Friday, 25 February 2011

How to make a nation of beggars

Black beans, pinto beans, red beans, green beans: they all grow so easily we used to take them for granted in Venezuela before Chávez came to power. You could do nothing wrong if you were growing beans in Venezuela's fertile land. Now we are importing them from China. We are also importing cereals and vegetables from there. The military regime says it is making Venezuela more secure because it will store some of those imports.

This is absolutely mental. Venezuela importing beans from China is like Spain importing olives from Vietnam

Update: well, actually it is not: you need to wait years and years before your olive tree produces the first olives and olivie trees require particular soils and seasonal temperatures. You just have to wait weeks to see the beans grow and they grow very easily almost everywhere in Venezuela.

The military regime is also letting the Chinese and some Belorussians do the construction work in Venezuela. Why? Because now Venezuelans are incapable of doing that themselves. Productivity is lower than ever.

Weight-ligting and gun-tottering Juan Carlos Loyo, the minister for the "Popular Power for Agriculture and Land" said Venezuela imports no more than 30% of its food requirements. And cows lay eggs. He says Venezuela will now "export bananas". In reality the Chávez regime signed a deal in Russia early last year that would benefit Russian corporation JFC at the cost of Venezuela's private producers. Once Chávez came back to Venezuela, he expropiated the land Russians had an eye on already. So far for food independence. I wrote about that case in Spanish here.

Ecuador of all countries is exporting vehicles to Venezuela now. It used to be the other way around: Venezuela would import some parts, produce some others and assemble them for internal production and for export to some countries in the region. That was before Chávez came to power. The Veniran join venture between Iran and Venezuela to produce vehicles is one of the many forgotten stories of Chavismo.

The regime can still do all this because oil prices are at record levels. Only for some months in 2008 were they higher. And yet Venezuela's total debt in 2009 was 36.35% of its GDP when it was 32% in 2000. As a reference: the OPEC basket price was  $27.6 a barrel in 2000 and $61.01 in 2009. This year the OPEC barrel is giving on average $95.85.

If you read Spanish, check out El País's article for further details on how the regime is wasting the biggest oil boom in Venezuela's history.

Many have predicted the fall for years now but no one ever thought oil prices would keep rising this way. Still, once thing is sure: oil prices cannot keep increasing forever and Chavismo can get less and less for each petrodollar it receives. When the fall comes, it will be disastrous.

If you think the percentage of beggars is staggering in the US, wait until you see Venezuela now


  1. How? Easy, put chavistas in power.

  2. I wonder if my grandparents, who were farmers, would have believed that: now we need to import even black beans from China.

    And millions of Venezuelans completely ignore how wrong the whole economic structure is and no one wants to talk about that.


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