Photo: Sundde


Vice-president Tareck El Aissami announced that three exchange houses are already operational and “legally authorized” to perform transactions associated with remittance access: Grupo Zoom, Italcambio and Insular; explaining that the three of them have 124 offices across the country and that they’re allies of operators such as Western Union and Moneygram. He said nothing about the exchange rate for remittances (the 17th DICOM auction had an exchange rate of Bs. 79,950 per dollar) and the gap between it and the black market dollar price is colossal. El Aissami offered an update on the “Paper Hands” operation: they confiscated Bs. 12 trillion that would be taken to Colombia to be sold under the Colombian government’s auspice, he said; Bs. 5 trillion frozen in bank accounts (90% in Banesco,) 216 people arrested and 78 raids. He also spoke of the “Metal Hands” operation to stop gold smuggling, a chilling piece of information because the monopoly on mining exploitation is controlled by the Armed Forces since February 2016, so, who’s smuggling? Perhaps, the study published by The Economist where Venezuela ranks 80 out of 84 countries in the fight against illegal trafficking, offers the answer; you can read it in Tal Cual. In any case, much has been written over the years about the Armed Forces’ role in the trafficking of minerals.

A bankrupt economy

While Nicolás announces the establishment of communal officials to control product prices, Platts reports that our oil output keeps collapsing, that it reached 1.36 million barrels per day in May (a drop of 50 mbd in a month,) adding that the number of operational drills sank ot 25, so the output for June will inevitably continue to drop. Additionally, the World Trade Organization and the National Investment Promotion Council report that imports dropped by 32.47% between 2016 and 2017, with the extra detail that direct foreign investment is experiencing a severe contraction (a 1,470% drop,) due to the political instability and economic recession of the last five years. The Comptroller’s Office announced that they’ve opened an administrative proceeding against lawmaker Tomás Guanipa for his equity situation. Guanipa told EFE that this investigation shows that the government continues its persecution against the opposition, stating that his equity “has only been declining” and that he has all of his asset and Income Tax declarations to prove it. SUDEBAN will punish companies offering points of sale in dollars (?). When you can, read Mayela Armas’ work in Crónica.Uno about the additional debt that Nicolás will handle in 2018 without the National Assembly’s approval and without reporting the initial indebtedness: opacity is the rule for chavismo.

We migrants

  • Venezuela is on the list of ten countries with the most forgotten and unattended humanitarian crisis in the world in 2017, made by the Norwegian Refugee Council (NRC). The Council says that displaced Venezuelans need food, water, medicines, shelter and protection, and additionally, this mass displacement could destabilize Colombia’s peace process.
  • Peru’s National Migration Office reported that an average of 3,000 Venezuelans enter the country per day, although not all of them to stay. Until June 2018, Peru accounted for 330,000 Venezuelans staying in its territory, explaining there’s been sustained growth. According to official data, the vast majority of Venezuelans are staying as tourists, which allows only a maximum six-month stay.
  • Italy’s Embassy reported that by late May, the Consulate has issued or renewed 6,353 passports, which represents a 70% increase compared with the same date in 2016, estimating a projection of 15,247 passports by year’s end. If confirmed, Caracas would once again rank among the very first places in the Italian consular network abroad.
  • The European Council greenlighted two missions that will visit the Venezuelan borders with Colombia and Brazil by the end of the month, to coordinate a humanitarian aid plan. One of the mission’s members, Ramón Jáuregui, spoke of raising awareness about the amount of Venezuelans who have already left the country due to the crisis. The missions were proposed by Antonio Tajani.
  • Lawmaker Américo de Grazia issued a serious complaint about the protest of pemones in the Troncal 10 freeway (specifically in San Luis de Morichal) for the murder of five native leaders (the Valdez brothers) at the hands of paramilitaries the Colombian National Liberation Army (ELN). The pemones demand justice but also denounce that they fear for their lives because the ELN has take over their lands. I add this information here because it’s exactly these kinds of abuses which hasten and increase our diaspora.

Abroad

  • The U.S. State Department approved the extradition of former Panama president Ricardo Martinelli, wanted in his country for embezzling funds to create a network of spies that reached 150 people during his tender. His defense has remarked that if he returns to Panama, “there’s the possibility of inhuman treatment (…) and it’s probable that he be subjected to torture.”
  • El Salvador’s Prosecutor’s Office ordered the arrest of former president Mauricio Funes, several of his former officials and relatives, accused of partaking in acts of corruption that allowed them to pocked $351 million in State funds, the left is so beautiful!
  • Dictator Daniel Ortega asked the Nicaraguan Episcopal Conference for a couple of days to think about the “democratization” proposal presented during the national dialogue, currently suspended as progress has been impossible. Four hours after this request, another Nicaraguan citizen was killed.

This Friday started with the horrible news of Anthony Bourdain’s suicide. He was one of the best storytellers I’ve see on television, with the skill to describe people, cities and cultures from the noble scripts of their cuisine and food. Many people decided to speak about suicide, some associating it with depression, others defending the pertinence of choosing when to end your own life and a few more hopping on the self-help wagon. It’s always important that tragedy calls for reflection, but I’m certain a man with the work Bourdain did deserves an arepa in his name.

-And even more so during avocado season!-

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21 COMMENTS

  1. It is the great Bourdainian paradox that after publishing “Kitchen Confidential”, he went on to earn the title “celebrity chef”. Line cooks past and present, the world over, lost their hero.

  2. Seredipity, No me Judas,. How many messages must you post to earn an extra clap box for the month? Or oerhaos you get paid a few bolivars for each message? What a miserable filthy little creature you are! But you already know that.

  3. Perfect economic symmetry, begins with a photo of a well known producer/distributor
    and closes with the demise of a well known user.

  4. The best offer on electronic money transfer right now via exchange houses is 79.926 Bs/$. Banks will transfer typicaly at less than 10,000 Bs/$. Money market is over 2.000.000 Bs/$.

    Quite a lot of space for creative arbitrage, which raises two questions: Who are the present owners of Zoom? And who or what is Insular?
    With the de facto expropriation of Banesco, the regime directly controls most of the banking assets in country and a very large percentage of all retail bank operations. From this, they clearly hope to be able to identify transfers which look like “illegal exchange deposits” in Bs made through entities other than their controlled group of three exchange companies. The recent freezing of assets and widespread arrests suggests that they have been combing through Banesco records trying to identify any accounts which looked like they were being used as Bolivar sources for out-of-country foreign exchange. (Dollars deposited abroad for a bolivar transfer in Venezuela.) The next round of arrests will be associated with those accounts which received large regular transfers from such sources.

    Even people who have been using trustworthy friends and acquaintances for converting dollars into bolivares are exposed, if their friends have been transferring from a Banesco account. And there is no guarantee that the regime won’t increase its penetration by taking over the few remaining private banks.
    This fear has already had a chilling effect on remittances into Venezuela. Many people are witholding their remittance dollars, and this seems likely to have been one of the several causes of the vertiginous rise in Bolivar/dollar exchange rates recently in the parallel market. It is not at all obvious to me what the regime is trying to do with these actions. Do they seriously think that cutting off demand for Bolivares in the black market is going to help them to stabilise the Venezuelan economy? Quite the opposite. Or do they think that the demand will increase because of some King Cnut belief that they can channel all transactions through their selected outlets and stabilise the exchange rate? Or do they just see the short-term possibility of grabbing some arbitrage profit while the going is good? Ideology? Ineptitude? Good scam coming up? Take your pick.

      • Yes, Dicom is dry in dollars, but for people making remittances to their families in Venezuela the problem they have is NOT one of buying dollars. They have to SELL dollars for Bs. For that, the exchange rate of 79.926 Bs/$ is a terrible deal – less than 4% of the parallel market rate today.
        Most people therefore make use of unofficial exchanges or physical cash transfer for remittances from abroad. For the first, you find a guy that has a lot of bolivars devaluing in his account and a dollar account abroad, and is prepared to act as a “dealer” in the exchange transaction. A Venezuelan working abroad who wants to send money to his family transfers dollars into the dealer’s account abroad, and the dealer then transfers Bolivares into a nominated local Venezuelan account at the rate agreed between the remitter and the dealer – which is normally cloase to parallel rate less commission.
        Physical cash transfer involves waiting until a friend makes a visit to Venezuela and you ask him to take a fistful of dollars to your family. This can be converted locally in a simple cash exchange.

  5. “Ideology? Ineptitude? Good scam coming up? Take your pick.”

    The answer, as always where chavismo is concerned, is “all of them”.

  6. I suspect hat people associated with the regime (or sections of the regime itself ) afford themselves of the benefict of using their access to dollars to make a killing reselling them to the public in covert ways , if they shut their doors to these kind of transactions they may be harming their own interests, it may make sense if they plan to raise the dicom dollar parity quite substantially , but nothing allows one to predit it .

  7. It is very disappointing to see Naky write “(un descenso de 1.470 %)” and it is worse to see Javier not correct this mistake and just translate it to: “(a 1,470% drop).” I find mathematic and economic ignorance to be a real problem in venezuelan media, it is awful to see it displayed and then reaffirmed on this blog.

    • It is the convention in Venezuela to use a period to delineate thousands, millions, etc., and a comma to delineate the beginning of decimal fractions… the reverse of what the U.S. uses.

      However, the prevalence of the more common convention in computer software is changing that. In practice we see both conventions used. It is nearly always obvious from context, which is meant.

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