Say It Ain't So

 We’ll head Down The Rabbit Hole in a few but first…The Jerusalem Post tells us that the founder of the Ahrazi Liberal Party, an organization opposed to the Islamic Republic of Iran, claims to have secured a document showing the Supreme Leader of Iran, Ayatollah Ali Khameni transferred $4 billion to his son’s personal account in Venezuela.

 The transfer request was sent to the Central Bank of Iran by Khameni’s Chief of Staff for the funds to be sent to the BCV (Venezuela Central Bank) account held by his son. Kamran Maleckpour, an Iranian-Canadian journalist told The Jerusalem Post that he believes the letter to be a fake document. So far the letter has not been independently confirmed.

 Now we already knew that the Chavistas were hopelessly corrupt and that money belonging to the Venezuelan people is in Chavista bank accounts all over the world but the Iran Supreme Leader, the guy that’s supposed to be so morally pure (even if he is BFFs with Nicolas Maduro), come on…say it ain’t so.

 And we have Reuters reporting that Venezuela’s opposition has announced it will hold it’s presidential primary on October 22, 2023 to choose a candidate to face Nicolas Maduro in 2024, although the CNE (electoral council) hasn’t officially scheduled the date for the presidential election. I’m sure Nico will tell them when he wants it to be (or if he wants it to be) sooner or later. It’s the opposition’s first primary since 2012.

 Then we have World Oil telling us that European oil companies Eni (Italy) and Repsol (Spain) are pressing Nicolas Maduro for greater control of their operations in Venezuela.

 US oil major, Chevron, received a similar deal last year , however, in addition to the negotiated contract with PDVSA (Venezuela government-owned oil company) Chevron received a new 6 month license from the US Treasury Department to allow the operational change in Venezuela, which is more than just a simple export license. It is unclear if the European companies have discussed this with the US Treasury Department. Eni, Repsol, Venezuela Oil Ministry, and PDVSA didn’t reply to requests for comment.

 Let’s head Down The Rabbit Hole, shall we?

 Chapter 17 continued…

…Air Canada tried various negotiating strategies to continue servicing Venezuela. In a last-ditch effort to continue doing business they asked the Chavistas, if they weren’t going to allow enough currency conversions to reduce the burdensome balance sheet, at least allow them to pay for fuel in Venezuela in Venezuelan currency. Remember, at the time it was illegal to transact business in Venezuela in anything other than the bolivar (“the law is what we say it is”) . The Chavistas said NO! That was the last straw for Air Canada and they discontinued service to Venezuela.

 Air Canada wasn’t the first to discontinue service to Venezuela and they wouldn’t be the last. Many tried to hang on as long as they could due to Maduro’s threat that any airline that completely stopped flying to Venezuela wouldn’t be allowed back in but most eventually threw in the towel. A market that used to be serviced by dozens of airlines was now down to 7 or 8 carriers, depending on who you talked to. When the auto industry hit $4 billion as a group they followed the same pattern although most maintained a minimal presence. There are almost no new cars produced in Venezuela, down from several hundred thousand. Ditto for the pharmaceutical industry, ans so on.

 We’ve touched on expropriations but here are some shocking numbers. During the Chavez years Venezuela expropriated 1,147 companies or their facilities. Under Maduro accurate numbers are harder to come by but estimates in 2019 put the total number of expropriations for the Chavismo years between 1,800 and 2,000. Compare that to fellow socialist ally Ecuador. Over the same time period they expropriated less than 10% of Chavismo’s number.

 How about a little comic relief? One trait that seems common to authoritarian regimes is their penchant for making demands on the international stage. Maybe it’s because they’re used to being the big fish in a small pond but, whatever the reason, they seem to do it all the time. Here’s one of countless examples from the Chavistas.

 At one time Venezuela was a leading member of the economic/political bloc called MERCOSUR, referred to as the “South American Common Market”. A couple of years ago the members, most of whom had been screwed on deals by the Chavistas, voted to drop Venezuela from their organization. No Venezuelan representative was invited to the meeting as the bloc had made numerous overtures to the Chavistas to change their ways to no avail.

 Venezuela’s current Vice President was Foreign Minister at the time and traveled to the meeting site to demand entrance. She was greeted by a MERCOSUR representative who informed her that without an invitation she would not be admitted. The Foreign Minister, Delcy Rodriguez, was incensed and demanded (I told you, these authoritarians make a lot of demands) someone meet with her immediately! She was shown to a conference room and was told someone would be in to speak with her. After a few minutes (I probably would have made her wait longer) the same woman that had shown her to the conference room returned. When Delcy demanded to know who she was going to meet with…immediately!…the woman informed her “That would be me”.

 As badly as Chavismo has crippled production in Venezuela you might thing that imports in Venezuela would rise. The stuff has to come from somewhere, right? Well, as of 2019 the answer would be no. In 2012 when the economy was headed towards trouble but was still in reasonably good shape due to the massive borrowing and high oil prices, the import numbers were up. Contrary to all their “smoke and mirrors” statements about increasing productivity, the Chavista economic model was to import whatever they needed and pay for it with oil revenues and money they borrowed from China and Russia. As of this writing (in 2019) estimated imports (you never get real numbers from the Chavistas) called for numbers to be down 83% from 2012 levels. So, they weren’t producing goods domestically and they weren’t importing them. Where would they get what they needed? Short answer, it’s a “Let them eat cake” kinda’ deal. Chavistas would drink champagne while the rest of the population struggled to find water.

 Oh, and just so you know, I didn’t forget about exports. The 2019 estimated exports were $21.8 billion, down from $98 billion in 2012. This leads us to the precipitous drop in GDP. According to a July,2019 IMF (International Monetary Fund) report, for the period 2013-2018 the Venezuelan economy contracted by 65%. Overall, the economy went from $350 billion to $70 billion under Chavista stewardship. As I’ve said before, these are numbers reserved for countries ravaged by war, natural disasters, etc. For the Chavistas it’s business as usual.

 More tomorrow….

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