Tag Archives: Chavez economic war

May
18
2011
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When all else fails and an election is in sight…blame the private sector

With presidential elections nearing and as inflation and food shortages continue to pound Venezuela, President Hugo Chávez once again sets his crosshairs on the private sector. Feeling the mounting pressure of his failed economic policies, Mr. Chávez resorts – as usual – to desperate measures. This time the target of his old tricks is large food retailers.

This week, Mr. Chávez reinvigorated his campaign against supermarket chains accusing them of hoarding and speculation to “explain” the food shortages that plague Venezuela. Those charges have been vehemently denied by the National Association of Supermarkets and Services. Mr. Chávez’s accusations are nothing but his latest excuse for a problem that continues to hurt Venezuelans. In fact, according to a recent report by prominent Venezuelan research firm, Datanálisis, food shortages have increased from 12% to 20% in Venezuela – the highest rate recorded this year in Venezuela.

Mr. Chávez has threatened both EPA and Central Madeirense, large food chains that span across Venezuela, with expropriation if they don’t act according to “the book.” The last time Mr. Chávez went after a food chain was in January 2010, when he nationalized French-Colombian retailer Almacenes Exito, after accusing the chain of price hikes, when the Venezuelan government devalued its own currency.

The Datanálisis report states that shortages range from over 40% for powdered milk, 46.5% for cooking oil, 34.5% for chicken, 30.5% for beef, and 23.9% for sugar. Government-run supermarkets, according to the Datanálisis report, registered food shortages of 46.3% in Mercal and 44.8% in PDVAL stores.

Despite the government’s insistence on threatening expropriation, Venezuelans increasingly reject those policies. The same Datanálisis survey shows that 83% of Venezuelans expect the government and private sector to work together, something that seems to fall in the deaf ears of the Chávez government.

While hoarding and speculation are in Mr. Chávez’s bag of old tricks, he now has implemented a new bait and switch scheme in government-controlled food chains. Consumers are being forced to buy “package deals” to be able to get the food products they desire. Picture this: you want to buy chicken at your local government-run grocery store, but when you get there you realize that you must also buy mayonnaise, potatoes, and whatever else the store deems part of your “packaged” meal. You cannot purchase the chicken alone, you must buy it all! But, what if you don’t have the money to purchase the “package deal”? Tough, the government says, you’re just out of luck.

 
May
6
2011
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In Case You Missed It… Articles Roundup Week of 5/6/11

In this week’s News Roundup…Governor Henrique Capriles Radonski announces his candidacy for the 2012 presidential elections in Venezuela, which prompts President Chávez to launch a smear campaign against opposition candidates; analysts debate how to define Venezuela’s government; and Mr. Chávez offers yet another unique perspective on foreign policy, denouncing the killing of Osama bin Laden.

Governor to Challenge Venezuela’s Chavez in 2012, Voice of America
The governor of Venezuela’s Miranda state says he plans to run for the presidency next year, challenging President Hugo Chavez. Governor Henrique Capriles made the announcement Tuesday, saying he wants to be “president of all Venezuelans.”  Capriles also said he would seek the endorsement of a divided opposition to challenge President Chavez, who has been in office since 1999 and is seeking a new six-year term.

Chávez launches charm offensive against rivals, Financial Times
Hugo Chávez, Venezuela’s president for the past 12 years, has made much of his desire to rule beyond 2030 in order to complete his socialist revolution and claims he will “smash” his opponents in the oil-rich country’s next elections.Yet there may be more than a little hubris in those plans. Polls show that if those elections – not due until December 2012 – were held this weekend the firebrand leader would actually lose.

Is Hugo Chavez an idiot? Washington Post Blog
When I was in Moscow last year, I paid a visit to Boris Nemtsov, one of the leading figures of the Russian opposition. Naturally, I had come to Nemtsov to discuss Russian politics. But the conversation quickly turned to, of all things, Venezuelan economics.

Coronel: Is Venezuela a Dictatorship? Latin American Herald Tribune
Some of the most sophisticated political analysts currently writing about Venezuela are defining Hugo Chavez’s regime, either as a “procedural democracy” (Luis Vicente Leon, chief analyst at Datanalisis, a Venezuelan polling firm) or as a “hybrid regime” (Javier Corrales and Michael Penfold: “Dragon in the Tropics”, Brookings Institution Press, 2011), but definitely not as a clear-cut dictatorship. As a Venezuelan who has been closely living and watching our nightmare for the last 13 years and who has done his fair share of reading on what constitutes a democracy or a dictatorship, I find this tendency appalling.

Venezuela Foreign Ministry Asks UN To Condemn Libya Airstrikes, NASDAQ
The Venezuelan government Monday asked the United Nations to condemn the North Atlantic Treaty Organization’s bombing of what it called its sister nation, Libya. A statement released by the country’s Foreign Ministry criticized what it called the NATO-led “imperialist coalition” for the recent airstrikes that killed a son and three grandchildren of Libyan leader Moammar Gadhafi.

Venezuela denounces killing of bin Laden, Foreign Policy
As the world has reacted — largely with a mixture of relief and jubilation — at the news of Osama bin Laden’s death, Venezuela yesterday issued its own statement: “Venezuela Rejects Use of Terror to Fight Terrorism.”

US to examine possible sanctions against Venezuela, El Universal
The US House of Representative’s Committee on Foreign Affairs will hold a hearing to examine the Venezuelan government activity and determine whether it must be subject to sanctions. The hearing, which will be attended by senior US administration officials, was scheduled to be held on Tuesday, but was postponed due to the death of Saudi terrorist Osama Bin Laden, which forced the Congress to change the agenda.

Venezuela oil tax to net billions before Chavez vote, Reuters
New Venezuelan taxes on windfall oil revenue will let socialist President Hugo Chavez boost spending on popular social programs by billions of dollars ahead of his re-election bid next year. They set a top rate of 95 percent on some oil income and are Chavez’s latest move to increase the state’s share of the OPEC member’s main export. During 12 years in power he has nationalized most of the South American nation’s oil industry.

 
May
6
2011
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In Case You Missed It… Is Hugo Chavez an idiot?

Is Hugo Chavez an idiot?
Washington Post Blog
By William J. Dobson
May 6, 2011

When I was in Moscow last year, I paid a visit to Boris Nemtsov, one of the leading figures of the Russian opposition. Naturally, I had come to Nemtsov to discuss Russian politics. But the conversation quickly turned to, of all things, Venezuelan economics.

Nemtsov has no love for Vladimir Putin and his regime. The Russian government has arrested him and thrown him in prison, and it strangles the political movement he leads. But Nemtsov saw one bright side: At least he didn’t have to live under the economic policies of Hugo Chavez. “Putinism will survive if oil prices are huge. Frankly, it is the same with Hugo Chavez, but Hugo is more stupid than Putin. Chavez nationalizes industries. He establishes price controls. Putin looks cleverer. He doesn’t touch the real economy much . . . he doesn’t touch small, average businesses,” Nemtsov told me. “Economically, he looks closer to Chinese authoritarians than to Hugo. Because Hugo has no ideas about the economy at all. He is a real idiot.”

Ouch. Harsh words. But then again, Nemtsov has the numbers to prove it. Venezuela was the only country in South America to see its economy shrink last year. By many reports, it now suffers from the world’s highest inflation. In 2010, Venezuela was the only South American country to have a negative balance of foreign investment. (It dropped by $1.4 billion.) The International Labor Organization says that Venezuela was one of only five countries in the region to see job growth fall. (The others were Barbados, Jamaica, Honduras, and Trinidad and Tobago.) Power outages, rolling blackouts, and water shortages have become common as state infrastructure crumbles. And, in perhaps the most stunning achievement, the state-owned oil company has reported falling profits – even as oil prices rise.

When I mentioned these and other signs of economic decline to members of Chavez’s political party last year, they scoffed. What I didn’t understand, they said, was that Venezuelans were some of the happiest people in the world. Okay, maybe. But I didn’t meet anyone happy about the shortages of basic staples like milk, sugar and meat. And I didn’t meet anyone happy about the fact that crime has reached epidemic levels. Experts estimate that there were more than 19,000 murders in 2009. It is hard to know the precise number because the government stopped publishing the figure after it began to soar.

But fortunately all of this is about to end. Chavez just announced that he is raising the minimum wage by 25 percent. He is also going to end unemployment by creating 3 million jobs in the next eight years. And he will build 150,000 houses this year and another 200,000 in 2012.

Of course, he has made these promises before. In 2005, he was going to build 120,000 houses. A government ministry later said 21,400 were built, less than 20 percent of the promised total. In fact, over the duration of Chavez’s time in office, the government builds an average of 12,500 homes a year.

But Chavez will reach his goal. Because his real goal isn’t meeting housing targets he has failed to meet before. It is to inject enough short-term cash into people’s wallets to raise his chances for reelection in 2012. Never mind that that cash will disappear from their wallets as the minimum wage hikes fail to keep pace with inflation. Indeed, Chavez’s newly announced measures will make inflation worse. But he isn’t concerned with that. As he told a crowd this week, “I have a year and a half more in this government, then six more in the next one.” That is Chavez’s main consideration. Six more years. Because, whatever he does to Venezuela’s economy, the man is no idiot.