(Since Cadivi is gasping its final breaths surrounded by controversy and not a minute too soon, this guest post by Iesa professor Pedro Luis Rodríguez could not be better timed. Rodríguez takes on Javier Corrales’ assertion that we’re mostly middle class, and concludes that it was all a mirage. Take a read and let us know how you view…
Over the past two weeks, Venezuelans have poured into the streets, but not simply to protest. Throngs are desperately trying to get the officially licensed sticker albums of this year’s FIFA World Cup from Panini. Every four years, soccer fans the world over buy the officially licensed Panini sticker album in order to get a glimpse of which of their favorite football…
The ongoing saga between international airlines and the Venezuelan government continues. Just when you thought airlines were going to get their money, the government is now suggesting they will only get paid in part, and at a much higher rate than previously thought. According to El Mundo, the government is playing hard ball as usual,…
Confused about SICAD II? Wondering whether the new currency exchange system really is a legal, market-based alternative to the black-market, or whether it just plays one on TV? Don’t worry, you’re not the alone: Nicolás Maduro himself seems to conflicted on the question to the point of schizophrenia. In his New York Times OpEd, he describes SICAD II as…
Did you hear? The government is going to liberalize the dollar-bolivar market! It’s huge news! On paper, the Convenio Cambiario #27 setting up what’s known locally as SICAD2 – a legal, market-driven alternative to exchange controls – looks like the most significant economic reform in 15 years. What’s more, it looks like the first pro-market reform we’ve…
Venezuela’s government is about to unleash the biggest economic reform set forth in the last 11 years. A currency market is about to be set in place, with far fewer restrictions than the previous systems. This reform is a step back from the toxic policy of exchange control, and it is exactly 11 years late. The…
Quico Toro, the founder of this blog, wrote an OpEd for yesterday’s New York Times in which he ponders the reasons for the massive protests currently rocking Venezuela. His theory is that the protests are in defense of the right to free assembly. There may be some truth to that. However, I think we are…
In the midst of social crisis, an airline boycott and massive amount of bolivar liquidity Ramirez announced that SICAD II will be launched on Feb 24th. Not many details available yet as they will be disclosed tomorrow but here are the bullet points of what we know: Rate will fluctuate with government intervention with fix amounts…
The latest casualty in the ongoing newsprint crisis is, surprisingly, one of the hegemony’s main newspapers: Diario VEA. In Monday’s edition (seen the photo), they informed their readers that they would probably stop printing because of the shortage. They finally could keep publishing for now thanks to the leftovers of newsprint from previous editions. VEA’s…
As reported in earlier posts, the ongoing newsprint shortage crisis has been deepening in the last few weeks with more newspapers closing shop, and others being forced to heavily reduce their content. This week, the National Press Workers’ Union (SNTP) staged a protest in front of the main offices of CADIVI, demanding that the multiple…
After an eleven-year course on currency exchange controls, it’s time to take our final exam boys and girls. The test has a single question: what have we learnt about currency exchange controls? Is it that … they are ineffective at stemming capital flight; they create huge distortions; they usually lead to an overvalued currency; they…
Hours before Nicolas Maduro announced the coming end of CADIVI, Barquisimeto’s main paper El Impulso made public that its request for currency to buy newsprint was finally approved, after months of delays. Had that request been denied or simply gone unanswered, the paper could have been simply forced out of print by Feb. 2nd. However,…
As reported months ago, Barquisimeto’s main newspaper El Impulso is facing a serious crisis. But even if it survived the earlier announced December deadline, the 110-year old paper could still be forced out of local newsstands by February 2nd. The reason? The government has not authorized them the currency required to import newsprint they need.…
An excellent story on smuggling in Zulia state, by Bloomberg’s Anatoly Kurmanaev and Andrew Willis, on Venezuela’s unlikely and unsustainable path to becoming … a rice exporter! The money quote: “Sotomayor hasn’t seen rice for sale in the shops of Venezuela’s second-largest city since July, as smugglers snap up the staple for a maximum of…
It has become very hard for foreign airlines to keep working in Venezuela. Thanks to currency controls, the government (through CADIVI) owes them around two and half billion dollars. After a proposed trueque deal of bonds and free fuel didn’t quite fly, some airlines are starting to consider the idea of just packing their bags…
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