Ask A Venezuelan

 Our next chapter of  Venezuela : Down The Rabbit Hole, “Just The Basics” is just around the corner but first…why today’s line “Ask A Venezuelan”? It’s not about a particular breaking story involving Venezuela or Venezuelans but it is the underlying purpose for Tales From Teodoro. We can learn from their mistakes if we choose to, if we’re paying attention…something people are generally not very good at. If they were good at paying attention socialism would have died a long time ago. It has a 100% track record of failure but it’s still around, people still want to believe it works. Why? Well, it just sounds so good.

 Which brings us to “Ask A Venezuelan”. No, it’s not because it’s another example of socialism failure, although it is. It’s something more specific. Twitchy posted some responses to a question on CNN’s website, “Should the government control food and gas prices?” Forget that government price controls don’t work, that they create more problems than they solve. First among those problems is shortages. When a government sets a price it has noting to do (at least rarely) with production costs or business models. It’s just a number a politician, or group of politicians, decided was the right number…a popular number. When the producers can’t make a profit at that number they stop producing hence shortages occur.It happens every time. After a period of self-inflicted pain the public decides the shortages are worse than the prices they were paying and they clamor for removal of the price controls.

 My favorite example in Venezuela was egg prices. Through other price controls hundreds of products had already disappeared but there were no price controls on eggs…yet. They weren’t cheap but at least they were available and to a starving population provided much needed protein. The government wanted to show they were doing something about food prices so it was eggs that got hit next. When the government set the price at what they thought would be a fair (and popular) price it was no longer profitable to produce eggs and they disappeared almost overnight. They didn’t return until price controls were lifted.

 So, the best response to CNN’s question, “Should the government control the price of food and gas?”…. Ask A Venezuelan!

 And now to a little Covid-19 news (or is it delta…or omicron?).Telesur (government media) reports Venezuela has received another 3.1 million doses of vaccine from China, which it will use for boosters. Good news huh? Well, only if you believe that they’re not needed for primary vaccinations which means you would have to believe the government vaccination numbers. In a related article Telesur tells us the government says 95% of adults in Venezuela are vaccinated. Well, about a month ago when the government said the vaccination rate was 85% the WHO (World Health Organization) and the PAHO (Pan American Health Organization) put that number at just over 40%. Who do you believe?

 Then we have this from IBT, “Venezuela may be out of hyperinflation but no one feels it.” The reason, Venezuela still has, by far, the highest inflation in the world.

 VOA had a piece on the most “digital authoritarian” countries in Latin America. With China’s support and technology Venezuela and Cuba have the most digitally controlled populations. China’s ZTE employees help “manage” Venezuela’s Carnet de la Patria (homeland card), a key method of control for the Chavistas.

 Now, Down The Rabbit Hole we go….

 Chapter 4/ Just The Basics…

 Once you get past ensuring the safety and security of the population as well as availability of food, (these will be discussed later) there is nothing more basic the government must provide it’s people than water and, in the modern world, power. You know, the things we take for granted. Turn on the tap and water comes out. Flip the switch and the lights come on. You would assume that a country with an abundance of natural resources and especially one more or less swimming in oil would have no problem providing these essentials. Of course, you would be wrong. Let’s start with power generation and distribution.

 When I first visited Venezuela back in the 90s there were occasional power outages, as is common in third world or emerging market countries. They would last for an hour or maybe a few hours and everyone adjusted to it.It was simply an annoyance. To a foreigner like myself it was actually kind of quaint. You know, “Well, there it goes again.” I was in a tourist area so the service was better than in some locales and the capital of Caracas also had better uptime than rural areas.

 When Chavez came to power one of the things he vowed to fix was the unreliable power grid, which was primarily hydroelectric. With the abundance of fossil fuels and plenty of potential for thermal power generation, not to mention lots of rivers to expand the hydroelectric system, it simply had to be made a priority.

 In 2007 Chavez nationalized the various independent electric companies and combined them into one entity,operated and regulated by the government. To great fanfare many projects were announced, primarily thermoelectric and hydroelectric. Natural gas was largely ignored, used for generating power for oil wells or simply burned off. It’s not hard to imagine the frustration of living near Maracaibo, the country’s second largest city and the heart of the oil industry, and seeing the flames of natural gas burning off while you sit in darkness. “Hey, couldn’t we just use some of that stuff?” With the world’s largest proven oil reserves there is also a vast quantity of natural gas. It’s even more frustrating when you think that Maracaibo was the first city in Venezuela with electric power.

 The prioritizing of increasing hydroelectric and thermoelectric power wasn’t necessarily a bad thing. Better for the environment, right? The problem, as with everything Chavismo related, came in the implementation. The over $50 billion spent on these various power generation projects has produced, to date, zero, yes ZERO, kilowatts. Billions more were wasted, misallocated, or just disappeared.

 More tomorrow…


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