World

In Venezuela, The Dictator Who Stole Christmas

FELIZ CHAVIDAD

He seizes toys to give them away in his own name, and prints so much money it’s worth nothing, then makes it disappear. The Grinch has nothing on Nicolás Maduro.

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JUAN BARRETO/Getty

Stealing Christmas is not easy. It takes practice, and the Venezuelan government has gotten good at it.

This time around the task was in the hands of a sad little man called William Contreras, superintendent of the Venezuelan price control authority (Sundde for its acronym in Spanish). As a staggering 784.5 percent annual inflation was eating away at Venezuelan salaries, Mr. Contreras led a government-enforced Black Friday, where store owners were ordered to reduce prices (by 30-50 percent) under the threat of being sent to jail if they didn’t.

This sort of December crackdown on businesses has become customary since a few years ago when President Nicolás Maduro ordered appliance chain stores to lower their prices so Venezuelans could shop at discounts which, of course, don’t answer to inflation and other economic nuisances. The measure obviously drove more than one business owner into bankruptcy.

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But the breaking point of this year’s measure, the moment of the big, bad, beautiful headline would be December 10, when Mr. Contreras and a band of National Guards seized 3.8 million toys from the Kreisel toy distributing company. A family-run business that has been selling toys in Venezuela for well over 20 years. Contreras’s toy police confiscated dolls, board games, robots and the like, now to be distributed and sold at “fair prices” by the government distribution network “Clap.”

Just a couple of weeks before, the Venezuelan political crisis seemed to peak after the election authorities shut down the referendum process spearheaded by the opposition which had aimed to replace Maduro.

As the recall referendum faced its unconstitutional death, the opposition was strong-armed into sitting at a Vatican-led negotiation table with the government. Those talks exacted a high cost for the opposition, as its followers felt betrayed by their leaders, many of whom have admitted that sitting for the negotiation and dialogue process was a mistake.

And then, the economy gulped down the political crisis in one bite.

While president Maduro was invested in his daily four-hour salsa radio show, the country sank into a deeper economic debacle.

The local currency, once deemed Bolívar Fuerte (Strong Bolivar), plunged dramatically before the U.S. Dollar in just a month. By the end of October the parallel rate of exchange was 1,200 Bolivars per 1 US Dollar, and by December 1 some transactions were being closed at 4,500 Bolivars.

The staggering loss of value of the local coin had a direct effect on food and the price of basic staples. According to economist Anabella Abadi, the phenomenal excess of liquidity in the Venezuelan economy may well have caused the spike in the parallel exchange rate.

The government had been printing new bills at an extravagant rate. In September 6.6 trillion Bolivars circulated. By December 9 the economy had seen a 42 percent increase in monetary liquidity with up to 9.4 trillion circulating. The excess of Bolivars called for a higher demand of U.S. dollars, especially at the beginning of December when private businesses and the government require more of those to import goods and cover the higher holiday and year-end expenses.

The government then rushed to make some last-minute economic adjustments by calling for measures that had been put on hold for over a year. Venezuelans, who were becoming accustomed to tipping waiters with stacks of cash, finally heard the government announce that the Bolivar banknotes for 2, 5, 10, 20, 50, and 100 would be replaced by 500, 1,000, 2,000, 5,000, 10,000, and 20,0000 denominations.

A couple of days later, President Maduro announced that during the 72 hours following his address, all 100-Bolivar bills, which account for 77 percent of the value of all bills, would be taken out of circulation. After 72 hours, those bank notes would not be worth the paper they were printed on—which, actually, most of them are not—and could only be exchanged at the Central Bank of Venezuela for a few days more.

This sounds pretty bad without putting things into context. Now, let’s put things in context.

Christmas bonuses are customary in Venezuela. Usually, Venezuelans wait for their “aguinaldo” to buy Christmas presents, and to have some cash for their holiday vacations. This year, however, according to local polling most Venezuelans were going to use their Christmas bonus to buy food. To eat, you know. The dire economic situation of years past had worsened exponentially.

By December 12, the date of the announcement, most Christmas bonuses had been paid, workers had their pockets full of those 100-Bolivar bills. They would now have to rush to deposit them in banks, and to try to exchange them in the Central Bank.

Nestor Reverol, the Interior Minister, indicted in the United States for “participating in an international cocaine distribution conspiracy,” held a meeting with Venezuelan bank presidents and their compliance officers at the National Antidrug Organization (ONA) premises, of all places, and explained the measure had been put in place to thwart a scheme by the U.S. Treasury Department to drain the economy of those 100-Bolivar bills by arranging to have them shipped to Europe.

Yes, I know, we are in Austin Powers territory.

A stronger economy may have stood its ground against an insane measure such as this one, but Venezuela isn’t one. And, of course, it hit the hardest in the places where the economy is predominantly cash driven, like Ciudad Bolívar, the country’s most important mining town.

In the days that followed the 72-hour announcement, over 80 percent of businesses in the city were sacked in lootings mainly led by Pranes, organized crime leaders who usually run their gangs from within jails.

After the events in Ciudad Bolívar, the government shyly tracked back on its decision and said the bills would be valid until January 2. This, along with the parallel rate of the dollar stabilizing somewhere near 2,800 Bolivars has provided an artificial sense of calm in a stormy December.

As Minister Reverol explained, the government blames the economic crisis on a conspiracy between international powers and some groups that have representation within the opposition-held parliament.

Diosdado Cabello, one of chavismo’s most prominent bigwigs, has promised a couple of surprises for Christmas and the New Year. Usually these “surprises” translate into some form of authoritarian measure. But as gathering lunch from a dumpster becomes more and more common in Venezuela, the people don’t have time to deal with bourgeois problems like outrage against tyrannical threats from the dictator’s spokespeople.

These past days of Christmas have been an overblown example of the way the late Hugo Chávez used to operate: managing both the political and economic crisis, switching seamlessly between one and the other, slowly stretching the Venezuelan public’s pain threshold.

Meanwhile, the world’s deadliest salsa DJ, Nicolás Maduro, keeps on playing songs by El Gran Combo and ordering government-enforced sales events. Their latest victim, EPK, a successful children’s clothing business, is now subject to Mr. Contreras’s gun-to-head discounts: 70 percent in their case.

The state media network came up with a clever way to wish Venezuelans a happy holiday, and replace Christmas with something else. One that mixes perfectly the notion of Navidad under chavismo: “¡Feliz Chavidad!” It proclaimed.

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