We’re going Down The Rabbit Hole in a few but first let’s talk taxes. The Caracas Chronicles headline read “Chavismo’s New Campaign To Bring The Bolivar Back To Life”. Personally, I’m not sure there’s anyone in the Maduro regime astute enough in macro economics and finance to have a motive more than just greed. I view the new 20% foreign and cryptocurrency tax as something more akin to raising taxes here in the US. Politicians see an opportunity to raise taxes as a means to get more money when in reality, more often than not,revenues go down when taxes go up. Those with money, the supposed targets of the tax, find ways around paying more tax and those less fortunate simply spend less hence revenues drop and economic activity drops… but I digress.
On social media the Chavista propaganda machine is putting it out there that the new tax will have no impact on the majority of the population. Communication Minister, Jorge Rodriguez, tells us the new tax will “…allow the state to receive dollars pocketed by the rich and merchants.” Local economists and tax experts see it as possibly having an inflationary impact. Government propaganda says “Our economy will grow stronger than ever.” I have to wonder when,exactly, was it ever really strong? The Ministry of Information is telling us this move will be a “strengthening of the people’s purchasing power” and “No more criminal dollars” and “…defense of the stability of the homeland.” Social media is deluged by messages like this which are primarily bots. On the other hand, Tweets by the private sector relating to economic protest are 94% individual generated.
For all the regime’s ideological blather, Fedecamaras, the business chamber, views it a bit differently. They say the new tax will stimulate fiscal evasion, informality,shortages,and inflation while reducing production and imports. They remind us that this was originally billed as a corporation to corporation tax but there are no protections for individuals or small businesses. It’s simply a dollar to dollar tax. Call me crazy but, based on the Maduro regime’s track record, this move will do more harm than good.
On the rights violation front we have the Jurist telling us that three Human Rights groups have put out a report researched for over a year. They contend that the combination of stigmatization and arbitrary detention show calculated repression and could constitute crimes against humanity.
Then we have Anadolu reporting that Defense Minister Lopez says the anti-personnel mine explosions that killed at least 8 people were laid by terrorists traveling on motorcycles. Uhh, and exactly how do you know this? He did,however, reference a good name for the regime’s operation to deal with the situation, Operation Bolivar Shield 2022. Was there an Operation Bolivar Shield 2021?
And we have more news from the cryptocurrency world. Cointelegraph reports cryptocurrency use in Venezuela on an unprecedented scale. People use it as a means to fight inflation and the devaluation of the bolivar. It’s now the 1st Latin American country to crack the top 12 in cryptocurrency mining, primarily due to the incredibly cheap electric rates for the electric power intensive operation. To try to get more legal miners registered the government has ordered cryptocurrency regulatory agency SUNACRIP to refrain from inspection and supervision of cryptocurrency mining operations after widespread of coercion/extortion basically calling off the dogs of the corrupt Chavistas. There was no mention of el Petro mining or anyone using el Petro.
On the migration front we have The Guardian reporting that migrant repatriation is being criticized in Venezuela. Venezuelan attorney, Carlos Trapani, says “Migration is not a crime.” Well, illegal immigration is, by definition, a crime.
And how ’bout this from Telesur (government media). They report that the Argentine Army planned an invasion of Venezuela in 2019. The article was long on conjecture and short on facts…kinda like the many reports about assassination plots against Nicolas Maduro. How many is it now?
And Mehr News (Iran) reports that direct flights between Iran and Venezuela will begin in March. 50 Iranian tour operators are scheduled to visit Venezuela March 2nd.
Now, Down The Rabbit Hole we go….
One such scheme was a 2010 project launched by Hugo Chavez with China’s CAMC Engineering Company. It was promoted as a comprehensive project including the largest rice-processing plant in Latin America and rice paddies twice the size of Manhattan. $100,000,000 was allocated (a large sum by Venezuelan standards) and more than a decade later the project remains half built although the money was not half spent. At one of the buildings for the Hugo Chavez Plant they had a ribbon-cutting ceremony in 2019 with Maduro’s Agricultural Minister doing the honors. The visuals on Venezuela state-run media were impressive, silos and everything! Looks can be deceiving. It turns out that inside the plant workers were packing IMPORTED RICE by hand instead of utilizing the proposed machinery capable of producing 18 tons per hour.
And the Hugo Chavez Plant, which hasn’t produced a single grain of local rice, was just the tip of the iceberg. CAMC was paid over $3 billion for at least five projects that were never completed. As with all other Chavismo related frauds this is one piece of a complex puzzle. PDVSA Agricola, a new unit developed by Chavez to boost agricultural production,handled the contracts.The money went from the China Development Bank to Venezuela’s development bank and was doled out from there. Remember, 60% of Venezuela government spending goes through FONDEN which isn’t subject to oversight so the forensic accountants have their work cut out for them. So far $32 billion has been tracked plus another $6 billion from an infrastructure fund created by Chavez. The ongoing investigation has already revealed dozens of people with millions of dollars going to each of them. “These guys were carrying around briefcases full of contracts.” It’s worth noting that Venezuela state-run media has yet to report on any of this.
In another example of the complete disdain “The Revolution” has for the people, as of the time of this writing (2019), we are currently in the second week of a hunger strike by former PDVSA workers. The hunger strike was to protest the government’s lack of response to their requests for money they were promised by Hugo Chavez so this goes back a ways (Maduro took power in 2013). Funny thing is, the money he promised them was put in an account that was supposed to pay them in dollars. The government tried to use outdated exchange rates from the time of the agreement and doled out a meager amount to them in bolivares so it was a win/win for Maduro. He fulfilled the promise made by Chavez (technically) and with the favorable rates used he payed out almost noting. What a double whammy for the workers, being on a hunger strike while their families and those around them are starving!
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