Sunday, October 28, 2007

The good, the bad, and the incoherent 

The good: Well, no wonder you can’t find anything in Venezuelan supermarkets these days – lowly workers and poor people are cleaning the places out. We already knew that the income of poor and working Venezuelans had boomed under Chavez. We also already knew that food consumption is way up there too. But today we learn that because Chavez has put so much more money in the hands of social classes D and E they now think they are moving up in the world and are shopping in supermarkets. According to Datos, visits to supermarkets by social class D have gone up 35% and while visits have gone up 39% by social class E.

Guess that explains why you can never find your favorite yogurt these days – the hoards that Chavez has given much of the oil money to got there first.

The bad: On the road to socialism there are some uncomfortable facts that are not going to make things easier. According to an article from Panorama newspaper today about 20% of all births in Venezuela are to teenagers. Venezuela has the second highest rate of teen pregnancy in Latin America after Brazil and Colombia. This is attributed to poverty, low levels of education, broken homes, and low self-esteem.

I hope the government has a plan to deal with this (come to think of it – why hasn’t something already been done about it?). It is going to be hard to improve peoples living conditions with problems like this left festering.

The incoherent: A dollar (or Bolivar) invested is better than one spent. Accordingly, any news of investments in new industries is very welcome. But it would be even more welcome if it was coherent enough to be believable.

At an international trade fair in Germany the Venezuelan state petrochemical company, Pequiven, announced large expansion plans. According to Pequiven’s general manager Francisco Toro (ahh, so he has a full time job – no wonder he has no time for blogging) the company will be building 6 new petrochemical plants to make plastics, resins, and fertilizers. So far so good.

But then things go a bit off the deep end. First, Toro says that they will be investing $20 billion per year!?!?!?!?!? Considering that $20 billion would be half of Venezuela’s oil revenue that seems rather improbable, to say the least. He then stated that 700,000 new jobs would be created. Of course, that that is more people than the oil and chemical giants Exxon-Mobil, Dupont, and BASF employ – combined – seems not to be a deterrent.

Lastly, he stated that $20 billion dollars in profits will be made per year. I wonder how much they have to sell in order to make a PROFIT of $20 billion?

One interesting thing is that this is not all going to be done by the State – something called “private socialist companies” (apparently that is not an oxymoron) will also be involved.

That they can’t even put forward a coherent set of numbers and plans doesn’t bode well for much ever getting done. Like the natural gas pipeline to Argentina that still doesn’t exist or even like previous unfulfilled plans by Pequiven, these announced plans look likely to stay on paper and never do Venezuela any good.


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