Archive for the 'Venezuela' Category

Venezuela: Where Is The Money? (¿Donde están los reales?)

May 7, 2014

As foreign analysts talk up the “pragmatism” of the current Venezuelan Government and Venezuela and PDVSA bonds soar, one has to wonder where the money is. After all, with shortages and inflation at an all time high, you would think this “pragmatic” Government would make a huge effort to reduce shortages by giving our foreign currency to importers to guarantee supply.

In my mind, the moment is now, not 2015. With the Government’s popularity at 21%, this is the time to adjust an really  be pragmatic. Instead, the only “pragmatism” has been that the Sicad 2 rate was higher than anyone expected. The rest, is so far wishful thinking, from currency unification, to any increase in the price of gas.

It is a case of “Show me the money”. So far, I have seen very little.

Thus, bonds go up on three acts of faith:

-The Government is “pragmatic”

-Oil will not go down in price.

-The parallel funds have the money the Government says

(And there is a corollary: The political cost of defaulting is too high. Ummm, I have heard that before: The political cost of firing 20,000 PDVSA workers is too high. The political cost of jailing Leopoldo Lopez is too high and so on and so forth, you get the idea)

Meanwhile, let’s look back at Cadivi approvals  for imports in 2012 (no data for 2013):

2012The important numbers here is that in 2012, the Government gave importers in twelve months US$ 18.18 billion  or US$ 77.7 million per day.

Well, today, Cencoex released the number for the first four months of the year, and this is the same data for imports:

CencoexWell, this 2.827 billion in four months for imports, which is equivalent to US$ 8.481 per year, substantially below the US$ 18.2 billion of 2012. And if you think Sicad 1 or 2 explains this, let me remind you Sitme was around in 2012 at daily average levels near or above Sicad 1 and Sicad 2 combined so far this year.

That is a factor of over two difference. So, if you have felt the shortages this year, the quantitative explanation is right there: A third of the money, a third of the goods.  And shortages, of course, create inflation, as there is too much money chasing too few goods.

So, if the Government has so much money in the parallel funds and if oil is high and you have become ¨pragmatic¨, why not use it? What are you waiting for?

For the Government to reach 10% in popularity? Really?

Which only leads to the question Luis Herrera used to ask: ¿Donde están los reales? (Where is the money?)

I have absolutely no idea, it may not even exist…

Tales Of Bolivarian Inefficiency IV: Puerto Cabello’s Bermuda-like Triangle

May 3, 2014

One of the nice things about having faithful readers, is that I sort of get copies of videos, documents and papers (like this one) making sure that I seldom miss important stuff. Sure I get stuff twice or even more times, but it is an incredible source of information, so thank you all. Once in a while, readers write to tell me stories, many of which I would not know about in detail if it were not for them. Sometimes, these become a post. This is one of them.

Chavismo thinks that it can hide incompetence and inefficiency. But modern tools are pretty incredible. Chavismo also seems to believe that it can do anything, run any enterprise. Their infinite belief in the power of the State and their own ability is simply scary. Take imports. In its war against the private sector Chávez began importing stuff from all over, just to bypass the local private sector. In his mind, if there is no toilet paper, or corn, or wheat, it is just a matter of importing the stuff and magically, it will show up in the shelves of local stores.

Except in reality, the path is an extreme adventure in inefficiency. It starts with how much is paid for the stuff, as there are bribes and commissions at each step. Then, there is the problem of what to bring. Some bureaucrat in Caracas decides to import paper towels and corn and, in a few weeks, people are using the towels in lieu of toilet paper and making corn bread because there is no wheat.

Except that it is not even that easy, because to get stuff from say, Brazil, to the Venezuelan consumer, the stuff has to go through the Puerto Cabello Bermuda-like triangle, where ships don’t disappera, but they do get lost for a while:


You see the port responds to the whims of Chavismo, as it is run by Bolipuertos, which is 49% owned by Asport, the Cuban port authority. This is not an easy fact to dig out, as they try to hide it deep in the webpages, but go to slide 22 of this page, and it is clearly spelled out.

This means that if it is May Day, like yesterday, many of the dock workers are bussed to Caracas to participate in the Maduro march. That means tough traffic to get in and out of the port, little unloading and almost no cargo going in or out.

But Puerto Cabello is like a Bermuda triangle, where ships get lost in time, as they arrive, spend weeks and months waiting and then too much time unloading. And time, my friends, means cost and money for everyone involved.

What my friend and reader taught  me (let’s call him DD) is that in the maritime world you can’t hide. Each ship carries  an AIS (Automatic Identification System) which is sort like the black box that airplanes have, allowing all ships to be tracked. There are websites like this one or this one, where you can follow each step of what is going on. I actually subscribed to the first one for a while ,so I could go back 60 days and follow the ships. In fact, you can even add alerts to keep track of ships.

This, for example, is an overview of the part of the Caribbean where Puerto Cabello is from the first site I linked to:


The first thing you note is how much movement and density of ships there is near Aruba and Curacao (Ships moving look like little arrows, rather than diamonds, which are vessels that are not moving), while around Venezuela everything is so static. (If you go to the webpage, you can even tell how fast the ship is moving by putting your mouse on it). Obviously, comparing the size of the three economies, you would expect much more movement and density around Puerto Cabello. But such are the ways of the revolution…

In fact, you can zoom in and see how little movement there is inside the port itself  (Colors are what type of ship it is, tanker, (red), cargo (green), passenger (blue), etc.):


You can dig even deeper, blowing up the port to the level of street detail, if you know the port, then you know where the grain elevators are, for example. Thus, if you know your stuff, you can tell what type of ship is at each spot, even if the system tells you most of the time.

Here is a detailed picture of  what was going on in Puerto Cabello, yesterday May 2nd. 2015:


In fact, you can click on any of the ships and you can get all sorts of information on each ship. For example, if you click on the second green ship below the point in the middle, you get this window:


Note that you can check out the vessel’s track, history, itinerary. And in vessel details you can get even more pictures and find out this ship came from Norfolk Virginia, for example. If you are subscribed, then you can see when it arrived in Puerto Cabello, when it went to port and the like.

And here is where you find that Puerto Cabello has become almost like the Bermuda triangle: Companies send ships in, but they never know when they will come back. First, they arrive at port and have to wait for weeks, sometimes months, to get into the port to unload the cargo. As an example, last November, the 27th. to be exact, the M/V UBC Toronto left New Orleans loaded with corn. The trip takes about 8 days. Thus, it should have arrived in Puerto Cabello  around December 8th., the 9th., at most.

Well, on February 24th. this ship was still sitting in the same spot outside Puerto Cabello, waiting to be unloaded. We are talking more than seventy days later! It finally left Venezuela at the end of March (I did not follow its course and my subscription expired!), arriving back in the States on April 9th. that is a four month trip, for something that should only take three weeks, two traveling and one unloading.

This not only costs money, days inside the port cost on average US$ 15,000 per day, but think about it, this ship was loaded with corn at a time that Venezuelans are experiences shortages in Harina Pan to make their arepas!

Chavista management is clearly an oxymoron…

There was another ship, which arrived right before last Christmas, which was unable to go into port to unload until after two weeks anchored at sea. Well, this ship was still in Puerto Cabello unloading at the end of February, more than 8 weeks later. And it did not leave until the first week in March, which means that at $16,000 per day for roughly 60 days, the trip cost an additional US$ 960,000 for the trip.

Guess who pays for this?

So add it all up. In most of the world, workers unload, on average, about 5,000 Tons per day, from a vessel with peak rates of about 10,000 Tons in very efficient operations. In Venezuela, with luck, you may get to 1,000 Tons per day, but rates can be about half that much. This adds costs from US$ 10,000 per day, all the way up to US$ 20,000 per day, for up to two or three months. Given that a shipment may be worth US$ 10 to 12 million, this becomes a very expensive proposition. (Not to mention graft, overprice, commissions and the like)

Add it all up. This is the cost of the ports being under the inefficient Chavista management, under the advise of Cuban consultants, which not only charge for it, but turn out to own 49% of the company running the ports (They probably paid nothing for it). And, of course, being in charge of the port is juicy business, with Generals or whatever their rank may be, fighting for the top spot regularly (Last year, the port had four different Heads, with each new one requiring to learn the job from scratch, They probably never did, except to learn at which step you could charge something)

There are many other stories surrounding this. DD told me how a ship used in the oil business, costs about US$ 400,000 per day rental, US$ 230,000 if not in use. Just bringing it to Venezuela, if it is in Europe, for example, costs about US$ 2 million. Well, one such ship was brought to Venezuela last year from Europe. By the end of March it was still there, sitting around, doing nothing.

Chavista inefficiency at its best!

Meanwhile, maritime operators tremble at the thought of having to send a vessel to Puerto Cabello. It is the Bermuda triangle backwards. Your ship always disappears when it goes into the area, you just don’t know when it will reappear!

And these guys think hey can keep doing this!

(Thanks to DD for the tip and the info)


A Premature Look At The Nascent Sicad-2 Venezuelan Foreign Exchange System

March 26, 2014


It is premature to judge the Sicad-2 system yet, but I think it will be premature to give judgement on it for quite a while, so it is worth talking about what has (finally!) happened with this nascent foreign exchange system.

First of all, I clarify what I tell everyone that wants to listen: this is not a trading system for fx, as has been reported in the international press. This is a system by which the Government allocates foreign currency to those that request it, with the Government exercising a significant discretionary judgement in the amounts and levels at which people are allocated the foreign currency.

The Government took quite a while in implementing the system and it is still not fully functional, but I guess it was getting to be somewhat embarrassing to announce that it would begin operating so many times and having it postponed for almost a month.

So, the first good thing to say about Sicad-2 ,is that it is here! Finally!

The bond part of the system is not functional, but should be up and running soon. Basically, right now you are just given cash. At some point in the future you will be told that you were given the equivalent of the amount allocated to you, but in the form of a bond at the price of that particular instrument in the international markets. There will be uncertainty in the final price as the bond will be sold in two or three days.

So far, only banks are part of the system. The regulations for brokers are not out yet and they have not been authorized to work in the system. Many banks have yet to begin operating with Sicad-2, essentially because they have not given the system an urgent priority and are taking their time starting operations. Other banks, you can even place orders via their webpages.

The second good news is that the Government wisely decided to operate a a price higher than apparently many people expected. This is good for reducing the distortions, it will improve the fiscal balance, create incentives for foreign oil companies to invest in the Heavy crude projects and help with PDVSA’s cash flow. According to the President of the Venezuelan Central bank, foreign currency has been allocated between Bs. 50 and 61 with the average price each day at Bs. 51.84 and Bs. 51.58. Apparently, no order above Bs. 61 has been filled.

The parallel market went down to Bs. 55 before Sicad-2 began operating, but is being indicated at Bs. 75 today already. Either people sold a lot of dollars ahead of the start of Sicad-2 or they were expecting much lower levels for it.

Reportedly, individuals are being assigned, so far, small amounts, even if they requested large ones. Similarly, many company orders are allocated a large fraction of their order, but not all. The Government is not reporting total amounts.

Demand has been slow. On the one side, those requesting dollars may not have an account in dollars in Venezuela or in the case of companies, they are still looking at the legal issues surrounding Sicad-2. On the financial institution side, not all are ready for it.

In the end, the big question remains how much is the Government planning to sell via Sicad-2. This is what will determine its success. We believe that it will only work if part of the foreign currency allocated to Cencocex at Bs. 6.3 per US$ or the Sicad I at Bs. 10.8 per US$ is moved up. Perhaps the fact that Sicad 1 was lowered to Bs. 10.8 per US$ implies that the Cencoex  dollar will be moved to the Sicad 1 rate. There are indications that this is what the Government has told some industries in private, but it will require increasing regulated prices significantly.

Thus, the conclusion is that it finally started, foreign currency is being sold at a good level to make the system successful but we don’t know yet about whether the Government will sell daily average amounts that are ample to satisfy demand and make the system a total success.

Despite the cartoon above, it is looking well, but we reserve final judgment until wee see the dynamics for a coupe of weeks.

To Those That Think Maduro Is Not A Dictator: ¿Qué Pasa en Venezuela? by Foro Penal Venezolano

March 14, 2014

I am still amazed by the number of people that are still saying we should wait for elections, bla, bla bla. The video above proves beyond any doubt that Nicolas Maduro has become the Dictator of Venezuela. He has to go. Period.

And if you still have doubts, read Gustavo Coronel’s article “Approaching the Unthinkable” about Venezuela importing oil and you will realize that indeed, under Chavismo, all that oil underground will always stay there.

Si-Cad Or So-So-Cad in Venezuela’s new fx system?

March 11, 2014


Almost eleven months ago, Nicolas Maduro was elected President and since then, the Government’s economic team has been telling us about the new foreign exchange system (fx for short) in the works, which was almost ready. Today, everyone wants me to write about the “new” and “improved”  fx system, called Sicad 2, but there is not that much really that I can say about it. The Devil is in the details and we still don’t know most of them.

Meanwhile, Maduro keeps thinking that talking and not working, is the way to survive as President. He now has a new program (above), While that may have been something good to do for his former boss, he just does not foot the Bill. I mean who wants to listen to Nicolas give us his usual BS that half of Venezuelans are right wing fascists oligarchs, and the other half pure PSUV socialists? If that were true, there would be hope for Venezuela, not because we need more oligarchs, we have enough with Chavistas, but because there would be more market ideas, which does not seem to be what the opposition is proposing either. But Nico sounded nostalgic tonight, maybe he has been reading too much Dieterich these days. Eight weeks left of this nightmare? First time I am rooting for a Chavista prediction!

But going back to the new fx system, the so called Sicad-2, which is what people want to know about, all I can sayis , so far it looks like So-So-Cad, more than Si-Cad in my opinion. And I do hope they change my mind in the upcoming days. I would love to be proven wrong.

But let me be clear: Sicad-2 is a huge and positive step for Chavismo. First, it is a significant break with their ideological straight jacket, which has tied them for so long, and it it is very positive step for PDVSA, which will improve its cash flow by selling dollars at a much higher rate than the official Bs. 6.3 per US$ or the Sicad-1 rate of Bs. 11.8 per US$.

End of positives.

Because in Sicad-2, the Government has not created a foreign exchange market, but as usual, a complicated auction-like system, in which it is not clear who will win and how much you win. This is typical Chavista thinking: They spend eleven months thinking of what to do and come up with a Goldberesque system for fx trading.

To begin with, what is the fixation with bonds? Why can’t people trade Bolivars for US Dollars, Euros, or Yuans?  (or vice-versa). Remember that bonds were introduced in the fx system as a pantomime to mask the true fx rate at which things were being done. The Government made it a criminal activity to buy or sell Bolivars for dollars or vice-versa, unless you used securities. You could not even say at what equivalent price transactions were being made.

But now, neither how you do it, nor saying the price is illegal. You can even say the price of even the black market, it is no longer a crime. Remember all those brokers jailed in 2010? The case against them has been dropped, as the new Foreign Exchange Illicit Bill, decriminalized everything they were accused of doing.

So, why not forget about bonds? The Venezuelan Central Bank will actually state at which rate each batch of dollars will be sold on average.

Anyway. The new and improved Sicad-2 will begin operating…soon. We still need the rules and regulation. But if we are to believe the authorities, it will work something like his:

You go to your friendly bank, where you will say you want to buy x dollars and you given them a range of prices at which you want to buy (or sell if you are deranged enough). (You need an account in Venezuela and in dollars first)

Your bank, will create a spreadsheet with all its postures, which it will send two or three times daily to the Central Bank. You can only place a single posture per day. Unlimited, in amount or price.

The Venezuelan Central Bank will come back to you and say Si-Sicad for you, or No-Sicad for you, without explanation, after “matching” buying (bids) prices and sell (offer) prices. At the end of the day, the Central Bank will publish only the average price of all dollars sold.

So, this is not a market, it is a pseudo-auction system, where only the Central Bank will know bids and asks and what it does with them.

Fairly opaque in the details.

The system has no upper bands, limits and is flexible, but nothing says there will be unlimited offer to all the bids. In fact, I am sure there will be limited offer only. Nothing says that if you want to buy 1 million dollars at Bs. 100, they will give it to you. In fact, they may give it to you cheaper, as the Government has the right to intervene to keep the price down.

So, it is still is unclear. My opinion is that the Government has very limited resources for this market. Thus, initially there may be some optimism, which will fade fast. No matter what you may have heard, the parallel market (it is no longer black) has barely budged, suggesting some level of skepticism with the new Sicad-2 system.

At the same time, there will be little demand at the beginning. The large buyers (multinationals) will have to review the foreign exchange agreement, the regulations and the Foreign Exchange illicit Bill before they can even begin to operate in this new Sicad-2 market. The small buyers (you!) will have to open a dollar account in Venezuela, which is apparently one of the requirements to participate.

So, it may be on Maduro’s first year anniversary as President in mid-April (which falls in the middle of Dieterich’s prediction) before Sicad-2 shows its true dynamics and whether it is a real positive or not. In my humble opinion,there will be too many exchange rates, not enough transparency and too many limitations. The Government in trying to solve economic distortions, simply creates more and more, without understanding the true implications. To begin with, a new price for the dollar, which represents a huge devaluation, implies allowing prices to rise in the middle of 56% inflation per year. The Government has yet to understand that a foreign exchange market is not economic policy, but a transactional part of the economy. If it does not create other rules and regulations, it will all be a waste of time.

But if Sicad-2 is all they could come up with in eleven months, there is little hope for the rest of the policies. Thus, maybe Dieterich is right.

I just find it hard to be that optimistic.

The Ignorance Of Venezuela’s People’s “Defender”

March 8, 2014

People’s “defender” today

The Chavista Constitution of 2000, created the position of the People’s Defender, better translated as the People’s Ombudsman. This was a great idea of the 2000 Constitution, which, as so many things with Chavismo, it has received really bad implementation.

Like really bad…

Because those holding the position in the end have only sucked up to Chávez then, or Maduro now, defending the Government and seldom doing what Art. 280 of the 2000 Constitution mandated them to do:

Artículo 280. La Defensoría del Pueblo tiene a su cargo la promoción, defensa y vigilancia de los derechos y garantías establecidos en esta Constitución y los tratados internacionales sobre derechos humanos, además de los intereses legítimos, colectivos y difusos, de los ciudadanos.

(Article 280. The People’s Defender is in charge of promoting, defending and watching over the rights and gurantees in the Constitution and the international treaties about human rights, besides the legitimate, collective and diffuse interests of the citizens. )

And so far, the only person to occupy the position and do her jov was the first one, Dilia Parra, who was the only one qualified and truly independent to hold the position. The other two, German Mundarian and the current one, Gabriela Ramirez, have been know as the “Defensores del Puesto” (“Defenders of the position”) spending their time more defending the untenable positions of the Government, than those of the people.

Over the last few week, little has been heard from Ramirez, while repression blossomed in Venezuela. Ramirez, who reached her position with little human rights back1groung, reached her position after failing to win the race for Mayor of Baruta, three years ago and her buddy Diosdado brokered the position for her in a deal with Chávez.

But she is clearly not qualified. She has no interests in human rights and protecting the people.  At least in three years as the People’s Defender, she has shown no inclination for this. She is also a terrible (abominable?) speaker and knows very little about her job.

A typical Chavista Government official…Not qualified, not competent and fairly ignorant.

Today, there was a controversy over Ramirez, based on the video above. Despite three weeks of protests, Ramirez has been fairly invisible. In fact, only four days ago, she made these absurd statements, in which she claimed not to have any accusations of torture, despite individuals making them, as well as those of Foro Penal Venezolano, which have been very clear and extremely specific and quantitative (Alfredo Romero tweets updates regularly under @alfredoromero). In fact,Ramirez claims that “bullets” have come from “somewhere else” while there are numerous videos which show cops, police and National Guard shooting real bullets at people, exactly what Ramirez says is prohibited.

But today Ramirez in one single sentence showed not only that she is not qualified for her position, but that she has not even bothered to learn the basic tenets of what human rights are.

The controversy arose because people took her statement “la tortura tiene un sentido, por eso nosotros tenemos que ser muy rigurososos con el uso de los términos. La tortura se emplea para obtener…” (Torture has a sense, that is why we have to be rigorous in the use of terms. Torture is used to obtain information…) to mean that she thinks torture is justified.

While this may be what is understood or derived from her statement, I think it is just a consequence of how badly prepared she is to speak in public. But if her words were wrong, her true intent was just as bad, because while I don’t think she was trying to justify torture, she was trying to walk a very fine line and differentiate between torture and cruel or degrading punishment. Suggesting the “Torture” Committe only had to deal with those cases where people were obtained to obtain information.

But it just so happens, that Ramirez is stupidly and ignorantly wrong, because the United Nations, the OAS and even the Venezuelan Government have tried precisely to differentiate that very fine line. And Venezuelan law even includes “intimidation” as part of torture to make Ramirez look even worse and even more ignorant.

Thus, in her attempt to defend the Government, instead of doing her Constitutional job, Ramirez showed her ignorance of international law and the fact that she is not complying with what the Venezuelan Constitution says or what international says are the rights of  the people. As such, she could be one day charged for not preventing “torture, and other cruel, inhuman or degrading treatment or punishment” an as stated very clearly in the convention, people like Ramirez will not be able to argue that they followed superior orders as “they will be held accountable individually”

In fact, Ramirez’s statement justify her immediate dismissal from her position, something we know will never happen. Which simply proves the point that Venezuela is a Dictatorship, where human rights are not only nor respected, but those in charge of defending them are incompetent, ignorant politicians who only want to suck up to the highest levels of Government to scale positions in the future.

A profoundly sad and disturbing episode, which simply surprises nobody. Scruples is not a word Chavistas have in their vocabulary, nor is it a concept they can understand or comprehend.

But Humann Rights violations never expire…

Who Is In Control In Venezuela? By Paul Esqueda

March 8, 2014

My good friend Paul Esqueda, a very distinguished Venezuelan, with a career in science and science and education management, asked me if I could publish here his article expressing his concerns about where Venezuela is headed. I do so with great pleasure.

Who is in control in Venezuela?

Paul Esqueda

The recent events in Venezuela suggest a very concerning trend. The Government seems to control the centers of power (the Military, Congress, the Supreme Court, the National Elections Board and most of the governors and city mayors). However, a critical piece such as the economy is completely out of control. Inflation is at an all times high (55%), the parallel market rate of exchange of the national currency is ten times that of the official rate fueled by an obvious shortage of US dollars, and the supply chain of consumer goods is completely disrupted with the consequent shortages of vital consumer goods in the supermarket shelves. There seems to be a mix of improvisation and ignorance with the end result of very poor management of the economy. In addition, oil production seems to be declining, which is the most important source of revenue of foreign currency. Furthermore, the Government has not be able to honor the debts to most suppliers from neighboring countries and the international airlines. These are just some of the serious imbalances of the economy that may lead Venezuela to be a failed state.

Since Chavez came to power he began the creation of a “militia force” to defend the revolution. At the time, most public figures warned that this type of paramilitary forces presented a huge potential danger for our society. They have no clear chain of command, they are not trained to apply the rule of law, and most important they could get out of control at any time with their fire power. This is actually happening as I write these lines.

The Movement of Democratic Unity (Mesa de la Unidad Democratica, MUD) gathers most of the opposition groups. They have made every effort to turn things around by pointing out the economic imbalances with very little success. As a very democratic movement, the MUD is a heterogeneous group with many critical thinkers and very strong intellectual power. The MUD has promoted peaceful protests with rallies that have had massive attendance. However, things are getting out of control because the protests have taken root in many neighborhoods in Caracas and in most large cities in Venezuela setting up barricades (guarimbas) and progressively paralyzing the economy. The student movement, mostly from higher education institutions, are leading the guraimbas together with the local residents in each neighborhood. By the way, the MUD has very little control over the student movement. The MUD has constantly called for peaceful protests and have condemned the guarimbas as a violent and improper approach. The Indeed, one of Venezuela’s most important political analysts and economist, Luis Vicente Leon, referred to the guarimbas as a “path to a cliff.” Most importantly he claims that there is a “lack of leadership” and no clear way to funnel the powerful street protests.

The Government has opted to exercise all its power to crush the guarimbas by massive repression and shear use of military and paramilitary power. The consequences are evident, blatant violation of human right and a fake approach to power. Nicolas Maduro would call for a peace conference and dialogue only to turn around a few minutes later and order his militias to “wipe out” all protesters. Words definitely do not follow action, a clear lack of integrity that does not contribute to generating trust.

The Organization of American States (OAS) has been called to intervene by invoking the “Democratic Letter.” This is an agreement signed by all OAS members with a commitment to enforce democratic principles such as respect for the diversity of ideas and freedom of speech as we understand it today. OAS is moving at a snail pace arguing that Nicolas Maduro was democratically elected and that Venezuelans should resolve their issues among themselves. On the other hand, Nicolas Maduro argues that the protesters are a minority that only represent the upper class in Venezuela. Nothing further from the truth, the protest and barricades have taken root in all neighborhoods. Those low income neighborhood that stay quiet are under the rule of the militia thugs that violently repress any sign of dissent. Two important conclusions: the guarimbas need leadership badly since they are out of control and democracy is extremely lacking in Venezuela.

The whole argument of this article is that the Government is not in control of the economy (the main source of the problem as admitted by Chavista Governor of Tachira State, Jose Vielma Mora) , the militias are out of control, and the guarimbas are out of control. So who is in control in Venezuela? Is Venezuela at the verge of becoming a failed state? Is chaos going to reign in Venezuela? That is why the help of OAS is badly need in Venezuela. The human rights and freedom of speech pieces are pale next to the real challenges that Venezuela faces.

The Venezuela Paradox

March 1, 2014

After three weeks of repression, fifteen dead, at least 60 reported tortured and more than eight hundred detained, including opposition leaders and reporters, the Venezuelan students have at least shown the world what little respect the Maduro administration has for the human and civil rights of the people. Venezuela has seen similar repression before during Chavismo’s rule, but never has it been compressed in such a short period of time. Or taped, photographed and videoed so extensively. By now, it is clear around the world, how prevalent repression, censorship and violence are under Chavismo. Maduro talks peace and repproachment with the opposition, the day after calling an opposition lady a prostitute and the day before the most repressive use of force in Caracas. Maduro decides to give two days of vacation ahead of the four-day Carnival break, in the hope or belief that by next Wednesday people may have forgotten what he has done.

How little people learn from history! In fact, Hugo Chávez believed the same thing in March 2002 when the Easter week vacation arrived. He thought the protests would subside and all the insults and repression of the previous days would be forgotten. He was gone four days after Easter Sunday, only to return due to the stupidity of those that did not follow Constitutionality after he resigned due to the deaths of April 11th. 2002.

The problem is that this victory by the students has by now become a paradox. Venezuela represents the paradox that in the twenty first Century, as those that were repressed in the twentieth century become Government, Human Rights and Democratic Rights have become less important around the world.

It is an amazing turn of events. I remember the era in which Virela and Pinochet were despicable figures who governed Argentina and Chile. It was beyond my comprehension how famous physicist Antonio Misetich, who had returned to live in Argentina to find his missing sister, could also be disappeared jut like that. Or how Juan Jose Giambiagi, a Nobel class scientist who later became my friend, would emigrate to Brazil and the Argentinian Government cheered. Venezuela was a recipient of the emigration of this era. We heard the stories, we could not believe that this was happening in what were once thriving democracies.

But today many of the same countries are run by those that were persecuted and their silence is deafening. Argentina ignores what is happening for ideological reasons, Colombia for commercial ones, Chile because it is in a transition, but I do not expect much from Bachelet. But the real surprise all these years has been how morally empty Brazil’s left is. You can not lead a region when you behave like that. It will come back to haunt them one day. They have also forgotten history. Sadly, they seem to think or feel that repression is a thing of the past in their respective countries. They think they have the institutions to withstand anything. Think again. Chile was the strongest democracy in Latin America in the sixties. Venezuela took its place. And we know how both turned out.

And that is what makes me pessimistic about the future. Not of Venezuela. Of the whole region. When you hear repeatedly that Maduro was elected  (Was he?) from those that are leaders of their respective countries. When they so conveniently ignored that the audits promised to them never took place, you have to wonder what concept of democracy they have in their minds.

And while they are many decent people expressing their outrage at Maduro’s repression and discrimination of those that oppose him, it seems that they are few and far between. And few are powerful. The international media knows by now. Some countries like Panama have stood up on the right side of humanity. But unfortunately, Panama is one of the exceptions.

The rest simply prefer to ignore it.

And I do not expect anyone to come in and intervene in Venezuela, nor do I want them too. Cuba is here already, we should just kick them out.

But I do expect people who call themselves leaders to express their outrage at a Government brutally repressing its people, killing some of them, torturing kids for doing what is a Constitutional right under the Constitution proposed and approved by the party in power. And institutions like the OAS, who have decided not to say much, should also raise their voice. Not only against repression, but about the silencing of the media, the censorship of the Internet and the jailing of opposition figures. Otherwise, they will soon lose their right to even exist.

Because the other paradox is that as the students have continued their protests, the Government has become even more violent. Protests are not going to stop and the current handling of them will only increase their intensity. And the death toll will rise. It is the Government that has all of the tools to stop this, but so far, it has not budged an inch, pushing forward at every step.

And I think the students have won the international media war. And their battle will continue, but nobody knows where it will end.

With an economy in shambles, scarcity increasing and Maduro acting like their is no urgency to attend economic problems, the protests can only add participants.

And those that think that these are middle class protests should think again. It was San Cristobal that initiated the protests and in that city it is a proportion much larger than the middle class that is participating actively in the daily protests.  An in Caracas, Caricuao, Petare and Catia have taken part, even if they have pressure not to do so. And I have been in Altamira and talked to the students, anyone that thinks they are just middle class, should visit with them.

My theory is that some in Government are undermining Maduro to have an excuse to replace him from within. But what do I know.

Much like 2002 or the Ukraine today, these protests have unforeseen consequences and ends, Some “tenientico” , for example, can get the wrong idea. Why not? If Chávez tried it, why can’t he?

That is not only part of the paradox, but is also part of Venezuela’s  current tragedy.

Peaceful Day, Violent Evening in Venezuela

February 22, 2014

After a very peaceful day, when Chavismo held its somewhat small march and the opposition, despite the limited media availability, held huge marches everywhere, including a massive one in Caracas as you can see by the overall view from that drone above, the evening has not been as quiet.

And it is hard to understand what is the Government’s strategy. What does it gain from sending the National Guard and “colectivos” at this time, on a Saturday night? After the march, students returned to Altamira and blocked their usual stretch, which is no more than around three sides of the square. They did this Thursday, nothing happened. Again last night, nothing happened. But tonight after a very peaceful day, the Guard went after them with the aggressive and armed colectivos, much like Wednesday. Really, what’s the point?

It would seem at this time, that it is to the Government’s advantage for things to quiet down. So, why repress the way they did in Altamira, where they have retaken the square after avoiding it for two days?

This is the square right now:


What have they gained? To send the students back to planning where they go now. To get them even more angry than ever after a day that was sooo nice for them.

Because at this point, Caracas is third in the ranking of the Government’s problems.

Number one, of course, is San Cristobal, where the Government has a huge problem in their hands. If they try to get the people out of the streets, there will be violence and repression and things will actually worse. Many are likely to be killed if the Government tries the violent approach. And the peaceful route seems to be a dead end, as the population is incensed at the violence an it seems as if even the National Guard does not want to fight its “pueblo” and there are very few avenues of negotiation available.

Then, there is Valencia. Repression there has been remarkable and today the girl who was shot in the eye with pellets died after three days in intensive care. This will only get people more incensed than ever. To give you an idea of the level of violence in Valencia by the National Guard and the police, this is a picture of the cartridges, bullets, shots, casings left at a single residential complex on Wednesday:


Is this normal? Isn’t this a little bit overdone?

So, why would you want to increase unrest in Caracas?

And I repeat, the question is what is the Government after? Because I don’t see a pleasant end to all this repression. And it will have a huge political cost for the Government. Are Maduro’s buddies simply letting him run the show so that he screws up and they can remove him? At this time, this seems the most likely scenario in my mind.

The march was extremely peaceful and it was really massive. here are my pictures in no particular order:

photo(25) photo(23)

Looking back on the Los Ruices elevadophoto(22)

From the Los Ruices elevado


Heading back after two hours, people still arriving in droves.


Students jailed, criminals free, Made in Venezuela

The next to last picture above was taken two hours after the first picture after I started heading back. people were still arriving in droves and I could not go close to the stage, simply there were too many people to go forward. I don’t recall this ever happening again.

And despite all of the Government expenses, the Chavista march was puny in comparison. Last night, I went out late at night, bordering the La Carlota airport and found the military airport filled with buses with the people brought to the march in Caracas, the only one the Government held today. To say nothing of those held all over the world.

Maduro has made mistake, over mistake over mistake so far. Today just seems to be another one. Jailing Lopez was stupid, shutting down the Colombian TV station was another, massive repression over and over is another, kicking CNN out another one (even if the backtracked)

Internationally, Maduro has lost what little credibility of doubt some people may have had. Even his closest allies are likely wondering what is going through his head, even if their silence is shameful. Funny how these leftist idealists are more concerned about their mercantile interests at this time than about human rights and the violation of the Venezuelan Constitution.

What a pitiful bunch of so called leaders Latin American Presidents and politicians have become.

But a day of reckoning seems to be arriving for them. They should be concerned by now that a Government change, even within Chavismo, will lead to less preferential treatment for them.

And I will soon leave Caracas, with mixed emotions. On the one hand I have to go back, on the other it has been so much fun being here and covering events close to them. But there is also a feeling of wanting to be here to see the end of this. I don’t know when this will happen, but I want to be here no matter what. It’s been so long in coming…

Not that I know what is coming.  think Chavsimo will replace Maduro at some point, How and in which sequence of legality or not, I have no clue. Who comes after him is even more of a mystery. What is clear is that economically the days ahead are very tough and this instability has debilitated the Maduro Government even further. And it remains as indecisive as ever on economic matters, which will only exarcebate events even further.

Stay tuned, even if I will no longer will have a front seat, like I have tonight in Altamira.

As Protests Become Widespread, So Does Repression in Venezuela

February 20, 2014

After the Government showed some restraint all day yesterday in Caracas, mobilizing National Guard troops but not having them act, despite the widespread  blocking of the highways and major street in Caracas, things changed last night.

First, in Valencia and San Cristobal, repression increased, tear gas was used and many were injured. In Valencia alone, there were seven people who were shot. One a former beauty queen was shot and died today, further incensing students.

Then today, as protests became widespread when opposition leader Leopoldo Lopez was supposed to be arraigned in Caracas, but was instead moved to a military facility in Los Teques where the arraignment was supposed to take place. This is not only illegal, but shows the political character of Lopez’ detention. While he has been jailed, none of those seen in pictures and videos killing the students on February 12th. have been detained. And the Head of the intelligence police was removed, but given another position,which could be considered a promotion.

By this afternoon, protests were blocking highways and major intersections all over Caracas, from Catia to Petare. The biggest concentration was in Plaza Altamira from where the Government mounted a huge attack with National Guards, police and “colectivos” in motorcycles. There were barricades all over the area but with time the Government thugs moved up to Altamira square. First they used tear gas, but by the end they were using cops and colectivos in motorcycles, shooting weapons, not only tear gas.

This is a video about a block from Plaza Altamira tonight:

this is another:

This was happening as Maduro gave a rambling speech in which he was aggressive and calling for peace at the same time and defending the “colectivos” as groups that work for the fatherland.

At this time, people have been shot in La Candelaria at this time of day, while protest have begun in Catia in Western Caracas. At least two people are reported to be shot dead in the west of Caracas.

Repression in San Cristobal, Tachira State, where the protests begun seems to be the worst. The Government shut off electricity and communications to the city as National Guard tanks went into it.

I stay very close to one of the hottest spots of repression. While I tried to watch parts of the action, it became dangerous. Students came into our parking lot seeking refuge from the guards who wanted to detain them. Fortunately they did not come in into our building, which they did all over the place. This is absolutely illegal.

I saw either police or guardsman go on the sidewalk on a motorcycle following students that were trying to escape from their attacks on the streets. They had some sort of rifle in their hand, either tear gas or a real gun. As repressive a scene as you could ever imagine.

This is not going to stop here. Students are becoming more radical, as the Government turns the repression an the human rights violations to an incredibly new level, without any shame. Maduro praising the colectivos tonight was simply a declaration that this Government is more than a dictatorship. It has now become one in which repressive violence will be openly used against the population that disagrees with or protests against the Government. This can only lead to further violence.

I find it hard to believe that there is no dissent within the Government about this new tack.  Internationally, the repression together with the arbitrary detention of opposition figures has shown the world the true face of the Maduro Government, where appearances are no longer important.

And that is an image, the Government can not erase.

(This post was supposed to go on last night, but computer problems did not allow me to upload it, sorry).


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