Thursday, September 14, 2006

A boom even the opposition can see 

A week ago there was an economic perspectives meetings at the Venezuelan-American Chamber of Commerce. It was there that Datanalisis presented its numbers showing how the real income of the majority of Venezuelans has climbed dramatically under Chavez.

But there were other ones such as a presentation on the general state of the economy by MetroEconomica

This slide which shows the REAL (ie adjusted for inflation) price of oil is quite interesting:

Note how in the decades preceding Chavez coming to office the price of oil was on a steady downward slope. Of course, it wasn't only the actions of Veneuela that were responsible for that but they played a big part. Their rampant over production and quota busting had a devastating effect on prices and despite the curve that seems to bottom out in the late 90s note that the actual price of oil headed to new lows in 1998. It was only when Chavez came to office in 1999 that it began to climb - who knows where it would have ended up if the opposition was still running the country and maximizing production. Chavez is certainly not responsible for oil's recent dizzying climb but he is responsible for getting the ball rolling in the right direction and Venezuela is reaping huge dividends.

This slide is interesting. The gold bar represents Venezuelan oil production. Note how it seems to be going up, if just a little, and it also seems to be over 3 million barrels of oil per day. Yet the drumbeat of propoganda from the opposition is that oil production is well below 3 million barrels and falling.

Of course, readers of this blog already knew that Venezuela was producing over 3 million barrels of oil and the opposition was just lying. Still it is interesting to see that in spite of what they say in public in Private Power point presentations amongst themselves they do condede reality. I suppose its good to see they are not so dissaciated from reality as to believe their own propoganda.

Here is a slide that shows some of the effects of those high prices with the blue line being the value of Venezuelan exports and the red line being the value of its imports. Note that Venezuela is running a huge trade surplus which is what the gold bars at the bottom represent. Americans can only drool in envy. Also note that while imports are indeed climbing (something the opposition complains about constantly in spite of a good part of it being THEM buying luxury goods) these purchases are easily afforded by Venezuela's much larger exporters. It's called living within your means - something that again would be a novel concept to most Americans.

This slide is another result of the increased oil revenue. It shows the steadily increaing foriegn reserves. The last bar is a projection for 2007. Quite likely it will turn out to be an increase rather than a slight decrease MetroEconomica projects. The gold bars are the monies transferred from the reserves to the National Development Fund (Fonden) which is used for large capital projects. There are lots of those large capital projects under way in Venezuela these days and in the near future I will be showing some pictures of them (56k modem people beware!). In any event Venezuela is flush with cash as the green bars are all savings and the gold bars are to a large extent not yet spent.

To Be Continued: There are more slides which I will post when time permits...


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