Caracas Chronicles

If you invited 100 sane, competent economists of the left, right and center who do not work for the Venezuelan government, to grab a coffee and to talk about the Venezuelan economy, you’d find yourself having similar kinds of conversations with a good 99 of them.

You’d end up talking about a failed model based on multiple, unrealistic price controls that create huge distortions, crazy arbitrage and irresistible corruption opportunities. This model benefits the few at the expense of the many which, when you think about it, is what socialists have always criticized about capitalism.

In your 100 cafecitos, your 100 economists would certainly disagree on ultimate causes, and on the sequence and scope of needed reforms. They’d disagree on all kinds of details. Your cafecito with Ricardo Hausmann would certainly be a lot different from your cafecito with Mark Weisbrot. But, in the end, you’d find yourself having 100 conversations about the same thing.

That streak ends, though, when you enter Planet PSUV.

According to Últimas Noticias, the ruling PSUV party held an economic conclave “a calzón quitao” at la Universidad de las Artes (Uneartes) in Caracas. If UN’s account is to be believed, the conversation they had simply never touched any of the themes you’d have had in your 100 economist cafecitos. Instead, PSUV launched an economic summit that studiously avoided even mentioning, much less discussing, any of the key distortions currently mangling the Venezuelan economy. And you won’t fix a problem that you refuse to acknowledge. You can’t.

In revolutionary terms: the PSUV seems to constantly ignore the first two of the three revolutionary “R”s –revisión, rectificación y reimpulso – because the “revision” tends to be more like a scapegoat parade and the “rectification” process limits to a couple of mea culpa speeches and vows for still stricter controls. “Relaunching” is a fan-favorite, because the same popular programs are presented with a new name or logo, giving the government more time to fulfilled a never-ending list of promises.

Economist Tony Boza, who apparently organized the gathering, said that the meeting would produce a working paper to be brought up for a national discussion amongst Psuv members to later be presented to the country.

According to Boza, after the MUD won a majority in the National Assembly the PSUV delegates decided to undertake a first round of revisión profunda to launch more efficient actions. This sure sounds a lot like: ‘the economic crisis was not a problem until we lost the 6D parliamentary elections’, doesn’t it?

The oil panel at the soiree included Alí Rodríguez Araque and Carlos Mendoza Potellá and was moderated by David Paravisini. Former governor of Portuguesa Antonia Muñoz presented some ideas to develop the Venezuelan countryside.

Other members of PSUV in the – so called – debate were Luis Salas, José Gregorio Pino, Judith Odreman, Erika Farías, Carmen Menéndez and the national deputies Ramón Lobo, Ricardo Sanguino, José Avila and Jesús Farías.

According to Boza, there is no consensus about increasing gas prices and -inspite of the Communist Party proposal- they are not considering the nationalization of the banking sector. He also said that they are proposing the strengthening of the Sucre – a rather small compensation system for regional trade – and that they hope the government defines mechanisms to keep on meeting foreign debt payments. Don’t we all?

Now… for the fun -and sad- part: Let’s see what the ‘true revolutionaries’ had to say about the economy.

Alí Rodriguez Araque claimed that “the economic crisis will be continue for the next two years, causing the social impact of shortages and rising poverty levels”. No surprise there…

However, he seemed to miss -once again- the cause of the problem when he added: “we should remove the phrase ‘economic war’ from our speech and explain more clearly to our people that our economy depends on oil, that oil revenues are dwindling and that this situation will continue in 2016″. Let’s be clear: the crisis started on the first semester of 2014, before the oil prices started to dwindle… and just like Bárbara and me once wrote over a year ago: “don’t let anyone tell you our recession is because oil prices fell. It’s because our policy-makers failed”.

But at least Alí and I agree on something: the ‘economic war’ speech doesn’t help and it’s time to let it go. Cue the ‘Frozen’ soundtrack.

Rodríguez Araque also dared to say that the crisis should be explain to people in an honest way, just like “a true revolutionary” would. Maybe the government should start admitting their responsibilities and catching-up on the loooong list of delayed official publications before talking about honesty.

The revolutionary deputy José Ávila talked about corruption and its effects on inflation. Ávila, as a national deputy, has comptroller powers… so if he and his bancada knew about such corruption schemes, then why didn’t they do something about it? Uh? I guess that meant that they would have to dismantle the distorting controls they been defending all along.

Ironically enough, in October, Ávila said that the government hadn’t released official inflation figures because of they have been altered by economic actors -scapegoats galore.  

Ávila also criticized the remate of the debt of Petrocaribe, decision made by “los que acaban de salir de Pdvsa”. He didn’t mention any names. You can’t help but wonder.

I want a government that works for the people and not for a failed revolution. We, as Venezuelans, want answers.

The cause of the crisis is undeniable: a failed model, built on a huge proliferation of dysfunctional controls. But PSUV suffers from a strange kind of blindness about this. It isn’t even that it can’t fix the problems, it’s that it can’t talk about them because it can’t see them.

What passes for “economic debate” within chavismo today contains no economics at all. It is, instead, a parade of scapegoats, a bunch of mea culpa speeches and no real rectification whatsoever.