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  HOME | Opinion (Click here for more)

VenEconomy: The Claws of Silence

From the Editors of VenEconomy

Venezuela has become a country where ideas and opinions aren’t discussed in the open or shouted on the streets. They are shared in whispers and low voices and not with just anyone. The censorship which exists in Venezuela under Hugo Chávez’ Administration not only affects political divergence but it also engulfs other matters such as personal safety, labor statistics, health, education, housing, the economy and exchange issues.

The people are being kept in the dark and the media gagged. The latest example of this being Hugo Chávez’s supposed “announcement” of economic measures on Thursday, September 17.

It’s simply unacceptable that six days have gone by since the President announced to the nation that 40 economic measures have been introduced to deal with the current economic situation, and the people still don’t know anything about these measures, what they include, or what there scope is. And to make matters even more incredible, part of the delay in releasing this information has to do with the President having promised Vanessa Davies, the director of El Correo del Orinoco newspaper, an exclusive and that he wouldn’t release the information until her paper had published it, according to statements made by Hugo Chávez to the press.

What’s worrying, and makes this information blackout so irresponsible, is that these measures, designed behind closed doors, will affect the lives of all Venezuelans in the days ahead. It’s expected that the President has made some adjustments to the exchange policies which would affect the country’s production sector, and thereby, the whole population.

But withholding information regarding exchange controls and exchange polices is nothing new since amendments were added to the Exchange Crime Law in January 2008, which among other things, prohibited the media from publishing swap-market exchange rates in hopes that if the people didn’t read or hear about the swap-market through the media, then it wouldn’t exist.

These types of restrictions only promote rumors and speculation and make it impossible to have a serious and transparent debate concerning the exchange situation in Venezuela. A good example of how the swap-market is affected by speculation and rumor is the 10% drop the exchange rate suffered last week.

According to the President, this drop was due to measures that the government has been implementing, among which is that CADIVI has begun to release foreign currency for imports that it had delayed.

But according to analysts, there are other reasons which caused the swap-market exchange rate to drop: the market expecting another issue of bonds backed by dollars to be issued by the government; foreign currency entering the swap-market from loans received by the government, now that it is not obliged to sell them to the Central Bank of Venezuela; and lastly, due to capital repatriation and public officials closing their accounts abroad due to fears that they will be frozen. Others say that PDVSA will be directly intervening in the swap-market again.

But the government, being completely absorbed with its political agenda focused on the 2010 Parliament election, can’t be bothered by the effects of its inefficient exchange policies, or that it is keeping the people in the dark, guessing about what’s to come regarding this matter. It doesn’t seem to matter much to the President that thanks to him, Venezuela now has a port economy, that almost 80% of basic goods have to be imported, and that so far this year, 57% of all imports have been financed through the swap-market.

VenEconomy has been a leading provider of consultancy on financial, political and economic data in Venezuela since 1982.

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