Venezuela Economy Grinds To A Halt As Maduro Orders “Five Day Weekend”
Just three weeks ago, the Venezuela socialist paradise gifted local workers with one extra day of rest each week when, as a result of the crippling economic crisis and collapsing power grid, president Maduro designated every Friday in the months of April and May as a non-working holiday in his desperate bid to save electricity as a prolonged drought pushes water levels to a critical threshold at hydro-generation plants. Never without a scapegoat, Maduro immediately blamed El-Nino for implementing the three-day weekend.
“This plan for 60 days, for two months, will allow the country to get through the most difficult period with the most risk,” Maduro said on state television in early April. “I call on families, on the youth, to join this plan with discipline, with conscience and extreme collaboration to confront this extreme situation” of the drought blamed on the El Nino weather system.
As a reminder, the reason for the electrical rationing was the water content of Venezuela’s Guri Dam, which supplies more than two-thirds of the country’s electricity. As The Latin American Herald Tribune wrote a month ago, the dam “is less than four meters from reaching the level where power generation will be impossible. Water levels at the hydroelectric dam are 3.56 meters from the start of a ‘collapse’ of the national electric system. Guri water levels are at their lowest levels since 2003, when the a nationwide strike against Hugo Chavez reduced the need for power, masking the problem.”
Yesterday the water levels at Guri dam reached a record low of 241.67 meters, according to state power utility Corpoelec. If levels drop below 240 meters, the dam’s operator may be forced to shut down units at the plant that produces about 75 percent of the electricity that Caracas, the country’s capital and largest city, consumes.
(arrow shows where the water should be if the dam were operating at capacity)
Alas, since this plan was doomed to fail as the Venezuela economy would produce even less output as a result of the extended weekend, things went from comical to farcical overnight when the Venezuelan gift kept on giving, and the nation expanded the three-day weekend to five days, declaring a two-day work week for government workers, adding it was seeking international help to save its power grid amid a drought that threatens the capital’s main source of electricity.
The two-day work week, after the government added Wednesdays and Thursdays as non-working days to save more power, will last at least two weeks, President Nicolas Maduro said on his weekly program broadcast on state television. Schools will be closed on Fridays starting this week, he said.
“The public sector will work Monday and Tuesday, while we go through these critical and extreme weeks where we are doing everything to save the Guri,” Maduro said, referring to the giant hydroelectric dam that has become like a “desert.” The collection of electricity-saving measures have reduced Guri’s daily drop from 22 centimeters a day to 10 centimeters, he added.
As Bloomberg adds, Venezuela is requesting emergency international help from the United Nations for public works construction to help the country recover from an “extreme situation,” Maduro said. He called for “social peace” during the power crisis.
Meanwhile, Venezuelans, except those in the capital and some states, began to experience programmed four-hour rolling blackouts on Monday as a drought cripples generation at the Guri dam. According to the IMF, Venezuela’s economy will contract 8% this year, after shrinking 5.7% in 2015. Considering hyperinflation in Venezuela is already running at over 700%,and now that the economy is effectively shut down, we will take the under.
Today’s announcement follows another curious idea by Maduro when earlier this month he ordered the country’s time zone changed to save energy, reversing the decision by his predecessor, Hugo Chavez, to set back clocks 30 minutes in 2007 to ease daily predawn commutes for school children and the poor. Clocks will be moved forward a half hour May 1.
Looking forward, we doubt that the decision to expand the weekend from 3 to 5 days will be reversed any time soon (after all the initial 3-day weekend expansion was supposed to be temporary as well), and the most likely outcome is that in his next decree, Maduro will announce that public workers can just take a 7 day weekend, and no longer show to work. They will also receive a commensurate wage.
At that point, we assume, is when the Venezuelan experiment in creating a socialist paradise finally concludes.