The Devil's Excrement

Yes, I have been traveling, but I have also been swamped with work, which happens a lot when traveling. But besides these factors, I just don’t want to be repetitive about what is going on in Venezuela. Everything just seems to be going downhill non stop. But if I thought I had heard everything about corruption, today the Minister for Sports tells us that her signature was faked in sixty files to request foreign currency for traveling sportsmen. Amazingly enough, a single “athlete” was given US$ 66 million over a period of a year and a half, according to the Minister.

What this says is that there is simply no control anywhere in Venezuela. If a single (and lowly) Minister’s signature can be faked and someone can obtain US$ 66 million illegally, imagine what a Minister of Finance or a Minister of Energy can sign for without anyone checking!

Even worse, is the ethical deterioration in that Ministry and among the “athletes”, including the Minister. Because she wants to protect the names of the people involved in order to “respect them as athletes”.

Say what?

These are people that faked signatures, newspaper clippings, trophies in order to rob the Venezuela people and she wants to respect them?

The only respect they deserve is jail. And the Minister should be fired for allowing this to happen. And the Comptroller of the Ministry too.

This is simply an insult to the average Venezuelan who is given a few hundred dollars after dozens of requests, checks and the like, while the Bolideportistas and the Boliestafadores can get anything they want. If Maduro wants to fight corruption, the first thing he will have to do is fire everyone around him and try to find someone within Chavismo that is still honest, which may be a tall task in itself given the immorality that this news represents.

Anyone that thinks they understand the sudden moves made by Nicolas Maduro during the last few weeks, should wait a while, because I don’t think the full picture is clear yet. What I do think is clear is two things: Maduro is not happy the way things are going, he knows his Government is not working well and the importance of Nelson Merentes has been substantially diminished.

In fact, Merentes’ slide seemed to begin earlier than two days ago, when in a puzzling move, Maduro failed to include him in his bombastically-named “Organo Supeiror para la Defensa de la Economia (OSDE)” , which was created on the last day of September and is presided by a General, whose power has been increasing, but despite its name, failed to include Merentes. This discrepancy was noted at the time, but nobody knew exactly what it really meant.

Merentes is clearly paying for his lack of accomplishments. The man that was supposed to be the “pragmatic” member of Maduro’s Caibent, was not energetic enough to push his agenda and the more ideologically minded members of the Cabinet managed to slow down all of his initiatives and Merentes has essentially nothing to show for his almost six months in the Ministry of Finance.

The second sudden move, was the removal of Maduro’s confidant Temir Porras from both the development bank Bandes and the development fund Fonden. Porras was a new figure in the economic side of the Government and had been reported to be Maduro’s sounding board on economic and financial matters. But faster that you could say Temir, he was pushed out last week with no explanation. And there is still no clear idea of what happened there, even if some suggests that Porras was removed due to Maduro’s displeasure with the French intelligent services pulling off the operation that allowed them to catch the drug in the Air France plane. Reportedly Porras’ inability to know about this forced him out. Others suggest that Porras’ team convinced Maduro that the Chinese would lend him the US$ 5 billion in cash, which did not happen.

Then this week, Merentes was removed as Vice President for the Economy, a position that is now occupied by the Minister f Energy and Mines and President of PDVSA Rafael Ramirez.  This position is not that important, but there is a “Revolutionary” Cabinet above the crowded Cabinet, which is composed of six Vice Presidents. This supra-Cabinet meets more often with Maduro and is supposed to have a coordinating role.

It turns out that Ramirez was already part of this supra-Cabinet, so whether it has a meaning or not that he replaces Merentes is not that clear. Ramirez was previously the Vice President for Territorial Development, a position now occupied by General Hebert Garcia (More on him later)

Ramirez being the new Vice-President for the Economy may not be so bad as many think. He is considered to be part of the more ideological and radical branch of the Government, but he has shown in the past that he can be quite pragmatic. In fact, the only area where there have been some positive signs since Maduro took over has been in PDVSA’s flexibility, which has been led by Ramirez. Ramirez may actually be more capable of convincing the radicals that some change is needed.

The problem is that Ramirez is no economist and the change needed is more than a foreign exchange system, like Merentes seemed to think. What is needed is a larger adjustment of the economy and its variables, before distortions gets further out of hand. Ramirez will certainly not deliver that.

Caracas is full of rumors and among them, the possibility that Ramirez may also be moved sideways is one of them. PDVSA is where the money is and some Madurista groups may be trying to get closer to the honey pot and the Royal Family having a bigger influence there.

As for General Hebert Garcia, he now occupies three positions, the one in the supra-Cabinet, the President of Mision Vivienda and the President of OSDE, signifying that Maduro trusts him and he is the point military man to organize the economy and reduce shortages and build housing. Sounds like a tall order for a single person, let alone a Venezuelan General. But as PMB comments today, there seems to be this belief in Chavista circles that the military can organize things despite fifteen years of proving the contrary.

So, stay tuned, Maduro may yet make other moves pronto, which will allow us to better understand the ones he has made, excluding how he fell from that bicycle.

Americo Da Grazia, the opposition Deputy from Bolivar State, the same one that was pushed down the stairs of the National Assembly a few months ago by a group of Chavista Deputies, gave this excellent speech during the discussion to approve a resolution backing Maduro’s decision to expel three US diplomats. Da Grazia is a member of Causa R, the Guayana socialist party associated with the union movement.

For those that do not speak Spanish, Da Grazia starts by showing his birth certificate and saying he is Venezuelan and where he was born. He then recalls the murder of a Causa R leader last weekend. He then says among other things:

-What a pity that this assembly refuses to discuss Venezuela’s problems.

-Pity you don’t care about what Venezuelans care about.

-We are not lackeys of the gringo empire, but we are also not lackeys of the Chinese empire. But you just gave away the Las Cristinas gold mine to the Chinese empire while on your knees. Shame on you!

-You also gave Guyana (the country) the disputed territory.

-You dont say anything or discuss anything about the Sidor strike, the Ferrominera strike or the miners that are in jail.

-Because of you electricity consumption is back to the 80’s in Guayana because you ruined the electric infrastructure. And you don’t talk about it.

-How many of you know that in Guayana there is not asingle hospital that can provide chemotherapy or radiotherapy treatment to cancer patients. single hospital that provides chemotherapy or radiotherapy to cancer patients, but then you want to discuss this “pendejada”.

-He then says ironically that he just told his daughter not to go to the market, because thanks to kicking out the americans, there will be no shortages, there will be toilet paper and the dollar will go down in price.

-He then calls them stupid and imbeciles.

-He then calls for a democratic solution to Venezuela’s political problem.

-He then mentions all the positions, CNE, Comptroller that need to be elected and says they are illegitimate.

A Chavista Deputy then answers him with ideological BS.

Hat Tip: Damian Pratt who made the effort to place the video in youtube

For a group of people that is incapable of managing even the simplest systems, Chavismo has proven quite adept at establishing controls systems for everything. It is truly amazing how they can be so creative and inventive to establish very complicated systems to monitor and control, but are incapable of managing a simple supply chain for example, for an arepera.

Yesterday, I was praising Chavismo in private, because for the first time, they were actually going to remove some layers of controls for imports, removing certain steps to request certificates necessary for any import request, as well as extending the validity of current certificates until December 31st.

But my joy lasted a very short time, when I learned today about the new invention of the CADIVI “creativity” department to stop the “raspaito” of credit cards without traveling. As you know, people are buying airline tickets, requesting the CADIVI dollars for travel and not using them (This requires folders, going to the bank, wasting half a day, going online many times, etc..). They take their credit card, send it with someone or have someone use it for them and voila, they exchange those dollars bought at Bs. 6.3 per US$ and sell it at a huge profit at six times that rate in the unmentionable market. With the difference, the price of the ticket is almost irrelevant.

Well, given the truculent mind of Chavista officials, here is what they are planning to do to stop “raspaitos”: They will set up fingerprint units at all international exit points of the country in airports, ports, roads. Then, as you exit immigration, you will activate your credit card with your fingerprint. The system will be connected to the national credit card system. In this fashion, the theory goes, only people that actually leave the country will have their credit card activated.

Except…

-What if the system is down when you leave?

-What if there is no electricity that day?

-What if the connection is down?

-There is no law stopping you from leaving the country and immediately going thru immigration, missing your flight and activating the card in the process.

and so many others…

And, of course, there will be a cost to implementing this whole thing, but who cares, we will have Patria and fingerprint systems and they will feel good about it!

A few months ago, I heard a strange tale of cheap Chinese cars being imported to Venezuela and sold for incredibly low prices. When I asked on limitations, I was told there were none, the organization they were telling me about could buy as many cars as it wanted. Just put a small down payment down per car and voilá, a few months later and upon delivery, you would pay the balance. To give you an idea of the prices, the down payment was less than Bs. 10,000 (US$ 1,587 at the official rate or US$ 244 at the parallel rate of exchange) and upon delivery you paid the balance, with the total cost being around Bs. 100,000, or US$ 15,870 at the official rate of exchange or US$ 2,440 at the parallel rate. Yes, less than US$ 3,000.

The whole thing sounded very fishy. I immediately thought it was some sort of scam via CADIVI, whereby someone was getting dollars at the official rate of exchange to bring these cars to Venezuela. But it sounded strange, why would the Government give official dollars to some scammer, rather than giving it to the car companies that generate work in the country?

After making a few inquiries, I tracked down the story behind the cars. In some sense, it is not a scam, it is somewhat legit. But in another it is an amazing example of how Chavismo has lost sight of what developing a country is all about. Moreover it is simply The Devil’s Excrement at work: Oil generates such wealth, that those in charge can’t think on how to use that wealth productively and instead waste it “doing good” to a  few, without generating any wealth or well being for the “people”.

Most of you have probably never heard of Suvinca. Suvinca is a company owned by the Ministry of Commerce, which is an acronym to the name “Venezuelan Industrial Supplies”. Suvinca is supposed to procure “the access to raw materials, inputs, capital goods, intermediate and finished, with the purpose of deepening the endogenous development of the country”

A noble goal indeed. But somehow, something was lost in translation. Or by the limited brains of the Revolutionary management. Because it turns out that Suvinca has access to the loans from the Chinese Funds. One of those loans, was partly in in the Chinese currency Yuan (70 billion Yuan if I recall correctly, almost US$ 10 billion at the time). Well, the money from these Chinese Funds is supposed to go roughly (my words) to:

“Projects within the National Development Program, that have high social impact, improve the standard of living, generate employment and consolidate some sectors which are considered a priority.”

Well, it turns out that Suvinca uses intermediary companies in the US, of all places, to import cars made in China, some made by US companies in China exclusively for that market, and which are paid with the Yuans from the loan from the Chinese Fund. Suvinca then turns around and sells these cars to chosen groups of individuals, at ridiculously low prices, since those Yuan are calculated at the official rate of exchange.

Thus, Venezuela’s “development” money. The same money that is borrowed from the Chinese, instead of being used to buy machinery, factories, equipment, as everyone envisioned, is being used to import Chinese cars. That’s it!

That’s what someone in the Chavismo stratosphere considers “development”

How low our country has fallen…

In fact, if you look through the news section of Suvinca, this “procurement” company, seems to do anything but what it was mandated to do. It sells cars, school supplies, produce in markets. But mostly, it sells cars, cheap Chinese imported cars, paid by the loan, as you can see if you go down the list of “news”.

It is all about cars, importing them and selling them to buddies. Many quite well off, actually, like my friend.

Thus, we get a loan to import stuff, undercutting local producers who went more than a year without Cadivi giving them much and likely importing many cars that are not even supposed to come to Venezuela and for which there are no spare parts or support.

It’s The Devil’s Excrement at work, as implemented by brainless bureaucrats, whose only qualification to preside those institutions, is loyalty and ideology to the brainless revolution.

And President Maduro? In China, getting another one of these “development” loans.