Friday, January 15, 2016

Nationalization of Venezuelan Economy + Bolivarian Corralito

The regime has decided this noon to ask the National Assembly to grant it a decree of "economic emergency" for 60 days, extendable to 60 more. The objective is to face the "economic war" which is what made it lose the election. That economic war modality has never been explained but we were told it was waged on the regime by these nasty capitalist. So it is time to put them under real control.
Minister Salas as he read
the infamous decree against
the economic war, whatever
that is/was/will

Here follows the highlights as I weigh them and at the end I will attempt an interpretation. Note: this decree was issued BEFORE Maduro goes to the Assembly for his State of the Nation speech in a few minutes. I am not commenting all articles.

Article 2.

1- Because of inflation the regime has some budgetary crumbs, it seems, and they will use them at discretion, without need to go through the assembly. The excuse is to maintain the "misiones" working.

2- Confirmation that resources may be used within the budget or outside of it to guarantee welfare of "el pueblo".

4- Let's not bother with bidding.

6- Exempt certain goods from importation permits.

7- Suspend for some the requirements for obtaining foreign currency for import (What foreign currency? Oil barrel is at 24).

8- Demand that public and private enterprise produce in full capacity to provide the markets. Yes, that is right, I kid you not. This is my favorite!  There is no raw material, there is no USD to import it, The harvest is in the dumps this year. And we are ORDERED to increase production.

9- The nationalization part. My translation and emphasis:

el ejecutivo nacional podrá requerir de las personas naturales o jurídicas, propietarias o poseedoras, los medios de transporte, canales de distribución, centros de acopio, beneficiadoras, y demás establecimientos, bienes inmuebles y demás mercancías que resulten necesarios para garantizar el abastecimiento oportuno de alimentos a los venezolanos, así como otros bienes de primera necesidad.

The executive branch will be able to request from private persons or businesses, owners or users (?) the means to carry, distribution systems, regional distribution warehouses, animal processing plants and other assorted establishments, real estate and other products that may be necessary to guarantee the prompt supply of food to Venezuelasn, as well as other basic necessities goods. 
In short, the regime can take over ANY business that works with food, produces it, distributes it, sells it. ANY, courtesy of the vagueness in it. In theory it will return them to their owners at the end of the emergency but in which conditions? Will they pay for what they used, wore out, etc...?

10- Bring in foreign investment and jump start exportations. Yeah, right.... In 60 days....  With full trust....

Article 3. Maduro can dictate other measures that will be necessary to protect living standards of families, children, teenagers and elderly. I kid you not, the redaction is much worse in Spanish.

Article 4. The "corralito" article. Simply: in rather vague terms the regime gets the right to control the flow of money inside the country, establishing limits for financial and banking transaction. In short: you cannot dispose of your money as you will, you need a permit to buy and sell. Note: "corralito" was what Argentina did in 2002 crisis where people could not get money out of their bank beyond a certain amount, or Greece a few months ago.

Article 6. People are not invited, they are summoned to participate in this economic offensive. the list of people that must partake include artists, sportsmen, youths, students and what not. In short ALL of US. Otherwise? My translation:

a la consecución de los más altos objetivos de consolidación de la patria productiva y económicamente independiente, como fiel manifestación de la cohesión existente entre los venezolanos en el desarrollo económico nacional y contra las acciones ejercidas por factores internos y externos que pretenden la desestabilización económica del país.

to the pursuit of the highest objectives of the productive fatherland economically independent, as the faithful manifestation of the existing cohesion among Venezuelans for the national economic development and against the actions undertaken by internal and external factors who pretend to destabilize the country's economy.
Important note: in the summoned "pueblo" there is no call to any established authority, be it governors, mayors, etc...  But all the parallel organizations such as consejos comunales, parlamentos comunales, etc are summoned and will be the enforcers. That is, the only organizations called to support the emergency decree are all the structures controlled by the PSUV that have no legal basis but are given it now for their action, whether they have any legality or legitimacy. Mob rule in the works. Paramilitary colectivos to the rescue.

Article 8 and 10. They contradict themselves. The regime announces that as soon as the decree is published in the official journal, it can be applied. However the Assembly has 8 days to consider it. Is the regime planning already some demagogic action during these few days, like taking over Polar?

My interpretation.

This decree is clear and direct announcement that the regime will take over all what it needs to take to make things work. The excuse for that is that nothing about the actual food shortage crisis is its fault, that all has been caused by the private sector. Just like that, point blank.

Of course, the decree is unworkable, it is only the paroxysm of a failed model of outrageous controls that have resulted in a worthless currency, massive food and medicine shortages and even loss of independence. If this decree is enforced total ruin awaits Venezuela.

Why is a regime that has lost an election a month ago under the clear perception by the voters that the crisis is due to the mismanagement of Maduro and the extensive corruption?

One thing is that the regime truly does not understand why it lost the December election. Thus they are trying through a nuclear bomb decree to prove that they have been right all along. And along the way establish rationing under the excuse of the emergency, even if not directly noted in the decree.

Another thing is that the regime is preparing for an election, more likely to change Madruo or to change the constitution to get rid of the National Assembly.

But what I think is going on is that the regime, or rather the Maduro faction has decided to gamble it all on this provocation. Because it is a provocation, the National Assembly cannot possibly approve of such an emergency decree that not only will void its authority but will block any reform it may wish to make. Never mind that the Assembly cannot allow Maduro to put the blame on the Assembly. Not only there will be a rejection but it will have to be forceful.

From this confrontation there are only two possible results: Maduro leaves office or a coup is perpetrated.


Note: the economic war theory has been advanced a few months into Maduro's tenure. The Dakazo was one of his first campaigns. Apparently business deliberately hide their production, or paralyze them so that prices increase and people get upset and blame the regime.

And yet there is no credible case where such a political/economic strategy has been proven except in the case of some isolated stores which at most had supplies for a couple of weeks stashed away. The big players have always been irreproachable no matter how many controls the government has put on them. I think of the Polar Group, for example. Let me put it this way: if Polar were successful in hiding corn flour it would need dozens of gigantic warehouses. Where would those ones be? How come in two years the regime could not find any?

What makes it worse is that it si public knowledge that all the industries and lands expropriated under Chavez are either closed, unproductive, deficient and what not.

The regime had no other option but to invent an imaginary economic war to cover its ineptness and today it is forging ahead even if the risk is a total collapse in a matter of weeks.  Not months, weeks, as in 4,5 weeks.


  1. Even the gullible, under-educated "pueblo" doesn't buy the "economic war" cuento chino. They just insist on that because they still have about 5 million enchufados, and what else can the blame the disaster on, Colombians, Gringos, Guyanese, Macri, recent oil prices, global warming?

    It's beyond pathetic. Since the criminal bus driver will get the hell out of there after his galactic aberrations, answering no opposition questions, what's important is the MUD's retaliatory speech, saying preety much what Daniel started writing here: the obvious lies and flaws of every thing the wicked highschool drop out out will babble.

    They have to use the Media and high ratings to just SQUASH everything the donkey will say, immediately after he's done with the stupid lies. Perhaps "el pueblo" will learn something, have Borges, Henry and Freddy address each stupid "medida urgente" and utterly destroy it with minimum common sense. Today. Live TV.

    1. Charly10:10 PM

      As a notorious denier, I favour global warming as the main culprit. After all everybody and their dog blames something on this "scourge".

      As for the nationalisation part, Mendoza better watch his back. Some general is about to run his business.

  2. On the surface to me it seems the regime knows and hopes it will be rejected these powers and hence it can blame the Assembly for the mass starvation about to come.

  3. WTF?? You only have to read the first paragraph to know this is absolute BS. They must really think that we "el pueblo" AKA you and me, are really , really stupid. I quote:
    "That on the occasion of the death of the Supreme Commander of the Bolivarian Revolution and Constitutional President of the Bolivarian Republic of Venezuela, Hugo Chavez Frias, national and international sectors initiated a series of actions to destabilize its legitimately established institutions and cause a rupture of the constitutional order based on discomfort induced by these sectors."

    1. I'm trying to hang on after the first half hours of heavy duty empty crap, hot air, lies, and total bullshyt. Does the "pueblo" beleive half of this putrid and meaningless enchilada? Pobably.

      After the media was controlled by the regime, this stupid, lying Clown will just escape on a back-door, without answering any opposition questions. That's "democracy" in Vzla..

  4. Anonymous1:03 AM

    Watch the assembly sell out the people of Venezuela just how Tsipras sold out the people of Greece.

  5. Charly3:11 AM

    And obviously Ramos stole the show. Kudos!

  6. Ramos was weak and too short. He did not rebut the 3 hours of crap from Maduro. Did not even mention a DOZEN problems he should have hammered on. Way too conciliatory. Crime? Medicine, Worst Economy on the Planet? Massive Debt. Default? Oil gifts? Masive Corruption with exchange controls? Universities and professors down the tubes? 1 murder every 20 minutes? 28,000 Dead last year? Endless Colas (he barely alluded to that)
    The Border Crap? Esequibo Circus? True Inflation? True Pension numbers? Why they don't want to give Vivienda titles (extorsion) massive Corruption with the Cadivi 3 exchange control levels? Massive Drug Traffic? BCV true numbers? Total crime impunity? Oil at over 100$ for a decade, historic, GONE. Massive Nepotism and corruption on a world-record 37 "Ministries"? Electricity crisis? Water shortages? NADA.

    I could go on and on. Allup didn't mention ANY of those matters, and then some. He could have done so in 15 more minutes, or less, the time it took me to write this. Weak speech from HRA, after the Maduro 3 hours of utter crap.

  7. How about a Decree which the AN sends back ordering all Businesses that the Govt. has expropriated be re-opened and made to produce. Let them solve part of the problem with what they already have. If they can't make the businesses and farms that they took productive, then why should they be allowed to confiscate more and then ruin them in less than 60 days? I say no, let the govt. reactivate their own ruined businesses that they stole. That were once productive in private hands...


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