I have been trying to catch up reading the news from when I was away. A few articles struck a chord with me. I will translate some as time allows. Here is the first one, by Veneconomia, an advisory group run by Toby Bottome, which publishes a number of very good econimic publications about Venezuela:
The economy in the hands of Hernandez Behrens by Veneconomia
Few data points better describe the Venezuelan tragedy than the fact that main economic debate in the country is the controversy about whether the Government is destroying the private sector intentionally or is doing it without realizing it.
Veneconomia has maintained that the attack against the private sector has all of the appearances of being the result of a premeditated plan. But one has to admit that when one hears the idiotic statements (burradas in Spanish) –there is no other way to qualify them- that Captain Edgar Hernandez Behrens says each time he approaches a microphone, a space opens to the possibility to have doubts about this. The ignorance and improvisation that the Chief of CADIVI (the Exchange Control Office) demonstrates when it comes time to make public statements are so clear that it is hard to believe that the fate of the Venezuelan economy is truly in the hands of a character like him.
A few days ago, Hernandez Behrens said that if the exchange controls were to be ended today, the Bolivar would revalue, trading at Bs. 1,500 per US$ and that it is only the “negative thinking” of the economists which stops them from realizing this. The most obvious question is, if the Government truly believes this folly, then why not then free the exchange control markets? Exchange controls are fundamentally a mechanism to prevent the currency from an uncontrolled devaluation of the currency. If the Bolivar would revalue if it were liberated, then why maintain it “artificially undervalued”? The answer obviously is that the story of the revalorization of the Bolivar is not beloved even by Hernandez Behrens’ lawyer.
On the other hand, Hernandez Behrens told local paper El Nacional, that the regional payment system of ALADI, which is part of the Andean Pact can be used to violate the exchange controls, demonstrating in that way that he ignores that a treaty subscribed by the Republic has constitutional range, while CADIVI is supported over the weakest legal framework imaginable –a simple presidential decree-besides its dubious legality.
And if this were not enough, the Captain demonstrates his lack of professionalism, almost like taken from a cartoon, when he said that the first $8,000 were handed out to “Cargill, I believe”. I believe? Could it be that Hernandez Behrens does not know who got the first few dollars for imports after four months without them? Well, yes, after all this is the Fifth Republic, where everything is possible.