A territorial mess, cont.

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Parallel governorship CorpoMiranda received more money this year that many state governments.

Venezuela is divided into states. States are divided into municipalities. Each municipality has one mayor, and each state has one governor.That is what the Constitution says.

Simple, right?

Well, no. The Maduro administration wants to change Venezuela’s territorial distribution and put it all upside down.

But even if the new Territorial Organization bill has not been yet discussed in the National Assembly, most state governments are feeling the pinch in their budgets. What we are witnessing is an all-out attack on (opposition-held) state and local governments.

Since they are largely forbidden from raising their own funds, state and local governments get their funds from a portion of the national budget. The transfer of funds from the central petro-state to state and local governments is known as the situado constitucional, because its rules are set out in the Constitution.

Since 2010, the situado has been under-estimated thanks to the absurdly low average price of oil upon which the national budget is calculated, resulting in Venezuelan states getting less money than they should.

The official budget, however, is simply a small, small part of what the government spends. Extra-budgetary spending is enormous, and all of it goes to chavista institutions. In the end, parallel state and local governments are the ones privileged by central authorities.

For example, let’s take CorpoMiranda. Founded in late March as an ad hoc consolation prize for losing gubernatorial candidate (and Foreign Minister) Elías Jaua, it has received more money this year from legislative appropriations than many State governments put together.

In comparison, the Miranda State Government got only one appropriation so far, a fraction of what CorpoMiranda is getting. Right now, there’s a titanic struggle between the Miranda Government and the Chavista-controlled Legislative Council over the funding of several projects, 2014’s proposed budget, and the debt owed to school teachers.

Thanks to that, in addition to the elimination of FIDES and LAEE funds and the denial to give states some financial autonomy through a long-proposed piece of legislation, states have been forced to stretch the little money they have, while new parallel governments are loaded with huge checkbooks, which they can use on a discretionary basis.

1 COMMENT

  1. As a government things work this way:
    1. We will tell you, straight and harsh, what are we planning to do, or in perfect Venezuelan, “cara ‘e tablamente” we will change this or that in order to control your life.
    2. Everyone complaints and talks about it until we give you the next big and important topic (a.k.a. “reparticion de penes” or “millones y millones”) and the people make fun about “how stupid” Maduro and chavismo are.
    3. While the people keep “making fun of Maduro’s ignorance” we are moving forward with what we already told you. Remember, I did it cara ‘e tabla
    4. We introduce and approve the new law, budget, or decree that will screw your freedom or rights
    5. The people complaint a little bit more but then they find out “it is too late, it is already approved” so they will leave/forget the issue and move on to the next “penes” or “millonas” conversation because those are the things that really matter.

    Chavismo learned this the hard way when Chavez tried to control PDVSA back in 2001. Now, they mastered this procedure and the opposition keeps dance to the music Nicolas or Godgived want to play.

    • You are correct and I am sure that the new Vice MInister for the Supreme happiness is one of those important topics like “repartición de penes” and millones y millonas”.

  2. In El Universal, Excerpts of column “Runrunes” (Rumors) released on Tuesday, October 29, there was a reference to Felipe Pérez Martí’s lambasting, from which I quote: “… statizing foreign trade and private banks” So, I looked up “statizing” and found a great number of references that I have been reading this afternoon. As I gather, “Statization” is the process of instituting socialism and has many incarnations, many of which are historically economically and/or politically disastrous. The variables seem to be how power is allocated to various institutions, namely the state, labor, consumers, corporations, etc. Statization, as I understand it, is when the government simply replaces the corporation as the new employer of labor. In those circumstances, the typical problems that labor encounters are exacerbated because government does not need to observe labor laws. And that is only one of the complications that arises. However, the RunRunes article apparently indicates that Felipe Pérez Martí’ correctly predicted the inflation, corruption, and the challenges of the coming election, and he is predicting a potential coup. Those references are highly esoteric, and I find them confusing. However, I think they may be the vary ideological issues that Chavismo is coping with at this time. Is there anybody in this blog community who is familiar with these issues?

  3. One thing I don’t understand: starting a parallel government involves more than receiving funding. There is infrastructure in place already, we’re talking buildings, utilities (electricity, water, garbage disposal), etc etc, AND bureaucratic and technical staff. What exactly is corpomiranda doing?? Are they just outsourcing, funneling money to their own pet projects? And to what purpose, other than “buying votes”? Are they doing anything concrete or just spreading the wealth, “organizing communes” and the like, whatever that means?

    • Well, by looking at CorpoMiranda’s website and Twitter account, they’re spending a lot of money in public works and giving tons of credits to people. Basically, a little bit of everything you wrote.

    • Spreading money to communes and other socialist entities without giving them both power and accountability (especially accountability to consumers) is the breading ground of corruption.

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