The Ongoing Scam

Your daily briefing for Thursday, July 26, 2018. Translated by Javier Liendo.

Photo: Prensa Presidencial

To celebrate Caracas’s 451 years, Nicolás made several economic announcement during a mandatory broadcast:

  • The monetary reconversion starts on August 20 (as if 16 days could make a relevant difference in its application) with the circulation of the sovereign bolivar.
  • The sovereign bolivar will have five less zeroes (not three as previously announced) and its value will be tied to that of the petro, a sanctioned and restricted currency, whose value is artificially decided by the government, allegedly based on oil prices.

  • He’ll send to the ANC a modification of the Law on Foreign Exchange Crimes, which apparently seeks to allow the circulation of foreign currency and eliminating barriers for them to flow freely in the country.

  • He handed the Orinoco Oil Strip’s Ayacucho 2 Block over to the Central Bank to be a part of its assets, although underground oil has no value, especially for a country with dwindling extraction capabilities.

  • He exonerated raw materials, spare parts, machinery, supplies and equipment imports from paying taxes for a year.
  • He announced a census on the entire vehicle fleet to cross that data with the carnet de la patria and create another channel for State dependency.

Nothing changes

Nicolás tried to excuse his administration’s economic results with the persecution of capital and the “economic war” and said that chavistas who have criticized his work are “pretenders” and traitors. He had an important revelation: “I can say that in the development of productive forces, we’ve failed, comrades,” considering that the State’s most important companies are bankrupt. And he restated the end of the rentier model, but minutes later he tied the sovereign bolivar to the price of the petro, whose value is itself allegedly tied to oil prices. Yesterday’s announcements show that they won’t change the model that has ruined us: depreciation will continue its course without another fiscal measure. Strictly, the sovereign bolivar will be 100,000,000 of normal bolivars, those that existed when el finado took power. The minimum wage will be BsS. 51.96 and with there won’t be any way to pay for fuel with the new monetary cone (the price is BsF. 6 thus far) so either they’ll scrap subsidies for good or end up giving it away. The same applies to the fees for public services. Only the Bs. 100,000 banknote will survive from the current monetary cone, but it’ll be worth BsS. 1. By the way, it’s impossible to apply the cone by August 20, since banks and shops adjusted their systems for three less zeroes, not five. We’ll see the circus today at the meeting with bankers.

218 minimum wages

According to the Venezuelan Teachers Federation’s Documentation and Social Analysis Center (Cendas), the price of Basic Food Basket for June was Bs. 654,214,674, demanding 218 minimum wages to pay for it. The price increased by Bs. 353,076,321 since May (117.2% in a month) while the yearly price gap between June 2017 and June 2018 was 37,538.6%. All products increased in price, with education showing the highest increase (656.9%), followed by clothing and shoes, with a 442.9% increase, and cleaning and personal hygiene products (88.5%), while the fees for public services report an average increase of 84.1%. Meanwhile, the remittance dollar keeps rising: Zoom and Italcambio will pay Bs. 2.9 million per dollar, Bs. 400,000 more than the amount announced on July 3, although the DICOM dollar remains at Bs. 120,000 and the black market dollar surpasses Bs. 3.5 million.

Amazing chavismo

A group of former Venezuelan officials and business executives, along with executives from other nationalities, were accused of laundering $1.2 billion from PDVSA in Florida, announced the U.S. Justice Department, which identified these “members of the Venezuelan elite” as “boliburgueses,” including Francisco Convit, shareholder of Derwick Associates; Carmelo Urdaneta, former legal advisor for the Oil Ministry and Abraham Ortega, former PDVSA executive. Believe it or not, the diplomatic body visited the “Expoferia Penitenciaria 2018” yesterday, to know the “government’s accomplishments in the broadening of rights for prisoners.” Minister Iris Varela thinks that the prisoners have become “the best workers and the best students,” and she believes her ministry will become “the first honey-exporting body in Venezuela.” Meanwhile, insurance activity superintendent Juan Carlos Cabello Mata announced that they’ll take actions against insurance companies that charge in dollars, explaining that sanction levels range from permanent inspections and interventions to liquidations.

Brief and serious

  • The National Assembly held a special session in Zulia State and called for a march this Thursday to demand authorities to solve the electric crisis. The plenary was attended by Fergus Walshe, head of Maracaibo’s Chamber of Commerce, who explained that the electric supply plan is a big farse, marked by constant and irregular blackouts.
  • The Rafael Rangel National Hygiene Institute reported on the order to remove medicines with Valsartan active compound issued by the Spanish Agency of Medicines and Sanitary Products, due to the contaminant detected in studies caused by a change during the production of batches. The institute urges patients to notify any problem or irregularity with the use of medicines with Valsartan.
  • In their protest, the health sector held a “Caravan for Life” and requested support from the Catholic Church, which promised to accompany the demonstration: “when the health of citizens is under attack, life itself is under attack,” said Saúl Ron, who remarked that the government must allow the opening of a humanitarian channel for the access of food and medicines.
  • Workers of the tire-producing companies Pirelli, Firestone and Goodyear started to protest to demand better salaries and working conditions, explaining that their staff numbers are declining as well as their productivity, and that they’ve had to cannibalize their equipment due to lack of parts.
  • Northern Santander is overwhelmed and can’t cover the services and attention needed by Venezuelan migrants. Regional authorities demand that the new government take measures to implement public policies to remedy this situation.

Italian researchers announced that, for the first time, they have proof of the presence of liquid water in Mars, in an underground lake below a layer of ice. The evidence was found thanks to the results of a radar installed in the Mars Express probe from the European Space Agency.

Naky Soto

Naky gets called Naibet at home and at the bank. She coordinates training programs for an NGO. She collects moments and turns them into words. She has more stories than freckles.