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VenEconomy : And where is the money ?

 

It’s no secret to anyone that Venezuela relies on imports to meet the demand for basic goods. And it’s no secret either that the current crisis over the shortage of those basic goods is owed primarily to the lack of foreign currency in order to bring them into the country.

One of the reasons for the lack of dollars to buy those basic products are the indiscriminate transfers, non-transparent and uncontrolled, done by the Central Bank of Venezuela (BCV) and stare-run oil company Petróleos de Venezuela (PDVSA) since 2005 to the National Development Fund (Fonden), a fund managed by Finance and Planning Minister Jorge Giordani.

It turns out that, according to official reports, accumulated “contributions” to Fonden, thanks to the BCV and PDVSA, hit $102.6 billion during the first quarter of 2013, an amount supposedly to be invested in top-priority development projects such as the Metro subway system in the cities of Caracas, Los Teques, Valencia and Maracaibo, as well as in railroads, a road infrastructure, the national electric grid, housing plans for the poor, a healthcare network, among others.

But nobody knows the whereabouts of the $102.6 billion. Yes, it’s true that many half-built structures can be seen around. But, Fonden is a black box. It does not report about any of this.

However, during the Oil and Mining Ministry’s Report and Account that cites Fonden’s “primary projects,” it truly catches out eye that the overall total was only $13 billion. Perhaps the remainder of $87 billion went to projects of LITTLE importance? Which ones are we talking about here? Where were they supposed to be developed?

It also catches our eye that a quite summarized balance sheet and statement of profit and loss (unaudited and without notes) published by Fonden in local newspaper Últimas Noticias, indicated that its total assets are $113 billion, an equivalent to $26 billion. How do we explain this dismal amount in a fund that has reaped over $102 billion? Where is the rest of the $76 billion?

Did the money just fade away? Is it somewhere around or simply went astray? What is its location?

Was it taken by the birds of Cuba, Nicaragua or Bolivia? Or, is it in the accounts of conspicuous officials from the Government who got rich at the expense of the public treasury and welfare of the Venezuelan people?

Why can’t the Government explain to the country the whereabouts of the $76 billion, an amount equivalent to 6 months of the Central Government budget?

It’s mandatory that Nicolás Maduro, the acting president, and his team make up a believable answer to this important subject. Particularly because if those $76 billion were invested in important projects, today Venezuelans could rely on well-supplied hospitals, schools in tip-top shape or road infrastructures without any deterioration. And, besides, there wouldn’t be a shortage of dollars that keeps people from having their daily meals as accustomed back in the days.

By remembering the electoral campaign from former head of state Luis Herrera Campins back in the late 1970s, it makes us wonder: And where is the money?

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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 April 4, 2013. Petroleumworld reprint this article in the interest of our readers.


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Petroleumworld News 04/05/2013

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