Saturday, April 24, 2004

A Chavez séance on the Venezuelan Economy
Rewriting history books in three parts (I)

Satruday 24, April 2004

Thrusday night Chavez treated us to a cadena on economic matters, namely the supposedly successful placement of a new bond issue. Since I was busy on other things I did not turn off the TV, nor switched to cable and with a distracted ear I followed his ramblings. I was not disappointed. I do not remember exactly the sequence of events, but in Chavez speeches this is really not important. So I will describe a few of the themes that I picked up.

The democratization of bond issues

The main point was to talk to a captive audience of the virtues of the new sovereign bond (see Miguel's blog for details on bond issues). He addressed the audience as if it were a foreign crowd when in reality it looked just like the packed crowds that officials prepare for him, with a few foreign guests on the first files.

Chavez gloated that for the first time in Venezuelan history small investors had access to such bond issues, that for once a bond issue was not in the hands of a privileged few that set the conditions that best fit them. Maybe. But at 10,000 US dollars the smallest coupon, I would hardly talk of "small" investor. At the official exchange rate 10,000 USD are 19,200,000 Venezuelan Bolivares, VEB. As a reference 1,000,000 VEB monthly paycheck is considered today a decent paycheck and puts you in the middle class (1). With Venezuelan labor laws that 1 million monthly becomes perhaps a 15 million total at year end with bonus and vacations. I wonder how on a 15,000,000 VEB income one can save 19,200,000 VEB. Democratization? Give me a break! To be able to save such amounts in today’s Venezuela you must own your own business or be a high placed executive.

Or win the lottery.

Or be a corrupt official.

-------
(1) For perpective, 1,000,000 is almost 5 times the minimum wage.

No comments:

Post a Comment

Comments policy:

1) Comments are moderated after the third day of publication. It may take up to a day or two for your note to appear then.

2) Your post will appear if you follow the following rules. I will be ruthless in erasing any comment that do not follow these rules, as well as those who replied to that off rule comment.

3)COMMENT RULES:
Do not be repetitive.
Do not bring grudges and fights from other blogs here (this is the strictest rule).
This is an anti Chavez blog, with more than 95% anti Chavez readers that have made up their minds long ago. Thus trying to prove us wrong is considered a troll. Still, you are welcome as a chavista to post,> in particular if you want to explain us coherently as to why chavismo does this or that. We are still waiting for that to happen once.
Insults and put downs are frowned upon and I will be sole judge on whether to publish them.

Followers