Caracas Chronicles

Katy says: I have been to Venezuela three times in the last year, and each trip brings a new insight into what is going on there, insights that are hard to get from reading Globovisión or form the daily feeds of Unión Radio, El Universal and Descifrado. Recently, I began wondering whether Venezuela is indeed a right-wing dictatorship.

The thought occurred to me when I was window-shopping the Duty Free stores at the not-quite refurbished Maiquetía airport and I came across a display of Swarovski figurines. You know the ones – made of crystal, ridiculously expensive, tacky yet attractive.

Anyway, we had thought about getting a few for our house, and I figured that it would be great to buy them in Venezuela. The price for the figurines was listed at $100 each, or Bs. 215,000 at the official exchange rate of 2,150 Bs/$. Yet out in the street, you could sell your dollars for at least 5,000 Bs/$. It doesn’t take a math genius to figure out that by selling $43 at the street rate, I could get the Bs. 215,000 that I needed to buy the $100-worth figurine that I wanted.

The $57 difference between what I would pay for the figure and what it actually cost is a subsidy I, a member of the “corrupt oligarchic elite,” would get from this supposedly left-wing government. Mind you, it’s not a subsidy to send my kids to school. It is a subsidy to decorate my house with expensive crystal figurines.

The effects of Mision Cadivi are everywhere in Venezuela. People are buying Italian kitchens by the hordes. The streets are chock-full of large, brand-new vehicles. And with a tank of gas costing less than $1, there is no need to control the size of your vehicle – the bigger the better!

The stories you hear are incredible. Whisky imports have reached all-time highs, and this year we are headed for a milestone – $40 billion in imports, a much larger figure than our current level of international reserves. People are traveling abroad like never before – in the airport, I ran into a few escuálida friends who were going to Israel for the third time this year!

It’s not just rich Venezuelans who are benefiting from all this – rich people from neighboring countries are in on it as well. Travel agencies in Colombia, Panama, Peru and Ecuador routinely schedule their passengers to Europe to fly via Caracas. Through associations with Venezuelan travel agencies, their customers can take advantage of this massive arbitrage opportunity and travel for less, while both travel agencies benefit get their cut. Colombians wanting to buy cheaper cars, microwaves, computers, washing-machines and other goods are making the trip from Cúcuta to San Cristóbal’s shops by the hordes.

We have a name for governments that subsidize the rich more than the poor: right-wing governments. Because if you put all of Chávez’s rhetoric aside, that is what this amounts to, a massive subsidy of the middle- and upper-classes. In a country where $150 in cash traded in the black market buys you a months-worth of groceries for a family of three, the more you consume the more subsidies you receive. Never mind the scarcity – I saw some of that, but I also saw lots of imported olive oil and Spanish olives for sale. And ultimately, scarcity is caused by private importers’ inability to purchase staples like milk at international prices and sell them at the controlled rate. Sooner or later, the government steps in – as it always does – and buys the milk overseas and sells it cheaply. The subsidy works its way to your pocket one way or another, you just have to be patient.

I also saw a lot of indications of Venezuela lurking toward a dictatorship. There is more fear in the streets, and fewer ways of channeling it. The government’s pressure can be felt everywhere, and the massive subsidies it hands out undoubtedly act as a distracting measure. Who has time to conspire, plan for the future or organize grass-roots efforts to oust Chávez when there are all these arbitrage opportunities to be had?

My friend Roger told me the Internet was pulled from all computers in his government office, armed security has begun inspecting their briefcases and their pen drives every day when they leave work, and he received a memo indicating that, from now on, all employees had to come to work on Fridays wearing pro-government red T-shirts. Oh, what would Scott Adams do with this stuff.

Turn on the TV and you’re unlikely to catch any opposition voices. Pro-Chávez lawmakers routinely make the rounds at Globovisión and Televen, while Venevisión has simply dropped all its opinion shows. José Vicente Rangel even has his own show in Televen again, where opposition figures almost never make an appearance. In VTV, not even chavista-light legislators from Podemos make the cut.

Businessmen are scared to even discuss with the government the cons of what they are doing. I met people who want to sell their apartments but are afraid of putting them in the market for fear of being marked as “rich” and kidnapped. Bullet-proofing your car has become the latest trend in yuppie excess.

As for the economy, people are doing really well, rich and poor alike. The industries doing the best are shopping malls selling imported stuff and anything related to the government. Non-oil exports, investment in technology and research and development are practically nonexistent.

As for the poor, well, you still see the same ranchos, you still see beggars in the street, the government has cracked-down on street-vendors, and traffic has gotten worse. While they are probably better off in absolute terms, it’s hard to dispel the notion that they are not benefiting as much as some of my richer friends. Their paltry Misiones checks don’t compare with the hefty subsidies the rich get, but that’s life under a right-wing dictatorship. Good luck complaining.

PS.- I’m not the only one thinking Chávez leans to the right – check out Bruni’s terrific post about this issue. A must-read!