Wednesday, November 21, 2007

While exports go nowhere milk flies off the shelves. 

In today's El Universal newspaper they had an article on Venezuela's non-oil exports with an interesting chart. It is viewed as critical by many, including this blogger, that Venezuela expand its non-oil exports if it is to develop economically and improve its populations standard of living. Unfortunately, when we look at the numbers we see that is not happening, or at least not to any significant extent:

Note that these numbers are for the first 9 months of each year which is why they may appear somewhat lower than we have seen in other charts.

Clearly, non-oil exports aren't going anywhere very fast. They have trended up some under Chavez's government but nowhere near as fast as they should. For example, during South Korea's high growth phase their exports grew about 30% per year. Venezuela's haven't grown that much over the past eight years. No one should be happy with this performance.

At the same time it also should be noted that this chart rebutts some of the doom and gloom nonsense we constantly hear from Chavez's opponents. After all, while their growth may not be what we would want non-oil exports have in fact grown under Chavez. That is, Venezuela exported FEWER non-oil products when Chavez's opponents were running the show. So the typical opposition assertion that the country is going to hell is non-sense, it just isn't getting better anywhere as fast as it should.

Of course, by this point I assume all readers of this blog know at least one measure the Venezuelan government could adopt to help boost non-oil exports.

Now, if exports are just plodding along milk is doing anything but that. I am sure by now we have all heard the horror stories about milk "shortages". Like Mark Twain's death they are greatly exagerrated. However, there are many times when it is difficult to find certain products, including milk, on the shelves of grocery stores.

Does that mean there is less milk? Not at all. In this article from today's El Universal the president of the supermarket chain Makro says there whereas before they were getting 300 containers of milk per week now they are getting 500. Unfortunately (or fortunately, depending on your point of view) all this milk just doesn't hang around on store shelves very long.

Why? Well according to the president of Makro there has been an "avalanche" of increased consumption from social classes C, D, and E (for those who don't remember what those social classes are they are basically the ignorant, lazy and unkempt masses who keep voting for that scumbag Chavez) which have seen their purchasing power greately expanded.

So there aren't any true shortages of milk - it is simply that consumption is up a lot more than demand can keep up with and hence it is sometimes unavailable because it has sold out.

Now, the same problem has happened with automobiles. Venezuelan's will buy an all time record number of automobiles this year, about 500,000. Demand is so strong that many people are on waiting lists for 6 months before they can get their car.

Oddly we never read about "car shortages" in Venezuela. I suppose "car shortages" just don't have the same drama factor as "milk shortages".

Anyways, the bad news here is this is likely to get worse. It was also reported today that the unemployment rate went down. That is due to 436,000 new jobs having been created in the past year, 324,000 of those new jobs in the formal sector. More people with jobs and money could mean tough times ahead for milk (and car) lovers. Stay tuned.

[BTW, you would think an economy the size of Venezuela's creating 436,000 new jobs would be news, but somehow I suspect most all of the english language media the world over will manage to ignore it. I guess it must be because only bad news sells newspapers. Anyone have ideas on how to spin the creation of 436,000 new jobs as bad news?]


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