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  HOME | Opinion (Click here for more)

VenEconomy: Is Nicolás Maduro Speaking Truthfully This Time?

From the Editors of VenEconomy

This weekend, amid a series of announcements that seemed to come from an unbelievable and unreal parallel universe such as the creation of a vice-ministry for the “supreme happiness of the people of Venezuela” or the “reactivation” of an “anti-coup commando,” President Nicolás Maduro spoke at least two truths amid many of his well-known tall tales: 1) Venezuela is dealing with “continued blows,” and 2) that supplies of food have been sustained thanks to strategic reserves, comprised of imports by the middle of this year.

Maduro is right about that. Since the Castro-Chávez “Revolution” came into power in 1999 by using the democratic channels established by the Constitution of 1961 valid to date, which are there to guarantee the rotation of the presidents, the country has been suffering “continued blows” in all its democratic institutions, in its free-market economic system, in its economic and civic freedoms, in its productive system and in its rights to food and healthcare according to the Constitution of 1999.

He is also right about international reserves keeping imports flowing in so the population can get indispensable food products. He is for certain that Venezuelans have been nearly without any food or hygiene products over the past few months.

What Maduro is not saying here is that those reserves are at historical lows, despite high oil prices, or that those reserves should have been quite substantial by now if the Government had followed the policies from the now extinct Investment Fund for Macroeconomic Stabilization (FIEM) in saving some resources amid an oil boom rather than putting them into the “bottomless pit” of the National Development Fund (aka Fonden).

Maduro is not making mention either that his “supreme commander,” Hugo Chávez, the man who first caused all this mess, activated the so-called “Zamoran farms” so Venezuela could become a “truly agricultural country” in order to “lower poverty levels both in the country and the city; lower unemployment, crime rates and so many other evils we have inherited over the past 50 disastrous years.” Now it turns out that, according to Rafael Ramírez, now vice-president of the economy, it will take 50 years to “right all the imbalances.”

Reality is that farmlands have been devastated over the last decade thanks to the Zamoran farms, confiscations of lands and a castrating Land Law, while it is impossible to harvest anything in Venezuela from rice, wheat to corn and not to mention the production of meat or toilet paper…

And what those “continued blows” did not do to the national productive sector, they did through an enabling law with the decree of the Law of Fair Prices enacted on July 11 of 2011: A law that has been imposing strict regulations, with inflexible administration mechanisms and excessive control of prices in all products and services that are produced, distributed and commercialized in Venezuela.

These “continued blows” by the Chávez-Maduro administration to the economy and food tables of Venezuelans rather than make the right move in a bid to right all the wrongs, the only “solution” it comes up with is announcing another “blow”: A massive plan of food imports from Argentina, Brazil, Colombia and Uruguay to be paid with, according to Ramírez, “dollars in cash and bonds from portfolios of public bodies” which will also allow that “other countries pay their outstanding debt with Venezuela through food shipments.”

Does this plan mean more “continued blows” from high corruption levels in the country?

VenEconomy has been a leading provider of consultancy on financial, political and economic data in Venezuela since 1982.

Click here to read this in Spanish


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