Archive for November 9th, 2013

Maduro Promotes Anarchy In Venezuela

November 9, 2013

President Maduro ordered that all of the products of an appliance distributor called Daka be sold at “just” prices because of some “irregularities” found in the pricing and thus promoted anarchy in both Daka, as well as Pablo Electronics, a store that was mentioned by the Venezuelan President.

Starting last night, people gathered around the stores of these two companies to participate in the “piƱata” creating fights, some looting and even shots were fired as the free for all began. While in some stores order was maintained by the police and the National Guard, in others, people left without paying.

And it was a free for all in some cases, as customers broke windows, took stuff without paying and authorities and “pueblo”, both opposition and chavistas, participated in this obscene act, which shows how low the country has come. One has to wonder whether Maduro was losing grip of the situation with his actions, which will certainly lead to shortages for appliances in short order.

Here are some shots from the Daka store today. A return to “ta barato dame dos” (cheap give me two):


and more


And this National Guardsman must be thinking he had a good day:


And indeed, the shelves were emptied


even if some shots were fired to maintain order at some point:


The curious thing is that while the “irregularities” have not been described, it is a matter of “just prices”, calculated at the official rate of exchange of Bs. 6.3 per dollar, which curiously does not appear to apply to appliances or TV’s. In fact, I reviewed the list of CADIVI importers up to 2012 and Daka is not in the list between 2004 and 2012 and Pablo Electronics was assigned all of US$ 135,000 in 2012, the last year for which Cadivi published the list.

Thus, these importers are being punished, without proof, for importing at the black market rate and trying to make a profit amid shortages, which in fact raises prices even further. What this means going forward is that there will be more and more shortages and higher prices. But Maduro fails to get that.

What is more ironic about all this is that Pablo Electronics and Daka sell cheaper than the Government’s Bicentenario stores. Moreover, in the Mi Casa Bien Equipada program, in which the Government “sold” Chinese Haier appliances at “just prices”, prices turned out to be over 50% higher than those charged by Where was Indepabis then?

In the end, I have to wonder if part of the stuff that Pablo or Daka are or were selling, was actually imported by the Government and resold by some “guisadores” to these stores for a quick profit. With the arbitrage close to ten to one at this time, it is too tempting for Government operators to set up deals like that. Just think, you import and let someone else take care of the distribution and sale.

All in all, a very sad scene in Venezuela, where people seem to have lost sight of reality. This maybe just grandstanding by Maduro, but the scenes are reminiscent of those seen in Zimbawe in 2007, where the “inflation police” forced shopkeepers to sell things at “just” prices. And we all know how that ended up.

In the end, the rule of law no longer exists in Venezuela. A bullish Government can just push you around, inadvertently pushing the country closer to anarchy. Today, appliances, tomorrow, Harina Pan, the day after, there will be nothing left. At that point will people fight each other or decide to get rid of the Government?