March 22, 2008

Bring Back the Maisto Doctrine!

Quico says: So, wondering why posting’s been so light recently? Here’s the deal: I spent the last three weeks in Caracas. Elementary paranoia kept me from disclosing as much before coming back, but now that I am safely ensconced in a forgotten little bit of the Dutch countryside I will, of course, be posting at length about the trip.

Now, I’d love to tell you I went back to immerse myself in the politics of a renascent opposition, or the travails of my nearest barrio, or the wonders of our natural heritage. Alas, my motives weren’t so pure: basically, it was Misión Cadivi that brought me back. As a Europe-based Venezuelan student, I qualify for a
irresistible cupo of $1,800 each and every month, payable at a scrumptious, nibbliscious Bs.2,150/$.

Hell, I’m just a grad student: I’m in no position to pass up that much free cash.

Filthy lucre, yes, how very counterrevolutionary of me…or, is it?

On the one hand, I realize it’s a bit problematic to get on my high horse and denounce the systematic ransacking of the nation’s oil wealth as I sign on enthusiastically on the side of the ransacketeers.

On the other hand, what I’m doing is scrupulously (if counterintuitively) legal: I really am Venezuelan, really do study in Europe, and ultimately am just taking advantage of a policy that wouldn’t even exist if the revolution hadn’t put it there. As far as petro-state plunder goes, it doesn’t get much more zanahoria than my case: I’m not even scamming the system! Hell, it's almost unvenezuelan to do it this way...

Still, the irony is hard to get over: I, great escualido cyber-scourge of the revolution, just about doubled my income on the revoluion’s dime just by filing a few forms.

In Caracas, I found that I was far from alone. In the appallingly sifrino circles I tend to inhabit when I’m down there, Cadivi has become a kind of universal obsession: everybody I met had either just finished asking for their dollars, was fighting the Cadivi website for their cupo, had an aunt who’d just come back from Miami to cash out her’s, or some cognate of these stories.

At my sister’s house, where I was staying, even the maid was in the loop: the bureaucratic nightmare she was facing trying to send family remittances back to her folks in Colombia was easily the most hairraising of the bunch.

My second day in town (first day I was getting my cédula, so here's lookin' at ya, syd) I went down to my bank in Sabana Grande to explain my situation to them. I was told that, on top of my student cupo, I could qualify for a $5,000 traveller cupo as well.

To do so, I would need to take out one of their credit cards…for which processing times had risen to TWO MONTHS because, these days, everybody and his cousin's cat is desperately trying to get a credit card, precisely so they can get those 5,000 insanely subsidized dollars.

It’s a policy I found especially telling. To get the travellers’ cupo, you have to have a credit card, and to get a credit card you basically have to be middle class. My sister’s maid, as you can guess, can’t get one: she has neither a credit history nor a high enough salary for any sane bank to give her one. So, in practice, the revolutionary socialist state systematically discriminates against her (and everyone else who is poor) in one of the most expensive and systematic wealth ridistribution policies it runs.

This is no detail. Because, trust me, you’d have to add up a lot of misión scholarships to match the implicit subsidy in the 5,000 official-rate-dollars handout that only credit card-holders can even apply for.

It’s a realization that brought me back to a point Katy made a long time ago, but whose deeper truth only really sank in during my trip: if you revisit the Maisto Doctrine and judge chavismo by what it does rather than what it says, you have to conclude what we have in Venezuela is something like a right wing dictatorship.

All revolutionary/discursive paja aside, the government lets nothing stand in its way in its drive to redistribute oil income up the income scale. The mountains of bullshit that come out of Chávez mouth have tended to obscure this reality, yes, but have never altered it.

For those with the courage to revisit Maisto's supposedly (but only superficially) discredited theory, it’s really no surprise that the Central Bank finds income inequality is rising in Venezuela: the socialist revolutionary government’s two weightiest macroeconomic policies uniformly shift income up to the privileged.

A staggering seven percent of GDP is spent on a deliriously regressive gasoline subsidy, while untold billions of oil dollars are spent subsidizing the imported toys the rich amuse themselves with.

Needless to say, Maisto and his doctrine aren’t particularly fondly remembered in opposition circles these days. To my mind, though, the man was a visionary, a misunderstood genius. He was the first to intuit a truth that grows harder to ignore every day in Venezuela: that government discourse and government reality aren’t just “in tension” with one another, or “not always easy to reconcile” or even “sporadically contradictory", but rather run in completely opposite directions, and do so systematically, on the most salient policy fronts, and have done for a long time.

Seriously, take it from me: a Mantuano-descended reactionary and incorregible government critic just back from a Cadivi-funded junket that doubled his income.

March 20, 2008

The foreign correspondent's POV

Katy says: Posting will be light in the next few days. Quico is traveling and I'm full of work and family duties. But friend and all-too-infrequent poster Lucía sends us a link of yet another foreigner's impression of the full Venezuelan treatment.

The traffic, the wait in the hospital, the milk shortages, the panaderías, the lushness of the Ávila - it's all there in the diary of The Economist correspondent's life in our maddening capital city.

March 19, 2008

Chávez for Spaniards

Quico says: Julio Rivas Pita, the man-on-the-ground here for Spain's El Mundo, is running extracts from his upcoming book, Chávez para Españoles, in a new blog. His latest piece is on the backstory to the operation that got Raul Reyes. Worth a look...

March 18, 2008

English court OKs partial privatization of PDVSA

Quico says: So, it turns out English courts have no jurisdiction over the PDVSA/ExxonMobil pissing match. They've just lifted the preliminary asset freeze on PDVSA, handing chavismo a massive propaganda win and a chance to sell anything and everything PDVSA owns abroad. Effectively, it took an English judge to authorize the privatization of a big chunk of PDVSA.

My guess is that that's what we're about to see. Cuz, remember, the whole point of freezing PDVSA assets abroad was so that, in case the international arbitration case over the Faja contracts went ExxonMobil's way, they'd have some way to collect damages. Of course, that arbitration is ongoing at the International Chamber of Commerce in New York, but it isn't expected to reach a decision for another 3 years or more. Plenty of time for PDVSA to get rid of any asset Exxon might want to move on in case (hypothetically) they got awarded something at arbitration.

For now, the whole case looks like a big miscalculation on Exxon's part: its current status is no chivo, no mecate. And for a Venezuelan government finding it increasingly hard to meet its import bill, the chance to raise a few billion bucks by privatizing PDVSA's foreign holdings is excellent news.

Such a sale would add a few more months of viability to the macroeconomics of populism, and would put off the thoroughly inevitable adjustment that little bit the cost, bien sur, of decapitalizing the state that little bit more.

Calls for a bit of marginal analysis, this one: on the margin, what is the impact of one additional stripe on a tiger?

March 17, 2008

Hello, fat man!

Katy says: Every Monday I get in my inbox the abridged transcript from the previous day's political reality show, "Hello, Mr. President!" While I wouldn't be caught dead watching this show, I always make it a point to read the summary just to see what the Fat Man in the Palace emphasized and what his mood seems to be.

One thing seems clear after yesterday's show: Chávez was not in a good mood.

First off, he kept talking about health policy, no doubt worried about the jump in health care as one of the population's top concerns, according to Alfredo Keller. He went on and on about how they needed to integrate new clinics to the current Misiones, no doubt realizing that the Misiones are slowly collapsing.

The other big topic of the day was communication policy. The President is still reeling from the fact that the death of Raúl Reyes put a hamper on the liberation of six of the FARC's hostages. He also scolded the Education Minister (his older brother) for not reacting to recent news reports that said that the rate of student enrollment has fallen dramatically in recent years, according to the Education Ministry's own statistics.

The Minister, who was immortalized thanks to this hilarious YouTube video, replied that these were all lies of the opposition, that this was all a conspiracy and that they were "manipulating the numbers to confuse the population." He said they would hold a press conference on Tuesday to explain what is going on. He also put out a press release that is full of lies and confusing statistics that do not address the crux of the issue raised by the news reports.

The President scoffed, saying it was silly to hold a press conference on Holy Tuesday and that, if this is false, the Ministry should have come out and said so immediately after the item was published. Chávez also stated that the problem is that the Annual Reports from the ministries are weak and are not "well-grounded" from a mathematical point of view, whatever that means. At one point he seemed so pissed, he said that all PSUV meetings had to be approved by him.

All of the government's media was focused yesterday on the President and his pet topics. Yet this little event went unmentioned in all of them. For chavista news outlets, it never happened.