home | Archive | analysis | videos | data | weblog

news in other languages:
Editorials in English
Editorials in Spanish
Editorials in Italian
Editorials in German


Venezuela: Rich Government, poor country

By Teodoro Petkoff *

The patron saint’s party that celebrated the twelve years of the attempted coup of February 4th. 1992 (4F) included, between roosters and midnight, an act that they attempted to do a slight of hand with: the new devaluation of the Bolivar. Up to February 4th. of this year, the US dollar cost Bs. 1600, hours later, it began costing Bs. 1920. A devaluation of 20%. The first victims of the adjustment are, naturally, the common citizens, especially the poorest, whose income, measured in terms of US dollars, has experienced a sharp drop.

The minimum salary of workers is today 247,104 bolivars. Up to 4F, that salary was equivalent at the rate of Bs. 1600, to 154 US dollars. After 4F, the minimum salary, which remains the same, is equivalent now to 129 US dollars. Together with the minimum salary, all other salaries, measured in US dollars, experimented a similar sharp drop. Divide your salary by 1,600 and then by 1,920 and you will discover how much less you make today than before 4F. But if you make that division by 3,000, which is in round numbers what one of those greenbacks from the north costs in the black market, then you will surely begin to cry.

For now, the minimum “black” salary comes to about 82 US dollars. This number is closer to reality than the “official” rate, because under the conditions of an exchange control, it is the black market which sets the economic benchmarks. This revolution is getting pretty!

Of course, I am sure that there will be some that will point out that we make money in Bolivars and not in US dollars, but it so happens that in a country which imports 60% of all its goods, especially food, you will pay in more expensive US dollars. Thus, the prices of the supposedly controlled items (because in practice there is no control that has stopped the increases) have received an impulse in their flight all the way to Mars. The devaluation, of course, is gas for the flame of inflation. Last year’s was 27%. That of January 2004 reached 2.5%. If you extrapolate until December, without taking into account the devaluation, you would close the year at 36%.

It scares you to think how much the weight of the devaluation will add to this. This celebration of 4F is turning out really cool. But for the Government it is not all bad news. It will now receive more Bolivars for each dollar and its fiscal problems will be alleviated and there will be more cash for electoral plans and the buying of votes, following the classic Creole model of populism. The devaluation makes the citizens poorer, it enriches the Government.

There has been a tax increment not established in any law. The Government now takes more money out of our pockets via the so-called “inflation tax”. Chávez is Robin Hood backwards, Hood Robin: he takes from the poor to give to the rich, especially, the most powerful of all, the Government itself.

Well, we have already celebrated half of what Chavez baptized as the “silver decade”, which was supposed to precede that of “gold”

But, the truth be said, “For now” (por ahora), what we have is five brown-colored years, of thick consistency and with disagreeable smell. Yes, made exactly of what you are thinking.

* Teodoro Petkoff is the editor of Tal Cual, translation by Miguel Octavio

send this article to a friend >>

Keep Vcrisis Online

top | printer friendly version | disclaimer