Archive for January 20th, 2008

Chavez’ ignorant occurrences and whims continue to screw up Venezuela as he shuts down all toll roads

January 20, 2008

I have been meaning to write about Chavez’ decision last Sunday to eliminate all toll booths, but have not had time to do so which is some sense was good given the developments since. This decision basically shows why things can’t function in Venezuela as long as Chavez is President and that the reason things are not worse is just the US$ 300 billion in oil revenues the country has enjoyed since Chavez became President, which cover up the mismanagement, improvisation, corruption and stupidity.

Last Sunday President Chavez announced that he was eliminating all toll roads in Venezuela because they impeded the free movement of people around the country as guaranteed by the Constitution. Of course, this was the ostensible reason from the same man that sends the National Guard to block highways to impede that same freedom whenever the opposition holds a march in Caracas.

The true reason is first, one actually mentioned by Chavez, that this is in some sense a capitalistic measure, which charges people to use infrastructure that the state should provide for them. A second reason may be that these tolls provide funds to some opposition Governors or Governors, such as the Aragua Governor, who may be in the opposition as part of Podemos, even if he has not said it openly.

But there were many reasons why this decision was improvised and even illegal and it just happened to be an idea Chavez had and announced without consulting anyone and which goes in the direction opposite to where the country should be going.

First of all, none of these toll roads are national, they were all State toll roads, so that Chavez once again goes against decentralization. Thus, it was not even his business to shut them down. Even worse, some of them were under concession to private groups whose rights and contracts were simply violated because of a whim Hugo Chavez had. Thus, the right to private property protected not only by the Constitution, but also by the rejection in December of any changes to its definition by the Venezuelan voters, was once again violated by an Hugo Chavez that has yet to understand that the voters said no to this style of running the country and his political project.

But Chavez did not even take into account the human side of shutting down these toll roads, the more than 10,000 workers that man the toll booths (as well as 1,000 “paneleros” at the Guacara toll booth) and which with one swipe were left unemployed. They protested all week, blocked roads and in the end, they got their way in at least two states, Aragua and Carabobo, where the tolls were restored for large trucks as the workers now all became part of the ranks of the civil service in a country with too many public employees.

But the worst part is that these roads are in a terrible state of disrepair for the simple reason that the repairs were funded by the proceeds from the tolls, which had remained at the same Bs. 0.1 (4.6 US$ cents at the official rate or 1.9 US$ cents at the parallel swap rate) for the last nine years, a period in which Chavez has regaled Venezuela with an increase in prices of 295%, in another proof of the incompetence of his improvised economic policies. A country can not simply be run on the back of the occurrences of the President.

In the end tolls are a very fair tax, much fairer than the inflation created by the Government with the financial transaction tax, as you only pay it if you use it. But Chavez and his cronies have their minds programmed against not only such charges, but they abhor the thought of States outsourcing the administration of the tolls to the private sector. The same state that is incapable of maintaining the same roads the cars drive on, but the limited understanding of complex matters by the autocrat that is destroying Venezuela keeps him pushing the country in the same destructive direction the country has been in for the last nine years.

The same day Chavez banned the country’s asphalt exports, despite long term export contracts being in place, the same way that today he felt like increasing the price of milk at the wholesale level by 50%, as more than 400 items remain under control. He also called for banks to be intervened if they don’t lend to agriculture while the law simply states banks will pay a hefty fine of they don’t allocate their quota to such loans. Today, he inaugurated a milk plant purchased by the Government from Parmalat, which insures that milk shortages will continue, as the inefficient Government takes it over. But as one of his first Ministers of Agriculture said today, agricultural production per capita has fallen by 11% since Chavez became President. It will never occur to Hugo Chavez that most of his ignorant occurrences and whims are responsible for it.