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Opinion: Inflation Rains On Venezuela's Red Parade

Wed, 17 Sep 2014 08:00:38 -0400

Venezuelans used to say prices rose in elevators while salaries climbed stairs. Today salaries are still on the stairs, but prices ride jets as the impact of runaway inflation hits the nation with the crushing speed of a supersonic jet.

One year ago, Isabel, a live-in maid from Colombia made around US$1.000 a month, plus room and board in Caracas, and was able to send some US$600 back to her children at home under a subsidized foreign exchange system. No longer. Isabel's entire monthly wages now add up to no more than US$90 and are dropping. She now plans to go back to Colombia despite scarce jobs there.

Isabel may escape back home, just as many of young Venezuelans are leaving the country — but 90 percent of those who leave are university graduates and most people in this nation of more than 28 million do not have that option: They must stay and live with an inflation that this year tops Colombia's compounded rate for the past 8 years.

Serious economists predict an oncoming and inescapable perfect economic storm, as "bolivarian" hacks parrot the party line and live in constant denial — but to the man on the street the hard facts hammer home on a daily basis with the strength of a sledge hammer.

August this year closed with the greatest inflationary jump in 18 years. The cost of living has gone up 101 percent over the past 16 months. According to figures disclosed by the Central Bank, the average price of food and non-alcoholic beverages skyrocketed 210 percent in August 2012 - August 2014.

Year to date, food and non-alcoholic beverages have increased by 91 percent, housing by 55 percent, leisure and entertainment by 50 percent, transportation by 48 percent, clothing and apparel by 46 percent, health services by 36 percent and schools by 32 percent. The effect is devastating lower income families.

Venezuela's current inflationary cataclysm is shown on a recent chart based on highly manipulated data from the nation's Central Bank:

The respected Teachers Union's economic research unit reports the average monthly cost of a basic food basket for a normal family is now 21,572 bolivars. At the official exchange rate, which is used in government fiction, that would come to US$3,425.

This in a country where the minimum monthly wage is 4,251 bolivars – US$ 675, should you insist on remaining within a sort of fantasyland created by the National Statistics Institute – run by an old diehard communist apparatchik and accepted by some unquestioning international organizations such as the UN's Food and Agriculture Organization.

Another source shows that 25,506 bolivars are required to fully fit out a child for school this year. That's US$ 4,050 or US$ 255, depending on which exchange rate you live by within a insane, convoluted and corrupt system which has two additional "official" exchange rates for travelers and selected importers.

On the parallel market, which actually decides real prices for what can be actually bought in a sea of growing scarcity, the current minimum wage brings in around U$ 42.50 per month and dropping.

But if you are one of the very fortunate – no more than 1 percent of the population who have their own dollar disposable income – US$1,000 will bring you up to 100,000 bolivars and rising, which means your monthly family food bill for basic products is around a mere US$ 215, and you can equip your child for school this year for US$ 255.

The insane distortion underlines just how the fake Venezuelan "socialist revolution" grinds down the man in the street and makes it an irresponsible joyride for Venezuela's ostentatious nouveau riche "bolibourgeois" oligarchs.

The callous Maduro regime is far more interested in political survival than the well-being of Venezuelans, and its hard core believes it has to keep people begging and fully dependent on government handouts for their day to day survival.

Tarek El Aissami, a Maduro hardliner, former Minister of the Interior and current governor of Aragua state recently spelled it out: "The more poverty there is, the more loyalty to the revolution."

Perhaps El Aissami – a fervent backer of Muslim terrorists – is thinking of parts of his native Syria, where a docile peasantry may be kept in the Stone Ages. Or the bloodthirsty Cuba of the 1960s, when more than upper 17 percent of total population migrated - not to mention the many millions of peasants and farmers exterminated by Stalin and Mao in their day. But that is definitely not the profile of modern Venezuela.

Too many analysts make the usual mistake of referring to a "disappearing middle class." Little do they realize that "middle class" is basically a state of mind, a view of life. Once you get there you never really go back. Most Venezuelans have known better, have lived better and have greater aspirations. Girls in the worst barrios here sport Kardashian hairdos. This is the main reason a majority opposes the regime even after a 15-year onslaught of promises and personality cult.

Reality here is best described in the old post World War I song: "How ya gonna keep 'em down on the farm, after they've seen Paree?"

Venezuelan President Nicolás Maduro Snubs Washington For Beijing

Tue, 24 Sep 2013 15:16:43 -0400

To listen to the current Venezuelan government talking about the United States, you might think that a squad of CIA agents is just waiting to seize President Nicolás Maduro on a street corner in Manhattan, where he is attending the United Nations General Assembly meeting.

Following unsubstantiated claims last week that the U.S. closed its airspace to Maduro's plane as he flew to China, Venezuelan Foreign Minister Elias Jaua has written to the UN Secretary-General, Ban Ki Moon, demanding "guarantees that we are going to be respected by the government of the United States." Jaua also said that the State Department had denied visas to members of the Venezuelan delegation heading to the UN – an allegation firmly denied in Washington.

These outbursts of hatred toward the U.S. are to be expected from the Venezuelan regime, which has accused the Americans of all sorts of conspiracies in the last few months, from assassinating the late President, Hugo Chávez, to plotting the shortage of basic goods like cooking oil and toilet paper which is currently plaguing the country.

There is some purpose behind these accusations. Maduro is looking for a great power ally and he thinks he's found one in China.

Maduro's trip to China last week came just days after the Venezuelan government announced a $14 billion deal with the China National Petroleum Corporation for a project to develop the Junín 10 block in Venezuela's Orinoco region, an area that holds one of the largest oil reserves in the world.

Over the last decade, Venezuela's relations with China have grown warmer at all levels. When he served as Venezuela's foreign minister under Chávez, Maduro assiduously cultivated China's ruling communists, regarding them as both an ideological and an economic ally. After the United States, China is Venezuela's biggest trade partner, and Venezuela has become the main destination for Chinese investment in Latin America.

Maduro and those loyal to him are fond of presenting the relationship with China as integral to the country's socialist orientation. Yul Jabour, the president of the Venezuelan parliament's Foreign Policy Committee, trumpeted Maduro's Beijing visit as essential for the well-being of the "Bolivarian revolution." Alongside China, Jabour named Russia, Iran and Belarus as countries with whom Venezuela enjoys a fruitful relationship. Interestingly, Cuba, which receives a colossal $8 billion worth of subsidised oil from Venezuela each year, didn't make it onto Jabour's list of friends.

Regardless, what all these countries have in common is that they are run by authoritarian regimes. Following the widely disputed presidential election in April of this year, in which Maduro held onto power after refusing a recount, Venezuela has steadily been developing the features of a more traditional dictatorship. As that tragic process continues, Maduro has come to understand that he needs allies who share his view of the world, but who won't bleed the country's resources – as Cuba does – at the same time.

China has consistently proved its willingness to invest first in Chávez and now in Maduro. As a result, Venezuela supplies China with 600,000 barrels of oil per day, a figure that could increase to one million barrels if China is able to transform Venezuela's corrupt and chronically mismanaged oil industry. Make no mistake, that will be an uphill task: before Chávez became president in 1999, PDVSA, Venezuela's national oil company, was producing 3.5 million barrels of oil per day. Almost fifteen years later, that figure has collapsed to 2.7 million barrels.

For strategic reasons, the Chinese are willing to play with an element of risk. With U.S. President Barack Obama reorienting American foreign policy to east Asia – famously known as the "pivot" – China perceives important opportunities in America's backyard.

For democracy advocates in Venezuela, the relationship with China is deeply unsettling. It weds our country to a regime whose contempt for human rights is well-known, and where corruption is rampant. Maduro already has enough bad habits of his own without learning more from his Chinese friends.

Additionally, we worry that decisions on partnerships are being made on ideological rather than practical grounds. Chinese petroleum companies are coming to Venezuela not because they offer the best deals and resources, but because Maduro regards President Xi as the best hope for the anti-American forces in the world today.

That same desire to shun America disturbs us for many reasons, foremost that the U.S. remains our largest trading partner. But that relationship is becoming jeopardized. Two years ago, PDVSA was caught supplying oil to Iran, in violation of U.S. sanctions. As a consequence, PDVSA can no longer compete for U.S. government contracts or secure U.S. financing. Given that the U.S. imports $18 billion of goods from Venezuela annually, for Maduro to risk this vital revenue in the name of ideology is criminally negligent.

During the Venezuelan opposition's presidential campaign earlier this year, the opposition pro-democracy candidate, Henrique Capriles, stressed that as an oil-rich country with an educated population, Venezuela should conduct its foreign trade, whether with China or the United States, as an equal, not as a subordinate. But under Chávez and now Maduro, our country has been robbed by Cuba and compromised by China and Russia. And there is no end in sight.

The Ultimate Irony: Chávez Wins Posthumous Journalism Award

Fri, 07 Jun 2013 15:34:23 -0400

It's difficult to make up one's mind as to whether the decision to award the late Hugo Chávez the 2013 Simon Bolivar Prize for Journalism reflects a healthy sense of humor on the part of the Venezuelan government, or none at all.

If it's a joke, then like all the best jokes, it's in very poor taste. It's like giving a human rights prize to Robert Mugabe, or a tolerance prize to the Iranian regime.

If this is not a joke, then it's evidence of how 14 years of Chávez's rule has blinded his hardcore supporters to that most human of instincts — irony.

The jury that awards the prize declared that Chávez was being recognized for giving "a voice to the oppressed of the world" and for fighting against "media lies."

A voice to the oppressed? Is this a reference to that legendary coterie of enlightened leaders, aka Hugo's Friends, which includes Mugabe, Ahmadinejad, the murderous Syrian tyrant, Bashar al Assad, and Europe's last dictator, Alexander Lukashenko of Belarus? It must be, because one of Chávez's favorite mind games involved rebranding these autocrats as loyal tribunes of the persecuted and downtrodden.

Media lies? Venezuelans will always remember how Chávez clamped down on the independent media in our country. Truth or falsehood had nothing to do with it – if Chávez didn't like your politics, you were under the spotlight.

In that regard, it is instructive that the award was announced by Lil Rodriguez, a bigwig in the pro-Chávez media. In many ways, Rodriguez owes her career to Chávez's determination to destroy any media voices who criticized his rule. In 2007, Chávez refused to renew the broadcast license of Radio Caracas Television (RCTV) accusing the station of encouraging strikes and protests against his regime. Despite mass protests against Chávez's action, RCTV was still closed down –they not only deprived them of the right to broadcast, the regime also stole all of their equipment– and replaced by the meekly compliant Televisora Venezolano Social, otherwise known as TVes. The president of TVes's Board of Directors is none other than Lil Rodriguez.

And the muzzling of independent, critical voices continues. The latest victim is Globovision; this once vibrant forum for broadcast and web journalism is now under new and not completely transparent ownership. One journalist, Kiko Bautista, was fired for defying editorial orders that banned live coverage of activities by opposition leader Henrique Capriles Radonski. All of Venezuela –and the democratic world– is watching to see what happens with the remaining independent journalists who continue to provide a voice to the democratic opposition.

A recent report on the Venezuelan media by the Committee to Protect Journalists offered the following blunt conclusion: "Today, several of the most critical media outlets are either gone or scared into silence, and a vast state media presence echoes the government’s positions."

It is against this context that the journalism prize posthumously awarded to Chávez should be judged. And it is another reminder to the people of Venezuela that even though Chávez is dead, his imitators try to continue controlling what we read, what we hear and what we see.

But neither Chávez nor his successors can control what we think. The net result of their censorship efforts, therefore, has been to ensure that Venezuelans trust very little of what is produced by the state-owned media. Also, the Stalinist mind-set of the new regime of Nicolás Maduro cannot understand the uncontrollable power of social media.

Venezuelans on the Brink, Putting Up With Daily Outages, Growing Scarcity and Fear

Thu, 02 May 2013 12:04:26 -0400

There's an old joke about the rabbi who explained to his congregants that Adam and Eve were the first communists, because they wore no clothes, had one apple between them, and thought they lived in paradise. Well, that pretty much encapsulates what Venezuela's current rulers would like its people to believe about the state of our country right now. But the mask is slipping, just as it did in the Garden of Eden.

When you go shopping in Caracas these days, empty shelves in stores speak volumes about the shortage of basic goods. The entire country, especially outside the capital, is plagued by power outages as often as three times a day, for several hours in all. Remember, this is taking place in a country with the largest reserves of oil in the world.

Venezuelans are learning through bitter experience that fulminating against American plots, hailing alliances with Cuba, Iran and similar authoritarian regimes, and dragging out the specter of the late Hugo Chávez at every opportunity – all hallmarks of Nicolás Maduro's new regime, which came to power in a fraudulent election a little over two weeks ago – won't put food on the table. A poll this week conducted by a Caracas newspaper showed that for the vast majority of people here, crime, inflation, crumbling public infrastructure, and the non-availability of goods we once took for granted are causing huge anxiety.

However, whereas the citizens of this country think in practical terms, Maduro and his cohorts think in rigidly ideological terms. They cannot offer new answers, only tired dogmas. And that is why, in spite of all the hardships we face, there is also a spirit of determined optimism.

It was, appropriately, Karl Marx who observed that a thing is best understood in times of crisis. After fourteen years of chavismo, Venezuela is undergoing its biggest political and economic crisis since oil became the motor of our development almost a century ago. And what is abundantly clear is that most Venezuelans are fed up with being governed by an ideology that has – much like Soviet-style communism – completely failed. Hence the popular feeling that meaningful change is possible, even imminent.

For as long as Chávez remained in power, this realization was delayed. In part, that was because the relatively high price of oil during the Chávez period allowed his regime to lavish money on its so-called misiones – social programs whose principal aim was to win the political loyalties of their beneficiaries. Additionally, whatever his numerous faults, Chávez was possessed of a charisma and wit that none of his followers, least of all Maduro, can count on.

Even more fundamentally, the view that Maduro is an illegitimate president with an illegitimate government is growing in leaps and bounds. Around 6,000 violations were recorded by independent witnesses on election day. Alfredo Weil, a respected local pollster, believes that the opposition candidate, Henrique Capriles, actually won the election by four points. Opposition calls for a comprehensive recount of the votes have been blocked by the National Electoral Council, or CNE, which faithfully follows every edict issued by Maduro.

Whereas Chávez used a mixture of persuasion and repression to make his case, Maduro cares little for the former and frequently resorts to the latter. Last week, the Minister for Prisons, Iris Varela, warned Capriles that a prison cell was being prepared for him. In the interim, intimidation of public sector workers whose loyalties are in doubt has resulted in over 4,000 complaints against the government. One has to seriously ask whether the fate of these latest additions to the growing roster of Venezuelan dissidents will be similar to that of opposition politicians in the National Assembly, who this week were the targets of a ferocious physical assault by pro-government parliamentarians and their bodyguards.

Slowly but surely, the regime is seeking to squeeze the space for lawful opposition. Just prior to the attacks in the National Assembly –a shameful scene that was not witnessed even during Chávez's rule– the National Assembly President, Diosdado Cabello, warned opposition legislators that if they didn't bow to Maduro's legitimacy, they would be forbidden from speaking. One of them, the infinitely courageous Maria Corina Machado, reported that she saw Cabello smiling and laughing as she was pulled to the ground, punched and kicked.

Yet the government cannot control people's thoughts. More and more Venezuelans understand that this last election was a sham, that this government has no mandate to rule, and that it cannot provide the voters with the economic or physical security they so desperately crave.

That is why we find ourselves at the most important crossroads in our recent history. When we look at the example of the Arab Spring, we realize that repressive regimes don't just take a bow and leave the stage. They engage in massive violence first and then, assuming that they collapse, all too often leave a political vacuum that encourages even more extremism in their wake. For the opposition, the critical question is how to avoid responding in kind to extreme provocation by Maduro's bullies.

An overwhelming majority of Venezuelans are determined to stay a democratic course. And, in Henrique Capriles we have a leader who has proved beyond doubt that this regime will resort to any methods to remain in power, and at the same time steer unyielding resistance through a peaceful responses.

The only discouraging element is the apparent indifference of an inter-American system in which the flow of oil seems thicker than any democratic principle.

In Venezuela, Every Vote Counts

Thu, 11 Apr 2013 13:04:38 -0400

As we approach this Sunday's presidential election in Venezuela, there is a new spirit lifting the campaign of opposition leader Henrique Capriles Radonski.

Millions of Venezuelans who felt alienated during the Hugo Chávez era are now daring to think what was, in the weeks following Chávez's death, quite unthinkable: that we can win.

That belief was on tangible display at last Sunday's opposition rally in Caracas. With hundreds of thousands of people in attendance, it was one of the largest demonstrations in the history of our capital. The mood was determined, but also joyful. People chanted, sang and laughed together beneath the sweltering sun. It was as if the great moments of recent world history – the triumphs during the American civil rights struggle, the defeat of apartheid in South Africa, the peoples' revolutions against communism in eastern Europe, the overthrow of corrupt Arab dictatorships – all coalesced in our little corner of the globe.

What makes this development even more extraordinary is the fact that this Sunday's presidential election is the second in just over six months. Last October, Capriles was also the opposition candidate, and he acquitted himself well against the domineering Chávez, whose victory was in part down to his success in persuading much of the electorate that he'd been cured from the cancer that felled him before taking office for his new term.

This time around, Capriles faces the dour, uninspiring Nicolás Maduro, the handpicked successor of Chávez. Many advantages that favored Chávez electorally are also stacked in Maduro's favor: absolute control over state-run media, influence over millions of poorer voters who have benefited from the corrupt and arbitrary social development programs launched by Chávez, and the overwhelming presence of his political allies in both the Venezuelan judiciary and the National Electoral Council, or CNE.

One might have expected – especially when this last point is taken into account, and when you remember that the opposition has had only a few weeks to prepare for the vote – that the Capriles campaign would have resigned itself to a defeat before the polls even opened. And indeed, many loyal opposition members have argued that we would be better off boycotting elections that we could not win, because the regime seems determined to pull off a victory by means both fair and foul.

That argument was and remains wrong — in my view, dangerously so. If we are to fulfill the promise that was manifested on the streets of Caracas, we need to argue the reverse: that every vote counts.

Capriles is setting the agenda for debate, and this is driving Maduro and his regime cronies to desperate, increasingly crazy rhetoric. They drag out Chávez's ghost at every opportunity. They abuse Capriles and his supporters as "Nazis" and "faggots." They see American plots behind every political development (Maduro has claimed that the U.S. backed the gang of pro-Chavez motorcycle bullies that viciously attacked a group of unarmed students carrying out a peaceful demonstration in Altamira Square!)

This is not the behavior of a party that is convinced it will win. It is the behavior of a regime mired in the past, and one that relies on paranoia and threats, rather than reason and persuasion, to get its message across.

In addition, the nation's catastrophic economic situation, symbolized by two currency devaluations in quick succession, stagnation in wages, and a 10 per cent surge in inflation since Maduro took over, could well mean that hundreds of thousands of voters who might have voted for the regime will abstain. Signs are sprouting up around Venezuela: "With Chávez, everything; with Maduro, nothing".

If the final result does hinge on abstentions, then Capriles needs everyone who can cast a vote for him to do exactly that. And that means not just Venezuelans living in the country, but those outside — including the more than 200,000 qualified voters currently living in the United States and other countries.

Like many countries stunted by political tyranny, Venezuela experienced something of a "brain drain" during the Chávez years, with young people especially driven abroad because of rising crime and lack of opportunity. During last October's election, many of the 1.2 million Venezuelans living around the world, from Houston, Texas, to Madrid, Spain, descended on their local consulates to cast their votes, the vast majority opting for the opposition.

In some major expatriate centers, voting isn't possible because the regime has closed its diplomatic offices in these locations, partly to prevent émigrés from exercising their right to vote – Miami, where Chávez closed the Venezuelan consulate in the summer of 2012, and which is home to well over half of the Venezuelans domiciled in America, is the most infamous example.

But in other cities, overseas voting is possible. That is why those of us who continue struggling inside our country and are working overtime to bring the Chavez era to an end, urge our brothers and sisters abroad to do everything they can to bring about a free Venezuela.

Electoral defeat is still a serious possibility. But Venezuela's vocation for democracy and voting is one of the barriers that prevented Chávez and his cronies from imposing a full-fledged dictatorship for the past 14 years. Should Maduro win, we will face several more years of political and economic decay, and an increased trend toward political repression. That's why we must seize the moment — and the moment is now.

Venezuela: The Case for Capriles

Thu, 21 Mar 2013 16:09:49 -0400

On April 14th, Henrique Capriles-Radonski will challenge Hugo Chávez for the presidency of Venezuela for the second time in just over six months.

On the first occasion, on October 7th last year, Chávez was very much alive – and despite the Comandante's stranglehold upon the media and his control of Venezuela's national electoral commission, the CNE, Capriles garnered 44 per cent of the vote. It was a much better performance than that achieved by any of Chávez's previous opponents. Had both candidates competed on a level playing field, there is every reason to believe that Capriles would have won.

This time around, Chávez is dead. Having failed to embalm Chávez for eternity, thanks to their legendary incompetence, his successors are nonetheless attempting to transfer his political DNA to acting President Nicolás Maduro.

Maduro wants the forthcoming election – the most important in Venezuela since the Chavistas came to power in 1999 – to be about Chávez. That's why he loudly proclaims that we Venezuelans are all Chávez. It's why he insists that Chávez died from a cancer implanted in his body by nefarious forces in Washington, DC. Maduro is even trying to co-opt Capriles into his conspiracy theorizing by claiming that the U.S. "right-wing" attempted to assassinate Capriles himself!

Against this fevered, increasingly irrational background, Capriles is trying to affect a quiet revolution in Venezuelan politics. In doing so, Capriles has had to overcome discontent within the ranks of the opposition, some of whose members criticized him for conceding too easily last October. The opposition's poor showing in last December's state and local elections further cemented the gloom about the prospects for an opposition victory on a national scale.

In standing again – a decision that necessarily involves a great risk to his own career – Capriles has come out fighting. He has openly challenged the legality of our current political arrangements: under the terms of our constitution, the acting President should be the President of the National Assembly, Diosdado Cabello, and not Maduro, who was Chávez's Vice-President. Capriles has also highlighted the danger posed by the Venezuelan Defense Minister, Admiral Diego Molero Bellavia, whose flagrantly illegal pledge that the armed forces will back Maduro demonstrates a degree of military involvement in politics unseen since the departure of former dictator Marcos Pérez Jiménez in 1958.

Above all, Capriles understands that the April election is about the ownership of Venezuela's national institutions. For if Maduro has his way, Chávez's lasting legacy will be the conquest of those institutions by the tribunes of his "Bolivarian revolution."

In today's Venezuela, there is no longer a constitutional separation of powers: as early as 2004, Chávez railroaded through a law that expanded the number of judges on Venezuela's Supreme Court, the TSJ, from 20 to 32, and then promptly packed the court with his own appointees. Since then, the TSJ has dutifully served the regime's every whim. Among its most notorious decisions was the suspension of the opposition politician Leopoldo Lopez from running for public office, on the basis of corruption allegations for which he was never charged, prosecuted or convicted.

It's a similar story with other nominally independent institutions that are critical to our political and economic future. The CNE electoral commission, run by Tibisay Lucena, a former Chávez aide, has consistently refused opposition entreaties for consulation on everything from voter registration to voting machines. It has also canceled, without proper explanation, a round of local elections scheduled for this July.

Our state oil company, PDVSA, which controls the 95 per cent of our foreign revenues that come from the export of petrol, has been wrecked by the replacement of competent, non-political officials with loyal Chavistas. By providing heavily subsidized oil for Chávez allies like Cuba, and by diverting funds into Chávez's high-cost, low-impact "social programs," PDVSA has become a plaything of the Chavistas, rather than the motor of our economic development.

Capriles offers a profoundly different, and far more attractive, political vision which revolves around four key points. Firstly, a return to the rule of law: no-one will be above the law, and the law will not be compromised by ideology. Secondly, the banishing of hate-filled rhetoric from our political life: last year, the Chavistas regularly threw homophobic and anti-Semitic barbs at Capriles, a continuing trend which the opposition leader has rightly condemned as "fascism." Thirdly, an end to the corruption and cronyism that stained the Chávez years, beginning with an overhaul of PDVSA. Lastly, the promise of Venezuela taking its place as a sovereign member of the community of democratic nations, no longer at the beck and call of Chávez's allies in the Cuban regime, and enjoying fruitful relations with other states in the region from Brazil and Chile to the United States and Canada.

Capriles goes into this race as a clear underdog, but he does so in a nation that traditionally favors underdogs. The stakes have never been as high as they are now, but if pro-democracy Venezuelans didn't let Chávez extinguish them while he was alive, they'll be damned if he'll do so now that he's dead.