Our first issue today is something that we covered extensively in our Venezuela : Down The Rabbit Hole segment, “Just The Basics”. We’ll be doing a reprise one of these days but until then we have Caracas Chronicles telling us that in Venezuela public services have a structural problem intensified by lack of investment, maintenance, and contempt for knowledge. Chavismo prizes loyalty over expertise and experience in everything they do (Chavista loyalists are in charge of everything despite an almost universal lack of qualifications) hence everything they touch falls apart.
Maduro says he wants to “recover” water, electricity, cooking gas, and telecom services and have better structures in place for the demand that the “apertura economica” (opening of the economy) will generate without mentioning that it was the Chavistas that closed the economy. Regime officials developed working round tables with the commercial, industrial, and business sectors to develop strategies that would allow for improving public utilities. Maduro’s Electricity Minister says fees for public service are 75% subsidized (and they are).
OK, reality check…The Chavistas have ignored public services for a couple of decades now. From the time Hugo Chavez took power until his death in 2013 Venezuela was enjoying high oil prices and oil production was 4-5 times what it is today so money wasn’t the problem. Then, to make matters worse, besides ignoring the present the Chavistas mortgaged the future unnecessarily borrowing over $60 billion from China and borrowed from Russia as well.
The Chavistas have proven themselves to be among the greediest, most corrupt regimes to ever take power anywhere with estimates of their theft from the Venezuelan people ranging from $600 billion to over a trillion dollars, we may never know the total. One thing you can be sure of, with whatever plan Maduro and the Chavistas come up with to “recover” public services, it will be at the expense of the people and the private sector, not Chavismo.
And in a related piece, BN Americas reports the Venezuelan government announced plans to expand it’s installed power capacity as it grapples with a widening electricity deficit and degraded transmission infrastructure. Electric Power Minister, Nestor Reverol, said the government was seeking measures to reinforce the national grid without providing details (they always do that). “We evaluated the comprehensive plan for the recovery of transmission lines and protection of the national electric system, the incorporation of more megawatts for stabilization of the system, and the maintenance plan for electrical substations.” According to local action group Cero Apagones (Zero Outages) there were 20,325 service interruptions on Venezuela’s electric grid in July.
Here’s a hint about what’s going to happen…nothing! The Chavistas have been singing this same tune going back to the Hugo Chavez days and have done nothing but continue to allow the situation to deteriorate. (Chavez’s new hydroelectric project, after spending billions of dollars, never produced a single megawatt) Now, having never recovered from the massive, week-long blackouts of a couple of years ago (which they blamed on the usual suspects, terrorists etc. when it was really just a simple lack of maintenance) conditions are worse than ever. To deal with the problem would take a serious commitment of both action and money, neither of which will happen. Welcome to the new normal.
And on the legal front we have Law 360 reporting that Conoco Phillips won approval to enforce an $8.5 billion arbitration award in US District Court, Washington DC. Judge Carl J. Nichols made the ruling concluding that Venezuela did not have a valid reason for ignoring the litigation.
Then we have CGTN telling us that the UN-WFP (United Nations World Food Program) report says regular access to nutritious food is a constant concern in Venezuela and Haiti. With the minimum wage in Venezuela now at under $22 a month and dropping (it was $30 a month in October) there may be food available but it’s not affordable to the 95% of the population that live in poverty nor the 75% that live in extreme poverty. Just a reminder, when Hugo Chavez took power the poverty rate was about 50% and he vowed to “raise the people out of poverty” through 21st Century Bolivarian Socialism.
And we have Caracas Chronicles telling us that the “Border Agreement” Forum had business people and guilds from both Colombia and Venezuela as well as Colombia border authorities discussing conditions required to re-activate commercial relations and the opening of the border. The meeting ended without a firm date for the re-opening. All authorities spoke of things that could happen, possibilities and possible conditions. Sounds kinda’ like the UN (or the Mexico negotiations between the Maduro regime and the opposition)…a meeting to decide to have another meeting.
The Colombia Transportation Minister did say that commercial flights between the two countries could begin operating in October while the Colombia Commerce Minister said “Guaranteeing institutional coherence with the regime is fundamental, including security and diplomatic conditions.” Uhh…OK…He went on to say the process could take a few months. Maybe that’s because they’re considering ideas like the Colombia Ambassador proposing upgrading the system on the border to capture fingerprints of those who cross it.
Then we have Hermes Perez, an economist with BCV (Venezuela Central Bank) saying Venezuela’s external debt is currently $60 billion and could be $90 billion by the end of the year, which would be twice Venezuela’s GDP. This is typical Chavista under-reporting of numbers (or over-reporting when it’s to their advantage). The World Bank put’s Venezuela’s debt at $187 billion and it increases every month. One of the reasons is lack of reserves, both cash and gold at the BCV. There is cash flow but nobody seems interested in using it for debt service nor to care for the people.
Economist Rafael Macquhae says that because of increased prices and lack of adjustment of base salaries Venezuela families spend everything on food. (Many survive on remittances from family members abroad) This is hardly a revelation as it’s been that way for years, going back to the “Guarimba” of 2014, and continues to get worse. Remember, at one point the minimum wage in Venezuela was an incomprehensible 67 cents a month. With 95% of the population living in poverty and 75 % in extreme poverty (I know, we say that a lot) Maduro’s economic recovery is only for the elite. Everyone else continues to starve. Maduro says the economy will grow between 10% – 20% in 2022. He said he “was not authorized” to reveal the exact number. Really…not authorized? FYI, the BCV hasn’t published growth numbers since the 1st quarter of 2019. Reliable estimates put projected growth for 2022 at about 8%, which is a positive sign after 8 consecutive years of Chavista- induced recession.
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