Archive for January 12th, 2010

XXIst. Century Socialism finally arrives in Venezuela: Electricity rationing begins tomorrow!

January 12, 2010

After eleven years of failed policies, the Government of President Hugo Chavez will finally achieve what it has been unable to achieve in any other field: It will bring to all Venezuelan citizens a true feature of socialism in the form of electricity rationing. Yes, I know, dollars were rationed too before, but the poor have no access to them. Thus, for the first time the Government will impose a policy on all of the citizens which represents a worsening of their quality of life, certainly a very distinct characteristic of socialism and similar regimes. Somehow, they always end up imposing rationing of some sort.

Way to go Hugo!

And if the policy was not bad enough, it was announced an implemented with the same level of confusion, incompetence and improvisation that caused the electricity shortages, Daniel has a good summary of some of them, but I will describe some in more detail.

Basically, in Caracas (so far the rationing details have not been announced everywhere), every two days, wherever you live or work, there will be rationing for four hours in 4×6 chunks. You can download this complex document (see one page above, including the cynical Ahora Venezuela es de Todos sign), where you can see which Areas of Caracas correspond to each block. If you are in block A then you can find when your home or work will have the electricity shut off from midnight to 4 AM, from 4 AM to 8 AM and so forth.

Except that for each area, even to some streets, there are six zones for each residential or business area. That is if you are in Zone 1…

but wait, nowhere does it say how these zones are defined! That is, rationing begins tonight in about three hours, but nobody knows what their Zone number is. I have reviewed my electric Bill, no zone. I have tried to log in to the Corpoelec website, overwhelmed. Electricidad de Caracas website, also overwhelmed. Not ready for prime time, but coming very soon.

You’ve gotta love the robolution! Even when they deliver socialism, they do it inefficiently and incompetently!

But I digress..

Once again, the Government imposes a half-baked model. Since it is hard to know when somebody will or not be shutdown, there will be a lot of frustration and wasted time.

Let me give you a simple example: Suppose somebody wants to visit my office. We actually installed an emergency back up power plant eight months ago (We were certainly not surprised by all this, even if the Government was!). It can power us up for a total of 24 hours. However, if the person does know we are open, they will not show up. And even if they do, they may not want to walk up eight flights of stairs and then sit in my office without air conditioning for an hour or so.

But then look at it from our point of view, if our counterparts in our business are shut down, that in itself will hamper my business. How can I sell somebody something if they are not there? Because in fact, few of my counterparts had the foresight to get an emergency plant. In fact, we were originally told we could not install one in our building, but when the future looked clear to many last year, we were told to go ahead. (If we knew, why didn’t the Government know?)

And remember, the lag now is eight months to install an emergency power plant of any reasonable size. (I am also purchasing two Uninterrupted Power Supplies for my ADSL, WiFi and computers at home, if I am going to sit at home in the dark from 8 PM to 12 PM some nights, I might as well be surfing or blogging, no?)

I am just waiting for the Government to argue that this will not impact economic growth. Sure, fewer and more inefficient hours of work, have no impact in the economy. Tell me about Cinderella now!

And then we come to my biggest concern: Crime. You can be sure that criminals will be looking at the same maps to take advantage of the lack of police and security in whole areas that will now have no lights for four hours at a time:No lights, no alarms, no police, a sweet model indeed!For crime. Crime will go up, that is about the only prediction you can make.

Unfortunately, it will go up unevenly. This is where socialism will break down, poor areas will be hurt the most. Because they have more crime to begin with, because they have less security and because they are more exposed.

Because in the end my argument is false, absolutely spurious. Most of what Chavez and his Government does in the end hurts the poor more, not equally with the well to do, The devaluation hurt the well to do less, because those that can save at least managed to preserve some of their purchasing power in the form of savings in dollars. The poor don’t save. Or if they have a job, the purchasing power of the well to do will be restored in time, but the poor’s will take time to recover. It will take years now for the Government to even try to argue that the poor are better off in Venezuela under the robolution. This is the 2002 devaluation in steroids!. Crimes will get worse for everyone, but it will be worse for the poor. And inflation will affect the poor much more than it affects those that have jobs and purchasing power.

Short term, I actually think that this will piss people off more than the devaluation. This has an immediate effect on the quality of life of every single Venezuelan. The devaluation will show its ugly face slowly over the next two months.

Remarkably, it is hard to imagine anybody, anyone, doing a job that is worse than this. Everything, from economic, policy, to oil policy, energy policy , has been royally screwed up by the Chavez Government. Only the fact that oil prices soared had managed to mask the perverse effects of ignorance, incompetence and the full devotion to politics of Chavez’ Government.

Now that Socialism is here to stay, Venezuelans should brace themselves for many forms of shortages and rationing. If your lights go out at midnight where you live, turn on your flashlight and your laptop (keep fully charged!) and you will immediately know what is the number of the zone where you live!


Chávez’s “socialism” is extinguishing Venezuela by Veneconomy

January 12, 2010

Chávez’s “socialism” is extinguishing Venezuela by Veneconomy

Like the emperor in the fairy tale, the Chávez administration now stands naked before the world and is finding it increasingly difficult to cover up the disaster it has created with its ill-named 21st Century Socialism.

In the first 12 days of 2010, it has had to resort to a drastic devaluation of the currency, announced on Friday, January 8, despite its reluctance to take this step for more than four years. And now, on Tuesday, January 12, it has had to make the electricity debacle official with the joint announcement by the Ministry for Electrical Energy and the affiliates of the state-owned National Electricity Corporation of a “special electricity rationing plan that will cover the entire country and will involve suspensions of the service for a maximum of four hours” in each region.

The arguments offered by the electricity authorities are incredible, to say the least, in a country that has recently enjoyed a prolonged period of high oil prices. The Minister for Electrical Energy claims that the announced blackout to which they will subject all regions of Venezuela at discretion seeks to “generate a process of saving and rationing that will make it possible to keep the country operating,” as failure to do so would result in the water in Guri falling to levels that could put the country in a very serious situation at the end of February. He also explained, quite shamelessly, that they are “trying to avoid” Guri Reservoir, on which 70% of the country’s electricity generation depends, falling to critical levels and generating a “countrywide blackout.”

What is even more serious –and important- is not merely that this critical situation in the supply of electricity is the result of more than ten years of lack of investment and planning and of having totally abandoned a coherent, sustained maintenance program, but the fact that the government persists in making last-ditch efforts, refusing to rectify the pernicious way in which it has been handling the country.

The Chávez administration is responsible for not having made, during these two long terms during which it has been controlling the entire state apparatus, the necessary investments to develop the country’s electricity generation, transmission, and distribution capacity, or at least to maintain it at 1999 levels.

On that issue, it is worth mentioning statements given this Monday to El Nacional by José Manuel Aller, a professor at Simón Bolívar University with PhD in electrical engineering, when he maintains that “lack of investment in the national energy system over the past ten years amounts to approximately $20 billion and some 20,000 megawatts.”

Worse still is the fact that, instead of assuming its responsibility in the debacle into which it has plunged the sector, the government insists on passing the buck and saying that the situation is due to the atmospheric phenomenon, El Niño, or to the population’s irresponsible consumption of electricity, ridiculous arguments that hold no water when one sees just one photo of the broken down turbines at Guri or at Planta Centro Power Station or reads the reports warning of the gravity of the situation that different specialists have been submitting for years. Today, the people of Venezuela are paying the price by being condemned to darkness and to a deteriorating standard of living.

The fact of the matter is –now revealed in all its glory and impossible to hide- that the project that Chávez has wanted to implement by force and against the wishes of the vast majority of Venezuelans has only brought failure after failure in all areas of development that are vital for the population.