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VenEconomy : As time go by

Lieutenant Colonel Hugo Chávez, a complete unknown, emerged from nowhere on February 4, 1992, when he took responsibility for the failed, but bloody, coup d'état against President Carlos Andrés Pérez. His “bravery” in admitting that he had failed to take power by force brought him to the attention of the general public. In a country where leaders avoided taking responsibility for their actions (and still do), this admission of guilt was perceived as an act of valor and honesty.

However, in his more than eleven years in the Presidency of the Republic, Hugo Chávez has demonstrated repeatedly that the last thing he has in mind is admitting his mistakes and assuming his responsibility for the failure of his model for the country.

Venezuela is springing leaks on the political, social, and, above all, on the economic fronts. Despite this, Chávez not only continues to insist on moving ahead towards an obsolete Castro-communism, but he is also laying the blame at everyone's door but his own.

A quick glance at the news of the past few days confirms this sad fact.

The country is submerged in an economic crisis. GDP fell by 5.8% in the first quarter of 2010 and domestic production is shrinking due to the lack of legal certainty, the absence of the rule of law, indiscriminate expropriations carried out with no legal justification, and the persecution of the private sector. As a result, the country is becoming increasingly dependent on imports, to the point where this has become unsustainable. Shortages affecting an endless number of basic products have become the norm.

Given this situation, instead of correcting its policies, the government is stepping up its persecution and improper appropriation, not of the companies that have survived, but their production. Polar and its products have become the regime's target, as have butcher's shops and several food distribution companies, such as Friosa and Monaca.

While all this has been happening, there have been two incidents that perfectly portray the government's corruption, inefficiency, and arrogance.

The first is the discovery of 1197 containers belonging to Cealco –a company “acquired” by the government- with more than 36,000 tons of basic food products that have either gone bad or whose consume-by date has expired and that were intended for PDVAL and Mercal. So far, no government agency has offered any explanation for this evident laxness.

And the second is that, while more than 800 workers from Polar's plant in Barquisimeto have been on watch for more than 30 days to defend their jobs, PDVSA organized a strange “demonstration” with workers from companies taken over by the government in front of Fedecámaras's headquarters. Apparently, the protest was about defending socialism and in rejection of the “conspiratorial attitude” of Fedecámaras's and Consecomercio's member organizations on the economic front.

In these eleven and a half years, the government has still not managed to understand that the country cannot take this change without course that its political project implies.

VenEconomy has been a Venezuela's leading specialized publisher on financial, political and economic data since 1982. VenEconomy's Points of View on the issues of the day, as seen by VenEconomy during the last week. Petroleumworld does not necessarily share these views.

Editor's Note: This commentary was originally published by Veneconomy , June 02, 2010. Petroleumworld reprint this article in the interest of our readers

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Petroleumworld News 06/03/2010

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VenEconomy : As time go by