Multiple “Gods” in Venezuela

July 14, 2016

godfathermaduro.jpg

While everyone was watching one “God” in Venezuela, Dios-dado, a different one seemed to ascend to power, Padrino (Godfather), as Maduro designated his Minister of Defense Vladimir Padrino, as his all power Czar of food supply and distribution. In Maduro´s words: “All the Ministers, all of the Institutions of Government will be under orders and in absolute subordination to the Great Supply Mission under the orders of the President and General Padrino Lopez”

I have been pondering over this ever since it happened, trying to understand what it really means. Not only did Maduro make the General his equal, but the General did not waste much time in making the statement that his objective was “To govern…”

padrino

A strange statement from a man that has been deeply involved with a “Government” that has ruled Venezuela for sixteen years, with the tight involvement of the Venezuelan military of which he has been a leader. Or did Padrino mean “To Govern well”, something which has definitely not happened since Chávez took power in 1999.

But while many saw this as a resolution of the power struggle between civilians and the Venezuelan military, one has to see it first as a victory of General Padrino Lopez over General Marco Torres, a more subtle Cszar over Venezuela’s Food distribution and Supply for quite a while, who also presided over the finances of the country during the same time.In fact, Maduro  did not say what the naming of Padrino Lopez implies for Torres’ Ministry for Feeding, as well as his total, albeit remote control, over both the Ministry of Finance and the Venezuelan Central Bank.

But Padrino may have moved too soon for his own good. He clearly believes in the “model” that the Government can buy and distribute all of the food for the country and eliminate shortages while holding inflation back. Which means that he has no clue, like his predecessors, that it is not the distribution model, but the economic model that needs to be changed. And since there seems to be no economists in the Cabinet, nor in Padrino’s team, Padrino’s effort will meet the same failure that Marco Torres’ did. And there is plenty of time before the end of the year for the same infighting  to point out that Padrino’s all-powerful mission has been a total total and complete failure: Shortages will increase and inflation will not abate.

Because as was reported today, from the same Government that took the the Simadi/Dicom rate to close to Bs. 700 per dollar, somebody has now realized that this was a mistake and the plan now, without telling or consulting the Cabinet, is to now lower that rate.

This may simply be General Torres trying to show he still has some power.

What’s next? Changing the exchange rate’s name again? How about Godmadi or Godcom? (In Spansih: Diosmadi or Dioscom)

As I noted two posts ago, this rate is irrelevant to the scheme of things, as it is the Bs. 10 per US$ rate that needs to be urgently modified. Someone should ask these “Supply-Side-experts”, including Torres and Padrino, why not simply give away the food for free and eliminate shortages, after all, the difference between Bs. and Bs. 600 (Or Bs. 1000) is so large, that making it zero for distribution purposes will make no difference.

Meanwhile Maduro  wants to extend his Emergency Economic Powers, despite the fact that under the previous two, both not approved by the National Assembly, shortages grew, international reserves went down, inflation increased sharply and the country’s oil production dropped by more than 10%.

Thus, this battle of the multiple Gods in Venezuela, seems more like a brawl among empty headed buddies at a bar, to decide who will play better billiards when they are no longer drunk.

And the winner may be somebody else…

 

 

 

 

 

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9 Responses to “Multiple “Gods” in Venezuela”

  1. Computer Says:

    When price goes down and cost of production goes up and you have no new wells so you can shut old ones down and keep producing on your new investments, even well managed, you got a problem. The word is that it will be open on Sunday again.

  2. Mick Says:

    So, the powers-that-be say Kimberly-Clark had full warehouses. That they just walked away from millions of dollars of assets as a political statement.

    That doesn’t sound like any greedy, self serving, multi-national, capitalistic corporation I have ever heard of. I would be curious to know how long these factories continue production under the state, if at all.


  3. Just keep putting new people in charge until cool stuff falls from the skies….

    What a Cargo Cult!


  4. The new guy can’t magically make imports come any better than Maduro can. If the money does not exist, then it does not exist. Nationalising industries will not help when incompetents are promoted for political loyalty, even if they promoted competent people it would still not work well. Socialism never does.

  5. Jim P. Says:

    We hear from my wife’s family in San Cristobal that people mostly don’t sell scarce goods for money, only barter. For example, the going rate for a box of feminine hygiene products is one liter of powdered milk. Nobody can find rice or beans, basic staples. Also, last week they briefly opened the border at Cucuta and were overwhelmed by Venezuelans trying to get across to buy food so they closed it again. Supposedly they will re-open it within a week so already busloads are preparing to descend on the border crossing.

    • IslandCanuck Says:

      The word is that it will be open on Sunday again.

      Don’t know about them closing it last Sunday but it was reported that some 35,000 people crossed.


  6. I read somewhere that power cuts had impacted oil production, but I suspect the problem is deeper. If the problem is a combination of poor maintenance and low investment, plus the power cuts, then production capacity can return. But if they have been pushing the wells too hard, reservoir pressures have dropped, water production has increased, and so on, then the problem is fairly irreversible.

    In the past I had access to a huge amount of information about the Faja, and I eventually concluded it had to be managed very carefully to avoid destroying its potential. What I’ve observed is Pdvsa doing exactly the opposite of what’s required.

    As regards Padrino López, if he’s being mentored by the Cubans and Serrano, the moves will be made to implement a control system that allows food to be distributed on a selective basis to those who don’t back the recall referendum. International law says this is a crime against humanity, and can be prosecuted in the Criminal tribunal.

    But my experience watching Obama, Hollande, and Mogherini swooning over Raúl Castro (who is guilty of serial crimes) tells me the international community will whine but won’t apply economic sanctions on both Castro and the Maduro-Padrino regime. Let’s face it, this world is designed to be unjust, and in the end conflict seems to degenerate into civil war and/or terrorism.

    • Roger Says:

      Venezuela exports oil for USD but, almost everything needed to produce it is imported with USD. When price goes down and cost of production goes up and you have no new wells so you can shut old ones down and keep producing on your new investments, even well managed, you got a problem. Add to that that you also have to support half the country with global priced food with record breaking inflation and corruption!
      As far as Cuba goes, their planning life without Venezuelan oil/money. Who need sanctions when Chavezimo is the ultimate weapon of mass self destruction!


    • Venezuela has sanctioned itself.


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