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  HOME | Opinion (Click here for more)

VenEconomy: More and More Bad Things to Come for Venezuela

From the Editors of VenEconomy

The Venezuelan Government on Wednesday, on another never-ending national TV and radio broadcast, hinted at the new direction Venezuela is going to take from now on with a “new economic order” that had progressively been announced since Hugo Chávez’s “successor” took office in April of this year.

That so-called “new order” does not bode well for the country as we could all have expected from those persisting on taking Venezuela to the level of “the sea of happiness” (Cuba) and from what we deducted when President Nicolás Maduro addressed the National Assembly (AN) on Tuesday, in whose speech referred to the private sector as being a “parasitic bourgeoisie” claiming that socialism will no longer be possible should it “keep enjoying the privilege of importing goods on a large scale without us putting a halt to it.”

On first analysis, what Venezuelans can expect from these two statements, should the country stay on the path of Castro-communism, is more and more bad things than they have already suffered over the past fifteen years:

First of all, there will be more tight regulations and controls: On the one hand, a “new general regulation scheme of prices on goods and services” is to be implemented over the already tight controls from Indepabis and Sundecop, two of the Government’s consumer protection bodies, and under the watch of the Bolivarian Armed Forces (FANB). And on the other, the National Center of Foreign Trade (CENCE) and Foreign Trade Corporation (the main offshoot of CENCE) will be created to apply more controls over the access to foreign currency different from those already imposed by Cadivi and SICAD, besides the watchful eye from the Government on all imports, which represent more than 85% of the demand of all kinds of products and services required by the country’s population.

Second of all, more inspections are to come (meaning more and more fines, company shutdowns and briberies) besides those already applied by several taxing bodies that keep harassing big, small and mid-sized businesses.

Third of all, funds and more funds are being created or reactivated (the Popular Savings Fund, the Special Fund for the Compensation and Stabilization of Prices on Goods and Services of Mass Consumption and the Bicentennial Fund, for now). These will get the resources from the public purse to be managed with total discretion and no accountability. This is translated, in real life, into the exclusion of companies that are deemed against the socialist process from that “new order” and the inclusion of those “attached” to the centers of power, meaning more corruption and the bleeding of our oil revenues.

As a corollary, the registrar of the business using foreign currency allocated by Cadivi will be “debugged” in order to comply with the obligation of managing the use of foreign currency that “belongs to the people of Venezuela for their own benefit.”

In the history of military governments in Venezuela there has always been the tragedy that when rulers have sought to “benefit the people,” they end up harassing, persecuting and destroying all productive sector that inevitably falls into the eye of the “revolutionary” storm.

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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