Venezuela Post-Chavez: Hustlers' Paradise

[Bacchus4.0]

http://www.businessweek.com/articles/2014-01-16/venezuela-post-chavez-hustlers-paradise?campaign_id=yhoo



Venuzuela, a country of 30 million, has been in a state of economic bedlam since strongman socialist Hugo Chavez succumbed to cancer a year ago. His successor, former vice president and bus driver Nicolas Maduro, has a penchant for sub sandwiches and the teachings of an Indian spiritual guru with an afro. The stock market is up 483 percent in the past year, largely as people holding depreciating Venezuelan bolivars seek any store of value and traders bet on the end of Chavismo and/or a return to some semblance of capitalistic rule of law.

The black market, meanwhile, seems straight out of Mad Max. Last year, the bolivar tanked 73 percent versus the U.S. dollar on the unofficial but prevailing Caracas street exchange rate, a crisis that has spawned hording, looting and dire shortages of food and consumer staples like toilet paper and soap—this for an economy with the world’s #1 oil reserves. Last year there were upward of 24,000 murders in Venezuela, making it one of the bloodiest nations on the planet; a former Miss Venezuela and her husband were recently ambushed and killed in front of their five-year old daughter.

The Maduro regime has sanctioned an officialized version of looting—where military guards take over stores and lower prices—and has ordered the central bank to halt its release of regular statistics for the first time ever, as Venezuela faces spiking costs on $10 billion of new financing it needs. In a televised November 23 address, the president argued these emergency measures will lead to deflation.

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As for more traditional metrics: annual inflation is currently running above 55 percent, while economic growth slowed to 1.6 percent in 2013 from 5.6 percent the previous year. International reserves have been cut in half since 2008 to approximately $22 billion. Last month, Moody’s and Standard & Poor’s slashed Venezuela’s rating to the lowest level in a decade, citing poor economic policymaking. Devaluation looms and a plunge in oil prices could well sound the death knell for whatever post-Chavez order now barely holds.

One in five basic goods were out of stock at any given time in the nation, according to the central bank’s last scarcity report in October. It has since stopped providing this data.

[Common Sense Party]

1. As Nigel Tufnel would say, "But that's just nitpicking, isn't it?"

I was just talking with a young Venezolano a couple months ago. He's studying here, trying to learn English and business. He wants to go back home when his studies are done, as his family are all there, but he realizes the place is as unstable as can be. He doesn't have hope that things will improve much.

[COLGATE4]

2. It's called "swirling the bowl".

Not much chance of anything improving so long as Economic illiterates are at the helm.

[Marksman_91]

3. I'm in the same situation

Last edited Fri Jan 17, 2014, 08:19 AM - Edit history (1)

I'm currently studying in Miami and living with my brother. Both of us got out of there mostly because of just how dangerous things got. The economic prospects are simply just a secondary reason. If things keep going the way they are, I plan on staying away from there as long as I can, as sad as it may sound.

Not only are we governed by economic illiterates, we're governed by completely incompetent and/or corrupt individuals. Maduro's administration has been in power for less than a year and already he's reshuffled half of the ministers in the government. And he blames the mainstream media, such as telenovelas, for being the main cause of the violence in the country. I thought it had more to do with stuff like this: http://www.maduradas.com/miralas-antes-que-las-quiten-estas-son-las-causas-de-la-violencia-en-venezuela-fotos/

Yeah, then people wonder who are the ones that promote more violence and weapons on the street.