Grigori Potemkin was a prime minister of sorts of Catherine the Great Tsarina of all Russias. He became so as he was her lover, and made sure to feed the Imperial bed once he got tired of the aging tsarina (or she of him, more likely). But not any longer a “favorite” he retained both considerable power and great influence until his death. Yet for all his achievements (though questionable) he is remembered most for the “Potemkin Villages” that may or may not have existed, a very apt irony for the concept they represent. The legend, happily spread by his political enemies, came about when during a visit by Catherine to the new provinces, sailing down the Dnepr, he supposedly made a few fake villages and fake serfs cheering along the river’s bank. This way the Tsarina felt comforted in the belief that her newly conquered territories were indeed being settled and Russianized as God intended.
This tale of what autocracy does to people has come back frequently to my mind. After all in Venezuela we have a despotic Tsarina who wants everyone to love her and who is looked upon as a new “enlightened despot” by philosophical intellectuals only too happy to cash on her gifts and correspond with her as intellectual peer; we also have different little Potemkines around as there is no one of the stature of Potemkin in Venezuela. Then again Chavez does not have the stature of Catherine either, nor his pseudo-intellectual supporters the stature of the XVII century philosophers. But we can all agree at least on the “despot” part of the story. Thus I thought that as a weekend amiable entertainment I should look at a few of the Potemkin Villages of the Venezuelan pseudo-revolution, true Potemkin villages that is.
The Potemkin money
Let’s start by the most recent invention. Apparently in a stroke of cosmetic genius they have decided to lop off three zeros from the Venezuelan currency, the Bolivar (VEB, Bs.) and call it the “Bolivar Fuerte” (Bs.F.). This will start right now, as early as January 1 2008.
Now, there are many cases in history where it has proven to be necessary for a government to change a strongly devaluated currency into a more manageable, and stable, currency. For example De Gaulle started the conversion of the French Franc into the Nouveau Franc by loping off two zeros. But he also added a fiscal restraint to the country and promoted over a decade of strong economic growth that stabilized that new currency who for all its fault only lost about 25% of its value until it became the Euro (courtesy of the inflationary policies of Mitterrand, by the way). But in both changes, there was a long educational, legal, fiscal process that allowed for a successful change of currency (now the Euro trashes the USD).
We also have some cases where simply the governments decided upon a cosmetic changes when the loaf of bread started coasting more than 1 million. Usually within a few years the loaf of bread cost again a million and a new currency again came up. See Brazil, for example, before the Cardozo Plan finally put some order.
What is going on in Venezuela? The financial Potemkin of the regime, perennial financial minister, is supporting the simple loping off of three zeroes to the currency and noting else. No fiscal restraint. No accounting. No improved investment climate. No nothing. And through an unusual cadena of the Central bank, who left me in a state of stupor, the directory presented the whole thing as the best change since monetary sliced bread. Now, for the record, Giordani is the economy expert who has presided over the devaluation of the Venezuelan currency from a 550 to the USD when Chavez came to office in 1999 to the current 4000+ on the street market value we must put up with these days.
Now in all honesty I would like to believe that Giordani and the combo at the Central Bank could be qualified as modern days Potemkin for selling such a fail sure idea to Chavez. But at least Potemkin knew he was looting the country and faking some of his successes. These guys do not have successes to brag of and do not when know what fakes they are.
Meanwhile, I am taking bets as to when the next money change in Venezuela with an inflation that promises to go above the 20% annual rate for the years to come.
The Potemkin economy
Through 2006 we were treated of tales of Venezuelan economy booming at 10% rates. True on paper. Indeed with sky high oil prices and a governmental willingness to spend more than it was taking in to win (buy?) the presidential election, money was in the streets and the financial situation of the people in general improved (particularly for government people and their associates who started buying hummers, BMW and what not).
But once the election passed we got quite a different story. My local Central Madeirense since early January has been lacking white sugar routinely. Beef also is frequently lacking and the little bit that comes is barely good enough to make stew or for the dogs (which admittedly does not bother me as I am a near vegetarian). Other items are missing. Even the BBC felt obliged to run a feature on empty shelves. My favorite tooth paste has disappeared. No more imported cereals. No more fresh milk, only the unregulated skim milk presentations, and not all the time. And a few other items missing at regular intervals. Stores are trying to cover up, for image, their gaping holes and thus you can find now toilet paper filling depleted cookies shelves. Or more and more, nothing.
There are many reasons, including a conspiracy theory that I am sorely tempted to write about. But the fact of the matter is that these scarcities are provoked EXCLUSIVELY by deficient government policies. There is a coupling of a few factors, ranging from general lawlessness that makes business extremely expensive and little profitable, to considerable delays in the granting of essential foreign currency for production, without forgetting corruption as usual, price controls dating from 2003 that the government refuse to adjust for the near 50% inflation since, and more. The result is simple: local Venezuelan production is simply insufficient when not dropping altogether. After all chavista are unable to understand the essential axiom of anyone managing a business: you are not going to manufacture stuff to sell it at a price BELOW what it cost you to make.
And thus the brightly growing economy is turning out to be yet a new Potemkin village as real production growth has been absent all these years and we are starting to feel the consequences. the fake façade being lots of imports and lots of trucks distributing them to governmental benefits recipients.
The Potemkin administration
OK, I admit it, this is an excuse to take a shot at the two prominent figures of the regime outside of Chavez. But who could resist seeing Jose Vicente Rangel and Jorge Rodriguez, vice presidents of Venezuela, as second rate modern day Potemkins (though as corrupt as the original one)?
Jose Vicente has been sort of fired in December. Nobody knows for sure whether he fell off Chavez favor or if he has decided to become a power behind the throne by setting off new favorites close to Chavez but who communicate often with him. After all on his own admission Jorge Rodriguez is close to Rangel.
Now JVR, out of office, has decided to return to TV. In his inaugural show he has decided to tell us how true journalism is done. Ironic that after 8 years in office, dodging real questions and refusing to account for anything, he is going to tell us how it is done, outdoing himself once again in cynicism. Unfortunately like many of Catherine favorites, once he shared the crime bed of Chavez he will never lack adulators (nor will he ever be trusted by serious thinkers again). Certainly that he welcomed Chavez as his first guests will allow him quite an amount of flattery and hangers on for the foreseeable future. Heck, I suspect that many opposition figure will be watching carefully his show in the ever hope of being the first ones to detect the first real sign of break up between Rangel and Chavez. But Potemkin was very careful to never break up completely with Catherine. After all, when you have shared the same bed for so long each one knows too much about the other one for an effective one way blackmail.
So JVR, we discover, has been so successful at fostering the career of Jorge Rodriguez that this one is the new favorite of Chavez. And he comes with a proven Potemkinesque track record. After all Jorgito presided of true Potemkin elections in 2004, and set up the system that continues to deliver such elections for the foreseeable future. Even today yet new allegations are surging about the validity of the 2004 results, but since the opposition has been stupid enough to accept the conditions of the 2006 election, then the 2004 sort of do not count anymore.
But Jorge Rodriguez has the quality required for a new Potemkin. As a shrink we can be sure to see cheap politic-psycho manipulation to make look everything as progress and success. After all when Rodriguez, dressed with a fabulous Italian suit states to an El Universal interview that “nobody questions the 2004 result anymore” you know what to expect (the suit looks much, much better on the printed edition). The interview has been translated into English here and is worth reading to take the full measure of the man and what is in store to strain our intelligence and credulity.
The Potemkin constitution
And to top it up, I cannot resist a final jab at the constitutional reform proposed. We were told that the 1999 constitution was the most perfect ever written in Venezuela (at least on a stylistic and grammatical point of view it sucks big time).
Well, the 1999 one was such an empty shell, so much violated already by the very same people who wrote it, that there is a need to change it. See, the only thing that ever mattered in the constitutional change of 1999 was to introduce the presidential reelection who wiser men have always predicted to be most of the time a bad idea in Latin America. Now in secret there is a discussion on how to create unlimited reelection of Chavez, the only thing that matters, a real village this time…
A Potemkin country
So now it just remains to sit an watch. Surely, as the country keeps degrading we will have more and more youth festival better and better organized and more and more colorful. Speakers at those festivals will grow and outdo each other in sycophancy to the “enlightened despot” who restricted the liberty of Venezuelans (and a few others in LatAm) just as to fight the elected tyranny of a Northern Country. It has always happen, even in starving countries such as North Korea. But it will all be a Potemkin Country, a real one this time, with all the required fakeness, including unfinished subways inaugurated in great pump or sugar mills that exist only in the pockets of corrupt military put in charge of the project.