Archive for November, 2014

IVIC: A Very Personal Story

November 27, 2014

Ivic(Here in Spanish)

I wasn’t born at IVIC (Instituto Venezolano de Investigaciones Cientifícas, the Venezuelan Institute for Scientifc Research), but for a large fraction of my existence, I actually felt almost like I was. (Which was actually possible, since IVIC has housing for researchers, except it did not exist the year I was born). Thus, it is actually quite painful to see how the fake revolution wants to erase its past, turn it into something different than it should be and simply destroy in the revolution’s ignorance what that institution has meant for Venezuela.

For those that don’t know what is going on, the Venezuelan National Assembly approved in its first discussion a project to change IVIC’s bylaws, including changing its name, its objectives, how it is run, essentially erasing the proud history of an institution that contributed quite a bit to the scientific, educational, academic and technological institutionality in the country. The project was supposedly promoted and written by PSUV Deputy Guido Ochoa, a Ph.D. in Forest Science, with a fairly unimpressive publication list, but who apparently believes he knows what is good and best for Venezuelan science.

Reportedly, not even the authorities of IVIC, mostly pro-revolution, knew of the Bill, approved in its first discussion and the project was not consulted with any of the scientific community of IVIC, so much for the much ballyhooed “participatory” democracy of Chavismo. Among other pearls, the Bill replaces the researchers Assembly, which approves such things as promotions to tenure and policy, by an all-employee Assembly, where to decide such important matters, any employee who has been at IVIC for one year will participate and all students will be part of it. IVIC’s name is changed to IVECIT (Instituto Venezolano de Ciencia, Tecnología e Innovación) and the changes are made so that “science will no longer be shut in in the laboratories, which will allow “el pueblo” and the communities to permanently build technological elements for the transformation of the country”

What a bunch of inflated and supercharged BS, which only shows the ignorance of those that promoted it and wrote it. They are simply unqualified to even be involved in scientific and technological planning in Venezuela.

The project goes on to spew similar BS about the relationship of the new Institution with the community so that the Institute can protect the” habitat, the integral health, the economic and social institutions, culture, uses, customs and values”

Unadulterated, empty and ignorant words if you ask me. A Government that gets rid of the Ministry of the Environment, disregards all of the terrible environmental disasters in the country (Maracaibo, Guayana, air via cheap gas and the like) now wants to impose these criteria on an institution that has been a pioneer on this subject. (When I was at IVIC, too many years ago, there was an Environmental Engineering Department, which I see survives to date, under the name of “Atmospheric Chemistry Laboratory” with Eugenio Sanhueza still leading it)

And just as you think that this stuff can’t be written by anyone with some intelligence, the IVIC project, as approved by the Assembly, also states that the new Bill will allow IVIC to respect the identity, the languages and religions, the “cosmovisons” (Whatever that means), the spirituality and sacred and worship places. Equally, it will respect “the collective intellectual rights of knowledge, technology and innovations of all communities and the exchange of wisdom, according to constitutional principles.”

Yes, it is really hard to make this stuff up.

Many years ago, in the late sixties, I showed up at IVIC to inquire about the possibilities of working in the labs of the Physics Department. I had just finished my Freshman year, didn’t really know much Physics, but knew what I wanted to do (I thought!) with the rest of my life: Experimental Physics. I was told to come back with certain information about me, grades and the like, and take an aptitude test. I did, and a few weeks later I was called and told that I had been accepted for a summer internship. When I showed up, I was told I would get Bs. 300 per month (All of US$ 70 per month at the time) and a food card that would give me lunch daily at the Institute’s restaurant. I could not believe my good luck.

My first day at IVIC, I was told to go meet my adviser, Roberto Callarotti, who turned out to be a much (like very much) younger  guy that I imagined, who welcomed me with enthusiasm and introduced me to a very funny maracucho who had a poster of a naked guy at a beach with an umbrella and a sign attached to it that said “Experimental Hydrologist at work”. He was hydrologist Ignacio Rodriguez Iturbe,  now a Distinguished University Professor at Princenton, a Venezuelan so distinguished that I will let you judge him by his CV.

It was a very auspicious beginning, even if I did not know or grasped it. Roberto would become my mentor, supporter and friend.

From then on, IVIC played a huge role in my life. I spent three summers as an intern. Then IVIC gave me a felllowship to go get a Ph.D. abroad, with a contract that said I had to come back when I finished. How could I not? Good people, my country, lots of opportunity. After four and a half years I came back at the tender age of 28, IVIC was an exciting place to be, lots of interesting and smart people, you got the feeling Venezuela was going somewhere, in science and everything else. My life was research, my life became IVIC. I took on students, found money for research and got support from lots of people. We did good work, published papers, sent more students abroad, even started an engineering research institute.

I had some wonderful colleagues at IVIC, some have passed away, other have moved on, and some were pushed out by the revolution even if they were still doing world quality research after their retirement age. The revolution does not tolerate excellence and competence.

Not everything was ideal. Soon I learned that politics, not science, played too important a role at IVIC. At one of my first Assembly of Researchers, I was given the very impressive CV of a biologist who was up for tenure. To my surprise, 15 people, out of about 100, voted against, just because of politics. (Years later I would be very proud that I did not get a single vote against me in the same process). But the toughest part came after the 1983 devaluation. Budgets were decimated, the work I did was expensive (Experimental low temperature physics) and a roller coaster of budgets  and devaluations that has existed to this day began.

But I still thought at the time that I would spend my life at IVIC.

In 1992, there was a strike by the workers, they wanted more privileges without doing all that researchers did. I was even Sub-Director of IVIC for 21 days after the strike. (A story on its own) At that point I realized that it would be difficult to do first class research work in my field with the low budgets and all the difficulties, I began thinking that I should leave the country if I wanted to continue doing Physics. Instead, I was lucky enough to find an exciting job in finance, where I still am today.

But I spent more of my life at IVIC that at any institution so far in my life.

The revolution has not been kind to IVIC, it bypassed its bylaws to name Directors, it brought people in for ideological reasons. I am glad I was no longer there. But many people remained, working hard, truly devoted, trying to continue doing world quality research against all odds and with limited resources, teaching courses, supervising research thesis in a fairly adverse atmosphere.

And with the proposed new law of IVIC, the discussion seems to be going back to what I thought were very byzantine discussions thirty years ago: Trying to justify IVIC’s existence. IVIC began with basic science, the job it has done has been outstanding. With a budget that has oscillated between US$ 10 and 20 million per year it has been a bargain. Rounding errors in the inefficiency and waste of Venezuela’s budgets. And with this meager budgets, IVIC not only did world class research, it helped institutionalize research in Venezuela, trained thousands of undergraduate and graduate students. That would have been enough, but IVIC also helped create other institutions, such as Intevep, the oil institute destroyed by Chávez in 2003, the Institute for Engineering, IDEA and the blood processing company Quimbiotec. IVIC also helped populate Venezuelan universities with high level academics who did research in all fields, while developing technologies and doing consulting and services, a natural byproduct of basic scientific research.That’s the natural evolution of every basic research system in the world, some stay doing research for the rest of their lives, others let their drive and dreams take them elsewhere, whether it is technology, innovation or development work in the private sector.

And now some embittered and failed Chavista scientist wants to impose his ignorant vision on IVIC, wants to erase history, wants to wipe out its distinguished history to replace it with a new institution with little link to its successful past. And note that with all the ruckus of the last week after the new Bill was approved, the Government is supposedly now willing to “discuss” the Bill, not withdraw it. A sure sign that Chavismo is not going to back down, but simply entrap the IVIC community into a discussion to later approve the current monstrous Bill and say it was approved thanks to the oxymoronic Chavista participative democracy. But the end result will not be that different than what has already been approved.

This is a Government that thinks that science and technology involves buying US$ 400 million Chinese satellites (Yes, two of them!), rather than developing its own. A government that has total contempt for excellence and  expertise. A Government that does not like discussing ideas, or tolerate people that think differently. A Government that has proven to be clueless as to what science is or where it should go and has named very limited  and non-scientific characters to preside over the science sector, including the current President of the Central Bank, the current Vice-President and the current President of Corpoelec. All of them promoted to those positions temporarily to give them a perk while another position awaited for them, but who had not clue as to what science is or where it should go. But men loyal to the process, to the revolution and its destructive ambitions. None of them will raise a finger to save IVIC at this junction.

It is a wonder that they bother with something with a small significance in the scale of the huge the problems the country faces. But small men, fight small battles. They react to their resentments, hates and picayune ambitions and goals. That is all this is.

It is simply another step in the ability of Chavismo to destroy without creating reasonable or decent alternatives. Anyone that thinks they will back down from this, should think again. Chavismo likes control, not open discussion, democracy or technological progress. The “people” will be used and abused only in name, only in that they will be mentioned until Chavismo has its trophy: The destruction of a distinguished, honorable and efficient institution and what its memory entails.

An Example Of The Absurd Subsidies And Distortions Present In Venezuela

November 23, 2014


As you all know, I go to Venezuela regularly. In fact, I just came back from there. Yesterday, right before going to the airport I had breakfast and, of course, I had to go to my friendly neighborhood arepera to enjoy the true flavor of nice local cheese and arepas, something I do at least once every single time I go. In my travels, it is incredible how I notice inflation from trip to trip. Even the chocolates I buy at the duty free store at the airport were up this time, a full 50%. They are no longer as cheap as they used to seem.

But going back to the breakfast, the picture above shows the menu I had: Two cheese arepas, a jugo de patilla and a cafe con leche grande. I was surprised at the cost, Bs. 402 for such a simple breakfast. Here is the breakdown:

Each arepa was Bs. 120

The juice was Bs. 80

The coffee was Bs. 39

Now, to get the right perspective one could calculate this at various rates. At the official rate of Bs. 6.3, it would be a scandalous US$ 63.8. At the Sicad I rate it would be a still expensive US$ 33.5, at the Sicad 2 rate it would be a still not cheap US$ 8, while at the parallel rate, it would be an very cheap US$ 3.24. Using a different perspective, the Bs. 402 represent 8.2% of the new monthly minimum salary, a clear outrage, as this is just one meal, breakfast, and there are 89 other meals every month. Which clearly show the absurdities of the Venezuelan economy.

But as I sat there reading El Nacional, the only daily left that can be purchased and has some true to what it says, I was amazed to read that Samsung had begun selling appliances, TV’s and the like, purchased at the Sicad I rate on Thursday and that people made long lines and even slept at the stores to get them.

Think about it, while people pay Bs. 402 for a simple breakfast, which is outrageous at the Sicad 1 rate, others benefit from the subsidy (and the luck!) of being able to buy appliances at that same rate. Note that this is simple populism, very few people actually benefit from the subsidy, but the image that the Government is doing something good for the people makes good headlines and many can only hope or dream that they can get their hands on one of these subsidized items. In fact, the Government makes headlines about this many times: when it calls for the auction, when it assigns the foreign currency and when the stuff finally arrives and gets sold.

Let’s try to put it into perspective, the clothes washer that El Nacional says was for sale at the JVG store, cost the equivalent of 31 breakfasts like the one above. That is, for a family of four, it is the equivalent of seven breakfasts. Cheap, no?

Which simply shows how screwed up the system is. Arbitrage is the rule of the day in Venezuela, you have to wonder how much of the stuff that arrived in Venezuela or is waiting in 243 containers at the port, will be sold and resold (or reexported to Colombia or Brazil) by those that are lucky enough to get their hands on one of these appliances.

Because in the end when you go to the store in Venezuela, you have little clue as to at what price something was imported. At Bs. 12,600, that clothes washer would be worth US$. 1,050 at the Sicad 1 rate (not cheap!), US$ 252 at the Sicad 2 rate (cheap) or US$ 101 ( a steal) at the parallel exchange rate. Thus, if anyone purchased this at the lower rate and tried to sell it for twice or three times at much in Bolivars, it would seem like a good deal and it would be the intermediary that was making most of the profit.

But the absurdity and the distortion is that the Government gives out money for this, which in the end is a “luxury”, in a country where there is poverty (and increasing) and people are having a hard times making ends meet.

Picture added from comments, sent by Ira, the Arepa Lady from Barinas at Walmart:



Oligarco Works The Fascist Phone Line

November 20, 2014


Last we heard from our friend Oligarco Burguesito, he was doing well, deep in arbitrage of all sorts, even if profits were down from the heydays of bond and travel money arbitrage in Venezuela. However, things have not gone well with Oligarco since then, travel quotas were sharply reduced, bond sales eliminated, so that his life has been reduced to arbitrage of all the basic products that are controlled by the Government. But even this has been limited, because many of the street vendors he sold the stuff to have moved to doing other things, mostly contraband. Thus, Oligarco moved to Valencia, where he does a bit of everything. Lately with inflation at 70%, even this is not enough and he has lost lots of money playing the horses and even betting on baseball games, thus he jumped at the chance to work as a supervisor at the call center for denouncing the traitors to the PSUV party, the so called fascist phone line. Is his first salaried job since before Chávez was elected.

This was Oligarco’s experience the first day:

First Call: Caller #1: Hello, is this the line to denounce traitors?

OB: yes

Caller #1: I wanted to denounce the traitors to the revolution and socialism that have authorized the import of natural Christmas trees at the Sicad  exchange rate. This is clearly another battle of the economic war. Someone has infiltrated the party and the Central Bank, authorizing dollars for this at a time that we don’t even have money for medicines due to the CIA conspiracy to bring oil prices down. This is clearly a boycott of our economy, to further weaken us with the promotion of something foreign to our country and a tradition that is not part of our heritage. This is a capitalistic tradition, promoted by the US, Obama and the Republicans and the other Marco, the one from Florida, as a way of undermining our own identity. I want this to be investigated and the person responsible for authorizing dollars at the Sicad rate should be jailed in Ramo Verde and sentenced to life in prison.

OB: Well, Sir, but this was actually a decision by the Board of the Venezuelan Central Bank, presided by Nelson Merentes, a loyal friend follower and supporter of Hugo Chávez and supported by the whole Board appointed by President Maduro, who allocated foreign currency specifically for this purpose.

Caller #1: Oh! Really! Never mind. (Hangs up)

Second Call: Caller #2: Alo! Can you her me! Can you hear me! Is this Nicolas?

OB: No, this is the PSUV line to denounce traitors.

Caller #2: I want to talk to Nicolas. I have something important to denounce

OB: Well, the President set up this line, but he has no time to answer it himself. You can tell me and I will make sure that he gets the information you will provide with total confidentiality.

Caller #2: I don’t know, this could be very dangerous to me. Because I want to denounce someone very close to this line, how do I know you will not tell the President or he will find out who I am and they will come get me.

OB: don’t worry, I assure you this is confidential and we have no caller ID, so I will never know who you are.

Caller #2: Umm, I don’t know. Well, umm, ok. I want to denounce that an extraterrestrial has infiltrated the traitor hotline

OB: What do you mean an extraterrestrial?

Caller #2: Well, many years ago I saw a movie about extraterrestrial beings that had invaded the earth and the same guy was the one that was on TV announcing and promoting the line. Clearly, this space invaders want to boycott the revolution and like Chavez said, capitalism destroyed life in Mars, now they are trying to destroy Venezuela and this guy has infiltrated us.

OB: I still dont get what you are talking about. Who do you mean?

Caller#2: I don’t know the name, but I saw him on TV and I am sure that it is the same guy i saw on the movie, but older. Do you have a cell phone? I could send you the picture of the guy in the movie and the one I saw on TV, so you can see what I mean.

OB: Ok, my cel is 0412-OLIGARCO, you can message me there.

Caller #2: Ok, here it goes, first the picture of the extra-terrestial, then the picture I took on my TV when they announced the hot line


See, it’s the same guy, just older, see the similarity?

OB: Excuse me Sir, but this is Francisco Ameliach, he is not only an important and loyal member of PSUV, but he is also Governor of Carabobo and President Maduro has trusted him with this project.

Caller #2: Oh. He is not a conehead? Are you sure? I was sure he was. “&%$* I am glad you don’t know who I am, but now you know my cell phone, I must seem really stupid. (Hangs up)

Third Call: Caller #3: Hello, this is Yamijuli Maria Garcia from the Comuna for toy manufacturing Isidora Dolores Ibárruri Gómez in Altagracia de Orituco. Is this where I denounce capitalist infiltration into PSUV?

OB: Yes Yamijuli, what have you detected?

Caller #3: Well, I wanted to denounce the fact that someone has regulated the price of Barbie dolls at US$ 2.5 per doll. Even at the capitalist pigs exchange rate, it is impossible for us to compete with this here in my comuna, where we make true Venezuelan dolls We make dolls that are white, brown, black, any color, just like people in Venezuela, but we can not compete with this price, our dolls cost Bs. 400, which is much more than the new regulated price for Barbies. But this is not all, the Barbie dolls are all blond, so that whomever approved this, wants to promote gringo looking women and make the average Venezuelan women look different. Not only that, but it also promotes women dying their hair which is clearly not a very revolutionary activity. Mi Comandante spoke against this, but now someone is trying to undermine the Bolivarian revolution and sell capitalistic blond Barbie dolls, destroying revolutionary values and undermining the work we are doing at the Isidora Dolores Ibárruri Gómez comuna. This should be investigated immediately!

OB: Well Yamijuli, it was President Maduro himself that ordered the price of Barbie dolls regulate, so I don’t think there is really much to investigate.

Caller #3: I disagree, we should investigate Maduro then, because he is not being faithful to the Supreme Commander and Father of the revolution. Do you know if Marea Roja has a hotline to denounce deviations from revolutionary principles? Can you give me that number?

At this point Oligarco hung up, got his jacket and left the job that he thought would be so great…He lasted 5 minutes.

All The Wrong Things About Minister Jaua’s “Nanny” Affair

November 9, 2014


The Elias Jaua ¨Nanny case¨ has so many edges, that I have been trying to establish a hierarchy of the many things wrong with this case. For those who have been living in the Artic Circle, here are the basic facts of the case: Jaua, a former Venezuelan Foreign Minister, now Minister for Communes, went to Brazil, on an official/unofficial trip, reportedly on a private trip, as he needed to have his wife treated at the Syrian-Lebanese Oncology Hospital in that city. Reportedly, he then had his mother in law flown in, with the family Nanny, in a PDVSA jet and on a special flight. As they went through customs on Sao Paulo, a gun was found in the Nanny’s briefcase and she was detained. Later, the Government of Brazil protested, via its Foreign Minister, for Jaua’s “unofficial” trip, which included the signing of agreements with various Government (City of Curitiba) and non-Government groups (Movimiento Los Sin Tierra). The Nanny has been released, but awaits trial. Jaua argues his trip was perfectly valid and he told the Nanny to remove the gun from his briefcase, which contained documents which had little to do with his trip to Brazil. The National Assembly refuses to investigate the affair. Nobody in Government really wants to investigate Jaua.

How many things are wrong with this picture?

Too many in my opinion. Just too many:

-The one a lot of people have focused on, has been the fact that Jaua used a PDVSA jet for his personal use, or at most an unofficial use. This is clearly corruption, but this has become normal during the years of Chavismo. PDVSA has a fleet of planes that has been ready to fly anyone from Antonini, to General Carvajal, to Cuban officials anywhere they want, upon demand. Yes, it is illegal, it is corruption, but in the end, nothing new there, La Carlota airport has been closed to private traffic for 11 years, but you see the planes (PDVSA and Government) take off and land daily from it.

-How about that gun in Jaua’s briefcase?  To me, this is more interesting, a Government that claims to be disarming the population, because it is concerned with violence, but then a Minister carries a gun in his briefcase and it is hard to believe the Nanny, “forgot” or could not find the revolver in the briefcase. Hard to believe. What does this say about the mental and emotional state of these Ministers that not only go around surrounded by armies of bodyguards, but are also carrying? What for? What are they afraid of? Does Jaua know how to use the gun? Does he have a permit? Does he think nothing of bringing it to another country?

-The unannounced visit. This is also quite interesting. The trip became an “official¨visit, only after the Nanny was caught with the gun and jailed. Except that the Brazilian Government knew nothing of the trip and complained after that fact via diplomatic channels and publicly. Jaua apparently met with groups and signed agreements, but reportedly this was an excuse brought up afterwards to justify the “Nanny’s” trip. Jaua has said little of what ails his wife, but he has also said little of what the agreements have to do with his Ministry or his responsibilities in Venezuela. He probably never expected the friendly Roussef Government to complain about his trip.

-The Nanny. Some Venezuelans justify Jaua having a Nanny. Why should not he have one if it is so common in the country? Well, to begin with, it is not as common as it used to be, because it is no longer as cheap and only wealthy people can afford to do it. But more importantly, Minister Jaua is not a wealthy bourgeois oligarch ( Or is he?), but a supposed leader of a radical “revolutionary” process. He is a self-confessed “Tira Piedra” (Stone Thrower) who has become more radical with time. But wait. the “Nanny” is not a recent addition to the family. She has been with the family for about ten years, when Minister Jaua was barely beginning his revolutionary career (He was actually doing a Masters Degree at the time). But more importantly, the “Nanny” goes everywhere. She is not stay at home Nanny, but a frequent flyer Nanny, needed wherever the family may be.It makes life easier for everyone.

Because in the end, the new revolutionaries are as bad as the old ones. Jaua may have become more radical with time, according to his own words, but more of an oligarch and bourgeois as time went by. In fact, his kids go to a well known private school in Caracas, where they mingle with the upper classes and since it is a “foreign school” they also befriend the children of diplomats and expats. Thus, Mr. Jaua’s radicalism and revolutionary spirit seems to end at the door to his home. Like so many others in the Chavista Government he hires his wife. That gives them a double salary hosuehold and I guess in their mind justifies the need for a Nanny. Nepotism is not a word used by Chavismo.

And while Mr. Jaua keeps accusing Miranda Governor Henrique Capriles of neglecting his duties, he goes around the world promoting the Bolivarian revolution and not doing his job. This is nothing new, Argentina once refused to accept him as Ambassador, because he seemed to be interested only in promoting the Bolivarian revolution.It seems this is his life, holding positions, but always just dong politics and promoting the revolution. As Minister of Agiculture, Jaua did nothing more than expropriate, but little to promote the use of the lands he took over.

And the briefcase had little of interest to Brazil or the Venezuelan Government. Most documents were about how to win next years election, revolutionary processes, the Government’s political agenda in Venezuela and how to stay in power. I guess Jaua really worries about losing his status as an oligarch. But never mind, his kids are now fluent in another language and he can always send the Nanny to accompany them if necessary.

But the deeper question is how these guys mutate from revolutionaries to oligarchs so fast. At which point did Jaua start betraying those radical ideas that took him to such important positions? Shouldn’t the kids of a revolutionary go to public school with el “pueblo”. How did he get away with sending his kids to this foreign school, while the same institutions were under fire from the revolutionary Government? How do his kids (now adolescents) perceive the world and their father in this potpourri of conflicting ideas? How many nannies does the Jaua family have?

There is something profoundly wrong about this sordid affair. These are the “radicals”, the tira piedras, the encapuchados of the revolution. Their revolution has the consistency of tapioca and their world is a an incredible farce in which they have become the new oligarchs.

And they know it.

Idiocy And Airlines In Venezuela

November 4, 2014


What is it about airlines that brings out the most idiotic logic out of Venezuelans? I have found the subject the most difficult to talk about even with people that understand markets and are fairly logical and intelligent. In the eyes of many, it was the airlines that became the bad guys in the escalation of ticket prices, later in abandoning Venezuela, as if Government policy (idiotic before and after Chavismo) had nothing to do with it. How many times did I hear the argument that a flight to Aruba costs half as much as a flight to Caracas? Duh!!! The Aruban (or Colombian) Government barely regulates how many flights can land in their airports, they don’t ask for reciprocity or try to regulate fares. You want to come to Aruba or Colombia, you have a good reputation? Come on down!

By the time airlines began leaving Venezuela, reducing flights and dollarizing airfares, at least some (not all!) people understood that airlines were not making a mint in Venezuela like they thought, since they could not repatriate their Bolivars. It was Monopoly money.

But somehow, the idiocy over airline policy continues. This week, the institute in charge of air travel, the INAC, started by stopping airlines like Aserca, which flies within Venezuela and nearby destinations, from selling new tickets until they would improve their online performance. (It also stopped Government woned airline Conviasa) Now, the first question I would ask the guy from INAC is: Where were you and your 2,000 “agents” for the last sixteen years?  Creating their Facebook page? I mean, I have swore like three times in the last decade that a particular wedding in Margarita island was the last one I would attend, because flights to that island were regularly delayed at least two hours. And I reported my travails last summer when I was forced to go to Venezuela via Aruba for the simple reason that there was no other way to get there. So, where has INAC been all these years?

But more importantly, how does banning the sale of tickets “protect the users” or improve the on time arrival of planes? Obviously, the fewer passengers that fly, the easier the airlines can fill and empty airplanes and improve their on time record, but is that the point? And how are you protecting passengers when you ban the sale of tickets? When you do that, you limit the already severely hampered accessibility of flights, inconvenience people and really accomplish very little.

But as I was wondering over these issues, today INAC suspended the sale of tickets for five international airlines, who they are is irrelevant. What is relevant, and even more puzzling, is that the ban on the sales of tickets is only for Maiquetia airport…

Say what?

You are banning the sale of tickets to those that show up at the airport to buy a last minute ticket? Given how few empty seats they are, these are probably the neediest and the people most desperate to get somewhere. How are you protecting or helping them?

And last I heard, most airlines have websites, which allow you to reserve and buy tickets even with your telephone. So, what exactly is INAC accomplishing with this idiotic policy and ban on the sale of tickets?

I have no clue. (And please, get rid of those red vests on INAC personnel)

But if it is hard to understand these Government officials and where they have been for sixteen years, it is even harder to understand a certain Roberto Leon Parilli, President of ANAUCO, which is a private organization that is supposed to defend consumers. What Mr. Parilli did, was to ask the Government to intervene because airlines are selling airline tickets in foreign currency, which is illegal in Venezuela.He wants the Government to stop this practice.

Well, airlines are not selling tickets in dollars in Venezuela. Airlines are selling tickets to those that have a credit card in foreign currency and use it to buy a ticket online or via a travel agency (which place the order abroad). And if this path were blocked, the consumers that you are supposed to protect Mr. Parilli, would not be able to fly out of Venezuela. Because, Mr. Parilli, the Venezuelan Government has no money to pay its debt with the airlines, unless it devalues all exchange rates to around Bs. 70 per US$.

Got it? I doubt it!

In fact, the black market, which you are correct in denouncing Mr Parilli, would flourish if the Government somehow (I don’t see how it can do it, other than banning airlines from coming to the country) managed to stop the sale of tickets in foreign currency. Venezuelans would simply be trapped. Thank you Roberto!

In fact, if you want tickets to be cheap and readily available (in any currency) what your would need to do is to ask the Government to invite all major international airlines to add an unlimited number of flights without any restriction, including in which currency people can pay, eliminating reciprocity, quotas and the harassment of foreign airlines at Maiquetia airport.

The rest is simply being idiotic and clueless about what the consumer wants and how the market for airline tickets operates in the world.

Maduro Adds Fuel To The Inflation Fire

November 3, 2014


For eighteen months, Nicolas Maduro has refused to make any adjustments on an economy suffering from all sorts of distortions, for fear of losing popularity as well as the lack of clear advise from anyone close that grasps economic theory. To Maduro and his Ministers, economic policy has been limited to decisions on controls, foreign exchange policy and salary increases, as inflation and  shortages increase dramatically and the limited funds available are shifted to cover the immediate needs of the Government.

And after firing in September the only Minister that had some sense that adjustments should be made, we spent four weeks thinking that no adjustments were forthcoming. Then, statements by various Government officials suggested that something may yet happening. Nothing dramatic, a small devaluation, a small gasoline price increase, less deficit spending, monetary measures and the like. Instead, Maduro goes on TV tonight and bombastically announces that he has approved a 15% minimum salary increase starting December 1st, such that the minimum salary will become Bs. 4,889 a month (US$ 776 at Bs. 6.3, US$ 444 at the Sicad I rate, US$ 97.8 at the Sicad II rate or US$ 47.66 at the parallel rate). Maduro also boasted that Venezuelans have the highest minimum salary in Latin America, as he used the impossible to get rate of Bs. 6.3 per US$, when the reality is that it is the lowest minimum salary in the region at the other extreme and likely at the Sicad II rate too. Maduro was very proud that with this increase, the total increase in the minimum salary for the year is now at roughly 68%. It will never occur to him that inflation being at 70% and the increase at 68% have any relation whatsoever.

Just to make sure the fire keeps burning, Maduro also increased the “food tickets” given to all employees every month by “only” 50%.

No other measures were announced…

So, at a time that the economy is really screwed up, Maduro simply decides to add fuel to the fire, with no accompanying measures to mitigate inflation, reduce scarcity or reduce the deficit. In fact, at a time of falling oil prices, this forces the Government to print even more Bolivars, as it was clear that it had no Bolívars to finish off the year.

I guess Maduro read that Wall St. analysts were beginning to predict triple digit inflation and decided to make sure their predictions become true.

But more importantly, what Maduro is doing is guaranteeing triple digit inflation, with 50% shortages, a sure recipe for social unrest.

And a huge devaluation…and unrest.

And I am not exaggerating, it is difficult not to envision some form of social unrest with 100% inflation, Chávez dead and  a rudderless leadership. While many think the Government is in control, I disagree. With Rodriguez Torres’ departure, the hoodlums have taken over. Dario Vivas, Freddy Bernal and the Colectivos are up, everyone else is down. The “military” takes over PDVSA and you know nothing good is going to come out of that. Meanwhile, Marea Roja is being shunned, forced into becoming a party and becoming “opposition”. As if the opposition was not diverse, an extreme  left Chavista party may be soon part of it.

But what worries me is that despite all of the controls, all the media manipulation and all of the intimidation, people will simply explode when things become untenable. Because in the end, the only solution is an adjustment, an extremely strong adjustment. An almost impossible adjustment that would bring down any Government. But few people are saying how bad the adjustment has to be. In fact, I was disappointed at Voluntad Popular calling today for a 45% salary increase across the board.

What is this, a contest to see who is more irresponsible?

Anyone wants 100% increase?

What I fear is that we are going into a period of chaos, where the Government will have trouble maintaining order, unless it wants to resort to brutal repression. A period of instability and uncertainty never before seen in the country´s recent history.

And Maduro might not only have thrown some fuel into that fire, but he may just have ignited it…

Sorry for the optimism… 😦