Friday, May 02, 2014

The money-losing machine in Caracas

A must read epic article on Venezuela's disaster at Foreign Policy. The last paragraph alone is worth the price:
Which brings us, finally, to the million-dollar question: In post-Chávez Venezuela, who has the political capital to institute the deep and painful reforms the country requires to break out of this wicked cycle? If Chávez himself -- who was the closest to God you can get in Venezuelan politics -- didn't dare to touch the gasoline subsidy or move against the Armed Forces' involvement in organized crime, who would dare? In the answer to that question, more than in the epic battles painted by the likes of María Corina Machado, lies the key to Venezuela's long term future.


  1. Boludo Tejano5:55 PM

    From the FP article: While the biggest corruption schemes in Venezuela are organized and sustained around currency controls and subsidies, neither of these policies was instituted by Chávez or brought about by his so-called Bolivarian Revolution. The gas subsidy has been in place for several decades, with its current price fixed since 1996, three years before Chavez came to power.

    The article neglects to point out that the gasoline subsidy has gotten much bigger under Chavismo. Our ice-cream loving Devil points out the vast increase in the gasoline subsidy under Chavismo in Random Thoughts About Blogs, Venezuela and a Government Caught in Political Asymptotic Slavery:

    In 1998, right before Chávez came to power a tank of 80 liters of gasoline, or about 21 gallons, cost about 13.5 US$ in Bolivars. Chávez decided to freeze the price of gas to preserve his popularity. By now, that same tank of gas costs 11 cents of a US$. (NOT A TYPO).

    There is a disagreement in the Foreign Policy article and the Devil's calculations for the cost of gasoline in Venezuela in dollars, which is probably due to the big variations in the official and black market rate.

    I found it amusing that the FP article pointed out that were the gasoline subsidy to end, all those smugglers would be out of a job. Pobrecitos...

    Bloggers have long been aware of the issue of the gasoline subsidy. Daniel wrote about it seven years ago: In Venezuela, the rich get the biggest subsidies.

    1. 7 years ago...... and some are still discovering warm waters.....

      thanks for memory lane :)

  2. who would dare?

    Only someone who truly loved Venezuela and was willing to make the very great sacrifice

    indeed , a tough situation


  3. The FP article is a revelation to me as to why nothing is changing in Venezuela - and unlikely to change soon.

  4. The regime appears to embrace many idiotic unsustainable policies on an apparent road to self destruction. The only question is who are going to be the biggest victims and will be hurt the most, and how are they going to react? Will they react? Will they just fall to their knees to get what they can from the regime when the regime is the only source for food and gasoline and everything else?

  5. Anonymous10:05 AM

    There's always someone who would dare but for success someone with clean hands would be necessary.
    Ummm, anyone know anyone with clean hands ??

    1. Charly4:38 PM

      Uribe. Just swap one Colombian for another in Miraflores.

  6. Look, that article has the implication that Chávez gave a damn about anything else besides having the most sycophants kissing his ass, which we all know that isn't true.


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