The editors of Veneconomy take a look at the financial numbers for 2009 -- with oil down and government spending up -- and conclude that the figures obviously don't look good. Then they search for answers as to why Chavez isn't taking measures to protect the budget, economy, people and country from this obvious disaster ahead?
Those in Central Government are deceiving the people with premeditation and malice aforethought.
Suffice it to take a quick look at the numbers to get an idea of the extent of this deception. There is no hiding the fact that the price of the Venezuelan oil basket has already dropped below $40/barrel, and expectations are that it will continue to slide, which will have a heavy impact for the country in 2009. Despite this situation, there is no sign that the government is taking any measures to reduce the impact of a foreseeable, drastic cut in revenues.
In displaying this indifference to things economic, the government wants to make it seem that no crisis exists and it boasts that the balance of payments posted a surplus of $5 billion in the first nine months of 2008. The government does not understand that this result is nothing to boast about, in particular if account is taken of the fact that the country borrowed $10 billion in 2008, mainly new debt for PDVSA. Had it not borrowed this sum, the balance of payments would have posted a $5 billion deficit.
Moreover, the Central Government’s budget had a deficit of Bs.F.12 billion, equivalent to $5.5 billion. What is worse, these poor results were obtained when the average price of the Venezuelan basket was $101/bbl and not at the present levels of $40/bbl. Perhaps in 2009 the price of the Venezuelan oil basket could recover and reach an average of $51/bbl; unfortunately, in this “optimistic” scenario, things do not look good for Venezuela either.
To give an idea of the magnitude of the problem that could arise, take a look at these figures: If you are one of those who believe that the government is telling the truth when it says it is exporting 2.8 million barrels a day, then, if the barrel had been at $51 in 2008 and maintaining all other parameters the same, the balance of payments deficit for the first nine months of this year would have been $43 billion and the Central Government’s deficit would have come to $21 billion. That would have meant that the government would not have been able to cover the $34 billion in imports brought in during that period.
But if you are among those who believe that it is the OPEC and the International Energy Agency that have got the figures right and Venezuela is only exporting 1.8 million barrels, with the barrel at $51, the balance of payments deficit in the first nine months of 2008 would have been $30 billion and the Central Government deficit $21 billion. This amount is not sufficient to maintain the rhythm of imports either.
In short, it could well be that the warnings of analysts regarding the crisis that is occurring are falling short and that it will show its worst face in 2009. It is thought that the situation could be similar to what happened in 1989, when the Carlos Andrés Pérez administration found that Jaime Lusinchi had left it with the coffers empty and the Central Bank without reserves.
On that occasion, CAP had the courage to face up to the crisis, resort to the IMF, implement drastic and unpopular measures, and assume the political cost that all this implied. The result was that the country managed to overcome the crisis in a short space of time. Now, everything indicates that Chávez will give priority to his political project and his ambitions for power over the well-being of the population.
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