Wednesday, 2 October 2013

Venezuela's Economic Stumbling

OPEC prices, $ per barrel since 1998
The Chavista government has managed to stay in power in Venezuela primarily because of the One thing: record international oil prices during an extremely long time.

Venezuela will still receive a lot of petrodollars for many years. And yet: corruption and sheer incompetence are making every single petrodollar deliver less goods now than 5, 10, 15 years ago. The government simply has less money to pay for ever higher expenses.

Maduro went to China to plead for more money. He got some 5 billion dollars, but it won't be in cash. Venezuela is forced to buy more Chinese products and that's all. And now the government plans to pay  food to Colombia with PDVSA bonds.

The government is trying to import as much as it can in order to distribute that before 8 December's elections. As usual, sustainable development is not on the agenda.

There are shortages everywhere and the government's response has been to criminalize the reporting about those shortages.

The opposition needs to focus on grass roots work. Opposition leaders in every region should go around, talk to people and be prepared for vicious, government-sponsored attacks. Opposition teams should be ready with cameras, contacts to the international press and NGOs, with local non-political leaders.

For the next 3, 4 months, opposition leaders should abstain by all means from spending time abroad, specially in the "evil" USA. The government will only use such visits for propaganda purposes. Never mind right now Boligarch Diosdado Cabello is in Russia looking for support on intelligence and military equipment.

The regime is unlikely to devalue a third time before the elections. It will probably carry out the devaluation after 15 December, maybe in the first days of 2014.

Repression will escalate. It will be increasingly difficult for the opposition to express its views. It is already hard now. The government will pressurize the few remaining critical papers.

And yet: the government will become weaker as the economy degenerates further. All in all, power will ultimately change when a larger proportion of the population feels the general decay in their own pockets. It is basically there where the vast majority of revolutions start.

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