The intricacies of Venezuela’s bizarre economic policy apparatus long ago became a subject approached with confidence only by seasoned specialists. Undaunted, Caracas this month decided to make an already byzantine currency system even more complicated by introducing another official exchange rate to the two (plus the black market version) that already exist.
The move came after pressure from falling oil prices, which have hammered Venezuela’s exports and reduced its dollar earnings. Other countries with similar problems in recent years such as Iran (and to some extent, Argentina) have also taken the route of multiple exchange rates. Read more
“You want milk? Low fat? Skimmed?” asked a man who identified himself only as Juan. “I can get you milk, but it is going to cost you!”
My arrival for a three month reporting stint in Caracas has schooled me in some simple rules of life in the Venezuelan capital. One is that supermarkets almost never have milk, so if people want something to add to their coffee they need to find the telephone number of someone like Juan, a fixer.
The next rule is that once they’ve heard the price, they’ll prefer black coffee. Juan was charging 150 bolivares a litre ($24 at the official rate of 6.3 per US dollar). That is roughly ten times the cost of pasteurised milk at the regulated price in state-run supermarkets. Read more
By Russ Dallen, Caracas Capital Markets
Trying to predict what will happen in South America’s wildest emerging markets in 2015 has the degree of difficulty of trying to compute pi to the 100th digit in your head.
With Venezuela, in particular, the range of options of what could happen next year is almost as infinite – ranging from more of the same and muddling through, to default, violence, coup, civil war and international brigades. On the economic front, whether Venezuela survives 2015 will depend almost purely on the price of oil, however. Read more
One could talk about Venezuela’s economic policy in Shakespearean terms. To devalue or not to devalue; to converge foreign exchange rates or not to converge; to raise the price of the world’s cheapest gasoline or not to raise; to sell Citgo or not to sell; to default or not to do so – these are the questions.
The distortions created by the government’s foreign exchange and price controls – covering even Barbie dolls – keep playing a treacherous role in Venezuela’s unfolding tragedy. Why is this happening instead of not happening? To some analysts, that is the question. Read more
With Venezuela’s economy in tatters, corruption allegations abounding and political infighting the name of the game, it may be time for changes at the top.
A fortnight ahead of the ruling socialist party’s third congress at the end of July, President Nicolás Maduro (pictured) is expected to make the first announcements of a government restructuring this week. What’s at stake in the country with the world’s largest oil reserves, but where shoppers struggle to find basics such as toilet paper and powdered milk? Read more
More tragic news from the frontline of Venezuela’s crime scene: the murder in front of their five year-old daughter of Mónica Spear, a former beauty queen and soap opera star, and her British-born ex-husband at the hands of a gang of armed robbers this week.
It is doubtful that the assailants had much on their mind beyond armed robbery – which they knew could end in murder, an outcome not unusual in a Venezuela ravaged by violence. In that sense, the deaths are just more statistics in a country with one of highest murder rates in the world, up there with Honduras, El Salvador, Ivory Coast and Jamaica. Read more
By Felipe Pérez Martí
In a recent article published in The Guardian, American economist Mark Weisbrot argues that concerns expressed by economists about the condition of the Venezuelan economy are unfounded. He claims that the Venezuelan economy is not headed for collapse, and describes those who say this is so as “Venezuela haters” allied to the opposition.
I served under President Hugo Chávez as Minister of Planning and Head of the Economics Cabinet between 2002 and 2003. I deeply believe in the ideals of the Bolivarian Revolution of creating a just, egalitarian and democratic society in Venezuela, and in Chávez’s commitment to turn these ideals into reality. Read more
President Nicolás Maduro is a fraud, his government is incompetent and corrupt, most ministers should be sacked, the ruling Socialist Party’s ideological discourse is sterile, the national “Bolivarian” project is on a suicide path, and there is a growing risk of a coup from within the administration.
But don’t believe the FT on any of this. These are the words of Heinz Dieterich, a Marxist professor and former mentor of Hugo Chávez, writing in the leftist website Aporrea. Having cleared our throats before Sunday’s municipal elections, what actually is at stake at the vote — in concrete terms? Read more
As beyondbrics was landing on Monday evening, Venezuela’s capital gave it a warm welcome: a massive blackout. A big chunk of the country was without power, including much of Caracas.
Roving the streets of one of the world’s most dangerous cities in complete darkness was quite an experience – even for your correspondent’s seasoned driver, desperately calling family and friends to check if they were doing fine. Read more
First, he came for the toilet paper factory. Then, late on Friday, Venezuela’s President Nicolás Maduro seized a national chain of electronic stores as part of his battle against galloping inflation and rampant shortages he blames on an “economic war” coming from right-wing contrarians.
Maduro sent soldiers to “occupy” Daka, (similar to Best Buy in the US), accusing them of unjustified price hikes and said it will force them to sell everything at “fair prices”. Read more
Christmas comes round pretty quickly each year – too quickly for some, given the proliferation of Xmas ads on TV. But not soon enough, it seems, for Venezuela’s President, Nicolás Maduro. Forget the calendar: over the weekend he wished his followers a “merry early Christmas”, flicking on the lights at the presidential palace and saluting the Three Wise Men.
His decision of advancing Christmas by decree means that workers will receive the first two-thirds of their bonuses and pensions next week, with the remaining in early December, and that the supply of some 50m toys will be guaranteed in a country that is battling shortages. Read more
What to do if you are a president struggling with massive shortages and galloping inflation? You create a Deputy Ministry of Supreme Social Happiness, to try keep people, well, happy.
That is what Venezuela’s President Maduro announced late last week, stating that the ministry co-ordinate all the poverty alleviation programmes installed by his mentor and predecessor Hugo Chávez. Leaving aside the self-declared good intentions, some commentators smell political motives ahead of municipal polls in December already perceived as a plebiscite on Maduro’s rule. Read more
Even the IndyCar Series now appears to have been hit by Venezuela’s currency jousts, another example of the country’s citizens desperately trying to skirt around the country’s tight foreign exchange controls.
On Friday, officials froze the hard currency allowance to automobile and motorcycle racers who compete overseas while they are being investigated over activities that might be “fictitious or overpriced”. Read more
For a country where consumers are often hard-pressed to find staples like milk or toilet paper, Venezuela certainly has no shortage of scandals. After last month’s accusations of electoral fraud and a saloon-style brawl in congress, now Mario Silva, a TV talk show host, rabble-rouser and the best journalist in Venezuela – according to the late president, Hugo Chávez – has fallen into the fray.
In an extraordinary hour-long recording of what opposition politicians say is a conversation between Silva and a top Cuban intelligence official, the chavista broadcaster delivers a laundry list of backbiting and corruption at the highest levels of chavismo. Venezuelans are wondering what will come next. Read more
Perhaps the most revealing feature of the wikileaks publication of US diplomatic cables a few years ago is that it showed that what Washington said in public to other governments is also what is said to them in private.
By contrast, many other governments, especially in the Gulf but also in Latin America, were often revealed as two-faced hypocrites that praised each other publicly in elaborate shows of regional unity while privately stabbing each other in the back. That remains as true as ever today when it comes to Venezuela’s contested presidential election, which Nicolás Maduro, heir of Hugo Chávez, won by a whisker. Read more
Violence has erupted in Venezuela after Nicolás Maduro won the narrowest of victories in the weekend’s presidential election, with opposition leader Henrique Capriles questioning the result. John Paul Rathbone, Latin America editor, discusses with deputy emerging markets editor Jonathan Wheatley the implications of the disputed result on the country and investors’ view of it.