From stories about currency to breast implants, Venezuela’s imploding economy has provided plenty of fodder for economists to pour over. Robbie Gramer wrote about the poor state of Venezuela’s oil export infrastructure:

• A fleet of Venezuelan tankers carrying 4 million barrels of oil are stranded in the Carribean.
• In order to traverse the ocean they need to undergo safety inspections and hull cleanings.
• But Venezuela is mired in debt and is struggling to afford the services required to make the tankers seaworthy.
• Ships have had to wait in the open seas for as long as two months – posing an environmental hazard – before they can sail their cargo.

Read more on Foreign Policy.

Fabiola Zerpa and Andrew Rosati showed us what Venezuelan hyper-inflation looks like:

• Inflation in Venezuela is running somewhere between 200% to 1,500% a year.
• For vendors still willing to accept Venezuelan currency, it’s not worth taking the time to count it. Instead many will just weight it to approximate its value.
• The government has been stubborn about releasing notes worth more than 100 bolivars.
• Today that’s worth just US$0.10. But the government has promised to print bills as big as 20,000 bolivars – in time for Christmas bonuses.
• Until then Venezuelans will lug around massive piles of cash. ATMs used to be restocked every few days, but now have to be restocked several times a day.

Read more about life in a country dealing with hyper-inflation on Bloomberg.

Via: Marginal Revolution

Zero Hedge covered one of the many alarming elements of Venezuela’s ongoing financial crisis:

• Hyperinflation in Venezuela has caused a financing crisis for the government – with public servants being required to take five day “weekends” in order to save money.
• The government has been trying to print money to make its payments – further fueling inflation and driving a vicious cycle.
• Venezuela has struggled to print the money itself – partly because the country has a shortage of the security paper, and metallic ink required to pump out the currency.
• So it has outsourced currency printing to other international vendors – who have been delivering bank notes by the 747 plane-load.
• Recently, however, it has emerged that the government has missed $71 million worth of payments to one of its vendors, and it’s unclear if the government will ever make that payment.
• It doesn’t help that the largest denomination note is for a mere 100 Bolivars – about ten American cents on the black market.
• The administration of Nicolás Maduro, the President, could save a lot of money by releasing higher denomination notes that it wouldn’t have to print as many of.
• However, the government fears that this will contribute to inflation – right now, at least, prices are limited by the amount of notes that can be carried in a wheelbarrow.
• As it is Maduro’s government has stopped printing denominations of 20 Bolivars and below because they cost more to produce than they are worth.

Read the full saga over here.

Source: Zero Hedge

In an article about the similarities between today’s Venezuela and Zimbabwe of the 2000s, The Economist took a look at some of the creative ways that people are getting around price controls:

• Rice might be price controlled. But add a bit of garlic to it and now its garlic rice and nobody thought to put price controls on that.
• Sell one roll of toilet paper to a consumer and you have to sell it for the official price. Sell a thousand rolls of toilet paper to a consumer and it’s now a business to business sale, which doesn’t have to comply with price controls.
• Transporting goods that will be sold for a pittance in Venezuela? Just drive across the border to Columbia after bribing the poorly paid customs officers, and sell goods for the true price there.

The full article has more details. Read it here.

Source: The Economist

South Sudan joins Venezuela in struggling with inflation wrote The Economist:

• Last year hyperinflation in South Sudan peaked at more than 50% a month.
• Oil used to produce 99.8% of the world’s newest country’s export revenue – and after prices collapsed the government printed money to pay its debts.
• Food is mostly imported from neighboring countries, and prices have massively jumped contributing to a “near-famine situation”.
• Despite its citizens needing all the help they can get, the government’s latest revenue measure is to raise the cost of work permits for foreign aid workers from $100 per person to $10,000.

Read more on The Economist.

Venezuela isn’t the only country struggling to pay off debts. Cubans are getting creative too according to the BBC:

• Cuba and The Czech Republic used to be Communist chums during the Cold War. Back then Cuba took out some loans from the Czechs.
• Almost $300 million is now due, and rather than expend precious cash, Cuba offered to pay it back in rum and pharmaceutical drugs.
• The Czech Republic is now a member of the European Union, and Cuba’s medicines aren’t certified in the EU, making them effectively worthless.
• But the rum may cause Czech negotiators to pause for thought. If the entire debt were paid off this way, it’d be enough to supply the country for more than a century.

Read more at the BBC.

Andrea Kendall-Taylor, and Erica Frantz wrote about what happens when a dictator dies:

• Many are hopeful that when Robert Mugabe, the 91 year old dictator of Zimbabwe, and Nursultan Nazarbayev, his 75 year old Kazakh counterpart pass away, democracy will finally have a chance to flourish in the countries.
• Others feel that the passing of old dictators could throw a country into chaos as rival factions compete for power.
• Evidence indicates that both are incorrect. Usually after a dictator passes, the status quo just sort of continues. This happened after Chávez’s, passing in Venezuela, and Kim Jong Il’s death in North Korea.
• One reason is that while a dictator may get all the attention, in reality they rule with a wider government that ensures continuity after the head dies.
• This is what happened to Syria’s President, Bashar al-Assad. He took over when his father passed away, and tried to liberalize the country. However figures from his father’s regime thwarted him.
• Another reason is the strength of succession plans. Kuwait and Saudi Arabia are strong monarchies and nobody expects there to be uprisings after their aged leaders pass away.
• Leaders who have the luxury of being able to die in office must have been particularly adept at crushing opposition, eliminating dissent, and corrupting institutions over the decades.
• Therefore the very things that allow a dictator to die in office also ensures that the dictator’s legacy lives on.
• That’s not to say there’s no hope for regime change. Evidence indicates that coups, elections, and term limits are effective ways to end dictatorships.

The full article provides many more details, and explores other fascinating tangents. You should read it here.

Source: Foreign Policy

The Economist took a look at countries that attempt to mess with the time-space continuum:

• North Korea has decided to go back in time. A few days ago it turned its clocks back an hour to establish a new time zone for itself.
• The insular country probably thinks the unique time zone is a metaphor for the country’s exceptionalism.
• The rest of the world probably thinks that the country going backwards in time is a good metaphor for the economic and social policies of the Hermit Kingdom.
• Other countries use time zones to assert their authority. Despite their size, India and China, for example, impose one clock on their entire populace.
• Hugo Chavez turned Venezuela’s clocks back so that it wouldn’t share the same time zone as the United States.
• Messing with time is a millennia old practice. The Roman Senate named the month of July after Julius Caesar.
• When they decided to honour Augustus Caesar with his own month, they had to mess around with the days in several other months so that Augustus’ month was no shorter than Julius’.
• Not all changes stick. France once tried to introduce a ten hour clock and Turkmenistan’s former President tried to rename every day and month, including a month just for his mother.

Read about other changes that haven’t stood the test of….time here.

Source: The Economist

The Economist looked at the market for cross border election consulting:

• Expert pollsters, strategists, and media analysts are hired by candidates in large countries to help them win elections.
• However when the home country is going through a lull in between elections these same experts market themselves to countries abroad.
• The trade flows both ways between developed and developing countries. South American experts have helped American candidates appeal to Hispanic voters.
• At times you can tell a lot about a candidate based on the type of experts they hire. Pro-Russian candidates in ex-Soviet countries prefer Russian consultants, while their opposition usually prefer American ones.
• At times foreign consultants can be seen as unpatriotic – perhaps this is why Israel’s Benjamin Netanyahu hinted that American forces were trying to unseat him in Israel’s most recent election.
• What he failed to mention was that American strategists had also been hired by his party to help (successfully) win the campaign.

Read why Boris Yeltsin had to go through his daughter to get campaign advice, how consultants helped Hugo Chavez win Venezuelan elections despite his cancer diagnosis, how Americans are influencing Britain’s upcoming election, and more over here.

Source: The Economist