Caracas Chronicles

Over at Foreign Policy’s Transitions blog, I take a less pessimistic approach to SICAD II than Quico. The value added:

“The new system is also much more transparent. The Central Bank will, supposedly, allow transaction prices to be set by market forces, and will publish the average exchange rate every day. There are pledges that transactions will be finalized within 48 hours, a stark contrast to the current delay-plagued system.

In a sign of how different the tone of the six-page law is, the word “market” appears eight times, the word “demand” five times, while the world “fatherland” does not appear at all — surely a first for chavista legislation.”

I think we can all agree that this is no sure thing, and the thing could easily collapse if other measures are not taken. Yet the signal SICAD II sends is very significant, and for a country reliant on expensive foreign financing, signals are important. And if we believe that protests – erm, the Cadivi barricades, remember? – have at least something to do with limited access to dollars, Sicad II may even help get people off the streets.

The fact that a political heavyweight such as Rafael Ramírez is behind it suggests that this is not just a show, and that the government is at least going to try and make this work – if not out of conviction then, perhaps, because the puppet masters demand it.

Quico has made up his mind: the thing will crumble after a few weeks. I’m not so sure. Will Ramírez let Sicad II fail when everyone seems to agree this is his baby? We’ll soon find out.