Caracas Daily Journal (Jeremy Morgan): Pressure is growing on the government to rethink its approach to its economic policy amid concern that Venezuelan companies are beset by a combination of imports, slowing demand, and official controls on prices and foreign exchange.
Finance Minister Rafael Isea has called in representatives from business and industry to review economic policy. However, economists say it remains to be seen how far he'll budge on long-standing demands for the controls to go.
Conindustria, which claims to represent small and medium-sized companies, many of them in manufacturing, has urged the government to focus on ways to boost domestic production. But Conindustria President Eduardo Gómez Sigala said he felt the government was more interested in speeding up procedures for importing products in short supply.
Gómez Sigala wasn't that impressed by the government's performance on the economic front, but emphasized that he was approaching the talks with a positive attitude.
"I believe that the results the government has shown are very weak and these meetings are part of the efforts that the government is making in difficult moments," he said.
Imports were not the solution, Gómez Sigala argued. "They're not attending to the root of the problem which is how can we really give an incentive to domestic production and give priority to Venezuelan agriculture and industry," he said.
The Foreign Exchange Administration Commission (Cadivi) earlier this week announced a new 24-hour electronic service on its web site for people seeking authorization of access to hard currency. At the same time, the government is trying to halt a renewed surge in the "parallel" foreign exchange rate.
Talk is of the government launching three new state debt bonds worth a total of $4.1 billion, a measure aimed partly at soaking up excess liquidity in the local money market, which is seen as a primary source of inflation. The Finance Ministry and the tax collection agency, Seniat, are also taking a look at the tax on financial transactions (ITF).
Launched last year amid protests from business that it would inevitably boost costs, some officials are now said to be recognizing that it does indeed tend to fuel inflation.
There's speculation that ITF could be cut in coming weeks. The other aim of the widely expected bond issues is to shore up the finances at the National Development Fund, Fonden.
The fund, which is partly financed with direct contributions from the state oil corporation, Petróleos de Venezuela (PDVSA) and partly by the Venezuelan Central Bank (BCV), disbursed more than $18.1 billion during the last two years.
Over the same period, Fonden received $17.045 billion from the central bank and $15.15 billion from PDVSA.
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Why aren't these bolivarian ministers working closely with representatives of the working-class? What kind of 'socialism' is so solicitous of the views of the chambers of commerce -- the very ones behind the economic and political sabotage..? I think there needs to be REAL big shakeups in this government, frankly.
ReplyDeleteI don't know what exactly has to be done here, economically and/or fiscally -- but the likes of the "Oil Wars" blogger certainly seem to have a better handle on what the venezuelan economy needs than most of these bolivarian ministers, looks like. Why don't the bolivarian ministers consult with him and the representatives of the consejos at the national level?
I suggest the workers organize and apply relentless and permanent pressure on these 'bolivarian' bureaucracies, and make it very clear where the power now lies in society -- i.e. not in the chambers of commerce or in the executive suites or the golf courses or Miami or Washington or New York or Sao Paulo.