The Venezuelan
National Assembly spent this week dealing with something urgent: Trying to hide
reality. The whole thing would be laughablem if it were not so tragic and stupid
that their first priority after the referendum was to revise the
Foreign Exchange Illicits Bill, which establishes the regulations and
penalties around the exchange controls in Venezuela.
The Bill,
much like the previous one, makes the “parallel” swap market
absolutely legal by
excepting from the regulations all securities (Art.9) but then it wants
to hide that same reality that males it legal by prohibiting anyone (Art. 17) from
divulging what the price of the parallel market is:
“Anyone
that offers, announces, divulges in written, audiovisual, radio
electric, computerized or via any other media, financial information or
exchange information the price of foreign currency other than the
official one will be fined 1000 tax units (About Bs. 37 million Bs. or
US$ 18,000 at the official rate of exchange)”
Can they be any more stupid and control-oriented than this?
After all,
the Venezuelan Government sold over
US$ 11.3 billion in securities during 2007 into precisely the parallel market, in order to bring the rate
down (unsuccessfully mostly!), not only recognizing its existence but
even benefiting from it by selling foreign currency at a price higher
than the officials exchange rate of Bs. 2,150 per US$.
Some
people think this is censorship. I think this is so ridiculous and silly that I
will simply call it stupidity. What’s next? Prohibiting anyone from
revealing crime statistic to see if crime will go away? This follows the issuing of epidemiological bulletins to hide the reality of health issues in Venzuela.
The
worst part is that in the end this will simply hurt market participants,
who will have a harder time finding out what the “right” price is, as
the measure will make the price less transparent in the end. As
transparency is lost, people are likely to pay sometimes more than they
should or get less than they should, as they will have fewer reference prices to learn what the very
active parallel market is doing. This means that some sites like
Veneconomia will no longer be able to publish the price of the parallel dollar. I don’t know about others like
bonos venezolanos,
dolar paralelo and
Venezuela fx, all of which are hosted abroad and don’t reveal who is behind them.
It
also means that newspapers and the media will not be able to have
stories on the parallel exchange rate moving one way or the other. In
my case, I will refrain from mentioning it explicitly, but if there is
something interesting to talk about, you can be sure I will fond spme
form of euphemism to discuss the parallel rate if it seems important.
This
is all part by the stupid frame of mind by Chavismo of controlling
everything. Their infinite belief that Government can be all powerful
and efficient and can manage to control anything. In fact, the same
Bill gives the Ministry of Finance the responsibility of enforcing the
penalties in the Bill. Funny thing is, that Ministry does not have the
personnel or ability to do that, so it will have to start a new
Department, hire people and most likely they will do little in the end.
Other changes to the Bill are mostly
insignificant, it increases penalties, says people can not transfer the
official dollars assigned to them, establishes that importers will
have to say in their import manifest where they obtained the foreign
currency and stores will have to post whether their products have been
bought with dollars at the official rate of exchange.
Meanwhile,
since the now infamous Maletagate case, the National Assembly has done
very little on it, no investigation, nobody is asking where Mr. Antonini got his US$
800,000 in cash, how he got it out of the country and what he was
planning to do with it. So much for laws, Bills and having the little
guy prove what he spent his $3,000 Internet quota, while who knows how
many suitcases full cash left Venezuela for Argentina and the National
Assembly does not even want to look into it.
Which
only proves how stupid the whole thing is. The recently approved Bill
will be applied to enemies and those that do not sympathize with Chavismo, while the Government’s buddies and sympathizers are
protected and defended, while those that participate in the parallel swap market get
screwed by the Government’s prohibiting that people know what is real
and perfectly legal.
You got to love the stupid revolution!
