The Devil's Excrement

The question posed by the title of this post is not rhetorical. You have to wonder if there is a Government in a country where decisions appear to be random, if and when they are made and when incoherence seems to be the norm, rather than the exception.

Take, for example, Rafael Ramirez. This guy is supposed to be in charge of like half the Government. He is President of PDVSA, Minister of Energy and Oil and also holds a position with the over the top name of “Vice-President for Economic Affairs”.

Now, for months, Mr. Ramirez has been proposing a unified exchange rate to remove distortions and in his own words: “It is very difficult to manage three exchange rates”. Separately, Mr. Ramirez has been the main proponent of a gasoline price increase, calling the current level of subsidies “absurd”.

You would think that with all his titles Minister Ramirez has some pull in Venezuela’s Government. I mean, he made all of these proposals at the PSUV Congress (Where nothing was voted, in the best Stalinist tradition). The people even stood up and cheered for most things he said.

Despite this, not only has nothing been decided, but Ramirez has changed his tune. He now talks about “convergence” of the exchange rate, which should be read as “more than one”, maybe two or even three. But the timing is quite fuzzy too. He now says that additional measures have to be taken first, mostly monetary measures. Funny thing is, M2 not only keeps growing at the same unstoppable rate, but Treasury Bill auctions were recently declared null for the first time in years and the rates were really stupidly low.

Thus, it does not appear as this very powerful man has any power in Venezuela, as he has been preaching at least “reasonable” measures for months, but no decisions are made and his proposals change over time.

Of course, Ramirez has a boss, President Maduro. Thus, in the end it is your boss that decides things, no? But at the same time, you don’t go out publicly with anything without running it by your boss first, no? That is what organizations do, from the Girl Scouts, to companies, to Governments. They discuss, talk about it and run with the conclusions. Sure, sometimes in politics you float balloons to see how the public reacts, but these balloons don’t last six months.

But Maduro behaves much the same way. He says one thing one thing one day, only to promote the opposite later.

Take the whole issue of using fingerprint machines at supermarkets to control smuggling. The whole thing is absurd. Are you going to impose a system on the “people” you always cry you care about, given that it is hundreds of Tons of stuff that gets smuggled out of the country all the time? How much does this system cost? Who will run it? Who sells it? Who maintains it? Who profits from it? How do you implement it?

Even worse, just last week, one of Maduro’s powerful underlings, the Head of Sundde, declared the”war” on lines at supermarkets. Do you really think that implementing a fingerprint system with restrictions to boot, will help ease them.

Imagine the dialogue:

Cashier: “Sra. please move your finger. Ok, Ok, dry your finger before you place it on the scanner. Great, finally. Well, sorry you are limited to two bags of Harina Pan, two cans of powdered milk and one kilo of sugar, so we have to take it our of your cart.”

Sra: “But please, I have four kids, I need the milk. Even if I come tomorrow you will not give me any additional milk. Etc., etc., etc.”

Meanwhile the line backs up even more. People get upset, start complaining and who is going to come calm them down. The Sundee? Sure.  Most likely the National Guard.

But the worst part is that Maduro said a year ago that he was against this type of system. In fact, he ordered that Governor Arias Cardenas of Zulia State stop any form of rationing, arguing that producing stuff was the only way to go.

A year later, Maduro is the king of rationing and the surely corrupt biometric systems. As I tweeted, it would be much cheaper to put a voice transmitter on every military officer in the country, in order to stop them from charging commissions at every step, including all the flow through the borders.

Just watch this video from  this blog, and even if it is in German, you understand the guy is bribing the Guards to get thru and make a lot of money smuggling. So, are you going to check the cars or the Guards? Same idea applies to foodstuffs.

I mean, if as Ramirez says 100,000 barrels of gasoline get smuggled out of Venezuela, does Maduro believe it is one barrel per car? Or maybe it is like 500 barrels (80,000 liters) per truck and a few national Guardsmen helping out. And “colaborando”, wink, wink.

But going back to the title of the post, who then runs Venezuela?

I am starting to think nobody. This is a collection of individuals with no apparent command or direction, led by an indecisive man. I don’t think Maduro went to Cuba to receive orders. I believe he went to Cuba to ask Fidel which of the many proposals he should follow. And Fidel likely told him to just hold tight, try to sell Citgo, see how long they can last. And if they can’t sell Citgo, you can make very tough decisions, like hold payment on debt, borrow somewhere and try to ride it out. But Nicolas, Fidel likely told him: You are not Hugo.

And so the country drifts into som sort of economic black hole. Today it is fingerprint scanners, tomorrow it will be some different imaginary battle. But it will always be about attacking the consequences, not the causes. Those, they will not touch. Maybe a small adjustment in the price of gas. Maybe move the Bs. 6.3 per US$ rate to the Sicad 1 rate. But that’s it. In the absence of Government, there will be no decisions. No real policy changes until 2016

At the earliest.

I am behind on writing about Venezuela. There are so many things to write about and I do have many opinions on them. And there is little time. But the subject of the gasoline price increase is at the top today. In this supposed “adjustment” that Chavismo has claimed it will do for the last eight months, the discussion began after the regional elections in December with precisely the price of gas. But then, much like the so called “unification” of the exchange rate (now called the “convergence”), there was a lot of internal opposition within Chavismo to the increase of gasoline prices.

Now things have been turned around, there is a lot of opposition to the convergence of exchange rates internally, so all of a sudden Minister Ramirez revives the subject of a gasoline price increase. It seems Ramirez only wants to find a way to have PDVSA improve its finances, rather than improve the country’s fiscal balance.

Let me state first, that I am absolutely and totally in favor of the gasoline price increase. I find it appalling that people oppose it, condition it, question it and dilute it it in an absurd discussion of what they want or don’t want the Government to have or do.

The gasoline subsidy in Venezuela is a disgrace, it is wasteful, it is absurd, it is bad for the environment, it generates contraband, it is regressive, it is unfair, it is unjust for future generations, it generates traffic, it distorts policy making and it is simply irresponsible.

In fact, I find it amazing not only that the opposition has so many reasons to object to it, but that the Government is thinking of a small adjustment like to Bs. 2 per liter, if not half of that.

Gas is so cheap (free really) in Venezuela, that it is difficult to talk about how much a liter costs. So, we go back to a picture I posted in May 2011:

I filled up my tank down in Caracas with 43 liters of gasoline and paid Bs. 4.2 for he whole thing. Bs. 4.2 for 11.43 gallons of gas, which at the Sicad 2 rate happens to be 0.082 dollars for a tank of gas. All of 8.2 cents of a US$.

I use the Sicad 2 rate, because it is the highest accepted by the Government and the only one “real” people have a small chance of having access to it.

So, currently in Venezuela, filling a tank of gas up costs 8.2 US$ cents, let’s round up to ten cents for the sake of the discussion.

Now, as you can see in the picture above on the right, I used gas that cost 0.097 Bs. per liter. The Government wants to increase it to either Bs. 1 or Bs. 2, depending on who you believe. This means that the Government wants to increase it to around one or two dollars a tank of gas.

Ridiculous.

To me, that is the same as leaving it is where it is today. It will have no impact on contraband, waste, PDVSA, fiscal accounts, etc, etc., etc…

Furthermore, with 70% inflation the effort of convincing the population that the increase is good, doing it and implementing would be wasted very fast.

Thus I think the Government should target an increase that is large. Say to US$ 20-40 per gas tank. (50 cents to one dollar a liter, still cheap. Or FOB export price, which is the most rational to do) and maybe do it over a year. Similarly, they should schedule further adjustments whenever they devalue, so as to maintain the price at the same relative level to international prices as the adjustment.

All of the other arguments are simply irrational and spurious. That you don’t trust the Government and what it will do with the money? Nobody trusts any Government and what they do with your money. It is the same arguments why people don’t like or want to pay taxes. But the bills have to be paid and in the end it is a vicious circle. The same with the argument that the public transportation is terrible. It is a chicken and egg problem.

Finally, there is the Cuba and Petrocaribe argument. They are valid, but you can’t tie one to the other. The opposition should raise a stink and point out that we give Cuba and those countries very cheap gasoline. In the case of Cuba, the Government of that island sells it at international prices and makes money. But that should not stop us from supporting the price increase. In fact, if anything, the oppsoition should attack the increase because it is not large enough.

Until policy is not discussed seriously, Venezuela will never advance. Chávez introduced the absurdity of an overly subsidized gasoline prices, if this Government wants to take a small step into some semblance of sanity in its policy making, it is absurd in my opinion to oppose it. Otherwise you are promoting the same type of irresponsible Government you object so much too.

I know this will not be a popular post, but I do believe that in politics, one should have certain essential beliefs and principles and that one should stand by them and not turn them around and debase the nature of the discussion just for politics sake.

I was in Caracas last week. Almost did not go for the simple reason that it is quite difficult, besides expensive, to find an airline ticket out of Caracas. Venezuela is simply drifting away, further and further apart from the world.

In my case, my trip, more like a saga, began when I found a ticket Caracas-Aruba in Aserca to make a connection to a US airline in Aruba. Plenty of time between the two, Aserca was leaving at 11:30 AM, the other flight leaving at 3:35 PM. Given that the flight to Aruba is 35 to 40 minutes, there should be no problem. On top of that, I had only hand luggage.

Chop half an hour from the time between flights, thanks to now banned Chavista genius Navarro, as I did not take into account (my fault) the half an hour difference between the two countries. I did show up at the airport a three full hours before flight time. Seemed like a good precaution, as Aserca has no line for those without luggage.

Well, when I showed up, there was a huge line for the full flight and all but four passengers were in line in front of me. Fortunately (or maybe I should have worried about it) there was a sign that check-in would close at 9:30 a full two hours before the flight. That meant, that the line would only last one hour.

And it did. With about three minutes to spare.

In the line, I learned a number of things from the ladies ahead of me. For one, they bring their food to Aruba, you know, they told me, food is so much more expensive there. Thus, they bring their food, hiding it under the clothes, so that Aruba customs does not take it away. That happened to me, said a different lady. They also discussed how bringing lots of food is good, more space to bring back the stuff they buy in Aruba, which turns out to be paper products (toilet paper and diapers are favorites), food (not fancy ones, those you can get in Caracas. It’s all the stuff he government controls or imports that they bring back) and cosmetics. Cosmetics, like soap, shampoo and similar things, lest you think that they bring back expensive things like perfume. I also learned you have to stay a full week in Aruba in order to get the full US$ 700 from Cadivi. Better to go to Aruba than Miami, said a third lady, the ticket is cheaper and you get the same amount of money. Besides, I bring my kids, they don’t cost as much and I can ask for US$ 700 for each.

I trust I am not passing bad information, I haven’t checked it. But on how to squeeze the Chavista foreign exchange/travel system, these ladies seemed like true experts.

To my surprise, right before check-in there was a guy that would actually ask you if you were connecting to another flight. I thought I was the only one. How wrong I was. There were people connecting to my flight and to at least four other ones. In fact, looking over his writings on the reservation list (the only thing that was respected all day) about half the flight, including many kids, were making connections to the US and/or Europe. There were twelve connecting to my flight. I should have gotten worried when the agent told me that Aserca was not responsible for any of my expenses if I did not make the connection. I actually expressed confidence that there was plenty of time between flights, to which he answered: “Well, yesterday one passenger did not show up and it took an hour and a half for the National Guard to allow the removal of the baggage belonging to that passenger. The plane left with a three and a half hour delay.”

But I am a lucky devil, no pun intended, so I went to immigration confident that  there would be no problem.

Think again!

We were told to be at the gate at 10:30 AM, so I drifted towards Gate 22 at 10:15 AM not that I expected the flight to leave without me. Gate 22 must be the gate from hell. It is a combination of Venezuelan organizational planning, combined with Venezuelan military organizational planning (A true oxymoron).

You see, when you approach Gate 22, there are two signs: Gate 22 in the back and gate 17 in the front. If you are dumb enough to follow the Gate 22 sign, you reach a corridor, blocked by cardboard. Thus, you have to go back to gate 17. That is Gate 22. Obvious no?

There are no signs in gate 17 ( or 22). Just an escalator going down and stairs coming up. Given that there were four flights waiting to use Gate 22, the upstairs lounge was completely full, since it did not even have capacity for a  small commercial jet. Downstairs is different. It is empty, there are seats. But even though you have just passed security once, the chairs in the waiting lounge are blocked and you have to go through the National Guard security in order to get to the lounge and eventually on to the buses to the plane.

A not so pleasant looking Guardsman comes up to me and tells me to go back up until my flight is called. Up the stairs I go, not before he gives me the explanation: Your gate number could be changed (I should have paid more attention at this point), for example, and you would be down here.

Sounds perfectly logical, but I still don’t understand why flights that required a bus, need double security.

I go back up. During the time I was there, I saw some two dozen people go downstairs and then trek back up, including a pregnant lady with two kids.

Order (ha! ha!) was restored when the Aserca people showed up, roughly at the same time as the La Venezolana staff (different flight). This happened about ten minutes after the time we were supposed to be at the gate. Then began the placebo explanations of the Aserca staff. The plane is being filled with gasoline. Next customer up, the plane is in the national terminal. Next customer, if the plane is brought here we will leave from a different gate. (Told you I should have listened!)

As I am getting impatient, a passenger says: “We have to be very patient, this is Venezuela”. I feel like telling her why I don’t want to be patient, but I shut up. About an hour later, we are told the plane is full of gas (Cheers!), but it will be brought over now to the international terminal (Booo!). This means we have to go to Gate 28. (Which is actually Gate 28)

A real gate! No second National Guard check up of our hand luggage. Makes sense, no? Just kidding!

At the gate I meet a lot of fellow “conectees” worried about time. I meet a guy who is connecting to my flight. I tell him I only have hand luggage and have my boarding pass printed. I explain that the airline closes the flight 45 minutes ahead of time, thus, if we are further delayed, he will not make it. He does the check in in his phone. (He is the only other person that made the connection: “Thanks Devil” this guy should say. You are welcome!). There is a family going to San Francisco, a girl to meet her Spanish fiancee in Scotland. A guy who is moving to the US. Another getting his visa soon. Another bought a fish business. And finally, an Arubian/Venezuelan (Doctor, builder, grandfather and tool smuggler into Aruba) who clearly has done this many times and explains at the gate and on board exactly what obstacles you will have in Aruba to make the connection. (Thanks buddy!)

We finally board. A little disorganized, but hey, Germanic compared to everything what went  on before. We might yet make it.

As we are sitting on the plane, the Captain apologizes for the delay and says…we will have another delay, because the truck to start the engines is in the National terminal and has to be brought over. (Why did they move the plane then?)

It looks tough now. Very tough.

As we wait, the stewardess asks me to check if my seat has a life saver underneath. It does. Two mechanics come on board and start checking for life savers around my area. They are all there, but there is a report that one was missing. Finally it is determined, that it was the seat of the girl going to Scotland, sitting behind me, that did not have one, it was an empty bag under her seat. How would she know. She is given a life saver to put in the pocket ahead.

To my surprise the two mechanics that boarded the plane to check the life savers, stay on board. I don’t even want to ask why. They are seated in front of me, this must be the safe area of the plane, I tell myself…

We finally move at 1:45 PM Caracas time, which is 2:15 PM Aruba time, my flight is at 3:35 PM. Looks bad.

Flight goes well. I am seated close to the front. I leave the plane and start running. I get to Aruba immigration and the lines are huge, like 50 people deep. The not so considerate gentleman organizing the line tells me to get in any line, he can’t do anything for me. My new friend follows. We ask the people in the next line if we can go ahead of them. they say sure, they are vacationers going to Aruba, we look stressed. We bypass a bunch of people and when I am called, the immigration lady  I got is given a pack of eight passports to process ahead of me. “You can stay here, she says”

I smile.

And then I run. Remembering the instructions by the Aruban/Venezuelan guy on the plane, I exit the terminal, take a left. Then another left to departures. I keep running, O.J. Simpson style  (dated joke, last time I did this was in 1977, still recall the analogy). Then I do Aruba immigration and security. I keep running. Then I do US immigration and security. No lines, thanks God. Nice agent.

Then I run more, My plane is at the last gate at the airport. gate 8. I show my boarding pass. Lady says: “Mr. Octavio, I thought you were already on board”. I run, get in the plane, sweating by now, sit down and the stewardess offers me a glass of water and some paper towels (Thanks Veronica!) . She then turns around and closes the door to the plane.

I made it, but I realize that Venezuela is slowly drifting apart form the world. It is further and further away every day in all possible senses: Physically, intellectually and cronologically. And this increasing remoteness is true for both those abroad like me and for those who still live there.

What a tragedy!