Sunday, October 23, 2005

Nicolas, money doesn’t grow on trees 

The Venezuelan government recently came out with its budget for 2006. There are several notable features, such as the heavy investment in social programs, the very conservative assumptions about oil prices revenue (anticipated price - $26 per barrel !), and the increasing portion of the budget that will be financed by normal tax revenues instead of oil income in spite of the budget going up significantly. However, the budget is large and complex and I am not in a position to post on it in detail at this time. For those wanting a little more detail they can see the article on it in Venezuelanalisis.

But there was one item of the budget that did stand out – and not for good reasons. And that is the amount of money to be spent on the National Assembly ( AN - Venezuela’s legislature) itself. According to Ultimas Noticias the budget for the AN will be about $150 million for 2006. That is a 60% increase from 2005 when it was “only” about $90 million. In case you are wondering how out of line this is remember that the AN is unicameral and only has 165 members. In other words they are managing to spend about $1 million per member just to run the AN!

And what do they manage to piss away that much money on? For starters, they spend about $10 million just on the AN members salaries which comes to $60,600 per member. While not extravagant it is not a small amount either in a country where most people get by on a couple thousand dollars a year. On top of this the legislators get another $20,000 per person for vacation bonuses and other benefits. Another $60 million gets spent on other salaries, presumably each members support staff and general employees of the AN.

But then things get a little ridiculous. Approximately $10 million is budgeted for travel expenses and airline tickets - $2.5 million for international travel ($15,000 per member) and $7.5 million for domestic travel ($45,000 per member). As if that weren’t excessive enough another $4.5 million is budgeted for general travel (what is this - chauffer driven cars?).

Clearly, the A.N. is an important body. And clearly it has done a good job of helping steer the country through turbulent times and setting policies which have revitalized the economy and created an abundance of funds for important governmental programs. But just as clearly, this budget for the A.N. is wasteful and sets a poor example for the rest of the country. The opposition likes to unjustly slam the government over many of its expenses. It criticizes the high social spending as “handouts” and “vote buying” even though it is making up for a social deficit decades in the making. It criticizes money spent abroad even though this money often helps to accomplish important foreign policy objectives. And it regularly blasts Chavez for flying overseas in a presidential airplane – as if the President of the country, who has very legitimate security concerns, was going to fly coach on Delta. But with this level of unjustifiable spending the A.N. is just setting itself up for very criticism.

Unfortunately the head of the A.N. seems not to get it. “We serve the popular will with their proposals and complaints along the breadth and width of the country. It is a small amount compared with the responsibilities of the A.N.” said Nicolas Maduro. Mr. Maduro is entitled to his opinion on this. But he runs the risk come election day of finding out the electorate doesn’t necessarily agree with him.


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