A year after supposedly being elected President of Venezuela, Nicolas Maduro is still trying to figure out how to do his job. Growing up under the shadow of Chávez, Maduro had or has little idea about how to manage the Venezuelan economy. He thinks that he can follow the path of his Master, but the Master left the economy in bad shape and there are few places where the regime can find the funds required to stabilize the über-distortioned Venezuelan economy. Add to this the internal bickering between the various factions in Government and it took Maduro almost a year to make changes to the foreign exchange markets of Venezuela, which Chavismo thinks is the most important piece of any economic policy.
In fact, it thinks it is economic policy.
But other than the Maduro administration admitting a much higher rate of exchange, the new Sicad-2 foreign exchange system has become a Sitme-like repeat monster, which shows little of the supposedly “free” and “transparent” aspects that the Government promised. But what can you expect from the brainiacs that surround Maduro?
And as the world expects that the Maduro administration will become pragmatic, we have seen little of the sort. But somehow, good “sources” tell analysts stories of a future unification of all exchange rates at the Sicad-2 level, a noble goal, but one as vaporous as Chavismo’s pragmatism or Chavista “ideas” for that matter. The time for Maduro to make an adjustment was then and maybe still is now, but not next year, when the economy will be in worse shape, the Government’s popularity will be at its lowest ever and a Parliamentary election will be looming in the horizon.
Call us skeptical, but we just got over this new “free” and “transparent” fx system being promised.
Meanwhile, while Maduro blamed everyone for the economic problems, he doubled inflation to 57% per year, shortages increased dramatically to levels such that the scarcity index is no longer published by the Venezuelan Central Bank and monetary liquidity increased by a whopping 75.3% during his first year, mostly due to the Central Bank lending to PDVSA.
Economic “stupidity”, more than economic “war”
And rather than seek expert help, Maduro relied on the same clueless advisers that led Chávez and him to where we are, promoting the man who has destroyed PDVSA, Rafael Ramirez, to Economic Vice-President, as if Ramirez had any training on the subject. And it shows.
And rather than recognize the failures of the policies of controls and intervention, Maduro, who has even less of an idea on economic issues than Ramirez, went for more controls, more intervention and more imports (overcharges and “guisos”) by the Government. Price and profit controls on everything were imposed and right before the regional elections, Maduro declared war on prices, forcing merchants to sell below cost, increasing his popularity, but accelerating scarcity and the overall deterioration of the private sector.
Way to go Nico!
And just to make things a little worse, the Government did not include its debt with importers from 2013 in the foreign currency budget, slowing down both local production, manufacturing and imports, something that is still going on today.
Not exactly what needs to be done. But rather than try to change direction, now Maduro wants to declare another war on the economy. This time around, he wants to increase taxes, introduce an asset tax, since taxes from profits have gone down, given the lower profits, if any.
Talk about clueless. With deeply negative interest rates, those that have assets will soon learn the wonders of borrowing to the hilt to buy things that can be hidden, like dollars, or acquire others, all under the subsidy of the Government. Some economic model!
Meanwhile, Venezuela not only finances Cuba under incredibly generous (or is it stupid?) terms, but even the meek Comptroller takes offense on the Cubans ripping Venezuela off, overpricing up to 9,000% (no error there!), importing unnecessary products, the Cubans not sending even 1% of certain orders, storage costs, delays and mismanagement.
It is an extension of the Cuban economic model, applied to rob Venezuelans.
Stupid Solidarity Forever! (SSF!)
Meanwhile, Maduro seems to be trying to juggle the military, the corrupt, the radicals, the so called “pragmatists”, his family (or Cilia’s) and Chávez’, as well as combinations of all of these, including Diosdado.
Houdini would be proud!
And as if this was not enough, Maduro decides to repress protests, jail the leaders of the same and have a dialogue with anyone but those protesting. Remarkably, the opposition shines on national TV, but you have to wonder, who does Ramos Allup represent in the end? Could he get elected to anything? How many people like him, including his wife?
But the beat goes on, Maduro is a clueless President, the country is rudderless, with nobody really proposing an alternative model, beyond applying more order and knowledge to the current one. Everyone fishing to see what morsel they can grab. Even the opposition supporters have by now drank the Kool Aid that the real manufacturing sector has made heaps of money off the Government and that the airlines, car companies, pharmaceutical companies and the like deserve not to get paid.
They should ask themselves: Am I better off than in 2000 and their answer will be the same as that of those companies.
But Maduro is really happy, he believed what Rafael said about the economic model being right and successful. He still wonders why there are meetings all the time and nothing ever gets done. And Cilia prods him to keep on repressing, who cares about human rights and the like?
At least she is safe!
And crime is rampant, but the pretty revolution does not even care for its own supporters. Have you noticed? Even the deaths of Government supporters are not investigated and punished. Maduro is worried because that is the number one concern of the “people”, but he think he can’t control crime if the opposition leaders do not help.
And like in Catch-22, so it goes…
Maduro’s Government is 365 days old, how many more will the country have to endure?
The Devil's Excrement 
April 28, 2014 at 9:21 am
My wife is Venezuelan and I have visited her family in Maracay many times over the past 7 years. In just these few short years we have both noticed the deterioration. Standing in line is now the norm for making a bank transaction (internet banking is still a long way off it seems), buying staple foods (on the rare occasion that they are in stock) and buying medicine (although in our experience we get the same reply “don’t have any in stock”). The only time there is not a queue is at any of the car retailers, and you guessed it, because there aren’t any. I have not seen a single new car in a showroom in Maracay in 3 years. It is sad to see the deterioration, but I do feel that a lot of the responsibility is on the Venezuelans. As an outsider (from London), the country is dirty, run down, unkempt and dangerous.
Dangerous because of the continuous threat that you are going to be robbed at gunpoint while waiting for the traffic lights to change but also because the roads are death traps. Compared with the rules and laws enforced on the roads in the UK, there seems little regard for them in Venezuela. Green and Red traffic lights both mean ‘GO’, just so long as you look left and right (inbetween checking your Twitter, Facebook, Instagram, the radio station and changing gear) as you blatantly risk the chance of being smashed into by the many Schumaker wannabe’s that race along the city streets. If you crash, which is quite likely, and you happen to be in one of the particularly dangerous neighbourhoods, then don’t expect people to come and help you. Instead it would be seen as an opportunity to take anything of value from you. There are many documented examples of people having complete disregard for human life and only seeing an opportunity to help themselves. And I have to mention that pot holes are more like bomb craters which can be big enough to swallow a car. There is one particular pot hole that I remember on my first visit to Venezuela that someone had thoughtfully placed a car tyre and stick in front of. I think they knew that nothing was going to be done about it, and they were right. The hole has now become home to a small tree!!
People, more now than ever, make their own entertainment as going out after dark is seen as a risk not worth taking.
Buildings are visibly crumbling, new building projects seem eerily quite. News is that a new sports stadium has been given the go-ahead in Caracas. First thing I said “can’t imagine when that is going to get started, let alone finished, if we expect it to go the same way as the new train line between Caracas and Maracay.” The train line was started when Chavez became president and, so far as I can see, has been abandoned. The only evidence is a series of bridge supports and small sections of completed track.
I could go on and on but am bored and frustrated with how Venezuela is imploding. The only advantage for me is being able to fly 2 people business class for the same price I would normally pay for one person flying economy. All because I know people that are desperate to acquire dollars or euros on the black market when the Bolivar is being devalued at an alarming rate.
April 22, 2014 at 9:34 pm
Chavistas believe as Joseph Goebbels Said “power will only be taken from our cold dead hands” Raul Castro came to tell Maduro in person, “Fidel said keep them (the opposition) talking till they they realize nothing s going to change!
April 22, 2014 at 7:36 pm
This insanity will come to a screeching halt when there is simply no more money left to steal to support the fantasy world that these idiots are inhabiting. That will come in about Aug. or Sept. We will know that moment has come when people are asking where the hell are Rafael Ramirez and Diosdado Cabello…
April 23, 2014 at 7:49 am
Oh Roy! Do you want to try that again? I mean, you really nailed the first sentence, and then flew right off the tracks with the second. There’s plenty more to steal, years if not decades worth. It’s called The Devil’s Excrement, maybe you’ve heard of it.
April 23, 2014 at 8:10 am
Eventually the insanity will end because an ever increasing number of Chavistas will need an ever increasing payoff. Even with large oil reserves, the oil needs to be pumped and sold in order to get funds. An interruption in oil production or sales will quicken the collapse.
For example, dozens if not hundreds of Chavistas must have known details about the election fraud. All it takes is one defector who did not get paid to testify about the illegitimate election. The whole government would leave the country within days.
April 23, 2014 at 10:10 pm
Ronaldo, haven’t you ever heard of the word, repression? Yes, Chavistas will consume their own, starting, of course, at the bottom. Thinking that this was something personal was always a handicap that the opposition never overcame. These monsters don’t detest the oppo nearly as much as they love themselves – and only themselves. There will be many more years and even decades of ‘Chavismo’ – short of a coup or tragic war.
April 22, 2014 at 7:36 am
an interesting article……I like the one comment saying “you made your bed now sleep in it” http://www.breitbart.com/Big-Peace/2014/04/21/Venezuelan-Political-Asylum-Requests-to-US-Skyrocket-Under-Maduro-Regime
April 20, 2014 at 5:39 pm
The main thing for these crooks now is to cling to power.by any means as the country unravels. Having the cuban king of leeches attached to the Venezuelan economy will not help. The futile stupidity of marxist economics never ceases to amaze as its adherents cling blindly to it in the face of repeated drastic failures ( like the rich idiots of Hollywood) through history as if there is no other option available to them. Ideology trumps common sense.
April 22, 2014 at 9:43 pm
The rich in Hollywood believe in socialism because they make millions for a few days work! and spouting socialist rhetoric is a way to ease their guilty feelings. It took the Titanic a good half an hour to hit the bottom of the Atlantic after sinking! and the Venezuelan ship still has a long way to hit bottom!
April 20, 2014 at 11:30 am
I can’t believe I’ve been so wrong so often. With every presidency I’ve thought there could not be a worse one. It’s been downhill since Rómulo. 56 years swirling down the drain.
April 20, 2014 at 11:22 am
I wish it had been “Maduro’s LAST 365 Days As President Of Venezuela”
April 20, 2014 at 11:18 am
Is all of his for real? We’re sitting here watching an entire nation imploding, in slow motion no less, yet nothing is being done about it. Really?
“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”
― Friedrich Nietzsche
April 20, 2014 at 3:00 am
Blend concepts like socialist state and absolute monarchy and you might get the off flavour of what is going on in Venezuela. How will it taste when the economy finally collapses?… maybe iron will taint the recipe.
I invite you to read my new blog, estupalabra.wordpress.com, where I have written a Monologue with Karl Marx.
April 22, 2014 at 10:05 pm
Karl Marx never spoke of state capitalism, he spoke of the workers owning production of their factories, which in Germany and Sweden part ownership by workers now happens, it was Lenin who introduced state control of production. Before his assassination he was beginning to go back to Karl Marks ideas. Starlin was the one (ex-bank robber from Georgia) who ruthlessly pushed state capitalism!
April 19, 2014 at 9:31 pm
quien con quien, llora
April 19, 2014 at 9:21 pm
Well MIguel, after touching some economic points her I would recall what Henri Falcón, Lara´s Governor, said the other night at the “debate” …”not economic war but economic improvisation”… along with your words that…. ” It is an extension of the Cuban economic model, applied to rob Venezuelans”