Starbucks recently opened a store in Caracas, which became an instant success. Social media buzzed with the news, signaling a potential recovery for Venezuela. Reports indicate that Caracas looks different now, with bodegones (delis) popping up everywhere. Restaurants and nightclubs are filled with beautiful people, and some eastern avenues in Caracas are once again illuminated as part of a beautification effort initiated by local authorities. The greenback is king…
The issue is that Starbucks did not actually open a store in Caracas. It was created by Jorge Nieves, a Venezuelan entrepreneur who thought that the unauthorized appropriation of Starbucks’ intellectual property, logo, and business model was a clever idea amidst ongoing Treasury sanctions. Nieves’ café lasted less than a month, but this seems to be a recurring theme: Walmart and Kellogg are other American brands that “opened” in Venezuela without headquarters’ knowledge.
Bodegones represent another phenomenon, faring much better than Nieves’ Starbucks, thanks to the abundance of boligarcas, narcos, chavistas, and other criminals in Caracas. It’s fair to say that Venezuela could very well challenge any jurisdiction in money laundering at this moment. With a unique position in the Andean region, drug cartels operate with the support of chavista military forces, under a government that controls one of the largest energy conglomerates in the world (PDVSA). Backed by Putin, Xi, Erdogan, and the ayatollahs, Venezuela remains open to all sorts of money laundering, big or small.
The “economic miracle” is happening in broad daylight, much like Nieves’ Starbucks. It’s not hidden, nor does it invite prosecutions or lawsuits of any kind. In fact, Nicolás Maduro has made the astute decision to implement a near-official currency adoption: everything is now bought and sold in USD in Venezuela. This move adds another layer of irony at the expense of the Treasury, and clearly mocks the sheer stupidity of U.S. government policies toward a country that seems to be thriving. A new budget of over $13 billion for 2022 has recently been approved, although it’s safe to say that another $13 billion, likely much more, will flow into the economy. For a country the size of Venezuela, this will give Maduro ample room for maneuver and could end up overshadowing Biden’s mid-term debacle.
Then there are talks of fortunes returning. The “rich,” namely those whose looting has plunged the country into a humanitarian crisis, are returning to the only place where they can find “success.” And they will find “success” again. There’s no need for U.S. banks or trade flows when Russia, China, Turkey, Iran, and Europe are eager to lend a hand.