Tuesday, September 20, 2005

When you’re on a roll, you’re on a roll. 

Its not easy being an opposition hack these days. All the news and statistics coming out of Venezuela is so overwhelmingly positive that its hard for them to find anything to complain about or negative statistics to harp on. They really have to dig, just to find any little thing to complain about. Such is the revitalization that Venezuela is currently undergoing.

But just when I thought things couldn’t get any better in Venezuela, guess what? They got better. And in way I didn’t really expect.

As I’m sure most readers know Venezuela’s economy is overwhelmingly dependent on the oil industry. Historically, 80% of all Venezuelan exports are petroleum related. While this is to be expected from a country that has such large oil reserves it is not completely healthy. It is the equivalent of having all your eggs in one basket. Such that when oil prices have headed south so has the Venezuelan economy.

To remedy this it has always been the goal successive governments to diversify the Venezuelan economy and in particular its exports. The efforts of the Chavez administration in this respect were always somewhat suspect. Chavez has never seemed to put much emphasis on exports in his speeches or initiatives – he is more focused on “endogenous” production for the local markets. Further, he has followed the unhelpful policy of letting the Venezuelan Bolivar be overvalued compared to other currencies thereby making Venezuelan exports more expensive and less competitive in world markets. So I didn’t expect Chavez to have any more success in this area than any of the previous governments did.

How wrong I was. Yesterday the National Institute of Statistics said that Venezuela , through the first six months of this year, had non-oil exports of $4,663,000,000. If this level of non-oil exports continues Venezuela would easily surpass $8 billion which would be a record. The highest previous level of non-oil exports was $6,992,000,000 in 2002. This is an astounding increase in non-oil exports and is quite surprising given that Venezuela’s currency is still overvalued. All I can say is that with respect to the Venezuelan economy right now it is looking like Chavez can do no wrong.

What are these non-oil exports made up of? Primary steel and aluminum which are produced by the heavy industries in the Guyana regions (BTW, Richard Estes has part 3 of his series on those heavy industries over at American Leftist. Be sure to check it out). They accounted for 38.6% of the exports. Next was minerals at 33.6% followed by chemicals at 10.3% And where did these exports go? Primarily to the U.S. which was the destination for 43% of them followed by Colombia at about 10%.

In any event some very welcome, if surprising, numbers. Hopefully the good times and good numbers will keep rolling.


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