$12,000,000,000 in the Hole (and Digging)


Stop_Digging_^_-_geograph.org.uk_-_195319Bank of America today estimates that, if oil prices stabilize at the level they’ve already fallen to, Venezuela will have to find an extra $12 billion in foreign financing to balance its external accounts in the next year.

That’s on top of the already massive import cuts that have already sent the economy into recession this year and led to an absolutely unprecedented supply crisis.

The options are all bad: absurdly costly new financing? clamping down even more on import volumes and adjusting-via-empty-shelves-s’more? Selling off Citgo?

Ghastly stuff, all of it.

Now, like Rodrigo says, the interesting thing about Maduro’s approval rating, at 30%, is how high it remains. Without Chávez’s charisma, mired in a economic chaos and recession, visibly rudderless and incapable of the simplest common-sense reforms, Maduro still retains the support of 3 out of every 10 Venezuelans. That really is kind of remarkable.

But will that chavista hard-core stay cohesive after another round of adjustment? Where exactly is el llegadero for the patriaomuerte crowd? The crazies have had to swallow hard over the last 18 months to accept Maduro’s leadership. Some of their most visible leaders have already been thrown under the bus, others have been murdered. Everyone’s standard of living has taken a hit – well, everyone who’s not in uniform, anyway. Chavismo’s base is under strain, no question, but you can’t really say it’s buckled.

The people we used to call “transactional chavistas” – people without strong ideological allegiances, who were in it for the perks – have now turned their backs on Maduro pretty decisively. But the core hangs on. Just.

What happens to that cohesion when you force another $12 bn adjustment?

Caracas Chronicles is 100% reader-supported. Support independent Venezuelan journalism by making a donation.


  1. Just 12 billion?
    Well, I’ve got some news for ya, and yet more ammo for twisting and keep eroding the “chavista base” beliefs in their anti-gods:

    “Y en la Seguridad Alimentaria, también tenemos a otra cubana, de nombre Barbara Castillo Cuesta, que es miembro del Partido Comunista cubano, que es la que se encarga también, y se encargo, desde el 2008, de las compras y de las necesidades de PDVAL , hay un convenio de PDVSA, mas de 13 mil millones de dolares, en estos últimos años, se le han entregado a Cuba en petroleo, quisiéramos cualquier familia venezolana, tener esas condiciones para comprar una casa, para comprar un vehículo. 25 años le dan para pagar, al 1%, y dicen que la deuda que tiene el gobierno cubano,a Venezuela, sobrepasa los 7 mil millones de dolares. ”

    There you are, the corpse carved a 13 billion dolar-shaped hole in Venezuela, which is basically the simple plunder of Venezuela’s riches by the diarrhea mummy.


    Why do you think folks that tenientico mc choro pimentón wants to toss Berrizbetia in a cell or would prefer to frag him?

    The worst consequence for US are all the options you mentioned, the BEST option for Venezuela is simply rescind such agreement and get every cent of those thirteen billion back.

    There’s a really easy “narrative” for the M.u.d. to catch voters there.

      • The “narrative” which I was referring to could be:

        I think that castro screwed Venezuela, hard, that’s the main source of our woes.
        Damaging subsidies should be reduced, such as gasoline (Just keeping it for public transport)
        Price and currency controls should be gradually removed (Inflation spikes are inevitable there and are going to hurt a lot)
        Subsidies and gifts for other countries should be axed, that way there would be currency for social investments (hospitals, schools, police, firemen and such)
        Legal permits to establish a business (in any scale) and maintain it should be obtained with simple steps.
        The judicial system and law enforcement should be purged from trash.
        The education system should be reformed to teach younger generations about all the damage castro and his dictatorship have done to Venezuela since the 60s, the astounding amount of idiocy that ruined the country’s economy in the 80s and 90s, and how chavismo destroyed Venezuela in the 2000s.
        Criminal gangs should be disarmed, by force, and terminated if necessary.
        That’s what I can get in like 5 seconds off the top of my head right now.

        Yeah, I guess that sounds like a fascist wild fantasy, or maybe I’m aiming too far from the target.

        I guess the idea of coming to chavistas simply showing them the truth of the reasons about why the country is so fucked up shouldn’t be that hard, like I said in another entry, sugar-coating everything with some fetishist respect for the wax doll or cuba just complicates stuff, because that way the chavista bases are being treated like stupid children that can’t accept the fact that Santa is not real, and you’re not advancing at all to purgue chavismo from people’s minds either; what guarantees that another chavista doesn’t get elected after a MUD government? The only thing that could help stop commies from coming into power would be showing how much damage they did while they were the power, and remind it to people every day for years to come.

        And I was using “stupid” in the strict sense of the word: “Showing a lack of understanding to understand stuff” <- The M.U.D.'s speech right now hasn't changed since the infamous "coordinadora democrática", the opposition has been terrified from attacking the wax doll in any way possible.

        Compare that behavior with the "antipolitics" in the 90s, which was the completely opposite, the government and each public worker were blamed from even rain at that point, then the wax doll came with his promise for revenge and everybody ran to vote for the douche, just to "take vengeance on the mean, all guilty government"

        Sorry for the english there, not my first tongue.

        • “Yeah, I guess that sounds like a fascist wild fantasy, or maybe I’m aiming too far from the target.”

          Funny how that happens when you advocate the murder of large numbers of people…

          • Well, chavismo advocated to murder a large number of people first.

            But, beyond using the lame excuse of “they said it first!” I defend the termination of criminal gangs “if necessary” with the argument that an amount of the criminals are willing to surrender their weapons, pay for their crimes and return to society, while others are willing to kill as many innocents as possible to keep their impunity.

            If the criminal pays his debt with society by purging a sentence in prison, fine, he’s got what he deserved (after he’s put ina fair trial with the rights given by law, of course)

            But if he wants to kill the rest of the country just to continue being an asshole (Case in point: Colectivos aka death squads, who want to keep murdering people right and left), well, the doctor prescribes a dose of Bullet-to-the-face-anol.

            After all, the criminals are the society’s enemy, and should be treated as such.

            I understand that there’s a portion of the population that’s got relatives that are involved in criminal activity one way or another, and they’re never going to allow any regime of law to touch said relatives (Like those people who come sobbing after a barrio scourge got killed and claim that he was a model citizen), but we can’t tolerate and acquiesce crime forever, because we have seen that impunity encourages the worst crimes, both in the 4th (impunity for corrupt officers) and in chavismo (impunity at all levels for all crimes)

            But yeah, as I said, getting the society free from crime is fascist, I mean, I practice my best nazi-robot salute everytime I propose that xD


          • Killing people is wrong.

            Some of us do not consider malandros “people”. Thus, an elegant solution is to “dispose” them accordingly.

  2. Don’t worry, the President himself said that oil prices WILL rise! Because that’s the only outcome that the Comandante Eterno will allow from the heavens, right?

    We’re so doomed.

  3. I’ve never understood why CC is so enamored with F-Rod/Bank of America. These prognosticators’ BS is not unknown. The emperor has no clothes

    • It’s not CC, fosforito, but F-Tor who’s enamored with F-Rod.

      Note all the editorial massages in today’s post on F-Rod’s latest revelations that go something like this: oops, the sky is kinda falling, after all, for how in hell will Vz find that extra $12 billion in foreign financing? At least if I say that Vz needs this, it’ll protect me from my earlier claim (no default here, folks), designed to market junk Vennie bonds.

      What I love is F-Rod’s tilted head, his index finger placed firmly on his cheek while he wonders like an Alice in Wonderland about the strength of public adherence to Maduro, based on the information from a largely discredited pollster. Then again, whatever helps F-Rod/BofA backpedal his earlier claim and telegraph a note to bondholders: maybe it’s time to sell those Vennie bonds folks, albeit it at a loss.

      Reality bites. Gotta find some swaddlin’ clothes to coddle F-Tor in his bull rush basket.

  4. Speaking of growing discontent, I am hearing about ghastly lineups for gas, in Valencia, Tachira, Barinas at least. What is up with this development? Is it just some regional thing that affects everybody I happen to know?

    • I’ve heard of some issues in Ejido as well.

      What if, instead of raising the price of gas, they left it as is….just made it unavailable with intermittent deliveries? Sure, gas is still cheap, if you can get it. Kinda like chicken, rice, oil, whatever.

      Then they can blame the disruption in the supply chain on the economic war, which at least a sizeable portion of people would believe. Meanwhile, they can vacillate that much longer.

      • More likely they are having production problems and can’t satisfy the demand. Somehow that seems worse to me because it implies a continuing degradation of capacity and not a conscious effort to curb consumpton. As always with this regime, everything that happens is by happenstance and not by design

        • Agree. Occam’s Razor: The simplest explanation is usually the correct one. In this case, we should not try to see a conspiracy when stupidity and incompetence can explain the facts.

          • Whether there is a production constraint or not, previously, they’ve imported gasoline when there were concerns about supply (cf Amuay).

            The number one non-value added hole in the economy/budget is the gasoline subsidy. Essentially free supply to a consumer results in, for all intents and purposes, unlimited demand/consumption. Its unsustainable and as the government has been willing to constrain other imports (even with unrealistic price increases), why would they not do the same with gasoline?

            Remember, something like this has been coming. They are aware of the issue as its been broached before regarding a price increase for gas, yet they’ve done nothing about it whatsoever, likely because of the political cost. Wouldn’t it be easier to simply cut the supply somewhat and maintain the price, effectively limiting capital losses and mitigating some of the subsidy’s damage?

            That’s Occam’s razor to me.

      • Restrictions on gasoline sales will lead to a black market which reflects supply and demand. Instead of transporting gasoline to Colombia, people can just fill their tank and sell the gas at a premium to the last guy in the line at the gas station. It could be happening now.

        Maybe Chavismo feels more comfortable with more corruption.

    • Here in Valencia, in the morning, there was one station that had a line so long that it collapsed the traffic around it. In the afternoon, I saw another that had a line that you’d normally expect. I think people just went paranoid because of what’s happening in other places.

  5. In regards as to how long can the regime hold on to its almost 1/3 approval rating, I think that, paradoxically, it’ll be the upcoming elections (without the presumably expensive campaigns we’ve become accustomed to) that’ll allow the dam to breach. In a much larger scale, political loyalties are in fact fads, and just as the ones in fashion or music, they fade away as well. Sure, there’s always a lingering presence of what once was (Peronism, the Che cult, Eastern German communist nostalgia, among others) but that is too a point that will be reached.
    Of course, it must be kept in mind that the current government cannot even afford to attend its most basic problems such as the recent health crises, let alone a glooming and almost daunting amount in foreign, commercial and domestic debt. Not unless it is willing to compromise and allow a flexibilization that helps adjust the country with, well, reality. The almost undisputed permision for basic good produces to up the prices by over 200% in some cases not only reveals a tale of how much the value of our currency has sunken, but as well as how fall they’re willing adjustment to go. This week, parking lot prices we doubled as well.
    In short, elections could be that political breaking point that ought to accompany the economical one. In spite of the fact that we’re heavily in debt, 30% is loyal, as you point out. However, this is still the tip of the iceberg. Admitedly, it’ll never be pretty let alone bearable, but it can always get worse.

    • It depends greatly on whether a group large enough will be brave enough to break off. If that happens, all bets are off. If not, things will slowly get more and more miserable. It could last a long while.

  6. History has no shortage of martyrs. A 12b adjustment would shake any normal political base, except that the chavistas’ faith in the establishment is not normal.
    At this point, I’m more inclined to see them fall spectacularly with an economic doomsday rather than see them fix their mess.

    • I think that they feel the same as you. They rather let the bomb explode than do anything about fixing a single problem.

      I mean it’s the only logical explanation, they have to be doing what they are doing on purpose.

    • The thing for the Chavistas who are running the country, is that they have all long established their golden parachutes. Their foreign bank accounts are flush, they have homes outside, the high profile ones have already made their agreements with host countries for asylum/protection, etc.

      They know that the collapse is coming. The results of the “Sacudón” confirmed that they do not intend to fix their mess. They will not be martyrs. When the time comes when there is simply nothing more left to steal, they will just slink away in the dead of night and abandon Venezuelans to their fate.

      • Of course they’ll pack their bags and leave when the chips are down. There’s no question about that, although their departure will never be voluntary.
        But I was talking about their supporters. When the worst comes and goes, there will still be chavistas wearing red shirts with pride.

  7. Don’t worry. As long as the military is well fed and paid, chavistas will still be in power for a very long time.

    Ever heard of “songun” policy?

    Venezuela is becoming Latin America’s North Korea, without the gulags (yet).

    • North Korea has a population of approximately 80% of Venezuela and a standing army approximately eight times that of Venezuela. That’s about how much you need for Songun to work. You can’t go from a state with an army to an army with a state in a few years either. A generation or so would suffice. Chavizmo has mere months to do so.

  8. As long as a lot of the oppo elite behave arrogantly and do not think you should talk clearly to people and as long as a lot of those oppos are not aware of fundamental principles of democracy and accountability either, we won’t convince many more.

    We need to be much more kosher than the Rabi or much more Catholic than the Pope, not just a wee bit.

  9. “Maduro still retains the support of 3 out of every 10 Venezuelans. That really is kind of remarkable.”

    It’s fanatism. Their conscience’s have been so annihilated by state propaganda that they won’t come out of the dark by themselves. Soon they won’t have enough food to give to their own children, and they will still be on their knees praising la Revolución Bonita like idiots. It reminds me of that Groucho Marx’s quote: “Who are you going to believe, me or your own eyes?”.

    • Agree. I think those fanatics, 30% of the population, will continue to support the “revolution” no matter what. Those people are lost forever.

      • After the collapse of communism in Europe in 1989, the old communist parties got 20 – 30% of the vote in open elections. A lot of people are basically conservative, and regard the government, almost any government, as representing the country, the flag etc., and additionally there are those who are profiting, or expect to profit, from the status quo. We don’t need to postulate fanaticism to account for 30% support.

        • So, do you call someone who despite suffering a lot with one goverments’ policies still chooses to side with it a ‘conservative’? Interesting perspective. What about a chavista who is forced to abandon Venezuela because of the food scarcity and crime, but still defends the regime like a preacher in whatever the new country he is now living in? Is he just a ‘conservative’ too?

          Do you remember Doctor Zhivago’s reaction when he sees dozens of proletarians living in his own house? He comes to his senses and realizes that maybe that regime was not good after all, whereas a fanatic would have never reached the same conclusion. Sorry, but I prefer to call those people ‘fanatics’.
          Because the fanatic is someone who, instead of believing his own eyes, decides to believe in what his masters tell him what to believe in. Thus, in most cases it’s almost impossible to bring these people back to reality because their consciousness have been reduced to the level of animals.

          Maybe those 30% are not all fanatic, but the ones who keep being chavistas after you had exhaustively explained them how the regime is harming their lives clearly are.

    • I call it the “caracas/magallanes” sindrome, a fan of Leones del Caracas or Navegantes del Magallanes (both the most popular beisbol teams in venezuelan profesional league).

      No matter how bad their team plays this year, a “Caraquista” o “Magallanero” always be a “Caraquista” o “Magallanero”, guess is the same for yankees o red sox fans.

      For this people, for good or bad, “chavismo” is their team, regretably.

  10. The opposition is a damaging mix of fearful people who do not want to rock the boat, people who are wishy- washy opposition ( some of who continue to receive perks), and those who would be willing to sacrifice to get rid of the government but who do not have the back up they need because so many are, indifferent, morally corrupt, or fearful,

    Until the opposition gets its act together and stops believing in stupidities( like the government will collapse any minute, or the US will bail them out etc etc) …there isn’t much hope.

  11. My dear Mother in Law arrived in the US last night. She has been about as fervent a Chavista as anyone I can recall.

    She lives in Catia La Mar, in a somewhat decent barrio.

    No sooner was she out of baggage claim that she started to tell us how difficult life has gotten, how nothing is found on the shelves when you need it, etc.

    Her most telling comment however, was, “Everyday I see people protesting this or that, yet no one wants to do anything other than scream and shout. I have no idea why someone doesn’t do something”

    So I asked her why she didn’t do something.

    “Well”, she replied, ” I would if I could but I have my pension to think about, and my brother’s medical treatments, and I know there’s at least two snitches on our street………”

    Bottom line, lots of folks are pissed, but no one dares to do anything because there are no leaders to point them in a direction they feel will take them somewhere.

    The fact the opposition polls better than Maduro is more a testament of “anyone but Maduro” as opposed to “I like the MUD better”.

    Still, “anyone BUT Maduro” is a golden opportunity.

    Problem is, I see no one in the On Deck Circle that can hit it out of the park.

    So it looks like implosion is the leading candidate.

    • Sounds like a chunk of that 30% is composed of people afraid of losing their benefits, jobs, misiones, huesos, etc… rather than emotionally attached to ideology… Is like the wife that gets beat up by her husband, but is afraid of a break up because of fear of making ends meet by herself

      • Don’t forget the fear that voting is not secret. The same with polls. Respondents cannot be certain that their information will be kept confidential so they answer in favor of the government to protect their benefits.

      • Try a father-in-law, who unfortunately, is an old school communist/Tupamaro that used to run guns across the Colombian border. Dinners are….interesting.

        A reformed chavista mother-in-law isn’t that bad, since they are generally delighted to escape Venezuela and see the grandkids. It results in at least 50% less sarcasm.


Please enter your comment!
Please enter your name here