In Venezuela not only shelves are empty in supermarkets, but there is also a shortage of information, a blackout of official credible economic indicators, actual figures on reserves and data on inflation. All of these economic data is public in democratic countries, as based on it banks make credit available, small and large companies plan production and hiring, foreign investment flows in and financing lines of credit from multilateral organizations open up.
In Venezuela, the people, organizations and businesses have been living in an information limbo for over ten years. This became apparent recently when President Nicolas Maduro succeeded in eliminating the National Assembly’s control over the nomination of the governor and directors of the Central Bank of Venezuela. He did so the very day before expiry of a law – Ley Habilitante – which granted him special powers “to defend Venezuela from the attack of imperialism.”
The new CBoV law establishes furthermore that its board can classify what it considers “secret or confidential information that by anticipating [government] moves (…) could harm the general interests” in the case of “internal or external circumstances that threaten the national security and economic stability.”
The Venezuelan Socialist Party lost control of the National Assembly in polls earlier this month, for the first time in more than 15 years. The CBoV law de facto provided Chávez’s protégé again with discretionary powers to decide which economic information to withhold from the public “in an emergency context” – that is, what the nation has been experiencing now for several years.
“To black out the release of data is a very serious step. Information is essential to any economic assessment, and to find solutions for the short, medium and long term”, said to East Carlos Alvarez, chief economist at Ecoanalitica, an economic think tank in Caracas.
“Adding to this is the difficulty in interpreting data that has been released because, for example, in the case of inflation, the CBoV used lately a methodology that no one is familiar with. This opacity has eventually a negative effect on agents’ expectations, a fundamental point in economics,” said Alvarez.
Opacity is a word that keeps occurring in Venezuela when people talk about the economy. “We reckon that international reserves amount currently to 15 billion dollars, of which 14 are junk bonds and only one is liquidity; we beat the world’s inflation record, and nonetheless it’s now over a year that the CBoV maintains an information opacity, even if it is required to publish price increases and shortages every month, and the GDP quarterly,” explained to us Hector Landaeta, a journalist. “The reality is that Venezuela at this time is a disaster.”
The economic disaster was confirmed by the government when it attempted to pass the “Emergency Economic” decree a couple weeks ago. According to the government, however, the emergency owes to an “economic war” waged against Venezuela by the bourgeoisie, entrepreneurs, merchants, the opposition, the empire [the US], smugglers and that the triple alliance Miami-Bogota-Madrid. “Internal and external actors,” said the government, where “causing inflation, putting pressure on the price of oil, and trying to destabilize Venezuela.”
The figures of PDVSA, the state oil company, are another opaque area. Yet everybody knows that the country depends by 90% on oil exports. In late January, Venezuelan crude fell to $ 21 a barrel against a production cost of about $ 20, while the budget was calculated with oil at $ 40 a barrel. The paradox – or “the saddest thing”, as comments in Venezuela go – is that external debt has soared by more than seven times since 1999, precisely during the years of highest oil revenues in Venezuela’s history.
According to the International Monetary Fund, the fall in oil prices is one of the main reasons why the economy will continue to contract following last year’s -10%.
The request for special powers by President Maduro was rejected by the new Parliament, because the government was not able to prove its need based on economic data – it didn’t publish any last year. Even so, the decree sent some shivers down the private sector on fears of a currency and bank deposits shut down, once more due to the lack of transparency about government action.
The president of the opposition party A tiempo nuevo, Elias Matta, said that “ministers are not accustomed to deal with journalists or with anyone for that matter. People voted for the opposition in a search for transparency. We are not afraid of the media or debate”, he added.
The press critical with the government fought an uphill battle in recent years in order to be able to continue to publish their papers, and give access to information according to their criteria. “The opacity in public management is a constant in Venezuela,” said the journalist Javier Mayorca. “Just check the reports of the NGOs Espacio Publico and IPYS. Not even their requests for information was ever properly answered”. Violations and complaints relating to freedom of the press and freedom of expression have been increasing in recent years, sometimes by 16% a year.
“There is not such information that justifies the need for it to be classified. On the contrary,” said chief economist Carlos Alvarez. “All information regarding the current economic situation should be published and discussed. How we got here must be explained, and we must know the state of the economy in detail to reckon the scale of the crisis, and find structural and not just short-lived solutions”.
Whether any more of that 20% of Venezuelans who voted for the leader of Chavismo in December will buy the government’s message which goes that the price of oil collapsed due to a conspiracy “against Venezuela”, will show in future polls.
In the meantime, at least one of the government’s priorities was announced. According to a statement by the Minister of Defense, General Vladimir Padrino Lopez, on 22 January, it is to “make the Armed Forces sector self-sufficient “. To that purpose, the general announced the setup of a factory, which will produce a radio installation, rifles and gunpowder.
In Venezuela, the people, organizations and businesses have been living in an information limbo for over ten years. This became apparent recently when President Nicolas Maduro succeeded in eliminating the National Assembly’s control over the nomination of the governor and directors of the Central Bank of Venezuela. He did so the very day before expiry of a law – Ley Habilitante – which granted him special powers “to defend Venezuela from the attack of imperialism.”
