The Devil's Excrement

I had not seen this article in Time Magaxine about efforts to revive Venezuela’s best cacao, the criollo bean. It describes the private efforts near the coastal town of Choroni to revive what is considered to be the best cacao in the world.

In the last two decades there has been a strong private effort to develop and project both the country’s cacao and the country’s chocolate. There are some unsung heroes of this effort which has been quite successful, it is truly said when one of them, Jorge Redmond,  is quoted in the article saying:

“Jorge Redmond, president of Chocolates El Rey, a Venezuelan company that has been processing premium cacao since 1929, says El Rey saw almost 865 acres (350 hectares) decimated recently when 40 families invaded. “A 10-year effort was destroyed in days,” he says. “We were able to produce one batch of San Joaquin Private Reserve chocolate before this happened, but we will never taste that chocolate again. It was an incredible chocolate.” His tone is one of heartbreak, lamenting a sweet romance that has often ended in tragedy.”

Not much can be said in the face of the wholesale destruction of such positive efforts by the robolution.

It is getting a little tiring to write about Hugo Chavez and his Government. How irresponsible can he be? Today he said he would turn on the tanks and the Sukhoi jet fighters if Colombia violates Venezuela’s sovereignty and gave Coca Cola two weeks to give up some land it owns in the west of Caracas.

First of al, there is no need to threaten another country when all its Minister of Defense has said is to repeat that it will pursue guerrillas wherever they may be, without mentioning country’s names. Because in the end, Chavez is only bragging. Last time, he “turned on” the tanks, they went nowhere, as the deploprable state of Venezuela’s highways made it impossible to move them. Moreover, the military refused to move anything and the major highway of the country was blocked by protesters that same day.

But in the end, Colombia’s military is much better trained that Venezuela’s and has been engaged for years in its own war. Venezuela’s military has problems holding a parade, as uniforms come unglued and vehicles burn. So, Chavez is once again talking to the gallery, but should threa carefully should the Colombians take him as his word.

Coc Cola is on the other hand screwed. There are no private property rights in Venezuela anymore. Whatever whim Chavez may have, whether a legally built Mall or a parking lot, he decides what to take away and if the owner of Polar “se pone comico” (he gets funny, like going to Court or something like that) Chavez will also take it over and pay with worthless paper, in his own words.

Because Chavez has interpreted the recent referendum victory as carte blanche to carry forward his personal supposedly socialist project, despite the fact that the results of the Dec. 2nd. 2007, referendum should still stand. But Chavez is no democrat and he has long forgotten that the “people” rejected that same project at the time.

And to get an idea about the autocrat’s frame of mind, he no longer uses Bolivar, Zamora or other heroes of the Venezuelan independence. What for? Why use those references when you have him: Hugo Chavez, the hero (?) of so many epic episodes (?) of Venezuela’s history.

Thus, in his latest hair brained scheme, Chavez proposes a chain of Restaurant Chavez, Mac Chavez, so that Venezuelans can eat at a reasonable price with wine and candles (his words)

So, Chavez not only wants to intervene now in every facet of Venezuelan’s life, but he now wants to use his own name for the projects in a clear sign that we will see more and more traits of a cult of personalty as we go forward.

It is all about Chavez, not socialism or any other project.

But the worst part is the passivity of those that are against Chavez. Not of the so called opposition, but of the every day Venezuelan who watches this alarmed but feels powerless to do anything about it.

And expect more in the upcoming days, it is clear that pushing his project forward is more important for Chavez than implementing measures that would help alleviate the upcoming economic crisis that all Venezuelans, but mostly the poor, are going to feel.

(P.S. I am an avid Coca Cola drinker, I will take to the streets if I have to do without that!)

The new Minister of  Commerce announced today that the Government will review areperas, the popular fast food joints where you can buy the typical staple of Venezuelans. According to this genius of commerce, Eduardo Saman, he went into an arepa place and there was a pork arepa which cost Bs. 20. Then, he argued, from a package of regulated corn flour he says he can make 20 arepas with one kilo of pork, which costs him Bs. 16.

Where should I start?

First of all, a 50 gram pork arepa (20 from a kilo) sounds really small, I am not sure which arepera Mr. Saman went to, but the arepears I go to don’t make such small sizes. Second, the arepera I go to has prices which are about 25% cheaper (including VAT, which the Minister did not mention. Finally, maybe the people can buy pork at Bs. 16 per kilo in Mercal, but commercial establishments certainly can not and there you have to pay around Bs. 36 per kilo for pork, which always including some bone. Add to that the 10% VAT that is included in the price and Mr. Saman’s math certainly needs to be looked at.

But, in the end, Mr. Saman can not accuse areperas of usury as he suggested, because ussur only applies to interest charged on loans. There are no regulations on the price of arepas, but it sounds like we will see one in the near future.

This is actually quite sad for me. I still recall when I acme back from my studies abroad some time ago, how disappointed I was to find that most areperas had turned into hamburger joints, after the Carlos Andres Perez Government (I) regulated the price. One of the few things Luis Herrera did which was a positive was to deregulate arepas and immediately areperas sprouted all over the country.

But Chavismo is clearly set in ruining the country. After all, if it was so cheap to make an arepa, how come there are not hundreds of arepa carts around the city, selling them at half the price?

Maybe a cook in my audience could take the time to figure out how many arepas (arepera size) with pork filling (also arepera size) you can make with one kilo of pork and one package of Harina Pan and we can figure out what the margins are for the arepa, without talking into account overhead and the like.

Clearly in Venezuela, what is not illegal, maybe so under Chavismo criteria…

What’s next, the arepa decree?

And in another funky, groovy episode of the clueless revolution, Hugo Chavez announced tonight the expropriation of at least part of the Venezuelan operations of Cargill, the US based food producer. Even the announcement was unclear, as the President did not specify if this applied only to the rice facilities of the company.

And taking advantage of the moment, Chavez also threatened Venezuelan Grupo Polar with expropriation of all of its plants, because, imagine that, the company sent lawyers to challenge Chavez’ decisions. How could they challenge the natural law that says Chavez can take over anything he wants?We seem to be going from autocracy to Dictatorship fairly fast.

While I have not had time to talk about the “intervention” of the rice plants by Chavez, as well as a new decree which regulates what you can and can not produce, it is all based on the concept of “public utility” approved in the 26 laws withing the Enabling Bill. This same concept was voted as part of the 2007 Constitutional Reform referendum which was not approved, despite which Chavez issued laws that covered the same topics…

Thus, Hugo Chavez is once again violating the country’s laws and the Constitution but some fools abroad still will claim this is a democratic Government. As usual, they back, what they would consider outrageous and a violation of liberties in their own country.

So, please, go do a revolution in your own country and don’t come defending Chavez’s actions.

This revolution is becoming hilarious. Today the Minister of Communications announced on Nationwide TV, some changes in Ministers of the Cabinet, but most news reports (Bloomberg,  Reuters) went like this:

“…announced a changed in the Cabinet, but the Minister of Finance was ratified, so was the Minister of Energy and Oil, the Minister of Foreign Relations and the Vice-President”

Jeez, what were the changes?

Well, the Vice-President is now Minister of Defense. That does not seem much of a change, no? He gets both jobs at once!

The Minsiter of Commerce was changed, do you recall the previous one? The new one is Eduardo saman, formerly of consumer protection.

And the key positions?

Still in the hands of the incompetents, such as Rafael Ramirez, who said twice between yesterday and today that Fonden has US$ 57 billion, a quantum jump from the US$ 15 billion quoted by the Minsiter of Finance a month ago, and certainly over the last available financials of June 2008, where only US$ 13 billion was there. But you have to believe Ramirez he is the one that says we can live with no oil income and we need to “save”, because the country can’t have the “exhorbitant” expenditures of last year.

Diosdado Cabello, who people rejected for a second term as a Governor of Miranda was named Minister for Housing and Public Works, where he has failed before. Cabello has also been Minister of Telecommunications, Minister of the Interior and Vice-President. Not much change, no?

For Health the “new” Minsiter is Jose Maria Montilla, but hey, when did he leave the Cabinet, he was named to this post in May 2007, simultenously with being President of the Social Security system, I guess another super Captain from Chavez’ military year of which Cabello and Chacon are both members. Wonder what they were being fed in the army at the time to create these super-managers. Montilla was 113th. out of his class of 216, wonder where the other 100 are?

Nury Orihuela, Minister of Science, was named Minister of Science, Technology and Intermediate Industries and Erika farias, Minister for Social Participation and Protection was named Minister for Communes.

Maria Cristna Iglesias is back in the Ministry of Labor.

Oh yeah, I forgot, Jorge Giordani, who was Chavez’ Minister of Planning from 1998 to 2002 and from 2004 to 2005 is back at Planning! But we have known that since last weekend.

So, Chavez really changed the name of some Ministers, named failed ones to the same positions, or shuffled some around or gave some double duty with two Ministers.

So, nothing much changed, same Ministers different day, but there was a press conference swearing ins and the like. I guess they had nothing better to do. Remember, Venezuela is shielded from the crisis, wait, didn’t Ramirez say we have to save money? How come? He better talk to Giordani soon, so they can tell the same story without contradictions, or to Montilla, before his nose grows too much.

Gone a week, but it feels like eons. Despite the week having two days off for the non-existent Carnival holidays, Chavez managed in a day to “cash in” his referendum victory by “intervening” all rice processing factories and bringing back “The Monk” Jorge Giordani to the Ministry of Planning. The first one not significant in the sense that it continues the destructive path that Chavez has set. Not significant in the long run of things, but it certainly does matter because Chavista management will as, as usual, manage to destroy what’s there and there will be rice shortages in the end, more so now that money will become scarce.They are simply Atlas shrugging Venezuela.

But the second, Giordani’s return, is in the end the most significant factor. This will be Giordani’s third tour at the Planning Ministry and never has such an ignorant man on economic matters had so much power over the country’s economy. And believe me, there has been a lot of ignorance in the ineffective halls of the country’s Planning Ministry.

Because in his first tour of duty, Giordani set up a time bomb with his strategy of holding the currency constant and issuing boatloads of Bolivar denominated debt at 20+% interest rates in one of the most idiotic combinations of policies ever. He kept talking about the country’s piggy bank (The FIEM) being full, but then he allowed Chavez to go through it in a few months setting up the 2002 economic crisis that your favorite PSD’s continue to blame on politics and not on the mediocre and frustrated geniuses like Giordani whose academic careers went bust (if they ever existed), but had the foresight to go visit Chavez in jail in 1992-1993, making them the oracles of Chavez’ economic failures.

But even worse, these brainiacs became the Venezuela’s Presidents economic mentors, teaching our President a potpourri of feelings, North Korean economic theory, Cuban Management techniques and Maoist Marxist models, which have led to nothing but failure in the last ten years.

So, Giordani is back, maybe to hold the currency constant for a while longer that even I expected, because it was he who taught Chavez how good things were in Venezuela in the 60’s when the currency was kept constant, but in his ignorance he did not tell the autocrat that monetary liquidity was also kept constant at that time.So Chavez understood part I, but never understood the second.

Expect little from the change in Ministry other than more exotic financial management, which will only lead to more poverty and wealth destruction.

And just to make sure this happens, Chavez takes over the rice processing companies, warning that this time he will not even pay for them in cash, but with “paper”, as if he had paid any of the recent nationalizations and expropriations with either of them.

And now he affects the interests of Venezuela’s largest private conglomerate, which has tried to stay low key, hoping things will turn out for the best, as well as the US’s largest private company, also a low key player as long as things were going well.

But you harvest what you sow, and a decade of silence and obedience from the Venezuelan private sector is coming home to roost. Tomorrow, most people will be asking what this all means, rather than questioning who will be next. Chavez followed his 2006 victory with some new “revolutionary” moves, what else could anyone have expected this time around?

As the money runs low, there will be similar “grandiose” moves, playing to the gallery of the 50+% that voted for Chavez two weeks ago. At that time Chavez said he had shielded Venezuela with his good economic policies from the world credit crisis. He now says get ready for the difficult times ahead. One hundred dollar per barrel oil is no longer a “fair” level, but an autocrat’s fantasy. And since Obama does not want to meet with him, he sent the newly elected President to Hell, using the well known local phrase of telling him to go clean his coat (Vaya a lavarse el palto…), not precisely a polite or diplomatic way to address the man you were fantasizing about meeting three months ago.

And then there was the kidnapping of “the good guy” that I just don’t want to mention, but have to. It’s meaning unclear, but the threat very real. Whether part of the daily Venezuelan reality or a Government message, there is simply no place to hide. There is no authority to appeal to. Much like those near the rice companies, or the daily Venezuelans in the barrios, those near him probably find themselves trapped in the anguish of a country gone absurd. No rule, no law, no order.

And this is what some people call a revolution.