Thursday, August 28, 2014

Misery Loves Company

from Investors/com
Socialism: As Venezuelans prepare to be fingerprinted to buy bread, it bears noting that their country's transformation came with the late Hugo Chavez's promise of "a sea of happiness." Some happiness.

Fact is, socialism has made Venezuela the most miserable place on earth. But don't take our word for it. That's the result of objective research by Johns Hopkins University economist Steve Hanke.

He has created a "Global Misery Index" based on the original inflation-unemployment misery index of the late economist Arthur Okun and the interest rate and GDP per capita additions of Harvard economist Robert Barro. Put them all together and Venezuela tops the globe in misery with a figure of 79.9.

The misery in this case, as in so many others, is the product of socialism implemented in another purported but misguided effort to help the poor.

The fingerprints-for-bread requirement stems from 25% food shortages due to price and currency controls that lead to smuggling — with rationing instead of free markets the socialist answer. By year-end, Venezuelans must stand in line to be fingerprinted before buying 23 basic items including bread, sugar, toilet paper and other necessities in a system President Nicolas Maduro bills as "perfect."

"The whole thing is absurd," writes banker Miguel Octavio at his blog, The Devil's Excrement. "How much does this system cost? Who will run it? Who sells it? Who maintains it? Who profits from it? How do you implement it?" he writes. "Today it is fingerprint scanners, tomorrow it will be some different imaginary battle. But it will always be about attacking the consequences, not the causes."

But socialist failure extends beyond economics. On Monday, Gallup came out with a global perception survey showing Venezuela to be the most dangerous, crime-ridden hellhole on the face of the earth. It even topped all those Central American countries shipping illegal immigrants to the U.S. amid exaggerated tales of gang violence.

One of every 10 of Venezuela's 28 million people, according to a report in El Universal last week, has taken steps (not just contemplated, but taken actual steps) to emigrate. As this goes on, the U.S. embassy in Caracas warns that flights out of the country are severely curtailed, making Venezuela ever more like a prison.

Venezuela's Stefania Fernandez, a former Miss Universe, took her final catwalk from the pageant in 2010 waving a seven-starred Venezuelan flag in a veiled protest against crime. But she's a lot less subtle now, posing for a series of photos this week with a dirty bloody face, wearing her Miss Venezuela tiara.

Wednesday, August 20, 2014

Meet the Rice Queen - Cuba's Go-To Girl in the UN

from Bloomberg
A single mom, a brazen businesswoman, a party girl, a social-media rock star -- Maria Gabriela Chavez is many things. But the bona fide that counts on Chavez's resume is her bloodline. She is the daughter and longhaired likeness of the late Hugo Chavez Frias, Venezuela's former charmer in chief, who ruled this sharply divided land of 29 million for 14 years with one foot on the balcony and the other on the throat of the opposition.

Chavez died of cancer last year, but the aura endures. And ever since, pretenders to Chavismo's legacy have maneuvered to claim some of the glory. Few have climbed as high as Maria Gabriela, who, at age 33, with a journalism school diploma and no known job history, has just been named by President Nicolas Maduro as alternate ambassador to the United Nations.

With the highest inflation rate in the hemisphere, spiking crime and vanishing supplies of everything from eggs to antibiotics, Venezuelans aren't easily impressed. But word of naming the new envoy to a plum post at the world's leading multilateral organization chafed on even the most calloused companeros.

Until a week ago, Maria Gabriela, second in line of the four Chavez heirs, was known mainly as her father's favorite with a taste for high living and a reputation for scandals. Her most visible activity is feeding her Instagram page and keeping her 968,000 Twitter followers in Chavista aphorisms and factoids. Monday's offering was an item on the giant incoming asteroid scheduled to end life on Earth in 2880.

A year-and-a-half after her father's death, she has yet to clear out of La Casona, the official presidential residence. Even as she and her older sister, Rosa Virginia, help themselves to the palace linen and staff, Maduro and the First Lady, Cilia Flores, have been relegated to La Vineta, home of the vice president and guest quarters for visiting dignitaries.

The word in Caracas is that she'd grown accustomed to the whims of her father, who, after his divorce, rarely traveled abroad without Maria Gabriela on his arm in the role of virtual first lady.

Venezuelans know her by another honorific: the rice queen. The moniker commonly refers to a goodtime girl, as ubiquitous on the party circuit as rice is on a bride. In this case, it also refers to the Chavez scion's involvement in a murky import deal, in which she contracted a shadowy company to buy rice and corn flour from Argentina at a stiff premium.

The deal prompted a call last month for a corruption investigation by opposition lawmakers in Venezuela and Argentina. Hence, the whispers in Caracas that the sudden career upgrade was less an homage to the patriarch than a ploy to armor plate the Comandante's daughter with diplomatic immunity against inconvenient legal probes.

But another motive might better explain the instant ambassadorship. To strengthen his hand and suffocate rebellion, Chavez systematically centralized power, undercutting rivals he couldn't co-opt. And to keep a lid on palace intrigue, he turned to Cuba, swapping cut-rate Venezuelan oil for Castro Inc.'s best technology, domestic espionage.

As well as her beatified dad's blessing, Maria Gabriela also inherited his private line to Havana. And that, says Diego Arria, a former Venezuelan envoy to the UN, is the logic of sending an ingenue to Manhattan.

What the "infant diplomat" lacks in job training, Raul Castro's commissaries will supply in well-turned motions and speeches, ready for the teleprompter. "The Cubans are practiced in the workings of the UN, in part because it's one of the only international forums where they can still operate," Arria says.

This means little now, but the stakes could rise if Havana's proxy grabs a non-permanent seat on the Security Council, which is expected to vote on new rotating members in October. That would put the pariah of the Antilles closer to the head table of global governance.

Better still if Caracas's ranking envoy, Samuel Moncada, happens to be absent, in which case Havana's newest best friend will have her go at the microphone. Expect Chavista thunder and rice showers.