Not Another Argentina
Before we head Down The Rabbit Hole, a quick look at the news feed…First up we have the IMF reporting (kinda’) that the IMF (International Monetary Fund) Executive Board was briefed by staffers on recent economic developments in Venezuela. I checked the article carefully and clicked on every link I could click on and that was it! No details on anything. It seemed curious that they issued a report that told us nothing. So what’s the point? Are they considering another Argentina? So…what do we know about Venezuela under Chavismo and the IMF?
Venezuela, under Hugo Chavez, broke ties with the IMF in 2007 but the IMF monitors their economic situation. The IMF requires an official request for help before intervening.
In 2017 the IMF told the Financial Times a potential rescue of Venezuela would cost more than $30 billion per year. “This is going to be Argentina meets Greece in terms of complexity.” Venezuela debt, at the time, was $140 billion. (That doesn’t count all the court cases around the world that, one by one, are adding billions to that total)
The IMF generally advises countries receiving support to renegotiate foreign debt. When Venezuela defaulted on their bonds, for the first time in history, (Viva La Revolution) the guy Maduro put in charge of negotiating with the bond holders of the defaulted debt was prohibited by sanctions from talking to the bondholders. This makes it clear that Nicolas Maduro is more interested in making ideological statements than in resolving issues or negotiating in good faith. (Good faith and Chavismo don’t often collide in the same sentence)
This attitude was confirmed by Maduro’s stance on humanitarian aid for the desperate people of Venezuela. For years Maduro wouldn’t allow vast quantities of food or medicine, ready and waiting to help the Venezuelan people, to enter the country claiming it was a plot to control and/or “bring down The Revolution”. He also said it was an affront to the dignity of the Venezuelan people. (As we’ve said before, ain’t nothing dignified about digging for food out of the backs of garbage trucks) Even now Maduro only allows NGOs to operate in Venezuela on a limited basis. (Don’t want to be helping the people too much)
FYI, IMF bailouts are typically controversial in countries they attempt to help because they require “austerity measures” (a term that gets a bad rap…back in the day we used to call “austerity measures” paying your bills). Requiring people to pay their bills and live up to the terms of agreements is never very popular. Argentina has gone through this cycle three times…fail to pay your bills…get bailed out by the IMF …pay your bills and tighten your belt (no unlimited “free money”)…elect a new government that will resume the irresponsible spending…and repeat the cycle. Considering this, actually having to “pay your bills” in return for a loan, I don’t see a Venezuela bailout happening any time soon. But if that’s the case, what could these people at the IMF be talking to their staffers about?
Then we have Insight Crime with something new. We already knew that Alex Saab, currently awaiting trial in the US for conspiracy to commit money laundering, was the architect for Nicolas Maduro’s fraudulent CLAP government food program and other schemes to enrich high-ranking Chavistas. Now Insight Crime has evidence tying Saab to gold trafficking for the Maduro regime.
The president of Minerven (government-owned mining company for Maduro’s “Mining Arc”) is a former Saab employee and through his ties to the organization Saab allegedly facilitated the exchange of consumer goods from Turkey (where Maduro’s illicit enterprise for Clap relocated to after his Mexico operations came under scrutiny) for illegally exported gold from Venezuela. It might be a new revelation but it shouldn’t surprise anyone.
And we have Al Circle telling us that Venezuela state-owned enterprise, Aluminum Nationals S A, in Costa Rica, has been closed for over a year. However, the Maduro regime still owes $19 million for social security and medical expenses of former workers as well as additional amounts yet to be calculated. Gee…what a surprise!
Now lets head Down The Rabbit Hole…
Chapter 7/ continued…
…Surely with a situation as serious as a starving population the government must be taking some steps to address hunger. Well, yes and no. Here are a couple of recommendations from the government. One is their Urban Farming initiative. Residents in cities like Caracas should grow their own vegetables on roof-top gardens and balconies. I’m sure that will more than make up for the lost production of 3 and 1/2 million hectares of expropriated farmland.
Another proposed solution regards the protein shortage in the average Venezuelan’s diet as beef, chicken, etc. are beyond the means of all but the wealthy. It’s rabbits! They are a popular pet in Venezuela so the government says you shouldn’t consider them as cute little bunnies but as two kilos of meat.
The next idea had the potential to be a good thing but, as with anything Chavismo- related, they corrupted it. As the food crisis shifted from a simple lack of availability to a combination of lack of availability and total lack of affordability the government came up with a plan to deliver boxes of food to those that needed them every two weeks, enough to feed a family of five. OK, so we knew from the start that feeding a family of five was overly ambitious but it’s still a good idea…well…kinda’.
First, the CLAP (Spanish acronym) program can only be received by those holding the “Carnet de la Patria”. There’s that nasty homeland card again. Next, when first launched the deliveries were somewhat on schedule although,as we said, they weren’t big enough. It didn’t take long for the deliveries to become spotty with priority given to the well connected while others might not see their CLAP box for a month or two. Next, the quality of the products rapidly declined and many items would be past their expiration date. Next, the government drastically overpaid for the contents of the boxes, which surprised absolutely nobody. The majority of the items came from Mexico from a company affiliated with Maduro. When the company was targeted in a corruption probe it closed up shop and items were sourced primarily from Turkey. Not surprisingly, at the same time Maduro announced stronger ties with Turkey. Now, with the military put in charge of food distribution (it kept getting harder and harder to buy their loyalty, and still is), they also oversaw (and oversee) CLAP box delivery. C’mon, raise your hand if you think things will improve!
Summary : We’ve previously discussed the “Maduro Diet”, the food shortages, the lack of affordability when food is available (how about, at the time, 138 monthly minimum wages to feed a family of five), and the government’s denial of the problem, at least until recently. Now they can blame it on those evil, imperialist, interventionist sanctions by those gringos who are responsible for all things evil. A 2019 report by the UN Food and Agricultural Organization (FAO) really summed things up.
Said organization, FAO, gave an award to Venezuela in 2013 for reducing hunger by 50% from 1990 levels.This is a good thing although we now know that as soon as the historically high oil prices and massive borrowing went away so did the food. Anyway… Maduro got a lot of mileage out of that award on state media. Curiously the was no mention on state media of the FAO 2019 report. Venezuela at risk of famine! Malnutrition tripled from 2015-2019. Crop production was down 50% from already depressed levels and they didn’t even mention one of my personal favorites, in 2018 the combination of children with either malnutrition or wasting reached 35%. I didn’t even know what wasting meant (not malnourished but losing weight, which children aren’t supposed to do).
The purpose of the FAO report was to assess the situation and make recommendations to implement to address the issues. Now call me crazy but if the Chavistas won’t listen to recommendations from their most important allies, Russia (gave a four point economic plan to Maduro, number of points implemented – Zero) Cuba (Everyone knows what an economic disaster they are… or else why are there more Cubans in Miami than Havana? Cuba is only 90 miles from South Florida, by the way the South Florida Cuban population are rabid supporters of the Venezuelan opposition and staunch anti-socialist/communist), and China why would they pay attention to the FAO report? I saved the best for last. In a November 2018 economic conference a Venezuelan Minister told his Chinese counterpart that the key for Venezuela would be more government control. Yu Bin, the head of the Chinese delegation responded, “We have found exactly the opposite to be true. 90% of companies in China are private and the government does whatever it can to help and support their efforts.” Couldn’t have said it better myself.
Famine…Jesus…I think I hear that familiar refrain. These are conditions normally associated with torn countries or areas ravaged by drought or natural disasters. This is a man made disaster. A Chavista made disaster.
P. S. Just so you know I didn’t forget, there are photos and videos everywhere showing things like the group of people that jumped a fence and beat a farmer’s cow to death with rocks, slaughtered zoo animals, the lady cooking a cat in the street, etc. I didn’t think we needed to get into that here?? Oh, and don’t forget all the looting and hijackings. The most common sign on the side of trucks is “This Vehicle Carries No Food”.
That will do it for this segment of Venezuela : Down The Rabbit Hole. More news tomorrow…
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