Adrift in Caracas


1024x1024-life-of-pi-13I’m in Venezuela this week visiting friends and family, so I’m not going to be posting much. However, I did want to convey the very strong sense that the nation is rudderless.

Everything is as expected. The economy is dysfunctional, there is chaos everywhere, and politics is eaten for breakfast, lunch, merienda, and dinner. But there is something else this time around: a sharp feeling, an ominous sense in the air, that we don’t know where we are going.

Take yesterday’s news. The country is mired in a profound fiscal hole, and measures have to be taken. A modest devaluation is not going to solve the problem on its own. In true chavista fashion, the goverment is likely going to tax its way out of the hole, via an inflationary tax or other taxes such as raising the Value-Added Tax (VAT) or bringing back the Bank Debit Tax. This is more likely now that the government has decided to give oil companies a big fat tax cut in the middle of a budget crisis.

Yesterday, rumors swirled about a rise in VAT. Everybody assumes it’s coming, but chavistas are adamantly denying it – a sure sign that it’s in the pipes. Wheels are in motion, and yet … nobody knows. Nobody knows who calls the shots. Nobody knows when the guillotine will fall. Nobody knows whose tea leaves we have to read.

Before, it was easy – whatever Chávez said, that was the law. But Maduro is a joke, that much is clear. And as much as some believe the Cubans are calling the shots, they really can’t manage their own country, much less a larger, more complicated one. It strains belief to think that Raúl Castro is poring over the day-to-day details of the Venezuelan economy.

So, the nation plods along, with a ghost of a President, and no clear indication of where we are going. We may have elections in a month, in six months, or never. Tax rates may rise, or maybe not. Businessmen don’t know what the exchange rate will be in six months, and they don’t know who they will have to negotiate their prices with. Friends who have conducted focus groups say the first word out of middle-class Venezuelans’ mouths is “zozobra” … anxiety.

But the real problem with being adrift is that it opens the door for extremists both left and right. The problems in Venezuela are so deep, so intractable, either extreme could make a convincing case that, without military mano dura, the nation will be lost. A significant portion of people might fall prey to these kinds of movements. Hugo Chávez’s self-aggrandizing warning that only he could ensure stability in Venezuela … may prove true.

These are sad, scary times.

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  1. Really? I think it’s clear enough:

    At least as far as the economy goes, Giordani makes all these decisions. He did back when Chávez was well, and he does still. He was an ignoramus-nutter back then, AND HE STILL IS…

    • Quico, I strongly disagree with this. Giordani’s sole source of political capital was him being lodged in Chavez’s ear. Without that, the guy has very little real power. How many “diputados” does he have sway over? How much of the bureaucracy? How much of the other ministers does he hang out with?

      There is a very real sense that Giordani has some power, but it’s diminishing by the day.

      • According to the rumor mill, Giordani was adamant on raising gasoline prices. Since gasoline prices have stayed the same, I wonder if Juan is right and Giordani is losing that “some power”…

  2. Just a small typo:
    “This is more likely ow that the government has decided to give oil companies a big fat tax cut in the middle of a budget crisis.” -Now

  3. Beg to differ on the “Maduro is a joke” part. He is, on the purest sense of the word. And in another, more straightforward country, he would be almost unelectable. But Venezuela ain’t normal, never will be. On this wonderland we call home, this ´joke´ of a politician will be elected president. And he will win by a minimum of 10 points, mark my words. He, or any other comandante-land candidate, will crush any oppo foe. They have sympathy on their side. That, plus money, a complacent CNE, and the diehard “devaluation is actually good for us cause the government said so” believers. But now is not the time to cry over this. This can be good. Better that the chavista movement fizzles on its own. Let them handle what is coming economically and socially. And let the diehards live it and process it. Then, and only then, will we have our first real chance at getting this country back on track. Patience is the word right now. Patience.

    • The ship is sinking. You might be right. It might be an opportunity to put this country back on track. It is a pity we are also in the ship.

  4. I agree with Bonifacio. As terrible as it is to see our friends, families and countrymen suffer through the birth pangs of a new society, nations are like people. They must grow up, change and learn from its own experiences and errors. My hope is that the change is for the better, since it clearly could turn for the worse. While Hitler deserve all the condemnations for its heinous acts, eventually all Germans understood that he was a reflection of their own society, whether they agreed with him or not; each soldier was a little Führer in his own situation. I find fitting that now Chavistas proclaim that “Todos somos Chavez” since they will be, first and foremost, the recipients of the Chavez legacy: a worthless currency, a city ruled by prans, a fertile land without food. I see it as our duty to shelter and protect as much as possible those we love from this apocalypse. At least we have the advantage of foresight while Chavistas drink their Kool aid.

  5. Good story, JC.

    Just a small quibble:

    “It strains belief to think that Raúl Castro is pouring over the day-to-day details of the Venezuelan economy.”

    Is he PORING over, as in looking over, the day to day details, etc………

    OR is he POURING OVER, as in dumping copious quantities of, say, poop, over the day to day details, etc……..

    Or both?

  6. “And as much as some believe the Cubans are calling the shots, they really can’t manage their own country, much less a larger, more complicated one.” In their book, this bald, uncluttered statement of fact doesn’t discourage them one bit, inter alia, because they would never admit to its being the case. Besides, utter inability to run a real-world anything is a hallmark of regimes such as the one at issue. Real-world conditions are deemed subversibly intrusive in the parallel universe where they stagger “onward and downward”.

      • Rigpig,

        Haha, so true

        “Real-world conditions are deemed subversibly intrusive in the parallel universe where they stagger “onward and downward”.”

        Outside this dimension, who knew there was so much happening?

  7. I was in Caracas 2 weeks ago.
    The traffic is unbearable.
    BUT I thought those Chinese timers installed at the traffic lights were cool. they were not three years ago.
    AND I even dared to go to El Calvario Park because somebody told me that it had been recovered as well as downtown. Downtown is actually in the same shape than 20 years ago, when I used to work for the city, no big changes there except the red and horrendous phallic monument in the Plaza El Venezolano. It was a Sunday and everything, including the churches, was closed, so everything pretty much dead.
    But El Calvario was nice, guarded, with tons of people walking around. They opened up a cafe at the top where you can buy cafe bolivariano and be proud of the revolution. LOL.

    • I forgot something else I saw in downtown Caracas: propaganda, propaganda, and more propaganda. In every post, in every public building, hearts and people hugging Chavez.

  8. “Hugo Chávez’s self-aggrandizing warning that only he could ensure stability in Venezuela … may prove true.”

    I think that is the most shocking statement ever made, behind the statement that the opposition is unelectable…

    • I beg to differ. The only reason everybody is happy is because of the petrodollars and the irresponsible fiscal spending. People were glad during Venezuela Saudita times too. So happy, that they even voted CAP for a second term.

      If chavismo come crashing down it will be because the government has run out of money, not because Chavez was so good at chitchatting.

  9. without military mano dura … ??
    We shall look to Law and Order, Uniforms & Medals, Spiked Helmets with
    bated breath.
    I prefer your >>> a sharp feeling, an ominous sense in the air, that we don’t KNOW where we are GOING.
    Because, this way, we KNOW how it will all END.

  10. Shut, all what is needed there is a modern version of Pinochet. A good 10 years of “it is my highway or the highway” after implementing good old Chicago Boys economic policies will fix it. Too bad Mr. Friedman is dead.


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