After visiting Venezuela for a few days, there was a very clear message: Chavez is ready to pull all of the stops in order to win the 2012 Presidential race. If you thought the last twelve years were filled with cheap populism and undelivered promises, you ain’t seen anything yet. For the next eighteen months, Chavez will borrow, promise, give away and spend like there is no future. But he will not spend on anything productive, he will not build roads, or houses, or infrastructure. That is not the priority, the priority is to increase salaries, increase benefits, give away money, import food so that shelves are stocked, hold prices back as much as possible and promise and then over promise, just in case. The prioriti ys to convince people to vote for him.
There are two possibilities, that the strategy will work and he will be reelected, or that it will not and the opposition will be left holding the bag of a distorted economy, a Pdvsa without resources and in need of billions for investments and a gloomy future, that Chavismo will blame on the newly elected administration. If reelected, Chavez will then resolve some of the distortions and hope that things will somehow improve, pray for higher oil prices, so that he can then pull it off once again. Other than getting reelected Chavez, has never been very good on long term planning. He lives for the promise and the announcement, not the delivery. He lives for his whims and ideas, not for execution.
Nothing exemplifies this better than anything that the new “Mision Vivienda” Chavez’ promise that he will build 1.5 million homes for the poor in the next six years after being unable to build one third of that in his first twelve years. Everyone knows this will be impossible, that essentially nothing can even be accomplished before the 2012 election, but we are about to witness the Greatest Housing Promise Show on Earth.
To begin with, everyone in Venezuela with a cell phone (recall cell phone penetration exceeds 100% in Venezuela) received on May 6th. the following SMS from the Popular Ministry for Housing and Habitat:
“Bring your crib sheet with all of the data of your family group to register in the “Gran Mision Vivienda”. And go live enjoying life. Visit http://www.mvh.gob.ve”
There you have it, massive advertising, massive populism, massive illusion with a single SMS. Everyone that registers will think that there is a house at the of the Chavista rainbow. Never mind that, optimistically, only maybe 10-15% of those registering is likely to receive a housing unit in the next seven years. It is too tantalizing, too appealing to ignore, it works. It is the hope to get out of your personal hell with crime, unhealthy conditions and monthly rent in the barrio where you live.
Because in talking to experts you learn that it takes six to seven years to finish a housing project from the day it begins. Not from the day you think about it, but from the day you start, i.e. You have the land, you have a design, you now need to get the permits, get electricity, get water. Oh yeah! Now comes the tough part, getting the houses built. The best Chavez year in housing is worse than any of Caldera’s, one of the worst Presidents of the IVth. At least Caldera could have used the excuse that oil was near ten dollars a barrel.
As part of the show, The Chavez administration issued this week a decree exonerating builders from the VAT, from import duties and from income taxes. (Recall these same people were the enemies three months ago). It also placed a cap on who may get a mortgage from the mandatory credit portfolio of banks. If your family group makes more than five minimum salaries a month, it will come out of the bank’s portfolio, not the 12% obligatory obligatory mortgages.This will, of course, not generate any housing units soon, but it will generate interest, will generate activity, will generate investment, it will provide fire for the great housing illusion.
And it will work, like so many of the revolutionary illusions of the las twelve years. In four or five years, maybe a couple of hundred thousand houses will have been built, slightly more than without the Mision Vivienda and if there is a new election, Chavez will talk about something else, ignoring the failure of the housing illusion.
Maybe by then, it will be time for a real revolution in Venezuela.