Understanding Venezuela’s collapse

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first_img Election of Bolsonaro is likely to test democracy there, and regionally Brazil at the crossroads Thousands of angry demonstrators in Venezuela took to the streets again this week to protest the government of President Nicolás Maduro, two weeks after he was sworn in for a second term following an election that many critics say was rigged. The protests were organized by opposition leader Juan Guaidó, president of the National Assembly, who has assumed the role of interim president in accordance with the country’s Constitution until new elections can be held.Once one of the richest countries in Latin America with the world’s largest oil reserves, Venezuela has been in political, economic, and humanitarian freefall in recent years. Many observers blame Maduro, along with his predecessor, Hugo Chavez, whose policies pointed toward helping the poor and reducing inequality instead sent the economy toward decline, with political corruption reportedly rampant. With the economy failing, millions of Venezuelans have fled the country, and the International Monetary Fund anticipates the inflation rate there will hit 10 million percent this year.To understand conditions and their causes, the Gazette spoke with Ricardo Hausmann, the Harvard Kennedy School’s professor of the practice of economic development and director of the Center for International Development (CID), about current concerns and what steps the country might take to steady itself. Hausmann, who was the minister of planning in Venezuela (1992-1993) and a member of the Board of the Central Bank of Venezuela, now leads a research initiative on Venezuela run by the CID’s Growth Lab.  Q&ARicardo HausmannGAZETTE: What is the situation on the ground?HAUSMANN: The current situation is the biggest economic collapse in human history outside of war or state collapse. The GDP has fallen by well over 50 percent. That is double the size of the U.S. Great Depression. It’s double the size of the Greek crisis. It’s double the size of the economic collapse that occurred during the Spanish Civil War. It is something of really unique proportions. The consequence of that collapse is expressed in the fact that the minimum wage today is $6 a month. That means that the minimum wage does not buy two eggs a day. It buys something like 700 calories a day. It means that because you don’t have the calories and the proteins and the medicines for 30 million people, people are losing weight. This has been measured at something like eight kilos a year on average — there is in that the stunting of children’s growth.People are also fleeing the country. We did a study using Twitter, and we estimated that last year something like 10 percent of the population left. We tracked the number of people abroad using Facebook, and we estimated that 5.3 million people had fled. These numbers are a little bit bigger than what the United Nations has reported, but we have reasons to think that our estimates are conservative. So, there are shortages of electricity, of water, of transportation. There are no buses, there are no trucks, and there are no tractors because of a shortage of spare parts. There’s no cooking gas, there’s no gasoline. That’s the current situation. It’s a humanitarian crisis of Syrian proportions. “The current situation is the biggest economic collapse in human history outside of war or state collapse. The GDP has fallen by well over 50 percent. That is double the size of the U.S. Great Depression.”,GAZETTE: How did Venezuela get here?HAUSMANN: I think there are three fundamental elements that explain this catastrophe. The first one is something you might want to call an attack on the invisible hand, or an attack on basic economic rights. In a market economy, somebody’s need is another person’s livelihood. For years now, people have made fun of the fact that in Venezuela there is a shortage of toilet paper. In other countries, if people want toilet paper, it’s in the interest of others to supply it. But if the suppliers have no property rights, if they cannot access foreign exchange or the raw material or the machinery they need to make toilet paper, if they cannot set a price that lets them recover their cost, then there is the need but there is no incentive to supply that need, and that mechanism has been destroyed. That market mechanism, that invisible hand, in Venezuela has been destroyed by massive expropriations and massive controls.Six million hectares of agricultural lands, supermarket chains, coffee processing plants, dairy processing plants, the cement industry, the steel industry, banks, detergent factories, tire factories, telecoms, and so on have been expropriated. It’s been expropriation across the board. Those that haven’t been expropriated have been restricted in their ability to buy foreign exchange, to buy imports, to set prices, to decide who they sell things to. Their production has been requisitioned by the state. All of this has created this destruction of the market mechanism. That’s item one.Item two is a very severe shortage of foreign exchange. Imports are down more than 85 percent from 2012. Private-sector imports are down almost 95 percent. So, in the country there is a shortage of raw materials, intermediate inputs, spare parts, and that prevents labor and stalls capacity. I like to use the metaphor that Venezuela is like a taxi driver who owns his taxi but doesn’t have gasoline and doesn’t have the money to buy the gasoline. So his labor goes unused, his car goes unused. If you provide him with the gasoline, he will use his car, he will earn a living, he will pay for the gasoline, he will fill his tank and continue working. We need to address this very serious shortage of foreign exchange that is keeping production way below potential, which in itself is a product of mismanagement.Oil production in the country is less than half of what it was when Maduro came into power in 2013. And it’s less than a third of what it was when Chavez came to power in 1999. Even though Venezuela sits on top of the largest oil reserves in the world, they are easily accessible with zero geological risk, the government, instead of allowing oil production, focused on expropriating the companies that had provided services to the oil companies, and that brought a catastrophic collapse in output. They fired 20,000 workers of the oil industry and then they stocked it with supporters. That’s a big reason why there is a shortage of foreign exchange.Thirdly, they used the period of high oil prices between 2004 and 2012 not to save for a rainy day, but to borrow as it if was going out of fashion. They sextupled the public debt in the middle of an oil boom, spending as if the price of oil was at $200 a barrel when it was only at $100. When the markets decided that Venezuela’s debt was too big, they stopped lending, and the price of oil collapsed. That explains why the shortage of foreign exchange is so severe. Ultimately, this meant the collapse of the state. Today, the government is unable to ensure security. Caracas is the world’s most murderous capital, and issues that have been the responsibility of the state, like electricity, water, health, have collapsed.GAZETTE: What are the priorities moving forward?HAUSMANN: The new government will first have to re-empower society with basic economic rights. That includes the factors I mentioned, the right to own securely, the right to buy foreign exchange, the right to import, the right to set prices. That should also affect the oil industry. The government would like to be the sole producer of oil, but it doesn’t have the money to do it, and it won’t let other people do it, so there needs to be reform of the oil production law.Two, we need to deal with the foreign exchange constraint. That will involve international financial assistance, probably a significant program led by the International Monetary Fund, along with a restructuring of the public debt that was so irresponsibly accumulated in the past. Third, we need to recover the capacity of the state to perform its basic functions.The international financial assistance will kill two birds with one stone. It will allow the country to import more raw materials, intermediate inputs, spare parts, to recover production to make the taxi driver drive again, and it will also allow the government to fund its spending without printing money, which is a direct result of the collapse in oil production and prices as well as the collapse in tax revenues coming from the domestic economy. Tax revenues went from something like $8 billion a year to $1 billion a year. That meant that revenues were falling so quickly the government just printed the difference, which led to hyperinflation.GAZETTE: How has your program at Harvard Kennedy School been involved in helping address some of these issues?HAUSMANN: At the Growth Lab at Harvard’s Center for International Development, we started a program on Venezuela about three years ago, similar to the programs we’ve developed in other countries: Albania, Sri Lanka, Jordan, South Africa, Ethiopia. Our program in Venezuela is called the Morning After Plan. It’s been three years of waiting for the morning after, and we still are waiting. We started working with the Venezuelan National Assembly, which has been opposition-controlled since December 2015, on reaching a political consensus with the assembly’s parties on how to get out of this mess. This past September, 45 Venezuelan leaders from the assembly came to Harvard for a four-day brainstorming session we organized where they discussed paths forward. That led to a political agreement among this broad coalition of parties and to the roadmap that Juan Guaidó recently presented. We are very proud to have contributed to what the road forward looks like. The Daily Gazette Sign up for daily emails to get the latest Harvard news. Juan Manuel Santos, who won the Nobel for stabilizing Colombia, is back at Harvard to share what he learnedcenter_img Related GAZETTE: It appears Maduro still has the backing of the military, and the armed forces will be central to any shifts of power. Do you expect them to switch allegiances any time soon?HAUSMANN: The military is being severely controlled by the Cuban secret police, with 300 senior military officers in jail. The government realizes that if the military is needed to quell a rebellion, the rank and file is unlikely to obey them. As the economy worsens, the government is increasingly unable to pay its soldiers. There is no gas for the military to move troops around; their forces are not operational. As a result, Maduro has allowed them to loot the country. Members of the military used to go out on weekends with their wives or families in uniform, but no member of the military would dare be seen in uniform right now because they have lost the respect of the people. It’s been extremely destructive for the military institution.GAZETTE: What will it take to make change happen? What will be the tipping point?HAUSMANN: That’s probably above my pay grade, but I think that is in the making if you compare the current situation to Jan. 4, when we did not have this new, charismatic president in the National Assembly, his courage, his vision, his youth, his enthusiasm, his ability to connect, his seriousness. There is suddenly this Guaidó mania in the country. He has also been able to make the National Assembly a legitimate form of power despite the December 2015 elections that the government tried to steal. Fortunately, at the time a strong international presence forced Maduro to accept defeat, and the opposition got a two-thirds majority. But then Maduro sidelined the assembly, taking away its powers and ruling by emergency decree, and he has ruled unconstitutionally ever since. Though the National Assembly was a weak institution, suddenly it became the only legitimate democratic institution in the country. Guaidó has been able to get things passed with unanimous votes of the opposition parties. Very importantly, he recently passed a transition bill that is going to regulate and end the usurpation of power and define the terms of this transition government that is supposed to get us to free and fair elections. He has been able to unify the Venezuelan opposition around a common agenda.GAZETTE: President Trump has indicated that he would consider sending troops into the country in support of Guaidó. How would that kind of move be received on the ground?HAUSMANN: I think that it makes sense to say that nothing is off the table, because that creates uncertainty for the other side. For now, the focus is on political pressure, individualized sanctions, and negotiating a plan for Maduro to leave peacefully. But when you talk about military intervention, Venezuela is an invaded country. It has thousands of Cubans working as counterintelligence agents and military trainers and advisers, and there are Russian military contractors on the ground. Venezuela is a military regime, and that’s why it’s important not to take the military option off the table, because the Venezuelan military have to know that they are not as secure as they think.This interview was lightly edited for clarity. A prophet of peacelast_img read more

Benchmarks

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first_img July 1, 2004 Regular News Benchmarks Benchmarks Edward Rodgers, former 15th Judicial Circuit judge, was the keynote speaker for the Palm Beach County Bar Association Law Week Dinner, tying in the Law Week theme of “ Brown v. Board of Ed. at 50.”Hillsborough County Circuit Judge William Fuente was honored by the Florida Council on Crime and Delinquency with the “Judicial Distinguished Service Award” at a ceremony at MacDill Air Force Base in Tampa. Judith L. Kreeger, circuit court judge of the 11th Judicial Circuit, was named, “Jurist of the Year” by the American Academy of Matrimonial Lawyers – Florida Chapter. This distinction recognizes Judge Kreeger’s contribution in the area of marital and family law. Carmine M. Bravo, 18th Judicial Circuit county judge for Seminole County, has been appointed vice chair of the Barry University School of Law Advisory Board.Judge Diana Lewis of the15th Judicial Circuit in Palm Beach County has been appointed as a lay member to the board of directors of Catholic Relief Services. Cynthia G. Imperato, 17th Judicial Circuit court judge, has been appointed an honorary board member to the PACE school for girls in Broward County and the Broward County Crime Commission. Jack R. St. Arnold, Sixth Judicial Circuit court judge, graduated from Leadership Florida as a member of Class XXII known as “Can’t Catch 22.”last_img read more

Future of Indonesia’s education tech lies in untapped categories, experts say

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first_imgBhima went on to say that, apart from merely expansion, B2B EdTech platforms had a stronger consumer base and user loyalty than business-to-consumer (B2C) platforms, as institutional customers were less likely to switch to other platforms even when discounts are discontinued.According to a World Bank report published in May titled EdTech in Indonesia: ready for take-off?, fewer than 5 percent of EdTech platform users in Indonesia are willing to pay once a platform’s free trial period is over.Consequently, the report also showed that 90 percent of EdTech firms have changed their business model, mostly from only B2C to also tapping into B2B in an effort to increase revenue and improve customer acquisition, among other reasons.  “EdTech companies have a greater focus on social impact. Therefore, their market is not inherently a high profit-generating sector. This poses a challenge for EdTech firms in terms of attracting potential investors,” the report reads, adding that only 8 of 35 EdTech firms participating in the survey considered themselves profitable.Management consulting company Redseer noted that Indonesia’s EdTech startups only received US$200 million funding last year, with a large chunk of $150 million going to Ruangguru in December 2019. The number is significantly lower than the funding for the sector in India at around $2.5 billion and the US at around $7.5 billion over the same period.Indonesia saw at least eight cases of EdTech funding this year totaling more than $23 million, including Zenius’s $20 million series-A funding and learning platform Pahamify’s $150,000 seed funding. Indonesian education technology (EdTech) companies have the potential to expand to a wider market, including vocational training and the digitization of schools, as the COVID-19 outbreak has increased the need for such services, experts have said.“EdTech is still an uncharted territory with a few players and plenty of potential. It is also very segmented, as each level of education needs a different approach; that is what makes it interesting,” Institute for Development of Economics and Finance (Indef) researcher Bhima Yudhistira said in a phone interview with The Jakarta Post on Sept. 28.In the future, EdTech platforms could offer learning management systems (LMS) through business-to-business (B2B) partnerships with education institutions, he said, adding that there was also an opportunity to create tailor-made digital solutions, such IT system development. “We do think that this is the beginning of what is going to be a mega market. Indonesian EdTech will be very large and profitable, and we are very bullish about it,” Sequoia Capital India managing director Rajan Anandan told the Post in an interview on Sep. 30.Sequoia’s recent accelerator program Surge 03 included an Indonesian EdTech startup called CoLearn. Anandan claimed that CoLearn had been used by 200,000 students since its launch in September.He went on to say that Indonesia was likely to see some big players in EdTech for kindergarten to grade 12 students, while new players would emerge in university supplementary education and vocational training, filling in the current whitespace.Anandan added that there were opportunities to build businesses in LMS or a similar products to help offline schools and universities move to digital platforms, but consumer-focused EdTech companies were expected to be larger than the B2B companies.“Globally, we see it is much easier to scale and monetize a B2C business in EdTech than a B2B business,” he said.Ruangguru, for example, has tapped into the LMS sector by launching ruangkelas in July. The new platform is available for free to help teachers during the pandemic. More than 17,000 teachers in more than 10,000 schools have used the service, according to the company’s founder Iman Usman.“I do think in the future we will see more EdTech start-ups for upskilling workers, language learning and early childhood education, especially since millennial parents put priority on quality education,” Pahamify cofounder Mohammad Ikhsan said in an interview with the Post on Thursday.So far, the company has seen a tenfold increase in users from July to September compared to all of last year’s total users. It currently grants discounts of up to 90 percent during school closure amid the pandemic.Read also: Majority of Indonesians find distance learning costly: Study As the country still struggled with the rising number of COVID-19 cases, Indonesia’s 60 million students are forced to adapt to remote learning, which accelerates the use of EdTech.Currently, EdTech services in Indonesia are mainly consumer-centric, including Zenius, which offers free access to its library of more than 80,000 videos on various subjects for grades 1 to 12 students, as well as Ruangguru, an interactive online learning platform for students.However, some are more institution-focused, like Scola, an LMS service that digitizes classroom monitoring, which has a feature to track students’ scores.Read also: COVID-19 crisis opportunity for education reform in Indonesia Topics :last_img read more

Browns’ Freddie Kitchens ’embarrassed’ by Myles Garrett’s ugly attack on Mason Rudolph

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first_imgAfter Browns quarterback Baker Mayfield hit out at his team-mate, Kitchens also criticized Garrett post-match as a heavy suspension looms.’THAT’S ASSAULT’: NFL players react to Myles Garrett’s helmet-swinging attack”Of course that’s not who we want to be at the end of the game,” Kitchens told reporters. “That’s not who Myles wants to be, that’s not who we’re going to be.”You have to be able to maintain your composure in times like that and under no circumstance do we want anything to do with anything like that. I’m embarrassed, Myles is embarrassed, it’s not good so he understands what he did, he understands it’s totally unacceptable and we’ve got to get through it.HC Freddie Kitchens at the podium https://t.co/OcWZkxvc0H— Cleveland Browns (@Browns) November 15, 2019″We don’t react like that no matter what. That’s not an excuse for anything Myles did at all. We’re not giving him an excuse, he doesn’t want an excuse so it doesn’t matter what happened,” Kitchens added. “I don’t even care what happened. We’ve got five seconds to go in a game, that can’t happen.”We’ve got five seconds to go in a game, the biggest game this team has won … never beat Baltimore and Pittsburgh in the same year since 1999 and then we’ve got to talk about this so there’s 52 other guys on the team that that hurt and it’s going to hurt moving forward so we don’t condone that. Cleveland Browns head coach Freddie Kitchens said he is embarrassed — and so is Myles Garrett — after the defensive end hit Pittsburgh Steelers quarterback Mason Rudolph with his helmet.The Browns beat NFL rivals the Steelers 21-7, but Thursday’s win was overshadowed by an ugly incident involving Cleveland’s Garrett, who ripped off Rudolph’s helmet before swinging it and hitting the Steelers QB in the head late in the game. Pittsburgh’s Maurkice Pouncey then aimed kicks and punches at Garrett in shocking scenes in Cleveland. “Myles understands what he did wrong, he’s got to maintain his composure just like he had to do at the start of the year, he had to maintain his composure, we’ve got five seconds in the game, I’m sorry but it’s kind of like, he understands.”When asked about the possible length of suspension, Kitchens replied: “I’ve never seen that in my life so we’ll wait and see. I can’t answer that.”Myles is very upset about it, he’s got to maintain his composure. We’ll see. We’ve got to take it, whatever they give to us, we’ve got to take it, so we’ll see.”last_img read more

Move over, Adam Schefter: Liquor store employee actually ‘broke’ news of Patrick Mahomes’ contract

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first_imgPer USA Today, Camlin was told by her store manager that Chiefs employees entered the liquor store in search of some celebratory champagne.pic.twitter.com/Q5RH2oP70X— Gentleman Chief (@gentlemanchief) July 6, 2020MORE: NFL players react to Mahomes’ mega-dealThe now-deleted tweet reads: “A front office employee for the Chiefs came in and bought 6 bottles of Dom Perignon. Said there’s a big signing today. He said it’s not Chris Jones, so my guess is a Mahomes deal.””Off the cuff, I tweeted it because I’m a Chiefs fan and I was beyond excited,” Camlin told USA TODAY Sports on Monday. “It’s kind of fun to have a scoop.”While the tweet in itself is a bit vague to be considered news breaking — Camlin admitted herself that it was more of a guess than actual knowlecge — stumbling across that information is still pretty impressive. After all, its Google rating is nearly a 5.0, so Plaza Liquor must have the highest standard in customer service. Break open the bubbly — then break the news.That’s how Monday went for Kansas City Plaza Liquor employee Katie Camlin, who actually unearthed the news of Patrick Mahomes signing a mega-extension hours before ESPN’s Adam Schefter legitimately broke it. Camlin ended up deleting the tweet, fearing loss of employment from the store, thinking she may have broken some policy in revealing customer affairs. In any case, she was happy to beat the top NFL news breaker to the story.Im very overwhelmed and stressed out by the attention; I was worried about getting in trouble at work. Everything is fine but my anxiety is through the roof— Katie Camlin (@katie_cammm) July 6, 2020Holy shit I beat Schefter hahaha— Katie Camlin (@katie_cammm) July 6, 2020By the way, a regular bottle of Dom Perignon champagne can go for around $200, while the more expensive stuff can head upwards of around $500. With Mahomes’ mega-deal, it’s slightly surprising that the Chiefs had money left to blow on that champagne.In the days of Twitter, news comes from everywhere. While Schefter will still get the credit — and we should always consider the source — maybe Camlin has a future in news breaking.last_img read more

DDTV VIDEO: SPOT YOURSELF ON OUR DDTV NORTH WEST 10K VIDEO!

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first_imgMORE  than 2,600 runners and walkers took part in Sunday’s North West 10k charity run/walk – and here’s a video of everyone who took part.Tens of thousands of euro were raised for various charities with serious runners, walkers, people with their dogs, pram-pushers and even children on bikes. Participants came from every corner of Co Donegal (and across Ireland) for the Letterkenny event organised by Finn Valley AC and Letterkenny AC.Well done to the organisers for a superb family day out in the Cathedral Town.DDTV VIDEO: SPOT YOURSELF ON OUR DDTV NORTH WEST 10K VIDEO! was last modified: June 18th, 2011 by gregShare this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Reddit (Opens in new window)Click to share on Pocket (Opens in new window)Click to share on Telegram (Opens in new window)Click to share on WhatsApp (Opens in new window)Click to share on Skype (Opens in new window)Click to print (Opens in new window) Tags:DDTVdonegaldailyHigh DefinitionletterkennyNorth West 10kvideolast_img read more