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  HOME | Opinion (Click here for more)

VenEconomy: The Other Casualties from Venezuela’s ‘Economic War’

From the Editors of VenEconomy

This “economic war,” made up by President Nicolás Maduro to evade responsibility for the economic debacle he has dragged Venezuela into and to seek electoral money for the upcoming municipal elections on December 8 of this year, is leaving “casualties” all over the place.

The first of them are distribution companies and retailers, whose owners are being criminalized, stolen from, put on trial and facing public scorn and hate.

As shown by the history of any country that has seen this sort of dictatorial moves, in Venezuela is foreseen the end (or maybe some of them will be reduced to the minimum) of the privately-run commercial sector to be replaced by the hegemony of the State. The future of commerce is likely to be very similar to those of Cuba and Zimbabwe, just to mention two nations subject to populist and dictatorial regimes.

The recent experience of the taking of sectors such as agribusiness, construction, stock brokerages, electricity, cement, steel, sugar, paper, among many others, by the Venezuelan Government has been repeated again. These actions have made disappear some 170,000 companies from March 2003 through March 2012 (or 26.7%), according to figures by the National Institute of Statistics (INE). By the end of 2012, Jorge Botti, the former head of the Fedecámaras business association, told the local press that the number of companies that have disappeared would have reached 237,000 in November of this year from 617,000 in 2002 and 377,000 in 2012. And according to Botti’s calculations, this decline in the number of businesses affected some 900,000 people who could have gotten a job, but because of this situation they were forced to turn to the informal sector or get a job in the public sector.

From this very negative balance come the second casualties as a result of this onslaught against the private commercial sector: Its workers.

Froilán Barrios, member of the Autonomous Front for the Defense of Employment, Salary and Trade Unions (Fadess), condemned the actions from the Government against the commercial sector as he warned some 2 million jobs linked to the trade in goods and services, out of the 6.5 million in the formal sector, would be at risk.

This means that the order given by Maduro of emptying the shelves of DAKA retail stores, which has already caused an escalation of “mishaps” at stores of all kinds and sizes nationwide, may end up creating much more unemployment, thus condemning Venezuelans to starvation, start working in the informal sector or in the “best of cases” (but first they must swear loyalty to the Revolution) relying on either a social program dubbed “misiones” or getting a job in the public sector to keep nurturing a public payroll that today reaches 2.5 million people, an increase of 255% from the 980,000 public employees a decade ago.

And the third fatal victim will be the population, as usual, including the group of citizens praising the access to good and services at “fair prices,” as a result of institutionalized theft by the Government itself. Today they are taking LCD TV sets, refrigerators, car batteries and blenders; and the next day it may be hunger.

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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