Earth to Jaua: we're broke

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Let's pretend we have a government.
Let’s pretend we have a government.

It’s funny how Minister Elías Jaua hasn’t fully realized how broke we are.

Last week, the Minister, along with Infrastructure Minister Haiman El-Troudi, gave a bloated press conference where he announced $5 billion in new infrastructure this year. Among other things, he promised:

  • 300,000 new homes;
  • the completion of 354,775 homes whose construction is already under way (I guess the 354,776th one will have to wait until next year);
  • 20 new Metrobus-type mass transit systems;
  • the conclusion of the Highway to the East;
  • 13 new trains for the Tuy Valley Train System;
  • 4 new subway stations: one in Caracas, one in Los Teques, and two in Valencia; and as a result
  • 734,000 direct jobs, and 1.12 million indirect jobs.

Of course, El Universal published this without a hint of criticism.

These guys make the job of solopromesas.com somewhat redundant.

1 COMMENT

  1. Jaua was a poor sociology student. He doesn’t understand basic math, why would he understand complex budgetary inconsistencies?

    He isn’t the problem, the problem is, why are Venezuelan engineers extracting oil in Colombia and China, while Jaua and his ilk are in charge of an economy that moves half a trillion dollars per year?

      • The problem is that nobody has a good handle on what the dollar figures actually are for the Venezuelan economy, given the multiple exchange rates and the inflation. Consider the different measures for the Venezuelan economy which compare 1998 to 2012. The World Bank has contradictory figures when calculated for Constant currency units versus Current currency units- which you find out when you try to convert Current units into Constant units using an inflation deflator.

        The World Bank figures for constant B’s [LCU= local currency units] and constant dollars are quite similar. I have calculated simple ratios of 2012 value /1998 value.

        The World Bank data for growth in the Venezuelan economy in constant B’s [Local Currency Units] or constant dollars gives the same increase in the Venezuelan economy from 1998 to 2012.. Both show a 48 % growth for 1998-2012.
        2012 data/1998 data
        GDP (constant 2005 US$) 1.478
        GDP (constant LCU) 1.48
        GDP, PPP (constant 2011 international $) 1.48
        These give an increase of 48% in the Venezuelan economy in constant currency units from 1998 to 2012. All the above 36 indicators show an increase in per capita income of 14% from 1998 to 2012.

        When we look at current dollars, we get very different figures, even after factoring out international inflation, for the 2012 data/1998 data
        GNI, Atlas method (current US$) 4.85
        GNI (current US$) 4.85
        GDP, PPP (current international $) 2.00
        According to the Bureau of Labor Statistics of the USG, inflation from 1998 to 2012 was 41%.
        In constant dollars, this would have Venezuela’s GNI in constant dollars in 2012 being 3.44 times that of 1998’s GNI: an increase of 244%. Compare that to an increase of 48% using constant LCU or constant dollars. The inflation deflator should have rendered them the same.
        Which means that there was an appreciation of the Bolivar. But how much that actually was, in real money and not in funny money with multiple exchange rates, is another issue.

        According to World Bank data, Both Alejandro and Wanley are correct, and both Alejandro and Wanly are wrong. When you can use World Bank data to support either point of view- the per capita income increase of 14% in 14 years would support Wanley and the GNI current dollars would support Alejandro- you are chasing your tail.

        For me, the best measure of the Venezuelan economy is in referring to constant LCU/constant B’s. This is BCV data,which is even more damning for the GOV.

        How large is the Venezuelan economy in dollars? We don’t really know. All we know is that it is about to get smaller than it was.

        http://www.bls.gov/data/inflation_calculator.htm

        • Opacity at its best. Absolutely disgraceful. The country has no hard data, everything has become an opinion. Everybody is guessing. The saying is true: small lies, medium lies, big lies and then statistics.
          The inflation numbers are also manipulated, sorry “the methodology” for measuring inflation has changed several times.
          So half a trillion “IT AIN’T”, not even close. That would give a per capita GDP of almost 17.000 $, does that sound reasonable? Look at the poverty around. The real number nobody knows, heck they don’t even know how many prisoners they have in a jail.

  2. I read another article in El Universal in which Jesse Chacon was announcing several billions of dollars in new new spending for electricity generation and new transmission grid. Same thought… where is that money coming from?

    • And what if they were to raise electricity rates to help pay for ALL of this? By how much? Would it be enough? Who would help pay these new, electricity rates to help pay for, ….whatever? Or would teenagers climbing poles with wires in their hands be the new, unofficial, symbol of Venezuelan prosperity? Same with gasoline. If you don’t raise it enough to cover basic costs, you quickly face another catastrophe just around the corner.

      • Even if electricity rates went up to the sky it would solve the problem. Rates are in bolivars, no shortage of those. Too bad they can’t print dollars.

  3. This Eastern highway has become in my eyes the symbol of Venezuelan incompetence across generations.

    If I remember correctly, it has been in construction for more than 20 years. Never finished, even the sectors claimed to be complete are faulty.

    Think how much has been built in Brazil or Mexico since 1994, for example, to highlight how inept governments have been in Venezuela.

    • I have a distinct memory from the time I was 6 or 7 of sitting in the back seat of a sticky, stuck-in-traffic 1978 Malibú on a swealtering start-of-Semana Santa Saturday on our way to Higuerote, AC turned off because the car was on the verge of overheating, having made it only as far as Caucagua, and hearing my dad try to cheer us up saying “but just think, when we come back next year the highway will be built and we’ll make it to Higuerote in like 45 minutes instead of 4 hours!”

      This was in 1981 or 1982.

      • Let me tell you: you had it easy. My childhood trips were to CARUPANO, yeah, so I had to face the following bottlenecks:

        1)Caucagua
        2) Cúpira
        3) Pto La Cruz / Barcelona

        And then climb the nightmarish Guanta-Cumaná route, followed by the murderous Cumaná-Carúpano.

        That is 13 hours, my friend. I nearly turned my father into a child killer by asking “¿Cuanto falta?” 500 times before Caucagua.

        We had to take anti-emetic medicine to stand the route without vomiting.

        Enough to make you detest the bloody country forever. I am actually surprised I care about the whole bloody thing.

        There is no beach, no matter how blue, worth that trip.

        On the other hand, we had a nice car, the AC worked.

      • Our nightmare trips as children were to San Cristobal and back , when the Panamericana was being built , it might take three days , one to Barquisimeto , another to Merida and the third to San Cristobal we would encounter impassably muddy roads , swept away bridges , huge earth slides, no A/C of course just the open windows which had to be closed fast when another car approached on the other side trailing the usual dust cloud etc. The only difference that when my father said ´next year it will be shorter and more comfortable because the Panamericana will be complete ‘ thats exactly what happened, the following year the Panamericana was completed and the trip was made in one day!!

      • Almost makes one nostalgic for MPJ….at least he completed projects. Every time I go to Merida, someone tells me the story of the tunnel that was off by a meter or so in the middle.

    • Every Government for the past 30 years or so has fully budgeted the completion of the Eastern highway, then stole most of the money, trumpeting the completion of a few kilometers as a great accomplishment. As for Jaua, I really believe he’s too stupid to even begin to comprehend the idiocy of his infrastructure promises.

  4. Here we go again with the immature videos that seek to divert from the “multiple-handle” troll Lobo, f5, gro, as well as DD, one or more known by Betty. Who’s next to bomb posts in CC?

    • Laugh, syd, it’s good for you.

      Jaua may be suffering from mild schizo delusions. Symptoms include hearing el pajarito whispering … “si lo construyes, vendra”

  5. “300,000 new homes;
    the completion of 354,775 homes whose construction is already under way (I guess the 354,776th one will have to wait until next year);
    20 new Metrobus-type mass transit systems;
    the conclusion of the Highway to the East;
    13 new trains for the Tuy Valley Train System;
    4 new subway stations: one in Caracas, one in Los Teques, and two in Valencia; and as a result
    734,000 direct jobs, and 1.12 million indirect jobs.”

    If you’re going to announce all kinds of fantasy projects, why stop there? He could have added more more to the list, if you ask me.

    • Methinks his fantasies are crafted with the sole intention of attracting new adherents to chavismo and keeping the old ones from straying to the opposition, ahead of parliamentary elections in October 2015

      • “crafted with the sole intention of attracting new adherents to chavismo ”

        Not happening. Besides those on the payroll, they are down to their core. Anyone who is not completely and totally emotionally connected to the regime is not jumping,or staying, on board anymore.

      • Syd, this really is relevant–Bill Ross of Queens is really “Venny Trader”, astute investor in Venny bonds, and erstwhile contributor to this Blog (lol).

        • my mistake at not recognizing, among the various immature videos presented by the junior set without much thought, that there might be one closer to the mark. And nah, I think VT has a little more intellectual heft than this pobre diablo.

  6. Massive investment in public transport is a simple idea which would reduce the unsustainable levels of traffic in Caracas, reduce insecurity and violence, and …mitigate the effects of a necessary gas price increase. Unfortunately the simple idea wasn’t thought of and executed back when it might conceivably have had a chance of being paid for and done.

    The building is burning down with everything in it and this guy suddenly wants to buy an alarm and a sprinkler system…

    • The man really doesn’t see himself as having any blame all for this disaster. Incredible!
      I’m sure Giordani still sees no error in his 1990s article where he praises the North Korean economy, either.

  7. They are all talking and distracting us from looking at the ones manning the puppet strings!
    wait…. puppet master?

    Qui prodest ?
    Quen se beneficia de la debacle de Venezuela de los ultimos 5 lustros?
    quien se beneficio mas de todas las decisiones, falta de decisiones y accciones reales?

    *(hint is a dirt poor island in the Caribbean with a rich and powerful nomenclature.)

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