Wednesday, April 06, 2016

Can It Get Worse in Venezuela? (Part 1)


Venezuela's 'Chavismo' Risks Implosion, Dissident Faction Warns
Published on Oct 8, 2014
A dissenting faction of the ruling Socialist Party says, the socialist movement built by Venezuela's former president Hugo Chavez risks imploding if corruption, inefficiency and an economic crisis are not tamed. Gonzalo Gomez Freire, a leader of Marea Socialista, or "Socialist Tide", a small but vocal group of leftist intellectuals critical of President Nicolas Maduro's government warned, "The revolutionary process is in danger, it's falling apart." Chavez handpicked Maduro as his successor before he died of cancer in March 2013 and Maduro went on to win a presidential election the following month. But he is now under intense pressure with an economy in recession, shortages of basic goods and medicines, annual inflation above 60 percent and sky-high crime. Maduro lacks Chavez's charisma and his approval rating has dropped to around 35 percent. The Marea Socialista group relentlessly chides Maduro's government for enrichment of senior officials, top-heavy decision-making and what it sees as the abandonment of revolutionary purity.

Crime and punishment in the world’s murder capital
Published on Mar 30, 2016
Venezuela is a country plunging into chaos - its economy in crisis, its crime rates out of control. Caracas is now the murder capital of the world - hundreds of policemen are among the victims of Vanezuela's dangerous streets.

Venezuela’s Crime Debacle: Quickie kidnappings. (Venezuela Crisis).  
Published on Apr 10, 2016
Anyone is a potential target, including the very poor.
In Venezuela, where the number of abductions is rising, “express kidnappings” are the most common sort.

They are supposed to protect us. Venezuela Crisis
Published on Apr 1, 2016
President Maduro to Venezuelans: Turn Off Hairdryers
Venezuela Scrambles to Tackle Energy Crisis, Rolls Out 60-Day Rationing Plan
Sabrina Martín
April 11, 2016
Nicolás Maduro: “I think a woman looks prettier when she combs her hair with her fingers and then lets it dry naturally.” (Sumarium)
Faced with a worsening energy crisis, Venezuelan President Nicolás Maduro has asked women to save electricity by not using appliances. Not even hair dryers.
During the program Con el Mazo Dando “The Hammer,” led by congressman Diosdado Cabello, Maduro explained his rationing plan to save energy across the country.
“During this 60-days period the hairdryer should have minimum use. Do you think you can do it, women? The clothes dryer and the hairdryer are high energy-consumers. The iron too. We must raise awareness about this,” he said.
“I think a woman looks more beautiful when she combs her hair with her fingers and then lets it dry naturally,” he said.
The energy-saving plan will apply to all public administration, including governorships and local mayors offices, who will not work on Fridays during April and May.
The Venezuelan president urged both electrical inspectors and National Armed Forces (FANB) officials to “immediately” ensure the expansion of the self-generated energy plan.
This implies that industries, businesses, and shopping centers shall acquire their own power sources. They will be put to work for nine hours instead of the four hours previously agreed upon.
Part of the energy shortage comes from problems at the Guri dam, where water levels are dangerously low.
The Electric Power Minister, Luis Motta Dominguez, made a report on the Guri dam’s current situation, claiming that the water level has dropped about 30 meters. Some experts say the South American country is on the brink of a national blackout.
The Guri artificial lake is the fourth largest in the world and part of the Simon Bolivar Hydroelectric system. The Venezuelan government blames the weather phenomenon El Niño, but engineers say that the crisis is due to three factors: mismanagement of water resources, the unavailability of electric generation in the thermal park, and drought.
The Simon Bolivar Hydroelectric Plant is the second-largest in the world in electricity production, but its water level was recorded at 3.56 meters starting from the beginning of collapse.
How Nicolás Maduro’s Spy Network Silences the Opposition
Venezuelan Government Taps Phones to Keep Opposition in Check
Sabrina Martín
April 7, 2016
Maduro’s Government tries to keep full control of  its “potential enemies.” (Globovisión)

From clandestine offices located in Caracas, Nicolás Maduro’s Government Homeland Protection and Strategic Security Center spies Venezuelan dissidents, according to Vértice News.
A report entitled “An Unprecedented Invasion of Privacy” explains in detail how the Venezuelan government interrupts telephone conversations to spy on opposition leaders as well as senior officials.
•Venezuelan government attempts to block Twitter in interior states
•Venezuelan government boasts of spying on opponents
Miranda State governor and former presidential candidate Henrique Capriles is one of the victims of such privacy violation, in addition to opponents Henry Ramos, Maria Corina Machado and Julio Borges.
Ocando also mentions that journalists and human rights defenders in the country have their phone conversations tapped by President Nicolas Maduro’s government.
According to the publication, espionage is in the hands of military and civilian hackers who follow the president’s direct orders. They have two main tasks: “massive monitoring of social networks and interception of emails and conversations of opponents to the Maduro regime.”
Interceptions are made using a combination of advanced electronic listening devices as well as viruses designed by Russian and Chinese specialists. The enormous amount of data these operators amass is later analyzed through a sophisticated artificial intelligence system created by IBM. The whole process is controlled by a centralized office set up by Maduro in 2013: the Homeland Security and Strategic Protection Center (Cesppa).
According to Ocando, the Government recorded “thousands of conversations” and used IBM’s “Watson” to establish a complex map of actions that allow the government to stay informed of all activities undertaken by the people spied on.
The publication said those responsible for intelligence work must deliver daily reports to the Presidency’s office and Chavista leaders, such as Diosdado Cabello. Reports include intimate conversations and discussions.
Vértice’s research says that Army, Navy, Air Force, National Guard and Navy Guard Officers received special training in technological intelligence and counterintelligence with the help of Russian, Chinese and Cuban advisers. Gustavo González López, current Interior and Justice Minister, is in command of these operations.
The research mentions the interception of a “highly suspicious” text between Deputy Julio Borges and Miguel Pizarro. It was allegedly written in “traditional Chinese” characters with these clue words: soldiers, blow, lake, water, bowl and the phrase “‘pushing up.'”
The report referred to the interception of a highly suspicious text in Borges’ Movistar phone records. Vértice asked for a comment from Borges, but he declined to comment. Vértice also made several phone calls to Pizarro, but never received an answer.
In addition to organizing and storing the data obtained in phone calls, Blackberry chats, emails and recorded conversations (by the traditional use of microphones and information provided by thousands of “cooperating patriots”), Cesppa experts also tracked and analyzed thousands of internet portals and social networks like Twitter and Facebook to detect possible opposition patterns of behavior.
Social networks Control
It is not the first time that this government control and manipulation of private communications of thousands of Venezuelans was denounced.
In 2015, PanAm Post editor Thabata Molina received warnings on Twitter regarding the spread of information. She said restricting the use of the social network is also done from the military base on La Orchila Island.
The alleged social networking blocking is also used to the regime’s favor. The objective is that in the Falcon, Barinas, Apure, Portuguesa and Monagas states (inhabited by a population of approximately four million people), citizens are prevented from becoming aware of what is happening in other parts of the country. In these areas, the State has the absolute control of the media and Twitter is really the only tool through which people express their disagreements, despite not being the states with the largest number of users of the social network.
Venezuela Is So Broke It Can’t Even Print Its Own Money
The Venezuelan Government Has an Outstanding Debt of Over $71 million to Its Printer
Raquel García
April 7, 2016
It’s unclear whether the Central Bank of Venezuela paid the debt to its paper money and passport provider in March (Yaesnoticia)

The world’s most renowned banknotes, coins and paper printing house, De La Rue, based in England, demanded that the Central Bank of Venezuela pay up US$262,647,997 in fees for printing money and passports, among other goods.
In a letter last month, De La Rue Director Ruth Euling told Director of the BCV José Khan that being a public company listed on the London Stock Exchange, the institution has an obligation to declare their financial position “if at any time it deviates from expectations.”
She added that De La Rue is obliged to publish its detailed financial statements at the end of its fiscal year.
“If there is any possibility of not getting paid before this date, it would impact our financial position and we are under the obligation to inform our shareholders and the authorities that regulate the London Stock Exchange through a public announcement,” Euling said in her statement.
“We wish to express our deep concern regarding the current debt of the BCV with De La Rue, and the serious consequences it could have for both institutions if left unresolved for much longer,” she said.
To resolve the situation as soon as possible, and to have no problems with its financial statements, De La Rue proposed BCV to remedy an outstanding debt of $71,421,039 before March 24.
She also proposed covering “the guarantees currently open in the amount of $97,626,958 for contracts related to the paper money and passport supply, which have already been delivered and accepted in accordance with the respective contracts.”
•New devaluation in Venezuela with change in the exchange system
It requested the BCV to agree on contract terms for future bids “to ensure that neither party ends in a similar situation regarding new projects.”
It is unknown whether the BCV debt with De La Rue was honored before March 24, but its failure to pay on a regular basis is a sample of the crisis in which most Venezuelan institutions are mired.
Venezuelan Dies on Raft Set for Aruba
This is Not the First Time Someone Has Died Escaping Venezuela's Severe Economic Crisis
Sabrina Martin
April 4, 2016
Aruba’s press reported the discovery of a discomposed body found on Baby Beach in San Nicholas. (Animal Político)
The body of a Venezuelan rafter who tried to enter Aruba aboard a raft was found on March 29 off the island’s coast, Colombian news channel NTN24 reported.
The man, identified by his friend as Joemar Vargas, died trying to make the crossing last Monday morning in an attempt to enter Aruba illegally, authorities said.
Vargas is a native of Venezuela’s northeastern state of Falcon. His body was returned to his family, who are now handling burial arrangements, according to reports.
Not the First Venezuelan Rafter
This is not the first time a Venezuelan has tried to leave the country by crossing international waters — a phenomenon that has led some to draw parallels to the situation in Cuba.
Venezuela is widely considered to be one of the unsafest countries in the world, with one of the lowest minimum wages on the continent. Access to food and medical care are also scarce. In addition, flights out of the country are extremely expensive. Often, people have no other choice but to leave by raft like Vargas.
In June 2015, three Venezuelan students illegally entered Trinidad and Tobago by a raft in an attempt to escape their country’s severe economic crisis facing their country.
The three women were fined US$1,576 for trespassing by immigration authorities.
A Day Out at the Black Market in Venezuela
Widespread Inflation, Shortages Lead Desperate Venezuelans to Unregulated Street Vendors
By Scott Tong
April 3, 2016
Scarcity and rationing in Venezuela leads to staple food being sold at markups on the streets. (Jorge Galindo/Marketplace)
For three years in a row, Venezuela has reported the highest inflation rate in the world. The reported rate is 186 percent, though independent estimates range from 400 percent (by Johns Hopkins economist Steve Hanke) and 720 percent, a projection by the International Monetary Fund.
According to the IMF, the country’s economy shrank 10 percent last year and is projected to contract an additional 8 percent in 2016.
And Venezuela’s currency loses value by the day. A year ago on the black market (which virtually everyone uses), one U.S. dollar bought 200 Venezuelan bolivars. Today, it buys more than 1,000.
Imagine your grocery bill going up 17-fold. That would come out to something like:
•Loaf of bread: $32
•Dozen eggs: $18
•Pound of coffee: $85
This tries to capture the reality of Venezuela.
“It’s Common to Sleep in Line”
Noslen Ramos, a mother of three, queues up daily in Maracaibo. (Jorge Galindo/Marketplace)
Single mom Noslen Ramos queues up daily outside state supermarkets in the western city of Maracaibo, which is two hours from her home. She is a mother of three and sells empanadas on the street for minimum wage.
“The situation is critical,” Ramos said. “We need flour and rice. And coffee. Right now, we have no food for lunch.”
Crude oil prices have crashed, and so has normal life. Around 20 people line up in front of the store, but 200 more have been shooed around to the back alley, ostensibly to hide the crisis.
“It’s common to sleep in line,” Ramos said. “If we come at five in the morning, there’s already a big line. The people in the front, they probably slept here.”
On any given morning, there is no guarantee anything will be on the shelves when shoppers arrive. Even if items are available, each person can only buy two of any item in a week, said Ramos’s sister Michelle Suarez.
“The problem is, our family has 12 people, Suarez said. “So two bags of rice lasts just one day. So we go to other supermarkets and shop all day. Some stores don’t take cash, but I don’t have a debit card. And the bank says there’s not enough plastic to make more.
If they don’t find rice here, they’ll buy a bag at a place where they know it’s available – the black market. The price is steep: a one kilo (1.6 pounds) bag of rice costs the equivalent of two days of pay. A large can of milk costs one full week’s salary.
“It’s absolutely the worst ever,” said Caracas pollster and analyst Luis Vicente Leon of the firm Datanalisis. “It’s amazing.  It’s very difficult to find any country in the world right now that people cannot find essentials.”
Essentials products out on a table at the black market. (Jorge Galino/Marketplace)
The Datanalisis index of scarcity, reflecting goods missing from store shelves, exceeds 70 percent. The reasons are complex. It amounts to economic multiple organ failure.
First, Venezuela hardly produces anything domestically, besides petroleum (oil sales are 96 percent of the country’s import revenue).
Price controls destroy the profit motive for domestic makers, who sometimes sell their products for a loss. And the ruling socialist government has taken, or expropriated, entire private companies.
“They expropriate the majority of the sugar companies, and you cannot find sugar,” Luis Vicente Leon said. “They expropriate coffee companies in Venezuela, and you cannot find coffee. They expropriate Owens-Illinois, and we cannot find packages.”
So Venezuela imports just about everything. But now there’s not enough oil revenue to buy imports.
“We are mixing two different illnesses right now,” Luis Vicente Leon said. “The illness coming from the intervention, and the impact of the oil market.”
And the country has printed so much money, inflation has soared. During my trip, a national newspaper showed on the front page this graphic of the country’s ballooning money supply.
“Venezuela’s money supply surpassed 4 billion bolívares in 2016, a 100-percent increase.” (Marketplace)
Solution: the Black Market in Venezuela
Shortages drive anyone who can afford it to the black market. Mostly, bootleg sales take place underground: buyers find sellers through friends, or through closed chatgroups on Facebook or WhatsApp. It is illegal activity, after all.
But in Maracaibo, the black market is an actual place. The contrabando, as sellers call it, sits on tables out in the open.
The odd part, to an American, is that this contrabando is available every day at Aisle 3 in my local Safeway: flour, rice, coffee, Tylenol. I went in with fixer/translator Yesman Utrera and photographer Jorge Galindo, on a specific mission: to find infant formula for our driver’s baby. By the time we found two cans to compare prices, both were sold.
At a couple points, I lost track of translator Yesman, when he started shopping himself for coffee and medicine. “Got to get it where you can,” he said.
We didn’t linger too long: Yesman and Jorge noticed the illegal sellers were nervous, and there is always a risk in Venezuela of violence and kidnapping. Back in the car, we jotted down the prices, comparing the state regulated price with the black-market price. Here’s that page from my notebook:
The average markup, by our quick-and-dirty math: 17 times.
 Not everyone can afford these prices, of course. An elderly woman selling plantains at the market said she couldn’t find milk for her grandchildren at the official stores. And she couldn’t pay the scalper price, so she cobbled together her own milk substitute – from plantains.
“I open up the fruit and take the seed out – otherwise it hurts their tummy,” the woman said. “I cook it and blend it. Then I cook it again for 5 minutes, stir and add a little sugar. It’s the economy, you know?”
Back in the grocery line, the two sisters weren’t just hungry and frustrated about the shortages and black-market prices. They were furious — at people they considered profiteers in this crisis. Noslen Ramos said she assumed some of food missing from store shelves slipped out the back door.
“Every day when I walk to work,” Ramos said, “I see trucks loaded with flour, sugar, rice, shampoo, milk, driving to Colombia to resell them. I want to take a picture, but I’m scared what might happen to me.”
Michelle Suarez said she once hitchhiked on a truck loaded with basic consumer goods. At each military check point, she said, the driver bribed a soldier to go on through toward the border.
Before we left, Ramos cited a Bible scripture about a famine prophecy coming true. Things will likely get worse, unless oil prices miraculously skyrocket. By one estimate, the available petrodollars to buy food and medicine will shrink in 2016 by two-thirds.
Scott Tong is a correspondent for Marketplace’s Sustainability Desk, with a focus on energy, environment, resources, climate, supply chain and the global economy. Follow him at @tongscott. This article was originally published on Marketplace.
Also See:
Venezuela Is Out of Food! Who's Next?
15 February 2016
A Better Way? Barter System vs. National Currency!
26 December 2009
Food Shortage, Then Anarchy!
25 July 2012
What to Expect when the Economic Collapse Occurs!
17 May 2013
Disasters Happen! Be Prepared!
(Part 1)
31 March 2011
(Part 2)
30 August 2012
The Collapse of the Entire World’s Economic System has Begun!
18 March 2013
Economic Collapse! How Did We Get Here?
27 February 2013
Are We Facing a Global Financial Crisis?
31 May 2011
Financial Crunch! Economic Collapse! (Part 1)
31 July 2008
(Part 2)
20 November 2008
(Part 3)
25 January 2009
(Part 4)
17 April 2009
(Part 5)
23 June 2009
(Part 6)
23 August 2009
(Part 7)
30 November 2009
(Part 8)
23 February 2010
(Part 9)
28 August 2010
(Part 10)
13 January 2011
(Part 11)
29 April 2011
(Part 12)
28 July 2011
(Part 13)
04 April 2012
(Part 15)
02 November 2012
Recession? ... Depression? ... What is Going On?
(Part 1)
06 October 2008
(Part 2)
02 February 2009
(Part 3)
19 April 2009
(Part 4)
02 August 2009
(Part 5)
17 September 2010
(Part 6)
17 September 2010
Jobs, Jobs, Where are the Jobs?
(Part 1)
20 April 2010
Chavez, Venezuela, & Socialism
02 June 2009
Are Suspicious 'Suicides' Really Government Murders?
(Part 2)
25 March 2013
Are there Changes in Store for Venezuela?
08 March 2013