Eleven years into his Presidency, it’s an established fact that Hugo Chávez handles our country’s finances like his own personal pulpería. In spite of this, it never ceases to amaze me how the government’s fiscal decisions barely cause a ripple in our public sphere.
Today’s announcement that he would sell PDVSA’s refineries in Germany to a handpicked Russian company didn’t really register in the national conversation. In a democracy, a move like this, which effectively shuts our oil out of major European markets, should have come on the heels of a fleshed-out debate. But where was it?
The same goes for the report that PDVSA has effectively been kicked out of the planned refinery in Pernambuco, Brazil. El Universal is reporting that, because PDVSA has not kept up its side of the bargain with Petrobras for the project, its participation is very much in doubt. Five years ago, Hugo Chávez and Lula laid the foundational stone for the refinery. In 2008, it was announced that it would be processing 100,000 barrels of Venezuelan oil in 2010.
And yet today, all those pipe dreams lie in the dust, with barely a ripple in public opinion. We will probably never know how much has been spent on projects and planning commissions, and all of it for nothing.
There has been no debate about the wisdom, or lack thereof, of these consequential fiscal decisions. Our nation’s fiscal sustainability is subject to the whims of a madman, and yet there is no outrage. But I guess we can take comfort that the newspapers are still talking about it.
Yet what really got to me this week was a tweet I read by Chávez a few days ago. In it, he announced that the government was committing US$60 million to build 1,138 houses for people who had lost their homes in recent torrential rains.
Now, this one didn’t even register enough to make the headlines. And yet, at least to me, it is completely outrageous.
Since when did the tragedy of losing your home – because it was built where it shouldn’t have been – mean you get a $53,000 check from Uncle Hugo? What does this say to the millions of Venezuelan families who can’t afford a home and whose names sit idle on countless government waiting lists? And even if you lost your home through no fault of your own, why should the rest of Venezuela’s taxpayers effectively subsidize your insurance policy?
Now before you get your panties up in a tizzy, let me be clear: of course, I empathize with those who lost their homes and their belongings in the recent mudslides.
But public policy is not about empathy, it’s about making choices. And the fact of the matter is that spending $60 million on building more than a thousand homes for mudslide victims who shouldn’t have been living there in the first place means that money will not be available for more important things.
Resources are scarce everywhere. This announcement means that schools will have less money, cops will have fewer resources, and those potholes in the roads that need fixing will still be there. All of this because some people decided to build their ranchos on an 85-degree angle.
Mudslides are a common occurrence in Caracas. Venezuela has a rainy season and a dry season, and every year, toward the end of the rainy season, when the soils have absorbed the season’s moisture, the same story repeats itself.
Yet the reason we keep hearing the same stories like some twisted version of Groundhog Day has less to do with topography, and more to do with incentives. People in Caracas’ shanties pay no attention to calls to abandon unstable homes because they know full well that someone will bail them out when the inevitable happens.
The fact that the government can freely spend $60 million of taxpayers’ money on a populist giveaway is sad. But the fact that nobody – absolutely nobody – in our country questions this boneheaded decision is downright depressing. The victims of the mudslides need help, but what the country really needs is a long-term solution to the problem. And we can’t have that long-term solution without a serious conversation on how our money is spent, and the myriad ways it generates perverse incentives.
With no debate, there can be no solution. So the days go by, and we continue spending money without ever learning any lessons.
It makes me so mad, I feel like moving to the side of a cliff.
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