remove the zeros from the bolivar and knock on the doors of the “empire”

Inflation in Venezuela is written with four digits. It reaches the extraordinary figure of 2,339% per year. The figure is scary, but much less with a brief comparison. In 2019, this cost of living figure was 300,000 percent, according to the calculations of Bloomberg. What happened in between?

Between last year and today, the Chavist autocracy launched a series of changes in its model towards a capitalism with Asian accents. Internally, these changes were motivated by both the military sector which is the main column of the regime’s stability, and the vast territory of the civilian rulers who have grown rich throughout these years of supposed revolution: the boliburguesia.

Outside, the mandate is managed by Caracas’ main international ally, the russian government which introduced large doses of state capitalism into the fragile Chavista model. As this column has already pointed out, it is no small fact that the European headquarters of state oil company PDVSA has been moved from Lisbon to the Russian capital.

Last year, in a huge effort to anchor these transformations, Caracas initiated a process of opening up oil and mining activities to the private sector.

Then he devised a severe adjustment program which reduced state subsidies, removal of price controls, as well as restrictions on the purchase of foreign goods. And lately, it has allowed an extreme dollarization of the Venezuelan economy.

Today’s news, which has in fact been known since the beginning of last July, is the decision of the remove six zeros from the bolivar, whose depreciation borders on extravagant levels. The biggest bill in circulation of a million bolivars is not enough to pay for a coffee, just a bus ticket.

Punishments

This calamity is not only the product of the sanctions imposed on Venezuela for its continued violations of human rights and institutions. Since 2008, long before these sanctions got worse, first with Hugo Chávez and now with Maduro, the regime has already withdrawn eight zeros from the currency.

But hyperinflation has exploded due to an unsupported issue, in an economy lacking investment and who founded the oil business, its main element of exportation and collection of foreign exchange.

Regardless of the important but vague ideological questions, Venezuela is one of the most significant examples of inefficiency in dealing with the public question and the disintegration of the state. Reality contrary to supposed and proclaimed socialism from experience.

From now on, there will be notes from 2 to 100 bolivars, a “sovereign” stamp. It is a measure which obeys an insistent demand of Venezuelan and foreign businessmen confronted with increasingly absurd conflicts. due to the unstoppable flow of zeros in the system.

These sectors are the hills to be conquered by the regime which is seeking to reconvert to attract international investors. It is not an easy path.

The Washington Post quotes economist Asdrúbal Oliveros who, in an interview with Prodavinci, said that “the Venezuelan economy contracted 80% and is in a pit. “20% of the GDP works in the dark and two-thirds of the country’s payments are made in dollars, even in popular sectors. Venezuelan society is on the move between those who have access to dollars and those who do not ”.

“A recent study by the University of Oslo in Norway and the Center for Worker Research and Training in Venezuela that investigated the rise of luxury restaurants and supermarkets, This has shown that this type of business – a sign of the country’s economic distortion – has been the source of more inequalities, ”writes the prestigious Venezuelan journalist Luz Mely Reyes in the same North American newspaper.

In a column asking “What are you ready to give up Nicolás Maduro to obtain investments ”? He quotes the consultant Oscar Dova, director of a brokerage firm, Rendivalores, who provides an eloquent summary of what is happening.

“It’s something very similar to the Vietnam process.. Market economy, state capitalism with certain state controls, greater guarantees for investors and developments of neoliberal islands through special economic zones ”.

There is a little more to this whole menu: a 10-year moratorium on taxes, suspension of import and export taxes, guarantee of repatriation of invested capital and compensation for any loss resulting from government actions.

There is no place to be surprised by these movements. If you look closely at the details, you will see that the Venezuelan autocracy is only aligning with the same style of change that its former Cuban ally is trying. Since the beginning of this year, the island has launched a severe adjustment plan to unify its two currencies with an inflationary impact and shortages which explain the recent popular rebellion on the island.

Notoriously in Cuba, as in Venezuela, to have or not to have money is one of the keys to maintaining family consumption as a result of the enormous devaluation suffered by the Cuban peso. As it happened to the bolivar.

But Maduro, despite such contortions, he failed to lift North American and European sanctions, a requirement claimed by its Russian partners and that it must unblock the avenue of investments.

Recall that recently, the Venezuelan autocrat complained bitterly to the agency Bloomberg for the silence of the White House in front of his actions. “Venezuela will become the land of opportunities,” he told this financial news outlet, chosen not at random. The problem is, it’s not just the inexpensive package of steps that matters. It is also the political question.

Free the prisoners

This is measured in the release of dissident prisoners, the end of the ban on the opposition and freedom of the press, among other violated rights. These are pretty much the same points that have been raised in Venezuela in all failed negotiations with dissent, including those monitored by the Vatican in 2014 and 2016.

And also those on the list that the European Union and Canada as well as the United States included in a recent joint statement as a preliminary step to any consideration.

Julie Chung, the undersecretary for the hemisphere of the US Department of Foreign Affairs, who recently visited Argentina, suggested a few months ago, in response to Chavismo’s concerns, that “Organize free and fair elections, respect human rights and freedom of the press, release 323 political prisoners and stop persecuting the opposition and harassing NGOs ”.

An acidic cookbook for the delicate stomachs of the dictatorship but for President Joe Biden they have an internal political reason. Of course everyone actually takes a deeper look at the business they serve.

However, any progress in modifying the panorama, for example with the resumption of Venezuelan oil purchases and the sale of refined fuels to the regime, must show gains on these points in order not to jeopardize next year’s legislatures. in the state. from Florida.

There is a large diaspora of Venezuelans who embrace the powerful anti-Castro Cuban colony. These are the two paths that influenced Biden losing in that state in the presidential elections in November of last year.

Maduro has accumulated a series of gestures that include entry into the UN World Food Program, at a time of escalating coronavirus pandemic and exuberant poverty inside the country. Also with the release of American executives who worked for the Venezuelan oil company Citgo in North America.

But one of the main movements has been the renewal of the National Electoral Council who added two opposition rectors as well as three Chavistas.

One of them is the engineer Roberto Picón, former political prisoner of Maduro and architect of the legendary parliamentary victory of the opposition in December 2015. “His mere presence in the new CNE is exercised with a hint that this time things might be different, and the electoral road can be rebuilt, ”writes the aforementioned Venezuelan colleague.

The negotiations which are opening in Mexico with the mediation of Norway aim to give meaning to a return of the opposition to the elections, this time in the regional elections in November, after total abstention from the legislative elections last December.

The dissident leadership has a serious challenge. He does not want to validate Chavismo, but at the same time he cannot isolate himself from the economic opening proposed by the regime. on the world’s largest oil reserves. He must adopt this path, as maintained by the former social democratic governor Henrique Capriles, the first to break with the idea of ​​electoral non-participation.

It is a first victory for the regime, but certainly short-lived. The real bill that Chavismo will have to pay for opening up to work it will be much more than cutting zeros to the bolivar and trying to postpone their funeral. Not just those of the currency.
© Copyright Clarin 2021