VenEconomy : Borrowing , borrowing ....
Hugo Chávez has requested the National Assembly to pass, as a matter of “urgency,” a Supplementary Borrowing Act to the tune of Bs.F.45 billion, which would be in addition to the Bs.F.40.5 billion approved under the Borrowing Act passed in December 2010.
The President explained that the money would be used to finance the Great Venezuelan Housing Mission, the Job Mission, the Public Debt, and the emergency caused by the rains. How about that for nerve!
To start with, this request is being made at completely the wrong time and is totally illegal. According to the Budget Act and the Organic Financial Administration Act, the National Assembly may only authorize requests to contract debt from the President of the Republic in December each year, except in the case of a national emergency or a natural catastrophe.
Leaving aside the legality or not of Chávez's new request to contract more debt, the government has already mortgaged the future of the Venezuelan people to the hilt with a debt that exceeds $125 billion. And that does not include the humiliating debt with the Communist Republic of China. In other words, that is nearly four times the $32 billion debt that the country had in 1998, when Hugo Chávez won the presidential elections.
The naive question is: What have Chávez and his pals done with so much money? The answer, rumored by everyone, is: they've used it to finance his communist project in Venezuela, the region, and the rest of the world; to support outlaw regimes and international organizations; in an unnecessary buildup of weapons, and in corruption and more corruption, because it is obvious that there have been no sustainable or lasting improvements made in Venezuela.
When Carlos Andrés Peréz plunged the country into debt in the 1970s, despite the oil boom at that time, at least he left behind him some booming steel and aluminum industries and the Guri dam.
Here are some more questions: 1) Why does the government have to borrow if the average oil barrel price is currently in the $90-$100 range? The answer: because PDVSA has collapsed and produces and exports increasingly less oil. And 2) Where are the resources that have supposedly been deposited in the National Development Fund (Fonden) and the many other funds the government has set up?
For things to have reached these extremes of unsustainability, the regime's necessary accomplices in the castrated branches of government had to have been actively involved.
It's time that Venezuelans demanded accountability from the people who've been running things for the past 12 years.
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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, on June 2, 2011. Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 06/03/2011
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