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Venezuela: The State of the Nation, 2004

By Gustavo Coronel

(January 11, 2004) Forget for a moment about the name of the Venezuelan President and about his political philosophy. Forget about his vulgar and aggressive language and about his disrespectful treatment of dissidence. Forget about the manner in which he has aligned his country with the most unsavory characters in world politics. Let us put this aside for a moment and look, in a purely factual way, at the state of the nation.

Let us look at the economy. This year the Venezuelan GDP will drop more than 10%, the highest drop in Latin America. Inflation will be close to 30%, the highest in Latin America. Unemployment is at 22%, the largest in Latin America. Foreign investment is down more than 60%. Industrial output is the lowest in the last 30 years. Thousands of companies have closed their doors. Exchange controls have been in place all year, bringing economic activity to a virtual standstill. International reserves are sharply up, to the level of some USD $22 billion, at the expense of normal economic activity in the country. Poverty has increased to include a terrifying 85% of the population. Petroleum derived income decreased 25% during the year. National debt has doubled in the last five years and the internal debt has increased by a factor of six during the same period. The Venezuelan banks now have some 65% of their financial portfolio represented by government debt, a very dangerous situation. The main and only profitable State owned company, Petroleos de Venezuela (PDVSA), has had the worst year in history and is now in a very fragile organizational and economic situation, after losing 50% of its technical and managerial work force. Venezuelan exports have dropped some 40% during the year, while imports have decreased more than 60%, due to the inefficiency of the imposed exchange controls. New car sales are down 55%. The construction industry has almost completely disappeared. Tourism is down more than 55%, both tourism coming into the country and tourism by Venezuelans going abroad. Probably the only two economic activities which have improved have been the sale of lottery tickets and the sale of liquor, as Venezuelans are desperately trying to get some quick money or, else, to forget they are growing poorer by the minute. The Venezuelan currency, for the first time in history, is worth less than the Colombian peso.

Let us look at the Social Situation. Poverty and unemployment have turned thousands, if not millions, of Venezuelans into street peddlers, beggars and criminals. Today, 65% of the working able population are street peddlers since they cannot obtain a regular job. Hundreds of thousands of children live in the streets of Venezuela, without parental support or government guidance. These children lack all essentials and survive by begging, shining shoes, distributing drugs, petty thievery or worse. They sleep in the open, wherever they find a reasonably safe place. They are easy prey to adult criminals and sexual perverts. Crime is rampant and goes largely unchecked. During 2003 more than 10,000 Venezuelans were murdered, more than 3,000 in Caracas alone, in comparison with the 499 murders in Chicago, the US most dangerous city. Every weekend the Venezuelan morgues are overflowing with unclaimed bodies, as there are no organized systems to identify and inform relatives about the dead. Car thefts and muggings take place under total impunity, as police and armed forces are more intent in the control of political adversaries than in protecting the common citizen. In the streets of Caracas and other Venezuelan cities, garbage and filth mount for days or weeks since few garbage collecting companies are paid by the municipal governments. Social resentment has been fueled by the political discourse, mainly the Presidential rhetoric, which claims that the rich have stolen from the poor and the poor should use all means to get their wealth back. Racial tensions have been artificially revived by the presidential claims that the Venezuelan whites are the ones to blame for the misfortunes of the colored, a strategy supported by visits from abroad by black activists such as Danny Glover or white racists such as Greg Palast. Education and Health have further deteriorated, in spite of the immense amounts of money theoretically assigned to these sectors by the government, money that increasingly ends in the pockets of the people in power. Corruption is at a high level never seen before in Venezuela, not even during the worst moments of the administration of former President Jaime Lusinchi. This is due to the fact that there is no transparency or accountability in the execution of the government's social programs.

Let us look at the administrative situation. There was no normal execution of the national budget during 2003. Whatever programs were approved by the rubber-stamping National Assembly were lost in the frenzy of improvised expenditures, which characterized the action of the government. The government used money as it came in, in a totally arbitrary fashion. As a result, indebtness largely increased and many of the dollars obtained from the sale of petroleum were not normally managed through the Venezuelan Central Bank but directly by government bureaucrats. The game of musical chairs continued during 2003, to the point that the average life expectancy in the job of a minister or a high government official was less than one year. Even the brother of the President has been moved three times in as many years. More than 70 Venezuelans have occupied ministry positions in the last five years. Any management consultant would tell the government that this is no way to run a railroad. At lower bureaucratic levels, where most of the vital social programs are executed, the situation is even worse. Entire Boards are suddenly removed at the pleasure of the President, whenever he feels that the members of that Board are a bunch of thieves (often the case), as it has happened in the Seguro Social (Social Security) and the Bolivar 2000 or other programs. Thieves are sent to embassies abroad but never punished, just as it has happened during the worst years of clientelism and populist democracy in our country. The key areas of political control are jealously reserved to the unconditional followers of the president: the Comptroller, the Ombudsman, the Chief of the Armed Force, the Attorney General, the President of the Supreme Tribunal of Justice, the President of the National Assembly. His stooges are firmly rooted in those positions.

Let us look at the spiritual mood of the country. Citizens who are poorer and who feel more frustrated than ever, citizens who are more physically insecure, more stressed and subject to chronic harassment from the government and its followers. How can they feel? They feel pretty bad. As a means of compensating for these negative feelings, they have become ever more determined to bring about a change in the political, social and economic situation of the country. This explains the intense drive they have led this past year towards a peaceful and legal resolution of the deep crisis the country is in. The reaction of the people has been positive. They have not despaired but have decided to do something about it. And they are doing it.

In summary, there is no need to give the President a name, or to say that he is white, black or yellow, or that he comes from the ranks of the poor or from those of the rich. There is no need for us to say that he is communist, religious or heterosexual. We no longer care if his daughter has a turtle or not. We don't have to like or hate his off key singing. The only important thing for us is that the nation is in a mess and that this has to be corrected, no matter what efforts this correction require from us. The bottom line for us Venezuelans is the state of the Nation, not if the President is this or if he is that. He could have three arms and two noses if the country was in good shape. But, since this is certainly not the case, all we want is to see that person, whatever his name is, &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; &bnsp; OUT. . . .

2003 Gustavo Coronel

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