a major announcement like raising gasoline prices or formally devaluing the currency.
This I got to see to believe. CAP was kicked out of office when he raised the price of gas. At $0.95 a liter at the new official rate of BsF 10 per dollar, filling the tank will cost between BsF 400 and a BsF 1000 compared to today's 4 to 10 range. Although it's certainly the right economic move I doubt it will help raise Maduro's popularity.
For comparison, a kilo of potatoes (2.2 pounds) costs BsF 500.
Venezuela imposes gasoline hike, currency devaluation AFP 34 minutes ago
Caracas (AFP) - Venezuela's President Nicolas Maduro said Wednesday he would raise the price of gasoline and devalue the bolivar currency, as he faced growing pressure to ease an economic crisis.
The socialist leader said he would raise the pump price of premium gasoline from its current super-low level of $0.01 per liter to the equivalent of $0.95 at the fixed official exchange rate.
The move risks sparking protests in a country where citizens are struggling with soaring inflation and shortages of basic foods and goods.
"This is a necessary action, for which I take responsibility," Maduro said in a televised address.
Venezuela has the biggest known oil reserves in the world, but has suffered from the plunge in world oil prices over the past year and a half.
With the previous subsidies, a Venezuelan could fill a car with gasoline for the equivalent of less than a dollar at the state-fixed exchange rate.
A similar gasoline price hike in 1989 sparked deadly riots in the volatile nation.
Maduro also said the government would "simplify" the country's complex exchange rate regime from Thursday.
The current three-tier system of exchange rates will be slimmed down.
From Thursday there will be just two rates: a protected official rate for food and medicine imports and a parallel "floating" rate for other transactions.
Under the rate for food and medicine, the bolivar will weaken by 37 percent from 6.3 to 10 bolivars to the dollar.
Analysts will be watching closely to see what levels the bolivar reaches against the dollar at the floating rate.
Is Paris safe? Are American schools safe? The excessive worry about safety is paralyzing. Americans have lost their freedom to government security agencies like the ones guarding airports. There was a time when no one could ask you for an ID in America. No longer. Now you are not you but whatever a piece of plastic says you are. Humans have domesticated themselves. What a pity.
A long time ago my mom was knocked down by a purse snatcher in Caracas. She was mad as hell and she decided she no longer wanted to live in such a savage country. Maybe Canada. A week later she got a letter from her niece in Montreal with the news that she had been robbed!
The world is so safe and bland that now people jump out of airplanes without a parachute to get some excitement back in their lives.
Perhaps it is non of my business but why do you live in Venezuela?
It's my country and a lovely place it is!
What are sailors saying about Venezuela? I stopped collecting these stories in 2008 because Chavismo had practically destroyed the cruising industry long with everything else. It seems we are getting our country back.
Why is the government team afraid of the media all of a sudden?
Maduro's economic team pulled out at the last minute saying they would only participate if it was closed to the media, Ramos said.
Venezuela lawmakers to reject economic crisis plan AFP By Ernesto Tovar January 22, 2016 2:16 PM
Caracas (AFP) - Venezuelan opposition lawmakers vowed to reject on Friday President Nicolas Maduro's bid to decree a state of economic emergency, deepening a political crisis in the oil-rich nation.
Friday is the deadline for the opposition-controlled National Assembly to vote on Maduro's decree, which would give him special powers to intervene in the economic crisis.
A refusal to pass it will prolong a tense political standoff in the volatile South American state, where citizens are suffering shortages of food and goods.
The opposition speaker of the congress, Henry Ramos Allup, accused Maduro's government of failing to adequately inform lawmakers of the details of the decree so they could debate the plan.
"It would be totally irresponsible for the National Assembly to blindly approve a decree of such magnitude, scope and implications, without having any information because the government itself refused to provide it," he said on television.
He said earlier that lawmakers suspended a session of the assembly in which the government was due to defend the decree because the ministers did not show up.
Maduro's economic team pulled out at the last minute saying they would only participate if it was closed to the media, Ramos said.
Senior pro-government officials accused the center-right opposition, which this month took control of the assembly for the first time in 17 years, of trying to turn the session into a "media show."
View galleryThe chairs for the ministers summoned to a parliamentary … The chairs for the ministers summoned to a parliamentary session to explain the emergency decree rem … The decree, issued a week ago, would give Maduro 60 days of extraordinary powers to combat a deep recession and triple-digit inflation.
It allows for the administration to commandeer private companies' resources, impose currency controls and take "other social, economic or political measures deemed fitting."
The opposition as well as some businesses and unions have warned it is a threat to free enterprise and jobs.
- Tense political standoff -
Announcing the decree last week, Maduro admitted Venezuela was in a "catastrophic" economic crisis.
He called on the assembly to approve the decree and "help me navigate this crisis."
But he vowed to resist any shift towards what he called "neoliberal" policies.
View galleryVenezuelan President Nicolas Maduro (L) speaks with … Venezuelan President Nicolas Maduro (L) speaks with the president of the opposition controlled Natio … "You will have to come and overthrow me if you want to pass a privatization law. No, no and no!"
The same day Venezuela's central bank released its first economic growth and inflation statistics in more than a year.
The figures showed the economy shrank 4.5 percent in the first nine months of 2015.
Annualized inflation in September hit a painful 141.5 percent, fueled by crippling shortages.
Maduro said his emergency plan would allow the government to shore up its health, housing, education and food services.
He vowed to overhaul the country's system of production to shift it away from the oil revenue on which his social spending programs have relied.
Venezuela has the world's biggest known crude oil reserves but the price of oil has plunged over the past year and a half, slashing its revenues.
The opposition has branded the socialist policies of Maduro and his predecessor Hugo Chavez a failure.
It wants to scrap government's price and currency controls.
The head of the congressional commission examining the decree, lawmaker Jose Guerra, said the opposition would make its own economic proposals to the government.
"Our interest is in resolving the crisis, but it is not going to be resolved through the government's policies," he said Friday on television channel Globovision.
The commission opened a session about 1530 GMT on Friday to discuss the decree. The full assembly was due to convene later.
Analysts say the political deadlock threatens to worsen the hardship that drove voters to hand the opposition a landslide election victory last month.
They have warned of the risk of a repeat of violent street clashes that left 43 people dead in 2014.
The debate took place against the backdrop of more grim economic news as the International Monetary Fund predicted that inflation in Venezuela would more than double in 2016, reaching 720 percent.
Venezuela congress nixes Maduro request for emergency powers Associated Press By HANNAH DREIER January 22, 2016 5:58 PM
CARACAS, Venezuela (AP) — Venezuela's opposition-led congress on Friday rejected President Nicolas Maduro's request for emergency powers amid a plunging national economy, the depths of which were dramatized by an IMF estimate that inflation this year will top 700 percent.
Ruling party and opposition lawmakers accused each other of trying to run the country into the ground in the first major congressional debate Venezuela has seen in more than a decade. Critics of the socialist revolution kicked off by late President Hugo Chavez took control of congress last month for the first time in 17 years.
Maduro had proposed an economic emergency decree that would give him expanded authority for 60 days. In the past, when it was dominated by first Chavez's and then Maduro's allies, congress made a habit of approving these kinds of exceptional powers.
The opposition argues that Maduro is responsible for raging inflation and chronic shortages dogging daily life here, and is promising to oust him within six months.
The debate took place against the backdrop of more grim economic news as the International Monetary Fund predicted that inflation in Venezuela would more than double in 2016, reaching 720 percent.
The South American nation already suffers from the world's highest inflation and a crushing recession. The IMF estimates that prices rose 275 percent last year in Venezuela, while the economy contracted by 10 percent.
Ahead of the final vote on his decree, Maduro announced he had approved a change that will allow the country's small export sector to use a more favorable currency exchange rate. He scolded opposition activists for "turning their back on the country."
"They're bent on the politics of sterile confrontation," he said as state television began promoting the slogan "irresponsible opposition."
Opposition leaders rejected the decree as a trap intended to make them look intransigent and unwilling to fix the economy.
"We're not closing any doors. On the contrary, today we opened the door to a serious discussion," majority leader Julio Borges said. "We're not looking to double down on the same policies that got us into this crisis. What we need is real change."
The government has lost control over the press. Independent reporters are now allowed into the National Assembly (parliament) and can report what happens. The two thirds landslide victory shows that people have had enough of the revolution and now they can get the juicy details as well. The end of Chavismo is now only a question of time.
Venezuela President Gets Rare Live TV Criticism By HANNAH DREIER, ASSOCIATED PRESS CARACAS, Venezuela — Jan 15, 2016, 10:44 PM ET
In a stunning display of Venezuela's tense new political order, President Nicolas Maduro suffered through a long scolding from the head of the country's new opposition Congress Friday after presenting his state of the nation address.
Congress leader Henry Ramos wagged his finger inches from the embattled president's head in a rebuttal that was broadcast live across the South American country — unprecedented media access for an opponent of the country's socialist revolution.
It had already been a night of firsts. Neither Maduro nor his predecessor the late President Hugo Chavez ever had to contend with a hostile audience for their state of the nation speeches. Critics of the administration took control of the institution last week for the first time in 17 years.
Maduro himself had mostly bad news to share.
Hours earlier, the Central Bank released key economic data for the first time in more than a year, showing an economy in shambles and for the first time acknowledging what analysts have long said: That annualized inflation has surged into triple digits.
Maduro described the numbers as "catastrophic" and devoted most of his three-hour speech to what he called a "monstrous attack" on the economy by business owners and other foes of the leftist government.
In his rebuttal, Ramos took a professorial tone as he laid out the opposition's view that Maduro himself is responsible for the crisis.
"If you don't want to hear this, close your ears or leave," he warned as Maduro sipped from a coffee cup and checked his watch in the next chair.
"If you give in to the desire to have more and more bolivars with the same number of dollars, your bolivars are going to lose value," Ramos said, referring to the country's plummeting currency.
The sight of an opposition leader lecturing the president on a live television feed all networks were required to carry shocked even ardent supporters of the sharp-tonged new congressional leader. Maduro rarely exposes himself to questions from independent reporters, much less questioning from political opponents. And few broadcast networks carry opposition events.
Maduro had taken an unusually conciliatory tone in his address, calling for dialogue even as he warned the opposition that it could easily get overconfident and lose the next election. He also vowed to block one of its key initial projects: Giving people who live in government housing the title to their homes.
"No, no and no, we will not permit it," Maduro said during one of the most dramatic moments of his speech. "You'll have to get rid of me first."
The opposition has pledged to do just that, issuing a six-month deadline to hold a recall election.
Maduro mentioned in passing that his newly appointed Vice President Aristobulo Isturiz had spoken this week with U.S. Vice President Joe Biden and a high-ranking U.S. diplomat.
Ahead of his speech, Maduro declared an economic emergency giving him 60 days to unilaterally enact sweeping reforms. He later hand-delivered the decree to the head of Congress to be debated next week, but it's not clear that the government will wait for approval to enforce it.
Venezuela, which has the world's largest oil reserves, has suffered enormously as the price of oil has crashed from above $90 a barrel two years ago to just $24 today. Analysts say that means Venezuela is dangerously close to just breaking even on the oil it produces, which accounts for 95 percent of export earnings.
The country's economy contracted by 7.1 percent during the quarter that ended in September 2015, and inflation reached 141.5 percent, according to the new Central Bank data.
Maduro echoed many Venezuelans' fears Friday when he said he hoped the coming year would see peace, "not senseless violence that could lead anywhere."
I can live with a pragmatic socialist but clueless ideologues are dangerous.
Young socialist hardliner will lead Venezuela's economy Associated Press By HANNAH DREIER 1 hour ago
CARACAS, Venezuela (AP) — President Nicolas Maduro is doubling down on his existing economic policies with the appointment of a young leftist hardliner to head the country's cratering economy, setting up a potential confrontation between the ruling socialist party and the newly powerful opposition.
Luis Salas, the new 39-year-old vice president for the economy, has scant administrative experience, but champions the same theories of price and currency controls that have defined Venezuela's leftist economic policy for 17 years.
Like Maduro, Salas says the country is suffering from the world's worst recession and triple-digit inflation because business interests are colluding with the U.S. to sabotage the economy.
He even goes further than Maduro in arguing that many of the country's problems are the result of being too capitalist.
A professor at the Bolivarian University, an institution created by the late president Hugo Chavez, Salas was relatively unknown before this week. But he has outlined his economic philosophy in a large collection of open letters and pamphlets.
"Inflation doesn't exist in real life," he wrote last year.
He added that prices go up not because of scarcity, but because of "capitalist economies that are driven by the desire for personal gain through the exploitation of others; by selfishness."
Along with shortages, inflation has become the No. 1 concern among Venezuelan voters, many of whom spend hours each week waiting in line for goods that are increasingly impossible to afford.
After the opposition swept Dec. 6 legislative elections, Salas wrote an open letter in which he attacked as "pragmatists" those people within the socialist camp who were floating the possibility of devaluation, a move that outside economists agree is a necessary first step for righting the economy.
Disbelief at the president's choice for a new economic czar echoed in opposition circles Wednesday night, with some speculating Maduro might be trying to drive the economy into the ground.
Since its landmark victory, the opposition coalition has been split between those who favor negotiation with the government and those who want to start to remove Maduro from office. The new appointment and the socialists' combative rhetoric since the new congress was seated Tuesday could silence opposition voices favoring dialogue.
Socialist supporters have supported appointment of the new economic czar. Some pro-government people rallied in downtown Thursday morning to protest the opposition leadership's removal of portraits of Chavez from the gold-domed capitol building.
Maduro named other hardliners to top spots Wednesday as part of a larger cabinet reshuffle he says is intended to protect the revolution during a new political era.
He also created a new urban agriculture ministry and announced that he and first lady Cilia Flores had taken up urban farming themselves.
"Cilia and I keep 50 chickens at our home. It's time to start building a new culture of production," he said.
The government deputies walk out, the press is allowed in. I love this part:
The opposition also opened the doors of the assembly to dozens of independent journalists, who had been barred from the legislature for years. In a scene few Venezuelans are accustomed to, one of them asked the unsuspecting First Lady (and elected legislator) Cilia Flores a question about two of her nephews, who are facing drug charges in a U.S. jail. Like other chavistas, who never take questions from independent media outlets, Flores seemed perplexed by the journalist’s gall, refusing to answer while fixing him with a malevolent glare.
An Ominous Opening for Venezuela’s New Parliament Foreign Policy Magazine By Juan Cristóbal Nagel 23 hours ago
The building that houses Venezuela’s single-chamber legislature, the National Assembly, is a small, gold-domed capitol built in the late nineteenth century. The hall where the debates take place is just big enough to fit the 163 legislators who were sworn in on Tuesday for a five-year term. Following a landslide win last December, a large majority of them belong to the opposition.
But 45 minutes after taking their oaths, the pro-government minority decided the quarters were too cramped, and promptly left the building. (Oddly, lawmakers from the ruling party hadn’t found anything objectionable about the chamber while they were still in the majority.)
The excuse was an alleged breach in the rules governing the debate, but it was the overall atmosphere that forced them to go for fresh air. For the first time in the 17 years since the late Hugo Chávez swept into power, the opposition has firm control of one of the branches of government. This proved too much for the chavista legislators to handle, and their walkout foreshadows the tensions ahead.
The ceremony itself was part pageantry, part Venezuelan soap opera. The building was surrounded by three rings of military personnel who briefly blocked opposition legislators’ access to their new workplace. Several Metro stations around the capitol were closed to the public. Chavista paramilitary gangs had threatened to block access to the building in order to “protect the Revolution.”
Once inside, the new majority quickly began enacting symbolic changes. One of the first was to take down giant pictures of Chávez and of President Nicolás Maduro that had presided over the main debate hall since the former’s death and the latter’s subsequent election.
The opposition also opened the doors of the assembly to dozens of independent journalists, who had been barred from the legislature for years. In a scene few Venezuelans are accustomed to, one of them asked the unsuspecting First Lady (and elected legislator) Cilia Flores a question about two of her nephews, who are facing drug charges in a U.S. jail. Like other chavistas, who never take questions from independent media outlets, Flores seemed perplexed by the journalist’s gall, refusing to answer while fixing him with a malevolent glare.
The incoming president of the assembly, Henry Ramos Allup, was respectful of his colleagues in the minority, giving each side their turn. This was a striking departure from previous practice. In the previous chavista-dominated legislature, some opposition legislators were physically assaulted, others arbitrarily deprived of their parliamentary immunity. On several occasions, parliamentary leaders stripped opposition members of their speaking rights.
Ramos, a bookish 73-year-old and one of the few Venezuelan politicians with roots in the pre-Chavez political era, struck a conciliatory tone. He urged lawmakers to bring the country together and find solutions to pressing economic problems. But he also vowed to push the government to implement urgent reforms.
The government is in no mood for dialogue. In the last few weeks, it has stacked Venezuela’s top court with party loyalists. These new judges promptly moved to trim the opposition’s two-thirds majority by blocking the swearing-in of three legislators pending the resolution of an election dispute in the Southern state of Amazonas. (The deputies in question did not attend yesterday, and it is unclear what consequences this will have on the opposition’s ability to exercise its supermajority) The court’s ruling was based on shaky evidence, as demonstrated by the fact that even the chavista-controlled election commission certified the two-thirds majority. However this particular conflict is resolved, efforts by government-friendly judges to undermine its opponents will continue.
Moreover, on Monday, the government stripped the incoming National Assembly of any oversight over the Central Bank, taking away its power to nominate candidates to the bank’s board and to force directors to reveal economic or financial information. Crucially, the government also gave the Central Bank freedom to finance the executive branch, thus allowing Maduro to bypass the legislature to fund his massive budget deficit.
Despite all this, the opposition is determined to press ahead. It has pledged to pass an amnesty law that will free political prisoners. It has also vowed to cut Maduro’s term short via some sort of referendum in case the government does not cooperate. The chavista courts will likely have something to say about all of this.
A clash between the two forces seems inevitable. The legislature can pass all the laws it wants, but the institutions who implement them – the courts and the executive branch – are all firmly in chavista hands.
This means that Venezuela is in the throes of a full-blown constitutional crisis. Nobody can predict how it will play out, but if history is any guide, the military will play an important role in the outcome.
In the meantime, the country’s economy is in freefall. As the two sides bicker, Venezuela suffers from the world’s deepest recession and its highest inflation rate. The price of oil, the country’s top export, is tanking. And the Maduro administration has no idea what to do.
Watching Venezuela is seldom boring, and the swearing-in of the new National Assembly proved it. But the entertaining theater makes it easy to forget that this is a country of 30 million people living through an economic maelstrom, a president with no answers, and now, a divided government. The showdown in the National Assembly suggests the Venezuelan tragedy has a few more acts before it finds its resolution.
In the photo, opposition legislators argue with pro-government legislators during the new Venezuelan parliament’s swearing-in ceremony in Caracas on January 5, 2016.
Workers remove Chavez’ giant poster from National Assembly building
While I am far away, I could not help but be glued to the events in Caracas today. While it was certainly not a smooth day, it was a great day for Venezuela. A day of hope and possibilities, a bright day for the future of democracy in the country. A very important day for Venezuela’s history and the image above clearly shows that change is in the air. The statues have yet to fall, but it’s coming. The beginning is here, let’s see how long it takes to get to a good point.
I will start with the most important signs of the day:
They got rid of the Chavez portraits. Demagoguery is no way to run a modern country. Maduro has done a great job of discrediting Chavismo.
Venezuela opposition sets out to oust government AFP By Maria Isabel Sanchez 27 minutes ago
Caracas (AFP) - Venezuela's opposition laid claim Wednesday to a big legislative majority that could empower it to oust President Nicolas Maduro.
The opposition has vowed to find a way to get rid of Maduro within six months.
It has taken control of the National Assembly for the first time since 1999, the year the late socialist leader Hugo Chavez came to power.
At its first regular legislative session on Wednesday, the opposition-controlled assembly swore in three anti-government lawmakers, defying Maduro who had secured a court injunction to suspend them.
The three extra deputies boost the total number of opposition seats in the legislature to a two-thirds "supermajority" that could enable them to remove Maduro by constitutional means.
The government side vowed to charge the opposition with contempt of court.
The number two in Maduro's leadership, former assembly speaker Diosdado Cabello, said the swearing-in of the suspended deputies "flagrantly violated the constitution."
- Removing Chavez's portrait -
Opposition leaders earlier had portraits of the socialist government's hero Chavez removed from the assembly building.
"I don't want to see portraits of Chavez or Maduro. Take all this stuff away to the presidential palace, or give it away," the new speaker, Henry Ramos Allup, told workmen who were removing the portraits, in a video released by his staff.
He said his side would within six months propose a way "to change the government by constitutional means."
Maduro responded: "I will be there to defend democracy with an iron hand. They will not make me give ground or waver."
But on Wednesday, he announced a reshuffle of his government.
In elections on December 6, the opposition MUD coalition won a majority in the assembly for the first time in nearly 17 years.
Under Venezuelan law, with a two-thirds majority, the opposition could from next April launch measures to try to force Maduro from office before his term ends in 2019.
But it was not clear whether they will succeed in pushing ahead at odds with the court injunction.
The government side insisted any legislation passed with the votes of the suspended deputies would be null.
Cabello said the government would "paralyze" the assembly by withholding its budget from the treasury.
"No change of government is easy. Everything will depend on the situation in the country in a few months," said Juan Manuel Rafalli, an expert in constitutional law.
"I foresee great social conflict and enormous pressure for change."
- US 'interference' -
One of the first measures the opposition wants to pass is an amnesty for some 75 political prisoners, but Maduro has vowed to veto that move.
The US State Department backed the call for political prisoners to be released, with spokesman John Kirby calling Tuesday for a "transparent" resolution of the dispute.
Venezuelan Foreign Minister Delcy Rodriguez rejected that as "interference," in a Twitter message.
December's election result was widely seen as a protest by voters over the state of Venezuela's economy.
It threw up the toughest challenge to the president's authority and Chavez's socialist "revolution" since Maduro took over from his late mentor in 2013.
Venezuela has the world's biggest known oil reserves but has suffered from a fall in the price of the crude on which its government relies.
It is in deep recession, with citizens suffering shortages of basic goods and soaring inflation. Now they face the uncertainty of a political conflict.
"If the government uses its institutional control in a focused way, it could get its way in the short term," said analyst Luis Vicente Leon, head of polling firm Datanalisis.
"While the Chavistas and the opposition get involved in a political debate, the people will feel a great lack of solutions to their main problems."
Chavez was very much the product of the terrible mismanagement of our two old mainline parties AD and COPEI that ruled the country for half a century. Now they've elected an old combative ADECO to lead the opposition in the National Assembly. Big mistake.
The irony is that during all those years I voted for AD as the lesser evil. This old article of mine might be of interest:
August 6, 2006 Uslar Pietri, Venezuelan Democracy's Undertaker
Arturo Uslar Pietri was considered one of the leading Venezuelan intellectuals of the 20th century. He certainly was entertaining and educational on TV where he addressed his "invisible friends." He was also a failed politician who ran for president and lost badly. Carlos Andrés Perez (CAP) was of the opinion that, having failed to reach power via elections, Uslar Pietri was trying to reach a position of power through machination.
Combative Venezuela opposition leader will head congress Associated Press By HANNAH DREIER 10 hours ago
CARACAS, Venezuela (AP) — An outspoken opposition leader known for embracing confrontation was chosen Sunday to head Venezuela's new congress when it opens in two days as a counterweight to the socialist administration.
The newly elected opposition majority voted to make Henry Ramos Allup the president of the National Assembly when it is seated Tuesday. The new session will be the first time foes of the administration have had control of any government institution in more than a decade.
Ramos, 72, is a divisive figure that government supporters love to hate as much for his acerbic tongue as for his leadership in the once-hegemonic Democratic Action party that co-governed Venezuela for decades before the late President Hugo Chavez won power in 1998 and began his leftist program.
Ramos' rival for the legislative presidency was Julio Borges, 46, a member of the Justice First party, a newer, moderate movement that won the biggest bloc of opposition seats.
Although Ramos hasn't joined in street protests against the government, he won with the help of opposition hard-liners who favor such demonstrations and other confrontation with President Nicolas Maduro's administration. Borges' party advocates a focus on negotiation and elections.
Ramos said the new National Assembly will show Venezuelans a more democratic way forward.
"We ask the people to watch us, to demand more of us, and keep an eye on what we do to make sure that we honor our commitment," he said.
Ramos' supporters praise him as an experienced operative well-positioned to wrangle the dozens of parties that make up Venezuela's opposition coalition and stand up to what is sure to be an offensive by the administration.
Skeptics say Ramos is too prone to spouting off and plays into the government's attempts to paint the opposition as entitled snobs nostalgic for the days when elites ran Venezuela.
The opposition won a crucial two-thirds legislative "super-majority" by a single seat in the Dec. 6 elections and it will need to corral every lawmaker to get through the most dramatic policies.
But policy and strategy disagreements within the opposition will make it hard to get the most high-stakes votes through, said R. Evan Ellis, a professor of Latin American studies at the United States Army War College Strategic Studies Institute.
"I suspect that the government will also use a combination of personal inducements and legal intimidation to try to coopt some of the members of the new congress," he said.
The opposition has long been split between moderates and hard-liners, and the two sides have exchanged barbs since their coalition's landslide victory over the socialists.
Even as the scale of the victory was still settling after polls closed, some opposition members began talking jubilantly about taking steps to remove Maduro and rewrite the constitution while others cautioned that the voters wanted economic reforms rather than a political fight.
Justice First leader Henrique Capriles, a governor who narrowly lost to Maduro in the last presidential election in 2013, called the opposition's legislative victory a vindication of his party's focus on building electoral support district by district. His party won 33 of the opposition's 112 seats in the new congress.
In recent weeks, Capriles has lambasted opposition leaders who have advocated street activism, particularly a wave of protests that shut down parts of Venezuela in 2014 and resulted in dozens of deaths.
Carpriles said that if the opposition had continued to pursue open confrontation in the streets, the coalition would never have won congress. The street protest movement "must be named among our greatest national failures," he told the Venezuelan weekly Tal Cual.
Supporters of Capriles' chief rival, the imprisoned hardline opposition politician Leopoldo Lopez, angrily rejected that criticism. Lopez's father, Leopoldo Lopez Gil, tweeted that he was glad Capriles is a governor and doesn't have a seat in the "new, brave congress." He also backed Ramos' leadership bid.
Lopez has been sentenced to more than a decade in prison in connection with his leadership of the 2014 protests, and he consistently polls as one of the nation's most popular leaders along with Capriles.
The government has so far showed few signs of willingness to negotiate. The outgoing congress filled the Supreme Court with newly appointed judges, and the court last week barred three opposition lawmakers from being sworn in.
Ramos on Sunday reiterated the opposition's pledge that all 112 lawmakers would take their seats despite the ruling, setting the stage for a showdown. Both the opposition and supporters of the administration are promising to convene at the National Assembly building Tuesday.
Government dirty tricks in the open, they are trying to block the opposition's 2/3 rd. supermajority by preventing three or more deputies from taking their seats. The so called Supreme Court is nothing but a Chavista rubber stamp having been stuffed with Chavista acolytes. One of the aims of the supermajority was to clean up the Supreme Court.
While I understand the desire of the winners to get their rewards I don't think that supermajority is a good idea either. Too much power makes any and all governments dangerous, precisely the reason the Founding Fathers insisted on separation of powers, checks and balances. I love gridlock, it keeps rulers in check.
Venezuela opposition: Court blocking of 4 lawmakers a 'coup' Associated Press By HANNAH DREIER December 31, 2015 9:56 AM
CARACAS, Venezuela (AP) — Venezuela's opposition is calling a Supreme Court decision that bars four recently-elected lawmakers from taking their seats in the National Assembly part of a "judicial coup" and has vowed to uphold the voters' will when a new session starts next week.
The high court released a decision late Wednesday suspending the inauguration of four of the lawmakers declared winners after the opposition swept Dec. 6 legislative elections. Three are anti-government and one is a member of the ruling socialist party. The ruling comes in response to a challenge filed by supporters of the socialist party. The court did not explain the legal justification behind its decision.
The ruling could undermine the opposition's newly won two-thirds legislative "super-majority" and limit its power.
Opposition leaders are pledging that the barred lawmakers will attend the first session of the new congress on Jan. 5. Lawmaker Julio Borges, one of two favorites to be the next assembly president, said President Nicolas Maduro could not be allowed to overturn the will of the people.
"The National Assembly represents the sovereignty of the people, and the president is trying to violate that using a biased court," he wrote on Twitter. "On Jan. 5, we will swear in the National Assembly and preserve that sovereignty as the Venezuelan people and international observers look on."
The opposition won a landslide victory earlier this month, taking control of congress for the first time in more than a decade. The coalition captured 112 of 167 seats, giving it a crucial two-thirds majority by one seat. That super-majority would allow government critics to censure top officials and could open the door to recalling Maduro or even rewriting the constitution.
Opposition coalition spokesman Jesus Torrealba released an open letter Wednesday asking international bodies including the United Nations and the European Union to help stop the government from stealing back control of the legislature.
"The country, the region and the world face a judicial coup d'état attempt against the decision the Venezuelan people made at the ballot box," he wrote.
The ruling has not provoked popular unrest in the middle of weeks-long winter vacations. In Caracas, the streets were unusually empty, save for groups of people launching fireworks and drinking rum in anticipation of the new year.
But Tuesday's swearing in ceremony could be a tinderbox. Government supporters have promised to rally outside the National Assembly, and the opposition is calling for government critics to join all 112 elected deputies in a march to the building.
The hardline members of the opposition who led a wave of bloody 2014 street protests are calling for a show of force.
"The best response to this moribund regime is to show in the streets how many of us there are on Jan. 5," opposition leader Freddy Guevara said.
George Gilder was/is a brilliant fellow but he is no investor and the Gilder Days ended badly because he didn't have an exit strategy and I was too green to know that one need such a strategy. Yes, I'm still investing and learning but now I'm entirely self directed so I have no one but myself to blame or congratulate for my results. I post about investing as captainccs at The Motley Fool. Investing is a fascinating world!
Venezuela's soccer chief fighting extradition to US Associated Press 2 hours ago CARACAS, Venezuela (AP) — Venezuela's longtime soccer chief is fighting his extradition to the U.S. from Switzerland and asking to be judged in his home country on charges of corruption at soccer's governing body.
Lawyers for Rafael Esquivel told Venezuelan newspaper El Universal Wednesday that they've asked prosecutors to request his extradition.
Esquivel was arrested in May in Zurich as part of the U.S. and Swiss investigations into corruption at FIFA. In seeking his extradition to Venezuela his lawyers may be betting that the 69-year-old could benefit from his political connections in the socialist administration of President Nicolas Maduro or receive a more lenient punishment such as home arrest if he pleads guilty.
Venezuela's soccer federation, which Esquivel led since 1988 until the time of his arrest, declined to comment.
The Venezuelan National Guard is corrupt to the core.
Venezuelan officials accused of taking drug pay-offs in U.S. indictment Reuters By Nate Raymond 1 hour ago WASHINGTON (Reuters) - Two senior Venezuelan officials facing U.S. drug trafficking charges are accused in an indictment of taking payments from narcotics traffickers and alerting them to drug raids, according to a person with knowledge of the case.
Nestor Reverol, the head of Venezuela's National Guard, and Edylberto Molina, a former deputy head of the anti-narcotics agency and currently a military attache posted in Germany, are named in the indictment that prosecutors are preparing to unseal, people familiar with the case told Reuters.
In addition to tipping traffickers off about raids, the two are charged with taking other steps to hinder anti-narcotics investigations, the person told Reuters on Wednesday.
Reverol, the former head of Venezuela's anti-narcotics agency, would be one of the highest-ranking Venezuelan officials to face U.S. drug charges. He could not be reached for comment.
He has previously rejected U.S. accusations that Venezuela has failed to curb illicit drug shipments and has touted the National Guard's success in cracking down on the flow of cocaine from neighboring Colombia.
Venezuela’s embassy in Berlin did not respond to an email requesting contact information for Molina. The diplomat has been a general in the National Guard, which is the branch of the armed forces that controls Venezuela's borders.
A National Guard official did not immediately respond to a voice mail seeking comment. An Information Ministry official said the ministry had no comment on Reverol.
The indictment pending in federal court in Brooklyn, New York, which the people said was expected to be unveiled in January, comes as the United States investigates the suspected involvement of senior Venezuelan officials in the cocaine trade.
The National Guard issued a series of Tweets in Reverol's defense on Tuesday night using the hashtag #NestorReverolSoldierOfTheFatherland and saying he should be praised for capturing more than 100 drugs bosses.
In televised comments on Wednesday, Socialist Party leader Jorge Rodriguez accused the U.S. Drug Enforcement Administration (DEA) of drug trafficking in Venezuela and said the accusations were an "aggression" against the country's armed forces.
“There are two countries, one that produces drugs and another that shoves it up its nose. One produces and the other consumes, and neither of those two countries is Venezuela," he said, referring to Colombia and the United States respectively.
The U.S. Justice Department and the DEA have declined to comment on the case.
U.S. prosecutors have unsealed indictments charging at least five former Venezuelan officials with drug trafficking crimes over the past four years, according to records from Florida and New York district courts.
Venezuelan President Nicolas Maduro dismisses charges of official involvement in drug trafficking as an international right-wing campaign to discredit socialism in Venezuela.
Two other former officials with the National Guard have been indicted on U.S. drugs charges in recent years.
One of them, former captain Vassyly Villarroel Ramirez, was indicted in 2011 on cocaine-trafficking charges. The U.S. Treasury put Villarroel on its drug "kingpin" list in 2013, and Venezuela arrested him in July on drug trafficking charges.
Lawyers for Villarroel could not be reached for comment.
Two nephews of Venezuelan first lady Cilia Flores were arrested in Haiti last month and indicted in federal court in Manhattan on cocaine trafficking charges. They are scheduled to next appear in court on Thursday.
(Additional reporting by Julia Harte in Washington and Brian Ellsworth in Caracas; Editing by Stuart Grudgings)
The number of seats is 167, not 165 as I reported earlier and 2/3rds of 167 is exactly 112. There are three levels of majority to approve different kinds of laws and appointments. Earlier the discussion was about wether maduro could stifle a simple majority by the opposition but the supermajority sweeps away those fears. Having the supermajority means that the opposition can start dismantling the rubber stamp supreme court which has been one of the enforcers of the Chavista dictatorship. The Chavista dictatorship tried hard to wear sheep's clothing and in many ways it succeeded. That is now over.
I worry when any party has absolute majority in all three powers, executive, legislative and judiciary. It's a recipe for extremism and abuse. Our democracy started to go wrong when AD controlled both the presidency and the legislature. Not only was it a rubber stamp congress but it went so far as to give the president powers to rule by decree thereby taking congress (themselves) out of the game. The result was a poor presidency that ended with Carlos Andres Perez (CAP) being removed on trumped up charges. From there to Chávez was just continual decline as people got fed up with the so called democrats who, by the way, were also socialists.
When Chávez got the National Assembly to give him the same powers congress had given CAP, the opposition cried foul. But the example had been set by the so called democratic powers decades earlier. In fact, many of the things Chávez did which the opposition criticized, had already been done during the democracy. My friends hated me for pointing this out.
I'm not defending Chávez in any way, I'm condemning democracy without working separation of powers. I love split governments, gridlock, it's safer that way.
The election and the aftermath has been very quiet. The Chavista thugs (Círculos Bolivarianos) didn't take to the street. Maduro recanted on his previous threat to take power by force if they lost the election. Evidently electoral fraud was minimal or non-existent. Yesterday I was talking to an ex-sergeant of the national guard who had been dismissed early in the Chávez years when Chávez was padding the military in his favor. He commented that someone must have put the fear of god into top government people for this to happen. I really don't know how things happen at those levels and rumors are as abundant as flies.
My hope is that many of the Chavista mismanagements, to give them a kinder name, will be reversed, like selling under-priced oil to other socialist governments, we can't afford it and we don't need to buy their votes at the UN or at the OAS. That was Chávez's motivation. But I also hope that it does not turn into a witch hunt. We all must live in the same house.
Julio Borges, the fellow pictured below, is a good candidate for president of the National Assembly. He ran for the presidency of the republic but he just does not have the public personality to create enough of a following.
Venezuela opposition wins supermajority in National Assembly
Associated Press JOSHUA GOODMAN December 8, 2015
Opposition lawmaker Julio Borges, who was reelected to Congress, gives thumbs up as he arrives for a news conference in Caracas, Venezuela, Monday, Dec. 7, 2015, one day after congressional elections. Venezuela's opposition won control of the National Assembly by a landslide in Sunday's election, stunning the ruling party and altering the balance of power 17 years after the late Hugo Chávez was elected president. (AP Photo/Fernando Llano)
CARACAS, Venezuela (AP) — Venezuela's opposition won a key two-thirds majority in the National Assembly in legislative voting, according to final results released Tuesday, dramatically strengthening its hand in any bid to wrest power from President Nicolas Maduro after 17 years of socialist rule.
More than 48 hours after polls closed, the National Electoral Council published the final tally on its website, confirming that the last two undecided races broke the opposition coalition's way, giving them 112 out of 167 seats in the National Assembly that's sworn in next month. The ruling socialist party and its allies got 55 seats.
The publication ends two days of suspense in which Maduro's opponents claimed a much-larger margin of victory than initially announced by electoral authorities, who were slow to tabulate and release results that gave a full picture of the magnitude of the Democratic Unity opposition alliance's landslide.
The outcome, better than any of the opposition's most-optimistic forecasts, gives the coalition an unprecedented strength in trying to rein in Maduro as well as the votes needed to sack Supreme Court justices and even remove Maduro from office by convoking an assembly to rewrite Hugo Chávez's 1999 constitution.
Although divided government should foster negotiations, Maduro in his first remarks following the results showed little sign of moderating the radical course that voters rejected.
Even while recognizing defeat, the former bus driver and union organizer blamed the "circumstantial" loss on a right-wing "counterrevolution" trying to sabotage Venezuela's oil-dependent economy and destabilize the government.
On Tuesday, Maduro visited Chávez's mausoleum in the 23 of January hillside slum where the government suffered a shock loss in Sunday's vote. Accompanied by members of his top military command, he accused his opponents of sowing discrimination and class hatred, cautioning workers who voted for the opposition that they would regret their decision to abandon support for the government.
"The bad guys won, like the bad guys always do, through lies and fraud," said Maduro. "Workers of the fatherland know that you have a president, a son of Chávez, who will protect you."
Hardliners in the notoriously fractious opposition seem similarly inflexible, preferring to talk about ending Maduro's rule before his term ends in 2019 rather than resolving Venezuela's triple-digit inflation, plunging currency and the widespread shortages expected to worsen in January as businesses close for the summer vacation.
Moderates however are calling for dialogue to give Maduro a chance to roll back policies they blame for the unprecedented economic crisis. But with most Venezuelans bracing for more hardship as oil prices, the lifeblood of the economy, hover near a seven-year low, even they recognize the window for change is small and closing fast.
"If Maduro doesn't change we'll have to change the government," Gov. Henrique Capriles, who lost to Maduro in 2013 presidential elections, told The Associated Press. "But the opposition's response to the economic crisis right now can't be more politics."
Taking over the legislature by winning an election was the easy part. For a dictatorship to stay in power it has to be ruthless. Chavismo was not ruthless enough for its own good. Initially it relied on Chavez's charisma something that Maduro tried to imitate but failed to deliver. Defection from Chavismo at the top has been ongoing. A large number of Chavistas were socialist ideologues who left the party as they became disillusioned with how the country was being run. This has been ongoing for well over a decade. Just yesterday I met one such defector, a historian who had helped write the 1999 constitution and who was in the seat of power. He quit the party on ideological grounds. At the other end of the scale, there is the economic defector and their number is large enough to swing elections by landslides:
"I used to be a proud Chavista," said Rodrigo Duran, a 28-year-old security guard who switched allegiance in his vote on Sunday. "But how can I carry on when my salary doesn't allow me to feed my children? They deceived us."
The great difficulty is to bring the country back to economic health. Setting price controls is comparatively painless but it introduces terrific economic distortions. Just last week I paid $0.75 for a haircut. For the country to get back to economic sanity prices have to fit into the globalized economy. Our haircuts don't have to be priced at the same rate as in Los Angeles or Miami but they have to be high enough to allow the barber to buy products whose prices are globally set or at least influenced by global commerce. This adjustment, eliminating price controls, can be very painful, certainly much more painful than setting price controls in the first place. This pain was the reason a previous president, Carlos Andrés Pérez, was indicted (on trumped up charges) and removed from office.
Some countries, like Red China, managed the transition quite well. Others, like Russia, did not. How well will Venezuela cope?
The National Assembly has 165 deputies and three levels of majority for approving different types of legislation. The opposition has gained absolute control. Maduro has conceded. Total 165 diputados 1/2 mayoría simple 83 diputados 3/5 99 diputados 2/3 mayoría calificada 110 diputados
When the announcement was made the opposition had won 99 deputies, the Chavistas 46 and 20 were still undecided. The opposition estimates to have won a total of 113 which would give them absolute control of the legislature.
To tell the truth, I was not a believer in such a landslide victory.
La Asamblea tiene 165 diputados y hay tres escalas de mayoría para la aprobación de diferentes tipos de leyes. La oposición obtiene control absoluto, la llamada "mayoría calificada." Total 165 diputados 1/2 mayoría simple 83 diputados 3/5 99 diputados 2/3 mayoría calificada 110 diputados
En este momento quedan 20 diputados por decidir, la oposición obtiene, por ahora, 99 escaños y la oficialidad 46. La oposición cree que cuenta con 113 diputados para tener mayoría calificada.
Oposición obtiene mayoría calificada de la AN con 99 diputados
La presidenta del Consejo Nacional Electoral (CNE) Tibisay Lucena presenta al país el primer boletín oficial con tendencia irreversible de las elecciones parlamentarias de este domingo 6 de diciembre.
Lucena anuncia los resultados con una participación fue del 74,25% y con una transmisión del 96,3% de las actas.
La Mesa de la Unidad Democrática (MUD) obtuvo un total de un total de 99 diputados.
Mientras que el Partido Socialista Unido de Venezuela (Psuv) ha obtenido hasta ahora 46 escaños.
"Le decimos a los ganadores que deben celebrar, administrar sus triunfos", comentó.
As the hand-picked successor of Hugo Chávez, the country’s longstanding former leader, Maduro inherited one of the most innovative and successful propaganda models in the world, developed by Chávez between 1998 and 2002. Why hasn’t Maduro been able to use it?
If one has to grant Chavez an ability it was charisma. Two people who were not Chavistas but who had the opportunity to meet the man in person told me personally about his magnetic personality. One told me about the back stage happenings at an Aló Presidente where Chavez would greet workers by name and ask about their problems. Maduro, by contrast, was the most inept person he could find for the job of vice president. As a management consultant I discovered that the qualifications for high management position in Venezuela is trustworthiness. Owner want someone who they can trust not to defraud them. In politics they want someone who won't take their power away from them. Maduro was such a choice, bus driver and body guard! I recall riding the subway before the election that made Maduro president. A Chavista woman was saying out loud, for all to hear, that Maduro would be a disaster. Her words were prophetic.
The Slow Death of Chavismo
Foreign Policy Magazine Daniel Lansberg-Rodríguez December 6, 2015
Venezuela’s president, Nicolás Maduro, seems to be stumbling towards electoral defeat in the country’s legislative elections today, potentially triggering a long goodbye for the country’s seventeen-year-old socialist revolution. Polls show that, while Venezuelans may differ somewhat when assigning blame for their country’s ongoing economic collapse, discontent is nearly universal and only about 20 to 25 percent approve of the president himself. As the hand-picked successor of Hugo Chávez, the country’s longstanding former leader, Maduro inherited one of the most innovative and successful propaganda models in the world, developed by Chávez between 1998 and 2002. Why hasn’t Maduro been able to use it?
Hugo Chávez’s 14-year stint at the helm of Venezuela’s revolutionary government produced many uncertainties for its population: a new constitution, radical reforms, soaring inflation, and a veritable boom in street crime and urban violence, to name but a few. But for most of that time, one thing was certain. Every Sunday, viewers could watch Chávez’s television talk-show Aló Presidente, an eclectic mix of variety show, televangelical preaching, real-time government, and musical extravaganza. Chávez used his show, which was broadcast on the state television channel, to share his views on matters ranging from baseball to geopolitics, answer phone calls from the populace, share personal anecdotes, or spout his trademark ideological pedagogy, liberally peppered with outbursts of song.
On the show, Chávez would expropriate businesses, renounce Venezuela’s membership in international associations, and expel ambassadors; he might even indulge in mobilizing troops to the Colombian border or announce modifications to the flag, currency, and other national symbols. For many Venezuelans, Aló Presidente represented a window into national events and decisions, taking place in real time — a reality show which affected the lives of its viewers. Chávez also used the show to reward his supporters with gifts and patronage with the dramatic beneficence of a Caesar in a coliseum — deciding, if not matters of life and death, then at least the destinies of individual citizens, by doling out everything from scholarships and jobs to cooking supplies, all to thunderous applause.
For Venezuelans, Aló Presidente became a ready reminder of the benefits of working with the regime — and Chávez’s largesse contrasted with threats, invectives, and even arrest orders against those who broke rank. When ministers were regularly chastised, fired, and replaced on air, viewers received a clear message: the government’s many failures were due to poor execution of Chávez’s otherwise infallible plans by incompetent minions. He claimed, for example, that an important bridge had been felled by El Niño (not lack of maintenance); that periods of scarcity were the fault of hoarders or speculators (not economic mismanagement); and that the lights went out in several cities because an iguana had somehow got loose in the electrical mainframe. Conspiratorial scare tactics likewise abounded: shadowy opposition intrigues were alleged; CIA cabals brandished “cancer injections” and “earthquake rays”; Coke Zero (but not other Coca-Cola products) was accused of being poisonous. There were even cautionary tales such as the story of a once-thriving civilization on Mars brought low by the adoption of capitalism.
Ironically, while excoriating capitalism, Chávez’s state media empire learned to wield its best-known commercial and marketing tricks in pushing its main product: Chávez himself. Foreign heads of state and left-leaning international celebrities, such as Naomi Campbell, Danny Glover, and Sean Penn, would appear on the show, lending their star power to the Chávez brand of permanent revolution.
Aló Presidente represented the perfect populist vehicle: it kept Chávez in the public eye, helped define his political agenda, and drove the media conversation during any given week. When the Sunday afternoon format proved too limiting, Chávez became heavily reliant on cadenas, a type of broadcast permitted under Venezuelan law that gives presidents a constitutional prerogative to seize airtime on every radio and TV station for use in emergencies, or to broadcast major events such as the Venezuelan equivalent of the United States’ yearly State of the Union speech. Undeterred by convention, Chávez began serially invoking the law to deliver multi-hour speeches, meticulously timed to moments when opposition leaders were speaking elsewhere.
05:56 The Sun is coming out as usual but the clouds promise rain later in the day. Will report when I get from voting.
07:00 Left the house to go vote. The morning is cool and overcast, perfect for walking without breaking into a sweat. My polling station is about 5 Kms the way the crow flies. The first polling station I come to has a long queue but it has yet to open. I buy fresh turmeric (cúrcuma) on the way.
08:27 I arrive at my polling station. There are hardly any queues, a bad sign. It takes about 15 minutes to vote.
11:20 I arrive back home. That takes care of half my weekly walking. I took a different route to go past other polling stations. There is nothing unusual to report, just people going about their business. The siege mentality of previos elections is gone but there are plenty rumors going around. The first two polling stations I went past on the way home didn't have any visible queues. As I continued west to slightly lower middle class I found two very long queues.
Here is a report from "The Devil." Nothing much to report either.
Arrived only a few hours ago on Saturday and all I can say is that people are on the edge tonight wondering what will happen tomorrow. The cockiness of three weeks ago is not as blatant. Yes, the opposition will get a majority, but after 16 years of Chavismo people (and rumors) are rampant about possible tricks and maneuvers by the government.
This was not helped by the fact that there were Internet blackouts in many parts of the country today. The Head of Conatel, the telecom regulator denied this, but friends tell me that if you tried to call CANTV to report the problems, they were not even answering the phone.
The result is an atmosphere of mistrust and skepticism about what may or may not happen tomorrow. Or the day after, for that matter…
On the positive news front, the Electoral Board announced that witnesses for the opposition outnumbered those of Chavismo’s PSUV by 2,000, a clear indication of the inability of Chavismo to mobilize people like it used to. Many friends also reporting that numerous polling stations have seen no presence of pro-Government members, leading to the installation of the process without them.
Meanwhile, as the international media is harassed as they arrive in Venezuela and also as they try to cover the elections, Chavismo is selling it as a campaign against the country, even citing the number of positive (380), neutral (75) and positive (24) news items about the country. Which according to Chavismo, reflects this campaign and not reality.
Never mind that many reporters have had heir equipment confiscated at the airport and many have been told they can not take pictures of mundane events and their media has been erased.
Meanwhile visiting former Presidents managed to obtain a promise from the Government that political prisoners would be allowed to vote (They were not going to), while the opposition has created a parallel system of observation of the electoral process by foreign dignitaries, as well as social media tools to denounce problems tomorrow with the voting process.
Meanwhile, some pollsters claim to have seen a Maduro resurgence (!!!!), while others say that the result will depend on what Chavismo and now lukewarm Chavistas do. If the latter decide to stay home, the opposition will squeak by, but if they decide to go and express their unhappiness the opposition could enjoy a huge victory, even if short of the super majority.
I am sticking to my guns of a simple majority, roughly 55-58% of Deputies, hoping that former Chavistas are so disenchanted that they prove me wrong. I like the fact that Chavistas are outnumbered by the opposition witnesses and that they have been absent from the installations of the polling stations. But I just wonder if they will they be absent from voting too…
Abstention will be key and pollsters have little confidence that they have a handle on their number. Add proportionality, gerrymandering, fraud and tricks and numerical predictions are really hard to make.
I will do my usual scan throughout Caracas and report solid news, if such an animal exists before midnight tomorrow.
December 6, 2015 at 12:45 am We lost CANTV ABA around 3.30 pm here in Isla Margarita but I just woke up and checked it and it’s working again (1 am).
It’s going to be a very interesting day and evening. Everyone vote early and often.
Dean A Nash Says:
December 6, 2015 at 3:21 am Stay safe and good luck. My two cents (worth much less) is that the cheating will be massive enough to be obvious, but not odorous enough to cause an outright breakdown of order. Backup prediction: Massive cheating so obvious it changes the winner and causes the breakdown of order (this would all be part of the plan) in order for the government to step in and restore order (i.e. take away more freedom.)
Six one way, half a dozen the other. The end result remains the same: a clueless dictatorship dragging the country further down the rabbit hole. Hope I’m wrong.
Despite pleading, begging, and groveling by the Maduro government, OPEC keeps pumping up the volume. Take that Maduro!
OPEC Maintains Crude Production as Group Defers Output Target December 4, 2015 — 12:09 PM EST
- Group to wait until June meeting to confirm output ceiling - Nigeria minister says OPEC to keep output at 31.5 million b/d
OPEC will maintain production at current levels and refrained from setting an official output target, a continuation of the Saudi Arabian-led policy that’s driven prices to a six-year low.
The Organization of Petroleum Exporting Countries decided to retain production at 31.5 million barrels a day, group President Emmanuel Ibe Kachikwu told reporters on Friday, after a meeting of OPEC ministers in Vienna. OPEC will wait until its next meeting in June to confirm its output target, said Secretary General Abdalla El-Badri.
“Effectively it’s ceilingless,” Iranian Oil Minister Bijan Namdar Zanganeh said on Friday, after returning from the meeting with his OPEC counterparts. “Everyone does whatever they want. I think there will be a decision about how to act on the market in the second quarter of 2016.”
Guided by its biggest producer Saudi Arabia, OPEC has maintained output to force higher-cost producers to scale back their operations. The group also needs to prepare for increased shipments from Iran when international sanctions are lifted. OPEC has pumped more than its previous collective target of 30 million barrels a day the past 18 months, data compiled by Bloomberg show.
“The volume maximizing strategy goes on for OPEC,” said Giovanni Staunovo, an analyst at UBS Group AG Zurich. “It’s at least better to give up a useless ceiling. The burden to adjust supply remains on non-OPEC producers.”
OPEC pumped 31.5 million barrels a day in November, Zanganeh said.
The discontent is palpable on the street, the queues when something arrives are endless, yet things aren't bad enough for people to take to the streets to protest. People still believe the election will produce some favorable change in the legislature. I'm not that sanguine, I believe the government will find ways to win by fraud. The OAS is not being allowed to monitor the election. What do they have to hide? Fraud, what else?
Those of us with dollars can buy stuff via Amazon. There is an old rule still in place that exempts packages under $100 from duties and VAT tax which can increase the cost by one third. Unbelievable as it may seem I've brought in deodorant, bath soap, face towels, socks, and briefs, everyday items you guy don't even have to think about. Fresh vegetables and fruit are plentiful and very inexpensive by US standards. It's the manufactured goods that are scarce. Two weeks ago eggs disappeared when they were regulated at half the going rate. Then, as if by magic, they reappeared yesterday and huge queues ensued for people to get them. With the election set for Sunday, one has to wonder...
Yesterday I had an acrylic filling replaced. Total cost $20.00 at free market rates. 10 to 15% of US rates. A decent haircut was 75 cents! It's the poor who are getting screwed.
El autor concluye: "Ante esta situación, al 40% de los ciudadanos que no quieren votar ni por la troika moribunda, ni por la derecha unificada de Capriles-Falcón-López, les queda un solo camino de acción, para garantizar su futuro y el de la Patria. Formar un partido político de centro que rompa el nuevo nefasto bipartidismo venezolano."
Heinz Dieterich es un hombre de izquerda (ver cita de wikipedia mas abajo). Lo que para el es "la derecha unificada" en realidad es un grupo muy de centro - centro derecha y centro izquierda, social demócratas y social cristianos. Si en Venezula hubiera un partido de derecha podría hacer un pleno nacional en un Volkswagen. Para mi la diferencia es que un grupo son socialistas pragmáticos y los otros socialistas ideológicos. Con los primeros uno se acomoda, con los segundos no.
El problema con el 40% de no afiliados es que la abstención gana y el chavismo retiene el poder. Hay que taparse la nariz y votar a favor de Capriles-Falcón-López.
Venezuela: Último Año de Gobierno Chavista La troika y su sumisa nomenclatura entran ahora a la batalla decisiva por el poder
Heinz Dieterich Martes 20 de enero de 2015, 6:17 am
Crisis terminal La crisis económica de Venezuela se ha convertido en una crisis política terminal para el gobierno de Maduro. Maduro perderá las elecciones parlamentarias de este año y saldrá a más tardar en 2016 del poder, sea por referéndum revocatorio, renuncia o intervención militar. Es prácticamente imposible que el oficialismo revierta este escenario. Con el 75% de la población en contra del gobierno de Maduro; con China negándose a inyectar más liquidez a una política económica idiota y suicida; con una oposición unificada para las elecciones parlamentarias y la cobardía sin límites de los gobernadores y líderes del PSUV para cambiar el rumbo del país, el oficialismo ha perdido todo poder de negociación para salvarse. La troika Maduro-Cabello-Arreaza se mantiene sobre mentiras y bayonetas. Pero, las mentiras (“guerra económica”) ya sólo convencen al 20% de la población y el tiempo de las bayonetas se acaba. En menos de dos años, una troika de ineptos y prepotentes ha despilfarrado la herencia de lucha popular de generaciones; desprestigiado la alternativa del Socialismo del Siglo 21 y creado las condiciones para la reconquista del poder por la oligarquía y el imperialismo.
Economía política del debacle La crisis terminal es resultado del fallido intento de la Nueva Clase Política “bolivariana”, de monopolizar el poder político monopolizando el plusproducto petrolero. En un raro momento de verdad, el Gobernador del estado Anzoátegui, Aristóbulo Istúriz, reconoció públicamente (14.7.2014) esa estratagema: “El control de cambio en Venezuela no es una medida económica…, es una medida política. Porque si nosotros quitamos el control de cambio, ustedes sacan los dólares y nos tumban. Mientras gobernemos tendremos que tener control de cambio. […] Y tendremos que amoldarnos, con control de cambio, a manejar la economía”.
Dirigir un país a través del control del plusproducto –medida recomendada por Fidel a Chávez— es una política correcta. De hecho, todas las clases dominantes del mundo lo hacen. Pero, hay que saber hacerlo. Y ahí, la troika tenía todo resuelto. Delante de sus narices, Evo Morales, Rafael Correa, Lula y Daniel Ortega, aplicaban exitosamente el know how del desarrollismo criollo viable en América Latina. Simplemente, tenían que entender y asimilar la dialéctica de este desarrollismo. Pero, su incultura, arrogancia e ideología delusional (delusional thinking) lo impidieron y llevaron la economía nacional al actual panorama desolador. Las cifras del PIB, del déficit fiscal, de la inflación, de las reservas internacionales, de la sobrevaluación, etc., describen el panorama con precisión; mientras que el precio bajo del petróleo y la incapacidad de someter mercantilmente a Arabia Saudita, Irak y Qatar, aborta las esperanzas de una pronta recuperación.
Se asoma el Leviatán En su sobreestimación infantil del poder del Estado frente a la sociedad, y su hybris generalizada, la nomenclatura del PSUV convirtió la crisis económica en crisis política. Su receta de autodestrucción consta de tres elementos: a) no hacer las reformas necesarias cuando tenía el poder de negociación necesario, después de la elección de Maduro; b) no entender que su mentira de “guerra económica” tenía un ciclo de manipulación efectiva limitado, como toda propaganda; c) al obligar al ciudadano a presentar documentos de identidad, registrarse, someterse a controles biométricos, conculcarle sus derechos civiles y constitucionales (prohibición de pernoctar fuera de supermercados) etc. —y toda esta parafernalia para comprar un kilo de papas (sic)— lo humillan, muestran que su modelo económico es inviable y exhiben la cara de Leviatán del Estado (policiaco).
La negación de China El gobierno chino ha tenido tres fases en su trato con la troika. Cuando –por default– la troika llegó al Palacio de Miraflores, Beijing creyó en los reportes triunfalistas de los burócratas de su embajada, de que todo iba viento en popa. Cuando los índices de disfuncionalidad de la troika se hicieron más evidentes, Beijing aceptó que había una alta probabilidad, de que fracasara. Pero, para proteger sus inversiones de alrededor de 50 mil millones de dólares, por razones de Estado y geopolítica, decidió seguir apoyando, para evitar el peligro de un gobierno de derecha pro-gringa. Sin embargo, con el fracaso de la desesperada e improvisada visita de Maduro a China, Rusia y los países de Medio Oriente, quedó claro que Beijing ha abandonado la esperanza de que la troika pueda salvarse. Le negó a Maduro la liquidez necesaria ($16 mrd) para mantener su reality show” de “socialismo” hasta las elecciones. Para Beijing, la troika ya ha entrado en un de facto default político-económico. Es una conclusión nada dramática ni sorprendente. Simplemente reconoce una verdad objetiva que en lo económico ya había sido evidenciada por múltiples instituciones financieras del Capital.
Las mayorías se van – el fin del Chavismo La sentencia al colapso de la troika está escrita en la evaluación de su gestión en las últimas encuestas nacionales. El 84% de la población considera la situación del país mala o muy mala; el 74% piensa que la gestión de Maduro es mala; el 72% no creen “nada” de las declaraciones del Presidente sobre la economía; el 70% no quiere que siga más allá del 2016; el 86% lo considera responsable de las colas; la presencia de los militares en el gobierno es considerado malo por un 70% y el 75% cree que la situación económica es ahora peor o mucho peor que hace un año.
Maduro es, hoy día, un general sin tropas. Pero, peor, sin espacios de maniobra: el 80% de los encuestados está en contra de una devaluación del bolívar; el 70% en contra del aumento de la gasolina; el 85% rechaza las expropiaciones como mecanismo para resolver la crisis y más del 90% considera indispensable un acuerdo entre el sector público y el privado para enfrentar la crisis.
La batalla decisiva y el colapso de la 6ta República La troika y su sumisa nomenclatura entran ahora a la batalla decisiva por el poder. Pero, comandan una fuerza fantasma. No tienen programa, ni cuerpo dirigente, ni narrativa o mística de guerra, ni tropas (apoyo popular/clase media), ni dinero. Es decir, carecen de los recursos básicos para vencer. Y, aunque en la guerra se cuentan los muertos después de la batalla, es obvio, que el destino de la batalla está sellado.
Ante esta situación, al 40% de los ciudadanos que no quieren votar ni por la troika moribunda, ni por la derecha unificada de Capriles-Falcón-López, les queda un solo camino de acción, para garantizar su futuro y el de la Patria. Formar un partido político de centro que rompa el nuevo nefasto bipartidismo venezolano.
ANALITICA.COM no se hace responsable por las declaraciones y conceptos emitidos en los artículos de opinión publicados en nuestro sitio Web, los cuales son de la exclusiva responsabilidad de sus autores.
Heinz Dieterich Steffan (Rotemburgo del Wumme, Alemania, 1943) es un sociólogo y analista político alemán, residente en México. Conocido por sus posiciones de izquierda, colabora con varias publicaciones y lleva publicados más de 30 libros sobre la conflictividad latinoamericana, la sociedad global y los sucesivos paradigmas científicos e ideológicos que cruzaron al siglo, entre otras muchas cuestiones no menos complejas. Dieterich es un gran impulsor del concepto de socialismo del siglo XXI.
Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub U.S. probe targets No. 2 official Diosdado Cabello, several others, on suspicion of drug trafficking and money laundering By JOSÉ DE CÓRDOBA and JUAN FORERO May 18, 2015 3:36 p.m. ET
U.S. prosecutors are investigating several high-ranking Venezuelan officials, including the president of the country’s congress, on suspicion that they have turned the country into a global hub for cocaine trafficking and money laundering, according to more than a dozen people familiar with the probes.
An elite unit of the Drug Enforcement Administration in Washington and federal prosecutors in New York and Miami are building cases using evidence provided by former cocaine traffickers, informants who were once close to top Venezuelan officials and defectors from the Venezuelan military, these people say.
A leading target, according to a Justice Department official and other American authorities, is National Assembly President Diosdado Cabello, considered the country’s second most-powerful man.
“There is extensive evidence to justify that he is one of the heads, if not the head, of the cartel,” said the Justice Department official, speaking of a group of military officers and top officials suspected of being involved in the drug trade. “He certainly is a main target.”
Representatives of Mr. Cabello and other officials didn’t return phone calls and emails requesting comment. In the past, Venezuelan authorities have rejected allegations of high-ranking involvement in the drug trade as an attempt by the U.S. to destabilize the leftist government in Caracas.
In an appearance on state television Wednesday, Mr. Cabello said he solicited a court-ordered travel ban on 22 executives and journalists from three Venezuelan news outlets that he has sued for publishing stories about the drug allegations earlier this year. “They accuse me of being a drug trafficker without a single piece of evidence and now I’m the bad guy,” Mr. Cabello said. “I feel offended, and none of them even said they’re sorry.”
The Obama administration isn’t directing or coordinating the investigations, which are being run by federal prosecutors who have wide leeway to target criminal suspects. But if the probes result in publicly disclosed indictments of Mr. Cabello and others, the resulting furor in Venezuela would likely plunge relations between the two countries into their most serious crisis since the late populist Hugo Chávez took office 16 years ago.
“It would be seismic,” said a U.S. official, of the expected Venezuelan reaction. “They will blame a vast right-wing conspiracy.”
U.S. authorities say they are far along in their investigations. But they say any indictments that may result might be sealed, making them secret until authorities can make arrests—something that would be difficult if not impossible unless the suspects travel abroad.
The investigations are a response to an explosion in drug trafficking in the oil-rich country, U.S. officials say. Under pressure in Colombia, where authorities aggressively battled the drug trade with $10 billion in U.S. aid since 2000, many Colombian traffickers moved operations to neighboring Venezuela, where U.S. law-enforcement officials say they found a government and military eager to permit and ultimately control cocaine smuggling through the country.
“Most of the high-end traffickers moved to Venezuela in that time,” said Joaquín Pérez, a Miami attorney who represents key Colombian traffickers who have acknowledged operating out of Venezuela.
Venezuela doesn’t produce coca, the leaf used to make cocaine, nor does it manufacture the drug. But the U.S. estimates that about 131 tons of cocaine, about half of the total cocaine produced in Colombia, moved through Venezuela in 2013, the last year for which data were available.
Prosecutors aren’t targeting President Nicolás Maduro, who has been in power since Mr. Chávez’s death two years ago. U.S. law-enforcement officials say they view several other Venezuelan officials and military officers as the de facto leaders of drug-trafficking organizations that use Venezuela as a launchpad for cocaine shipments to the U.S. as well as Europe.
‘A Criminal Organization’ “It is a criminal organization,” said the Justice Department official, referring to certain members of the upper echelons of the Venezuelan government and military.
Mildred Camero, who had been Mr. Chávez’s drug czar until being forced out abruptly in 2005, said Venezuela has “a government of narcotraffickers and money launderers.” She recently collaborated on a book, “Chavismo, Narcotrafficking and Militarism,” in which she alleged that drug-related corruption had penetrated the state, naming more than a dozen officials, including nine generals, who allegedly worked with smugglers.
Law-enforcement officials in the U.S. said that they have accelerated their investigations in the past two years, a period that has seen Venezuela’s economy worsen dramatically. Rampant crime has spiked, making Venezuela the continent’s most violent country and spurring people to emigrate.
The deepening crisis has made it easier for U.S. authorities to recruit informants, say those working to enlist people close to top Venezuelan officials. Colombian and Venezuelan drug traffickers have also arrived in the U.S., eager to provide information on Venezuelan officials in exchange for sentencing leniency and residency, U.S. officials say.
“Since the turmoil in Venezuela, we’ve had greater success in building these cases,” said a federal prosecutor from New York’s Eastern District who works on Venezuelan cases.
In January, U.S. investigators made a major catch when naval captain Leamsy Salazar defected and was brought to Washington. Mr. Salazar, who has said he headed Mr. Cabello’s security detail, told U.S. authorities that he witnessed Mr. Cabello supervise the launch of a large shipment of cocaine from Venezuela’s Paraguaná peninsula, people familiar with the case say.
Mr. Cabello has publicly railed against his former bodyguard, saying he didn’t head his security detail and calling him “an infiltrator” who has no proof of his involvement in drug trafficking. “Our conscience is totally clear,” he said in a radio interview.
Rafael Isea is another defector who has been talking to investigators, people familiar with the matter say. A former Venezuelan finance minister and governor of Aragua state, Mr. Isea fled Venezuela in 2013. People familiar with the case say Mr. Isea has told investigators that Walid Makled, a drug kingpin now in prison, paid off former Interior Minister Tarek El Aissami to get drug shipments through Venezuela.
Almost a year after leaving the country, Mr. Isea was accused of committing “financial irregularities” during his days as governor by Venezuela’s attorney general, and by Mr. El Aissami, who succeeded him as governor of Aragua.
“Today, Rafael Isea, that bandit and traitor, is a refugee in Washington where he has entered a program for protected witnesses in exchange for worthless information against Venezuela,” Mr. El Aissami said recently on Venezuelan television.
Mr. Isea has rejected the accusations as false, politically motivated and meant to discredit him.
In addition to Mr. El Aissami, other powerful officials under investigation include Hugo Carvajal, a former director of military intelligence; Nestor Reverol, the head of the National Guard; Jose David Cabello, Mr. Cabello’s brother, who is the industry minister and heads the country’s tax collection agency; and Gen. Luis Motta Dominguez, a National Guard general in charge of central Venezuela, say a half-dozen officials and people familiar with the investigations.
Calls and emails seeking comment from several government ministries as well as the president’s office went unanswered. Some officials have taken to social media to ridicule the U.S. investigations. A Twitter account in the name of Gen. Motta Dominguez earlier this year said: “We all know that whoever wants his green card and live in the US to visit Disney can just pick his leader and accuse him of being a narco. DEA tours will attend to them.”
Recruiting Defectors To build cases, U.S. law-enforcement officials work with Venezuelan exiles and others to locate and recruit disaffected Venezuelans.
“We get people out of Venezuela, and we meet with them in Panama, Curaçao, Bogotá,” said a former intelligence operative who works with U.S. officials to recruit and debrief Venezuelans who have evidence of links between Venezuelan officials and the drug trade.
Former Venezuelan military officers and others living outside the country provide help by contacting their former comrades and urging them to defect, the recruiter said. If the defector can provide useful information, the recruiter said, he is flown to the U.S. and a new life.
“What does the U.S. want?” said the recruiter, who has been working Venezuelan cases since 2008. “The U.S. wants proof, evidence of relations between politicians, military officers and functionaries with drug traffickers and terrorist groups.”
Recently, at Washington’s posh Capital Grille restaurant, a few blocks from Congress, a Venezuelan operative working with a U.S. law enforcement agency took a call from a middleman for a high-level official in Caracas seeking to trade information for favorable treatment from the U.S.
“Tell him I’ll meet him in Panama next week,” said the operative, interrupting a lunch of oysters and steak.
The biggest target is 52-year-old Mr. Cabello, a former army lieutenant who forged a close link in the military academy with Mr. Chávez when the two played on the same baseball team. When Mr. Chávez launched an unsuccessful 1992 coup, Mr. Cabello led a four-tank column that attacked the presidential palace in downtown Caracas.
Mr. Cabello has been minister of public works and housing, which also gave him control of the airports and ports, as well as minister of the interior and vice president. He was also president for a few hours in April 2002 when Mr. Chávez was briefly ousted in a failed coup.
Many analysts and politicians in Venezuela say they believe Mr. Cabello’s power rivals that of Mr. Maduro and is rooted in his influence among Venezuela’s generals.
Julio Rodriguez, a retired colonel who knows Mr. Cabello from their days at Venezuela’s military academy, says that of 96 lieutenant colonels commanding battalions in Venezuela today, Mr. Cabello has close ties to 46.
The stocky and bull-necked Mr. Cabello, who often sports the standard Chavista uniform of red shirt and tri-color windbreaker in the red, yellow and blue of the Venezuelan flag, is host of a television program, “Hitting With the Sledge Hammer,” on state television, in which he uses telephone intercepts of opponents to attack and embarrass them. Mr. Rodriguez said he believes Mr. Cabello will never make any kind of a deal with the U.S. “Diosdado is a kamikaze,” he said. “He will never surrender.”
U.S. investigators have painstakingly built cases against Venezuelan officials by using information gathered from criminal cases brought in the U.S. In Miami, people familiar with the matter say a key building block in the investigations involved a drug-smuggling ring run by Roberto Mendez Hurtado. A Colombian, Mr. Mendez Hurtado moved cocaine into Apure state in western Venezuela and, according to those familiar with his case, had met with high-ranking Venezuelan officials. The cocaine was then taken by boat or flown directly to islands in the Caribbean before reaching American shores.
Mr. Mendez Hurtado pleaded guilty in Miami federal court and received a 19-year prison term in 2014. People close to that investigation say that Mr. Mendez Hurtado and his fellow traffickers wouldn’t have been able to operate without paying off a string of top military officers and government officials.
“The involvement of top officials in the National Guard and in the government of Venezuela in drug trafficking is very clear,” said a former Venezuelan National Guard officer who served in intelligence and in anti-narcotics and left the country last year frightened by the overwhelming corruption he saw daily.
“Everyone feels pressured,” he said. “Sooner or later everyone surrenders to drug trafficking.”
In another case, in Brooklyn, prosecutors have learned about the intricacies of the drug trade in Venezuela after breaking up a cocaine-smuggling ring led by Luis Frank Tello, who pleaded guilty, court documents show. The cocaine was brought in across the border from Colombia and, with the help of National Guard officers, shipped north, sometimes from the airport in Venezuela’s second-largest city, Maracaibo.
The U.S. investigations of Venezuelan officials have been going on for years, though investigators have sometimes been thwarted by politics.
In 2008, the U.S. Treasury Department put three top aides to then-President Chávez on a blacklist and froze any assets they might have in the U.S. Among the three was Mr. Carvajal, known as “El Pollo,” or the Chicken, then the head of military intelligence. The U.S. acted after extensive evidence surfaced earlier that year in the computers of a dead Colombian guerrilla commander of burgeoning cocaine-for-arms exchanges between the rebels and top Venezuelan generals and officials, according to the U.S. and Colombian governments.
In 2010, Manhattan prosecutors unsealed the indictment of Mr. Makled, the Venezuelan drug dealer accused of shipping tons of cocaine to the U.S. through the country’s main seaport of Puerto Cabello, which he allegedly controlled. Mr. Makled, who had been captured in Colombia, boasted of having 40 Venezuelan generals on his payroll.
“All my business associates are generals,” Mr. Makled said then to an associate in correspondence seen by The Wall Street Journal. “I’m telling you we dispatched 300,000 kilos of coke. I couldn’t have done it without the top of the government.”
DEA agents interviewed Mr. Makled in a Colombian prison as they prepared to extradite him to New York. But instead, Colombia extradited him in 2011 to Venezuela, where he was convicted of drug trafficking. This February, he was sentenced to 14 years and six months in jail.
Last July, American counter-drug officials nearly nabbed Mr. Carvajal, who had been indicted in Miami and New York on drug charges and detained in Aruba at the American government’s behest. But Dutch authorities released him to Venezuela, arguing that he had diplomatic immunity.
Upon Mr. Carvajal’s release, President Maduro praised the former intelligence chief as a dedicated anti-drug fighter who had set a worlds’ record capturing drug capos.
The U.S. is also gathering information from bankers and financiers who handle the money for top Venezuelan officials. Since last year, people familiar with the matter say the U.S. government has revoked the visas of at least 56 Venezuelans, including bankers and financiers whose identities haven’t been made public. Some have sought to cooperate with investigators in order to regain access to the U.S.
“They are flipping all these money brokers,” said a lawyer who is representing two Venezuelan financiers who have had their visas revoked. “The information is coming in very rapidly.”
—Christopher M. Matthews in New York contributed to this article.
May 26, 2015, 10:50 A.M. ET Venezuela Running ‘On Fumes’ As Bolivar Weakens By Dimitra DeFotis
Even though Venezuela tapped the International Monetary Fund in recent weeks to keep itself afloat, shoring up its currency is another matter.
The low price of oil has crushed the energy exporter’s budget. Russ Dallen, who contributes to a newsletter for investors, and writes about Latin America, writes today that “Venezuela’s situation continues to unravel at increasing speed as the bolivar tumbled 30% over just the last week, while the country’s international reserves simultaneously hit a new 12-year low, closing at $17.5 billion.” He says the weak currency and decline in reserves means the country is “essentially running on fumes.” He writes:
“Venezuela’s reserves have now fallen 21% since the beginning of the year, but more importantly $6.7 billion from their high just 2 months ago – a high that not only included $2.8 billion from mortgaging Citgo, $1.9 billion from the selling of $4 billion of oil receivables from the Dominican Republic, and the transfer of previously unreported China Fonden funds into the reserves.”
By tapping roughly $385 million in “Special Drawing Rights” (SDR) from the International Monetary Fund in recent weeks, for the first time in years, Venezuela has more financial liquidity and may have reduced its 2015 debt default risk. See our recent post on the subject: ”Venezuela Default Still Possible Despite IMF Money, Moody’s Says.”
Dallen et al explain SDRs in their weekly newsletter.
“The IMF created SDRs as an international reserve asset in 1969 to supplement all members’ reserves. Members are allowed to count the SDRs as part of their reserves and Venezuela is able to borrow those assets at an extremely favorable rate of interest (currently 0.05%, which frankly is much better than the over 30% that Venezuela is paying on some of its bonds). In 2009 as countries around the world were reeling from the worldwide economic crisis, the IMF decided to provide member nations a total of $250 billion in SDRs to shore up international liquidity. At that time, the IMF gave Venezuela 2.543 billion SDRs, which works out to about $3.578 billion in U.S. dollars (The SDR value floats against a basket of the U.S. dollar, the yen, the euro, and the pound, with one U.S. dollar currently worth 0.710769 SDR). Thus, the 276.6 million in SDR chips that Venezuela borrowed last month is worth approximately $385 million.”
Also see our September 2014 post, “Will Venezuela Default? Ask Hedge Funds” and this recent post: “Cheap Oil & Emerging Markets: India, Turkey Win; Venezuela Most At Risk.“
The iShares Latin America 40 ETF (ILF) is down 1.6% today. The leveraged Direxion Daily Latin America Bull 3X Shares ETF (LBJ) is down 4.3%. The iShares JPMorgan USD Emerging Markets Bond ETF (EMB) is down nearly 0.3%, while the Western Asset Emerging Markets Debt Fund (ESD), a closed-end fund, was down 0.1% in recent trading.
The Wall Street Journal reported last week that Diosdado Cabello, president of Venezuela’s National Assembly, is among those being investigated by the United States on drug trafficking allegations. See the WSJ story, “Venezuelan Officials Suspected of Turning Country into Global Cocaine Hub.”
The first thing to know is how and why Maduro came to power. My background as a management consultant helped me figure out local power structures. Often owners trust certain people more than they trust checks and balances which results in trusted but not necessarily competent people in key posts. I saw it often in business.
Maduro was the most harmless lackey Chavez could find to fill the post of vice president. When Chavez died Maduro took his place. For the next election there was a lot of strange maneuvering, probably some of it illegal, to make Maduro the official candidate. During the campaign I heard loyal Chavistas declare that Maduro would be a total failure. Maduro is imitating Chavez but he does not have his organizing skills. In any case, it is hard to know where power really sits, most likely in Havana. But while Cuba is opening up the the US, Maduro is sticking with anti-imperialism as his political motif.
The other thing to consider is that drug running is big business which does not benefit the country but it sure enriches the drug barons. These are the people running the country. The US would be a big help in defusing the world's problems if they abandoned the totally useless, worse, counterproductive, war on drugs.
The next election coming up is for the National Assembly and it's supposed to be this year but the dates have not been announced. The consensus is for the opposition to win a majority but my prediction is the opposite, not based on the vote count but on fraud. In any case, amazing as it may seem, Chavismo still has a lot of popular support because the official propaganda has been able to pin the failure on capitalist greed. If economists don't understand economics, what can you expect of ordinary people?
When exchange controls were introduced holding dollars or trading in dollars were made illegal, a move as stupid as banning drugs or alcohol in the USA. It does not work! Not even the Bank of England could protect the pound sterling against market forces, instead it made George Soros rich. Prohibition made the Mafia and Canadian distillers rich. The War on Drugs is making drug cartels, including Venezuelan officials, rich.
Because it did not work, the government set up bond trading schemes that effectively bypassed the bans. Until recently inflation/devaluation was held to around 30 to 35% annually but with the falling oil prices, rising dollar and Maduro's falling popularity (not that he ever was popular even with Chavistas), the bolivar has crumbled and there is nothing that the government can do about it.
I have long held that Venezuela's salvation was bankruptcy, the inability of government to buy votes. That is now coming to pass. The danger is that the uprising can be cruelly violent as was the case of the French Revolution.
Businesses quietly switch to dollar in socialist Venezuela Associated Press By HANNAH DREIER 18 hours ago
CARACAS, Venezuela (AP) — It's still possible to buy a gleaming Ford truck in Venezuela, rent a chic apartment in Caracas, and snag an American Airlines flight to Miami. Just not in the country's official currency.
As the South American nation spirals into economic chaos, an increasing number of products are not only figuratively out of the reach of average consumers, but literally cannot be purchased in Venezuelan bolivars, which fell into a tailspin on the black market last week.
Businesses and individuals are turning to dollars even as the anti-American rhetoric of the socialist administration grows more strident. It's a shift that's allowing parts of the economy to limp along despite a cash crunch and the world's highest inflation. But it could put some goods further out of reach of the working class, whose well-being has been the focal point of the country's 16-year-old socialist revolution.
The latest sign of an emerging dual-currency system came earlier this month when Ford Motor Co. union officials announced the company had reached a deal with officials to sell trucks and sports utility vehicles in dollars only.
A few weeks earlier, American Airlines said it had stopped accepting bolivars for any of its 19 weekly flights out of Venezuela. Customers must now use a foreign credit card to buy the tickets online. Virtually all other foreign carriers have made the same switch with the government's consent, according to the Venezuela Airlines Association.
Driving the shift is the crumbling value of the bolivar, which has lost more than half its value this year, plunging to 400 per dollar on the free market as Venezuelans scramble to convert their savings into a more stable currency. Desperate, people are selling bolivars for a rate 60 times weaker than the strongest of country's three official exchange rates.
It's a politically uncomfortable situation for President Nicolas Maduro, who regularly leads chants of "gringo go home" and says currency speculation is one of the main tools used by enemies to try to sow chaos and force him from power.
It's not just businesses chasing greenbacks. Real estate contracts are still drafted in bolivars to satisfy a requirement imposed by late President Hugo Chavez, but in upscale neighborhoods most owners operate outside the law and sell and rent in dollars only. A group of realtors in tony eastern Caracas has established a password-protected website for listings in dollar prices.
Analysts say the administration likely sees a limited dollarization as the only way to prevent multinationals from leaving the county altogether, as Clorox did last year, citing problems brought about by decade-old currency controls, supply shortages and inflation that hit 68 percent last year, and economists believe is now well into the triple digits.
Production at Ford has fallen by 90 percent as the company struggles to gain access to dollars needed to import parts. Customers will now transfer Ford dollars in advance to pay for the import of the parts needed to assemble the cars in Venezuela, according to union officials.
Foreign airlines made their switch to dollars after the government refused to let them convert and repatriate $4 billion in ticket sales held in the country.
Meanwhile, inflation is racing so fast that ATMs have failed to keep pace. Many deliver a maximum of just $1.50 worth of bolivars per transaction. Some shoppers stay away from cash altogether, according to reports in local media, leaning more heavily on credit cards so they can pay for purchases later, when they'll cost less in dollar terms thanks to inflation.
Decade-old price controls make staple items ridiculously cheap for all Venezuelans. A bottle of vegetable oil costs 20 cents at the black market rate, a package of rice costs half that, and a sack of sugar costs even less.
Still, many working-class Venezuelans are looking for ways to accumulate their own stockpile of the U.S. currency by offering services to wealthy or foreign clients.
"It's the only way we can try to stay ahead," said one gym teacher who supplements his $25 a month salary by offering personal training to clients who can pay in dollars. The teacher, who asked that his name not be used to protect his safety, keeps his bills hidden around his home until a friend or obliging client can deposit them in his Miami bank account.
The move toward currency substitution doesn't sit well with hardcore government supporters, many of whom cut their political teeth listening to Chavez's tirades against the "dictatorship of the dollar."
"How is it possible that in the face of the U.S. effort to sabotage the revolution, we are allowing transnational companies to conduct business with the imperialist dollar in our country?" wrote Omar Hernandez, an engineer who works for Chavista community programs, on the influential pro-government website Aporrea.
But outside economists say Maduro would be wise to embrace the dollar outright.
Steve Hanke, a Johns Hopkins University economist who has long advised governments facing currency crises, says replacing the bolivar with the dollar would nip Venezuela's inflation problem almost overnight and become an anchor of economic stability, though it could also force austerity measures. He points to the example of Maduro ally Rafael Correa in Ecuador, who has railed against the U.S. during his eight years in office but has so far shown no desire to bring back the old national currency, which the country did away with in favor of the dollar.
At the Ford factory, workers are optimistic that the new deal will save their jobs, according to union leader Gerardo Troya. In fact, they have an idea for more dollarization: They'd like to be paid in U.S. currency now too, starting at $8 a day.
¿Por qué sube el dólar paralelo cada 4 horas? Luis Vicente León lo explica en este análisis DolarToday / May 22, 2015 @ 8:30 am
“No reconocen errores. No anuncian ajustes racionales. Se deteriora la confianza. No hay divisas. ¿Qué esperabas que pasara en el paralelo?”, publica Panorama
Con esta exclamación comenzó su análisis el presidente de Datanálisis, Luis Vicente León, este viernes a través de su cuenta en twitter @luisvicenteleon a propósito del comportamiento experimentado por el dólar paralelo que la tarde de este jueves 21 de mayo sobrepasó los 400 bolívares por dólar.
“El precio del dólar paralelo es simplemente el que los compradores estén dispuestos a pagar y los vendedores a vender. Lo demás es paja”, afirmó tajante.
“Es cierto que en un mercado ilegal sin referentes formales hay espacios a la manipulación. Pero ese es el condimento no el plato principal (…) Si hubiera un mercado estable, con oferta suficiente y confianza, nadie pudiera manipular los precios por internet. Pero ese no es el caso (…) El problema no es la información, sino la distorsión cambiaría y la desconfianza causada por controles, falta de ajuste y caída de divisas”, subrayó.
“Nadie puede fijar un precio loco y que la gente lo siga a menos que ellos también estén enloquecidos por la situación de riesgo que perciben (…) Obvio que el mercado está manipulable, pero plantear que el problema son las páginas web y no el desastre económico falta respeto a la inteligencia”, recalcó León.
Aseguró que: “Sube el mercado negro porque no hay confianza en las autoridades monetarias y por ende en el bolívar como reserva de valor (…) Sube el paralelo porque las asignaciones oficiales cayeron dramáticamente y los tenedores de bolívares buscan cambiarlos a cualquier precio”.
También sube el dólar paralelo, agregó León, “porque el mercado percibe que el gobierno está perdido en relación a las medidas necesarias para rescatar equilibrios, porque los vendedores no quieren vender hoy pensando que subirá más mañana, porque los rumores de medidas económicas son aún peores que las actuales en términos de control”.
Dijo además que “los precios en Bolívares son incontenibles y pulverizan el valor de la moneda”, haciendo que se dispare el mercado paralelo.
“Sube el dólar negro porque cuando la gente no consigue lo que busca se pone nerviosa y está dispuesta a pagar lo que sea (…) Esta vaina no se resuelve hablando paja ni cerrando páginas web, ni metiendo gente presa. Se resuelve rescatando la racionalidad perdida”, insistió.
“No hay ninguna sorpresa con lo que esta pasando. Controlas, amenazas, no ajustas y se te cae el ingreso. ¿Qué esperabas que ocurriera?”, afirmó el presidente de Datanálisis en alusión al Gobierno.
“El enloquecimiento del mercado negro es ¿debido a una manipulación o al modelo económico primitivo? Ambas”, dijo “ y a la caída de ingresos petroleros, pero para los ‘linealpensantes’ de ambos lados un fenómeno multifactorial es demasiado”.
El especialista remató su análisis afirmando que “si el gobierno no toma medidas urgentes de ajuste cambiario racional, el país va como una locomotora a cuatro dígitos de inflación en 2016”.
El dólar en el mercado negro en Venezuela se disparó 66% en los últimos 8 días y superó este jueves la marca de los 400 bolívares, equivalente a casi 64 veces la tasa oficial más baja dentro del control de cambio, indicó una reseña de AFP.
La divisa estadounidense se cotizaba ayer 21 de mayo a 402 bolívares, contra 301,93 el 13 de mayo: un alza de 66%.
En mayo de 2014 el precio del dólar paralelo era de 71 bolívares, lo que implica un salto de 466%. Frente a esta distorsión el gobierno del presidente venezolano, Nicolás Maduro, creó en febrero pasado un nuevo esquema cambiario denominado Sistema Marginal de Divisas (Simadi), que afirmaba “derrotaría” al mercado negro.
No obstante el Simadi, que cerró este jueves en un precio de 199,73 bolívares por dólar, ha sido cuestionado, pues según consultoras privadas entrega muy pocas divisas, lo que no ha permitido resolver las deudas comerciales de miles de millones de dólares que acumula Venezuela desde 2012 con proveedores internacionales.
The rate at which the bolivar is falling is unprecedented. Today the parallel market is quoted at Bs 423.39 to the dollar is down in just a week from 285 or so. That's a 33% drop in a week or ten days. This is getting really scary!
Currency tumbles as Venezuelans look to offload bolivars Associated Press By HANNAH DREIER 3 hours ago
CARACAS, Venezuela (AP) — A staggering plunge in the free market value of Venezuelan currency sent people scrambling to sell off their depreciating bolivars Friday.
The widely followed website DolarToday, which tracks exchanges along the Colombian border, reported that the South American country's currency lost a quarter of its value over the last eight days.
The site's app has become so ubiquitous that everyone in smartphone-obsessed Caracas seemed to find out about the crash through 400 to the dollar at the same instant, as DolarToday sent out a series of alerts announcing the new numbers under the headline "hyperinflation!"
Venezuelan currency was trading at 415 bolivars per dollar Friday, according to the site. That's down from 300 bolivars per dollar on May 14. It stood at 173 when the year started.
While many black market dealers paused transactions until the rate stabilizes, some Venezuelans said they had changed money at the 400 bolivar rate Friday.
It was not immediately clear what prompted the sudden drop, though a Barclay Capital Inc. report issued Friday described the underlying cause as government expansion of the money supply.
"We do not see any signal of change from the authorities but these risks should make them reconsider their policies," it said.
Barclays projected the Bolivar could dip as low as 600 to the dollar this year.
The administration of President Nicolas Maduro keeps tight control over the legal exchange of bolivars, using a byzantine three-tier system. It is meant to subsidize crucial imports, but has led to widespread corruption and speculation.
The strongest rate is 6.3 bolivars per dollar. The weakest official rate, which was billed as an alternative to the black market when it was rolled out earlier their year, has inched up to 200 bolivars per dollar. The fact many are willing to pay double that price for black-market dollars indicates the supply is limited.
The Maduro administration has been hoarding dollars as it grapples with falling oil prices. That has contributed to shortages and other economic distortions.
DolarToday is openly hostile to the socialist government and carries news stories attacking it. But the site insists its exchange rate reports are based on actual trades at exchange houses on the Colombian side of the border and are not manipulated to undercut the government.
In April, Maduro repeated his assertion that the site's shadowy managers, whose identities are not public, are collaborating with the speculators and opposition leaders he blames for the country's problems. He accused them of purposely sowing chaos and promised to have them arrested.
"We're going to put those people at DolarToday who are waging an economic war against Venezuela behind bars, sooner rather than later" he said.
The site, which is sometimes blocked within Venezuela, responded with a cheeky video documenting its popularity set to the club hit "Turn Down for What."
Defying U.S., Cuba stands by Venezuela on eve of regional summit Reuters By Nelson Acosta 38 minutes ago
HAVANA (Reuters) - Cuba said on Wednesday it would remain steadfast by Venezuela even as it seeks to improve ties with the United States, criticizing Washington's Venezuela policy before a summit meeting where the U.S. and Cuban leaders will meet face-to-face.
Cuban Vice-President Miguel Diaz-Canel chastised Washington over its decision last month to declare Venezuela a national security threat and order sanctions against seven Venezuelan officials.
"Nobody could think that in a process of re-establishing relations, which we're trying to move forward on with the United States, Cuban support for Venezuela could be made conditional," Diaz-Canel, the heir apparent to Cuban President Raul Castro, told reporters in Havana.
"If they attack Venezuela, they're attacking Cuba. And Cuba will always be on Venezuela's side above all things," he said.
Under late Venezuelan leader Hugo Chavez, Venezuela became Cuba's closest ally and its most important benefactor.
When Raul Castro and U.S. President Barack Obama announced in December that the longtime enemies would restore full diplomatic relations and seek to improve trade, the move was widely applauded by Latin American governments.
But the praise of Obama's policy shift was tempered when the United States imposed the Venezuela sanctions on May 9, and the controversy now hangs over the Summit of the Americas in Panama this week.
Ahead of the meeting, the U.S. government has tried to persuade Latin American leaders that declaring Venezuela a security threat was a prerequisite for the sanctions, not a signal of U.S. aggression.
"The wording ... is completely pro forma," Ben Rhodes, a national security advisor to Obama, told reporters on Tuesday. "This is a language that we use in executive orders around the world. So the United States does not believe that Venezuela poses some threat to our national security."
Thomas Shannon, a top aide to U.S. Secretary of State John Kerry, was in Caracas on Wednesday to meet with senior Venezuelan leaders in an effort to ease tensions.
(Reporting by Nelson Acosta; Writing by Daniel Trotta; Editing by Kieran Murray)
A diferencia de los líderes de oposición anteriores, Leopoldo Lopez no huyó cuando iba a ser detenido, se entregó voluntariamente. En la calle la gente de todas las clases sociales sienten el descontento pero no ven la salida. Recuerden que los cubanos tienen mas de 50 años de estar presos en el socialismo Castro-comunista. No es fácil salir de una tiranía armada.
[EN VIVO] Leopoldo Lopez en entrevista telefónica con Fernando del Rincon por CNN
Nicolás Maduro fue humillado en Rusia al ser recibido por un funcionario de tercer rango de la administración de Putin, el vicecanciller de la Federación Rusa, Sergey Alexeevich Ryabkov.
A pesar de la humillación recibida, Maduro expresó “su solidaridad al gobierno del Presidente Putin ante pretensión desestabilizadora de EEUU”, refirió la ministra.
La ministra para la Comunicación y la Información, Jacqueline Faría, informó que esta visita del jefe de Estado venezolano a Rusia constituye un destino previo a una gira internacional de trabajo que lo llevará a China y a naciones de la Organización de Países Exportadores de Petróleo (Opep).
“Parada técnica en Moscú en el Inicio de esta gira presidencial por China, Arabia Saudita, Irán y Argelia”, escribió en su cuenta @JacquelinePSUV, en la que además publicó fotos del encuentro, en las que se aprecia que participan en la reunión el ministro para Economía, Finanzas y Banca Pública, Rodolfo Marco Torres, y la canciller Delcy Rodríguez.
Maduro inició este domingo su viaje hacia la República Popular China, para afianzar las relaciones bilaterales de cooperación de carácter diplomático, económico y comercial con esta nación.
Durante su visita al país asiático, Maduro sostendrá una reunión con el presidente Xi Jinping y además participará en el primer foro ministerial China-Comunidad de Estados Latinoamericanos y Caribeños (Celac) que sesionará el 8 y 9 de enero, en Beijing.
Posteriormente, realizará una gira por países que integran la Organización de Países Exportadores de Petróleo (Opep), con el propósito de abordar el tema de la baja de precios del crudo.
African saying: When elephants fight the grass gets trampled. At the OPEC meeting Saudi Arabia and its Sunni allies carried the day.
Nicholas Maduro is a bus driver and you can expect bus driver wisdom from him.
Oil prices are set at the margin but that is not the price at which the bulk of oil is sold. Spot is the speculators' price. Most real buyers and sellers have hedged their trades. Notice that the Fox article correctly talks about average selling price.
The Daily Caller article is a political commentator doing his job, speculating on worst case scenarios.
The power play: The purpose of cartels is to exert control, in the case of OPEC to control oil prices. The power to do so comes from the capacity to flood the market. For decades the Saudi's had that power specially with full OPEC backing. Iran is an OPEC member but Russia is not. For all practical purposes, while an important player, Russia is not and has not been a key player. That role belonged to OPEC and within OPEC to Saudi Arabia. I use the past tense because fracking upset the equilibrium.
On a side note: I have been advocating American energy independence for years and when fracking came online I predicted both the recovery of the American economy and a lessening of the power of the oil exporters (without predicting any details). When everyone was predicting the demise of the US dollar, my position was that if the dollar failed the whole world would plunge into chaos (for a while). I also commented that trying to replace the dollar as the world's reserve currency would have dire consequences. Saddam Hussein wanted to sell oil in euros, he ended, soon after, hung. Coincidence? Maybe.
The current situation, as I see it, is that Saudi Arabia and its Sunni OPEC allies are trying to give US frackers a "good sweating" to use a Rockefeller phrase. It is important to note that while the Arab oil producers are monarchies the US producers operate in a free market where collusion is illegal. It's not equal combat, the Arabs stand as a block, the Americans as a swarm. the outcome will be interesting! In any case, Russia and Venezuela are bit players of little consequence despite their large output. Should the Arabs win, the situation goes back to the previous state. Should the Arab "good sweating" fail, it will be the US frackers, turn to give the Arabs a "good sweating." That could break OPEC's power. I'm not making any predictions except to say that in price wars the "arms suppliers" and the consumers are the beneficiaries. Economists will worry about deflation but it is good deflation.
The question was about Venezuela.
First, during Chavismo Venezuela has not received the full price for its oil. The discounts and special deals with Cuba and PetroCaribe to buy international votes is well known. What special concessions the Chinese got is less well known. Chavismo has a slogan: "Venezuela es de todos" referring to the oligarchy. In truth now "Venezuela es de los nica, de los cubanos y de todos los amigos del chavismo."
Second, at the current black market exchange rate it costs 3 US cents to fill the tank of my Toyota Corolla, tip included. Some Chavista factions wanted to raise the price of gas as part of the crisis management. Maduro nixed it. He is a bus driver, not an economist.
Third, from Black Friday, February 18, 1983, to Maduro, the bolivar/dollar exchange rate increase by 30 to 35% annually. Over the past 5 or 6 months it doubled! Inflation is presumably running at 70%.
A Short Note On My Hyperinflated Arepa Index
Two weeks ago, as I left Caracas on Nov. 22nd. to be precise, I wrote about the cost of a breakfast which I found expensive for Venezuelans, which included cheese arepas. As I returned to Caracas two short weeks later, I went to have a single cheese arepa at the same place. Imagine my surprise when I found that the Bs. 120 cheese arepa of fifteen days ago, now costs Bs. 156.
That is a 30% increase in two weeks. A year ago I would eat two for Bs. 120.
Thus, I will keep reporting on the hyperinflated arepa in the future.
Fourth, in Chavista ideology, small farmers are good while industrialists (capitalists) are bad. This has consequences. Fresh fruit and farm produce including fresh eggs are abundantly available but packaged good are not, specially price controlled ones. While rice is price controlled and nowhere to be seen but you can buy parboiled or flavored varieties at several times the controlled price. Pasta you can generally find both price controlled and market priced varieties. Price controlled cleaning products are scarce and there are no "fancy" ones. But you can buy them from scalpers (black market) at four times the controlled price.
All sorts of things appear and disappear: toilette paper, car batteries, roasted coffee, medicines, spare parts as price controls and dollar availability cause scarcity and crisis management by Maduro temporarily solves the problems.
Fifth, The above is what you can see on the street. What happens inside Chavismo and the balance of powers in government I'm not privy to. But you get some glances: A drug dealer is named ambassador or something to Aruba, the US tries to get him but the Dutch let him go home.
Netherlands Says Venezuelan Detained in Aruba Has Immunity
Since then Carvajal has dropped out of the news. On to the next crisis.
Cuba and North Korea are just two example that show that economic collapse does not mean the government must fall, that depends on the ruthlessness of the government. I have often said that Venezuela is a democracy by the consent of the military. The military is entrenched in Venezuela and they are given free rain to run drugs or any other money making scheme or scam. That was partly the basis of Hugo's hold on power.
Venezuela has a serious cash flow problem which will be made worse by the falling oil prices. Maduro's envoy to China begging for more loans was sent packing. In fact, the Chinese are pissed off that Venezuela is giving other loans preference over the Chinese debt. Venezuela started selling PetroCaribe bonds to Goldman Sachs at half par value. But with a bus driver in charge, who can tell what foolishness will follow?
Anoche estuve pensando en el escrito de Paulina Gamus, como dicen, lo consulté con la almohada. Es conveniente conocer algo sobre Paulina. Ella fue parlamentaria por Acción Democrática (AD), uno de los dos partidos que gobernó del 58 al 98. AD es un partido de centro izquierda generalmente conocidos como "social demócratas." El otro partido, COPEI, es o era "social cristiano." Francamente, hay poca diferencia ideológica entre los dos. El hecho es que Paulina necesariamente ve a los socialistas como redentores como quizá lo fueron en su inicio.
Si conozco la historia, los anarquistas fueron los precursores de los socialistas. Como cosa curiosa, en sus inicios, aunque Ud. no lo crea, tenían ideas algo similares a las de Ayn Rand. El individualismo anarquista no sobrevivió y dio paso al colectivismo (el principio del fin de una buena ideología). Luego el colectivismo voluntario dio paso al colectivismo obligado en buena parte impulsado por Karl Marx. De allí a la dictadura de partido y al totalitarismo fueron pasos sencillos. Lo que sucedió con el socialismo es que demostró que no sirve para gobernar. La transformación china comenzada por Deng Xiaoping es admisión franca del fracaso que es el socialismo.
¿Los socialistas de hoy, serán de verdad idealistas o solamente ávidos del poder? Si Venezuela es una muestra, los allegados idealistas de Chávez lo fueron abandonando uno tras otro. Lo que quedó con él fue la lacra y la única ideología que Chávez jamás tuvo fue morir en "la silla," cosa que logró.
Paulina debe estarse comparando con los anarquistas idealistas y no con los "socialistas" reales como son.
Las derechas suelen ser más fáciles de reconocer al menos en Europa, donde no existe la actitud vergonzante de ciertos partidos políticos en América Latina PAULINA GAMUS 4 AGO 2014 - 04:35 CEST24
Los españoles utilizan el plural para referirse a las posturas políticas de izquierda y derecha, lo que viene al pelo para esta nota. Antes la gente era de una u otra corriente, ahora hay que hablar de izquierdas para poder englobar a un heterodoxo conjunto de así autodenominados, quienes asumen las más asombrosas identificaciones y solidaridades. Las derechas suelen ser más fáciles de reconocer al menos en Europa. Allá no existe la actitud vergonzante de ciertos partidos políticos en América Latina que se defienden con pasión cuando los acusan de ser derechistas. Ninguno, aunque lo parezca, quiere serlo. Y si lo es no quiere parecerlo.
Hace unos días un amigo me envió por correo electrónico el célebre Yo Acuso de Emile Zola. Releí no solo los alegatos que el escritor escribió y publicó en defensa del Capitán Alfred Dreyfus, un oficial judío acusado de traición a su patria francesa, sino también la historia de la tormenta política que vivió Francia a raíz del juicio amañado y la injusta condena al joven militar. Fue un hecho que conmocionó a la sociedad francesa durante doce años, desde 1894 a 1906. Aparece entonces la expresión despectiva “los intelectuales”(izquierdistas) que emplearon los antidreyfusards (Barrès, Drumont, León Daudet, Pierre Loti, Jules Verne...) contra los dreyfusards (Emile Zolá, Gide, Proust, Péguy, Mirbeau, Anatole France, Jarry, Claude Monet...).
Los antidreyfus eran de extrema derecha sin que les temblara el pulso y los defensores de la inocencia del capitán eran definitivamente socialistas y de izquierda aún con riesgo de sus vidas. La extrema derecha de entonces era ultranacionalista y chauvinista, con el antisemitismo como la fobia más protuberante. La izquierda, incluida la extrema, defendía con vehemencia los principios básicos de la democracia y los tan vapuleados postulados de la revolución francesa: libertad, igualdad y fraternidad.
Las definiciones continuaron muy claras con la aparición en escena del fascismo de Benito Mussolini y del nazismo de Adolfo Hitler. Los militantes de izquierda confrontaron ambos regímenes con sus ideologías y luchas. Muchos -no todos- abrazaron el comunismo soviético que parecía la contrapartida al nazifascismo. Pero cuando cayó la máscara siniestra del estalinismo, la mayoría de partidos y personas de izquierda se decidieron por el socialismo democrático y por la defensa genuina de los derechos humanos.
¿Es esto lo que ocurre hoy? ¿Qué significa en estos días ser de izquierdas? Comencemos por algo aberrante: Hugo Chávez Frías. Desde los inicios de su gobierno se autocalificó como izquierdista, se identificó con la revolución cubana y se convirtió en hijo putativo de Fidel Castro. Pero al mismo tiempo tuvo como asesor a Norberto Ceresole, un fascista argentino que le metió en la cabeza la trilogía caudillo, ejército, pueblo por la que padecemos hasta el día de hoy. Aunque el pueblo siempre estuvo ausente y ahora también el caudillo.
En el año 2000 Chávez visitó a Sadam Hussein, una especie de leproso en el contexto internacional. Le entregó la espada del Libertador a los sangrientos tiranos Robert Mugabe de Zimbabue y Muamar Gadafi de Libia y se hizo afectísimo de Alexander Lukashenko, el eterno dictador de Bielorrusia. Pero la tapa del frasco fue su fraterna relación con Mahmud Ahmadinejad, el fundamentalista iraní, quien venía cada dos por tres a visitar a su “hermano” Chávez y viceversa. Esas relaciones contra natura no fueron óbice para que partidos y figuras de Izquierdas en distintos países, consideraran a Chávez un camarada, un líder o mejor aún, un héroe.
¿Cuál fue el imán que atrajo tantas admiraciones hacia el dictador militar de Venezuela? Su antinorteamericanismo. Anti imperialismo no sería lo adecuado porque nos entregó en manos del imperialismo ultracapitalista chino al que Venezuela le debe hasta el modo de andar. Y es que en eso se han convertido las izquierdas, lo único que las define y las une es el odio hacia los Estados Unidos de Norte América. De esa manera se puede ser de izquierdas y ser aliado y admirador de las FARC, de un Stalin posmo como Vladimir Putin, del dictador sirio Bashar al-Asad, quien por el empeño de mantenerse en el poder ha provocado más de 200 mil muertes en su país, y de cualquier déspota genocida o fanático religioso que se proclame antinorteamericano.
Tratándose de Chávez cualquier desatino o exabrupto era natural y hasta lógico, pero uno esperaba que otros mandatarios de Sur América, hasta ahora respetuosos de la democracia, tuviesen una conducta coherente con sus orígenes. Por ejemplo ante conflictos internacionales como el que actualmente se desarrolla entre el ejército de Israel y el movimiento terrorista Hamás. No son el estado judío y Estados Unidos los únicos que califican a Hamás como terrorista, lo han hecho la Unión Europea, Canadá y Australia. Human Rights Watch y Amnistía Internacional han acusado a Hamás de crímenes contra la humanidad. Pero más allá de esos señalamientos, se sabe que Hamás tiene en su carta fundacional la destrucción de Israel y es además un movimiento fundamentalista islámico que discrimina y oprime a las mujeres, envenena con odio la mente de los niños y persigue la obligatoriedad universal de abrazar el Islam como religión. ¿Puede entenderse que tres presidentas mujeres como Cristina Kirchner, Dilma Rousseff y Michelle Bachelet condenen a Israel en su lucha contra el fanatismo terrorista de Hamás? ¿Tiene sentido que un socialista genuino como José Mujica, presidente de Uruguay, embista contra Israel -la única, democracia del Medio Oriente- para apoyar a un grupo fanático y violador de los derechos humanos como es Hamás? De Evo Morales mejor ni hablar pero ¿Ollanta Humala tenía también que plegarse a la moda de lo que ahora parece políticamente correcto que es condenar a Israel?
Por suerte para los venezolanos, cuyo gobierno ha promovido marchas y manifestaciones anti israelíes y cuyos medios de comunicación han desatado una campaña abiertamente antijudía, la población se ha mantenido ajena a esas incitaciones al odio. Las demostraciones públicas se han alimentado de la burocracia, ni la comunidad árabe que es numerosa, se ha dado por aludida. Y es que la hipocresía de Maduro y compañía hiere la vista de todos. Están acongojados por la muerte de niños y civiles palestinos cuando en Venezuela solo en los primeros siete meses de 2014, han sido asesinados más de 50 niños. En las protestas estudiantiles que comenzaron el 12 de febrero de este año fueron asesinados por los cuerpos de seguridad, 48 civiles y la delincuencia común, apenas en el mes de julio que acaba de terminar, segó la vida de 378 personas. En 2013, 123.000 venezolanos murieron de manera violenta y Venezuela no es un país en guerra. La compasión selectiva no es exclusividad del gobierno de Maduro, es una moda izquierdosa. Pero mirar la paja en el ojo ajeno si es una manera de esquivar la viga en el propio. Es el reino del revés.