Venezuela's redistribution of wealth

Unfortunately i will not manage to finish my paper for the deadline. There are some problems related to the soundness of my type system and ensuing tasks. It is like a domino, whatever i change will affect the next changes. So, what i am working on will have to wait a little bit before it is finished.

So, this week i was reading many things, and as always i was saying to myself that i should blog on this or on that. But then i have so many tabs open on my browser. I keep them open so i can close them when i have blogged on them or diggested them. Guess what, there are still many tabs open, so many that my browser may crash any time now :).

I have added two more links to my "Alexey reads" section. One is a link to the blog of boli-nica and another is to the democracy center. The authors of those blogs have different ways of looking at the world. The readers may do well of looking at both of them to not commit too quickly to an opinion.

If you have been following this blog for a while, you notice that i write about (not so deeply) personal things and sometimes about bolivian politics. Well, this time, i will write some more about politics. Although, my dear reader, i ask for your indulgence in my ignorant quoting of things i that read and think :).

Normally, i am not very sympathetic with leftist positions of organizations within my country, Bolivia. Mainly, because such positions have not worked well in the past. However, this week i was reading some articles written by authors that had more of a "izquierda" viewpoint. I will provide the link to one that talks about the Chavez regime in Venezuela. It describes the situation that maybe the social movements would want to take place in Bolivia. Namely, the resditribution of money for the improvement of living conditions of the poorest people in today's society. One of two main components are healthcare for poor neighbourhoods provided by cuban doctors in exchange for oil for the cuban governement. The supporters of this measure argue that in this way there is cheap healthcare in places where, otherwise, venezuelan doctors would not normally accept a job. As a consequence there is already a protest from venezuelan doctors that argue that this scheme hurts their source of employment and reduces their income. Furthermore, they claim that the cuban doctors are a vehicle for political indoctrination.

Other measures adopted by the Venezuelan government are subsidized markets, and informal education organizations. The government claims that in this way "1.3 million people have learned to read, millions have received medical care and an estimated 35-40 percent of the population now shops at subsidized, government-owned supermarkets". All this is achieved by redistributing the money that the state gets from the oil business. I suppose that that is the plan of the social movements in Bolivia if the oil industry is nationalized. Let me repeat my position that i am not for nationalization but for whatever arrangement that gets us (bolivians) a good income without getting into trouble with the international community. Oh well, let's go on with the article.

I can summarize the article as follows, the majority of the population is supporting Chavez government because they can see a difference in their life quality. This redistribution of resources was a bold move that roused the anger of the powerful oposition and you could see the results in their rallies calling for the ousting of president Chavez. However, some key actors of venezuelan economy are worried by the actions of the Chavez regime. I copy this quote from Oscar Garcia Mendoza, president of Banco Venezolano de Credito,

In 2004 government spending jumped 47 percent, much of which went to pay for healthcare and education--the missions. But despite the oil windfall, the government has had to borrow heavily. Instead of turning to international financiers, it has increased its internal debt to Venezuelan banks.

"But what makes this really crazy," says Garcia, "is that the government is depositing all its oil revenue in the same banks at about 5 percent, then borrowing it back at 14 percent. It's a very easy way for bankers to make money. That's why I say this is a government for the rich."

Maybe the most interesting quotes come from Jorge Giordani, the planning and development minister. First, he is worried about the corruption problems, simply there is not enough done to mitigate this problem. But most interesting are his opinions about the development of venezuelan society. Is it possible to use the oil money to educate people in order to have a more diversified economy? People educated enough to do "high technology, business services, healthcare and agriculture"?. He replies:

"We've been fighting political battles for most of our time in office. Many people have learned to read in the last few years, but how long will it take for them to work in high technology, or medicine, or services? Ten years? A generation? We are fighting a very individualistic, rentier culture. Everything has been 'Mama state, Papa state, give me oil money.' To organize people is extremely hard."

Giordani seems weary and cynical. "No, I am just practical," he says with a chuckle. "Development in Venezuela will take at least fifty years."

And how long will the oil last?

"Maybe twenty years, maybe thirty."

Of course, the question comes back to Bolivia's situation. How is the money of gas going to be used? How to get the most of it? And, more sadly, we have to realize that development is a process that takes several generations. No miracle or lottery is going to change radically the situation of the country.

Another thing that you see from this article and from what happened to Bolivia in the last months is that politics are very dirty. There are no completely decent political parties or a political Messiah. There are bitter fights among the parties involved and no one wants to concede anything. Are people really thinking that elections are going to bring the chosen that is going to fix things once and for all? That hope has been going on for more than two decades. Most likely, after this coming elections the same problems are going to appear. Confrontations, radical positions and demagogic speeches will be the rule. The change should be bottom up rather that top down. It does not matter if the president is capable if he/she is not able to organize a structure that suits the needs of society.