Muzzling a country

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CorralesCovering the quagmire that Venezuela has become in a fair way has always been the main purpose of Caracas Chronicles. As bloggers we try to unveil to the world what’s really happening on the political, economic and social fronts, providing our humble analysis of the status quo.

Yet recently it has become extremely hard to justify our arguments given the insane scantiness of official statistics. Even more, as the country attempts to miserably parry off the gloomy economic outlook ahead, it seems that the government exerts more effort in hiding the truth and keeping people uninformed of what’s going on, than actually governing.

Today, we Venezuelans do not know for sure whether our economy is worth $300 billion or so at the official exchange rate … or $20 Billion at the black market rate.

The last time we heard anything about official scarcity levels from the Central Bank was August of last year. It”s pretty much the same story with balance of payments data, CPI numbers, or whatever.

The World Bank claims that, according to our official data, we’re an upper middle-income country (the canard keeps on and on). What’s more dreadful is that these delays in the release of the data dampen the credibility of both our national statistics and our institutions.

Just last week, The Economist magazine published an article tackling this very issue. Not only is the Government witholding the information or tampering it, but it harasses and locks-up anyone who dares question their narrative.

This demeanor might have a sound reasoning according to Javier Corrales, a political scientist and friend of the blog. In a chart in the aforementioned article from The Economist, his research shows a staggering decline in the number of newspapers, TV & radio stations (local and nationwide) since 1998, meaning less accountability or oversight from the independent media … or what’s left of it.

Under these conditions, social networks might give an edge to civil society, but in Venezuela internet penetration is one of the lowest in the region (not to mention it being one of the slowest), so fewer Venezuelans have access to information. You can check some of Prof. Corrales’ slides from an event in Miami 2 months ago speaking about this very topic of Venezuela here.

This is why our fellow blogger Gustavo Hernandez, among others, tracks the constant harassment of what’s left of the independent media from what he labels the Hegemon, Corp, and its gangster gambits such as the “aggressive-takeovers” of an independent media outlet Chavismo-style. For example, did you know that El Universal was apparently bought by Tareck El-Aisami?

Deep down, the government is not worried about Venezuela’s truculent morass. It’s only worried about what people say about it.

1 COMMENT

      • Hey Juan, saludos – wanted to give you a shout-out the other day on a different thread but didn’t have time.

        I didn’t know you are a Michigan guy. Go Blue! I learned Spanish at UM and eventually graduated Poli Sci (BA ’89).

        “Los líderes y los mejores,” ¡¡pues!!

  1. Not mentioned is their practice of filtering the information which they do get out so that it is interpreted more favourably than it should , for example the recently announced 5 billion dollar Chinese loan is only for use in highly specific oil projects , mostly where China is a joint venture partner and will have to be paid with supplies of oil . the chinese are now very wary of giving the govt ‘no strings attached’ loans of any kind , This says a lot about how even the supposedly sympathetic Chinese have lost confidence in the regimes handling of the economy. or in their capacity to use the loaned money wisely.

    As LVL pointed out recently , in politics perceptions are more important than realities so that if you can methodically manipulate and falsify perceptions as a means of keeping your credibility , thats what you go for.!! , thus the importance of controlling or muzzling the media to maintain a rosy picture of the govts performance and outlook, thats why information is either distorted or simply made unavailable altogether .!!

    An yet a lot of information does get out because the govt bureaucracy is a sieve or because govt informtion can be counterchecked against other independent sources , ( for example oil related information can be reality checked against information from Opec or the import statistics of other countries or the IEA) or even because the govt is a mess keeping all the information it publishes congruent ( the CNE information of population shifts in certain electoral circuits vs the information posted by the Office of National Statistics) .

    .

  2. Nothing new about Dictatorships and media control, among the Freedoms to go, one of the first ones is that of expression.

    This works particularly well on naive, under-educated countries, where the populace will believe almost anything the controlled media says. In more educated, advanced societies, no one would believe the stories about Economic wars, foreigh bachaqueros stealing the pueblo’s food, Yankee Invasions.

    Having the “most Modern Transportation System in the World” is my favorite! (6 miles of some crap railway in Maracaibo).

    Our people Believe THAT. Millions of them. They do.

    That’s why Corruptzuela is where it is.

    • In an earlier post Bill Bass suggested naming something after Josuf Goebbles. The “Most modern transportation system in the world,” would be perfect!

      • The regime could pay no greater tribute to Dr Josef Goebbles , the most noted intellectual mentor of the Regime , than naming the ‘Most Modern Transportation System in the World’ after him .

      • Japan’s Minister of Land, Infrastructure, Transport and Tourism. Akihiro Ota is about to arrive to Maracay, Venezuela today. “We are impressed by the latest advancements in Transportation Technology in Venezuela. We humbly hope to learn all we can about this incredible TransMaracay futuristic approach to Human Logistics Solutions” he declared.

        “One day we hope to implement such advanced technology and replace our obsolete Maglev trains”, he added.

        http://www.cnn.com/2015/04/21/asia/japan-maglev-train-world-record/index.html

        Venezuela’s former bus driver, President Maduro, said he didn’t have time for such adulatory Japanese apprentices, opting to entertain other magnificent projects of the Revolution:

  3. To Carlos or any of the economists who can shed light on this:

    How is it possible that the World Bank estimates that Venezuela’s GDP in 2013 was $438 billion whereas the IMF estimated it at $206 billion? I guess it comes down to the dual exchange rate. But how is this calculated? My guess is that GDP won’t scale linearly with the Bs exchange rate to the dollar.

    • It’s a complete hassle dealing with macroeconomic numbers of the revolution. Maybe the divergence is based on PPP assessment or at the official (inexistent) 6,3Bsf per $ exchange rate. That’s the chaos…even The Economist is confused by those numbers. Just divide the latest nominal GDP from the Central Bank and divide by an exchange rate of 50Bsf per dollar…it could be even less than 200billion $.

      • “50Bsf per dollar…”

        That doesn’t exist either, you have to use simadi aka sicad III electric boogaloo (195Bs/$)

        Or closer to the truth, go and check dolar today…

      • PPP? Like in what? Not purchasing power, right?
        I just try to calculate how many hours a Venezuelan teacher needs to work in order to
        1) buy a kilo of tomatoes
        2) buy a lettuce
        3) rent a tiny flat in a lower middle class area.

        It’s just preposterous. A Venezuelan teacher now could not even pay with his monthly salary the rent for 1 week of a tiny flat in La Isabelica (Valencia) or Paraíso.

        PPP? Sure

  4. Here is what the World Bank says about 2012 per capita income in dollars for Venezuela
    Indicator Name 2012 data
    GDP per capita (constant 2005 US$) 6,412
    GDP per capita (current US$) 12,729
    GDP per capita, PPP (constant 2011 international $) 17,642
    GDP per capita, PPP (current international $) 17,960
    GNI per capita (constant 2005 US$) 6,208
    GNI per capita, Atlas method (current US$) 12,460
    GNI per capita, PPP (constant 2011 international $) 17,166
    GNI per capita, PPP (current international $) 17,490

    2013 data is not much different, but has fewer indicators.

    • “GDP per capita, PPP (constant 2011 international $) 17,642”
      That is just a big lie if a teacher cannot even afford to rent a tiny flat in a bad place for half a month with a monthly salary and the amounts of tomatoes or chicken he can buy with his salary is much less than in
      most South American countries.
      It’s just a lie.

  5. The problem with the PPP in determining standard of living is two-fold:
    1) You need to know what the true exchange rate is between the local currency and the US dollar (good luck with that in Venezuela)
    2) It says nothing about how long you have to work to earn a given amount of the local currency, and, hence, a comparable US dollar.

    A better method (seriously!) is the Big Mac Index in terms of how many minutes of work is needed to buy a Big Mac. Here are the figures for 2013:

    http://www.statista.com/statistics/275235/big-mac-worldwide-cities-working-time/

    No doubt the 2014 figures for Caracas are worse than for 2013.

    • Good points on PPP. Given all the subsidies accruing to different groups in Venezuela, it would be problematic to determine how much someone had to work for a given food commodity. The advantage of the Big Mac Index is that the government doesn’t subsidize McDonalds. Probably the only way to determine the true exchange rate for Venezuela would be to let the B float, and wait until the exchange rate had stabilized. But there is no way the regime will let it float, as a floating exchange rate would result in the enchufados’ arbitraged dollars floating away, like confetti in a hurricane.

      After 2006,the World Bank stopped calculating Argentina’s per capita economic growth, and per capita income in constant dollars, because it was apparent that the Kirchner government[s] was fudging inflation rates. A government which publishes accurate inflation data doesn’t threaten to prosecute economists who come up with inflation data that disagrees with the government.

    • I do not know why economists in the Americas these days don’t use more basic data?

      In German publications since I can remember people see comparisons of how much an average person had to work to get a kilo of meat, some trousers, a litre of milk, rent a flat.

      I did a tiny comparison about some basic food products here:

      http://venezuela-europa.blogspot.de/2014/05/the-tomatindex-onionindex-and.html

      Perhaps we should do something more extensive than that and distribute in flyers all across Venezuela.

    • Interestingly Venezuela has improved in time: in 2009 Caracas was ‘only’ 5th worst with 85 minutes; in that Wiki page in 2012 they were 2nd worst (slowest) but at 81 minutes.

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