Tuesday, October 20, 2009

Cell phone nation 

With the economic slowdown finally impacting Venezuela the bright lights of the "revolution" came to the conclusion that part of the problem was that they weren't pissing away enough money by giving out cheap dollars to import consumer goods.

So a couple of weeks ago they pissed away $5 billion (actually, they went borrowed that amount) giving out cheap dollars so people could take money out of the country (ie, they facilitated the "capital flight" they have always complained about) and importers could start bringing in more consumer goods. Now PDVSA is about go into debt to the tune of another $3 billion to again facilitate capital flight and waste money subsidizing middle class consumers.

What can we say, the insanity continues....

But there is more.

First, we have Jessie Chacon talking about how next year they will give $4 billion in cheap dollars to the auto sector (read, General Motors, Ford, Toyota and even the trade unionist killers Mitsubishi) who will presumabely assemble more cars in Venezuela. Never mind the question of whether or not Venezuela should really be spending $4 billion more on subsidizing car purchases for middle and upper class Venezuelans.

The real question is why don't they use that $4 billion to actually build a true domestic producer of automobiles instead of just giving money to transnationals to continue assembling kits which in and of itself will never get Venezuela anywhere?

The answer of course is too obvious and too sad - Venezuela has no plan to actually build a real automobile manufacturing industry. They prefer to spend their money to temporarily boost consumption and temporarily boost Chavez's poll numbers.

When they did that in 2005 and 2006 this blogger naively thought it was a temporary and necessary expedient due to the important elections at that time. Now it is clear it is actually their permanent way of doing things as they have no strategy beyond buying enough support to keep winning the next election. In other words, they want power not because they have ideas on how to make the country more prosperous, they want power because they happen to like having power. But I digress....

Today the silliness got even sillier. It appears that in the governments view one of the most harmful aspects of the current slowdown is that.... cell phone prices have gone way up.

Chavez may not have any development plan, but he is smart enough to realize that one of the quickest ways for him to get his ass run out of Miraflores would be for Blackberrys to be out of the reach of middle class Venezuelans. If he has to choose between empty shelves in the local Mercal or empty shelves in Movistar he sure knows which one is more tolerable... and it aint Movistar.

Soooooo, the government has taken drastic measures to make sure that millions of cell phone are brought into the country - and just in time for Christmas.

But just getting the cell phones into Venezuela isn't enough. They have to be CHEAP cell phones. If come Christmas your average Venezuelan can't afford to make hallacas that is one thing, but if they can't get a cheap new cellphone with all the latest features all hell will break loose. So now Venezuelan Ministers are strong arming the cell phone companies and making it clear to them that if the government is going to piss away billions making sure they can import cell phones cheaply they expect the cell phone companies to lower their prices.

All the silliness pointed out in this post is to say: 20 or 30 years from now when people are trying to figure out why Venezuela is still a shitty little thirld world country in spite of it having gone through a huge oil boom they'll probably be wondering "What the hell did they spend all the money on".

And part of the answer will be... cell phones.

If nothing else, at least Venezuelan's know what their priorities are.


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