tag:blogger.com,1999:blog-4080946.post3136037238074696588..comments2024-03-26T00:37:34.943+01:00Comments on Venezuela News And Views: The productivity problem in VenezuelaDanielhttp://www.blogger.com/profile/12128609182544333477noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4080946.post-8652187913930314252015-01-13T23:02:03.099+01:002015-01-13T23:02:03.099+01:00I too agree with Fernando. I also think that the e...I too agree with Fernando. I also think that the exchange rate system in place is aimed at thwarting local production (beside nourishing corruption). How can a local producer, facing a >60% inflation, compete with foreign goods imported (albeit every so often) at SICAD 1 rate? The whole system seems intended to force the Venezuelan people to revert to government aid for survival. Unfortunately the government is now bankrupt.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4080946.post-24797549083193145002015-01-13T03:28:05.063+01:002015-01-13T03:28:05.063+01:00Daniel, I'm afraid Fernando is correct and eve...Daniel, I'm afraid Fernando is correct and even optimistic. It's deliberate. <br /><br />And Cuba is actually a 'nice' case. The Castros need a population to run the country. No so much for Venezuela.<br /><br />Venezuela is a resource country. For dictatorial rulers, wealth is to found in the sandstone layers below the ground, not in the people above the ground. The population is extraneous and useless to the rulers, even a hindrance to them. You don't even need your population to run the oil industry. You can externalize it to foreign oil companies.<br /><br />So, the poorer and weaker whoever the rulers didn't manage to exile or kill, the better for the rulers. If it means the remaining population has to live in squalor at subsistence level, "great".<br /><br />If you want to see the future of Venezuela if those guys manage to stay in power much longer, look at Equatorial Guinea.<br />Fifinoreply@blogger.comtag:blogger.com,1999:blog-4080946.post-71341033910043875452015-01-07T23:30:30.392+01:002015-01-07T23:30:30.392+01:00Venezuelan President Nicolas Maduro reiterated on ...Venezuelan President Nicolas Maduro reiterated on Wednesday that Venezuela is not “a broken country” after his meeting in Beijing with his Chinese counterpart Xi Jinping.<br /><br />“Sometimes there is a whole international conspiracy to try to appear in the world to Venezuela as a broken country. Venezuela has an economic power, productive people, with the highest oil reserves in the world,” said the president after the meeting to several media.<br /><br />Maduro said his government is able to “get the financing” that his country needs to “ensure the functioning” of the economy.<br /><br />Currently Venezuela is in recession, with annual inflation of 64% in 2014 and a shortage of about one third of the staple products.<br /><br />Maduro is on tour in China since Tuesday, wherein according to analysts he expect to get more financial support at the big drop in oil prices, the source of 96% of foreign exchange into the country.<br /><br />China is a strategic ally of Venezuela, and in recent years, granted to 42,000 million in long-term loans, and 24,000 according to official data have already been canceled.William Hubschwerlinhttps://www.blogger.com/profile/00982230953460314441noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-14724345677021431742015-01-06T21:59:50.673+01:002015-01-06T21:59:50.673+01:00For the oil industry, you missed some of the eleph...For the oil industry, you missed some of the elephants in the room. After the strike of oil workers a few years ago, Chavez broke the strike and permanently fired the oil workers. The workers fired were mainly the more educated worker who mainly had no choice but to leave Venezuela to continue to work in their field. This was the great brain drain of the Venezuela oil industry. <br /><br />Due to the brain drain, Venezuela had a much greater need for foreign workers and large multi-national oil companies especially given some of the heavy oil that takes large capital investments and a very experienced engineering and program management team to get it done. Initially, the internationals were invited in - but Chavez changed the terms of the leases unilaterally. For the companies that decided to stay and work with Venezuela, he later changed tax rates a few different times. Basically, this caused the international oil companies to maintain only the minimal investment needed to try to recover at least part of their investment. <br /><br />For small companies, the picture is even worse. What Venezuela has done to some of them is to force them to sell their oil to the government oil company which in turn sells the oil internationally. The problem is that the government then only provides some of the money due to the small oil company. This essentially steals the last value of the company from them and prevents them from investing.<br /><br />The final issues are the ones that everyone else has. For the non-government company, they can't get any hard cash to buy supplies and parts. The government oil company has no extra cash as the government siphons it off for social programs. <br /><br /><br /><br /><br />Joe 999999https://www.blogger.com/profile/11644721665245952646noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-67924189734595554052015-01-06T13:04:45.006+01:002015-01-06T13:04:45.006+01:00Although I fully agree with you on the bleak and d...Although I fully agree with you on the bleak and dire outlook there is a difference. Big money likes the unrest caused by these incompotent unruly dictators. They keep disorder and make capitalistic places like the USA look good in comparison. Also the dysfunction of the worlds largest oil reserves looks good to the fracing companies. However at some point big money will want that oil field in Venezuela and will toss out the dysfunctional Chavistas. Big money controls all the world.Canadian looking inhttps://www.blogger.com/profile/00060240194591839197noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-88971581266868306982015-01-05T09:55:12.314+01:002015-01-05T09:55:12.314+01:00Mix the mouth wash with baking soda and you get a ...Mix the mouth wash with baking soda and you get a pretty decent toothpaste. But you got to mix it just a minute before you put it in your mouth. The baking soda can be bought on the black market. Fernando Leanmehttps://www.blogger.com/profile/16085680730729620836noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-11486839252767041732015-01-05T09:50:21.729+01:002015-01-05T09:50:21.729+01:00It won't fall. Nine years ago I sat at a meeti...It won't fall. Nine years ago I sat at a meeting in Venezuela in which we discussed whether the regime could survive given their irrational policies. My bosses brought in a few "experts" in economics and political science who in general agreed it was impossible for the regime to survive. But these experts had never lived in a gulag, and I suspect they never read 1984. Thus, they forgot to factor in that lowering the standard of living and using a very repressive system will turn people into rather docile concentration camp inmates. The North Korean Kims, the Khmer Rouge under Pol Pot, Cuba under the Castro family, and Myanmar under the military junta are good examples of how one can squeeze down on human beings and keep them enslaved. And unfortunately nations which claim to be for human rights are led by short sighted and venal politicians, and have business elites who are quite willing to work with these monsters. The Maduro regime won't fall. It will just turn Venezuela into a living hell. And nothing will be done about it. Fernando Leanmehttps://www.blogger.com/profile/16085680730729620836noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-84991001780447020422015-01-05T09:40:04.998+01:002015-01-05T09:40:04.998+01:00El hombre nuevo va a tardar varias décadas en desa...El hombre nuevo va a tardar varias décadas en desaparecer por causas naturales. El hombre viejo es uno que se hace chavista. El resto somos escuálidos.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4080946.post-85663063165496207502015-01-05T09:39:11.587+01:002015-01-05T09:39:11.587+01:00Daniel, the system they have is cuban inspired. Th...Daniel, the system they have is cuban inspired. The structure is intended to destroy independent businesses. They don't think they can allow such businesses to thrive because that sets up a semi independent entrepreneurial middle class. The cuban regime is used to controlling people by overt repression (beatings, jail, torture, execution), and by denying them decent work. This means they are on a path to destroy small and midsize business. <br /><br />A large business is easier to inspect and control, it's not as likely to bribe inspectors, and the set up invites foreign multinationals with the low ethics standards needed to cooperate with these guys. Unfortunately such multinationals are easy to find. They love the lack of free unions, the discipline of a highly structured society where slaves are kept in line by the state control apparatus. <br /><br />You may answer, "but look at cuba, they are opening opportunities for free enterprise", and my response is to look carefully at what they do. The idea scares them, so they put a lot of constraints on such businesses, and meanwhile they are maneuvering to bring in large foreign multinationals. <br /><br />I had a debate with Miguel Octavio about this problem. What is emerging is a very sophisticated dictatorship. It is hereditary (Raul's replacement is Alejandro Castro), it has a heavy dose of personality worship (Chavez, Castro, and Guevara Cult), it is a new 21st century brand of fascist populism. And it is imperialist. They have enormous influence over Venezuela, Nicaragua, Bolivia, and a couple of small Caribbean midgets. They scare the rest. They are financing and guiding their franchise in Spain (Pablo Iglesias and Podemos). <br /><br />And if you tell me a small ragged band of Caribbean dinosaurs can't emerge as a valid Neo fascist enterprise, consider what the Vatican did on the back of a crumbling Roman Empire, the power of the Venetian merchants, the Vikings, and other times in history when a small, rather primitive group with a key ingredient managed to expand and control a lot of territory, even if that glory only lasted a few hundred years. Fernando Leanmehttps://www.blogger.com/profile/16085680730729620836noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-63464915407501223172015-01-05T04:48:08.636+01:002015-01-05T04:48:08.636+01:00All logical thinking. But the idiots in charge of ...All logical thinking. But the idiots in charge of your country dont know how to do anything other than scratch their asses. <br /><br />Unlikely any of this happens ever. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4080946.post-9550833185362853982015-01-05T02:58:03.715+01:002015-01-05T02:58:03.715+01:00"The only imports for the next year should be..."The only imports for the next year should be raw material ......". Reasonable solution only work with reasonable people. I have in my living room a beautiful natural spruce tree imported from Canada thanks to CADIVI, CENCOEX or whatever one wants to call this monster these days. The other day I go to the local CM looking for toothpaste. The whole personal hygiene shelf is loaded floor to ceiling with ORAL-B mouthwash. Go to the local FARMATODO, also only mouthwash in sight. So we mouth wash and gargle at satiety these days. Do you want me to carry on with examples?Charlynoreply@blogger.comtag:blogger.com,1999:blog-4080946.post-3416019843008713762015-01-05T00:02:06.012+01:002015-01-05T00:02:06.012+01:00Right. But only fairly large companies can afford ...Right. But only fairly large companies can afford that. And when the inspectors want to roam the company you cannot stop it.Danielhttps://www.blogger.com/profile/12128609182544333477noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-88236710199445311642015-01-04T23:31:20.770+01:002015-01-04T23:31:20.770+01:00The reality is you can slow the crash but with thi...The reality is you can slow the crash but with this regime in play you are going to have run away inflation and no production. The private sector either has little money left or is foreign either way will not invest in this gov't no matter what changes it makes. With oil ad low as it is with no sign of a turn around in coming year the countries productive system will only further diminish. Now if this gov't is to fall and a secure component one was to arise then with so much of the productive system missing the country would turn around very quick. Foreign investment would flood in given the potential wealth and opportunities the country could offer. Investing a dime in this country under this regime is simple stupidity regardless what changes they make. And foreign investment is the key to stopping this free fall. Canadian looking inhttps://www.blogger.com/profile/00060240194591839197noreply@blogger.comtag:blogger.com,1999:blog-4080946.post-70058117432724260032015-01-04T22:43:12.456+01:002015-01-04T22:43:12.456+01:00Daniel, the key to handling state inspectors is to...Daniel, the key to handling state inspectors is to rent extra space, equipped with computers, copy machines, coffee pots, and a tray of small empanadas. This extra space has to be manned by knowledgeable employees transferred from the appropriate departments. Given their vindictive tendencies it's better to hang photographs of Chavez, Maduro, and Fidel Castro on the walls. Management must wait at the front door and greet them when they arrive around 10 am, and stand by to answer any questions they may have. This system worked fairly well for my company until it closed and left the country. Fernando Leanmehttps://www.blogger.com/profile/16085680730729620836noreply@blogger.com