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  HOME | Opinion (Click here for more)

VenEconomy: Break Points in Today’s Venezuelan ‘Democracy’

From the Editors of VenEconomy

The Castro-communist steamroller has taken Venezuela to a break point, not only at institutional, economic and social levels, but also ethically and morally.

From the beginning of these fifteen years of a leftist administration, all institutions from the country’s democratic era were all destroyed, corrupted, abducted and placed at the service of an external project of a Republic that used to be free, democratic, with Rule of Law and a judiciary system.

While this institutional onslaught was taking place, the chavista regime also took control of a large number of private and productive companies as it harassed others with an extraordinary number of hurdles, including controls, audits and penalties carried out from different governmental fronts.

For the tragedy of Venezuelans, this nationalization of the productive sector, rather than achieving the desired food sovereignty and agricultural development, has only led to, on the one hand, the bankruptcy of public industries, the total devastation of the agricultural and livestock sector due to a politicization in the management and a corrupt administration; and on the other, heavily depending on imports to meet demand of most part of products and goods. These imports have been relying on a rationed, discretional and obscure distribution of the dollars “administered” by the Government.

Results of these wrong policies were obvious when expenditures from the Government started to exceed income from the oil revenues and through tax levying. This cocktail mixed with shortages and inflation did not take long to go off.

The National Executive, in a refusal to recognize the failures of this model of country that looks to only impose things and before its capacity to seek a way out of the economic and social crisis, now it only comes up with accusing the private sector (that luckily is still breathing) of all the failures. This time, in its fight of a fictional “economic war,” it launched a new offensive against the last link of the productive chain: The commercial sector.

This sector has been between the devil and the deep blue sea for years, among other things, after the enactment of a law against speculation, hoarding and usury dubbed as Law of Fair Costs and Prices that adds to a Law on Foreign Exchange Crimes that has made business owners walk on the razor’s edge since all of them must turn to the so-called “black foreign exchange market” in order to import merchandise and also depend on scarce dollars from the legal market that are hard to come by, otherwise they have to take their chances with the “forbidden” market. This trio of laws punishes with heavy fines, confiscations and a time in prison.

And on top of that, President Nicolás Maduro, with the use of a heated and pejorative kind of speech, now is naming and shaming the commercial sector and putting the safety of people and goods at risk.

A fine example of this is the “inspections” being carried out to home appliances, electronics, clothing and shoe retailers, where supervising bodies turned into private investigators, judges and executioners at the same time are infringing upon all legality. If these business owners committed a crime, the “Bolivarian” legislation clearly indicates the procedures to follow, which do not contemplate in any case a call for looting or taking over the stores.

But what happened to home appliances retailers DAKA and JVG, and what might eventually happen elsewhere should the escalation of audits continues, which prosecute and sentence at the same time, creates a bad precedent not only for investment and the judiciary system in the country, but to the morals of citizens.

With these actions, the Government is using the population as a shield to protect itself from the economic offensive, thus turning groups of Venezuelans into professional looters and generating a collective moral breakdown by encouraging taking what does not belong to them without punishment of any kind.

This moral breakdown has been encouraged by the people from the Revolution since the late Hugo Chávez, by the time he took office, argued that stealing to eat was no crime at all. And this is what the current Government argues when it confiscates lands and businesses, along with invasions to urban terrains and buildings by mayors and councilmen from the Government’s party, and all this was justified by Maduro over the weekend when he popped the following question: Who is the looter? Who is looting who?

Answer: Looters are those looting the public purse for their personal benefit and looters are those trespassing on private property by force and take what it does not belong to them, and so are those who have left Venezuela without economic and moral reserves.

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

Click here to read this in Spanish

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