Maracaibo, la foto de un estado fallido.

Originalmente escrito para El Pitazo (marzo 2019). http://elpitazo.net/opinion/columna-blindada-maracaibo-la-foto-de-un-estado-fallido/

Sin luz. Sin agua. Sin ley. Así estaba Maracaibo el 11 de marzo. La segunda ciudad del país e importante eje petrolero del continente sufrió una ola de saqueos a empresas de todo tipo: desde un centro comercial hasta una planta de cigarros o un hotel.

Sumergida en la total anarquía, el estado de facto, de manera voluntaria o por negligencia, se quedó de brazos cruzados mientras cientos de personas saqueaban con total impunidad. ¿Dónde está la gobernación del Zulia? ¿Dónde quedó la Guardia Nacional? ¿El ejército? No hubo respuesta sino hasta mucho después de que el daño se hubiese materializado.

Parte de la población, dejada a la deriva por el régimen, vio con impotencia como su fuente de empleo, propiedad o simplemente parte de su ciudad se iba destruyendo. Otra parte, decidió defender sus propiedades como en una película del lejano oeste, a tiros (https://www.instagram.com/javierhalamadrid/p/Bu7r7XkAlp0/). La ley se hacía a punta de plomo. Barbarie total.

¿Se volvió Venezuela en un estado fallido?

Un estado fallido, de manera amplía y coloquial, es cuando un estado no tiene control sobre el territorio y/o no es capaz de proveer de los servicios públicos más básicos a la ciudadanía.

En cierta medida, Venezuela es un estado fallido. El régimen de facto no puede proveer de servicios básicos a la población como se hizo evidente durante el mega apagón con la ausencia de luz y agua. Lo ocurrido en Maracaibo demuestra que tampoco tiene (o quiere) lograr mantener cierto orden en un territorio.

Más aún, el llamado del presidente a grupos paramilitares -llamados erróneamente colectivos- a estar en “resistencia activa”, también sugiere que el régimen de facto no tiene un control sobre los cuerpos de seguridad del estado para acciones de gran escala. O peor aún, que éstos no tienen capacidad para contener manifestaciones sociales o alteraciones al orden público.

Sin entrar en la arena política, la imposibilidad de mantener control sobre un territorio, como demostrado en Maracaibo, puede tener importantes impactos negativos en la sociedad y deja al estado venezolano en un estado de precariedad notable. Un estado fallido.

¿Qué implica ser un estado fallido?

La situación, en materia de seguridad es ya compleja. Como resaltado en un anterior artículo en esta columna, la presencia de grupos irregulares y de crimen organizado ya supone un reto a la autoridad de cualquier estado que no este involucrado en actividades criminales, como el régimen actual.

Si bien, pareciera que la crisis económica ha llevado a una disminución en algunos delitos, como resaltado por el Wall Street Journal , no se puede gobernar efectivamente sin tener el monopolio de la fuerza y sin control sobre el territorio nacional. La imposibilidad de proveer servicios públicos básicos, entre ellos cierto orden público, son signos preocupantes de la capacidad que tiene el estado; especialmente fuera de Caracas, en donde los conatos de saqueos y saqueos fueron controlados de manera mucho más veloz que en el interior.

La Guardia Nacional, ese extraño componente militar que sirve para “mantener el control interno” no logra realizar su función básica. El ejército, también brilla por su ausencia. ¿Quién mantiene el orden interno?

Parcialmente pareciera que el régimen utiliza los grupos paramilitares para cumplir con la extraña definición de orden interno del régimen (reprimir manifestaciones pacíficas). El régimen delega a organizaciones criminales funciones inherentes de cualquier estado democrático o dictatorial. Se escribe y no se cree. Se lee y tampoco se cree.

¿Qué hacer?

De manera prioritaria, se debe investigar y conocer en profundidad por qué se permitió que Maracaibo fuese saqueada. Muy probablemente la capacidad operativa para hacer frente a este tipo de situaciones esté comprometida, pero se debe saber qué tan comprometida esta para tomar acciones y realizar un plan de acción para la restitución del monopolio de la fuerza.

Como sociedad, nada distinto a la destitución y/o renuncia inmediata de todos los encargados de permitir la inmersión de Maracaibo (y el país) en anarquía es moralmente decente, si quiera aceptable. Sin embargo, para el próximo gobierno, es necesario que la protección de la propiedad privada y la integridad de las personas sobrepase cualquier cálculo político y sea el centro de las políticas tanto de seguridad ciudadana como de defensa. El camino a una restitución integral del monopolio de la fuerza y control territorial probablemente sea largo y complejo; sólo hace falta ver cuanto le ha (está) costando a Colombia o México pero el estado debe tener presencia para mantener un orden mínimo. El ejemplo de Maracaibo debería ser un punto de inflexión.

Si pasó en Maracaibo; ¿qué pudiese pasar en San Carlos, Cumana, Mérida o tantas otras ciudades y poblados en Venezuela?

COLUMNA BLINDADA | Grupos irregulares y crimen organizado: grandes retos para la transición

Originalmente publicado para El Pitazo

Ejército de Liberación Nacional (ELN). Ejército Popular de Liberación (EPL). Disidencia de las Fuerzas Armadas Revolucionarias de Colombia (FARC). Frente Bolivariano de Liberación (FBL). Piratas.  El Tren del Llano. Bacrim. La Piedrita. El Cartel de los Soles. Hezbollah[1].

Estos son algunos nombres de las organizaciones criminales que operan en Venezuela actualmente y que suponen uno de los principales retos en materia de seguridad ciudadana y defensa para el Estado venezolano (cómplice del crimen organizado bajo Chávez y Maduro)[2] durante la transición y reconstrucción del país. Este artículo pretende señalar algunos de los retos y posibles soluciones:

1. Heterogeneidad de los grupos criminales: Si bien todos los grupos irregulares y de crimen organizado son organizaciones delictivas, su origen y motivación varía de manera importante. Grupos como el ELN, EPL y FBL tienen claras orientaciones y motivaciones políticas y en el caso de las guerrillas colombianas y el FBL, su supervivencia depende en buena parte de que puedan continuar operando desde territorio venezolano. Otros grupos como el Cartel de los Soles o el Tren del Llano son organizaciones criminales sin ideologías política definidas.

Estas diferencias hacen que su aproximación pueda requerir ser distinta: mientras con el FBL se pudiese -por ejemplo- encausar en diálogos para su incorporación a la vida política, no se puede hacer lo mismo con El Tren del Llano, como ya se intentó -fallidamente- a través de las zonas de paz. 

• Corrupción dentro de los cuerpos de seguridad, defensa y justicia: Un eventual gobierno de transición recibirá instituciones corruptas y corrompidas por intereses criminales. El propio hecho de que se reporte de “El Cartel de los Soles”, que se permita la presencia de grupos criminales extranjeros en territorio nacional o que los sobrinos de la pareja presidencial hayan podido salir en un avión desde una rampa del principal aeropuerto son sólo muestras del nivel de corrupción. No importa la calidad de las políticas públicas que se realicen, si su cumplimiento y seguimiento está comprometido por las propias instituciones que deben ejecutarlas.
• Modelos económicos que favorecen al crimen organizado: La economía venezolana tiene una serie de controles y distorsiones tales como el control cambiario, el desproporcionado subsidio a la gasolina, la inexistente regulación efectiva del sector minera, entre otros que generan importantes incentivos para la corrupción en cuerpos de seguridad, pero también suponen una importante fuente de ingresos para el crimen organizado. Quizá el caso más visible es el contrabando de gasolina de Venezuela a Colombia, clave para financiar grupos irregulares.

Estos son solamente algunos de los retos para tener un país seguro y soberano. Ahora bien, ¿qué se puede hacer para mitigar y combatir la presencia de grupos de crimen organizado e irregulares foráneos y nacionales? A continuación, algunas ideas[3]:

1. Hacer que la seguridad no sea percibida únicamente como materia de los ministerios de defensa e interior y justicia: Acciones en otras áreas como la económica/financiera pueden tener gran impacto sobre la seguridad ciudadana. Se debería tener un grupo de trabajo de alto nivel entre distintos ministerios y actores públicos y privados para asumir una visión holística e integral de la seguridad.

• Re-estructurar las instituciones de seguridad y defensa: Por cada policía (incluyendo CICPC) hay, al menos 5 militares (incluyendo milicianos) sin justificación alguna. Se debe reestructurar de manera integral todos nuestros cuerpos de seguridad y defensa para que puedan ser sostenibles financieramente, más profesionales, dignos y mucho menos corruptos.
• Voluntad política y cooperación bi-nacional: Para vencer al crimen transnacional, se debe tener la voluntad política de hacerlo y convertirlo en una prioridad nacional y además trabajar de manera cercana a nuestros países vecinos. Acabar con la presencia del ELN en Venezuela requiere de coordinación con las autoridades colombianas.

Las soluciones para mitigar a los grupos irregulares y crimen organizado implican gran cantidad de recursos financieros, humanos, diplomáticos y políticos para solucionarse y, de no hacerse correctamente, puede llevar a un escenario de control social en partes del territorio y de territorios donde el estado es fallido.

Sin embargo, otros países han resuelto situaciones similares y Venezuela, bajo un nuevo gobierno, no será la excepción.

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[1] https://foreignpolicy.com/2019/02/09/hezbollah-is-in-venezuela-to-stay/ ; https://informe21.com/politica/fiscal-de-colombia-dice-que-las-disidencias-de-las-farc-delinquen-desde-venezuela ; https://diariodelosandes.com/site/fundaredes-puso-a-disposicion-de-cancilleria-colombiana-pruebas-de-presencia-de-guerrilla-en-venezuela/ ; https://es.insightcrime.org/noticias/analisis/piratas-del-caribe-despejan-ruta-de-la-droga-entre-venezuela-y-trinidad/

[2] Para un estudio detallado ver https://es.insightcrime.org/investigaciones/venezuela-estado-mafioso-2/

[3] Se pueden ampliar en http://amnistiaonline.org/SeguridadCiudadana/Publico/Librillo_SC.pdf

Dentro de las Instituciones de Seguridad Ciudadana: Propuestas para un sistema funcional

Dentro de las Instituciones de Seguridad Ciudadana: Propuestas para un sistema funcional

Enlace al paper escrito para Amnistia Internacional, Octubre 2018. Realizado con Ernesto Herrera.

Paper Rosas_Herrera (2018). Aminstia Internacional.Download

A Long, Hard Look at the Oil Industry Today

Originally published for Caracas Chronicles on December 12, 2016 https://www.caracaschronicles.com/2016/12/12/long-hard-look-venezuelan-oil-industry-today/ 

We know things in the oil industry are real bad, but how’s the industry doing really? It’s not that easy to tell. The info out there is scant, sometimes contradictory and always complicated.

Igor Hernández and Francisco Monaldi of Rice University’s Center of Energy Studies at the Baker Institute shed some light on it in a new paper: Weathering Collapse: An Assessment of the Financial and Operational Situation of the Venezuela Industry. I spent some quality time with it and I’m here to tell you: for our oil industry, esta feo pa la foto is an understatement.

For starters, Hernández and Monaldi estimate that PDVSA might end 2016 with a negative cash-flow (money or liquid assets at the end of the fiscal year) of between $7 and $12 billion while producing 360,000 barrels per day less than in 2015. That’s terrible news not only for PDVSA but for the country. Our gallinita de los huevos oro seems to be struggling for survival.

PDVSA’s “esfuerzo propio” (wholly in-house) production has been in something close to free fall.

The underlying trend is that Venezuela’s production mix is becoming heavier, meaning more heavy oil from the Faja or Orinoco Belt and less from Maracaibo and Northern Monagas fields that produce lighter oil, which is easier to refine, transport and sell

Why does this happen? Largely, because PDVSA’s “esfuerzo propio” (wholly in-house) production has been in something close to free fall. Taking West and East together, PDVSA’s esfuerzo propio wells are down by 586,000 b/d between 2010 and 2015.

Meanwhile, the Joint Ventures — the places where PDVSA is in business together with foreign partners — have seen production increase by 357,000 b/d. Of course, almost all the joint ventures are in the Orinoco Extra-Heavy Oil Belt, whereas much of PDVSA’s esfuerzo propio production is in medium and light crude reservoirs. Clearly, without foreign partners around, we’d be facing a proper cataclysm in the industry. As it is, it’s merely a disaster: we are producing less oil that’s less profitable. And los musiues nos están sacando las patas del barro

Financially, PDVSA has just managed to pull through a bond swap, putting up CITGO as collateral. We managed to correr la arruga but the underlying problems remains. For one thing, Financial Debt is just one part of the story. As of 2015, the paper highlights the massive debts with contractors and suppliers, estimated at around $19 billion.

You gotta pay those guys, if you don’t they won’t work for you, and without them almost a quarter of the nation’s oil production is at risk. They also note that default risks remain significant over the next two years. It seems pretty much like check mate, if there are no drastic and immediate reforms, which are unlikely without a change in the company’s governance.

But wait…don’t we produce enough to pay?

In 2016, PDVSA’s poor management along with the regressive subsidies of gasoline will amount to almost 2.5 times the debt payments due all year.

Bad news. In the first semester of 2016, according to Hernandez and Monaldi, net exports generating cash flows for PDVSA “…represented only 1.5 million b/d from a total production of 2.5 million b/d. The decline in production during 2016 had an effect on lost revenue, which we estimate at US 1,776 Billion. Adding the lost revenue from the domestic market to the existence of non-cash generating exports results in total “missing” cash flow of US$ 21 billion in 2015. If we add the cost of oil imports from the U.S., the combined negative effect on PDVSA’s cash flow is of US$ 25.7 billion”. In 2016, PDVSA’s poor management along with the regressive subsidies of gasoline will amount to almost 2.5 times the debt payments due all year.

But not all is doomed…according to Torino Capital’s Francisco Rodriguez.

In a recent report by Torino Capital, Rodriguez states that the situation might not be so bad and makes some observations to the paper. First, he implies that if Hernandez and Monaldi’s assumptions turn to be incorrect on the weight of local currency used in the industry and implies that their cash flow estimates might be terribly wrong. The costs per barrel can vary from 22$ to 6$ depending on which exchange type one uses, which can make a huge difference on cash flow estimates. But then again, distress signals seem to be very clear…Rodriguez just says it might be wrong but does not precise an alternative that backs his claim. Wait, Francisco, is there something we should know?

FRod argues that PDVSA now amount to an agency of the government rather that an independent company, hence it’s a two-way financing scheme. He implies that Central Bank reserves have been used for coupon payment and that PDVSA’s 2035 payment could be paid with the Chinese Fund. Rodriguez notes that “PDVSA’s soft budget constraint works both ways – when it has extra cash it can expect the government to use it for other purposes, yet when it has a shortfall of cash it can expect the government to step in and cover the deficit”. He makes his argument that we should not see PDVSA as an independent company by as part of the state, like a government agency. But, does this makes a significant difference?

I called Monaldi to see what he made of this.

“Our assumptions in this paper were rather conservative,” he told me. “The situation might well be worse than portrayed. In case any transfer was made from the government to PDVSA it would probably be just to reduce commercial debt with operational partners and contractors. The magnitude of the negative cash flow might slightly improve but it will still remain negative.” In other words, the cash flow is going to be negative regardless of what the government does but might be slightly less than estimated if the government decides to aid PDVSA through the Chinese Fund, BCV reserves or any other source of dollars.

For the situation to be so dire as to not being able to pay for a loaded ship of diluent at Curaçao, the cash flow has to be in very bad shape.

Monaldi stresses that the key to survival is production.

“If the government did not help there,” he says, “how is it going to help in anywhere else? For the situation to be so dire as to not being able to pay for a loaded ship of diluent at Curaçao, the cash flow has to be in very bad shape.”

Operating in Venezuela is increasingly difficult. The industry is struggling with rising costs in local currency, wild macroeconomic conditions, a law-and-order meltdown, debt with contractors and lack of human capital.

The paper highlights shortfalls of 70% in the case of valves and other specialized pieces needed in the industry and of 40% of engineering hours to meet the Plan Siembra Petrolera. How handy it would be to have all those guys who got fired in 2003 around just about now.

Some difficulties are structural and will take time to improve. Esto va pa rato.

PDVSA has been severely abused by the national government. Management performance is abysmal by any imaginable measure. According to Hernandez and Monaldi, PDVSA closed 2015 with around 150 thousand employees: a threefold increase from pre-strike levels, which translates into the lowest productivity per worker in 80 years of available data.

PDVSA has also shifted both financial, human and logistical resources to non-oil subsidiaries that also take a toll on the company. The PUDREVAL case is one good example of the oil-company not only dedicated itself to something else but doing so poorly. PDVSA is like an entrepreneur brother that has to support its entire family and loses its company because of that.

Finally, the authors conclude noting that the the massively dismissing of human capital, the nationalization of operators and service companies and over-extraction of resources have led to investment stagnation and production decline.

There is strikingly almost no knowledge of the current industry situation outside some select business and academic circles, which is worrying due to our heavy reliance on oil. Additionally to the political exit to the crisis, we should also be thinking, discussing and planning how to avoid a final crackdown of our main industry. It’s useless anyway to gain power and then have no room to change or finance the change to fix the crisis.

Understanding the Venezuelan Collapse

Originally published for the Blavatnik’s School of Government in June 2017 https://blogs.bsg.ox.ac.uk/2017/06/02/understanding-the-venezuelan-collapse/

How does a country go from the being the richest of its region to absolute collapse? Why have people been protesting daily for over two months? Moreover, why do people continue to demonstrate when over 60 people have been killed by State security forces? How bad can the situation get? What is next for Venezuela?

Although the current crisis has a clear political origin, its roots go deeper and are the consequence of a mistaken political economic policy that has led to Venezuela’s deepest socio-economic crisis in modern history. The current protests were sparked when the Supreme Court decided to dissolve parliament and transfer legislation to itself, an act the Opposition considered as a coup. Nonetheless, people are demonstrating today not only for democracy, but also to have the possibility of a normal life, where buying food and medicine is not an epic achievement.

How bad is the economy? According to Professor Jose Manuel Puente, Visiting Professor at the Blavatnik School of Government, who recently gave a seminar on Venezuela: The Political Economy that led to collapse, the country’s economy is the only one in the continent that will face economic contraction for a fourth consecutive year. Furthermore, in the last three years, close to 30% of the country’s GDP has disappeared, causing a severe scarcity of basic goods and the highest level of inflation in the world.

Sometimes, when the magnitude of an economic crash is so great, it is hard to see its impact on everyday life. Well, according to an independent study conducted by three private and public universities in 2016 (the government has not released official data since 2015), the Venezuelan population lost an average weight of more than 8 kgs, while 82% are  below the poverty line.

But how does the country with the largest oil reserves in the world reach this point of economic crisis? If the Bolivarian Revolution did in fact bring its promised riches for all, then how did the country collapse? Why are people struggling to find food and medicine? Can it be explained by lower oil prices? Again, Professor Puente sheds some light on the subject. The collapse started before the fall of oil prices. The contraction of the economy started in 2013 with oil prices averaging over USD 100 a barrel due to currency controls, price controls, expropriations, corruption, lack of transparency, and irresponsible fiscal and monetary policies. Clearly, when 97% of exports are oil, any shock has an impact. But what Venezuela is currently experiencing is the result of negligent economic policy lasting for almost two decades, including the largest boom in oil prices in history.

The solution was worse than the disease

How has the government responded to the crisis? In the political arena, it announced a National Constituent Assembly without electing its constituents through universal and direct votes, and decided to withdraw from the OAS while continuing to imprison opposition leaders, ban them from running for office and destroy their passports (even when they were en route to the UN to denounce human rights abuses). By-the-book classical dictatorship.

As for the demonstrations, censorship over the coverage of protests has increased, as has the jailing of government opponents. In addition, security forces have killed dozens of people and injured thousands with tear gas bombs fired at very close range, illegal ammunition, and simply by shooting at demonstrators.

The Attorney General – one of the icons of Chavism – recently broke lines with the government when it intended to dissolve the National Assembly. This has created stark tensions within the ruling party.

Moreover, investigations from the AG have attributed direct responsibility to the security forces for the assassination of demonstrators. Although the Attorney General behaving as a non-partisan actor should not be surprising, given the institutional decay of the last years, it has been a surprise for Venezuelans.

Economically, the government has tightened controls on prices, distribution and any aspect of the economy that can be controlled. Furthermore, it pays one of the highest yields on national debt (State and National Oil Company) and prefers to pay money to Wall Street rather than import food and medicines for its population. And, ironically, the self-proclaimed socialist government has been most recently aided by one of the icons of capitalism: Goldman Sachs, who ­– clearly with no ethical remorse ­–  bought USD 2.8 billion (with an impressive 69% discount rate) in what Professor Hausmann has called “The Hunger Bonds”, giving oxygen to the dictatorship.

Instead of rectifying the economic policy, the government has increased the pace towards absolute destruction. The consequences will be felt deeply by all Venezuelans. The only hope for economic recovery is if there is a political change first, but will it come?

There is no clear answer. Like any crisis, the situation changes by the hour and casualties of young people like Miguel Castillo at the hands of security forces increase. I am optimistic that fractures in the government will increase and that with popular pressure on the government (demonstrations have, incredibly, not lessened) and a unified opposition, it’s only a matter of time until the country makes the transition back to democracy. Some benefits of this transition will be felt immediately, but reconstruction will not be easy, nor will healing the wounds of a polarized society and a ruined economy.

In the meantime, the international community should continue to put pressure on the government to call general elections that would allow the population to decide its own political fate. As for Venezuelans, within the country the pacifist struggle should continue to achieve peaceful change, and those abroad should create awareness on the heinous human rights violations happening back home.

The AN’s Insane New Police Social Security Bill

Originally written for Caracas Chronicles in September 2016 https://www.caracaschronicles.com/2016/09/08/the-ans-insane-new-police-social-security-bill/

The National Assembly has just put forward a bll to overhaul social protections for cops and it’s…bad enough it almost makes you thankful that everything they do is null.

By

Santiago Rosas

 –

September 8, 2016

18

Imagine Venezuela but with 30,000 fewer police officers and maybe an extra point of GDP in deficit. It sounds absurd, but some new legislation is trying hard to get us there.

Recently, the National Assembly held the first reading of a Social Security for Police Officers Bill aiming to improve police living standards and to make the profession more attractive. The bill would allow police officers to retire after 15 years of service and create a special Fondo Régimen Prestacional de los Servicios y Beneficios Sociales to be managed by a certain-to-become-a-corruption-cesspool Instituto Nacional de Seguridad Social del Policía, modeled on IPASME or IVSS.

The new institute would provide things like medical services, scholarships for policemen and their children, funeral expenses, and other benefits. One clause establishes the right to access health-insurance services, although it is unclear if it so as a complement or alternative to the services mentioned above

The bill envisages the creation health care centers specially for policemen and special benefits that the government must abide with such as bonuses for marriage, birth of a son or daughter, standardized uniforms endowments and travel allowances, among others.

First things first: do cops need better conditions? Definitely. According to some estimates, the country needs about twice as many police officers as it now has. Recruiting enough qualified new people into such a high risk profession is impossible unless you offer them a proper deal.

But the bill put forward by UNT’s Delsa Solorzano in the Interior Policy Committee of the National Assembly is very much not the way to get there.

A whiff of Armed Forces envy hangs over the bill.

Unlike economics, law and order policy is dimly understood even by the experts. Politicians go out of their way to avoid dealing with the problem and leave it in the hands of the military and the government. This is true on both sides of the aisle: just think how seldom you hear an opposition mayor or governor discuss law enforcement in any kind of depth.

But with the public more aware than ever over the cruel reality police officers face as they try to fight armed gangs, dying by the hundreds each year, the time is ripe for a debate.

A whiff of Armed Forces envy hangs over the bill. If the FANB have their own Social Security Institute, Bank, Television, Oil-Company, Hospitals, Universities, and they don’t even have to go fight choros on the street, but just prepare for war in a country that has never gone to war. So it seemed only fair that —finally— Police Officers would get some of the same perks.

So, why not start by dealing with the terrible, borderline-subhuman conditions policemen work in?

The bill now making its way through the A.N. is absurd economic terms: just parallel health structure it would require would break the bank.

The bill now making its way through the A.N. is absurd economic terms: just parallel health structure it would require would break the bank. What’s worrying is that our politicians have learned nothing from the chaos, disorder and disappointment that the traditional Social Security System (IVSS) leaves in its wake.

Neither have they learned the lessons from a similar law implemented by the Education Ministry: the sadly infamous IPASME. The new project for the police copies the same failed structures and features of IPASME and the IVSS and imposes a heavy budgetary burden not only on the national government but also on the states and municipalities that are already in the verge of bankruptcy. Are we really sure that a new public health organization can do the job that IVSS has failed at?

We know the public health-care system has completely collapsed —nothing new here— yet a major feature of the law is the creation of more state-owned health centers.

The sad reality is that nobody trusts public hospitals in Venezuela. When public sector unions go to negotiate a collective bargaining agreement, the first thing on the agenda is the HCM — the private health insurance component. It makes sense. Why get a gunshot or appendicitis treated in at the hideously under-resourced public hospital at El Llanito if you can do so at the gleaming private Centro Médico Docente La Trinidad?

Worse yet, the bill does nothing to address the biggest problem cops face: housing. Is Fuerte Tiuna just for military officers? Come on! That has been one of the major benefits of the military in the Chavez-era. If you are making the similar laws as chavistas, you might as well get right the few things it got right. Policemen and their families are logically scared living in the same barrios as the malandros they have to fight. Just recall the 17-year old son of a Policaracas Police Officer that was killed in El Cementerio purely because his dad was a cop.

But where the bill really fails the test of common sense is where it sets the retirement age after only 15 years of service. Amazingly, time spent training at the police academy counts towards that total. This means that someone who went into police academy at the age of 18 could retire with full benefits at the ripe old age of…33.

WTF?

If the bill becomes law, according to MP Franklin Duarte’s estimate, between 20 and 30 thousand officers would be entitled to retire early. At a recent debate on the law he argued, lamely, that they would not leave service because “they know things are going to change in Venezuela”.

Te damos CADIVI a 6,30 Bs para que vendas en bolos a 6,30. #AhOk

Financially, just assume that person lives up to, say, 75 years of age. This means that for 13 years of service (the first two are spent at the Academy) the state has to pay wages for 42 years. The State will be maintaining the person more than three times the time he served. Seems a difficult promise to keep up with. And the police service would be perpetually deprived of experienced cops.

When asked in a public consultation about the financial viability of the proposal, Solórzano told the audience that “if the government has money to buy tanks and 400K go to Cuba, then it should have for this law. That’s not my problem.”

Chamo, Tomás Guanipa and Solorzano must be sharing economic advisors.

This bill shows dramatically that our political leaders have yet to learn from our mistakes. Proposals are put forward with a view to political gain, totally divorced from any serious feasibility or medium-to-long term impact study.

Public safety is in everyone’s mouth but in nobody’s hands. I wanted to believe the opposition would be different, but I can’t. After five years without being able to pass any legislation, one would expect professional, innovative and sound proposals, not improvised bodrios. We cops were expecting Nutella and we got Choconut.

The failure of the Misiones on poverty reduction

Originally written for Caracas Chronicles November 2016 https://www.caracaschronicles.com/2016/11/11/failure-misiones-poverty-reduction/

Social policy planners in Venezuela today are like field doctors in a war zone: if they actually stopped to register emotionally the devastation all around them, they’d never be able to get any work done. Today, Venezuela is undergoing the most brutally painful economic and social calamities probably since the Federal War. Sitting around feeling horrible about it, though, is not a luxury policy planners can afford.

As the government pathetically tries to hide the scale of the crisis, researchers at UCAB, UCV and USB, through the ENCOVI survey, have gone to work doing the government’s job: quantifying poverty, pinpointing its location, understanding where the gaps are in the government’s safety net and laying the groundwork for what comes next.

With this data, UCAB’s Luis Pedro España, probably Venezuela’s leading poverty scholar, teamed up with sometime Caracas Chronicles contributor José Ramón Morales and Douglas Barrios from Harvard´s Center for International Development, to write a paper to bring some insights into poverty and the main governmental strategy to address it: the Misiones.

Poverty-reduction policies ought to be targeted to those who need them most and focus on building capabilities or social infrastructure to make efforts sustainable. But as you read read this paper you realize that Misiones are not just regressive and inefficient they’re targeted at all the wrong people.

As España, Morales and Barrios point out,

“…according to data from ENCOVI, the beneficiaries of the social programs are mostly non-poor. Only 40% of the beneficiaries would belong to homes living in poverty measured by unsatisfied basic needs”. In the case of the state’s subsidized food provision program, Mercal, the authors noted that “ the current administration excludes 73% of those in structural poverty (unsatisfied basic needs), meaning that at least 7 out of every 10 poor declare that they are not beneficiaries from Mercal.”

On capacity building, what started out as programs seeking to tackle structural causes of poverty such as education and work through Misión Robinson, Ribas, Sucre and Saber y Trabajo quickly morphed, as the government went crazy and started handing out money to their political base in any way they could.

As the paper puts it,

“…Between 2014 and 2015 there is an increase in programs that offer health services and food, while those aimed to provide tools for structural change of the social situation of their beneficiaries (work and education) represent the biggest fall. Education Misiones (Ribas, Sucre and Robinson) show decreases between 70% and 45% while the formative (Saber y Trabajo) the reduction reaches 80%”

the current administration excludes 73% of those in structural poverty (unsatisfied basic needs), meaning that at least 7 out of every 10 poor declare that they are not beneficiaries from Mercal

During the same time, populist programs that addressed the consequences of poverty increased. A very clear and tragic example is provided again by España, Morales and Barrios when analyzing Mercal and Bicentenario. They highlight that the increase from 2014 to 2015 in beneficiaries for MERCAL is 5 million – Or 17% of the population – in one year! Misiones currently are like paying food with your credit card and forgetting how to make more income to pay it back.

Ok we know that Misiones were a partial success at best…but how deep in trouble are we?

There are two dimensions to it. The first is the current situation of poverty. As of 2015, slightly more than 3 out of every 4 people in the country were living below the income poverty line.

This measure reacts quickly to shifting economic conditions, so it’s not surprising the measure shot up from 55% in 2014 to 76% in 2015. I can’t even imagine the figures for 2016. Forecasting 2017 with the current situation feels like going to a talk after your girlfriend has told you “tenemos que hablar”, nothing good can come out of it.

The second dimension is how well is the State prepared to make significant changes in the short and medium run. Recall that, more and more over the span of the oil boom, the Chávez and Maduro administrations created a totally discretional parallel system that made people more dependent on oil rent distribution.  Why go to the trouble to set up a sustainable, planned pension provision when you can just hand out petrodollars to viejitos through Misión en Amor Mayor? And housing policy? Who needs BANAVIH when you can have Gran Misión Vivienda Venezuela and straight-up give out apartments (but not titles, obvio) to your political clients?

The country has no social protection program. The Misiones Sociales weren’t conceived as such.

Misiones were of questionable efficiency as policy tools, but they were highly efficient politically. They gave general subsidies to the population, simply to anyone who wanted to join. It is basically just giving money while doing nothing to increase people’s capabilities to allow people to escape poverty by their own means.

Misiones are not sustainable, they create dependency and do not even properly focus on those who really need them. Inversion Social has been undertaken for political benefits. Substituting the private sector in the provision of food with subsidies, for example, can only work in the short term with high oil prices.

So, how to address poverty and Misiones?

The authors give some hints in their conclusions:

The country has no social protection program. The Misiones Sociales weren’t conceived as such and therefore can hardly be the starting point of a social protection program. (…) limited reach (30%) leads to us to think that it will be necessary to develop a new, massive direct transference program complemented with a much more reduced indirect subsidies scheme.

Lastly, we believe that direct transfers should have to be complemented and form part of a structural reform of social programs. The strengthening of social and educational services, feeding plans focused on the most vulnerable, third age social assistance not covered by current services as well as all referred to access and cost of medicines can not be ignored in a short term social plan.

In any case, brace yourselves, hard times are coming.