Caracas Chronicles

It’s been a while, how ya been? Sorry for being AWOL for, like, 12 years. We just sort of grew apart, ya know? But I’m back! Are you single these days?

Really though: Blanca Vera from El Nacional published an eyebrow-raising piece this morning where she claims that the Venezuelan government sent the IMF a full set of economic statistics after 12 years of near radio-silence.

Over a decade ago, in 2004, Chavez stopped the IMF’s yearly monitoring (Article IV consultations) and closed down the IMF’s office in Caracas. He didn’t renounce membership from the IMF because that would have triggered a default, but he stopped replying to their phone calls, email, and FB messages. Though they didn’t sign the paper, they basically got a divorce.

So why is the government flirting with the IMF again? Here are some possible reasons:

1. For free technical assistance (TA): the IMF has PhD level nerds that know how to fix just about any technical problem you could imagine. Need to improve the efficiency of FX allocations? Need to get some decent economic growth and inflation projections? The IMF can help. Gratis.
2. For $$: Venezuela could be looking for authorization to withdraw more SDRs (special drawing rights, hard currency deposited in the IMF, basically). And for that it would need approval from the IMF board, which won’t move a finger without having up-to-date official statistics.
3. For something more Machiavellian: maybe the Venezuelan government is flirting with the idea of getting some budget support (aka, big time $$ loans) in exchange for reforma neoliberal. Wouldn’t that be a twist?

It’s a little early to tell what is going on: Is Maduro looking for a piquito or does he want to go all the way? We don’t know. But we may find out soon. I’m excited.