October 25, 2016

ZIMBABWE: When An Egg Cost 1 Billion Zimbabwe Dollars, It Was Replaced By US Currency. Zimbabwe Civil Servant (Marxist Government) Wages Swallow About 83% Of National Revenue.

Mail and Guardian Africa
written by Bloomberg staff
November 9, 2015

ZIMBABWE freed its economy from the nightmare of hyperinflation by dumping its currency and adopting mainly the U.S. dollar. Six years on the economy is back in crisis.

Deflation is hindering spending and investment, factories are closing and the government is struggling to find money to pay its workers.

The dollar’s appreciation has made imports cheaper, exports more expensive and fuelled a cash crunch, said Mark Ellyne, an economics professor at the University of Cape Town.

Laws adopted in 2008 that compel foreign- and white-owned companies to sell at least 51% of their shares to local black investors have compounded the problem by deterring investment, he said.

“The dollar strength really works against them,” Ellyne, who worked at the International Monetary Fund for 25 years, said by phone. “They’ve made a wrong choice about the currency and they’ve not opened up enough. They should have tried to do a deal with South Africa to use the rand.”

Zimbabwe imported $2.5 billion worth of goods from neighbouring South Africa last year, more than from all its other trading partners combined, according to data compiled by Bloomberg. Their economies are further entwined by the estimated 2 million Zimbabweans who migrate to find jobs in Africa’s most industrialised economy, according to United Nations estimates.

Zimbabwe’s currency regime means its factories can’t compete with their South African and Zambian counterparts, according to Busisa Moyo, president of the Confederation of Zimbabwe Industries, who has called on the government to enact laws to cut salaries and utility prices. The rand has slid 26% against the dollar since the start of last year, while the kwacha has dived 60%.

Zimbabwe’s economic meltdown dates back to 2000 when militants backed by President Robert Mugabe’s government began seizing white-owned commercial farms, slashing tobacco exports. Inflation soared as the central bank printed money to enable the government to pay its bills.

The Zimbabwe dollar was scrapped in early 2009 and a basket of currencies, including the dollar and rand, became legal tender. Today all pricing and about 90 percent of trade is in dollars.

Multi-currency system

“There’s no immediate plan to return to the Zimbabwe dollar,” Finance Minister Patrick Chinamasa said by phone from Harare, the capital. “We’re tied into the multi-currency system and our focus is on creating growth.”

When hyperinflation peaked, Zimbabweans had to pay for restaurant meals before they ate and quotes from repairmen and businesses were valid for 15 minutes. With a single egg costing more than 1 billion Zimbabwe dollars, shoppers carried money in suitcases and rucksacks.

The experience still jars and few Zimbabweans favour renewed state control over the monetary system.

When the central bank introduced locally minted so-called bond coins to alleviate a shortage of U.S. coins, they were widely rejected, with most people opting to take change in candy or ballpoint pens instead.

“I doubt anyone will ever trust them with money again, not after 2008,” said Fred Nyikadzino, who sells building materials in Harare. “It’s better we struggle now with a U.S. dollar they can’t control than let them print trillions and trillions of worthless money.”

Businesses close

More than 80 Zimbabwean businesses shut last year, a trend that’s continued this year, and just 34% of the country’s manufacturing capacity is being utilised, according to Moyo.

Consumer prices have fallen every month since March 2014, dropping 3.1% in September from a year ago, without boosting sales volumes. About 700,000 Zimbabweans have formal jobs, the lowest number since 1968, government data shows.

The dollar forces fiscal discipline on the government and is “a red herring” when it comes to assigning blame for Zimbabwe’s woes, according to Steve Hanke, professor of applied economics at Johns Hopkins University, who together with research associate Alex Kwok calculated that at the peak of hyperinflation prices were doubling every 24 hours.

“Companies’ lack of competitiveness in Zimbabwe is largely influenced by the difficulties created by the government’s regulatory burdens,” said Hanke, who’s also director of the Troubled Currencies Project at the Washington, D.C.-based Cato Institute. “No one knows from one day to the next what the rules of the game are and how secure their property rights will be.’’

Mugabe’s control

Zimbabwe ranked 171st out of 189 countries in the World Bank’s 2015 Doing Business survey, which considers factors such as how easy it is to start a business, pay tax and enforce contracts. Civil servant wages swallow about 83% of state revenue. In August, the IMF its 2015 growth forecast in almost half to 1.5%.

Mugabe, 91, and his Zimbabwe African National Union- Patriotic Front party have ruled Zimbabwe since independence from Britain in 1980. Their blueprint for reviving the economy focuses on increasing the role of the state and black nationals.

“It won’t succeed because it’s premised on Zanu-PF and the government retaining control,” John Robertson, an independent economist, said by phone from Harare. “Nothing can change the direction unless they let go of the strings.”

Bloomberg News
written by Brian Latham and Michael Cohen
September 2, 2015

Alfred Moyo sees two possible ways of moving stock from his hardware store in Mabvuku township on the eastern outskirts of Harare, Zimbabwe’s capital: selling it at a loss or giving it away.

“There’s simply no money out there,” he said in a phone interview. “It doesn’t matter if you’ve got $10 million worth of stock or $1,000 of stock, either way all you can do is sit it out and hope things will improve.”

Moyo is one of thousands of Zimbabwean business owners who are caught up in a spiral of stagnating growth, rising unemployment and now, worsening deflation. Consumer prices have fallen every month since March 2014, dropping 2.8 percent in July from a year ago. That’s a far cry from the days when prices rose an average of 500 billion percent at their peak in 2008, according to estimates from the International Monetary Fund.

Zimbabwe’s decision to scrap the local currency in 2009 helped end hyperinflation as it cut off the government’s ability to print money to pay debts. At the same time, it eroded manufacturers’ competitiveness by making it cheaper to import everything from food to clothing rather than produce them in a country suffering from a lack of cash, power shortages and high costs.

With Zimbabwe adopting the U.S. dollar and currencies such as the South African rand as legal tender, authorities have no ability to boost money supply in the economy.

“The macro-economy is under enormous pressure,” Joseph Rohm, a fund manager who helps oversee about $1.3 billion in African investments in countries other than South Africa for Investec Asset Management, said by phone from Cape Town on Aug. 31. “Because it’s a dollarized economy, we are seeing a lot of cheap imports flood into the country, particularly from South Africa. It’s hurting some of the businesses that we’ve invested in.”
Growth Target

Hundreds of abandoned buildings, workshops and factories line the potholed roads in Harare’s industrial areas, evidence of Zimbabwe’s economic slide. The situation is even worse in Bulawayo, the second-largest city, where production has been hobbled by water shortages. More than 80 businesses shut across the country last year and just 39 percent of the country’s manufacturing capacity is being used, according to Busisa Moyo, president of the Confederation of Zimbabwe Industries.

The economy’s nascent recovery that followed a 2009 power-sharing government between President Robert Mugabe’s party and the main opposition has largely been eroded. Investors have been loathe to enter Zimbabwe since Mugabe, 91, won the 2013 election, pushing ahead with plans to force foreign-owned businesses to cede majority stakes to black Zimbabweans. Mugabe has been in power since 1980.

The economy, which grew on average 9.2 percent a year between 2009 and 2013, probably won’t expand fast enough to meet the government’s target of 1.5 percent this year, Christian Beddies, the IMF’s resident representative in Zimbabwe, said on Aug. 26.

“Local production costs are too high, so there is no way of competing with the imports,” Christie Viljoen, an economist at NKC African Economics, said by phone from Paarl, near Cape Town. “There is no way of being optimistic about the downward spiral ending any time soon.”

The United Nations estimates that more than 70 percent of the population of 14 million live on less than $2 a day. [but NOT Mugabe's Marxist Government loyal employees and loyal Marxist businesses feeding off of the government. (emphasis mine)] Remittances from Zimbabweans living abroad reached an estimated $837 million in 2014, exceeding humanitarian assistance of $735 million, according to data from the central bank.

Beer Volumes

Deflation comes with its own problems. It discourages consumers from spending as they anticipate prices will fall further, while declining margins reduces the incentive for businesses to invest and hire workers. That, in turn, limits wage increases, curbs tax receipts and worsens corporate and government debt burdens. Deflation fueled the Great Depression of the 1930s and several decades of almost no economic growth in Japan.

Brewer Delta Corp Ltd., Zimbabwe’s biggest company by market value and part owned by SABMiller Plc, cut the price of bottles of clear beer by 10 percent to 90 U.S. cents in December, the second reduction in three months. Sales dropped 4.3 percent in the year through March as volumes of lager beer slumped 17 percent. Econet Wireless Zimbabwe Ltd., the country’s largest mobile-phone company, said on Aug. 21 it agreed with staff to cut their salaries by 20 percent to ward off job cuts after annual net income plunged 41 percent.

No Comfort

In his annual state-of-the nation address on Aug. 25., Mugabe blamed the nation’s economic woes on drought, and said the government would repeal all laws hampering businesses, while implementing plans to revive agriculture and the mining industry.

Those assurances are of little comfort to Wilbert Chimedza, a manufacturer of security fences, who has resorted to only opening his workshop when he has orders to fill.

“The hardware shops aren’t buying because they have no customers, the people aren’t buying because they have no jobs,” he said by phone from Graniteside, an industrial area east of Harare’s city center. “I’ve explained to my staff, we either sit it out on piece-work or starve.”

ZIMBABWE: Zimbabwe Abandoned It's Own Failed Currency In 2009, Has 8 Official Currencies. The Nation Ran Out of U.S. Dollars This Year. So, It Will Print Its Own U.S. Dollars. Literally. Wow! :o

Soooo, what happens when these counterfeit Zimbabwe U.S. dollars reach America?!?! Will we be arrested for using these Zimbabwe counterfeit U.S. dollars that were put into circulation??? Oh, and by the way, for those of you who do not know... Zimbabwe has been ruled by a Marxist sleazbag dictator named Robert Mugabe since 1980.

Zimbabwe is a special case. It abandoned its own currency in 2009 and currently has eight official currencies as legal tender: the US dollar, South African rand, Botswana pula, British pound sterling, Australian dollar, Chinese yuan, Indian rupee, and Japanese yen.
The Atlantic, USA
written by Matt Vasilogambros
May 6, 2016

The African nation, which uses the American currency among others, ran out of physical cash. So, it’s going to print its own.

Zimbabwe is running out of cash and needs to print more money—so its central bank will print a new currency pegged to the U.S. dollar. The move has led to fears that the southeast African nation will soon abandon its multicurrency system and return to the hated local currency.

Zimbabwe has used the U.S. dollar since 2009 to substitute its own failed money, the Zimbabwe dollar. It also uses the South African rand, the euro, and the Chinese yuan, alongside the dollar. However, because Zimbabwe has run a trade deficit for several years, importing more than it exports, the country is literally running out of paper money.

In 2015, for example, it imported $5.5 billion in goods and only exported $2.5 billion. (The country’s economic problems are so bad it even had to sell off some of its wildlife.) That $3 billion trade deficit means the country’s supply of physical dollars continues to decrease. Zimbabweans can’t withdraw money from the bank because there isn’t enough of it—and banks have limited withdrawals at some ATMs.

To combat the shortage, Zimbabwe’s central bank will design and circulate new two-, five-, 10-, and 20-dollar “bond notes” that will be worth the equivalent of the U.S. dollar, but won’t actually be certified American currency.

Those notes won’t be worthless, however. Zimbabwe’s version of the dollar will be backed by $200 million in support from the African Export-Import Bank, a Cairo-based institution that promotes trade within the continent. Zimbabwe, then, will produce $200 million worth of new bills.

Among other measures announced this week to address the monetary problems: Officials have limited the amount of money that people can take out of the country to $1,000; and the central bank will convert 40 percent of all bank deposits that come from exports to the South African rand, and an additional 10 percent to euros.

The dollar is used as the official currency in other countries, as well. El Salvador, the Marshall Islands, the Federated States of Micronesia, Palau, and the islands of the Caribbean Netherlands—Bonaire, Sint Eustatius, and Saba—all use the dollar as their official currency.

Other countries have also adopted the dollar as their currency, but issued their own coins that are valued the same as American dimes, quarters, or nickels. Panama, East Timor, and Ecuador use American paper money, alongside their own individual coins. Similarly, since 2014, Zimbabwe has designed and circulated one-, five-, 10-, and 25-cent “bond coins” that are set to the value of the U.S. dollar. The coins bear little resemblance to their American counterparts. Zimbabwe’s new paper money will be made in the same vein.

Zimbabwe made the switch to the U.S. dollar in 2009 after its currency virtually had no value from over-printing and its economy collapsed following policies instituted by the government of longtime President Robert Mugabe. During that period, Zimbabwe produced 100-trillion-dollar notes. It got so bad that by the end of 2008, the inflation rate was 79.6 billion percent. By then, 1 U.S. dollar equated to 2.6 decillion (1033) Zimbabwean dollars.

Seven years later, the country isn’t facing hyperinflation, where there’s too much currency, but deflation, as there’s not enough physical cash around.

“It’s an indication of the lack of confidence in the Zimbabwean Central Bank,” says Russell Green, an international economics fellow at Rice University’s Baker Institution. “They want to print their own money, but they know that they’ve gotten in trouble in the past printing their own money.”

The absorption of the U.S. dollar as a country’s own currency, or even the attachment of its currency rate to the dollar, has previously proved perilous to other countries. Argentina’s peso had a fixed exchange rate to the U.S. dollar, and for a decade every one peso was equivalent to one dollar. However, after an economic depression that lasted from 1998 to 2002, which led to the fall of the government and a $95 billion default on its foreign debt, Argentina dropped the fixed exchange rate. Argentina’s central bank ran out of money during that time.

“The problem that all of these countries have, whether it’s with a complete dollarization or with a pegged currency, is if they’re running persistent trade deficits, eventually you run out of the foreign currency,” Green says. “That’s unfortunately Zimbabwe’s case.”

Keeping the dollar may not be a worthwhile option for Zimbabwe moving forward if it continues to need to print more money with the support of outside institutions. It may even have to go back to its old currency—a move many Zimbabweans fear.
The Economist
Who wants to be a trillionaire?
Lock up your dollars right now; Mugabenomics is back.
written by Staff
May 14, 2016

LIKE the governors of the Reichsbank, who kept on speeding up the printing presses as Germany plunged into ever-steepening hyperinflation in the 1920s, insisting that the real problem was a shortage of banknotes, Zimbabwe’s government claimed to have overturned the laws of economics during its own bout of hyperinflation nearly a decade ago. Gideon Gono, then governor of the Reserve Bank of Zimbabwe, claimed that “traditional economics do not fully apply in this country,” and said “I am going to print and print and sign the money…because we need money.”

The result was an increase in prices so swift that it was almost impossible to calculate the rate of inflation. By some estimates it peaked at 500 billion per cent, as the government printed ever-larger denominations. Notes such as one with a face value of 100 trillion Zimbabwe dollars are worth much more now as a novelty on eBay (where they sell for about $45) than they ever were in shops in Harare.

Zimbabwe finally tamed inflation in 2009, when it abandoned the Zim dollar and started using American dollars and other foreign currencies instead. (It converted bank balances to US dollars at a rate of $1 for every 35 quadrillion Zim dollars.) That brought instant relief. But the government of Robert Mugabe, a 92-year-old who has held power since the end of white rule in 1980, has again been spending more than it collects in taxes, and importing more than it exports. It does not help that Mr Mugabe destroyed the country’s main source of foreign revenue when he chased mainly white farmers off their land and handed it to ruling-party bigwigs.

Without money to pay civil servants—in particular the soldiers and policemen who keep Mr Mugabe in power—the government intends to start printing it again. This time it insists it is not bringing back the reviled “new” Zim dollar, but is printing notes that are “backed” by some $200m that Zimbabwe has borrowed from the African Export-Import Bank. However, it seems unlikely that holders of these new notes will be allowed to exchange them for those real dollars.

Given Mr Mugabe’s track record, that means they are likely to plummet in value very fast. Slow-motion bank runs have already started, as savers fret that their US dollars will be forcibly converted into the new notes. Banks have had to restrict dollar withdrawals, in some cases to as little as $20 a day. The last bout of hyperinflation wiped out savers and pensioners. Savers are braced to be robbed again.

The governor of the Reserve Bank, John Mangudya, insists the new notes will be an “incentive” to exporters, not a return to the bad old days. Not even the government believes this. It will not, for example, be using them to pay civil servants. Instead they will be foisted onto exporters who, having paid their suppliers and workers in hard cash, will have to accept funny money for their earnings. What could go wrong? Many will go bust, so export revenues will quickly tumble. Eddie Cross, an opposition MP, says the new policy could mean “the final collapse of the economy”.
Business Insider, USA
written by Jonathan Garber
August 10, 2016

Back in 2008, Zimbabwe experienced an episode of horrific hyperinflation as a result of Robert Mugabe's economic policies. Mugabe implemented price controls and the country's central bank printed endless amounts of money in an effort to end its economic slump. Those policies caused Zimbabwe's inflation rate to explode to a mind-boggling rate of 231,000,000% officially, while others have suggested the actual inflation rate was greater than 4,000,000,000%. "Where money for projects has not been found, we will print it," Mugabe said.

Zimbabwe's government responded by introducing the US dollar along with a combination of South African rand, and other foreign currencies. It even went as far as expunging the Zimbabwean dollar from its banking system back in June 2015. While those measures seceded in bringing Zimbabwe's hyper-inflationary spell under control, it created a new problem, deflation, as the dollar became more widely used.

According to a note sent to clients in July from Exotix Partners' Head of Equity Research Kato Mukuru, that dollarization of the Zimbabwe economy created two problems.
1. There has been too much reliance on the US dollar. The government moved away from the multi-currency regime and said it would conduct all of its transactions dollars. And since most of Zimbabwe's trade is with South Africa, the strong dollar (compared to the rand) has made it more difficult for Zimbabwe to compete.

2. Zimbabwe has been running a current account deficit since 2009. Zimbabwe has been exporting more dollars than its been importing, causing a shortage of dollars in the system.
These two things have made it more difficult for Zimbabwe to attract foreign capital into the country, and has created a wave of falling prices. Official government data from June showed consumer prices were down 1.37% in June, after falling as much as 7.5% in October 2015.

Liquidity problems could cause the government to de-dollarize the economy sooner than expected, warns BMI Research, and that would send the country back into a cycle of rapid inflation. From BMI's note"
"Adoption of a local currency would inevitably result in a rapid increase in the supply of broad money, as the central bank looked to inject enough liquidity into the economy to alleviate the ongoing cash shortage, caused by the current reliance on the US dollar. Without a simultaneous increase in real production, this would increase inflationary pressures."
As for how high inflation would get, BMI believes that would "depend on the rate at which the RBZ printed the new currency," but could easily surpass 30%.

That's not as crazy as it got a few years ago, but it seems as though Zimbabwe finds itself in a Catch-22.

WORLD: Here Are All The Countries That Don’t Have A Currency Of Their Own. Wow, I Just Learned About This And Had To Share With You.

Quartz News
Here are all the countries that don’t have a currency of their own
written by Kabir Chibber
September 15, 2014

As Scotland prepares to vote on independence on Sept. 18, the future of its currency has taken center stage.

For the moment, Scotland prints its own notes and uses the British pound, which is controlled by the Bank of England. (Follow?) In the event of independence, Scotland wants to continue to use the pound as part of a negotiated currency union. All three of the UK’s major parties have ruled this out.

Nonetheless, the most likely outcome of a “Yes” vote involves Scotland using the pound anyway. On option: the scenario dubbed “sterlingization,” in which the world’s newest state would have pound notes and coins but no control over its monetary policy. The head of the Bank of England—who, just to make things more confusing, is Canadian—has said that if Scotland were to adopt the British pound on its own, it would need huge reserves of the currency—around 25% of its GDP, or £36 billion—to convince the rest of the world it can credibly act as a lender of last resort in the event of crisis.

Yet if Scotland were to go it alone, it wouldn’t actually be alone. There are many places that have given up control of their legal tender.

Countries that only use a foreign currency

US dollar: Ecuador, East Timor, El Salvador, Marshall Islands, Micronesia, Palau, Turks and Caicos, British Virgin Islands, Zimbabwe.

The US dollar is the most widely used currency in the world, with many countries employing it as an accepted alternative to their own currency. But some have simply adopted the currency as their own, notes and all, in what is known as “dollarization.” They don’t have control over the currency—only the Federal Reserve in Washington sets monetary policy. Both Ecuador and El Salvador adopted the US dollar in 2000, following the creation of free-trade blocs like NAFTA and the EU and the debut of the euro, making even the notion of a “single currency for the hemisphere more plausible and attractive.”

“For Ecuador, adopting the dollar was a way of imposing strict fiscal discipline, in effect by turning monetary policy over to the United States Federal Reserve Board,” the New York Times reported in 2001.

Defenders of dollarization in El Salvador have said it helped to prevent economic crises and attacks from speculators that have befallen countries like Mexico and Argentina—though the cost of converting from the colon to the dollar resulted in prices being round up by fractions of a dollar, creating rising costs for the poorest Salvadorans. And is the Federal Reserve going to think about El Salvador when it slashes interest rates to near zero in the aftermath of an economic crisis and starts printing money? As we saw in 2008 and beyond: Not really, no. Scotland could become the next Norway, small and oil-rich, supporters of independence say. But it could be more like the next El Salvador.

That said, Ecuador chose to issue its own coins—it wanted to avoid the problems of Zimbabwe, which found it too expensive to ship huge quantities of nickels and dimes into circulation but needed much more change, as the cost of most goods had to be expressed in fractions of dollars.

Zimbabwe is a special case. It abandoned its own currency in 2009 and currently has eight official currencies as legal tender: the US dollar, South African rand, Botswana pula, British pound sterling, Australian dollar, Chinese yuan, Indian rupee, and Japanese yen.

Euro: Andorra, Kosovo, Monaco, Montenegro, San Marino, Vatican City.

Following the pattern above, this must be called “euroization.”

Most euro-using countries are neighbors of the European Union, like the principalities of Monaco and Andorra. Montenegro and Kosovo, two of the smallest remnants of what was Yugoslavia, changed currencies twice in less than four years; in 1999, they swapped the Yugoslav dinar for the Deutsche mark, and then each adopted the euro when the notes entered circulation in January 2002.

The turnaround was pretty quick. More than 2.5 billion Deutsche marks were held in Kosovo before 2002, tucked away in mattresses because of a general distrust of banks. These all had to be converted. In the first two weeks of use, for example, Montenegro’s central bank flew in “two planeloads of euro notes and 40 tons of coins.” In Kosovo, 100,000 bank accounts were opened in just the last month prior to the introduction of the euro.
Countries in a currency union

Euro: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.

Calls for monetary union in Europe date back to the 1920s, but things got serious when the European Commission (of the European Economic Community, precursor to the European Union) began looking into ways to stabilize fluctuations between the their currencies in the late 1960s. In 1989, the path to monetary union was set out in the Delors report. In 1992, the Maastricht Treaty was signed, which created the EU and set up the path to the launch of the euro in 1999. In 2002, euro notes and coins entered circulation.

There are extensive criteria to join the euro, but nothing in the EU treaties about leaving it—which was unfortunate, as many countries’ finances came under severe strain in the aftermath of the 2008 financial crisis. (None more so than Greece, which at one pointed owed $250,000 for each working adult.) While the euro looked doomed for awhile, the problem was solved using one of the best traditions of capitalism: throwing more debt at the problem. Greece was bailed out—twice—and there was one bailout each for Portugal, Ireland, and Cyprus by the euro zone countries and the IMF. Spain’s banks were bailed out, too, and a 500 billion-euro fund was set up to permanently act as a firewall to prevent this from happening again.

Currently, 18 countries comprising 330 million people use the euro. All the countries have given up monetary authority to the European Central Bank, which sits in Frankfurt.

East Caribbean dollar: Antigua and Barbuda, Dominica, Grenada, St. Kitts and the Nevis, St. Lucia, and St. Vincent and the Grenadines.

The successor to the British West Indies dollar was created in 1976. The East Caribbean dollar is fixed to the US dollar at a rate of 2.7 to 1. The only member of the Organization of Eastern Caribbean States to not take part is the British Virgin Islands—which uses the US dollar, of course.

CFA franc: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, Gabon, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal, and Togo.

It may surprise you to know that 14 countries in Africa also are dependent on the euro, albeit indirectly.

Strictly speaking, there are two currencies between them: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo use the West African franc. Cameroon, Central African Republic, Chad, Republic of the Congo, Equatorial Guinea, and Gabon use the Central African franc. Both currencies are at parity and their notes are interchangeable across all 14 countries, but they have different monetary authorities.

The CFA franc was created in 1945 to spare France’s colonies the pain that the post-World War II revaluation in the French franc would do to their much smaller economies. The CFA franc was set at fixed exchange rates against its French counterpart, and is now fixed against the euro.

Many places both officially and unofficially allow the trade of foreign currencies alongside their own. Residents from Belize to North Korea can spend in US dollars, for example. Panama has had the US dollar as legal tender since 1904, alongside the Panamanian balboa, and was viewed as a special case in Latin America because of the Panama Canal and its huge trade links with the world’s richest country. Others are usually based on relative economic might and regional proximities; Lesotho and Namibia also use South Africa’s rand and small islands like Tuvalu and Nauru use Australian dollars.

Many countries peg their currencies to another nation’s. The Hong Kong dollar, for example, was pegged to the British pound and has been pegged to the US dollar since 1983. It trades within a band of 7.75 to 7.85 HK dollars to the US dollar. How does the Hong Kong Monetary Authority maintain its credibility as the lender of last resort? It has a whopping 120% of Hong Kong’s GDP in foreign-exchange reserves.

The Chinese yuan was pegged to the US dollar until 2005 and has been a managed currency since then—much to the chagrin of the US Congress. The currency is allowed to trade up or down against a basket of currencies up to 1% each day, which was expanded from 0.5% in 2012. Many expect that the band will be widened again and that gains in the yuan will be allowed to accelerate.

EL SALVADOR: After Mining Giant, El Salvador Activists Want to Smash TPP Pushed By Obama, Hillary. El Salvador Ruling Offers a Reminder of Why the TPP Must Be Defeated.

TeleSurTV News, Venezuela
written by Staff
Friday October 14, 2016

For grassroots organizations, the fight to protect water and local communities continues, now on a larger scale.

After El Salvador won a decade-long legal battle against mining company OceanaGold on Friday, social organizations and communities pledged to continue fighting to protect the nation’s natural resources.

Friday's success story involved a US$301 million lawsuit and a court battle that first began in 2007, when El Salvador sought to defend its sovereignty by denying OceanaGold, then Pacific Rim, a new permit to extract the nation's gold reserves.

In an exclusive interview with teleSUR, Chico Montes, director of Association of Social Economic Development (ADES), a human rights organization, said the victory gives the Salvadoran grassroots a lot of strength in continuing its fight against exploitative industries.

Along with other rural organizations, they created the National Roundtable against Metallic Mining, which was crucial in achieving the positive ruling in favor of the Central American country.

According to Montes, the ruling is “a reflection of the struggle of the peasant and popular organizations."

“The communities have suffered for opposing these projects. Without their efforts, none of this would be possible.”

The battle now, according to Montes, will be against the Trans-Pacific Partnership (TPP) and free-trade agreements with Europe and any other region.

Before the lawsuit, the government of El Salvador raised concerns over the failure of the company’s El Dorado gold mine to submit an Environmental Impact Assessment. OceaneGold then sued the small Central American country in the World Bank's International Center for the Settlement of Investment Disputes, which allows corporations to sue states through free trade agreements if future profits are perceived to be infringed upon.

“Such projects put states and governments like ours against the wall, giving priority to the interests of international companies,” said Montes.

After years of legal wrangling, the World Bank court awarded El Salvador's government US$8 million to cover its legal fees and costs. For Pedro Cabezas, also a member of the roundtable and the Association for the Development of El Salvador, CRIPDES, the struggle now continues in the courts.

“We believe it is a claim that should have never proceeded, the only reason it did is because it was done under investment treaties,” Cabezas told teleSUR.

“These demands are against the rights of the people because companies may sue states, but states and people affected can’t sue the companies,” said Cabezas.

According to Cabezas, they have been fighting for over seven years to achieve justice for those communities and organizations affected by the pollution and corporate greed of OceanaGold.

“It is our right to determine our own development, companies cannot come and extort our governments,” said Cabezas.

El Salvador, the most water-stressed country in Central America, has witnessed a long uphill struggle as social movements and progressive politicians face powerful corporate interests over whether water resources are a public or private good.
International Business Times
State Department Blocks Release Of Hillary Clinton-Era TPP Emails Until After The Election
written by David Sirota
June 6, 2016

Update, 4:35pm ET, June 6: Following IBT's story, Donald Trump's campaign demanded that the State Department release Clinton's TPP-related emails. The Trump campaign referred to Clinton as "the outsourcing candidate" and said she was intent on "ramming TPP down the throats of the American people." Read IBT's story about Trump's statement here.

Original story: Trade is a hot issue in the 2016 U.S. presidential campaign. But correspondence from Hillary Clinton and her top State Department aides about a controversial 12-nation trade deal will not be available for public review — at least not until after the election. The Obama administration abruptly blocked the release of Clinton’s State Department correspondence about the so-called Trans-Pacific Partnership (TPP), after first saying it expected to produce the emails this spring.

The decision came in response to International Business Times' open records request for correspondence between Clinton’s State Department office and the United States Trade Representative. The request, which was submitted in July 2015, specifically asked for all such correspondence that made reference to the TPP.

The State Department originally said it estimated the request would be completed by April 2016. Last week the agency said it had completed the search process for the correspondence but also said it was delaying the completion of the request until late November 2016 — weeks after the presidential election. The delay was issued in the same week the Obama administration filed a court motion to try to kill a lawsuit aimed at forcing the federal government to more quickly comply with open records requests for Clinton-era State Department documents.

Clinton’s shifting positions on the TPP have been a source of controversy during the campaign: She repeatedly promoted the deal as secretary of state but then in 2015 said, "I did not work on TPP," even though some leaked State Department cables show that her agency was involved in diplomatic discussions about the pact. Under pressure from her Democratic primary opponent, Bernie Sanders, Clinton announced in October that she now opposes the deal — and has disputed that she ever fully backed it in the first place.

While some TPP-related emails have been released by the State Department as part of other open records requests, IBT’s request was designed to provide a comprehensive view of how involved Clinton and her top aides were in shaping the trade agreement, and whether her agency had a hand in crafting any particular provisions in the pact. Unions, environmental organizations and consumer groups say the agreement will help corporations undermine domestic labor, conservation and other public interest laws.

If IBT's open records request is fulfilled on the last day of November, as the State Department now estimates, it will have taken 489 days for the request to be fulfilled. According to Justice Department statistics, the average wait time for a State Department request is 111 days on a simple request — the longest of any federal agency the department's report analyzed. Requests classified as complex by the State Department can take years.

Earlier this year, the State Department’s inspector general issued a report slamming the agency’s handling of open records requests for documents from the Office of the Secretary. Searches of emails “do not consistently meet statutory and regulatory requirements for completeness and rarely meet requirements for timeliness,” the inspector general concluded.
The Nation
written by Robin Broad and John Cavanagh
Wednesday October 19, 2016

If you needed one more reason to take sides in the last great fight of the Obama years, that of the corporate giveaway package known as the Trans-Pacific Partnership (TPP), here it is.

Last week, the tribunal at the center of the proposed TPP ruled against a global mining firm that sued El Salvador, but only after seven years of deliberations and over $12 million spent by the government of El Salvador. Equally outrageous, legal shenanigans by the Australian-Canadian firm OceanaGold around corporate ownership will likely prevent El Salvador from ever recouping a cent.

The ruling simply reinforces what Salvadorans have said all along. This mining giant, whose Pac Rim Cayman subsidiary sued El Salvador after it didn’t get a mining license, did not deserve to get a license because it never fulfilled all the legal requirements for one. The tribunal should have thrown out the case from the start.

And the Pac Rim subsidiary that filed the suit was a Cayman shell company. OceanaGold, which purchased Pac Rim in 2013 and financed the lawsuit, will never have to pay for the environmental and social damage its mining “exploration” left behind. Hence, in the end, El Salvador simply won the right to implement its own laws. In other words, like the rest of these tribunal cases in the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID), there is no such thing as a “win” for the country getting sued.

The good news is what we’ve found on the ground in El Salvador, most recently in July, where communities and the government have put the right to water before corporate profits. As The Nation has reported, a decade ago communities in gold-rich northern El Salvador learned of the environmental horrors that would accompany gold mining and especially the danger of mining with toxic chemicals—notably cyanide—near fragile watersheds. OceanaGold’s proposed mine was near the Lempa River, which supplies drinking water to over half of El Salvador’s population of 6 million. At least four “pro-water” activists—one of them pregnant—were assassinated as mining opposition grew.

Community leaders in the north helped build a national coalition against mining (La Mesa), and convinced the Catholic Church and ultimately the government to say “no” to mining. You’d be hard pressed to find a better example of a government following the will of its people. Close to two-thirds of Salvadorans polled in 2007 opposed mining, a figure that rose to 77 percent in a 2015 poll by the University of Central America.

This large citizen mobilization against mining, supported by international allies, has convinced three successive Salvadoran presidents not to issue mining permits. This, despite hundreds of thousands of dollars spent by an OceanaGold “social responsibility” foundation providing handouts (folklore and sewing classes, Christmas dinners, and the like) to win hearts and minds in favor of the mine.

As we discovered in San Salvador in July, OceanaGold’s representatives are pushing hard for the government to let it in, arguing that the financially strapped government has no other easy way to meet urgent government expenses. Undoubtedly some are tempted, but President Salvador Sánchez Cerén met with La Mesa representatives in late August to assure them that, whatever the ICSID verdict, his administration would stand behind its environmentally based mining policy and not issue new mining licenses.

Also good news: El Salvador is not alone in this important policy stance. The Costa Rican government has stopped all new open-pit mining. Panama has ceased mining in the major indigenous area in the south. Colombia has stopped mining in its Andean uplands. And Argentina has halted mining that could damage glaciers, a key source of water.

But, as in El Salvador, global mining companies have launched lawsuits against Costa Rica, Panama, and Colombia over what should be seen as laudable actions.

As groups in the United States, Canada, Australia, and the Philippines (where OceanaGold has a controversial big mine) stepped up opposition to the lawsuit against El Salvador after 2009, people around the globe were shocked to learn that environmental and social issues around mining have no standing in the World Bank Group’s tribunal. In these cases, a panel of just three highly paid arbitrators, picked from a pool that is laden with corporate lawyers, have the power to make these decisions without any effective appeal option.

If this feels far from the US reality, consider this: Earlier this year, the TransCanada Corp. behind Canada’s Keystone pipeline used NAFTA’s rules to sue the United States for $15 billion for its ruling to stop extension of its pipeline in the United States. Yes, for stopping the pipeline. It was the right decision on Obama’s part, but one that likely ends with a TransCanada win at ICSID, given that Obama announced his decision was being made on larger “climate change” grounds (an ICSID no-no).

ICSID was created 50 years ago, and these biased investment rules have been part of trade agreements since NAFTA. They are also at the center of the Trans-Pacific Partnership, now being pushed in the US Congress against a broad progressive coalition. Since September, Bernie Sanders’s Our Revolution, the Citizen’s Trade Campaign, and a wide range of other groups have generated tens of thousands of phone calls to Congress opposing the TPP. Senator Elizabeth Warren, Nobel Prize winner Joseph Stiglitz, hundreds of academics, and many others have likewise raised their voices in opposition.

A TPP defeat would give momentum for more countries to follow Venezuela, Ecuador, and Bolivia in leaving ICSID; and for countries to follow Indonesia, India, and South Africa in taking steps to protect themselves from biased investment rules.

But no one should be complacent about defeating the TPP. Despite Hillary Clinton’s professed opposition to the agreement, she is not picking up the phone to convince members of Congress to vote no. On the other hand, Barack Obama—contradicting his pipeline stance—is waging a full-court press on Democrats to vote for this unpopular deal after the November elections. With the US Chamber of Commerce joining Obama, it will take every effort of the labor, environmental, family farm, religious, and other forces to defeat the TPP.

El Salvador just gave us one more reason to defeat the TPP, and we should do so in part to honor the brave Salvadorans who have chosen water over gold.

EL SALVADOR: El Salvador Beats Canadian-Australian Gold Mining Giant OceanaGold Who Sued The Government With World Bank Court For Pulling The Plug On A Proposed Gold Mine.

TeleSurTV News, Venezuela
written by Staff
Friday October 14, 2016

OceanaGold sued El Salvador for hampering its future potential profits — an increasingly common phenomenon through free trade agreements.

A little-known but controversial World Bank tribunal actually ruled against corporate power Friday, rejecting Canadian-Australian gold mining giant OceanaGold's claim that El Salvador interfered with its profits when the government pulled the plug on a proposed gold mine.

The seven-year, multi-million dollar, largely secretive court battle had pitted mining-affected Salvadoran communities — supported by human rights organizations in North America, Australia, and the Philippines — against the deep pockets of OceanaGold, formerly Pacific Rim, in an international trade tribunal that has been criticized as a “kangaroo court.” However, the court, in the end, awarded El Salvador's government US$8 million to cover legal fees and costs.

The conflict sparking the US$301 million lawsuit dates back to 2007, when El Salvador took a stand for national sovereignty and clean water by denying OceanaGold, then Pacific Rim, a new permit to extract gold in the Central American country. The government raised concerns over the failure of the company’s El Dorado gold mine to live up to national standards regulating the industry, including the fact that it dodged submitting a feasibility study and Environmental Impact Assessment for the project. But the corporation saw the decision as an assault on its profits and retaliated.

In 2009, Pacific Rim leveled a US$77 million lawsuit against El Salvador in the World Bank’s investor-state tribunal, the International Center for the Settlement of Investment Disputes, that allows corporations to sue companies through free trade agreements for perceived infringement on their future profits. The mining giant later upped the price tag on the suit to a whopping US$301 million — equivalent to three years of El Salvador’s public spending on health, education, and public security combined.

The government primarily rejected OceanaGold’s proposed mine over fears of water pollution and scarcity in the country, the most water-stressed in Central America. Water quality is a major problem in El Salvador, where some 90 percent of surface water resources are considered unsafe to drink by international standards. Metal mining has been a big offender in fomenting the contamination crisis.

“By allowing transnational companies to blackmail governments to try to force them to adopt policies that favor corporations, investor-state arbitration undermines democracy in El Salvador and around the world,” said Marcos Orellana of the Center for International Environmental Law. “Regardless of the outcome, the arbitration has had a chilling effect on the development and implementation of public policy necessary to protect the environment and the human right to water.”

Not only is the gold mining industry notorious for toxic metals into surface and groundwater systems through its cyanide-intensive extraction process, but it is also sucks up staggering amounts of water on a daily basis. OceanaGold proposed mine would have used thousands of tons of cyanide and hundreds of thousands of liters of water every day it operated in the parched country.

In 2009, the same year OceanaGold filed the lawsuit against El Salvador, the newly-elected left-wing government tried to institutionalize an official moratorium on mining mining concessions. Though the law has not been passed, the government has continued to uphold a ban on new mining projects. Meanwhile, local water defenders have fought for years — together with the governing FMLN party — to pressure lawmakers to enshrine the human right to water in the constitution and force corporations to play their part in preserving the precious resource. To date, the conservative-dominated Congress has opted to continue shielding private profits instead of introducing industry regulation to protect human rights.

Despite the outcome of this shocking ruling, El Salvador’s fight to protect water, the environment and human rights is far from over as corporate globalization and free trade creates the conditions for corporations to do business with impunity across the globe.

October 21, 2016

Edith Piaf, Beloved French Songstress. The Sagittarian Sparrow Sings, "Non, Je Ne Regrette Rien - Means, "No, I Regret Nothing." Enjoy! ❤

I was just reading a great article titled, 'Sagittarius The Hero'. Being a Sagittarius myself, it grabbed my attention. It definitely made for some very interesting reading to say the least. I had no idea Josef Stalin was a Sagittarius, born on December 21, 1879. Hmm... but it looks to me that Stalin's birthday falls on the Sagittarius/Capricorn cusp wouldn't you agree? For those of you who don't know, approximately 60 million Russians were starved to death, tortured and murdered by Stalin's Marxist Communist regime. It's hard for me to believe Stalin was a Sagittarius considering what a horrible creature he was. He was inhuman. Sagittarius are known to be the 'clowns of the zodiac', 'the entertainers', the 'great philosophers', the 'seekers of truth and fairness'. Our Sagittarius range of personalities is extreme. Because on the other side of the Sagittarius spectrum is Walt Disney, Mark Twain, Bruce Lee, Ludwig van Beethoven, Bhagwan Shree Rajneesh, later known as "Osho", and Winston Churchill to name a few historical famous Sagittarius figures that positively influenced humanity as a whole. This is the side of Sagittarius I choose to harness. Let us hope that this world never allows another Stalin nightmare. Hugs to all of you. ❤
okay, I just came across, 10 things you didn't know about Stalin:

His birthday is up for debate

According to official accounts, Stalin was born on December 18, 1879. However, the Old Style Julian calendar (the Russian calendar) marks his birthday as December 6. Stalin himself, however, changed his birthday to December 21, as well as his birth year (allegedly) to 1881, to throw off tsarist officials.
I was inspired to share Edith Piaf's song with you because she was mentioned in the 'Sagittarius The Hero' piece I was reading. Now, I find myself enjoying her gorgeous music on YouTube this Friday afternoon.

The Sagittarian Sparrow
"I want to make people cry even when they don't understand my words."

—Edith Piaf, beloved French songstress, born Dec. 19, 1915, may have personified her country's dichotomy, between the sublime and the degraded. She defiantly lived her life as if "death does not exist"—another quote of hers. The title of her signature song is Je Ne Regrette Rien (I regret nothing).

From the YouTube description:

Piaf dedicated her recording of the song to the French Foreign Legion. At the time of the recording, France was engaged in a military conflict, the Algerian War (1954--1962), and the 1st REP (1st Foreign Parachute Regiment) — which backed a temporary putsch of 1961 by the French military against the civilian leadership of Algeria — adopted the song when their resistance was broken. The leadership of the Regiment was arrested and tried but the non-commissioned officers, corporals and Legionnaires were assigned to other Foreign Legion formations. They left the barracks singing the song, which has now become part of the French Foreign Legion heritage and is sung when they are on parade.

VENEZULA: Corpses 'Exploding' In Decrepit Venezulan Hospitals. Foreshadowing Marxist Socialism's Final Days. Super-Rich Marxist Socialists Drink Champagne, While Middle-Class And Poor Venezuelans Turn To Trash For Food.

THIS IS WHAT AMERICANS WILL GET IF THEY VOTE FOR 4 MORE YEARS OF MARXISM  with Hillary Clinton AFTER 8 YEARS OF Obama's Marxist failed economic policies. And don't tell me Venezuela is an exception. NAME ONE SUCCESSFUL Marxist Socialist Nation ON THIS PLANET throughout history. ANSWER: THERE IS NONE.

Venezuelans voted for Maduro simply because he supported the same damn failed policies his Marxist Socialist predecessor believed in. They didn't give a damn that the only real experience Maduro has ever had was driving a fricken bus and leading a labor union protest against his employer. Yeah, that makes sense. Let's vote for more of the same crap sandwich please. Because it tastes so damn good. NOT. :/ Now the Venezuelan people are living in hell and people, mainly Chavistas, still have THE NERVE to defend the Marxist Socialist inept government and blame the US for Venezuela's nightmare. Yeah. Okay. Whatever.

Front Page Magazine, USA
Foreshadowing socialism's final days.
written by David Paulin
Wednesday October 19, 2016

It was one of the more macabre stories to emerge out of socialist Venezuela -- and served as a metaphor for the final days of the rotting regime.

In a hospital morgue, a bloated corpse exploded.

The morgue's barely functioning cooling system was to blame – hardly a surprise in the oil-rich yet impoverished nation whose health-care system has collapsed under the socialist government. Decomposing for two days in the tropical heat, the corpse finally exploded in a spray of toxic fluids and gasses. The ghastly incident earlier this month necessitated the partial evacuation of the hospital, University Hospital Antonio Patricio de Alcalá, located in Cumaná -- a city of 825,000 in eastern Venezuela. Patients in nearby rooms and corridors were sickened to their stomachs by the stench.

“It’s not the first time that a body exploded,” a hospital employee told a Venezuelan media outlet. “It has already occurred two times since the middle of September.”

The hospital certainly was not always a house of horrors. It was once regarded as one of Venezuela's best public hospitals -- a standard-bearer for health care, according to the Venezuela news site La Patilla. Recently, La Patilla sent a reporter with a hidden camera through the facility: it revealed patients unattended in hallways and the emergency room, shortages of essential equipment, and a lack of air conditioning in wards. The hospital is yet another example of economic decay under “21st Century Socialism" – what Venezuela's late firebrand president, Hugo Chávez, had pledged would turn the South American nation into a workers paradise. Socialism, however, has turned Venezuela into a workers hell.

To be sure, the collapse of Venezuela's health care system was well underway during Hugo Chávez's presidency, even as high oil prices filled government coffers -- a fact that alarmed officials at the U.S. Embassy in Caracas. They described their concerns in a "confidential" diplomatic cable sent in December 2009. Published by WikiLeaks, the cable was written during Hugo Chávez's tenth year in office when his socialist agenda was well under way -- from command-and-control economic policies to nationalizing large swaths of the economy. By then, Venezuela was hardly a workers paradise, however -- as was underscored by the increasingly deplorable state of its health-care system. Some of Venezuela's hospitals were closing while others were ridden with crime, noted the diplomatic cable. Many physicians were quitting medicine -- starting new careers in Venezuela or migrating abroad, upset at being paid a pittance or nothing at all. Medical supplies were in increasingly short supply. The cable blamed Venezuela's ongoing health-care crisis squarely on President Chávez -- his Cuban-style health care initiatives and the politicization of the Venezuela's health care system. Physicians perceived as being anti-Chávez were being disciplined, while incompetent military officials were placed in charge of public hospitals.

The economy's tailspin has worsened under Chávez's successor, Nicholas Maduro, a bus driver-turned politician, who has double downed on his predecessor's socialist policies amid slumping oil prices. Now, acute shortages of food, medicine, and even toilet paper are part of daily life in Venezuela – thanks to a command-and-control economy that abhors free-markets and fails to respect private property. In the morgue where a corpse exploded, for instance, there were no disinfectants, chlorine or formaldehyde, according to employees. Draconian currency exchange and price controls are among the policies that are rightly blamed for the scarcity of basic goods.

There's an irony here. Hugo Chávez, a former coup leader and Army paratrooper, won Venezuela's presidency in 1999 by running as an outsider (he had yet to publicly embrace socialism) and by portraying himself as a moderate who had traded the bullet for the ballot. He had during his campaign rightly lambasted Venezuela's traditional political parties for mismanagement and corruption that had put Venezuela – once an economic success story – into economic decline. Yet under socialism, Venezuela is now in the throes of the worst economic crisis in its history. Its economy is the worst performing in the region and is expected to contract 8 percent this year. Rampaging inflation -- the world's highest -- is expected to hit 720 percent this year as the government feverishly prints more and more worthless currency.

This is the "third consecutive year of economic contraction," observed IMF director for the Western Hemisphere Alejandro Werner during a news conference earlier this month. Venezuela, he warned, is in a state of “decomposition.” “The humanitarian aspect is of great concern to us in terms of health care coverage for the Venezuelan society, and in this vein we have been observing the country with a great deal of concern,” he added.

But the worst is yet to come: hyperinflation. Next year inflation is set to hit 2,200 percent, according to an IMF report that the international lender recently issued amid Venezuela's ongoing calamities – including news of an exploding corpse at a hospital morgue. Not surprisingly, an exodus of Venezuelans is fleeing into neighboring countries just like has happened before in other socialist countries from Cuba to East Berlin to Soviet Russia. Venezuelans with the financial wherewithal have headed to the U.S. and other first-world countries, while poorer Venezuela are fleeing into neighboring countries. The exodus has included a brain drain. Citing a study by the Universidad Central in Venezuela, The Miami Herald noted that some 1.5 million Venezuelans, mostly professionals, have migrated abroad as of 2015, with 260,000 arriving United States and 200,000 in Spain.

Venezuela's leftist leaders, for their part, blame the economic crisis and shortages on an “economic war” being waged by opposition leaders, business owners, black marketeers, and foreign enemies that include the United States.

Venezuela's long slide toward failed-nation status has, to be sure, been underway for many years as one government after another embraced bread-and-circuses leftist populism and tolerated corruption, all things that went into overdrive under Hugo Chávez.

The rot and collapse of socialism is an old story. But as Venezuela falls into the abyss, the true believers in Caracas can be counted on to embrace that old leftist war cry: “Socialism or Death!”

Venezuelan jail reveal emaciated prisoners left starving to death

Inside a Venezuelan hospital: 'If people come with cardiac arrest, they die'

CNN: Children Dying From Lack Of Medicine, Supplies In Venezuela's Hospitals

Animals Go Hungry In Venezuela Zoos Due To Shortages

The Daily Mail, UK
written by Jake Wallis Simons In Caracas, Venezuela With Pictures By Roland Hoskins
June 16, 2016

Venezuela's super-rich are enjoying lavish parties and gourmet cuisine, while middle-class people are forced to scavenge for food as the Socialist country's economy collapses.

In the opulent Caracas Country Club, where membership costs an astonishing £77,000 – 458 times the average Venezuelan salary – glamorous women in cocktail dresses were seen relishing a banquet of beef and lobster, followed by a colourful selection of puddings.

Meanwhile, in the Petare slum a few miles away, home to 370,000 Venezuelans, ordinary middle-class people were rummaging in stinking piles of rubbish for rotten cabbage leaves, desiccated limes and scraps of fetid meat.

'Those rich people are thieves. They are government cronies and they stole the country's money,' said Vanessa, 36, who earns £14 a month as an analyst at an electrics company.

'They don't want anything to change, or they would lose their high lifestyle.

'Chávez pretended to be this big Socialist, but he was rich himself. He was a hypocrite. He was a f*****g liar. His legacy is people like me looking for food in the garbage.'

For 20 years, Venezuela's economy was gradually destroyed by 'Chavismo', an authoritarian form of Socialism that wrecked the private sector with mass nationalisation and regulation.

Prices were controlled by the government – often set below the cost of production – and it was illegal to give employees the sack. Petrol was given away for 25p a gallon, and poor people were given free food and healthcare.

Billions disappeared from the economy due to cronyism, with Transparency International naming Venezuela one of the most corrupt countries in the world.

Despite all this, with the biggest oil reserves in the world, a flow of petrodollars kept the nation afloat.

The country has long been the darling of the Left. Ken Livingstone was Chávez's 'urban adviser', and Jeremy Corbyn is a longtime 'Venezuelan solidarity' activist.

But now that oil prices have collapsed – a barrel of Venezuela's domestic crude is now worth as little as $39 – the Socialist utopia has transformed into a failed country.

A state of emergency was declared in May. According to the Venezuelan Observatory of Violence, looters strike more than 10 times a day, and that number is rising.

Yesterday, President Nicolás Maduro, whom Hugo Chávez named as his successor before his death in 2013, resorted to legal action to block a proposed referendum to remove him from office, trying desperately to cling to power.

Meanwhile, at the Petare slum in the east of the city, Maria, 27, a mother-of-three, was sitting in a pile of rubbish hunting for food.

'I come to the rubbish pile whenever I can afford the bus fare,' she told MailOnline. 'I get more here than I would on minimum wage. Our money has become worthless.'

Sky-high inflation, currently approaching 700 per cent, has destroyed Venezuela's currency. The largest note, the 100-Bolivar bill, is now worth just 7p, plunging millions into abject poverty. The government can no longer even afford to print more cash.

'My husband is a welder and we don't make enough to live on,' Maria said. 'I have to queue for hours for food, and often I get nothing. If I come here, at least I go home with something.'

Mother-of-eight Carmen, 39, added: 'I don't want to be here digging in the rubbish. I feel like I'm suffocating, like I can't breathe. I feel like I'm drowning. But my husband is sick and we are hungry.'

Her 12-year-old son, Julio, was helping his mother scavenge in the rubbish after school.

It's not just food that's in short supply. At the El Algodonal hospital in Antímano, Dayana, 30, cradled her five-month-old baby, Anna-Gabriela, who was admitted with acute asthma and bronchitis eight days ago.

The hospital is unable to provide medicine, food or even toilet paper.

'My baby needs antibiotics and asthma drugs, but I've been to 10 pharmacies and nobody has any,' she said.

'I can't bear seeing my baby unable to breathe. I just want her to get better, but she can't follow a course of treatment.'

This was a world apart from the Country Club, where white-coated waiters were seen serving cocktails and canapés and men practised their swings on the golf course against a backdrop of the city's impoverished neighbourhoods on the skyline.

'It's not that we don't care about the poor people. We give a lot to charity,' one golfer told MailOnline. 'Should we stop enjoying ourselves just because the country is burning?'

The Club is just one of a network of exclusive establishments frequented by Venezuela's high society.

Around Caracas alone there is the Lagunita Country Club, which offers an equestrian centre and opera auditorium and costs £50,000 to join; the Valle Ariba Golf Club, which charges £47,000; and the Carenero Yacht Club, with parking space for boats and jet skis and a private beach, where membership costs £60,000.

Venezuela's Socialist rulers have long been at loggerheads with this symbol of capitalism, loudly threatening to seize its land for social housing.

Behind the scenes, however, the Socialists and Boligarchs – so called because of the wealth they gained through their connections to the Bolivarian Socialist government – are often hand-in-glove.

Diego Salazar, a pro-government businessman who was implicated in an oil corruption scandal last year, is a member of the Club, and Alejandro Andrade, Chávez's notorious Finance Minister who travelled in a £7million private jet, has attended its showjumping events.

A former American ambassador, C Allen Stewart – representative of a country so hated by Chávez – died of a heart attack on the golf course.

Inside the club, the air-conditioned Penguin Bar offers leather armchairs, fine whisky and cigars, while the restaurant, which sells vintage bottles of champagne, is proud of its seared tuna steak.

The golfer told MailOnline that many members of these clubs had nothing to do with corruption or the government, but were simply wealthy diplomats or businessmen earning foreign currency.

But few ordinary Venezuelans see things that way. 'I don't want the wealthy to suffer, but they have destroyed our country,' said Francisco Lopez, 66, an administrator at a bank, as he watched people going through the rubbish.

'I know many people who are members at the Club, and their lives are beautiful. Meanwhile, people in this area have no dignity.'

Supermarket shelves all over the country lie empty, despite the government's efforts to force shopkeepers to put everything they have on display.

Some desperate Venezuelans are resorting to bartering on social media to provide for their families, trading everything from flour and nappies to prescription drugs.

Wealthier people are still able to source the best ingredients on Venezuela's thriving black market, however, where goods are sold for many times their original price.

Black marketeers known as ants, or 'Bachaqueros' – so called because of the loads they can carry on their backs – hoard groceries and sell them on at vastly inflated prices.

One estimate suggests that one in four Venezuelans supplement their income in this way.

'Even if people are poor, I never give them a discount,' said black marketeer Christabell, 24, at her hilltop apartment in El Junquito, Caracas.

'I know it sounds like I'm a terrible person, but I worked hard to get these items. If I start giving away my livelihood, I'll be broke. People say I am playing with the hunger of the people, but what about my hunger?'

Her current stock – which she bought from a contact inside a supermarket – cost her £7, she said, and she will sell it for £35, a markup of 400 per cent.

The profit, £28, is double the average monthly salary in Venezuela.

'I often ask myself if what I'm doing is right, and I always answer that it is wrong,' she said. 'But the government has forced us into this, and things are getting worse. It's like a circle getting tighter and tighter around us every day.'

Outside Caracas, the shortages were even more acute. At the Excelsior Gama supermarket, northeast of the capital, thousands of people jostled and argued in an unruly queue while men armed with machine-guns tried to keep the peace.

Most of those queueing had been there since 4am, in the hope of getting one litre of cooking oil and a kilogram of pasta per family.

'We're on a forced diet. We've all lost weight,' said Carlos Acuna, 56, a security guard and father-of-six. 'We had a Socialist revolution, and these are the results. This is the diet of the revolution.'

Nearby, in the rural town of Tacarigua de Mamporal in Miranda state, an emaciated Weimaraner dog was seen stumbling around a tree on the brink of starvation.

Local residents Carlos de Parra, 39, and his wife Yoraima, 34, have seven children between the ages of six and 17. He works as a cleaner and his wife sells street food; but between them they earn just £2 a week due to spiralling inflation.

Living without electricity and running water, the family has so little to eat that they are starting to starve.

In the kitchen cupboard there was nothing but a bag of salt. In the fridge was just a few mouldy limes and a fist-sized lump of dough in a pot – lunch for all seven children.

'I grow corn, beans and yam but it is not enough for us and a worm is eating the crop,' said Carlos. 'I have no money for pesticides or fertiliser.

'Last week I queued for three hours at a grocery shop and in the end I left with nothing. I've never had to fight so hard for food.'

The previous week, he said, armed robbers broke into their house and stole their washing machine. The week before, police confiscated the rifle he used to hunt deer for his family.

'It's complicated to explain how I feel,' he said. 'I can't find the words. There are so many things that we need which I can't find. Every Venezuelan is angry.'

His wife sells street food six days a week, but is not allowed to eat any herself. 'I feel hungry, so hungry, I go to bed without dinner, and I'm not allowed to eat the food I sell,' she said.

'I know it's bad, but sometimes when the boss goes, I eat some pancake. But if I brought some home for my children, they would notice and I'd get sacked.'

Along with economic collapse has come a rise in violent crime. Caracas' murder rate is the highest in the world, earning it the nickname 'the most dangerous city on Earth'. Many parts of the capital, and elsewhere in the country, are lawless.

Chávez's policy of arming civilian militias and 'collectivos' to defend the Socialist revolution has led to Venezuela becoming the most weaponised country in the world, with one gun for every two citizens.

People live in constant fear of robbers and kidnappers, and many members of the middle-classes are leaving for Colombia or the United States.

In the face of such hardship, even the most fanatical supporters of the government – the so-called 'Chavistas' – are starting to have their doubts.

Marlene Gaspar, 44, a hospital security guard, is a member of a pro-government militia which is deployed to maintain order at food queues. But she is so weakened by hunger, she said, that she is no longer attending weekly paramilitary training.

'I used to be overweight, but now I am skinny,' she said. 'I weighed 11stone last year, but now I am under eight. I often don't eat so I can give food to my children.

'Chávez was supposed to change things, but it didn't happen. Instead the rich people have lots of money and fancy cars, and everyone else is starving.

'My heart is heavy. I feel cheated. Our Socialist dream is falling apart.'