AS expected the rise of general Vladimir Padrino as co-president of Maduro has changed nothing. After all Venezuela has been a dictatorship for a while, of a new XXI century kind certainly, but a dictatorship nevertheless. It was all just a formality.
Padrino cannot succeed in his attempt at putting food on the table of Venezuelans. His multiple inspections, in combat drag, of food producers have revealed no scandal so far, no hoarding, no lack of manufacturing will. The reason why there is no food production in Venezuela is simple, it is because there is nothing to make food out of.
For better or for worse, and with chavista bred officers it is likely for worse, Padrino seems to have been put there to prepare, or chair, a transition out of Maduro's mess. We already have the first signs on how doomed this might be as clashes between radicals and pragmatists, military and civilians have come to the forefront this past week.
One, for example, has been setting up a system for forced labor. I kid you not. A decree states that the regime can draft workers from private agribusiness to work for up to 60 days (and 60 more if needed) in the state agricultural undertakings. That is right, I repeat, workers from agribusiness, even myself, could be forced to go to work where the regime decides. I am not insulting the intelligence of readers discussing the historical precedents that say that forced labor never ended up in something positive, and always brought different levels of tragedy. No, the details are more interesting in a decree that cannot be applied.
First, there is no provision as to what would happen to a worker refusing to go to a state run facility (employers MUST part with the employees drafted while preserving their social benefits and their penalty does not need to be expressed since we know by experience what the regime does to us). Second, those business that still produce something could well come to a stop if they lose their trained personnel. Where would be the food relief in the country?.
One chavista union official quickly went to say that no one would be forced to serve against their will. But that is quite hollow when you read the decree where only different forms of expressing obligations can be found (I highlighted them in the scan from the decree on the right, if you can read Spanish).
I find it interesting that besides being an extraordinary sloppy job of a decree it is also so direct and self assuming of its importance. If you ask me it is from the hand of a military turned bureaucrat, used to give orders and be obeyed. But in real life that does not work.
Another example of the confusion reigning inside the regime comes from a "debate" between the head of the state oil monopoly PDVSA and Elias Jaua, a representative of the more radicalo-communist wing of the regime. It all started with del Pino saying that the nationalization of the services of the oil industry in Maracaibo Lake by Chavez in 2009 was a mistake. It is a taboo in Venezuela: oil industry should belong to the state. At least some good sense had prevailed in letting competitive services manage a large chunk of the oil industry, usually the more delicate work that required nimbleness, something that was not a given even in PDVSA best days.
In short what del Pino was suggesting is that the private sector should not be banned outright from Venezuela's oil industry. Something very pragmatic since oil output has been dropping after 2009 and that with current oil prices and Venezuela bankruptcy we do not even have the money to keep the current level of production for much longer. That is anathema to the radical left that is unable to come to grips that the Chavez and Cuban models have failed, that the country is broke and that we have run out of food and medicine. In their minds there is a course traced by Chavez (Plan de la Patria) and it should be followed, period. Elias Jaua even goes one more stating that the said plan was discussed and voted upon and turned into law (it was an emanation of Chavez and thus was never properly discussed to begin with, and a monstrosity to read by the way).
And thus we see the plain division between the "civilian" groups of chavismo, between those who think that something should be done and those that think nothing should be done, that we are all doing fine and that the only thing needed are yet more regulations, more controls, and now forced labor.
It is interesting to note that even if one were to agree with the need for some strong initiative to restart production these come too late for Venezuela. When Chavez came to office in 1999 there was already a strong tendency for the state to rule over everything. On that aspect Chavez simply did one better, pushing the system to its last consequences, benefiting of disproportionate and undeserved oil rent to smooth things over and thus pretending that the private sector was not needed. Now there are voices inside chavismo that want to re discuss the model, and there are even admissions that only the private sector can take us out of the mess, After all, the forced labor decree is simply a way for the regime to force technicians from the private sector to work for derelict state companies. This is an admission, if any, that the public sector is incompetent, at least on that front to be charitable.
Sunday, 31 July 2016
Wednesday, 20 July 2016
Recalling the recall
The news today, allegedly good, is that the CNE would have recognized that the 1% per state required signatures to call for a collection of a 20% required signatures to call for a recall election has been reached. Already from this sentence you know that the Recall Election this year is far from a sure thing. In fact, no matter what this tweet of Ocariz says, the date of a recall election is not going to be set before the January 2017 deadline after which the recall election is deemed useless (1).
Let's take the just proportion of this necessary but useless achievement (yes, Venezuela the country of oximoronism). As I wrote a couple of days ago a recall election is not the favored outcome for the regime official party, PSUV. Since all polls indicate that Maduro is going to be trounced badly, no matter how much discreet cheating the regime may do, it remains that the outcome is a sure thing. In fact the worse case scenario is gaining strength, that more people sign up to recall Maduro than those who voted for him three years ago. The humiliation of such an event in a fascist country which has been victim of the Tascon list since 2004 would mark not only the debacle of the regime but its political extinction as well.
So the question is why the regime seems (it is all a show of course) to accept a possible recall election. To begin with it may just be a way to add pressure on Maduro to resign and take all the blame for the current disaster, even preserving Chavez "legacy". A presidential election would follow with less disastrous results for the regime than recalling Maduro. There is also the option of gaining time while the regime decides which type of vote is best to avoid a debacle, and that decision having been made then forget about the Recall Election.
One thing is clear is that the regime does not want an election, any election. This is now officially a militaro-fascist regime and elections are not in the menu unless of a plebiscitary nature with open public vote. Or something of the sort. If you want to understand that with examples take the high court, TSJ, decision of today to exempt itself from any charge of wrongdoing. The last batch of TSJ justices was named outside of the rules for such nominations, amen of the disrespect of the requirements needed to be named high court judge. This is public knowledge and as such the National Assembly has decided to revoke the nomination process because it is fraudulent.
What has the TSJ done? In normal countries a court would have called for an independent commission to prove the National Assembly wrong and then proceed with the appropriate law suits. Here, the criminal party exculpates itself and that is that. Do you expect this lawless TSJ to rule in favor of holding elections of any type?
That was the real news today, that the TSJ is here to stay and that it will keep cancelling 99% of decisions taken by the National Assembly. And elections for good extra measure.
Now, I am not saying that a recall election will not take place, even though we have also reports of little activity in the Electoral Board CNE which should be now already in overdrive to prepare for the governor elections due in December. But since there is a risk of 100% state houses going oppo, you can understand that the CNE is in no rush. No, there will be a vote if the regime considers it necessary to promote an orderly transition. Such vote can be a recall election, a referendum, a governor election, or whatever they can come up that will hide the most the regime debacle. That vote, or no vote, will be decided solely by the army, whether Cuba likes it or not, whether civilian chavismo likes it or not... though there is always the possibility of a negotiated settlement with the opposition that may or not require an election. But I am not holding my breath on that one.
Unfortunately the way I see it, the stubbornness of the regime makes the opposition headed towards calling for a constituent assembly which cannot be denied in the constitution. That is, refusing to hold a referendum on whether to hold a constitutional assembly election would be akin of a total break of constitutional procedure which would force the outside world to take notice (something that the outside world has started doing, like waving Venezuela's turn at chairing MERCOSUR).
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1) If a Recall Election is held in the two last years of a presidential term then THE APPOINTED vice president serves the rest of the term even though the creep may not run even for a coop seat anywhere in his life time. That is chavista democracy for you.
Aquí está el acta que confirma los resultados de la validación por el CNE. Esperamos fecha para el 20% pic.twitter.com/dBB4rL0JM4— Carlos Ocariz (@CarlosOcariz) 20 de julio de 2016
Let's take the just proportion of this necessary but useless achievement (yes, Venezuela the country of oximoronism). As I wrote a couple of days ago a recall election is not the favored outcome for the regime official party, PSUV. Since all polls indicate that Maduro is going to be trounced badly, no matter how much discreet cheating the regime may do, it remains that the outcome is a sure thing. In fact the worse case scenario is gaining strength, that more people sign up to recall Maduro than those who voted for him three years ago. The humiliation of such an event in a fascist country which has been victim of the Tascon list since 2004 would mark not only the debacle of the regime but its political extinction as well.
So the question is why the regime seems (it is all a show of course) to accept a possible recall election. To begin with it may just be a way to add pressure on Maduro to resign and take all the blame for the current disaster, even preserving Chavez "legacy". A presidential election would follow with less disastrous results for the regime than recalling Maduro. There is also the option of gaining time while the regime decides which type of vote is best to avoid a debacle, and that decision having been made then forget about the Recall Election.
One thing is clear is that the regime does not want an election, any election. This is now officially a militaro-fascist regime and elections are not in the menu unless of a plebiscitary nature with open public vote. Or something of the sort. If you want to understand that with examples take the high court, TSJ, decision of today to exempt itself from any charge of wrongdoing. The last batch of TSJ justices was named outside of the rules for such nominations, amen of the disrespect of the requirements needed to be named high court judge. This is public knowledge and as such the National Assembly has decided to revoke the nomination process because it is fraudulent.
What has the TSJ done? In normal countries a court would have called for an independent commission to prove the National Assembly wrong and then proceed with the appropriate law suits. Here, the criminal party exculpates itself and that is that. Do you expect this lawless TSJ to rule in favor of holding elections of any type?
That was the real news today, that the TSJ is here to stay and that it will keep cancelling 99% of decisions taken by the National Assembly. And elections for good extra measure.
Now, I am not saying that a recall election will not take place, even though we have also reports of little activity in the Electoral Board CNE which should be now already in overdrive to prepare for the governor elections due in December. But since there is a risk of 100% state houses going oppo, you can understand that the CNE is in no rush. No, there will be a vote if the regime considers it necessary to promote an orderly transition. Such vote can be a recall election, a referendum, a governor election, or whatever they can come up that will hide the most the regime debacle. That vote, or no vote, will be decided solely by the army, whether Cuba likes it or not, whether civilian chavismo likes it or not... though there is always the possibility of a negotiated settlement with the opposition that may or not require an election. But I am not holding my breath on that one.
Unfortunately the way I see it, the stubbornness of the regime makes the opposition headed towards calling for a constituent assembly which cannot be denied in the constitution. That is, refusing to hold a referendum on whether to hold a constitutional assembly election would be akin of a total break of constitutional procedure which would force the outside world to take notice (something that the outside world has started doing, like waving Venezuela's turn at chairing MERCOSUR).
----------------------------------------------------------
1) If a Recall Election is held in the two last years of a presidential term then THE APPOINTED vice president serves the rest of the term even though the creep may not run even for a coop seat anywhere in his life time. That is chavista democracy for you.
Sunday, 17 July 2016
Ways out of the mess, doubtful all, military for sure, recall it ain't
Last I wrote on ways to get out of this mess was June 11 (and April). Things have changed somewhat since these entries. Time to include recent developments.
What has not changed
It is still a matter of a group of narko-mobsters holding Miraflores Palace who cannot surrender power because they will go to jail. All problems originate from this.
Period 1.
This has been a military regime for quite a while. Naming Vladimir Padrino as the head honcho co-president does not change things much, except on some stylistic matters, such as more naked repression, always a possibility.
Period 2.
What has changed
Even people that were reluctant to use the D word (D not for Democracy) are coming around and calling a spade, a spade. That for me it was officially a dictatorship since January 2013 is no consolation. Ever the Cassandra, sometimes even the laughing stock, but oh, so right.
The economic crisis is nearing tragedy proportions and the regime is simply unable comprehend, instead resorting to scrapping the very last bolivar that can be found. The cruelty shown by the regime is reaching genocidal proportions. This is for all to see, even at home in spite of heavy censorship of the air waves and even threats at social media.
And to drive in the point of the crisis there are reports of belt tightening in Cuba which proves that the colony is having problems supporting its master. From there to think that Cuba may want to get rid of Venezuela it is not that long of a stretch.
As a consequence there is some intensifying international movement. The OAS is starting the proceedings to apply its democratic charter on Venezuela. Mercosur does not want to give the rotating presidency to Venezuela. But the US seems to have misplaced views at forcing a "dialogue" upon Venezuelan opposition least a final collapse of Venezuela sends waves of Cuban, and Haitians, and Caribbeans, and Venezuelans to the Florida shores.
Facing all of this, the military had to take a more visible direct role. Why? They are already responsible for the mess, nobody believes for a second that their corrupt structure is going to change anything. Two possible reasons.
First, and foremost in my opinion, there is not enough to loot and the higher ranks have decided to limit the robbery intake and restrain it some, to some. That extremely corrupt Marcos Torres is not sacked and remain in office would point that way. Let me remind you that he was the one managing the billions at HSBC Spain and is yet to account on how that money was used. He has been censored by the National Assembly and yet Maduro keeps him even though his signature on contracts has no more validity as far as the National Assembly is concerned. His direction of the economy in the last couple of years, well, speaks for itself.
Second, the army does not want to do Maduro's dirty job. That is, they do not want Maduro to call on them for rough repression and be the ones to go to trial some day for it. That co-presidency sounds to me like a "if I go down you go down with me" thing
What are the current exits
This being considered we can review quickly which could be the possible exits to Venezuela's political crisis today. Which may be invalid by tomorrow but that is another story.
The best one for the chavista party PSUV to avoid a final collapse is to have Maduro resign. This can be done in such a way that Maduro remains in office for, say, three more months before a new election to complete the 6 years term of office, even if the opposition (if not divided) is certain to win. That way chavismo can put all the blame on Maduro and pull out a relatively untainted figure that would ensure the PSUV to bounce back to the 20ies it currently hold in polls to a more palatable 30ies, or even 40ies.
Odds? since it makes sense the odds are not good. Also, it requires several things. That Cuba approves. That Maduro accepts to abide. That the opposition gets into the deal and offers a more "moderate" candidate than Capriles or Lopez or Machado. That X Y and Z.
The coup is a resuscitated option, the more so when one sees the probably faked coup of Erdogan in Turkey that is allowing him to get a MASSIVE purge of public officials in there. After all, there is a precedent in Venezuela. Chavez himself admitted to have provoked the 2002 crisis and used his survival to purge all what he could in the Venezuelan state.
There are two modalities for the coup depending on what the "provocation" may be. One is a simple dissolution of the National Assembly, akin to the Peruvian "Fujimorazo". The other, a variation, is a more extreme state of emergency removing all powers of the state, Both options are "moderated" through a promise of elections within a year.
Odds? since it is reckless, since they are more into the current style of Maduro, Cabello and all the others that are going to jail sooner or later, the odds are not bad. Since Venezuela is already a bankrupt pariah state, who cares?!
There is the possibility of general collapse. It is clear that the army, no matter what Padrino tries to do, is less and less in control. The latest shopping exodus to Colombia is an evidence. Just as when the Iron Curtain borders control collapsed announcing the end of Communist Eastern Europe.
What would happen if general looting started, if people started marching from chavista former strongholds like Catia to Miraflores Palace? All is possible, from civil war, to military bloody coup to a swift regime collapse like Argentina's De La Rua escape from Casa Rosada in 2001. Many variations are possible but all drive from a provisional regime to an opposition take over that would have to face the highly unpopular economic measures necessary to end and correct the chavista narko-corruption mess. Let´s not speculate on that for the time being.
Odds? Probably the highest at this point as it seems that the "civilian" and narko wings of chavismo would chose this way out, either to exculpate its mistakes or to purge once and for all its opposition. But it is doubtful that the military would accept that last one as they will be finding themselves at The Hague benches. We are in the XXI century after all. Hence probably the recent take over by Padrino, which is far from ruling out that option as the guy has started by counting chickens in combat vest.
--------------------------
PD: something probably thought that I did not discuss the Recall Election scenario. There will be no Recall Election. Nor any election for that matter (can you imagine chavismo losing 90% of State House in December!!!!).
A recall election is the worse case scenario for chavismo. If Maduro is recalled, say, with a 20 points spread, that would reverberate badly downstream and the following presidential election could go to a spread half as larger! That is, the end of PSUV. Thus why I think that if the regime were to be forced into a Recall Election before 2017 it would have Maduro resign first, a less damaging option for the PSUV.
What has not changed
It is still a matter of a group of narko-mobsters holding Miraflores Palace who cannot surrender power because they will go to jail. All problems originate from this.
Period 1.
This has been a military regime for quite a while. Naming Vladimir Padrino as the head honcho co-president does not change things much, except on some stylistic matters, such as more naked repression, always a possibility.
Period 2.
What has changed
Even people that were reluctant to use the D word (D not for Democracy) are coming around and calling a spade, a spade. That for me it was officially a dictatorship since January 2013 is no consolation. Ever the Cassandra, sometimes even the laughing stock, but oh, so right.
The economic crisis is nearing tragedy proportions and the regime is simply unable comprehend, instead resorting to scrapping the very last bolivar that can be found. The cruelty shown by the regime is reaching genocidal proportions. This is for all to see, even at home in spite of heavy censorship of the air waves and even threats at social media.
And to drive in the point of the crisis there are reports of belt tightening in Cuba which proves that the colony is having problems supporting its master. From there to think that Cuba may want to get rid of Venezuela it is not that long of a stretch.
As a consequence there is some intensifying international movement. The OAS is starting the proceedings to apply its democratic charter on Venezuela. Mercosur does not want to give the rotating presidency to Venezuela. But the US seems to have misplaced views at forcing a "dialogue" upon Venezuelan opposition least a final collapse of Venezuela sends waves of Cuban, and Haitians, and Caribbeans, and Venezuelans to the Florida shores.
Facing all of this, the military had to take a more visible direct role. Why? They are already responsible for the mess, nobody believes for a second that their corrupt structure is going to change anything. Two possible reasons.
First, and foremost in my opinion, there is not enough to loot and the higher ranks have decided to limit the robbery intake and restrain it some, to some. That extremely corrupt Marcos Torres is not sacked and remain in office would point that way. Let me remind you that he was the one managing the billions at HSBC Spain and is yet to account on how that money was used. He has been censored by the National Assembly and yet Maduro keeps him even though his signature on contracts has no more validity as far as the National Assembly is concerned. His direction of the economy in the last couple of years, well, speaks for itself.
Second, the army does not want to do Maduro's dirty job. That is, they do not want Maduro to call on them for rough repression and be the ones to go to trial some day for it. That co-presidency sounds to me like a "if I go down you go down with me" thing
What are the current exits
This being considered we can review quickly which could be the possible exits to Venezuela's political crisis today. Which may be invalid by tomorrow but that is another story.
The best one for the chavista party PSUV to avoid a final collapse is to have Maduro resign. This can be done in such a way that Maduro remains in office for, say, three more months before a new election to complete the 6 years term of office, even if the opposition (if not divided) is certain to win. That way chavismo can put all the blame on Maduro and pull out a relatively untainted figure that would ensure the PSUV to bounce back to the 20ies it currently hold in polls to a more palatable 30ies, or even 40ies.
Odds? since it makes sense the odds are not good. Also, it requires several things. That Cuba approves. That Maduro accepts to abide. That the opposition gets into the deal and offers a more "moderate" candidate than Capriles or Lopez or Machado. That X Y and Z.
The coup is a resuscitated option, the more so when one sees the probably faked coup of Erdogan in Turkey that is allowing him to get a MASSIVE purge of public officials in there. After all, there is a precedent in Venezuela. Chavez himself admitted to have provoked the 2002 crisis and used his survival to purge all what he could in the Venezuelan state.
There are two modalities for the coup depending on what the "provocation" may be. One is a simple dissolution of the National Assembly, akin to the Peruvian "Fujimorazo". The other, a variation, is a more extreme state of emergency removing all powers of the state, Both options are "moderated" through a promise of elections within a year.
Odds? since it is reckless, since they are more into the current style of Maduro, Cabello and all the others that are going to jail sooner or later, the odds are not bad. Since Venezuela is already a bankrupt pariah state, who cares?!
There is the possibility of general collapse. It is clear that the army, no matter what Padrino tries to do, is less and less in control. The latest shopping exodus to Colombia is an evidence. Just as when the Iron Curtain borders control collapsed announcing the end of Communist Eastern Europe.
La foto más impactante de los venezolanos cruzando la frontera con Colombia https://t.co/qANXRl7mah pic.twitter.com/PQUTD56pQc— El Nacional (@ElNacionalWeb) 17 de julio de 2016
What would happen if general looting started, if people started marching from chavista former strongholds like Catia to Miraflores Palace? All is possible, from civil war, to military bloody coup to a swift regime collapse like Argentina's De La Rua escape from Casa Rosada in 2001. Many variations are possible but all drive from a provisional regime to an opposition take over that would have to face the highly unpopular economic measures necessary to end and correct the chavista narko-corruption mess. Let´s not speculate on that for the time being.
Odds? Probably the highest at this point as it seems that the "civilian" and narko wings of chavismo would chose this way out, either to exculpate its mistakes or to purge once and for all its opposition. But it is doubtful that the military would accept that last one as they will be finding themselves at The Hague benches. We are in the XXI century after all. Hence probably the recent take over by Padrino, which is far from ruling out that option as the guy has started by counting chickens in combat vest.
So that is that.@vladimirpadrino visita Empresa de Alimentos El Tunal, en Lara, como parte de la Gran Mision Abastecimiento Soberano pic.twitter.com/Hec5CVYXQ2— Vladimir Padrino L. (@vladimirpadrino) 16 de julio de 2016
--------------------------
PD: something probably thought that I did not discuss the Recall Election scenario. There will be no Recall Election. Nor any election for that matter (can you imagine chavismo losing 90% of State House in December!!!!).
A recall election is the worse case scenario for chavismo. If Maduro is recalled, say, with a 20 points spread, that would reverberate badly downstream and the following presidential election could go to a spread half as larger! That is, the end of PSUV. Thus why I think that if the regime were to be forced into a Recall Election before 2017 it would have Maduro resign first, a less damaging option for the PSUV.
Wednesday, 6 July 2016
Diary of Venezuelan businesses demise
It is not the aim of this entry to detail the catastrophe that has befallen Venezuela. I will only write some of the key events that have happened to my business, making it nearly bankrupt not through my own possible incompetency but through regulations that have strangled the life of all private business that are not associated with the corruption of the regime.
Chavez started with a new constitution that had a "free property, but..." feel. At first things kept as they were in 1998 which is to say not very well. But we could work, we could import raw materials to work, an important element since already in 1998 Venezuela was a net importer of raw materials and semi processed goods. Still, my business, agribusiness in nature, was able to do some small exports and was poised to expand these significantly to Colombia. Other plans included a project to export to Europe a choice crop from our family farm once our volume justified the export needs and costs, a farm for which we had obtained organic certification.
Then, slowly but surely the regime started to establish a series of controls that wrecked the economy. I am not going to go through them chronologically, just giving a main list.
In fairness not all chavismo intents were nefarious. For example the LOCTI law was voted to promote investments in technology by the private sector. That law created a tax that you could be exempt of if you used the tax amount in an investment project. That is, if your project was approved you could purchase, say, research equipment and then import it tax free to Venezuela. You could also include in the deal expenses to develop the system in your business. It was not a tax break per se, but autonomy in using some of the tax money for a productive project. An incentive to invest, in other words.
We did that, we purchased an analytical tool worth at the time 50,000 dollars, including miscellaneous expenses. Plenty of people did as we did, small projects like us or large laboratories set ups. But we should have known that such goodwill and constructive legislation would not last. First came the state inspections to verify whether we had actually done what our project stated. One day I saw a contingent of a dozen people arrive unannounced to inspect our purchase. We wasted two days explaining everything. We passed with flying colors, of course, but we already noticed the growing distrust of the regime as to anything private. And the increasing bureaucratic nature of the regime to send a dozen people where a single inspector would have sufficed, for one day at most.
You could be forgiven to believe that our track record would have allowed us to invest in yet a new piece of advanced technology, but this was never to pass. The regime saw LOCTI as a way to distract tax revenue for the state, not for the technological advances it brought to the country, in addition of creating new high paying jobs. The LOCTI was modified. Now only if the government approves the project would you get from the government the money for it, allegedly out of the tax pool collected. That is, first you should keep paying the LOCTI tax required without any guarantee that someday you could recover part of it in a suitable project. Of the diverse companies I do business with, not a single one has had a project approved in the last 7 years (never mind my own group). LOCTI is now just an additional tax burden. Note that one of the LOCTI goals was to finance public research. This one today is nearly zero. Nobody knows where LOCTI money goes but we all must pay.
Another shock came when currency control was installed in 2003. From then on you had to seek an import permit from the government to obtain the foreign currency you needed for such an import. This generated an extraordinary graft industry, a self explanatory consequence that I will not detail. What it meant to us was the creation of three job positions of people devoted only to tracking all the required paperwork. That is, these three people do not take any part on the purchase decision process, they only do the paperwork. Their only "productive" contribution, occasionally, is to supervise the arrival at harbors of some of our imports.
If this above is a direct cost, and if corruption is an indirect one, there is major indirect cost associated with such a control system: the impossibility to draw a coherent developing plan. All your projects are at the mercy of a bureaucratic erratic delay and when you deal with perishables you need to be conservative and slow down you growth since the failure to receive in a timely fashion corn for your feed or fertilizer for your crop can ruin you. In other words, you cannot start producing until you are certain that you will get it all at hand, a process that can add months to your production delays. Never mind the costs from holding stocks.
Speaking of erratic supplies. These were made worse by the policies of expropriation of good land and good farms. As rice farms were intervened, as supplies for cash crops was interrupted through expropriations of agricultural giants like Agroisleña, it became increasingly difficult to obtain a regular supply for your crops and animal feed, hence the continuous drop in production in these fields, to today's shortages. And never mind that the currency exchange control fostered corruption to the point of favoring for years overpriced imports that destroyed the local production which is today missing.
This already would be enough, but it is not all. Another apparent good intention of the regime was to improve workers safety. Unfortunately this one through the LOPCYMAT law did not even have a few halcyon days like LOCTI did. This new law was conceived from the start not only as an improvement on mandatory safety measures for workers, a commendable goal by any standard, but also as a way to infiltrate politically the work place. It is a requirement that elections are held among workers to set "safety delegates" personnel who benefits of union privileges, namely impossibility of being fired during their tenure.
That is still something we can work around. What is not is that these elected representatives must attend, at business expense, monthly day long seminars which are basically an exercice in indoctrination against the evils of capitalism that is intent on killing workers or something to that effect. These seances come with red Che posters and assorted insults if the safety delegates do not show enough enthusiasm for their mission and if they do not report enough irregularities from their employers. Never mind that to face the sometimes ridiculous requirements of the law we have had to hire special consultants to organize the safety books, organize the workers elections for safety delegate and what not. Needless to say that after an early sense of empowerment those safety delegates became tired of the whole charade and now business must beg for workers willing to run for these elections and in our case even offer bonuses for those willing to put up with the chores imposed on safety delegates.
Other bureaucratic workers right were reinforced. Although not properly a bureaucracy, the near impossibility to fire workers also generates many costs. Besides the need to negotiate in advance settlements with nasty workers so that they "willingly resign their job" there is a whole addendum of paperwork required that we did not use to have. For example we now have several lawyers on call to deal with those situations. This in addition of increased HR departments work as we now have to provide, for example, "entertainment" for workers and their families. This gives you an idea of the paternalistic functions which are foisted on business.
Another ruinous aspect is the price control system. Fortunately the products I work with are not subjected to price control. Yet in theory we cannot have more than 30% pricing over our production costs. So this adds increased pressure on the costs department, more work, so that we have a finely tuned cost system and we can keep our benefits at no more than 28% and avoid those ruinous inspections that can block for days all the workings of a company. Yes, when these inspections come by law the inspectors can demand any paper they want and you must provide for them no matter what you are doing. That is, for the duration of the inspection you can only attend to the very basic needs of your company as these inspectors literally suck the life out of you. Let me remind you that a 28% gain with an inflation in the three digits means that you actually lose capital over time. Never mind that you need to adjust prices at least once a month, hence more calculations. But I digress.
There are more examples I can give but to finish this let's revisit the organic crops we were planning on developing to get enough volume to justify exports. Sometime in 2002 or 2003 if memory serves me well Chavez decided that Venezuela should not export food, that it was a crime against the Venezuelan people to sell its food overseas. I am not going to insult the reader intelligence discussing the ignorance of Chavez as failing to understand that it is OK for Venezuela to export tropical fruits in exchange of apples and wine.
The fact of the matter is that not only we had to stop the small exports we were already making, and lose all the marketing made before, losing those markets, but even the organic farm project was stopped. We did not renew our organic certification. We stopped planting new land. We basically maintained what we had, at a loss, in the hope that someday exports be authorized again. To which I must add that the devastating insecurity that now hovers all of the farm land of Venezuela has made it impossible for us to visit the farm for the last 4 years. We have to rely on intermediaries and hope for the best. Owners of land simply cannot reside on their lands anymore as they will, within days, be attacked by armed gangs bent on ransom. If you persist then you must pay for armored vehicles and at least a couple of body guards. More costs that not every business can afford.
There are also two other factors straight from bureaucratic hell that counters any attempt at improving production. Some stuff can only be bought through the government now, for example grain for feed. Needless to point out how delays increased and corruption costs became prohibitive: in some cases businesses have had to pay 6 times over the official price on some of the grains needed, money paid through false factures for false services rendered. Another beauty is that nothing that is used to manufacture food for human consumption can circulate on Venezuela roads without government permit. That is, if I want to deliver a truck of, say, morning cereal, I need to declare it on line, await permission and declare it again once it has been delivered before my customer can use it. Imagine the delays in a country where Internet is more and more deficient. The information must even contain the ID card number of the driver! Any missing detail and you risk confiscation of your goods on the road at one of the Nazional Guard check points. You can figure out the added costs, including corruption of guards that check you out on the roads.
I trust that after this text you will understand better how come there is no food on the shelves in Venezuela. If I were working in the pharmacy sector, or textiles, or whatever I could probably write a similar tale of bureaucracy run amok. There is no mystery as to why Venezuela is not producing anymore. It is not due to the fall of oil prices. It is due to the incompetence, neglect, and stubborn ideology that is the core of the Chavez project. Let's not forget that in addition to bureaucracy there are many problems with production: devastated infrastructures, from roads to electrical plants; outdated production methods that make us non competitive since we have been frozen for 10 years now; difficult living conditions which make workers less productive (like when they rush out of office during working hours to stand in line for a pound of flour). Etc.
All business in Venezuela still operating and involved in the production of hard goods are nearly bankrupt, holding for dear life. There is no security, not to your property, not to your persona. You cannot plan your production in a rational way. The crisis aggravation has made it nearly impossible to get foreign currency from the regime. Our production system is falling behind the rest of the world in quality and competitiveness. In short, we work harder than ever for less production than ever, while struggling to stay alive as we see all our gains basically end up in the pocket of corrupt officials while el pueblo stands in line and starves.
There is only one question to be answered in future history books: how much of this destruction was willfully planned from the start. It is frightening to think that a regime deliberately planned for the impoverishment of its fellow citizens. But there is no other explanation that holds, in particular since Maduro replaced Chavez in 2013. Then the price of oil went down and the regime found no other palatable solution for their needs but to increase control and keep the level of corruption money, discovering that blackmailing el pueblo was easy if that one was hungry.
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What we need, fast. |
Sunday, 3 July 2016
Revocatorio, Brexit and other assauts on democracy
This past week we got dramatic examples on the limits of democracy. Let's dispatch Brexit fast as the "revocatorio" will require some details.
Some claim that Brexit was an exercise in Democracy and sovereignty. But this week has shown that it was anything but. From the quick collapse of Boris Johnson to the obvious intentions of a few in the Tories to remove Cameron at all costs, without forgetting Corbyn's naked intent at turning Labour into a British version of PODEMOS (or is that English now?) we can see that the voters interests were, well, accessory. Now Scotland is veering fast towards a new independence vote while the idiots that did not bother voting are now marching in the streets of London. And never mind the flow of racism that opened after Brexit, showing clearly what the vote was for some.
The saddest part of all this is that not only the UK voter took unnecessary risks to exert their "esprit de clocher" (podunkness?), but they are dragging Europe down with them, breaking up a peace zone that was so difficult to build up. Now that I think of it Europe should also have been voting as to whether keep Britain in. Things would be clearer today, for better or for worse.
The revocatorio in Venezuela is quite another expression of the limits of democracy, but with cruel fascist political garbage to boot. The objective here is that 20% of the electoral body can sign up, under certain conditions, to ask for a recall election of any given elected official. This may work out in countries like the US where people are used to register with a political group and where the given political group can never take for granted the amount of people that claim intent to vote for them.
But in savages country like Venezuela, a recall election is a sure way to destroy the secrecy of vote. It happened in a really bad way in 2004 with the Tascon list (yours truly was denied passport for a while for having signed up to recall Chavez, to give you an example). But now, without Chavez and with a group of renegades on top with too many crimes to confess, a recall election is out of question and any, ANY pseudo-legal trick will be tried to avoid such an election.
The latest one is that after an arduous process to collect 2% of preliminary signatures (not because of the lack of will of the voters to sign up but because of all the political pressure exerted by the regime to block the signature drive) rumors are that the regime will toss away these signatures anyway. The argument? A handful of signatures were ill collected and thus none of the million + is valid. Never mind that the electoral bord, CNE, supposedly did its job by filtering and rejecting already 600,000 signature including some of those from opposition leaders that signed in public, in front of news cameras.
What we see here is the profound anti democratic reasoning of chavismo. Since this one has had no convincing argument, for years now, their only debating strategy is to negate all because of one. That is, you can advance 100 solid arguments, if one is slightly shaky this will be used by chavismo as a proof that the other 99 are worthless. Self exempting themselves along from sustaining their own arguments, by the way. Note, such systemic reasoning is not exclusive of chavismo as we could see in some of the comments in my previous entry, quite similar to those of chavismo in the days where they infested all opposition blogs.
Thus in addition of the Venezuelan high court preparing itself to destroy the will of the people, we already see the regime creating a new version of the Tascon list with those poor sols that signed over a month ago. And the victims are the 8% that signed, even though the CNE "rejected" a good third of them. For apartheid, they are suddenly all valid.
As a I wrote, thus went away the secrecy of vote in Venezuela. The remarkable thing is that in spite of this, in spite of incredible regime pressure, 8% managed to sign. And this is duly noted when even Obama getting out of his reserve, forgetting for a while his tractations with Cuba, clearly stated that the recall election should go in Venezuela (timely this year, according to may others as a 2017 a recall election would be useless according of the shitty constitution of Chavez).
Churchill said that democracy was a messy system of rule, but that no better system had yet been invented. And probably will not. So we are left to try to improve the workings of democracy. Direct people rule is showing its limits fast. Even Athens, the copy right holder, succumbed to its excesses. With visceral reactions on twitter, facebook and other such easy access media people vote more and more through their gut feeling, electing the like of Chavez, or finding easier to bring down worthwhile instituions rather than reform them because of too many pakis.
For all what is worth, nothing pretty much, my provisional solution is to reinforce representative democracy. Shorter terms and strict term limits on executive positions should be installed to avoid the need for recall elections. Federalism should be increased. As for referenda, mandatory vote should be required, or at least that results are only binding if 50% of registered voters approves the question.
One can always dream, no?
Some claim that Brexit was an exercise in Democracy and sovereignty. But this week has shown that it was anything but. From the quick collapse of Boris Johnson to the obvious intentions of a few in the Tories to remove Cameron at all costs, without forgetting Corbyn's naked intent at turning Labour into a British version of PODEMOS (or is that English now?) we can see that the voters interests were, well, accessory. Now Scotland is veering fast towards a new independence vote while the idiots that did not bother voting are now marching in the streets of London. And never mind the flow of racism that opened after Brexit, showing clearly what the vote was for some.
The saddest part of all this is that not only the UK voter took unnecessary risks to exert their "esprit de clocher" (podunkness?), but they are dragging Europe down with them, breaking up a peace zone that was so difficult to build up. Now that I think of it Europe should also have been voting as to whether keep Britain in. Things would be clearer today, for better or for worse.
The revocatorio in Venezuela is quite another expression of the limits of democracy, but with cruel fascist political garbage to boot. The objective here is that 20% of the electoral body can sign up, under certain conditions, to ask for a recall election of any given elected official. This may work out in countries like the US where people are used to register with a political group and where the given political group can never take for granted the amount of people that claim intent to vote for them.
But in savages country like Venezuela, a recall election is a sure way to destroy the secrecy of vote. It happened in a really bad way in 2004 with the Tascon list (yours truly was denied passport for a while for having signed up to recall Chavez, to give you an example). But now, without Chavez and with a group of renegades on top with too many crimes to confess, a recall election is out of question and any, ANY pseudo-legal trick will be tried to avoid such an election.
The latest one is that after an arduous process to collect 2% of preliminary signatures (not because of the lack of will of the voters to sign up but because of all the political pressure exerted by the regime to block the signature drive) rumors are that the regime will toss away these signatures anyway. The argument? A handful of signatures were ill collected and thus none of the million + is valid. Never mind that the electoral bord, CNE, supposedly did its job by filtering and rejecting already 600,000 signature including some of those from opposition leaders that signed in public, in front of news cameras.
What we see here is the profound anti democratic reasoning of chavismo. Since this one has had no convincing argument, for years now, their only debating strategy is to negate all because of one. That is, you can advance 100 solid arguments, if one is slightly shaky this will be used by chavismo as a proof that the other 99 are worthless. Self exempting themselves along from sustaining their own arguments, by the way. Note, such systemic reasoning is not exclusive of chavismo as we could see in some of the comments in my previous entry, quite similar to those of chavismo in the days where they infested all opposition blogs.
Thus in addition of the Venezuelan high court preparing itself to destroy the will of the people, we already see the regime creating a new version of the Tascon list with those poor sols that signed over a month ago. And the victims are the 8% that signed, even though the CNE "rejected" a good third of them. For apartheid, they are suddenly all valid.
As a I wrote, thus went away the secrecy of vote in Venezuela. The remarkable thing is that in spite of this, in spite of incredible regime pressure, 8% managed to sign. And this is duly noted when even Obama getting out of his reserve, forgetting for a while his tractations with Cuba, clearly stated that the recall election should go in Venezuela (timely this year, according to may others as a 2017 a recall election would be useless according of the shitty constitution of Chavez).
Churchill said that democracy was a messy system of rule, but that no better system had yet been invented. And probably will not. So we are left to try to improve the workings of democracy. Direct people rule is showing its limits fast. Even Athens, the copy right holder, succumbed to its excesses. With visceral reactions on twitter, facebook and other such easy access media people vote more and more through their gut feeling, electing the like of Chavez, or finding easier to bring down worthwhile instituions rather than reform them because of too many pakis.
For all what is worth, nothing pretty much, my provisional solution is to reinforce representative democracy. Shorter terms and strict term limits on executive positions should be installed to avoid the need for recall elections. Federalism should be increased. As for referenda, mandatory vote should be required, or at least that results are only binding if 50% of registered voters approves the question.
One can always dream, no?
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