Venezuela's economy is a tangled mess

Venezuela's economy is in an endless state of disarray. Inflation is soaring, and basic staples are increasingly harder to find. Electricity blackouts are frequent, and crime presents an enormous problem for citizens and companies crazy enough to do business there.

The problem for Venezuelans is that their government has no clue as to what to do.

The dire state of the economy is the one thing both sides of Venezuela's contentious political scene can agree upon. Yesterday, the Central Bank announced that the monthly inflation rate for April was 4.3 percent, up from 2.8 percent in March. These monthly rates are higher than what many countries see in an entire year. In fact, accumulated inflation for the first four months of 2013 has already reached 12.5 percent, and it shows no sign of slowing down. Crucially, the prices of "food and non-alcoholic beverages" segment -- which affects poor consumers the most -- grew by 6.4 percent last month.

Venezuela's persistently high inflation has several root causes. Because of repeated elections and populist tendencies, the government continues to spend much more than it earns via taxes. Since it has few options to finance its deficit, it has been forced to devalue the currency twice this year, and this means producers - who mostly rely on imports to supply the market - are forced to pass this on to consumers.

Taming inflation would require the government to order their finances, but the administration seems reluctant to do so. For example, according to government sources, giving away gasoline for (practically) nothing costs Venezuelan taxpayers $24 billion in direct subsidies and lost revenues. This amount represents roughly a quarter of all spending included in the 2013 budget. But regardless of how dire the situation is, the government refuses to consider decreasing subsidies because it is fearful of a public backlash.

Unsurprisingly, it is getting harder to find items such as sugar, cooking oil, and corn flour -- an essential part of any Venezuelans' diet. According to latest figures from the Central Bank, scarcity peaked in April to reach a historic record of 21.4 percent. This means that roughly 1 of every 5 products consumers want to purchase is missing from the shelves. Not surprisingly, Venezuelan consumers are being forced to queue for basic staples, sometimes in an undignified manner. The photo above shows shoppers noting their place in line while shopping for corn flour.

Rolling electricity blackouts continue to be yet another thorn in the government's side. They've been the norm following the complete state takeover of the electricity industry in 2007. Sadly, newly appointed Electricity Minister Jesse Chacón has already shown signs that he does not have the understanding or the willpower to seriously address the problem.

Chacón has hinted that part of the issue is the bloated workforce in the state electricity companies, which currently has at more than 50,000 employees. However, he has vowed not to let workers go. Instead, he proposes dividing the state-owned electricity holding into different subsidiaries, something that will clearly not alter the underlying financial realities of the company.

He has also announced a rise in heavily subsidized electricity rates, although several details -- such as the amount of the rise and who it would apply to -- remain unknown. This might make sense in theory, but in practice will do nothing to inject fresh cash into the sector, since the country's soaring inflation will eat away any short-term financial benefit from the rate hike.

On the issue of crime, the government is also showing little creativity. They have publicly met with gang leaders, and are calling out to them, urging them to change their ways. Sadly for the government, they do not seem to realize that gangsters are not susceptible to persuasion or public pleas. The government's other response -- putting the military on to the streets -- may create more problems than it solves, since the military is not adept in law enforcement tactics, and is corrupt anyway.

Noted Mexican journalist Alma Guillermoprieto recently wrote in the New York Review of Books that the Venezuelan government is collapsing "into a scary collective insanity." She adds that "the growing tumult and disorder is so extreme, so clearly provoked, and so destructive that one must at least consider the possibility that it is being encouraged by defeated chavista rivals now smelling wounded prey, or from those sectors of the military who have never welcomed the Cuban presence in Venezuela, or both."

Whether the chaos in Venezuelan society is provoked or not, the fact remains that ordinary Venezuelan citizens are suffering the brunt of these mistakes. The problems currently accumulating are so large, so seemingly intractable, it's not a stretch to say that solving them will be a task for an entire generation.

Juan Nagel is the Venezuela blogger for Transitions. Read the rest of his posts here


Tunisians, we are also African


The multilingual residents of Tunis, Tunisia's capital, fancy their city on the Mediterranean to be a thriving, cosmopolitan metropolis. But not everyone is welcome. "Not a day goes by without a black African suffering from racial abuse. The most often-used insult is guira guira which, according to some means in a local dialect ‘big monkey'" says a student from Côte d'Ivoire. "For many Tunisians, we black Africans are savages."

Last week a student from Senegal screamed for help as a group of men started throwing stones at his apartment. He called the police -- but it was he who was arrested instead; evidently the color of his skin means that he is not wanted in this cultural heartland. The man lived in the neighborhood of Lafayette, in an apartment complex residents call "the blacks' building." The tenants are often students from sub-Saharan Africa enrolled in private universities.

According to a witness who filmed the events leading up to her neighbor's arrest, the fight began earlier in the day when a taxi driver called the Senegalese man guira guira during an argument. Things began to escalate when the taxi driver took out a baton to "teach" him a lesson. After being fought off, the driver came back later in the evening to take revenge -- and he was not alone. Backed by a group of men equipped with stones and sticks, they shouted: "Ben Ali is gone. This is Tunisia, not Africa!"

When the police arrived, it was the victim who was forced into the patrol car. Two hours later he was released, yet the armed men who threatened him got away scot-free.

The incident was strange to many Tunisians. We are part of the African continent; our roots as Africans are deeply embedded in our cultural heritage. But today, some of my fellow Tunisians think that our African neighbors are "intruders" who want to "taint our purity." The fall of the Ben Ali regime unveiled the previously overlooked phenomenon of xenophobia, especially regarding those from south of the Sahara.

Now in a climate of free speech, the uproar from the victims of discrimination has reached fever pitch. In an apparent security vacuum, attacks against the country's many African students and migrant workers are on the rise. Before the revolution, the rule of law was intact and the rights of the African immigrants were preserved since the former dictator Ben Ali was concerned with propagating an embellished image of Tunisia where stability and peace would reign. But discrimination based on skin color existed even in the "golden" days of "stability" and "peace" under the dictatorship of Ben Ali. The myth of Tunisian tolerance needs to be revealed for what it is: a myth. The stigmatization of skin color applies even with Arab Tunisian, as those with darker skin are also subject to bigotry and mockery.

It is upsetting that Tunisians still use the word wassif to refer to dark-skinned people, an Arabic term from when it was common in the Middle East to have African slaves. Unfortunately, this injustice was not swept away along with the 2011 revolution; racism abounds as many dark-skinned citizens of Tunisia still bear the legacy of slavery. During the reign of Ben Ali, racism was a taboo subject not discussed. Even though the phenomenon was endemic and rife; "black" Tunisians simply suffered in silence. To the outside world, Tunisia was promoted as the cradle of tolerance.

Overcoming racism should be prioritized as we fight for the transition to democracy. Politicians, religious leaders, teachers, activists, and all Tunisians should combine their efforts to eradicate it, because equality and human dignity of all citizens it essential for a prosperous and successful democracy.

Meriem Dhaouadi is a graduate student majoring in English Language and Civilizations at the University of Tunis, Tunisia. She is also a regular contributor to