Tag Archives: economy

Venezuela cash crunch note

Minor item, but I had thought Venezuela’s recent cash crunch came from the Amuay refinery explosion and the need to import lots of fuel for international prices. I downloaded the convenient chart of the country’s black market currency rate from dolartoday.com and I see that the steady exchange rate broke down on August 15, while the explosion didn’t happen for another two weeks. So if there was any causal connection, it might have been the other way. Chart:


Caracas’s forgotten water crisis threatens again in 2011

Updated 10:08 a.m. to make table readable.

Caracas’ water system made headlines in the fall when Alexander Hitcher, then president of the water utility Hidrocapital, went on television to say that he would impose mandatory water savings measures to reduce the flow to the city by 25%. The rainy season had added almost no water to local reservoirs and demand was growing. While the public whined about the nature of the rationing — 48 hours a week without water for most residents — I heard many people say that at least he was taking responsibility and doing something before the city ran out of water completely. I met plenty of people who at least said they agreed with my assessment that at 400 liters a day per capita, Caracas water consumption was unnecessarily high, and could easily be reduced.

Hitcher was promoted to minister of environment when Yubiri Ortega quit a few months ago, with the president saying that Hitcher had done a good job. He was back in public at the beginning of March to say that Caracas had successfully cut consumption by 30%. A week later, his vice minister of hydrology came out to say that people were using water more rationally, protecting the country’s reservoirs.

Meanwhile (to their credit) Hidrocapital continues to post periodic updates on the level of water in Caracas’s reservoirs. (March 1 presentation is here.) Looking at them breaks some of the tranquility one might feel after listening to the minister and his aides.

The biggest reservoir, Camatagua, declined at the exact same rate as it did in each of the prior four years up until the end of March. Since then, the rate of decline has slowed, but water level has continued to fall. Its current level is well under half of capacity. The reservoir has been exploited at an unsustainable rate since 2006. That was the last year when rains let the reservoir recover all of the water used in the prior dry season. Since then, each rainy season has failed to fill the reservoir, leaving the city with less and less margin for a very dry year like last year. There is now no margin for a multi-year drought — hopefully the nice people at Columbia University’s IRI are right to predict a heavy rainy season. Continue reading