We’ll get to our drug story shortly but first…Politico had a piece titled “Nicolas Maduro Tries New P.R. Campaign : Going Woke”. Last summer Maduro met with a group from the Democratic Socialists of America (as previously covered here). They were wined and dined in a five star hotel, toured museums, etc. but were carefully kept from seeing the daily horrors that afflict the Venezuelan people under Chavismo. One delegate said, after meeting Maduro,”Who I met was not a dictator. I met a humble man who cares deeply about his people.” These people are total Kool-Aid drinkers buying into all the propaganda put out there by the purveyors of 21st Century Bolivarian Socialism, however, this shows that, to some degree, Maduro’s new approach works.
Maduro co-opts the language of “feminism, LGBTQ rights, the environment, etc.” (also the rights of indigenous peoples which, we’ve shown here numerous times, he frequently tramples). He is “woke washing” the regime’s image with language that is acceptable to progressives and millennials. He also likes to drop terms like white supremacy, colonialist, imperialist, etc. when referring to the US. Maduro’s language helps progressives romanticize Chavismo and “The Revolution” instead of looking at the facts which are abysmal.
Then we have BA Times reporting inflation in Venezuela is not hyper but still chronic. The depreciation of the bolivar is only 6.7% this year, way down from previous years. The BCV (Venezuela Central Bank) buying bolivars is working so far to create artificial demand and keep it’s value from free falling, as it has in the past. (Remember, they have lopped off 14 zeros from the currency since the Chavistas took over.) How long will the artificial support last? What happens then?
In other money matters, Bitcoin.com reports that digital transactions in bolivars are up 21% and debit card payments are up 22% since Maduro instituted his foreign currency/cryptocurrency tax. That is to be expected but the question remains…how will it effect economic growth (discouraging the use of dollars) and if his support for the bolivar fails, will inflation tick up?
And we had another money-related article in FX Empire. They report that inflation and dollarization have widened the gap between private sector and state employees. Since Maduro relaxed foreign currency controls in 2019 dollar use, which was previously not allowed, has gone way up. The government is trying to steer people toward using the bolivar via it’s foreign currency/ cryptocurrency tax and it’s central bank buying of the local currency.
State employees (over 2 million) are paid in bolivares while 63% of salaries in the private sector are paid in dollars. The worker’s salaries in dollars have held their value in the last couple of years while those paid in bolivares have seen their buying power plummet. In the first quarter of 2022 there were 700 worker protests, up 27% from 2021 according to the Venezuela Observatory of Social Conflict.
The average salary range for public sector workers is from $30 – $100 per month while for the private sector the range is from $106 – $247 per month. We have previously reported the basic food basket, enough to feed a family a 2,000 calorie diet for a month, is over $300 so even the higher paid private sector workers can’t afford it. There is no longer a middle class, as there was before 21st Century Bolivarian Socialism. There is just the 95% that live in poverty and the 5% of well connected Chavistas or the few non-Chavistas managing to survive.
Then we have Merco Press reporting that according to INE inflation in Venezuela is currently at 222%. So now we have three different reports with three different rates of inflation, from 99% – 222%…
On a positive note we have CGTN reporting that Pink Taxi, a Venezuelan taxi service driven by women for women is gaining ground. They plan to expand from Caracas to other cities in Venezuela.
Then we have something that’s interesting although, at this point not particularly important. Business Insider reports former Defense Secretary, Mark Esper, says he prevented “dangerous things” like military action against Venezuela and a blockade of Cuba while serving under Donald Trump.
And from Havana Times we have AMLO, President of Mexico, reiterating his call to include Cuba, Venezuela, and Nicaragua, in the upcoming Summit of the Americas.
And we also have Desert News reporting that the Governor of Colorado is comparing the Governor of Florida, Ron Desantis, to Nicolas Maduro, after the state of Florida withdraws “own local government” status for Disney World. He’s really just angling for Disney to move to Colorado.
Then we have La Prensa Latina reporting that VP, Delcy Rodriguez, says Venezuela’s earnings as a country went from $52.6 billion in 2013 to just $743 million in 2020. She blames sanctions for this although there were no sanctions against the Venezuela government until 2017, and even then they were limited early on.
They reported that according to Ecoanalytica, PDVSA (government- owned oil company) lost $4 billion in 2021. They had to sell their oil at huge discounts due to quality issues and sanctions concerns.
They went on to say that economist, Victor Alvarez, has a plan to put all the extra revenue if sanctions are lifted into a fund designated for alleviating the “humanitarian emergency”. Good luck with that. The Maduro regime sold a 49% interest in a refinery project and the money didn’t necessarily go to the “humanitarian emergency”. Where it went…well…nobody knows. Followers of Venezuela : Down The rabbit Hole are familiar with FONDEN. That’s the Venezuela government agency Hugo Chavez set up to shield the Chavista’s financial shenanigans from the public eye. Chavez had a law passed whereby only 40% of government spending is subject to oversight by the National Assembly. The other 60% of spending flows through FONDEN and answers to, and reports to, no one!
Then we have Merco Press reporting that the OPEC chief visited Venezuela to meet with Maduro to strengthen bilateral ties. Maybe he should remind Maduro (and everybody else) that according to the OPEC charter all members must first address domestic oil needs before exporting. (you know…like Venezuela shipping oil to Cuba for free while Venezuelans can’t get gas or diesel)
Now, on with our drug story from Insight Crime….
Cartel of the Suns is a structure to keep the military happy but there is no central control or hierarchy. It is institutional but not organized. Each “cartel boss” has his own portfolio of services to offer traffickers. Defense Minister, Vladimir Padrino, provides movement corridors. Minister of Indusrty, Tareck El Aissami, provides port access. Army major general, Cliver Alcala (now under arrest) facilitated cooperation with FARC dissidents for cocaine supply and contacts on various Caribbean islands. Diosdado Cabello (number two man in Venezuela) has his fingerprints everywhere and he is the more public face of Cartel of the Suns.
Maduro’s involvement is more indirect although it directly helps him remain in power. The drug trafficking of Cartel of the Suns allows Maduro to keep the military happy but restricts their ability to gain too much personal power with the increased involvement of civilians.
Another way to limit those higher up in the military from gaining too much personal power is to “water down” the prestige of rank (but not necessarily the privileges). Today there are approximately 2,000 generals in the Venezuelan Army, which is relatively small, compared to under 300 in that of the US which is considerably larger. The concept is from Chavez and was expanded by Maduro.The rank of General is a geographic designation, not related to a unit, and is frequently rotated. Everyone profits but no single individual accumulates too much power.
On both the military side and the drug trafficking side the faces may change but the system remains the same. It is a network of networks. The primary purpose of Cartel of the Suns today is to provide a revenue source to the Chavistas after they bled all the other sources dry through their corruption.
That does it for our drug series. We’ll be back next week with more news and our wrap up of Venezuela : Down The Rabbit Hole. Until then…Have a great weekend everybody!!!
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