Not So Fast
We’ll get back to more of our drug story in a moment but first…Remember our story yesterday about some of the Venezuelan migrants in Chile considering returning to Venezuela now that things are,at least economically, less bad? Well, as I went through the news feed yesterday I was thinking, not so fast. There are plenty of reasons, especially with Maduro’s track record of economic ineptitude, to take more of a wait and see attitude.
First we have the inflation front which,admittedly, is no longer in hyperinflation territory. Yesterday we reported BNN Bloomberg saying that, according to their “Con Leche” index (the price of a cup of coffee) inflation is at 99%. That figure, while still high by real world standards, is far cry from the million % a couple of years ago. Well, not so fast. The Venezuela Observatory of Finance (OVF) reports inflation is actually at 172 %, still highest in the world. They did, however, report that the basic food basket, enough for a 2,000 calorie diet for a month, rose in price by 31.5 %, April over April. Once again, it may seem high to us in the real world but for Venezuela it’s not too bad.
Then we have our boy Nicolas telling us “We’re breaking coffee production records …it’s a productive-economic miracle.” As a quick “not so fast” cautionary tale I would say that we’ve heard this about Venezuela coffee production before from Maduro. A few years ago he was hyping coffee production numbers (the Chavistas never tell us where they get these numbers) and after the dust settled the real numbers came out and they were about 25% of the numbers Maduro was putting out there. Not much to get excited about.
And Reuters reports that Venezuela oil exports were down 8% last month citing quality issues. It’s an ongoing problem for PDVSA (government owned oil company). Due to years of little or no maintenance to storage, tanker fleet, and infrastructure they have an ongoing problem with contamination of their oil shipments. As more stories like this come out and you combine them with the chaotic (and ill conceived) roll-out of Maduro’s new foreign currency/cryptocurrency tax as well as the pending expiration of the waiver in the import tax, I think a not so fast, wait and see, attitude is warranted regarding this “economic miracle.”
Then we have Time reporting that after the release of American hostage, Trevor Reed, from Russia families of other hostages, two in Venezuela since 2017, are pressing for their release. What would Maduro ask for? …Sanctions relief? … Release of corrupt businessman and Maduro confidant Alex Saab, whose trial in the US is ongoing? Neither is likely but with the Biden administration anything is possible.
Then we have Ayn Rand Institute cautioning that the US shouldn’t buy oil from Venezuela’s Maduro regime in response to Russian oil sanctions. They posit that Nicolas Maduro’s regime is remarkably similar to Putin’s dictatorship in Russia. Maduro has even vowed to “reconquer” a resource-rich area of Guyana. Sound like Putin telegraphing his Ukraine invasion anyone? It’s worth noting that, to my knowledge, border skirmishes aside, Venezuela has never invaded anyone while Russia already invaded Ukraine during the Obama years. That said, how can the Biden administration condemn Russia and do business with Venezuela?
A brief aside… I had a bit of a Venezuela flashback when I saw that, in addition to the other periodic (sometimes persistent) shortages we’re experiencing in the US, we now have a shortage of baby formula. Ouch! We had the same thing a few years ago in Venezuela. But that’s Venezuela… and this is the US… isn’t it?
And we have Law 360 reporting that a federal judge in Delaware has allowed Venezuela to immediately appeal his decision not to wait for the Biden administration to sign off on continuing to organize sales procedures for Citgo shares in the Rusoro Mining case award of $1.6 billion citing “novel issues raised”. They may be “novel” but are they legitimate? Or maybe the judge is getting tired of this whole thing? We’ll see…
Then we have Kim Jong Un sending Maduro a “thank you note” diplomatic message for Maduro’s recognition of the 110th anniversary of President Kim Il Sung. I think he was Kim Jong Un’s grandfather? Brotherhood between dictators always makes me feel all warm and fuzzy.
And we have CGD reporting that Venezuelan migrant women are suffering lack of inclusion in Colombia. Is it as bad as their lack of inclusion in Venezuela?
Then we have Senator Bob Mendendez calling for the US Justice Department to investigate former representative David Rivera for allegedly having worked for the Maduro regime in Venezuela without registering as a foreign agent, which is required by FARA. This stems from his alleged work for PDVSA (government owned oil company).
Now let’s get back to talking drugs…
Insight Crime continued it’s cocaine in Venezuela series with a piece entitled ” The Paraguana Cartel : Drug Trafficking and Political Power in Venezuela”… About a year ago authorities arrested Emilio Enrique Martinez, head of the Paraguana Cartel. It was emblematic of the deep synergy between politics and drug trafficking in Venezuela.
Martinez was long thought to be untouchable due to connections to powerful actors within the state. Drug traffickers, local politicians, security forces, and national power players are all interconnected and form the basis of entire systems of criminal governance. His fall shows how factional struggles at the highest levels of Venezuela government can bring these empires crashing down.
Martinez’s three decade-long career had him connected to Mexican cartels and Venezuela’s most notorious and well-connected drug brokers but Martinez mostly stayed in the shadows.In 2017, with the election of Victor Clark as governor of the state of Falcon, Martinez became more high profile. Clark was connected to the top two men in Venezuela, Nicolas Maduro, and Diosdado Cabello. Martinez established a foundation to benefit locals and made improvements and modifications to infrastructure and regional government officials passed them off as public works. The military also benefited from Martinez;s largesse. In return, Martinez was allowed free rein to move drugs through Falcon state.
Relations between drug traffickers and the military are facilitated by governors. Changes in military command are political actions. A tight web of connections between the criminal, security force, and political elements creates a narco-fiefdom and profits are used for both personal enrichment and to maintain power. As Venezuela’s economic, political, and social crises have deepened so have these criminal relationships propping up both the Venezuelan state and the criminals.
The relationship between politics and drug trafficking is based on mediating the relationship between security forces and favored criminals. Politicians control and influence police and military appointments and coordinate security issues. Police and the military are allowed to make money through corruption and the flow of drugs. Besides allowing the uninterrupted operation of trafficking, politicians aid criminals with transport licenses and direct security operations against criminal rivals. More than half of the governors in Venezuela are believed to be involved in drug trafficking as well as many mayors and representatives to the National Assembly.
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