Monday, January 06, 2003

Venezuela is at the point of complete collapse. The rumors are that "a state of exception" will be declared, which will allow the Chávez government to shut down the press and force the banks to open, among other things. All constitutional guarantees to the citizenry can be suspended. A TV poll says that 81.5% of the Venezuelans will not abide by the "state of exception", although I have no idea whether they've got any choice in the matter. One thing, though, is that when the shooting starts, which it will, Chávez will not go down without a fight. The people have turned completely against him except for his hard core of lumpenproletariat (that is, poor and not too bright or law-abiding) supporters, less than 10% of Venezuelans. Meanwhile, the month-long general strike is hurting the government badly; it will have to suspend payments on its international debt if the strike goes on into February. Chávez had already wrecked the Venezuelan economy with Peronista-like reckless social spending of money the government didn't have, and lack of economic professionalism and competence on the part of the government. Now he's not collecting any tax money, either, and the economy has ground to a halt. There's not even any oil, since the workers are striking, and Lula da Silva has to send oil from Brazil to prop Chávez up. The banks are threatening to strike, too, and the government has announced that it will intervene if they do. 40% of the Venezuelan banks' money is on loan to the government, which means they are hostages; it the government doesn't pay back what it borrowed, they crash. The two big Spanish banks, Santander and Bilbao Vizcaya, hold $1.5 billion in Venezuelan government bonds; their investment is starting to look like it's really worth about $1.50. Venezuela is at the brink. If Chávez won't step down, which he won't, the military needs to step in. If the coup in Chile in 1973 was justified, which I think it was (NOTE: the killing of some 4000 people in the wake of the Chilean coup was NOT justified), this one is even more so.

According to the World Almanac per-capita income in Venezuela was $8000 in 1999. Chávez has probably managed to cut that in half, and with the strike, people's incomes are approximately $0. No situation like that can last long.

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