Economic electoral planning: institutional bachaqueo and printing money

The election date approaches. Whether these will be held is irrelevant, the regime needs to prepare for it no matter what.  From my sources I get the following tidbits as to how the regime is planning to distribute goodies to try to buy votes.

The "bachaqueo" is bringing some political dividends to the regime, at least from those who can actually profit from it. Bachaqueo for those late in the game is a Venezuelan variety of black market (1). Those that can stand in long lines because they are out of a job buy they share and resell part of it at significant markups. It becomes particularity lucrative when: 1) you belong to an information network from cashiers to truck drivers and storage personnel who can warn you that X will arrive at Z before the neighborhood hoi polloi knows about it, thus the bachaqueros are first in line before supplies disappear; 2) you know someone high ranked in the store or the Nazional Guards on duty to avoid riots and they let you get out with more than your share; 3) you belong to a network well organized with bus and motorbike drivers that can carry you fast from one line to another line so in one day you may be able to stand in line at 2 or 3 locations, and rack it in; and of course 4) you belong to a narco-military-mafia organization that do not even own a store and gives you a certain amount at mark up for you to mark it up further. (2)


The beauty of it all is that the Labor Law "reform" of Chavez to get reelected before he croaked is a major incentive for that line of business.  See, you cannot fire someone for multiple absences. If you try to, it is a long and tortuous process that in 95% of the time ends up with an expensive settlement. In fact today's practice is to call into the office to ask point blank the worker how much he wants to resign from his job. Certainly, you can discount from paycheck the missing day and the meal tickets, but what would a worker mind if s/he can make more in that day through bachaqueo? Which thus has become today the main cause of absenteeism, far above any epidemiological consideration.

Some of my clients, those with a significant payroll of say, more than 50, have observed an interesting arithmetic pattern. Say, you have 200 employees, of which 150 are workers whose paycheck is no more than twice the minimum wage.  In recent months you have discovered that absenteeism is at a steady 15%, EVERYDAY.  And never the same folks, of course. That is, e.g., you have in a single week missing, 26, 22, 38, 23 and 29. Everyday you have at least 22 folks missing, that is 15% of your labor force. Why?

Very simple. Workers have organized a network of absentee turns. No worker will be absent more than what the law "forgives". Sometimes you may even find out that, say, X worker is absent systematically every other Wednesday. And you may find out that the peak at 38 (25%) coincided with a food fair or a major arrival of goods at the market store next door. If it does not get worse than that it is because finger printing and stuff limit the number of people that can shop on a given day (never mind that the bachaquero needs to be able to pay for what s/he gets). Also, many business to ensure a minimum labor force for basic processes have established generous attendance bonus (I kid you not), so that workers will miss only when it is worth their while. Thus a fragile equilibrium exists which will break down anytime as scarcity becomes worse.

I trust the reader can figure out on its own how this affect productivity and costs in Venezuela.....

You may think that this is a conspiracy theory. Think again. Go to any ministry and the systematic absenteeism there is worse. Sometimes it is organized outright by the bosses who may even have shipped in some goods, in particular if linked with the military. From there to spread the habit more or less efficiently to private business is not far fetched. And the regime has gone out of its way to spread in time deliveries of scarce goods to create the illusion that things still arrive somewhat to the the shelves, you were just unlucky that day.

In other words the regime thinks it stands to gain something by promoting a bachaqueo network, not enough perhaps to compensate for the voters lost to the long lines, but a gain nevertheless where open and naked scarcity would cost more politically.

The other thing that I want to mention in passing is that from reliable sources I have learned that the regime is bringing in banknotes. Lots of freshly printed notes of 100, more than what is normally needed to replace the physically deteriorated bills. Those bills may actually be delivered in diverse areas of the country to avoid, I suppose, shipping and the like.

My guess is that they will be used to pay for the campaign and for direct cash payments wherever it is needed. Expect a tremendous surge of inflation next year as a consequence.

It also seems that the regime is trying to open, albeit, some partially made public works, such as a couple of metro stations in Caracas. That has happened in the past in Chavez campaigns, but this time after three years of nothing it is hoped for that opening even a single subway station, even if incomplete, may have a big impact. I doubt it, but that is not the point of this post, the point is that the regime is going to apply skinny populism but populism nevertheless. In the past they could raid, say, electronic stores. But all is empty. Thus fake income from bachaqueo, or a direct worthless cash advance, or a huge ceremony to open shit facilities is all that is at hand.

In addition of jailing opposition leaders; but that is another story.

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1) bachaco is the large tropical ant that eats everything on its wake and that laboriously carries huge loads on its back.

2) all courtesy, of course, from crazy price control schemes and currency arbitration (official 6.3, black market 700 to 1 USD; do the math).