BeritaSeo: decomposition venezuela

Mille e tre

Se sia brutta, se sia bella

I was in shock today going to my local grocery store after ten days out of the country. I was not expecting any improvement in the scarcity crisis but I was not expecting such clear degradation within a week. After all, the last week in January is the one where we are supposed to reopen business in full after the month and a half closing for the holidays. The least one would hope is that returning products would compensate for disappearing ones, for a few days, until all goes down the drain, say, late February. But it looks that wee will not have that luxury.

Madamina, il catalogo e' questo

I did not have time to look in details, first day at work, but that was I saw, or did not: lots of holes in all shelves. There was no pasta, not even the expensive imported Italian. No dish washing detergent.  No cereal whatsoever, not even some disgusting sugary concoction still available for kids. In fact, Coke had replaced cereal in its shelves. No tuna, even though it has gone a lot in price. Etc...

un catalogo egli è che [Lorenzo, not da Ponte] fatt'io

Of course, what is happening is simply what this blog narrative has been consistent about, "la costanza". There is no raw material henceforth, no production. The political humdrum welcoming me, much more important than grieving jails in Margarita, is the heptalogue of Lorenzo Mendoza about what the regime must do NOW, THIS INSTANT, WITHOUT ANY FURTHER DELAY before disaster strikes. I am not going to give you the details, I would need more than a post, and, besides, regural readers already can guess. What we need is regime change because reform at this point will not do anymore. Lorenzo did not say that but it is the inescapable conclusion of his words: he said what needs to be done and we all know that the regime is absolutely unable to do even a tenth of what is listed.

in Turchia novantuna

But Lorenzo went further than his proposal, he blew away the miserable half-assed actions that the regime has undertaken in recent days to try to cover up its failure at getting anything done anywhere, the more so that its emergency decree was rejected as it should have been. For example Lorenzo observed that in all those "mesas de trabajo" held to find solutions to the crisis, the Polar Group, the biggest, by far, food producing company in Venezuela was not invited to attend. Meaning that any regime plan that does not account for the only actor that can truly do something about the crisis is doomed to fail. And to nail in the point Lorenzo gave numbers, and deadly ones. He said that to import what Polar can produce with the 5.900 million dollars the regime allocated then the regime would have to spend 93.300 millions. In other words, Polar is 18 times more productive/efficient than the regime's bureaucrats.  The problem is not the private enterprise, it is the regime.

Osservate, leggete con me

Of course, the regime was not amused by the words of Lorenzo Mendoza, who were passed by Globovision that was punished again by the regime. But it is not going to stop there. We heard already heavy batteries shooting at Lorenzo from diverse quarters and tonight it came from Diosdado Cabello personally who said on his TV talk show that Lorenzo has received himself the 5.500 millions of dollars and thus became the richest man in the world. Why would the richest man in the world still reside in Venezuela he did not explain. But then again the audience he addressed such words is not the type of audience that delves in such finesse. Fancy fencing times are over, this is rude butcher knives throwing times.

...donne d'ogni grado,
D'ogni forma, d'ogni età

Meanwhile the currency reaches new records in the black market and lines for all are reaching new records. My black market person informed me today that he is not receiving goods, that there is not enough reaching the store so that he cannot resell some on the side. Apparently there is a certain percentage he was allowed to "buy" but now either there is not enough or he is outbid by other colleagues. How am I going to do to support not only me but those that I support because they cannot stand in line for hours, well, you tell me.... Anyone knows a good black-marketeer?

Voi sapete quel che fa........


Emergency decree is down. We may be the better for it

A little bit busy these days so I will be fast.

The regime tried to force through an "economic emergency decree" which was a mere diktat to make communism a reality in 60 days. You could read it all here, before most pundits tired to think about it, or worse, to pretend that there was some redeeming value somewhere. Usually pundits from brainy places like Forbes who can only think about a return on an investment that they were foolish enough to give to a country whose bloggers were active and announcing disaster since 2003. But I digress.


Since everyone knew that this was a mere propaganda ploy to try to put the blame of the crisis on the opposition (a mere trap Castro style), the Assembly majority MUD organized the only response it could do for the time being: call for hearings knowing they would be stood up. This was very simple to get because the Assembly decided that the hearings should be open to the press like it happens in EVERY democracy on earth unless it is about national security, as in ISIS about to bomb you. But apparently the state of bankruptcy of the nation is such that it cannot be revealed in public. Thus the ministers use that excuse to bail out at the last minute. Score 1 to 1 on propaganda. And I am generous to the regime.

The parliamentary commission named to inquire on the decree ruled that without economic data, that without at least announcing some the of the expected measures to be taken (the decree had no specifics) the emergency could not be approved. The following full debate today pointed out among other things that the country had been ruled by chavismo through 17 years, and that there had been enough enabling laws to emit enough decree laws for the regime to deal with whatever it needed to deal with. The emergency decree was thus duly voted down. The government was welcome to send in new and more explicit proposals and they will be speedily examined. And that is that.

Now what?

I am not sure what leverage the regime got out of that wrestling match. Probably some, there were enough idiots that though the national assembly would open the gates to cheap and abundant corn flour. But me thinks that those who voted for the opposition MUD in December knew exactly why they voted for them and hot air from the regime is not going to play much if actually some stuff does not appears on the shelves soon. Period. After all, they have been used to abundant freebies for years coming from Chavez. If then, why not know? Why not for the last two years? If the "economic war" cannot be won by Maduro maybe, just maybe, he should be replaced by one that can win it. No?

The fact of the matter is elsewhere.  The regime has no idea what to do and I can vouch for that. Many clients and providers have been summoned to many meetings in recent days. Hysteria grows by the day. To give you an example, one of them told me that they got an urgent mail from ministry X to send them in 24 hours a list of what they could start exporting as soon as possible so the permits could be processed fast. Without inquiring about the supplies and dollars they would need to be able to produce enough for the local market to then be able to export..........  [sigh, deep sigh.... shit like that does not appear in economic pages, just in blogs].

So the regime tries to blame the opposition and the janitor and his dog.

But no matter what, the reality is there. In my opinion default is unavoidable because there is no money to pay what needs to be paid this year EVEN if oil were to go back up to, say, 35 USD a barrel by fall. Even starving Venezuelans will not avoid default AND allow at the same time to send Cuba whatever meager allowance can still be sent. Maduro and Cabello and Padrino can refuse to visit the National Assembly, and close it, and send the MUD representatives to the execution wall, that reality is not going to change. What needs to change is the economic system but any change is impossible because the regime would unravel in weeks.

The question is not whether Venezuela is going to the IMF, but when. There is nowhere else to go at this point.

Of course there might be those who think that PODEMOS in Spain or Correa in Ecuador or Evo in Bolivia are going to come and bail us out. Bwahahahahah.....

So I feel good tonight because I read this whole week as getting us close to the end. Whatever the end is, it cannot be postponed much longer. Just go and visit a grocery store.

Tourism in Venezuela: at your own risk

So I was away for a few days of beach, sand and surf. Not quite.

Take out the water and it is pretty much like this



I have a time share for a yearly week in Margarita which is why there are occasional pics of the area through this blog. Considering that the S.O. does not like the beach and was OK in health, I risked leaving. Next, all the problems I had to endure for a meager 4 days break.

Preparing for the trip:

-. Get your reservation. Since I did not take my usual time slot the resort only confirms my change two weeks ahead. As a consequence since it is difficult to find airline tickets in such short notice, I already lost one day as I could not find flights for the day the week started. Plus, the confirmation coming so late, I had some unavoidable engagement that made me lose two other days. So form the start I had to pay for 7 days while being able to enjoy only 4.  I know, I know, little bourgeois disgust, but as you will read they keep piling up.

- Since a lot of taxis will be involved, since you cannot pay them with plastic, since there is no high currency note, then you have to get yourself a big bundle of bank notes of 100, the highest available. The shortest ride will set you back at least 500 VEB so you will need at least 5 banknotes of 100, if you can find them. See, the problem is that there is such a demand for 100 banknote (about 13 USD cents, that is, 0,13, barely a dime) that banks will not provide them that easily. Your best bet is frequent visits to ATM the week before, maxing out your daily withdrawal until you get the wad you need. In my case I estimated 20,000 in cab fair so I had to get 200 banknotes. TWO HUNDRED. An ATM run not from my bank will give me only 6. At my bank ATM I can get 40 (if available). Do the math. And then visualize getting out a wad of bills when you pay your cab and counting patiently dozens of bills......

- Of course, you have to pack very carefully as you do not know whether a missing item can be replaced at your destination. And yet it does not help: in my case my beach tongues broke and I could not find a replacement to my size so I had to get an overpriced pair of Crocs......

The trip:

- Mistakes abound and you cannot correct them easily. My airline screwed up on my ticket and I had to pay an extra 20% at the airport or else. Sure, I can appeal, but that meant I could not board....

- Creatures comfort are scarce. There is no bottled water. So it is a soda or Gatorade for your thirst. I was hungry and I got inside the fast food court aiming at "¡Que Arepa!" which looked clean and appealing. Except that there were out of corn flour so NO Arepa.

- Harassment in miscellaneous ways is present. The worst offender is that in Margarita you have an immigration check point for all. Allegedly to protect the island form the arrival of criminals and drug smugglers. Ask the natives if they feel any safer.....

- You arrive tired and hungry at your hotel. Yet relief is not there. The Caracas office screwed up and you have to wait half an hour until they can finally untangle part of the screw up and give you keys to your room. But since the screw up was big I had also to advance 50 banknotes so I could eat that night until next morning things got settled and I could enjoy my plan as planned (and get back my precious banknotes!!!!!)

The stay:

- So there we are and there is water but the toilet does not flush. So before I unpack I go to the front desk to report and change room. It turns out that there is a shortage of water in Margarita so they dropped the water pressure to save. Since the toilets are of the high pressure type, without reservoir, well, you can only flush in the few hours during the day where pressure is set to normal.

- Flushing my toilet off hours required me to fill up the paper basket with the thread of water from the shower and lug it to the john.  5 stars it wasn't.

- And after the second day the water was cut outright 20 hours a day, so there was not even a water thread.

- Food was actually not bad. Usually I do not get the food plan as I like to go out on occasion, and I eat munchies so as to spend the week dieting and exercising (there is a fridge in the room and I bring a water boiler). Considering the food shortages I decided that this time around I'd better get them to deal with it. But if food was not bad it was showing a total lack of variety. In short, 50% of the offerings were the same all the time and the other 50% alternated one day each....  After 4 days I had already enough of the cafeteria.

- Drinks were included but you'd better have a solid liver. See, over are the days of fancy liquor. Now what you have is basic rum and local made vodka and gin which are, well, at least for me, a fast source of headaches and hangovers. Still, there is also creativity at the bar. Bailey has disappeared in Venezuela as way, way overpriced. So the barman invented a "Margarita Bailey" which is Ponche Crema (kind of bottled eggnog) with a dash of Venezuelan made whisky and coffee liqueur.  Well, it sort of worked and became my night cap....

- Of course, with the water crisis you could not have your towels, bed sheets, etc. changed at will. Since the AC was way too cold and too humid you could not dry them properly. Within two days all started to have a weird scent.....

- I went only once out, to make an errand and get a beach thong replacement. So I had to go to a fancy mall (La Vela) where luxury stores exist except that they have a very limited displays and no customers inside anyway. I paid my Crocs three monthly minimum wages (about 40 USD at black market rate, 4700 USD at the official 6,3),  But a pair of solid thongs my size, not nice, just solid, would have set me back a monthly minimum wage anyway.  If I caved in and bought them is that by experience I know Crocs last more than three times what a pair of solid thongs can last...  The question here, of course, is not whether I can truly afford them; the point here is how the poor masses that voted for Chavez and live on minimum wage can afford to put anything between their feet and the dirt.....

Conclusion:

I 'll spare you more details, such as security, blackouts, etc.. I can only tell you that after 24 hours I seriously considered to go back home (the resort was rather empty, by the way). But the Caribbean is there and well....... even if the beaches are eaten up with oil pollution and look more like a Hawaiian volcano beach than a coral sand one........




Will it hold?

It seems that creating an unjustified "state of emergency" at the border with Colombia has accelerated talk of regime "change". We have Miguel, or a nice article at the FT (subscription) by Daniel Lansberg or a dire "self-coup" from Oppenheimer at the Miami Herald. Readers of this blog should not be surprised as I have expressed often my doubts at the elections on December 6 would be actually held, or when describing how the country was collapsing steadily.

Rather than going into the macro thing covered extensively elsewhere, let me go first into the micro stuff.


The fact of the matter is that shelves of non controlled products at grocery stores are getting empty. As for the controlled stuff when it arrives, it is in insufficient quantities, immediately sold, often among some trouble and even looting outside of Caracas as the situation there is much worse.  But this you already knew, it's just that it's getting worse by the day.

But scarcity of food and medicine is just the apparent face.  The reality is much worse as it is more and more difficult to produce food and medicine. It is not that raw materials are lesser and lesser amounts, it is that working with the limited amounts available is increasingly difficult. Not only spare parts deficiency stop production lines frequently, in addition to raw material erratic deliveries, but insecurity in transport and distribution make the few still producing reluctant to ship far away or to risky areas.

And that is not all. To the above problems you must add a renewed corruption drive where public "servants" now are asking straight to your face cash to perform the duties that they are required to perform by law. Not only inspectors now are blunt about asking you for money or they will close your facility on some dumb excuse that would carry at worst a small fine, but requesting permits for whatever has become an ordeal.

I am not going to give you references for the above: this all is my personal day to day experience. We are helpless in front of it all. There is nowhere to go for redress of any abuse, of any black market activity.

As expected this is having a deleterious effect on the political climate, explaining why the regime is grasping at any excuse to blame others for its failures. It was the "economic war" then it was the irridente Esequibo, today it is Colombia unable to control its borders and promoting paramilitaries even though we ALL KNOW that the huge contraband at the border can only happen because of the connivance or actual help from the Venezuelan military. Tomorrow?  It will get worse as these political shows have a light traction, at best, for the regime's political aims. Polls this week seem to credit that if fair elections were held the opposition is above 20% the regime and up and up. Difficult to see how the regime could bridge the gap by December 6. Short of miraculously ending all food and medicine lines I do not see how the regime can reduce the spread to less than 10%, the maximum amount that it can compensate through electoral cheating.

This being said it is quite clear that the Tachira "emergency" and the abuses perpetrated  against defenseless Colombian migrants are a clear step in the strategy to falsify the election. The hope is that cheap nationalism will be enough to reverse the regime's fortunes, or otherwise justify a national "emergency" that will allow a postponement of elections in the hope of better electoral days.

This all we can take as "fact". What is more worrisome is that the regime in full economic debacle IS NOT taking ANY MEASURE. ANY. Unless arresting a few assholes with an extra 10 pounds of corn flour or a few gallons of gas on their bike to Colombia count as an economic measure in a country with maybe 30 million folks. Why? Are we that broke that we cannot even buy basic staples overseas? Is the regime so politically helpless that we cannot even increase the price of gas to a dime a gallon? Are divisions and/or incompetence so entrenched in the regime that they cannot come up with or decide on a single measure to deal with the situation? Measures exist, simple, like a devaluation from 6.3 to 100 which, believe it or not, would have more beneficial effects on inflation than negative ones.

Or is it that the regime is so convinced of its own demise that it is playing the burnt earth card?

Which bring us to the title. My own opinion is that it is a distinct possibility that the regime will not hold until December 6. Either Maduro will be gone, or the regime will have morphed into your regular explicit proto-totalitarian dictatorship. Even if measures are taken TODAY they cannot have much effect by December 6. Even if the regime brings in a whole bunch of imports they are not here yet, they would be insufficient, they will not be spread efficiently and at best could only reach the hard core chavismo.

It is just too late to save the regime in December 6, even if electoral cheating is applied bluntly irregardless of world observation. It would be worse than when Ahmadinejad was fraudulently elected against Mousavi.

Thus the possibility of regime "change", from a Maduro resignation to a coup and bloody repression is becoming quite distinct. Whichever it is one thing is certain: it will not go away peacefully.


A guide to Venezuela eateries around the world

The Venezuelan diaspora(4%? population so far) has had an effect around the world: there are now dozens of Venezuelan food restaurants in most major cities of the "west" where Venezuelans do emigrate.  I got this in the mail, a comprehensive list made by Andrew Richard and Daniela Cadena. Though In Spanish it is easy to find your way around for your own city. I include the maps for Europe and the US where most readers are. But Australia and South America are well represented while Canada lists Toronto and Montreal and many Central America countries do have Venezuelan joints. 

So look to see if your place shows up and go for it. The places listed have a link.

By the way, for those who live in New York area, the Times has a complete review of the local joints.



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300

I am not referring to the title of a rather trashy movie purposely showing enhanced muscular bodies fighting it out with alleged Persians in dreadful drag. I am referring to a trashy banana republic that is unable to keep its economy inside the mere decency bounds where its citizens can hope to keep some of the value of their work. If they have any.



The US dollar has finally reached in the parallel/black market the 300 mile post {official rate is still the unbelievable 6.3 but nobody but the corrupt military can have access to it, of course}. Since I am out of the country in a place of bounty and mental partial recovery (because worrying sick that nothing happens to the S.O., to work, to relatives and to what not in no particular order as peace cannot be found even away) I have no time to go into the minutiae. I will just remind you that on February 25 I was writing about the bicentennial bolivar so on your own you can assess by yourself the effectiveness of Maduro's economic policies through March and April to restore trust and confidence in the economy of Venezuela.

But was amazes me further, even this far away, is the stupidity of the regime in admitting almost unwillingly that their policies have failed truly miserably. That is they have announced this week that the official dollarization of the economy has started. Since the regime is bankrupt and since they cannot even buy cars for their public administration routine, well, they decided to allow Ford motor corporation to start operating again selling cars in US dollars INSIDE Venezuela. How people are going to get highly expensive dollars to buy them I cannot figure out nor I am in a mind set to figure out from afar. And it ain't the point. The point is that the regime has started allowing for the sale of big ticket items in currency of the most reviled empire, the one for which a month ago they were still trying to collect gazillions of fraudulent signatures to bring to Panama to shame Obama.

The point is that the regime is accepting that they have reached the end of the road.

And the unraveling may be faster than expected. Already the Ford Trade Union wants to get paid in USD...  Note that trade unions in Venezuela are particularly corrupt, but again, I digress...

Crashing

The free fall of the currency continues in Venezuela. On February 25 the black market value crossed the psychological line at 200. Today on March 5 we have reached 283:

That is a 10 Bs depreciation every day since February 25, 1 dollar a day at the official 6,3 exchange rate which has become a fiction since last year.

There is no way around it: hyperinflation is here. January is reported to be 10%. The government has stopped SIMADI. There is no word from CENCOEX and SICAD. In other words we do not know for sure whether Dollars are still being exchanged (a little bit still do, some particulars on occasion let us know that a small portion of their dollar debt has finally been approved for payment, never more than 10% of their total debt).

Draw your won conclusions. Mine is that the promised financial collapse predicted for April may have already started,