VENEZUELA, A TOTAL CHAOS

A few days ago I wrote a blog titled TRUTH OR REALITY , which I basically state as a premise, that the truth is all that result of what has been adapted to the reality of each individual , and I say this, because to write about the reality of Venezuela is to come to the conclusion of what we all already know: VENEZUELA IS A CHAOS.

However, making an abstraction of me as a Venezuelan citizen with respect to the reality of Venezuela, and observing not from the first person, that is to say from the ordinary citizen who day to day lives immersed in this problematic, but as a spectrum alien to everything and without the human feelings and obviously understandable invade me by so much neglect, I can affirm that Venezuela is an entire literary work of dystopian fiction, so perfect in the style of Orwell and Bradbury together, as if they had agreed to write the masterpiece that represents the genre.

And I say this, because as an ordinary citizen, I could realize that I am suffering from the evil that many of my fellow citizens are suffering and is that of the CUSTOMER, because already the capacity for amazement was cut off and we hope and even we are already prepared for anything negative no matter how bad it is.

Venezuela is the perfect antithesis of countries like Switzerland and New Zealand, to give some examples, where the latter the system of government and the state in general are almost perfect or at least excellent.

The reality was not always the case, since in addition to being the birthplace of illustrious figures such as The Liberator Simon Bolivar, who contributed to the emancipation of most of the nations of South America and Panama against the Spanish Empire, going through painters like Arturo Michelena, literary artists like Miguel Otero Silva, musicians like Teresa Carreño, thinkers and intellectuals like Arturo Uslar Pietri, doctors and scientists like Jacinto Convit, among others, Venezuela also has immeasurable natural wealth, like oil, rivers and huge jungles, a lot of minerals such as gold, silver, coltan and various species of animal fauna.

There were also periods of great economic boom and incredible modernization processes, such as those promoted by Marcos Pérez Jiménez during his presidential term, from which nowadays we can even see some of the infrastructures that, even after 50 years of being built, still stand and that were in their time true works of art, such as The Helicoide that Salvador Dalí himself was interested in decorating with his art and that only today ends up being the site that most analogy with The Ministry of Love described in the novel of 1984 by Orwell, being room 101, the so-called grave that is found in the basement of this building, as well as the Hotel Humboldt that was an icon of modern architecture and that now only the vestiges remain as a cruel reminder of what Venezuela was destined to be and it was not.

But what makes Venezuela the dystopian paradise of realities antagonistic to the wishes of any democrat? To answer such a question, it is necessary to immerse ourselves in the reality that a Venezuelan family lives, that is, a standard family nucleus constituted by a father, a mother and two children.

Now, to exemplify this assumption it is necessary to establish foreign exchange indicators in order to better understand this example, since Venezuela is a country that depends almost 100% of imports, since evidently there are very few items that are produced in that country.

For the date of June 13, 2018, the official exchange rate (DICOM as it is currently denominated) handled by the Government is 94,112.00 Bolivars (Bs.) For 1.00 Euro (EUR), (currently it is not they settle currencies in US dollars but in Euros), and the exchange rate at cost in the parallel market (ie in the black market, since there is exchange control in Venezuela) is 2,769,518.75 Bolivars (Bs.) per 1,00 Euro (EUR), while with respect to the US dollar, the exchange rate would be 2,352,872.15 Bolivars (Bs.) per 1,00 Dollar (USD).

However, the minimum wage in Venezuela for June 13, 2018, is 1,000,000.00 Bolivars (Bs.) For full salary, plus 1,555,500 Bolivars (Bs.) For tickets ( tickets are not part of the salary since it is not used as a basis for calculating profits, nor social benefits, but it is a benefit for the worker in order to cover their food maintenance or at least that is the purpose), which added both would be 2,555,500.00 Bolivars (Bs.) for the minimum monthly remuneration received by the worker, which means that he is receiving only 1.08 Dollar (USD) as the minimum monthly salary.

¿But if the government has created the DICOM as a mechanism to acquire foreign currency, why Venezuelans and companies do not opt for this means, which also has a cheaper exchange rate than the black market offers?, because the DICOM is a system that works as an auction, that is, although the web platform (https://www.dicom.gob.ve/), establishes the exchange rate (this exchange rate is the one corresponding to June 13, 2018, since it varies) that of 94,112.00 Bolivars (Bs.) for 1,00 Euro (EUR), said value is only referential, since if I as a natural person would like to acquire through the auction 100 Euros, I would have to have 9,411,200.00 of Bolivars (Bs.) as a minimum, but that does not guarantee that these currencies will be settled. , since the majority of those who acquire them pay it at an exchange rate well above the reference established in the web portal, since logically it is an auction and it is evident that there is not enough monetary liquidity to pay all those who they wish to acquire foreign currency at the exchange rate indicated as a reference, which is why, in case of scarce debt, it forces natural persons, companies and other legal entities to acquire such currency in a parallel market, which has its own indicators as a reference value, as is the case of Dolartoday, which is the most famous.

¿What does the family nucleus have to do with the forex market? As far as the family nucleus is concerned, this is an example that I will present later, once I locate my dear reader in the context of the situation.

¿If the legal currency is the bolivar, why should the Venezuelan worry about the value of foreign currency? for the simple reason that Venezuela is a monoproductive country, that is to say, the economic one depends almost entirely on the exports of oil, and it is evident that PDVSA (Petróleos de Venezuela, a company that is responsible for the exploitation, refining and distribution of crude oil), is basically bankrupt (in another blog I will explain it in detail), which is why there is no compensation of foreign currency entering the country through oil exports with respect to the foreign exchange that comes out (Venezuela, since it produces almost nothing depends entirely on imports), results in a deficit in the balance of trade, so Therefore, the balance of payments is negative, that is, the government has to finance itself through other means, such as bonds of public debt and other loans, loans from allied countries and now the most important between the petro cryptocurrency.

However, a large part of those currencies that the government obtains through means other than exports are not offered in the market in order to curb the scarcity of foreign exchange that importers have in order to be able to pay external suppliers for the inputs they commercialize. the country, but on the contrary, are destined to political campaigns, investment of armament, ghost companies that at the time of the extinct CADIVI (Commission of Administration of Foreign Exchange) and CENCOEX (National Center of Foreign Trade) acquired currencies at a price preferential and among other unethical purposes, this being the reason why, importers must go to a parallel market to acquire foreign currency and adjust their cost structures according to the exchange disparity, in a few words, the economy is dollarized, we pay the prices based on the dollar, and we won in bolivars.

Added to that, the expropriations of private companies by the Government, as a policy of the late Chavez, of which, many of those companies taken as Industries Diana, Owens Illinois, Kimberly Clark, the most recent being the case of Kellogg's (Although it was not exactly expropriated, the country's economic situation forced that company to retire, and the government took the facilities and the machinery to create another similar company), they are virtually bankrupt, since the unconstitutional policy of appointing as president or directors from these mercantile entities to high-ranking military officers, in order to give them power and keep them happy, thus avoiding possible conspiracies and coups, logically causes the fall of these companies due to the misappropriation and mismanagement of assigned money, and the few companies remaining private, are on their knees looking to survive hyperinflation and constant harassment, as currently is living the banking and financial sector, whom the Government accuses of being a participant in the imaginary economic war that has badly the country.

¿How could one define the current situation in Venezuela? It is evident that Venezuela is in a state of chaos, and we only touch a little on the economic level, without counting other equally important aspects such as health, culture and others. all of them are geared in a system that is moved by an even larger gear called economy. And if anything, it has affected the government, it has been the international sanctions imposed, since it can no longer offer public debt bonds and sell them in the financial markets of the United States as a form of financing, since that State prohibited investors from buying bonds. To the Venezuelan government, added to that, the policies of the late Chávez in maintaining regional leadership as a geopolitical strategy, in order to have a cordial treatment (or rather buy votes in the OAS) with one of the Caribbean countries, gave origin to the creation of Petrocaribe, as a compensation system in which these States exchange items for oil and that in the end Venezuela virtually gives free of charge to these countries, an issue that will lead to is to suspend much of the delivery of oil to these countries, https://www.el-carabobeno.com/pdvsa-crudo-petrocaribe/, and even more so when Venezuela owes 62,000,000.00 dollars (USD) to China, without Investors who acquired before the sanctions bonds of the public debt and that these interests have not been canceled by the Venezuelan State and that are also preparing to go legally against.

Now, once the country's economy has been destroyed, the other aspects such as health, education, culture, scientific development, human rights, the judicial system and public institutions reached an equally critical point, as they describe fully each one is to make hundreds of detailed pages, since there is nothing that is not affected by the crisis, that is why the best way to understand the problems of the country, is to live in the flesh this situation, because to describe it would be all a titanic task.

But returning to the example of the family nucleus, we will try to describe the daily life of an ordinary family in Venezuela, composed of a father and a mother, with two children, the income of both parents assuming that it is well above the minimum wage each one, between both earn 18,000,000.00 bolivars (Bs.) monthly, a kilo of meat in the market are 7,000,000.00 bolivars (Bs.), a kilo of cheese are 2,000,000.00 bolivars (Bs. ), one kilogram of rice are 700,000.00 bolivars (Bs.), one cannelloni bread is 140,000.00 (Bs.), one kilogram of butter is 1,200,000, 00 bolivars (Bs.). If for some reason, both the father and the mother have to change the rubbers of their vehicle (standard sedan ring 14), they are 70,000,000.00 bolivars (Bs.), Public transport is almost gone, and as soon as to education, monthly parents pay for the education of both children in school around 2,000,000.00 bolivars (Bs.), a pair of shoes 50,000,000.00 bolivars (Bs.), a jean are 40,000. 000.00 bolivars (Bs.), This is a small example of how a standard family lives in Venezuela and that is why the vast majority of young people take the painful decision to emigrate to another country and start from scratch, because It is not about staying in the country and frustrated by not being able to buy a new phone, but the question transcends to the point that staying is not being able to buy even food.