Heading To 67?
We’ll get started with this week’s Venezuela : Down The Rabbit Hole segment, “Voting With Their Feet”, in a few but first…FX Empire reports that the much-maligned Venezuela bolivar (local currency) has depreciated further.
The official government rate is now 20 bolivares/dollar while the more commonly used black market rate is 21.8 bolivares/dollar. That puts Venezuela’s monthly minimum wage at 6 1/2 dollars (government rate) or under 6 dollars (black market rate).
A couple of quick reminders…When Hugo Chavez took power over two decades ago the minimum wage was about $200 a month. A few years ago it reached a low of 67 cents A MONTH (The UN metric for extreme poverty is earning less than about $2 a day). I doubt we’re headed back to 67 cents a month but you have to ask the question … “How’s that 21st Century Bolivarian Socialism looking now?”
Then we have The National Interest with the headline “Has The Dollar Fixed Venezuela?” That question may be asked among the international community (the answer is no!) but among Venezuelans the question is a little broader, “Is Venezuela fixed?”
The article dealt with how Venezuelans feel about Venezuela and it’s about what you might expect. People are split into two camps. The much larger group’s feelings can be summed up in a couple of quotes.
“Everyone hates Maduro but no one does anything, so it just is what it is.” or “With the way things are, who cares who is in power? All politicians in this country are corrupt.”
The much smaller group, who think everything is OK are “encufadas” (those plugged-into the government) or the wealthy who are insulated from the Maduro regime’s policies (some might say “disastrous policies”)
There is a marked reduction in social discontent and more an attitude of resignation. From her high-rise luxury condo one woman suggested “Caracas has been fixed. All the money is dirty but people don’t think about it too much. It’s always been corrupt. It’s a matter of a corruption that at least builds or a corruption that only destroys.”
So, there you have it…the pulse of the people.
Then we have LBC with an article on Lebanon losing it’s UN voting rights for non-payment of dues. There are six countries in that category and, of course, Venezuela is one of them.
And we have Merco Press telling us that Argentine opposition leader and presidential hopeful, Patricia Bullrich, called for the arrest of Venezuela President, Nicolas Maduro, should he travel to Buenos Aires for the upcoming Celac (Community of Latin American and Caribbean States) Summit citing the arrest of Chilean dictator, August Pinochet, in London in 1998 as precedent.
(For perspective, Maduro’s security forces commit an average of 1,400 extra-judicial killings every year while Pinochet’s security forces committed about 3,000 in 17 years)
It is unlikely that Argentine President, Alberto Fernandez, one of Nicolas Maduro’s socialist brothers, would order his arrest…but we can dream, can’t we?
Now, let’s head Down The Rabbit Hole…
Chapter 13/ Voting With Their Feet…
There’s a lot of talk these days about the migration crisis at the southern border of the US. At the same time there seems to be a number of people that decry the state of things in the US and constantly harp on all the things wrong with America. The two issues, one would think, would be at odds. If there was so much wrong with the US it begs the question, why are so many people risking their lives to enter America illegally? Especially since the US admits more legal immigrants annually than any other country.
Just as puzzling is the attitude of many people toward Venezuela, it’s dictator Nicolas Maduro, and it’s government, Chavismo also known as 21st Century Bolivarian Socialism. During the first decade of Chavismo the entire world was enraptured with it and many hailed it as the way of the future. Now that we’ve had more than a second decade of Chavismo all those same voices are suspiciously quiet about Venezuela while at the same time calling for the US, the same country they say has so many problems, to open it’s borders. Former Secretary of State Hillary Clinton and others are even calling for a border-less Western Hemisphere.
For years the entire world focused on the migrant crisis from Syria. It has had a profound effect, not just on neighboring countries, but on countries all over Europe including the UK. It’s worth noting that the European Union has an open border policy. These things all scream for a closer look, however, we’re not here to delve into why many people think the US is the place to be and the Syrian migration may have been the driving force behind the UK’s Brexit. Our focus here is on Venezuela so let’s take a look at their migration crisis and it’s effect both internally and externally. It’s worth noting that up until a couple of years ago many of Venezuela’s neighbors criticized the US for not opening it’s borders.
Before 21st Century Bolivarian Socialism the number of Venezuela migrants worldwide was negligible. They simply didn’t leave and it’s easy to understand why. Venezuela is incredibly blessed in both natural beauty and natural resources. It certainly had it’s share of issues and inequalities, as all countries, including the US, do. It had a poverty rate of 50% so clearly there was an underlying problem but, in hindsight, most Venezuelans would happily trade today’s over 90% poverty rate for that, with 75% living in extreme poverty. Remember, the UN classifies extreme poverty as earning less than two dollars a day. There really isn’t even a category for the millions of Venezuelans earning about six bucks a month (based on current exchange rates).
Venezuela back then had a substantial middle class and was climbing out of third world status and firmly in the emerging market category. Almost all Venezuelans living abroad were pursuing career or entrepreneurial opportunities. Then, with the election of Hugo Chavez and the arrival of Chavismo, everything changed.
As previously discussed, the early Chavez years did a lot of things for the poor of Venezuela and reduced the poverty rate by half, a commendable achievement. What was overlooked by the international community was the unsustainability of Chavez’s policies and spending. It was not overlooked by many inside Venezuela and the migration began. The mass expropriations and anti-business environment threw a scare into a number of Venezuelans, mostly business and professional people. They saw clouds on the horizon which in hindsight just seems like common sense. High oil prices and almost unlimited credit couldn’t last forever although based on their behavior the Chavistas must have thought they would.
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