Saturday, July 23, 2005


A couple of economic notes from Ultimas Noticias today. First, the Venezuelan Construction Trade Association reported that private investment in construction projects in the first half of this year was $500 million. This is a 20% increase over last years numbers Remember, this is only private investment and doesn’t include public infrastructure projects such as the new subway lines, housing, or roads. The head of the trade association, Alvaro Sucre, estimated that as a result of this reactivation of the construction sector unemployment amongst construction workers has gone down by 10% so far this year.

Also, yesterday the Venezuelan Central Bank announced that its foreign reserves have now surpassed $30 billion dollars. These reserves have been increasing steadily over the past two years as the economy has rebounded from the opposition lead strike of 02/03. During the strike when oil exports were almost completely stopped and the government even had to import gasoline to keep the country functioning the foreign reserves dropped to $14 billion dollars. Since then they have more than doubled.

This large amount of reserves helps Venezuela in two ways. First, it means that if Venezuela faces an emergency again it has even more money to fall back on and help it through the crisis. Secondly, given that these reserves are so large they are not really all needed and the government can use some of them to pay down debt or finance new purchases. In fact, the Venezuelan government is now considering doing precisely that.

In any event this is yet more evidence of the good things that happen when Chavez is allowed to govern – more investment, more jobs, more money. With Chavez at the helm Venezuela hit the trifecta.


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