Communal Councils are a mixed bag, says @brianpablo10

Get rich, quick, before the oil runs out

Get rich, quick, before the oil runs out

Reuters’ Brian Ellsworth has published a detailed look at communal councils – how mcuh money they get, and what they have done with it. Contrary to what you can imagine, the piece leaves a little bit for anyone.

Do you love the communal councils and believe they are the best thing since sliced bread? Here’s a money quote for you:

Before the Comptroller completed the investigation, Samán Mocho (a slum community council outside of Valencia) was approved for more funding. A government housing program gave the council another $465,000 in 2011 to build 30 homes, including one for (resident and ousted communal council board member Jesús) Díaz’s daughter. This time, Díaz says, the project was succesful. “It’s a demonstration that the people can build homes, it’s marvelous,” says Díaz.

Do you think the communal councils are simply a way of democratizing corruption, waste, and fraud? Here’s a money quote for you:

“Within a year (of receiving cash), auto mechanic Juan Freire was urging authorities to cut off (neighborhood communal council) El Chaparral and its sister community of Los Pinos, with a combined population of 250. The money wasn’t going to the needy, he said, and it wasn’t sowing growth. Instead, Freire alleges, leaders of the community council in this mountain suburb were using some of the cash for personal expenses and to build houses for family members. He and neighbors filed complaints with nearly a dozen state agencies seeking a halt to the transfers … Yet the money kept rolling in: In 2008, the council received close to $1 million, equal to about $40,000 per resident.”

Me? Count me in the second group … with a vengeance.

Who decides who gets what? Why does El Chaparral get $40,000 per resident while other communities get zilch?

Ellsworth says $7.9 billion have been distributed to communcal councils since 2006. That translates into roughly $1.1 billion per year. If you divide that among 15 million chavistas (the opposition gets nothing), you come to a figure of about $75 per person per year. That is peanuts – then again, it’s not like each chavista gets $75. The well connected ones in El Chaparral get thousands, others are left wanting.

If you want to distribute cash to poor people, then by all means distribute cash to poor people – equally, fairly, transparently. But a scheme like this leaves the good people of El Chaparral with forty grand in their pocket, and their less connected bethren over in, I dunno, San José de Táriba, with nothing. It’s the discretionary distribution of corruption, I don’t care how many low income houses you claim to build. And let’s not even get started with the “community centers” – is this really the best use of public money? How about creating roads? Drinking water systems? Things that, you know, will actually help people, industries, foster jobs, innovation?

The communal council exacerbates the failure of Venezuelans in understanding the idea of opportunity cost. Mr Díaz, from the first quote, was thrilled with the fact that 30 houses were built at a cost of $15,500 … but can that be right? Can you really build a house for $15 thousand? The real figure is probably higher. We will never know, and we will never be able to compare with the alternative uses for that money – who knows, who cares, as long as I get my house. It’s piñata economics on steroids.

Nicolás Maduro likes to say that the opposition will “do away with the communes” if they ever get to power. Oh man, if only that were the case! If only we had opposition politicians convinced that the communal council scheme is the devil incarnate.

So rest easy folks, sadly, your little Ponzi scheme is safe no matter who is in power. And do go read Brian’s piece.

13 thoughts on “Communal Councils are a mixed bag, says @brianpablo10

  1. NO COMMENT
    An accidental free verse poem by Brian Ellsworth

    The Finance Ministry didn’t respond to questions about the financing of community groups.
    An official at the ministry said she wasn’t authorized to provide any information.
    The comptroller’s office said it does not keep a tally of total transfers to community groups.
    Some of the data on the Safonacc site was taken down after Reuters began inquiring about the spending.
    The ministry didn’t respond to requests for clarification.
    Officials at the comptroller’s office say they have no way of auditing each council.
    The comptroller’s office said it had received a complaint about the situation but dismissed it for lack of proper documentation.
    The previous members of that council were unavailable for comment.
    The municipal government did not respond to an email seeking comment.
    The national comptroller told Reuters the case was being handled by a local office of the comptroller and that it was “in the evaluation stage.”
    The community often did not know what projects the council leaders had proposed and how much the group had received in financing.
    The comptroller found no evidence the Communes Ministry had inspected the projects it financed.

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  2. Well, at least a couple houses are being built. Better than just traditional corruption that deviates money to tax havens without buiding anything.

    When the situation is FUBAR, you have to cheer up with the small achievements, even the pathetic ones.

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  3. Communes are simply a parallel goverment, rotten to the core and completely controlled by the PSUV.

    Straight from the Little Red Book. The plan is to get rid of the pretense of governors and mayors. Oh, and communes get to elect the king, I mean, the president. Elections are for the burgueoise, all hail Castro!

    Don’t believe me? See “The Protector of Miranda”, president of Corpo-Miranda, Elías Jaua. That’s a parallel governorship in all but name.

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  4. This is just corruption democratization were everyone are able and enabled to take a cut. The worst part of this is I know a couple of people that tried to get into this comunas but they cant make it because “ellos firmaron” and they are now really pissed not because they did not get a chance to work, they are really pissed because they were not able to “darle palo a la piñata”
    The total budget expended on comunas represent less than 5% of the entire $400,000 MM that chavismos despaired during 15 years. Just imagine how many people recently become really really rich…

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  5. Comunas are a huge failure , they have become just another vehicle for scams which favour some govt stalawarts at great cost to the govt and with little benefit to the communities they are supposed to help.

    Franciscos free verse poem just underlines that the govt is trying to hide the ugly truth about how all that commune hogwash is an utter failure and the source of corruption for some of its best connected followers .

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  6. Well, chavistas are only efficient when it matters, and as long as this isn’t top priority, they won’t care enough to compensate their socialist rhetoric.

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  7. Regime authorities do not view these examples of communal corruption as a successes but as failures , they are sincere in thinking that communities can be helped by giving money to communes composed of their followers and really expect these to act the role of socialist benefactors , problem is that when the bad use made of the money is discovered they cant do anything about it because that would mean first the humiliation involved in recognizing that their dreams are failures (with the corresponding loss of face and embarrassment ) and secondly because if they really pursued these cheats and that became public knowledge that would give ammunition to the revolutions enemies to criticize their actions and ideals . Instead they must work hard to hide these instances of communal failure and corruption and continue to advertise the great job these communes are doing !!

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  8. Chavismo’s big historical original and grandious plans have always been about throwing money to a cause.

    LGBT community, throw money
    Illegal mining ,throw money
    We want free healthcare,throw money and cuban propagandist agents
    We want a free concert,throw money and some ganja dealers to a PDVSA La Estancia to all reggae lovers wich constitute about 20% of the venezuelan youth
    Communes are the best thing in the world,throw money of course

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