Archive for June 25th, 2010

A radical shift to the radical left in Venezuela

June 25, 2010

Believe it or not, within the robolution some people think there is a “right” and a “left”, the “right” belonging to those that want a little more pragmatism and less ideology for the sake of the survival of the robolution (with an “o”), while the left is composed by the more Pol Potian leaders, whose idea of socialism is averaging down everyone, until we are all as poor and as obedient to the “process” as can be.

It is not a very well-defined line. The more radical wing is actually more honest or should I say less corrupt, less touched by scandals, while the “right wingers” are also pragmatic when it comes to their life styles and allowing others to stick their hands in the till. They have discovered the good life and heck, they enjoy it.

The leader of the Pol-Potians is of course, Jorge Giordani, “The Monk”, who has been Planning Minister forever, where he has accomplished failure after failure in his planning and economic policies. But his honesty and chemistry with the All Mighty leader has allowed Giordani’s incompetence to flourish. Giordani took a gigantic leap forward when he was finally upgraded to Ministry of Finance, a position in which his decisions can directly and immediately screw up the Venezuelan economy and lead to the type of destruction on which XXIst. Century Socialism, whatever that may mean, can be built upon.

But a new powerful leader has emerged in the midst of all this, current Vice President Elias Jaua, the Ph.D. in Sociology who has presided over the not so successful land and agricultural policies of the Chavez era. After two million hectares under his control Jaua seems to have realized that he could not get more than 5% of them to produce and the real power is not in the land like Pol Pot and Mao dreamed of, but in the robolution the power is with the imports, that’s where the money is, so let’s go after it.

Some claim it was actually Jaua who started leaking all of the information about the food going bad all around the country as a means to get a strong hold on PDVSA’s subsidiary PDVAL, as well as the companies nationalized by Chavez in the last two years in the food production sector. If true, the plan worked out perfect as PDVAL is now directly under the umbrella of the Vice-Presidency and the food companies are part of the Minister for Feeding, another Jaua subsidiary.

In a perverse sense, this is good news for Venezuela. The food import and distribution is completely removed from PDVSA’s daily activities, which will allow its management to concentrate in the most important business in the land: Oil. PDVSA should have never been involved with PDVAL, but Chavez’ belief that PDVSA’s weakened management and almost infinite resources would solve the problem and Ramirez’ thinking that being in charge of the biggest exporter and the biggest importer in the land would make him untouchable, forced PDVSA into an undesirable and unwanted business.

But this is also bad news, as Jaua and his cohorts are full of ideology and have little managerial expertise to undertake the task that they have brought upon themselves. They may think that by being honest (less corrupt?) they can manage the food import and distribution business more efficiently, but they also belong to the Chavista strain that believes that anyone can do anything, even if eleven years of failures proves otherwise.

And besides the lack of management, there will be the lack of the ample resources (read cash) that PDVSA had and which can move mountains whenever it is necessary. No secret budget can even approach the levels of funds and agility available to PDVSA, something that Ramirez is certainly going to shield now from Jaua’s desires.

And it is a bad moment for this to happen. With the private sector now strangled, if the new PDVAL runs into troubles with the flow of imports, the shortages will be even more dramatic, completing the circle of good news/bad news for our dear country.

In some sense, Ramirez has to go now for Jaua to be successful in his new enterprise, but somehow the Minister of Energy and Oil is a true survivor, a man of many secrets and many suitcases, which so far have averted his demise.

But there is only one survivor, for now, in the robolution, and his name is Hugo Chavez. Ask Diosdado Cabello and his cohorts, six of which were swiftly removed from the Cabinet simultaneously with the PDVAL grab in the name of the Parliamentary elections. Or ask former Vice-President Carrizales who stood up for the military in the face of a Cuban invasion in key military positions and was quickly replaced by the quiet sociologist with the name that always seems short a consonant.

They are all gone for now, but they may return like comets, much like Diosdado has reappeared whenever things were not working well. Ideology imports little food and feeds few mouths and every time Chavez has shifted to the Pol-Potians he has eventually found the need to bring back the “right” to straighten out the mess.

For now, you can assume the worst case scenario, think Banks, think Globo, think Pol Pot, the total destruction of a system in the name of a nebulous idea which is still a work in progress eleven years after Chavez’ ascension to power. Only a quick deterioration could shift the balance of power at this time.

And Chavez needs a magician to stop the unraveling of the Venezuelan economy, which may lead to the resurgence of the radical “right” and the cycle would begin once again.