In spite of all the excitement I have had to pry myself away from the key board except for a couple of Twitter checks. See, I had a busy day at work today because things are getting real iffy, back in the real world where people are starting to plan about closing their business for lack of supplies. That is right, I work in supplies for food producers and we are running low, dramatically low in the supplies we need.
When I moved to San Felipe, Rafael Caldera had managed to do about half the the highway between San Felipe and Moron, with a bankrupt country. After 14 years of chavismo flush with cash, only a couple more exits have been added in what is perhaps the second most used road of Venezuela. Thus the last stretch between Moron and the highway is still about 12 Km of the two way original road, clogged with jalopy buses, trucks of all sorts carrying all the goods from Puerto Cabello to Barquisimeto and the Andes. And to enter the highway, you need to go through about half a mile of what is a dirt road, or rather of original country side lane turned into dirt by the big traffic.
I was thinking that after my post yesterday on how the regime has no clue as to what to do to boost exports, it would be fair for the readers of this blog to list what could be the bare, minimal measures that seen from ground zero could help Venezuelan producers to stay in business and perhaps increase production.
Lorenzo Mendoza promoting his competition?
Harina PAN all alone in the middle....
So tonight finally I checked out a few headlines and sure enough there is just too many idiocies that I cannot go to bed until I vent a little bit with you guys.
Apparently Maduro has been making a total ass of himself. I mean, TOTAL, as in without possible redemption, total enough that we truly must wonder why in hell Chavez named him his heir. Heck! Even Ramirez starts looking good in comparison. However I must also say that the idiotic presentations of Maduro seem at least to come in big part from his totally inadequate staff. What we see this week is the result of what happens when dumb instructs idiot.
This week we have seen dramatic shortages of the Venezuelan basic staple, at least outside of Caracas and in low income social classes: corn flour. Newspapers in Caracas are strangely silent about it but other papers like El Impulso of Barquisimeto are more vocal. Yesterday and today driving around San Felipe I saw long lines of people. But today was top: in a single short errand I saw three, 3, long lines of people waiting for a single thing: Harina P.A.N., the most basic, well known staple of the Venezuelan kitchen, now available world wide except in Venezuela. I managed to take two pics for you, but that is not all.
I am not making this up: Maduro, the pseudo-president of Venezuela has justified his trip to Uruguay with this excuse among others:
“Parte clave de la gira que yo arranco mañana (...) es para garantizar fortalecer nuevamente la reserva alimentaria de productos básicos de nuestro país a tres meses"
A key part of the tour I am starting tomorrow (...) is to guarantee to strengthen [sic] again the food reserve of basic products of our country for three months. (I am sorry, I cannot translate it any better, the guy cannot speak properly).
So many things wrong already there, not to mention that he also accused the private agricultural sector of hoarding and sabotaging the transition to socialism. Thus I suppose that I need to write a primer on food shortages in Venezuela as the one I did a few days ago for media.
There is all sorts of economists pontificating about the devaluation and all sorts of politicians talking of "paquetazo rojo" and how minimum wage has lost X% of its purchasing power. But I do not hear many talking on how the regime is actively bankrupting the private sector of the country by making the devaluation retroactive. And certainly no one in the MUD would be caught dead defending these filthy capitalists which are going to go belly up in a few weeks if the regime does not change its post devaluation robbery scheme. To bad for the workers about to be laid off I suppose....
La Planta jail riot and eventual closure keep revealing the inner workings of the regime. And it is not flattering. After all, when you accept to "negotiate" with hard criminals, when you allow them to take their goodies with them, when you allow them to pick the seclusion center where they will be transferred, you only acknowledge one thing: you are of the same nature than the criminals you are "negotiating" with. This was not a negotiation between the judicial system of the republic and inmates that may or may not have justified demands. This was an agreement between two type of gangsters so as to diminish the public impact, in order to keep doing business.
And today the regime keeps giving evidence of being such a gang. Not only with La Planta sequels but with the return of Loyo to office!
The failure of chavismo agricultural projects is not to be demonstrated anymore: that a country, which 15 years ago was tending to a balance of sorts in its agricultural import/export, is now importing more than half its food can be only explained by war or a devastating natural catastrophe. In Venezuela both are combined under the misrule of chavismo. Today we learned that in addition to all of the ills reported regularly in this blog, we are also getting an actual decrease in land under cultivation, an astonishing 7.8% drop for 2011 alone. The thing is that it is not enough to throw money at the country side, you also need to understand how that one works out to have a mere remote chance of success. During my last stay in Caracas I got a fascinating example on how it is simply impossible for chavismo to ever, ever increase agricultural production.
RNV not even hinting at Polar as a target of Chavez wrath
Yesterday Chavez gave yet another cadena of 5 hours where he said his usual inane stuff and then some more. I will pass on his usual provocations such as the armed forces being chavista. What I think was the worst this time around was his latest discovery that taxes and mandatory employee payment are not business expenses. True, it maybe a provocation also but in this case I am afraid that there is more to it: either he truly does not understand how a business is run, or worse, he wants to end all private business once and for all and is not even waiting for October 7. I became twitterless under the shock.
In Venezuela businesses pay a lot of taxes and are constantly audited so fiscal evasion is rather difficult, no matter how much you bloat your expenses. After all the SENIAT (our IRS) only accepts bills that are made at the business name and tax number, and under strict guidelines of presentation if not they are deemed not valid no matter the amount. The only small exceptions are some tolls, and food bills for very small amounts, considered in the global travel allocation of a given employee. So, from personal experience, I can tell you that one of Chavez accusations is an outright lie: it is nearly impossible to over-report sales tax (VAT). It is true that the system allows you not to pay all the VAT on raw material and services but you still pay a significant portion of it. Thus if it is also true that the final customer pays the bulk of it, it remains that intermediate VAT during the process are genuine business expense.
Reality is complicated. As a businessman making his livelihood in the agricultural sector I have indeed benefited from the credit policy of Venezuela which demands that 24% of bank loans go to finance agricultural activities. This is great for me and my colleagues because the interest rate is fixed at 13%, 2 to 5 points below the other markers. With an official inflation at around 30% and a real one maybe getting close to 40, this means that by the time we have paid our loan, in real money we may have made as much as 10% instead of paying interest. As a matter of fact, even agricultural business that do not need to borrow to grow still borrow, if anything to buy dollars outside of Venezuela, or to enjoy an easy bonus because you could lend that money at a higher rate than you borrowed it.
Chavez needs to show that he is cured, that he is in charge. What better than to go to next door state Aragua (short ride in copter) to expropriate a few farms and make job promises that cannot possibly held, not here, not in Brussels, not in D.C.
14.000 hectares (35.000 acres) of farmland expropriated, and Agroflora
Chávez robó las fincas productivas del Sur del Lago, las que nos daban leche, plátanos y carne, para dársela a los rusos, para que siembren plátano, para que se coman topochos en Novosibirsk. Allí va la soberanía alimentaria. Allí va la variedad de la comida nuestra. Allí va la soberanía, punto.
“Ya tenemos el terreno al Sur del Lago de Maracaibo" dijo así, como que si con el no fuera, como si se lo hubiese ganado en la lotería, como si hubiese levantado unas piedras.
¿Cual será el próximo robo de Chávez? ¿La próxima afrenta a la soberanía nacional? ¿Quitarle las producciones de flores de Yaracuy para dársela a los rusos también? ¿Es que nadie lo va decir en primera plana? ¿Habrá quien se lo recuerde al país?
Pero ademas de bandolero y desgraciado el tercio como que es idiota: va a poner a competir el Cocuy con la Vodka, como si se pudiese distilar suficiente Cocuy para la sed de los rusos. Si no hay ni suficiente Cocuy bueno para Venezuela....
¡Es que ...que... me dan ganas de llorar cuando veo en manos de que psicópata hemos caído! Pásame una botella de Cocuy, mientras haiga.....
I do not know how the invasion and organized land robbery of the Sur del Lago farms by the regime will end up, but one thing we are going to get is a fabulous saga by Milagros Socorro. In Codigo Venezuela, the e-zine she is now editing, she has started to tell the tale in a series of installments. The first one is up, in Spanish unfortunately but do not miss it and try the Google translation tool if you must. It is more, much more than just the narrative of the last couple weeks: it is a slice of Venezuelan social history and mores!
See, Chucho Hernandez Melean is going to be 94 next February; he has been around. When he was 10 Gomez held all power and Venezuela was at peace. Roads did not reach Sur del Lago. When he was 20 he saw the madness of oil prospecting while he was digging his trenches in the lands he could take over for free because no one wanted them. He survived the "revolucion de Octubre" and all of its failed promises while the original Venezuelan social contract started to fray. During his most productive years Perez Jimenez was ruling. When he thought he could plan his retirement, roads, electricity, health care arrived Sur del Lago, but also agrarian reform and, later, FARC banditry. He thus went along quietly completing one of the most successful farm complex in Venezuela while the country slowly sunk. He treated right everyone, from the military leeches seeking gifts to, we suppose, less wholesome parasites.
This is my first post under Venezuela's new dictatorship, a neo-totalitarian version adapted to the XXI century reality. We do not know how successful will Chavez adventure be but from now on we must assume that this blogger is writing at his own risk as anything that is posted from now on can be taken against him. But more on that in an oncoming post.
To open this new period in the life of this blog, or at least whatever life is left to it, I have this extraordinary video that I filmed from my TV screen, courtesy of Globovision (and taken from the official VTV, so it is "politically correct", chavista wise). I do not know whether it is available already but I could not wait to bring it to you.
This video is taken during a land grab, an expropriation of a productive farm, a robbery, whichever way you wish to qualify it. It happens following the orders of Chavez as to the lands in the Southern area of Maracaibo lake. It is carried in this particular farm by the agriculture minister himself, Juan Carlos Loyo.
In this extraordinary video, so telling of the mental structure of chavismo today, he behaves like a red Komissar of the USSR of yore. He harangues a crowd probably made of bureaucrats dragged to the scene. Probably some employees of that farm, and an extraordinary amount of military as if it were some invasion or something. All, ALL must listen to the political harangue, red t-shirt included with the picture of famous murdererer Che, and a big gun at the belt that Globovision helpfully circles in red as it is a violation of TV laws at this time of day, by the way. The message is clear, we have not seen such a disppaly of raw arrogance and naked blunt power since the good old days of the Soviet Union.
You do not need to understand the words, it is standard chavista fare, harking back to the 2002 "coup" that is not even an argument anymore as whatever Carmona Estanga tried to do then has been done since, and much worse, by Chavez. Just concentrate on the body language of what is little bit more than a beefy brute, empowered for verbal violence and waiting for more real violence, butch leather wrist band included. And the body language of the attendants.
By the way, Loyo is a totally incompetent guy, ill prepared to exert the position of Agricultural Minister but willing to to the dirty job of expropriating whatever Chavez indicates. His name jumped to the front stage when Diego Arria farm, La Carolina, was seized early this year. That got him the promotion that he exhibits today.
Since last Sunday people have been looking closely at Agroisleña that in a fit Chavez has decided to confiscate. confiscate is the word because by now the practice of the regime is to pay part only, when it pays anything at all. I need to update what I already wrote yesterday because the editorial of Veneconomia today shows that the Agroisleña take over could actually wreck the banking system of Venezuela. Even though Miguel already posted this editorial a couple of hours ago I thin that people interested in Venezuelan economics cannot miss it. At the end, some additional comments of my own.
With the announced take over of Agroisleña by the state, Hugo Chavez has made his first real communist "economic" move. You might wince at this but bear with me a little bit longer.
The first thing to note is that all previous economic measures that the regime had taken were punctual, taking great care to pretend that private property was respected up to a point and pretending that expropriations were necessary, were designed for the betterment of the economic apparatus and, well, the owners would be duly compensated. For example the attacks so far against the Polar group are to relieve it from some of its assets so housing can be built there. Farms are taken over, we are told, because they were either too big or unproductive. That the facts matched the tales was made in part irrelevant because, well, next door farm was left alone as if nothing. Even PDVSA which is advertised as being "nationalized in 2003" by Chavez followers was not since it belonged to the state for already three decades and the only thing that happened there was a change in management to make plundering easier.
When I moved to San Felipe, Rafael Caldera had managed to do about half the the highway between San Felipe and Moron, with a bankrupt country. After 14 years of chavismo flush with cash, only a couple more exits have been added in what is perhaps the second most used road of Venezuela. Thus the last stretch between Moron and the highway is still about 12 Km of the two way original road, clogged with jalopy buses, trucks of all sorts carrying all the goods from Puerto Cabello to Barquisimeto and the Andes. And to enter the highway, you need to go through about half a mile of what is a dirt road, or rather of original country side lane turned into dirt by the big traffic.
