Op-Ed Commentary
VenEconomy:
Just
one Christmas
Before the December 3 elections, storekeepers were saying that
there were going to be two Christmases in Venezuela: one in November
fueled by the “prompt payment” of the end-of-year
bonuses to government workers and pensioners; and the other, the
traditional one, in December seasoned with the payment of the
private sector’s profit-sharing bonuses.
While it is true that there was a lot of nervous buying in November
and sales (not including supermarkets and grocery stores) were
good, they were not exceptional. One factor that may have resulted
in Christmas in November not coming up to expectations could have
been that many people were cautious about spending their money
given the possibility of a violent electoral scenario.
Now that the elections are over, Christmas true and proper is
starting. The climate of tranquility that prevailed in the days
prior to and after the elections, the lack of widespread incidents
of violence, and the conciliatory tone adopted by the President
re-elect (but, look out, the message was far from conciliatory!)
have given sales a jumpstart, and it is expected that they will
post record levels in December.
This is not in the least surprising in a country where money supply
(M2) has reached the unprecedented levels of Bs.112 trillion.
It can be expected that, during the next three weeks before year-end,
sales will reach unimaginable levels, not only in terms of bolivars,
but also in real terms. Consecomercio has even forecast that,
by the close of 2006, its sector will have posted growth of 25%.
Undoubtedly all this will contribute to the euphoria of those
who, today, feel themselves to be the victors and will reinforce
the perception of a booming country.
So as not to get out of the habit of being the “party pooper,”
VenEconomy is of the view that this bonanza is an illusion. It
is the product of an irresponsible fiscal policy that has sought
to pander to the consumer at the cost of investment in infrastructure,
maintenance, garbage collection, health, security, housing, and
education, all aspects that are really the ones that will determine
Venezuelans’ standard of living in the months and years
to come.
| Saddest of all is that PDVSA’s frank state of deterioration,
weakening oil prices, and a bureaucracy that paralyzes the government
will make it more than difficult for this present bonanza to continue
into 2007, a non-election year. Next year it will be time to come
down to earth.
VenEconomy
is a Venezuela's leading specialized publisher in the economic
and financial area. VenEconomy's Points of View on the issues
of the day, as seen by VenEconomy during the last week. Petroleumworld
not necessarily share these views.
Editor's
Note: This commentary was originally published by VenEconomy,
on 12/06/2006. Petroleumworld reprint this article in the interest
of our readers.
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12/08/06
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