June 26, 2009

The Trouble with Mass Expropriations...

Quico says: ...is that, these days, the world just isn't set up for that way of doing things. Take the Eastern Shore of Lake Maracaibo oil service company expropriations. Chávez never stopped to calculate that if you just grab the boats that those companies were using to service the rigs, you leave their property in some weird kind of international limbo. Which matters, because those boats are insured internationally. If you grab them, you find yourself holding a bunch of boats that somebody else has already taken out insurance on.

Not surprisingly, the international insurers weren't about to take that sitting down. The scarily named Joint War Committee - basically a talking shop London-based maritime insurers have set up to monitor conflict zones around the world - has put Venezuela on its "War, Strikes, Terrorism and Related Perils" list alongside such tourist hotspots as the Gulf of Aden, the coast of Yemen, the Indonesian island of Ambon and the Niger River Delta.

The decision activates the War Exclusion Clause on the insurance contracts covering - as far as I can tell - all vessels operating in Venezuela. Which means that nothing that floats within 12 miles of Venezuela's coastline can be internationally insured.


June 25, 2009

Bugbear to All

Quico says: It's remarkable to realize how much of the political life of Venezuela these days is about Globovision: an influence entirely out of proportion to the station's coverage, both geographic and ratings-wise, that seems proportional to nothing so much as the scale of its demonization at the hands of the government.

This week, The Economist reviews the little-station-that-could's travails in a write-up that brings a welcome Economist-style sense of balance to the whole affaire. Well worth a read.

Of course, in covering the issue, this blog has been basically centered on The Economist's second-to-last paragraph, much more than on the rest of the story. To wit,
Globovisión has faults. Although its reporting is professional, its commentators are sometimes shrill and monotonous. Its owners abuse their power to choose which opposition voices are heard and which not. It is not much of an exaggeration to say, as government spokesmen do, that it behaves as if it were a political party. But contrast it with the government channels, which are both turgid and inflammatory, and it is a journalistic paragon.
There is, of course, much more to it than that, and I can fully grasp why, in writing for a worldwide audience, that graf ends up pretty far down the page.

But for a more Venezuela-centered audience, I feel that speaking forthrightly about Globo's many and very serious shortcomings, from within the opposition fold, is a needed corrective against the tendency to lionize the fairly grubby, often self-defeating operation these guys run out of Alta Florida. The alternative is a kind of atavistic oligophrenia. I mean, things really have come to a head when the viejas del este start turning out en masse to be, essentially, volunteer tax collectors for the chavista state.

But there I go again, off on an anti-Globo rant. I really can't help myself, y'know. Which is why it's good, now and then, to step back and look at the bigger picture.

¿Qué pasaría en Venezuela si no existiera El Chigüire Bipolar?

Quico says: "Indispensable" is one of those words that gets thrown around a lot. But this story demonstrates why El Chigüire Bipolar has become genuinely indispensable in Venezuela.

In three paragraphs, they deconstruct the dysfunctions of the oppo media more incisively than what you'd get in bucketfuls of pixels on Caracas Chronicles.

Plus, you laugh your head off, too.

June 23, 2009

The Exporter

Quico says: "Así estarán las vainas que when we manage to get the National Guard to show up at our factory, we celebrate," The Exporter says, savoring how counter-intuitive his sentence sounds.


"Well, sure. They make you jump through so many hoops before they'll even send an inspection team over to certify your shipment, it's a bit of a victory just having them there."

Bewildered? So was I.

Welcome to the world of The Exporter: a topsy-turvy universe where businesses positively relish the chance to get shaken down by some fat Guardia Nacional bloke who's holding their business plan hostage.

"Check it out, by the time the National Guard deigns to send an inspection team over, that means we've already gotten the Cadivi permits, the certificate saying that the internal market is already fully supplied, and we've finished the crazy little Treasure Hunt through the Caracas offices of the ministerios to get all the various permits: health ministry, tax office, labor ministry, the works. The export certificate has to have nine official stamps on it by the time you're finished and - credit where credit is due - that's actually the new, streamlined procedure because until a couple of years ago you needed seventeen!"

"Even nine, though, is a mighty struggle, especially because it turns out the last stamp has to be signed by the same MILCO official who signed the first one. Not the same agency, mind you, the same official. So if the guy is out sick, or on vacation, or just didn't feel like coming in that day...you're out of luck. The guy knows he can hold up your entire shipment so...as you'd expect, wheels have to be greased. Biggest racket in the world, that one..."

"So yeah, by the time that nightmare's over and you finally have all the papers you need to get the Guardia to come over to the plant, you're de fiesta."

Yowza. "Y ¿entonces?" I ask.

"Well then these guys come into the plant and they go through your shipment box by box, crate by crate, pallet by pallet, actually physically inspecting each one before putting a big plastic sheet over the pallets and an official Guardia Nacional seal on them."

I'm a bit puzzled by this.

"To make sure you're not over-invoicing, I guess?" I add tentatively.

"Well, in part," The Exporter says, "but mostly to make sure there aren't any drugs hidden away in the shipment. And that part, of course, you can understand. The Guardia doesn't want any competition, y'know? If any cocaine is moving through the country, they want a cut..."

"Anyway," The Exporter, who's in full swing now, goes on "you'd think now that your package is fully permisologized, inspected, signed and sealed, that's the end of it, right? No, mi amor. Not a bit of it, because then you have to put it on a truck and ship it off to a port where, the second it gets there, it gets stopped by...wait for it...La Guardia Nacional. That's right, a second set of Guardias take off the old Guardia seal, undo all the plastic and inspect it all over again, box by box, crate by crate, pallet by pallet. And when they're done they put a new plastic on it, and another seal on it, which, actually, looks just like the first."

"It's a nuthouse, Quico," he says, laughing, "and the really insane part is that, on average, a shipment takes 4 to 6 weeks to move out of the ports in La Guaira or Puerto Cabello. But the Guardia seals expire in three days! So every three days you have to suck up to them to get them to come back, take old seals off and put new seals on...and, of course, every three days you gotta pay someone off to do that!"

I'm staggered already, but it gets worse.

"But lets say somehow you manage to jump through all the hoops and you put your stuff on a ship, send it abroad and sell it...guess what? At the start of the entire process, you had to tell Cadivi you were going to export this stuff, so you're forced, as a matter of law, to take no less than 90% of the dollars you get paid and give them to the Central Bank, at which point they'll turn around and give you the princely sum of two bolivars and fifteen cents for each dollar worth of exports!"

"That's what?" I say, "maybe a third of what a dollar is worth, in purchasing power terms?"

"Right," The Exporter replies, "But since they've been inspecting you inside and out for weeks, they know exactly how much you exported and there's just no getting around it. If you don't hand over the dollars to BCV, you'll never get another export permit again."

"The way it works, basically, is that you have to go through that whole sprawling, steaming mass of hassles just for the privilege of having Chávez confiscate two out of every three dollars you earn. Or, to put it more delicately, tax your export revenues - your gross export revenues - at something like a 60% or 70% rate. Because that's the implied tax when they force you to hand over a dollar worth Bs.6 or 7 and they pay you just Bs.2.15 for it."

"Que bolas," I say.

"Nice, huh?" He's smiling this big masochist smile of his. "Es que not even PDVSA buys bolivars at the official rate anymore - or did we forget all about Rosemont already? It's basically occassional confused gringo tourists and us - those are the only pendejos left who'll fork over one full dollar for Bs.2.15."

It takes some time to digest The Exporter's story.

When you take it all in, it's no wonder that Venezuelan non-oil exports have collapsed to historic lows this year. The real wonder is that anything at all continues to be exported in these circumstances. Basically, the only firms that export are firms that have absolutely no other choice because there's no market for their products at home, or because they need to keep a presence in foreign markets if they're to have any hope of becoming competitive again some day in the future.

On this blog, we used to have some debate, now and again, on what an appropriate, progressive development policy for Venezuela might look like. But seen against the light of the utterly insane reality The Exporter describes, seriously, those kind of debates look so incredibly misplaced it's embarrassing.

Needless to say, these kinds of stories are the ones that first-world researchers miss by a mile. Somewhere, in an ivy-covered computer lab, a twenty-six year-old trade economist is running a regression and concluding that Venezuela suffers from a terrible case of Dutch Disease, a technical term that helps explain why oil-exporting countries export little else .

But it's not just Dutch Disease. It's not the over-valuation of the currency that is the main factor holding our non-oil exports back. It's the fact that the entire apparatus of the State is mobilized to stop you from exporting.

A change in perspective is in order. Any export regime that isn't certifiably bonkers would be a massive improvement over what we have now.

June 22, 2009

Leopoldo endorses opposition primaries

Juan Cristóbal says: - Leopoldo López, the former mayor of Chacao and an early front-runner for the 2012 opposition Presidential nomination, made some important news this morning.

In an article by Roberto Giusti in today's El Universal, López makes a whole lot of sense. He says the opposition's current non-strategy simply isn't viable, calling for primary elections to make up a single slate of candidates for the coming city council and National Assembly elections.

His main argument stems from the lessons we all should have learned in last year's Regional Elections. In spite of some notable successes, he calls a spade a spade and says that our side underperformed. He makes a strong case, pointing out that the opposition lost 76 mayor's offices and two governorships due to lack of unity, highlighting Barinas, Bolívar, Chacao and Baruta particularly as the most egregious cases (although in the case of the latter two, our side won).

He thinks the lack of unity and the ugly spectacle of backroom deals to hatch half-baked unity pacts turned off the opposition base. He points to Datos polling numbers showing that support for opposition politicians fell from 25% in early 2008 to 11% now.

How do we address this?

Easy: doing things differently.

He says primaries would enable our own base to participate in making unity lists, and that this would add legitimacy to our candidates, not to mention that it would allow the political parties their proper weight instead of giving each one an equivalent seat at the table.

"If we don't consult the voters," he says, "and define a clear perspective in the medium run, we are going to reach January without a shared strategy that generates enthusiasm and shows change in political leadership, and this would just be a rehash of the mistakes of the past."

He says that choosing candidates from the base would show the opposition endorses "a new way of doing politics", and thinks such a process can provide leverage and enable the opposition to harvest local leaderships named by the communities themselves.

Personally, I think this is exciting news. I have argued for a change in opposition tactics, spearheaded by a change in the opposition's leadership. I've been a latecomer to the idea of primaries, but the failed experience of last year convinced me that this is the only alternative to have an opposition movement that is national, organized, and credible.

The lackluster, haphazard, recently created "Mesa de Unidad" has generated zero enthusiasm. The government was quick to label it as a re-thread of failed experiments in the past, and guess what, they are right.

The last few weeks convinced me even more that only a bold approach can work. I've been waiting for months for an opposition bigwig to come out and endorse this idea, and I'm glad to see it happen.

While I have always recognized his talents, I've been critical of López in the past, and I'm not entirely sure I agree with his idea of inviting the CNE to organize the primaries. But by coming out and stating the obvious, by being the only opposition heavyweight willing to show a little bit of vision, I'm burying the hatchet.

López is now my favorite opposition politician.

Let's hope the others catch on to the idea of primaries and start understanding a simple fact: this is a necessary condition for the opposition establishing a new majority, our only (and perhaps last) hope.

June 21, 2009

Gone To The Dogs

Quico says: The sun was setting by the time he got to the farm gate, so it wasn't immediately evident to Kenneth that the guys loitering there were soldiers. Sure, they were toting assault rifles, but they were wearing plain olive-green t-shirts over their camouflaged pants. No uniforms, no insignia, nothing like that.

"Stop!" one of them said as Kenneth approached, raising his rifle. "Identify yourself!"

"Ummmm..." trying to piece together whether he was about to get robbed at gunpoint, Kenneth struggled for a way to say the next few words without sounding entirely preposterous, "es que...we, uh, made reservations."

Blank stares. Turns out the flunkies who'd been sent to expropriate this particular farm had no idea that, alongside their agricultural business, the old owners ran a posada - a kind of farm lodge for tourists.

"Reservations?!" the soldier barked back, "¿cómo es la vaina!?"

"Bueno, officer, you know, because normal hotels won't take this many dogs, so..."

Even blanker stares. Of course, if the soldier didn't know about the posada, he certainly didn't realize that its location - just outside Valencia - made it a favorite lodging place for dog breeders, owners and handlers heading to last weekend's big Pedigree Dog Show there.

Kenneth had been driving for hours and hours by this time, having toured Caracas to pick up the dogs and then taken on the massive traffic jam in Tazón before hitting the highway with 22 - that's right, twenty-two - dogs in kennels piled in the back of his van.

He was tired, and just wasn't prepared for any of this...five minutes earlier, his mind had been entirely occupied with worries about last minute grooming and such ahead of the big show the next day.

"Dogs?" The soldier didn't look much older than 18, and this stuff about dogs this took things from weird to downright surreal. "What dogs nor what coño?!"

"Sí, sí, you know, for the big dog show in town...we usually stay in this posada cuz they don't mind about the dogs..."

At this, the kids at the gate realized they needed to take this to their higher-ups. One of them headed into the farm. A few of minutes later, a fat army officer came out to Kenneth's van to figure out what this was all about.

"Bueno, we took control of this farm yesterday, ya sabes, para la nación. Now, what's this about dogs?"

Kenneth explained what was going on. Said he had no idea the farm was about to get expropriated. Showed the officer his printed out reservation. And the dogs.

...ud. no lo va a creer, pero hay escuelas de perros, y les dan educación...

"Officer, um, what can I say? How were we supposed to know about this invasi...erm, expropriation? We've been driving since this morning and the show's tomorrow and de pana que you gotta let us spend the night here!...there's just nowhere else we can stay in Valencia with twenty two dogs at this time of night."

The officer looked over the reservation papers, looked over the dogs, thought about it for a second and then, to Kenneth's astonishment, waved them in.

As the van rolled into the farm, Kenneth noticed the soldiers still following it with their rifle barrels...


Kenneth's friend, who turned up a few hours later, had a rather rougher time of it. When he turned up, the soldiers had left the gate unguarded. A regular at that posada, he just jumped out of his truck and started trying to open the portón to the farm himself, like he'd done many times in previous years.

Seeing this the soldiers freaked out, ran over, and started screaming at him to stand back, at one point holding their Kalashnikovs up to his nine year old daughter's head as they shouted questions at him.

It was not a pretty picture.


"Coño, nobody told us they were running a posada here," the officer said over beers with Kenneth later that night, almost apologetically.

"All we knew was that they were planting sugar cane on the farm, and you know, sugar cane's no good. I mean, for the revolution, it's just not a priority. Ecologically too. That stuff fucks up the top soil. So we took it over, for the pueblo."

Kenneth looked at the fields all around, though, and something wasn't quite jiving for him.

"Ummmm," he said, a little hesitantly, "well, y'know, I'm no farmer, but that stuff looks like corn to me."

"Sí claro," the officer shot back, "the owners got wind that we were evaluating a takeover a while back so, sure, this year, those vagabundos planted corn. Y'know, just to take the heat off. But last year and the year before that, and for a long time, they were always planting sugar cane."

"Ah, gotcha, understood," Kenneth said, letting it slide.

What he didn't say, for obvious reasons, was what he was really thinking, which ran more along the lines of "holy fucking shit! these guys got expropriated because, years ago, they used to plant stuff the government later decided it didn't like!!"

Followed closely by "what the hell does this guy mean sugar-cane isn't a priority?!!? hasn't he ever heard of CAAEZ?! of rum!???"

Staggered, Kenneth got back to tending his dogs.


At the show venue, the usual community of dog freaks from all over the country had come together to show off their mutts. Kenneth's story made for something of an amusing anecdote backstage.

Not that he'd want to make too much of it, though. This is a dog show, after all. Non dog-related talk is strictly frowned upon at these things.

"Well, that's The Process for you...hey did you see that beagle from Maturín?! What a beaut..."

Kenneth, along with his 22 dogs, spent two nights total at the posada.

The last day, as he got ready to pack up his dogs and head back to Caracas, he couldn't help but notice that the revolutionization of the farm had started. Literally the first thing the soldiers had been ordered to do was to take the whitewashed façade of the main farm-house, paint it bright red, and stencil a silhouette of Che Guevara onto it.