Fast Paced Changes In Venezuela

June 5, 2016

clap

I have been back a few days from my most recent visit to Caracas and I have been trying to put my thoughts together, without being able to form a single image of what is going on. What is clear though, is that things seem to be changing at a fast pace now in all aspects of Venezuelan life.

Despite the fact that I was only gone five weeks, longer than normal, there was a significant change in shortages, lines and general food availability.

Take lines, for example. Lines at large supermarkets, like Bicententario, have been around for a while. But now it seems as if there are lines anywhere where something useful may be bought, from supermarkets, bodegas or from drugstores to bakeries. And as shortages have become more acute, people displace themselves across the city in the hope of finding something. (These movement is not restricted to bachaqueros, just anyone looking for something they need)

The change for bakeries, as an example, has been dramatic. I found few that actually had bread and since it was known that they had none, there were no lines in front. Some, like my favorite bakery in Los Palos Grandes, did not even open for the whole week I was there. And the one closest to where I stay, had lines all the time I went by, but I did not bother to check what they were selling.

It was good for dieting, particularly if you are trying to avoid carbohydrates. Last time I was there, restaurants always had bread. This time, at one restaurant they apologized for not having any bread, at another one they had Swedish bread, the flat bread that is hard, made of wheat, whole wheat and rye and which you can still find at some supermarkets. While Polar has said that it is running out of corn flour and indeed, it has become hard to find it, areperas seem to have enough stock, with all of them open, even if some fillings are not necessarily available.

Milk is a different matter. People in my office report not having had cereal for weeks, unless they want to pay up for almond milk, available in some supermarkets at what is an outrageous price given salaries down there. After dinners, the first question I would ask was whether they had milk or not to make a marroncito for me. Half the time the answer was negative, but at least one time I could taste the undesirable flavor of powdered milk in the coffee. I simply prefer to avoid drinking it that way. But I understand that even powdered milk is becoming a problem, one of the upsetting aspect of shortages for families with small kids.

You can find eggs now, at a new much higher price, while meat exhibits some scarcity, but prices are simply out of control and you can find some good quality cuts if you are willing to pay.

One of the biggest sources of social conflict is the dynamics of lines. Much like the riots that took place last week near the Presidential Palace, when a bunch of pro-Government supporters tried to divert a truck heading to a market where people were lining up to take over the distribution of the goods, I heard at least three reports of the dynamics of lines producing confrontations between groups, not necessarily aligned along political lines.

In one case, in a lower middle class neighborhood of Caracas, a line formed at a Bicentenario supermarket at 7 AM. You have to understand that people by now get in line at random, just in the hope that they will get something to eat, trade, barter or sell. In this case, the person I talked to got in just hoping to get something and the National Guard organizing the line gave him a printed paper with the number 100 on it. Just across the street, there was a Farmatodo (Sort of Walgreens, Rite Aide or CVS) where a long line formed even if with less organization or supervision. Except that around 8 AM, the Farmatodo closed its doors. The people in that line all moved across the street to the Supermarket line, overwhelming the people, the guards and simply massively cutting in line. The guy I know, went from being number 100 to about 300 in a minute. He waited in line till 10:20 AM, but had to leave since he had to be at work at 11 AM.

A wasted morning, nothing to show for it.

By the end of my week there, the Government began organizing the so called CLAP’s, (Local Committees for Supply and Production) as the only possible source for regulated products, banning their sale at markets and supermarkets and therefore creating a system that favors those that support or claim to support the Maduro administration, a double standard and discriminating method, which is simply another form of fascism exhibited by the Maduro Government. (The picture at the top if when a CLAP tried to take over a food truck at a supermarket near the Miraflores Palace, by the end of it, people marched to the Palace in protest and the police had to use tear gas. )

And with increased lines and shortages, the conflicts seem to be increasing in intensity and size. What worries me the most, is that at some point, the military will lose control of the situation and there could be an escalation of the conflict beyond the capability of the Government.

And while all of this was happening, Maduro was acting like Nero in burning Rome. Two days he danced and sang on Nationwide TV, another he ranted against the economic war and by the end of the week, he left the country to visit Cuba, where he meekly asked Caribbean and Latin American countries to support his Government.

Meanwhile the opposition concentrated on the recall vote, which is currently paralyzed and frozen in the virtual world of some form of mediation by pro-Chavismo ex-Presidents.

Paralyzed. That seems to the word that best described politics down there. Both sides paralyzed in place, the Government because it can’t find a way of disentangling itself from the economic mess it created and the opposition, because it has a one track plan, which it wants to move forward via international pressure. There seems to be little consensus on the opposition on everything else, with Capriles apparently disagreeing with the only RR strategy and others, like Falcón, starting to organize looking towards the 2019 Presidential election.

Meanwhile, people are puzzled by the weakening black rate, a fleeting phenomenon, as the Dicom rate continues to soar (You can download my friend’s Girish’s App here to have this info on your cell phone or tablet). To me, this is nothing more than noise. While it is true that at Bs. 1,000, M2 is barely US$ 5 billion, it is also true that at the official rate, where the Government imports all of the regulated goods, the number is closer to US$ 500 billion. For the Government to unify the rate and truly lower the black rate, it would have to do too many things it has refused to do, like moving the stuff imported at Bs. 10 per US$ to something like ten or twenty times more, make the black market legal and raise interest rates and have some funds ready to sell in a new open market.

I don’t believe the Government will do all of the above at once. Without all of them, it simply will not work. The only reason the black rate has been moving down is that the excess liquidity in the financial system is mostly in the Government-run banks, which are precisely those that are not lending much (Grab your average Pendejo Sin Fronteras (PSF)  who calls for the nationalization of the banking system and explain this simple fact to them…).

And on that technical note, I stop for today, promising at least a post on Puerto Cabello in the next few days…

 

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44 Responses to “Fast Paced Changes In Venezuela”

  1. Shrillary Clinton Says:

    Hell NO !!! you people made your own mess now stay there and fix it !!!! Socialism or Death !! hows working out for you.? Its bad enough we have millions of Bernie voting millennial idiots here to deal with here. Chavistas we dont need. Too bad toy cant eat all that 2nd rate Russian hardware or that Chinese satellite or….. http://latino.foxnews.com/latino/news/2016/06/19/number-venezuelan-seeking-asylum-in-us-rises-as-economic-crisis-deepens/

  2. Yuzhou Lin Says:

    Amigos, one question, what kind of people can stay in rich and have wonderful lives in VZ now.

    • M Rubio Says:

      Hard-working, eternal optimists. At least for the moment.

      • Yuzhou Lin Says:

        so most of rich people in VZ now who can enjoy steak and lobsters are hard-working guys?

        • M Rubio Says:

          There are still many hard-working, wealthy individuals in Venezuela. While I don’t consider myself rich, I don’t miss any meals, gracias a dios.

          And while I still enjoy a decent steak from time to time, it’s been a long time since I had lobster, a number of years in fact at that fine little restaurant at the Hotel Hidalgo in Macuto. Try it sometime.

  3. M Rubio Says:

    I’ve had some fun today with a chavista.

    I was conversing via text message with a guy from Margarita who sells salt. We got around to my latest acitivities and I told him about the grain sorghum saga I’m involved with right now and what I thought the government was up to.

    Well, it didn’t take long from me to figure out he’s a full-blooded chavista……blaming the company he knows nothing about for all sorts of transgressions that brought down the Maduro hammer on their heads. He then read off the entire chavista of grievances against past governments, etc. Chavista to the core.

    This guy’s bought bales of hay from me in the past but I learn today he has no horses, cattle, nothing related to animals. He’s simply buying product here from me and reselling at a profit it Margarita. Same with the salt. He buys it where they produce it and bag it, and simply transports it to the mainland for resale at a profit. Zero value is added by him other than transport.

    I then asked why he couldn’t sell his salt to me at a fraction of the cost and after about ten messages he finally admits that he’d go broke and couldn’t sustain his business if he did so. Sort of like the way the government forces people to sell their products at below cost? I informed him then that he was actually a capitalist, like it or not.

    He didn’t take too kindly to that, but when I asked him how his business was any different than what the hated “bachacos” are doing…..buying product in one location and moving said product to another to resell at a higher price, he went ballistic. “The United States is bombing countries, killing children, yada yada yada”.

    Yeah, I know all that, but it doesn’t have anything to do with your bachaquiando activities, does it?

    He went silent. LOL

    • Boludo Tejano Says:

      Keep the stories coming. Please.

    • .5mt Says:

      What BT said.
      What kinda grass is the hay made of?

      • M Rubio Says:

        Coastal bermuda is the best to bale for both horses and milk cows because of the level of protein, up to 20% if it’s well-fertilized. Next in line in quality are grasses such as swasi, and estrella. Humidicula will be eaten by some horses, but not all. Bracharia decumbens is generally the lowest quality because it’s really rough and low in protein. Horses like guinea grass too, but it’s very difficult to cut and bale with standard equipment.

    • m.astera Says:

      A couple of years ago I was looking for an agricultural phosphate source in Venezuela. A friend and associate found a connection who said they had access to the tailings from a high-quality phosphate mine. The connection sent a lab analysis that showed around 25% P2O5, with a good amount of Ca and Mg. I buy and sell a lot of this quality in the US from mines in Florida and Tennessee. I was ready to order a truckload immediately, but wanted to see a sample. A few days later I received around 10 kilos, and sent a sample off to Acme Labs in Vancouver BC for their 56 element analysis. The lab report showed high levels of Ca and Mg and a little potassium, but less than a quarter of a percent P. It was all a lie.

  4. Diocletian Says:

    MO, MR, and others in Venezuela,

    How much “connectivity” to the rest of the world does the average Venezuelan have these days? Is the internet still widely available?

    PS: The radio show was a great introduction to Venezuela for the American public.

  5. mercedes atencio Says:

    Thank you for the link. This program airs at 2 PM here in town. It is very difficult to explain the venezuelan maelstrom!

  6. moctavio Says:

    I will be on NPR tomorrow Jun. 9th. at 7:45 AM, I dont know if the show is live, it is called The Takeaway

    • Roger Says:

      MO that show is on Public Radio International which not all NPR stations carry. No problem they archive it on their site too.

    • Dr. Faustus Says:

      Thanks for posting that. It is indeed a rare occasion to hear the famous Devil pontificating to an audience. Look forward to it.

  7. .5mt Says:

    M. Rubio do you think your loss seed will be sold or given away as feed?

    • M Rubio Says:

      In answer to your specific question .5mt, if the government seizes the seed of this company, they will likely distribute it to the different branches of AgroPatria spread around the country. There it will be sold to Chavista insiders for a fraction of market value. What they do with the seed is anyone’s guess, though if it’s like most products coming out of AgroPatria, it will be resold by the “socialist-minded” Chavistas at full market prices giving them a huge windfall. I’ve never seen bigger capitalists than Chavistas with a freebie from the government.

      At this point I see the likely outcomes for me as follows:

      1) I somehow manage to extract my 50 sacks of seed. I called again in the PM and the receptionist told me that since ours was a small order, and one of the few that was paid in full before the end of May, she’s going to see if they can somehow dispatch it. Nothing sure yet. Fingers crossed.

      2) Lose my 1,200,000 bs. If the company’s seed production is seized by the government, there’s no assurance that my funds will be refunded. If they go into some sort of bankruptcy procedure because of the seizure, by the time I’d come up on the list of creditors, the bolívares would be even more worthless than they are today, if that’s even possible. Sincé the laws don’t function here. I won’t be asking my attorney for advice on this one.

      3) The company refunds my money.

      I’ll keep you guys posted as the saga continues.

      • Daveed Says:

        It’s been less than a week, but the time to plant may be passing. Any update?

        • M Rubio Says:

          We picked up 1,000 kilos of grain sorghum today Daveed. I had ordered 50 sacks, but they loaded 62.5 sacks instead. I was confused at first, but realized when checking the invoice that the sacks now weigh 16 kilos each, and not 20 like they did previously. Have no idea why the difference, except that maybe the 20 kilo sacks were not availalbe this year. There’s a lot of that going on…..making do with what you have.

          We start plowing tomorrow having decided it was better to wait until we had seed in hand before using valuble tractor and plow time plowing for naught.

          We still don’t have the whole story about what happened to this company, but it’s obvious that the government is going to grab a percentage of this company’s production. I imagine that it’s a lot less expensive to confiscate seed than import seed, so now AgroPatria will have grain sorghum to offer as well. I’ve never bought from them because their seed quality (both corn and grain sorghum) has always been questionable. AgroIslena always imported a high quality Brazilian hybrid produced by a multinational like Dow or Monsanto, but of course, those days are gone.

          And since you’re probably wondering how we know the government is grabbing a percentage of the this year’s product, I’ll explain.

          We’re building a cold-storage unit to store seed this year since it’s getting harder and harder find each planting season. The employee I sent to retreive this seed told told me he not only saw fields of sorghum still being harvested, he saw material that was only about 30 days old. That means they’ll be harvesting at least through September. We called and asked if more seed would be available. They responded positively, but said it won’t sell for less than 1800 bs per kilo. We paid 1200 per kilo for today’s product.

          No one in this region has yet been given credit to plant corn, but the promises keep coming. Time will tell.

          Revolution!!!

  8. M Rubio Says:

    Well I just got some interesting news.

    Every year I plant grain sorghum. This year I plan to plant 50 hectars which means I need 50 sacks of seed. Last year I paid 3550 bs per sack for seed, the year before 1550 bs per sack. This year I was quoted 24,000 bs per sack! Okay, it’s Venezuela. No surprise there, the currency is now worthless..

    Late in May I made the final wire transfer to the company for a total 1,200,000 bs to be assured that I’d have my seed available when they began sales the first week of June. So I call today to verify when I can pick up my seed and was informed that the all-knowing, all-caring, Chavista government has ordered the company not to make any sales of seed until further notice.

    I already know what’s going to happen. The government will confiscate the production of this company so that that wonderful company AgroPatria they created by wrecking AgroIslena can sell the seed for a song. Bad. Worse though is that they’re going to force the company into bankruptcy which means next year NO ONE will be able to plant grain sorghum unless the grain is imported.

    The 1,200,000 bs won’t make me miss any meals, but I need to plant my own grain sorghum to be assured that I’ll have what I need to produce next year’s animal feeds.

    Just when I believe that things can’t get any worse, they get worse. This 20 year period in the history of this country which has so many natural resources that it’s almost criminal, will be looked back upon as one the greatest wastes of wealth and luck ever committed by mankind.

  9. Rafael Says:

    Por si no lo han leído, copio y pego aquí otro testimonio interesante encontrado en aporrea. Se explica por sí mismo y no necesita más comentarios.

    “Yo, Pancho José Alegría, hijo de pueblo, ciudadano del mundo, venezolano por nacimiento, de 86 años de edad, testigo consciente de más de setenta y siete años de vida republicana… militante del Proceso desde los doce años, agricultor de nacimiento y todero de hecho (bien preparado en más de diez oficios y ocupaciones para ganarme honestamente el sustento para la vida), campesino y citadino a la vez… ilusionado desde sus inicios con el Proceso Revolucionario Bolivariano, militante activo del Pueblo Bolivariano en Lucha… ante ustedes respetuosamente acudo para notificarles que en unión de mi familia (dos adultos y dos adolescentes) me estoy muriendo de hambre y vivo azotado por enfermedades que no puedo combatir con medicamentos prescritos porque no se consiguen en ninguna farmacia del país…”

  10. Rafael Says:

    Gracias por el testimonio. Es curioso ver cómo, aunque los hechos sean los mismos y ya hayan aparecido en la prensa, a la hora de contarlo siempre se puede aportar un enfoque distinto que, a su manera, ilumina o al menos arroja algo de luz en una realidad tan compleja como la venezolana.
    Gracias una vez más.

  11. M Rubio Says:

    I talked to a guy today who sells hot dogs in the evenings a few blocks away. I asked if he was able to find bread and he told me, “yeah, I have it brought in from Caracas (a 6 hour drive) but it’s getting difficult now with all the alcabalas”.

    Bread. Contraband. Bizarre.

    For me, the most dramatic change over the last year is the explosion of thefts and robberies. Almost every day I hear of another local farm or ranch being robbed at gunpoint. Last night it was the ranch of the infamous ” El Pollo” Carvajal. You guys remember him. He was the high military officer arrested in Aruba or Curacao on drug trafficing charges a year or two ago. Within about 48 hours he was released before being extradited to the US because of pressure from the Venezuelan government.

    Takes nads to rob a ranch like that because if anyone can bring the heat of the national guard down on somebody it’s a guy with his stroke. I wouldn’t be surprised if a high percentage of these robberies aren’t inside jobs.

    • Dr. Faustus Says:

      Your posts are always fascinating to read, but depressing. No offense, please. I can’t believe that you’re hanging tough and not packing and running. Wow! They robbed Carvajal…,at his ranch? That is a sure sign of the apocalypse coming to Venezuela, …a kind of 21st century Middle Ages barbarism, survival of the fittest and least moral. Frightening.

  12. Lee Kuan Yew Says:

    “You can find eggs now, at a new much higher price, while meat exhibits some scarcity, but prices are simply out of control and you can find some good quality cuts if you are willing to pay.”

    Yeah but somehow it gets sold. Or it would not be in the shelves. And the lines are packed because “el pueblo” has money to spend. Heck, many are not in the lines because they have enough money to spend to pay 10 x the price to bachaqueros. People pissed off waiting in line at the ATM’s…

    Where does all that money come from, with $12 minimum salaries, and a massive economic crisis?? Bachaqueo? Best case scenario, that’s for the most honest extortionists. GUISOS, everywhere.

    Not saying a few honest people who make good money like the Devil exist, but they are rare in Kleptozuela today. Very rare. Millions of “el pueblo” people are complicit with the massive pilferage, and highly corrupt themselves.

    Everyone always blames Chavismo, and the “government” for the Venezuelan current disaster. But the “pueblo” people are all saints, right? That’s only for those who have no idea what Vzla is all about, have never done business there, and/or havn’t visited in decades. The entire country is corrupt. From basic workers to managers, everywhere. Not just the infamous Chavista crap politicians. They all steal, at their own levels, and they all built Vzla as is it now: The worst country in Latin America .. unless, of course, you’re able to go shopping for bread in los Palos Grandes (where I used to live)

    • Arco Says:

      what is happening in Venezuela is called karma.

    • Robbie Says:

      Millions of “el pueblo” people are complicit with the massive pilferage, and highly corrupt themselves

      In a nutshell that is the problem. Wouldn’t surprise me if corruption was used as a tool in order to create guilt ( that seems an inappropriate word) on a national scale. Complicity would be a better choice.

      And those who should have shown a level of restraint were more than likely the worst offenders. So those from the barrio sold their souls for a bag of food and a few cash handouts but many of the “others” sold out for apartments/hummers/upgraded round the world airline tickets, Miami whatever and so on.

      The barrio may have been the catalyst for Chavez but the rest of you certainly knew how to use him.

      • Lee Kuan Yew Says:

        Yes, the Castro-Chavista plan is to pay lousy salaries, and keep people poor, unless they hook-up with the corrupt government and get into the filthy game. Or that independent workers, contractors, etc, are practically forced to accept bribes, and bribe other people to get contracts. That’s how it works, everywhere, at all levels. After a while, the entire country is corrupt. Complicit. Guilty of thievery in multiple forms.

        In the end the economy goes to hell, because almost everyone is stealing, not just the criminal regime in power. The BCV starts printing too much money, inflation goes through the roof, because they are all enchufado crooks too. Same as control de cambio or precio justo, tools designed to steal.

        After a while, most educated professionals leave the country – by the millions – and all you have left is an older, less educated, brain-washed, corrupt population, that depends on the corrupt system to survive. Mendigos y ladrones. Acomplices del desastre, y se lo merecen.

    • Super Says:

      That’s exactly right unfortunately. Just this past week someone was calling me about trying to do some deal with the militares in an area completely different from their area of expertise -if you can call making money importing with cadivi, an “expertise”! And these are people who supposedly want all this to end! It’s crazy, people only think of guisos no matter how bad the situation may be!

  13. amadol19 Says:

    Enviado de Samsung Mobile

  14. Roger Says:

    Speaking of Marine traffic, I have been noticing that a good number of ships also make a call to La Guaira which make me wonder if this is where the preferred stock is coming in to keep those of importance happy without prying eyes. For if shortage moves much farther up the food chain things will happpen.


  15. Id like to quote: “By the end of my week there, the Government began organizing the so called CLAP’s, (Local Committees for Supply and Production) as the only possible source for regulated products, banning their sale at markets and supermarkets and therefore creating a system that favors those that support or claim to support the Maduro administration, a double standard and discriminating method, which is simply another form of fascism exhibited by the Maduro Government.”

    This practice is condemned by international law as a crime against humanity. Coupled to Maduro’s refusal to accept humanitarian aid these two behaviors demonstrate Maduro is a criminal. Carlos Vecchio already filed a complaint in the Criminal Tribunal accusing Maduro. But events over the last six months strengthen his case. Widespread support to have Maduro indicted in The Hague will help put pressure on the chavista elite.

    I would also like to remind you that Cuba has enormous influence over Maduro, and that Obama’s policy towards Raúl Castro is backfiring. There’s an urgent need to highlight links between the two, and put pressure on the Cuban dictatorship.

    • Rory14 Says:

      “I would also like to remind you that Cuba has enormous influence over Maduro, and that Obama’s policy towards Raúl Castro is backfiring.”

      Are you saying that the situation in Venezuela would be different today if Obama didn’t re-establish diplomatic relations with Cuba and lift some travel restrictions? If so, how?

  16. captainccs Says:

    Some wheat must have arrived because there was some flour based products in the stores. Cream of wheat (semolina), cannelloni, and lasagna at regulated prices. Lasagna 250 gm, BsF 340.00.

    Black markets don’t exist where free markets are legal. Black markets are outlawed free markets.

    In middle class Chacao you can find just about anything as long as it’s not at regulated prices. Of course anyone earning a minimum wage can’t afford these prices. Portuguese olive oil, 750 lm, BsF 9,500.00.

  17. syd Says:

    Finally! I have gained a laser-beam focus on the scarcity/lines issues affecting Vz, or at least, Caracas, without hyperboles, rather, with just the facts. Thank you, Miguel.


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