In a brilliant piece in last week’s print edition, The Economist goes through the parade of horribles haunting Venezuela since day one of 2017. As expected, this year is already making 2016, the worst year ever, look like a lost Golden Era.

Starting with the unbearably shitty performance of last year, they note what we Venezuelan economists are already used to: officials have stopped reporting basic statistics more than a year ago, and no one knows if we’ll ever see those figures again.

Nonetheless, going on leaked BCV data, they suggest the country’s GDP contracted 18.6% last year, and inflation topped 800%; alongside with the estimate of their Intelligence Unit (they saw GDP falling 13.7% YoY), the figures suggest that Venezuela endured one of the all-time worst collapses in economic activity worldwide, much sharper than the one suffered by Greece at the height of the Euro crisis. Even so, their figures are still more conservative than the estimates of the warmest voices in VennyLand.

What has been the government’s response to this mayhem? Salsa, bluster and denial.

They don’t see any changes for better with the new chairman, vintage marxist ñángara Ricardo Sanguino.

Perhaps the sacking of long-time BCV President Nelson Merentes was a punishment for allowing the leaks, the authors suggest in an illustrative example at the center of the piece. Maybe it was due to the disastrous attempt at demonetization carried out late last year. In either case, scapegoats are increasingly scarce, and Maduro showed little consideration for a long-time chavista insider long seen untouchable.

So, pretty much in line with our view, they don’t see any changes for better with the new chairman, vintage marxist ñángara Ricardo Sanguino; nor with Ramón Lobo, the country’s new Economic VP and Sanguino’s younger partner and fellow ex-PSUV MP.

The Economist goes deep into the contradictions that have become tragically prevalent in our society this year: The economy is in a death spiral? Let’s add more controls! The poorest Venezuelans have borne the costs of the government’s criminal incompetence? Let them rot in a line for a plastic decoy! More than three-fourths of society publicly oppose the government? Let’s cling onto power more tightly! The government wants dialogue with the opposition? Let’s launch an ‘anti-coup’ commando and send some opposition MPs to jail for no reason!

Just when you start to question the sanity or strategic implications of this travesty, they go straight into the money (emphasis added):

Mr Maduro appears to be making two bets. The first is on disarray among the opposition. Divisions within the Democratic Unity alliance, a grouping of many parties, are widening as their efforts to defeat chavismo falter. It lacks a leader who can appeal to poor Venezuelans who feel betrayed by the regime’s empty promises.

Mr Maduro’s second hope is that oil prices will bounce back. They have already recovered from $21 a barrel in 2016 to $45. But PDVSA has been so badly managed and starved of investment that it will struggle to reap the benefits. (…) Mr Maduro vows that 2017 will be the “first year of the new history of the Venezuelan economy”. That will not shorten the passport queues.


Now, next time you see Nicolás Maduro tirando un paso on a government-mandated live broadcast, try not to think about how much of a clown he looks. Think about how all he wants is for time to go on, the cracks in the opposition unity to widen and crude oil futures to keep grinding higher, so he can stay in power for longer.

And keep blasting those tunes and busting those moves. Ugh.


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  1. the figures suggest that Venezuela endured one of the all-time worst collapses in economic activity worldwide, much sharper than the one suffered by Greece at the height of the Euro crisis.

    Which reminds me of these pearls of wisdom from Mark Weisbrot, back in 2013. Sorry, Venezuela haters: this economy is not the Greece of Latin America.

    Predicting a Venezuelan apocalypse won’t make it happen…
    Of course Venezuela is facing serious economic problems. But they are not the kind suffered by Greece or Spain, trapped in an arrangement in which macroeconomic policy is determined by people who have objectives that conflict with the country’s economic recovery. Venezuela has sufficient reserves and foreign exchange earnings to do whatever it wants, including driving down the black market value of the dollar and eliminating most shortages.
    Meanwhile, the poverty rate dropped by 20% in Venezuela last year – almost certainly the largest decline in poverty in the Americas for 2012, and one of the largest – if not the largest – in the world.

    Come to think of it, perhaps Dr.Whitebread is correct when he wrote that “this economy is not the Greece of Latin America.”

  2. Per capita output fell by 27.7% in the past 4 years. Just in 2016 it suffered a 17.9% contraction #VenezuelaThisWeek [From link at “the warmest faces in Vennyland.” BTW, when I was working in Venezuela, I referred to it as “Venland.” Perhaps because I had friends of Finnish descent in my hometown.]

    I went to the World Bank, where I got the following data.
    GDP per capita (constant LCU)
    1998 1785.070094
    2012 2056.964341
    2013 2055.548702
    2014 1948.608657
    2015 1813.068081

    I wanted to see if using the World Bank data, and the VenezuelaThisWeek data, I could come up with a comparison of GDP per capita change from 1998 to 2016.

    Calculate for 2016 using World Bank for 2015 and VTW figure for 2016 decline: (1813.068081)*(1-.179)=1488.529.

    Check to see how 2012 to 2016 change checks w 27.7% decline: 1488.529/2056.964341=.72365 or a 27.34% decline, which is close enough to 27.7%.

    Decline in GDP per capita (Constant LCU) from 1998 to 2016= 1-(1488.529/1785.07)= .166.
    In percentages: a 16.6% decline.
    The export price of Venezuelan oil in 1998, the year Chavez was elected, was around $10/BBL.

    Say no more.


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