Saturday, August 09, 2014

Venezuelan weather vanes

I suppose that I should start with an apology: a lot of important stuff has been happening in the political country and I have not covered it. The only excuse is that things are changing so fast, and so nowhere, that I was vainly hoping for a weather lull to try to figure out the direction things were taking.  Alas, it'aint not happening.

The heavy sense of being adrift is permanent. Both sides of the political spectrum are at a loss as to what to do with themselves. And this is aggravated for the regime as it needs to find a way to keep ruling the country while maintaining it viable enough so that looting can go unabated. All measures, from both sides, are piece meal, expedient, often amoral, improvised, even politically rudimentary as the country is regressing not only in technology but also in political language and ideas. A home made weather vane would be more effective to give us direction.

This being said, let me take a shot at writing a rather long piece that some of you may find entertaining to read this week end if you are bored.

For chavismo it is "the price of gas, stoopid!"

The regime keeps its inner fights and used the III PSUV ideological congress to reassert the regime hold to power. No expense was barred to make sure no waves would be made by an increasingly disgruntled base who seems to be turning every day more radical.

As expected, 15 years of ideological bullshit monitored from Cuba have had their consequences. Now there is a radical left wing inside chavismo who after 15 years has such great blinders that not only they fail to see the economic problems of the country but think that the real problem is that the chavista pseudo revolution did not go far enough. For them bourgeois society should be swept away once and for all, because Venezuela can stand on its own, globalization is a myth and whatnot. Add to this that likely many are upset that their share of the loot has not covered their expectations.

As a consequence, those that indeed have benefited from chavismo, from bureaucrats ensconced in AC ministries to the infamously rich and infamously corrupt bolibourgeois, are concerned. See, the rich that the radicals see everyday at work are those new rich, not normal hard working capitalists like Lorenzo Mendoza of Polar group.  And they know first hand how bad this bolibourgeois (cum drug traffickers) are.

The current post Chavez leadership senses the danger so the III PSUV congress "elections" was made with nearly 50% appointed delegates and a lot of pressure on the elected ones. As such the radicals did not get much more than 20% of the seats. And since they are themselves divided (mercifully!) they had no leverage.

But the risk of PSUV division, barely pushed back for the time being, are not the real problem of chavismo. While all of these internal struggles keep taking place, no serious economic measure are undertaken and the economy keeps deteriorating. No better example than discussing the price of gas.

This 300 ml bottle of water that I am holding in my hand reads 3.59 Bs. Plus taxes. So let's round it up to 4 Bs which is what you will pay. That is 0.63 USD at 6.3 official rate (interesting arithmetic coincidence). That puts the price of 1 liter of water at 13 Bs, rounding it of course.

I can fill up my SUV tank for around 5Bs, around 50 liters (and that takes me all through the week, by the way). So let's round up the price of gas to 0,1 Bs for a liter.

That is right, drinking bottled water costs at least 130 times more than gas in Venezuela.

Of course, the regime subsidizes such a price distortion. And this being energy, intuitively you get that this distortion affects all prices. To change this the regime should at least start cashing in the price of production of a liter of gas for your car. Internationally, and in a mood of rounding  prices, let's take at 0,85 dollar the price of gas, without taxes, as it reaches the gas station. In Venezuelan Bs that would mean the cost of gas sold should be at the very least 5.4 Bs. Or, 54 times more than what it is currently costing.

Note that I use the official value of 6,3 when in fact the real value would probably settle around 40 to the dollars if all currency controls were lifted. I will let you do the math for how much the regime should indeed increase the price of gas...  And yet this one is talking to bring up only to 3, which would already be 30 times more than the current prices and yet not enough to cover expenses....

In a nutshell, the story of the gas price if the best example on how 16 years of chavista outrageous populism have set us back. And gas is only one of the many problems, albeit the worse one. Price controls should be removed and real production costs for everything should be accepted. What to do? What political cost should be accepted by the regime?

And that is the real problem of the regime, it does not want to accept the political cost of the 14 years of Chavez follies.

So far, besides dithering the necessary economic measures, the regime has only tried to put the blame on anyone that came handy, even if its followers have enough logic left in their damaged brains to realize that some of these excuses are pathetic.  Remember that for example the electric power outages are due to iguanas eating out electrical cables. That airlines stopped servicing Venezuela because they sent their flights to the Brazilian market for the world cup (that the planes have not come back has not been addressed). That imported food rots in harbors because there is just so much of it for "el pueblo" that just "a little bit gets lost". That the decaying infrastructure is because of capitalist climatic change and not lack of maintenance. That inflation is a conspiracy of the private sector which is the only corrupt sector that steals currency controlled by the state. Etc...

But that is not going to stop the ever worse populist maelstrom. Let's look at the gas story. Maduro went boldly to say that all the money that will be gained from price increase will be allocated to social programs. He went even as far as splitting it up in 20% shares for this or that.  The only problem is that to make money out of gas he would need to sell it ABOVE production costs. And even if we were to assume that a moderate price increase would be enough to lower subsidies and free some resources for other needs, before "improving" social programs the regime needs to pay its debts to China and its debts to its providers so imports of raw material can start again and the economy restart.

I do not see any of that coming. The regime simply does not have the political strength or capital to do so. So Maduro goes Orwellian stating that it is not a gas price increase but a mere adjustment. The regime is waiting to see whether the radicals will take over and sweep away the remaining structures and finish off the country, or the pragmatic wing will use the military for repression and enforces austerity measures.  After all, after the Carvajal affair they know now that they have nowhere to go, that narcostates cannot find forgiveness. A third way is only possible if the regime accepted to compromise with the opposition and return to democracy. I do not see it, sorry.

For the opposition it is unified division

If you were hoping that the country would find in front of the regime a ready, and willing, and organized opposition you would be mistaken.  The time of reckoning has come and the mistakes of Capriles in not defending his victory of 2013, his mistakes in creating an ersatz referendum in 2013 that he lost, the mistake of Lopez and Machado thinking that the country was willing to follow them beyond Capriles just like that, the mistakes of a MUD that has only too many people inside compromised with sectors of the regime, etc, etc. have come home to roost.  Last week the MUD finally started splitting even though they all understand that unity is the only way to evict Madruo from Miraflores. The challenge of restoring unity is pretty much the equivalent of chasing the unicorn.

To begin with, Leopoldo Lopez is still in jail and all indications are that the regime has decided to pay whatever political cost it has to pay to keep him there. Period. As long as Maduro and Cabello rule, Lopez is in jail.

Then we can follow with Maria Corina Machado's wishes to figure at all cost and that has earned her today the first ever blistering political attack she has suffered from inside the opposition, through the acid pen of Rafael Poleo in this week Zeta. His attack is uncalled for and mean. But he is right on one thing: for all her troubles and wonkish appeal Maria Corina Machado has been unable to establish a viable political organization. As such she runs on fumes and stardom. Even Chavez, who also run on fumes and stardom in 1998, had the skill of making the MAS and PPT run his campaign then, letting them believe that they would be his government. As soon as he was in office he worked at getting rid of them, something achieved within 3 years. MCM has failed so far to get the endorsement of a party that still has enough personnel to run a semi presidential campaign.

Then we can go on to Capriles who think he is the leader of the opposition but who is fading faster than what people can imagine. Capriles has been absolutely unable to bring answers, even moral answers for the consolation of his hurting electoral bases. For some he passes as a coward (undeservedly) and for others like me he has lost their trust, irremediably (and deservedly). I for one think that even if by miracle Capriles were to take over Miraflores tomorrow, he would fail. And badly.

We can keep pushing further and see that a democratic left of the opposition has started drifting away from the MUD with Henri Falcon who has started to position himself as the only transition figure that could be accepted by chavismo and by the opposition. The only thing is that he risks becoming a Kerenski that will be swept away at some point. After all he fails to even gather all of the opposition left wing around his name, or much support outside of his state of Lara.

So good ideas that had sense months ago have become mere nincompooperies. For example some talk again about constitutional assembly, or a more mysterious but dynamic sounding "congreso de ciudadanos" where we are told that all the efforts at uniting the opposition that have failed in the past will be overcome through these assemblies.  If certainly it is praiseworthy to organize citizens in assemblies, be they called "congreso", the times are not for debating the sex of constitutional angels. The current reality indicates that the best to do now is to make the current constitution work out better. For all of its many flaws the 1999 chart still would be better than the current unconstitutional regime. This done we could start thinking about change or improvements.


I, for one, think that a division of the opposition is not necessarily a bad thing.  Why?

The regime is imploding and the disaster ahead is unmanageable unless new creative ideas arise. Neither the regime nor the current structure of the opposition allows for creativity. In fact both current "leaders", Maduro and Capriles, show a definitive lack of creativity, and thus lack real influence.

The regime will split. As the PSUV and MUD are set up right now there may be no way to get an agreement because factions in each camp will block it for personal ambition and/or personal interests. But once both sides break up an agreement crossing the line is more likely.  Even with the radicals that may consider in front of a crisis that they cannot control that it is better to ally with sectors of opposition so as to begin to demilitarize the narcostate before anything else can be done. I know, it sounds a little bit like black magic to suggest such ungodly alliances but remember, it is time to be creative and bold.

I will remind readers that I wrote a few weeks ago a scenario for "la salida" chavista way. Certainly after a post PSUV congress and the departure of Aveledo. that model already needs revision. But the point is still there, a group within chavismo wants out, or at least out of shared responsibility for all chavista officialdom. They only need someone in the army and/or the opposition to reach an agreement.

In fact a division within the opposition could turn to be a good thing. On one side, say, Falcon supported by AD, UNT and the like could be the deal makers with some groups inside chavismo. But on the other side, freed of political correctness of the MUD, the likes of MCM and Lopez and Ledezma could finally make a strong case for separation of powers, private property and economic wisdom. My guess is that a MUD division would fast enough get a majority winner in public opinion.  At any rate, it does not matter who reaches Miraflores first, each side will soften the other and make it more creative while chavismo decides if it wants to become a democratic left or collapse into the multiple political tendencies it really is, and that only Chavez and corruption could keep in check.


  1. Island Canuck10:51 PM

    "The regime is waiting to see whether the radicals will take over and sweep away the remaining structures and finish off the country,"

    Don't you think we're already there?

    From where I sit this country is already down the toilet with no hope in the forseeable future that things will change.

    1. We've been there for a long time, I'd say since Manuel Rosales was chosen to be Chavez's contender. I mean the man was as much a joke as venezuelan politics.I would've felt insulted and outraged if i had the political concience i have today.
      If there wasn't one before that, i'd say that was the best indicator of corruption inside te opposition.

      We are a one-party state managed by drug lords and mafias. Nothing will improve unless a large opposition puts its pants on and protests like the Arabs.
      I know some of you think there's another way, but I'm not immortal so I dont think waiting til the big bad chavismo runs out of money. It will never happen, you can do all the research,analyze what you will, but at the bottom line: These people are not your regular dictatorship.

      They won't fall, they need to be put down.

  2. Perhaps in our desperate search for political leadership from the oppo, we are expecting too much too soon, forgetting that pols like Romulo Betancourt had their years of fasting in the desert, so to speak, before bursting on the national stage with greater support. Having said that, there is no current oppo pol who has the intellectual acumen and the political savvy to command much respect. Is it because these oppo pols have been mollycoddled by Aveledo's Guardería? Jes' wonderin'.

  3. Island Canuck3:54 PM

    For any that think there is a way out of this mess all you have to do is read what our beloved president said yesterday

    Maduro llama a trabajadores a tomar empresas que hagan “guerra económica”

    They are getting so desperate to push the blame for the economic collapse of the country & their mismanagemnet of billions & billions of dollars that they are going to destroy what's left of any productive & profitable companies.

  4. They will just keep muddling ....people will less expectations and will adapt.The gov will be helped with sudden rising in oil prices due to crisis...only a massive Unity protest that extends into time could get rid of these criminals

  5. "let's take at 0,85 dollar the price of gas, without taxes, as it reaches the gas station." I would think most people would see the cost of refining and distributing as the minimum that must be paid. You're still giving it away for free.


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