Trying To Nail The Productive Sector Under Madurismo

May 1, 2013


We have had “new” Ministers for ten days, but very few announcements of new programs and policies. This is due in part to the repetitiousness of names in the Cabinet, most of which have already been there and have no new ideas. Others are simply not very qualified, as their expertise, if they have any, is seldom in the Ministry they hold.

One of the lone exceptions is Minister for Electric Energy Jesse Chacon who has made daily announcements about plans, programs and ideas. Chacon is not that qualified for the position, his expertise is in telecom, but he has been around and held a half a dozen positions, most of them Ministries, where he has learned how slow things move in Government and how things only move from the top. He showed that when he was Minister of the Interior and Justice, where he tried to understand the security problem, brought advisers from abroad (Even from the US! Fin de Mundo!) and was removed by Chavez when he had begun to formulate plans and understand things.

In his new Ministry, Chacon has been candid at times. He does not blame the power problems on opposition sabotage, a laughable position when power plants have been militarized since 2006 and those not loyal to the revolution were fired (and are still being fired) in various purges from important positions.

He has told us that the main problem is how the twelve companies that were integrated into Corpoelec don’t work together (Some have been “integrated” for ten years!) Well, this is a blunt criticism of Chavez’ brother Argenis, who learned of the appointment of his new boss watching TV and resigned immediately. He has also said projects are delayed, consumption is high and rates are behind. (Behind? Last rate increase was in 2000, the CPI is up about 900% since then. So behind is a mild word)

But so far, he has said little about specific projects, other than increase rates and force people to buy energy saving lightbulbs (At 4 times the price) He also gave himself an ultimatum of 100 days. Good luck!

But Chacon has also been less than honest in what he has said. He said that Caracas’ power is unstable because when AES took over Electricidad de Caracas (EDC), it stopped investing. What he fails to say is that AES owned EDC for only seven years, the Government nationalized and ran it for almost that same amount of time. EDC was taken over by AES in July 2000, Chavez took it over in April 2007, so it has been six years, not much of a difference. What did the Chávez Government invest in six years? Zilch. And the company now loses money. Way to go!

He also fails to say that at a time that Venezuela has power problems, the IDB (Interamerican Development Bank) has yet to disburse the US$ 700 million approved in 2010 for Guri and other power plants. Why? Venezuela has not complied with the requirements yet. The money is there, earmarked, approved, ready to go, but…

Chavista management…the biggest oxymoronic concept in Venezuela.

But Chacon is definitely better than Chave’z son in law Jorge Arreaza. He said the other day something like: ” We are trying to deal with the mess in the (State) productive sector. The State has yet to figure out (nail) how to leverage some industries”

Well Jorge, it’s very easy, you need people who know what they are doing, work hard and know what management is all about. Let me give you an example: Remember the satellite you purchased from the Chinese? The one bought to survey the country and called VRSS? When you made all the noise and it went into operation in Chinese hands, you yourself said that in three months it would no longer be in Chinese hands, but would be operated by Venezuela.

But shucks, you remembered to pay US$ 170 million for the satellite four years ago (easy money that could have been used in sooo many productive things!!!), but you forgot that to control the satellite from Venezuela, you had to install the antennas to control the satellite and to receive the images. The result is that the satellite “sees” Venezuela a few times a day, but its useless. Besides the pictures you asked the Chinese to take for show, the return has been exactly zero. (To say nothing of the fact that with US$ 170 million you can buy all of the images of Venezuela of France’s SPOT satellite since of all its satellites were launched and in all frequencies available, but that is another matter)

And you call this “technology”…I call it turnkey waste.

The problem is that to “figure out” or “nail” the productive sector, you need people that know the business, you need planners and you need managers. When the criteria for hiring people are political, nepotistic or cronyism, things can’t work.

You also have to care, understand what is wasting time or money, plan every day, have the know-how. All your Marxist ideas don’t work, because you are trying to adapt an ideology to the wrong type of people, led by the wrong leaders. Yes, you also need leadership. Like you screwed up in the satellite project, if you had not been your father in law’s son in law, you would have been fired.

But Maduro promoted you to Vice-President.

Think about it and you will figure it out Jorge, but you will not nail it!

26 Responses to “Trying To Nail The Productive Sector Under Madurismo”

  1. Glenn Says:

    Shamefully there is no incentive for entrepreneurs unless the wear the right color T-shirt and leave their entrepreneur spirit behind.

  2. Dr. Faustus Says:

    “…if you had not been your father in law’s son in law, you would have been fired.”

    And while we’re on the subject, who’s gonna get back that 170 million check so generously proffered to the Chinese? Just imagine the number of new houses for the Venezuelan poor that that Iranian guy, who spent time in a customs jail in Dusseldorf, could build with that kinda money. 3..? 4..? Who knows?

  3. Gordo Says:

    Ok. I get it about the electric grid. How about farming? Please, explain why so much food is being imported, and what needs to happen to turn it around!

    • Gordo Says:

      Farming just seems so low-tech that I can’t imagine one could blame it on poor understanding of the technology.

      • moctavio Says:

        not when they take it over, control prices and hold the currency artificilaly low, impossible to compete with imports.

        • gordo Says:

          Taking over private enterprises, controlling prices, and importing certainly contributed to the he demise of domestic production across the spectrum of industries. Reliance on oil revenues and the increase in oil prices helped sustain the economy for a long time. However, the productivity never seemed to recover in spite of all the government subsidies. Where was the failure? Was it political, managerial, or was it because of worker behavior?

          I guess, what I’m asking: is it socialism that doesn’t work, or was it the incompetence of individuals in the Chavez hierarchy? And then, would Capriles have to abandon all the missions, etc. …. or can he turn some of it around to appease people who depend on and are passionate about those aspects of Chavism?

        • HalfEmpty Says:

          Or Right-Deviationist Wreckers.

  4. concerned Says:

    Possibly low tech, but costs from seed, fertilizers, irrigation trying to produce government price controlled fruits and vegetables is not economically feasible or in many cases not possible. Large producing farms were also expropriated on a whim, and quickly dried on the vine.

    The government has gone out of their way to crush production of all products, not just farming. This government has never cared for improving Venezuela, and only for improving their personal bank accounts. The money to be made is through importation and exploiting the system. Criminals through and through, hidden behind the mask of a fake revolution.

    • m_astera Says:

      The main reason most food is imported is because of the money to be made by the importers who are paying for their imports with $$ obtained at ~4-5 Bs/$. There is an immediate 300 to 400% profit right there.

      Second, as I have mentioned before, a major part of the Castro/Trotsky plan of action is to destroy the economy and the private sector’s ability to make a living independent of the government.

      Third and not least is that agriculture is considered the lowest of occupations in Venezuela. In many other countries the common people have the dream of their own self-sufficient homestead. In Venezuela the dream is a condo in Miami with a BMW and a Hummer in the garage.

      My field of work is agriculture, specifically soil minerals and nutrition. I consult with growers all over the world, just about everywhere except where I live, in Venezuela. There is no interest in growing high-quality crops in this pais, only in exploiting the soil to produce the maximum yield for the least possible cost. The soil test results I have seen from Venezuelan farms are shocking how depleted the soils are. Depleted soils produce nutrient deficient crops, leading to poor health. For that reason it may be best that most of the food is imported.

      • Gordo Says:

        I’m still not clear how importers can mark up foods so much. Is it that price controls affect domestic producers alone, and importers are free to mark up products as they please?

      • HalfEmpty Says:

        Sadly the fields are being rejuvenated the hard way now. Forced fallow.

        • Gordo Says:

          1. Is this why farmers are questing money for chemicals?
          2. What are the issues for livestock and fruit trees?

      • Gordo Says:

        So, there is no future for agriculture in Venezuela, even under Capriles?

      • Dr. Faustus Says:

        Oh my. That was interesting….

      • m_astera Says:

        “So, there is no future for agriculture in Venezuela, even under Capriles?”

        There is huge potential for agriculture in Venezuela, just not the type of land management that has gone on in the past. Short version: The fertility of the soil is a function of the minerals in the soil (*not* the organic matter content). Each time a crop is grown and sold out the farm gate, the fertility of the soil is diminished by the amount of minerals hauled away. As a rule, the only minerals that have been replaced have been nitrogen, phosphorus, and potassium, NPK, as in the numbers on a bag of fertilizer 10-10-10. Plants need perhaps 20 minerals to grow and reproduce, humans and animals need perhaps 50. When only 3 are replaced, and those three the ones that produce rapid yield response, all of the other minerals that the crop needs to survive are being depleted, year in and year out. As the mineral reserves are drawn down, the crops get weaker and more susceptible to disease and insect attack. Strong healthy crops seldom need toxic rescue chemicals.

        Venezuela has all of the minerals needed to re-supply and rebuild its agricultural soils and even make them better than they were as virgin soils, but there needs to be an interest in doing that, informed agronomists and growers, and the capital to make it happen. The present system is like giving speed to a worn-out horse to force one more day’s work out of it.

        Venezuela could easily be self-sufficient in food and grow the best, most nutritious food in the world, but it won’t happen by decree and it won’t happen with a government that hasn’t the slightest clue about agriculture.

      • m_astera Says:

        Those interested in where I’m coming from might appreciate the interview here:

      • Gordo Says:

        Ok. How about fruit trees? How is the domestic production of that agricultural segment doing?

        • m_astera Says:

          Really I have no idea. As I wrote above, I work with growers all over the world except here in Venezuela. The ones I tried working with here were only interested in short-term profit for minimum input. I gave up wasting my time and effort.

          Venezuela has some of the world’s best phosphate reserves, and at the same time some of the most phosphate deficient soils. Citrus needs a lot of phosphorus to do well. There’s a clue for anyone interested in growing tree fruit.

    • gordo Says:

      Yes. That’s what I think as well. I’m just not sure how it all can be turned around quickly. If the opposition took over the whole government tomorrow, how would the economy change, and what would you and I do differently?

      For myself, I’m a doctor, but I’m thinking of buying a hacienda and becoming a farmer. I grew up on a farm. What would you do?

      • gordo Says:

        What I’m saying is that there is going to be an abrupt change and a sudden cornucopia of new opportunities. I think it will be something like a gold rush, and people who can will try to seize whatever they can.

  5. O.W. Says:

    The Tocoma hydroelectric project should be coming on-line this year and that should help.
    Also, of course, they have to increase prices. Especially to commercial users but also for residential users. They really need to start talking to people about this and prepare them for it, well in advance of increasing the prices, and then do it. Same as with gasoline.

  6. moctavio Says:

    I think of the 700 million , 300 million are for Tocoma, thus, unless they get the money elsewhere, Tocoma will not be ready unless they pay for it from other source.

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