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Venezuela: How could such a rich country become so poor (Part I)

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By LUIS FRANCESCHI
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Air France Flight AF 0368 left Paris’ Charles de Gaulle Airport for La Guaira, Caracas, on January 12 at 9:05am. I was on board. As the plane took off, I checked the local currency exchange rate in Venezuela. It was at 900 bolivars to the dollar.

Nine hours later, we landed at the Caracas’ La Guaira Airport. A majestic run down and lonely international airport that speaks of better days; it has the scent of long-gone but extremely wealthy days. I checked again the exchange rate; the dollar was now at 2,200 bolivars.

By the time my passport was stamped, crossed customs and came out of the airport, the dollar was at 2,500. I then realised that I had become a millionaire in just 10 hours.

I had unbelievable purchasing power. I had amassed a fortune and it would grow by the hour, provided I did not change my few dollars into thousands of bolivars.

La Guaira Airport is squeezed between a deep blue Caribbean Sea and the imposing Avila Mountain, a 3,000 meters-high beautiful mountain range that separates the city from the airport.

I was driven to the city through an impressive superhighway built in the 1950s. We passed Boquerón I and II, two never-ending tunnels that pierce right through the massive green mountain. Behind is the sea, on top is the mountain, and suddenly, the light at the end of the tunnel is a no less impressive sight – Caracas city. It is a unique, breath taking experience that Venezuelans take for granted.

Caracas sits on a green valley. The city is made of a cobweb of impressive elevated superhighways built in the 1960s, surrounded by remarkable skyscrapers built in the 1970s, 1980s and 1990s, and some remarkable unfinished and abandoned buildings that were supposed to have been finished in the first decade of the millennium, the 2000s.

Thirty years ago, Venezuela was the richest country in South America, and one of the most important economies in the South. Ironically, there were also huge and unjustifiable disparities between the rich and the poor. The social gap, corruption and a tsunami of illegal immigrants triggered a time bomb. It brought the charismatic Hugo Chavez to power.

Venezuela is seated on magical landscapes. Its name was coined in 1499 by Italian navigator Amerigo Vespucci of Venice. After observing stilt houses built on water that reminded him of Venice, he named it Veneziola, or “Little Venice”. It is twice the size of Kenya, with less than half of its population. It is literally floating on oil; it has the biggest oil reserves in the world, vast and rich deposits of gold, iron, bauxite…every possible mineral, and it is watered by large rivers that make its lands highly suitable for agriculture.

I had not been to Venezuela since 2015, when the exchange rate of the bolivar to the dollar was at 2,500. How could this be? 25 years ago, the bolivar and the Kenyan shilling were almost at par, at around 60 per dollar. Today our shilling stands at 100, while that original bolivar vanished. Today that bolivar would be exchanged at the rate of 350,000,000,000 per US dollar.

By 2008, the original bolivar had lost so much value that Chavez tried to stop inflation by removing three zeroes and creating a new currency, the strong bolivar (bolívar fuerte). This trick did not work and the strong bolivar continued to decline so much that ten years later, in August 2018, Maduro tried the same trick by removing five zeroes, so that 1,000,000 bolivars became 10.

Maduro called this third currency the sovereign bolivar (bolívar soberano). So, if you had one million in the bank, you could afford to buy three chapatis, at 300,000 strong bolivars each. The day after the reconversion, you could buy the same 3 chapatis for 10 sovereign bolivars. So, it seemed a logical step forward and an improvement.

The problem with dull and ludicrous leaders is that they tend to resolve problems by passing new decrees, laws, changing names, holding referendums, conferences, inventing new controls and blaming outsiders. They create their own animal farm, where they resurrect the dead by painting the coffin, and cure sicknesses by changing their name or the colour of the bulb in the sick person’s room. They never ask themselves, where the sickness is coming from and what is causing it.

As predicted, the slippery slope accelerated so that today’s exchange is at 3,600 (sovereign) bolivars to the dollar. This means that in 5 months the bolivar has devaluated from 10 to 3,600 per dollar. It wiped out any savings, pension, investment or retirement benefits.

The whole middle class has joined the poor, and the poor slumped to being miserable. Today, the minimum salary is just below four dollars per month, which is also the price of two loaves of bread. People no longer ask ”How much is the dollar today?” Instead, they ask ”How much is the dollar now?”

What had happened? Chavez died in 2013 and in came Maduro. Soon after, oil prices started plummeting. Chavez’ philosophy had been to do away with the private sector. He could do it because the country was extremely wealthy. He did not need to collect taxes, and he could afford to pay fat bonuses to anyone in need.

The oil crash that followed made Chavez’ model unsustainable. The country could not afford the high social bill. Corruption hit a high never seen before. Economists say that almost $1 trillion has been stolen in the last three years.

Meanwhile, Maduro behaved like a host throwing an exuberant party. He kept it going so that no one would notice; after all there was still food in the kitchen…but it was bound to end in disaster. Maduro should have known better, but you cannot expect oranges from a mango tree. Maduro kept the party going.

What caused such hyperinflation? Why was the currency so badly devalued? Chavez had nationalised the oil business; he had full control of PDVSA, one of the biggest and most successful oil companies in the world. He nationalised the biggest mineral corporations, banks, food factories. He expropriated land, buildings, farms… He also had full control of the Supreme Court, the electoral commission, the Office of the Public Prosecutor, Parliament…everything! What went wrong and why?

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Transgender men have functional ovaries after a year of testosterone injections » Capital News

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Doctors from Tel Aviv studied 52 transgender men aged 17-40 for a year after they began receiving testosterone injections and found their ovaries appeared to remain functional © AFP/File / VALERY HACHE

, Washington, United States, Mar 23 – The ovaries of transgender men appear to remain functional even after a year of receiving hormonal treatment with testosterone, according to a small Israeli study presented Saturday in the United States.

Transgender men are born female but self-identify as male. Not all of them undergo gender reassignment surgery but lots of them take hormones to make their bodies more masculine.

Doctors from Tel Aviv-Sourasky Medical Center studied 52 transgender men aged between 17 and 40 for a year after they began receiving injections of testosterone.

They had access to the complete results for 32 of them, which is a small sample but studies of this kind are rare.

“Our research shows for the first time that after one year of testosterone treatment, ovary function is preserved to a degree that may allow reproduction,” said the study’s lead investigator, Yona Greenman.

“This information is important for transgender men and their partners who desire to have their own children,” Greenman said.

The level of the Anti-Mullerian Hormone (AMH) dropped off after 12 months of treatment but remained in the normal range for fertility, said the researchers, who will present their findings at the annual conference of the Endocrine Society in New Orleans this weekend.

The level of this hormone is an indicator of the so-called ovarian reserve and is used by doctors to assess the remaining egg supply.


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Weatherman: Long rains likely to delay

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By BERNADINE MUTANU
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There seems to be little chance of a reprieve for Kenyans against the ongoing drought even as they expect the long rains to start pouring down later this month.

This is because the drought, which has left at least 1.1 million people in need of urgent food aid, will not be ending soon and may actually spread out according to the latest predictions by the Kenya Meteorological Department (KMD).

Cyclone Idai may have killed more than 500 people and devastated thousands in the southern African nations of Mozambique, Malawi and Zimbabwe, but in Kenya, the storm is expected to leave millions hungrier, according to KMD.

According to the weatherman, the onset of long rains has delayed because the cyclone delayed the movement of the Inter-Tropical Convergence Zone (ITCZ) — a belt of low pressure near the equator, “where trade winds of the northern and southern hemispheres come together” to create favourable conditions for rains.

As the government and food aid agencies continue distributing food and water to starving Kenyans in different parts especially in Turkana, Baringo and some parts of Coast and northern Kenya, more will need food aid in the coming months as the March-April- May rainfall is expected to be short and sparsely distributed.

Although above-average rainfall for most parts of the country was expected except for parts of Eastern Kenya and the Coastal regions in accordance with the Climate Outlook, the situation has abruptly changed due to the cyclone, said KMD in its latest weather update.

“The seasonal rainfall onset was also expected to be timely over several parts of the country. However, a tropical cyclone known as “IDAI” located in the Mozambican Channel has delayed the northward movement of the rain-bearing ITCZ,” said Stella Aura, the Acting director of meteorological services at KMD, in a briefing.

According to the update, “the cyclone significantly reduced moisture influx into the country and led to the continued sunny and dry weather conditions over the better part of the country.”

And more depressing is the fact that there is a possibility of more tropical cyclones which may further delay rains in the eastern parts of the country and prolonged dry spells in the western counties despite timely onset of the rains.

Also in play is the neutral to cooler than average sea surface temperatures along the Kenyan Coast and very warm sea surface temperatures to the east of which contributed to the delay in the establishment of the ITCZ over Kenya.





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How Hamad’s defection alters Zanzibar vote

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Former Civic United Front secretary general Seif Sharif Hamad has defected to the Alliance for Change and Transparency -Wazalendo party, ending a three-year leadership wrangle in Zanzibar’s leading opposition party.

Mr Hamad’s defection immediately after the High Court in Dar es Salaam threw out his petition challenging Prof Ibrahim Lipumba’s chairmanship of the Civic United Front was a culmination of behind-the-scenes negotiations with three Tanzania Mainland opposition parties as he sought an exit.

ACT-Wazalendo party leader Zitto Kabwe on Thursday joined Mr Hamad in a homecoming tour of Zanzibar where they were expected to visit Mr Hamad’s strongholds in Pemba and Unguja Islands.

The CUF enjoys a near-fanatical following in Zanzibar and made significant inroads into the Mainland during the last general election in 2015, more than doubling its MPs.

Mr Hamad holds commanding sway among party supporters whom ACT-Wazalendo hopes to welcome alongside the man they say has remained steadfast in advancing their interests since the 1990s.

Prof Lipumba, who for years worked alongside Hamad, resigned from the position of party chairman in the heat of the 2015 elections, but returned in 2016 to claim the position.

His faction has accused the government through the Registrar of Political Parties of engineering the split in the party by propping up Prof Lipumba.

Mbarara Maharagande, a former CUF spokesperson, told The EastAfrican that at least one million membership cards had been issued to prospective defectors to ACT-Wazalendo.

“We are confident we will print as many more in the coming weeks,” he said.

Sources said that Mr Hamad’s faction settled for ACT-Wazalendo fearing stiff competition within Chama cha Demokrasia na Maendeleo (Chadema) which was also likely to grapple with its own internal rivalries between their leading lights for the presidential ticket.

Chadema national chairman Freeman Mbowe hinted they were interested in recruiting Mr Hamad but said they have taken it in their stride his decision to join ACT-Wazalendo.

“We will work with him from his new base to strengthen our unity,” he said.

Awadhi Ali Said, a former president of Zanzibar Law Society said that Mr Hamad’s defection puts ACT-Wazalendo on equal footing with Chadema in coalition-building ahead of the 2020 elections.

“The defection also raises Mr Kabwe’s stake should he choose to run for the Union presidency, with Mr Hamad in Zanzibar,” said Mr Awadhi.

In Chadema, the defection back to CCM of 2015 opposition presidential candidate Edward Lowassa means the party will likely front Mr Mbowe or its firebrand Singida East MP Tundu Lissu for the top seat.

Mr Lissu is currently in Belgium, where he has been receiving treatment from injuries sustained in a failed assassination attempt in September 2017.



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