Monday, February 18, 2008

Caracas Crash?

Seems things are getting a bit difficult in the beautiful country of Venezuela. Even as the denziens of the barrios voice their love of Hugo Chavez, his hosanas might soon be coming to an abrupt and perhaps bloody end.

The promises of a bountiful future under Chavez's leadership has lead to some interesting results. As any serious student of what nationalization does to a country's economy could have predicted, so it goes in Venezuela as the government raids private property to seize staples.

As Reuters reports: CARACAS, Feb 17 (Reuters) - Shoppers in oil-rich Venezuela often can't find basic food items in stores but the government of President Hugo Chavez on Sunday turned up a huge stash of milk and chicken in a private health clinic.
Inspectors from the consumer protection agency Indecu found the shelves of the upscale Caracas Policlinica Metropolitana stocked with half a tonne of milk and a similar amount of chicken.

Meanwhile it is becoming more and more obvious that Chavez's government is meddling in the internal affairs of Colombia. How obvious? How about one FARC leader, Luz Dari Conde Rubio, caputred along the Venezuelan border. Rubio lead the team that captured the three Americans when their plane crashed so just perhaps these three men can finally be rescued. Rubio, like much of FARC, was also deeply involved in the cocaine trade. Speaking of cocaine, its strange that one of Colombia's top drug lords met his untimely demise in Venezuela, but that is what happened to Wilber Varela.

For a group who's aim was to replace the existing government of Colombia with a Communist one, FARC has instead become a tool of the drug lords. Plus running a kindapping for ransom ring that just resulted in five FARC being sentenced to death by bullets. It seems FARC has followed other terrorists organisations down the rode from revolutionary to being a bunch of thugs, like the Black Panthers and Weather Underground before them. Uribe and the people of Colombia are winning their war against FARC and its in the United States interests to see they succeed.

If that was not enough, the sacred cash cow of the Venezuelan economy is down to skin and bones. I am talking of course about PVDSA, the Grail Hugo turns to to feed those of the barrios to keep them complacent. The Economist article on this is more disturbing. Anyone who has handled accounts receivable should all sit up and take notice that PVDSA has changed the normal billing cycle of 30 days to pay to a mere 8 days. Can we say liquidity problems on PVDSA's part? Then to add insult to injury, eight super-tankers of fuel oil went begging at the end of January. Plus lack of investment spending on top of plumetting oil production signals significant troubles ahead as revenues vanish. One could almost say Exxon's legal manuevers to freeze PVDSA's assets is just the coup d'grace. Notice how fast Chavez has now changed his tune and wont cut off oil shipments to the US?

Since Chavez uses PVDSA as his personal ATM to pay off people, once PVDSA stops spitting out its money Chavez just may wish he stayed under that table in 1992 wetting his pants and never thought of leading a coup.


Timothy said...

Yes, a coup would be nice, especially if it lead to a more stable government there. The sad reality is that many times in these countries, it seems one coup leads to another.

Anna said...

The sad thing about Venezuela, until the 1992 attempt, Venezuela had known a hundred years of stability. Unfortunately when Hugo gets booted, it will probably take decades to undo his damage. Pray for the people.