Sunday, December 28, 2008

Not to be left behind in the race to the bottom. 

No sooner do we finish debating some of what I perceive as the craziness of the Chavez administration than one of Chavez's most prominent opponents goes out of his way to show he can be every bit as crazy and ill informed as anyone else in Venezuela.

The person I am referring to is Julio Borges who is one of the leaders of the opposition party Primero Justicia. I'll admit, even I, and I am no fan of the Venezuelan opposition, have long viewed Primero Justicia as being the "rational" opposition and those who most likely have something to offer Venezuelans besides pure unadultered hatred of Chavez.

Apparently I was mistaken in thinking them rational.

Today Julio Borges made some remarks on the Venezuelan economy and the potential problems it faces that when not outright false were highly misleading. Lets have a look.

First we get this little gem:

"El único gasto que sube es el militar, todos los demás gastos están bajando, somos el noveno país del mundo en gasto militar", dijo Borges.

Now what makes this remark truly breathtaking is that anyone who spends one minute thinking about it should surely be able to realize that there is absolutely no way that Venezuela can be the ninth largest spender on the military in the world. Think about it, just start ticking off the countries that MUST spend more on their militaries than Venezuela - the U.S., Britian, Russia, China, Japan, France, India, Germany, Israel... I think you get the idea. Seriously, there is just no way Venezuela can be the ninth largest military spender, not even close. For those who are too lazy to try to think of all the countries that surely have it beat here is the list.

And this man was educated at Oxford?!?!?! Just goes to show, you can send someone to a good university, but you can't make him think.

As I said in Chavez's case though, everyone is entitled to a brain fart once in a while. Problem is, what he said after that was worse:

"Es necesario que el pueblo tomé conciencia de que esta crisis ya llegó, de que esta crisis hay que enfrentarla con liderazgo y con madurez y que al presidente hay que exigirle que el gobierno sea el que se apriete el cinturón y no venga el pueblo que es el que paga los platos rotos, a pagar con devaluación, con impuestos, con inflación, una crisis que se dio porque el gobierno malgastó el dinero cuando lo había en vez de ponerlo en resguardo para todos los venezolanos", enfatizó.

There is so much screwed up in this statement it is hard to know where to begin. Let me start with the most trivial. He states that Venezuela faces a crisis because the government didn't save money. This is wrong on two counts. First, Venezuela faces a crisis not because it didn't save up money but because it has an economy dependent on on product and the price for that product is tanking. Secondly, unless just about every major economic statistic in Venezuela is falsified, it did save money. Arguably it could have saved more money - but that would only effect the timing of when the crisis hit. Venezuela never could have saved its way out of this.

But the larger point he makes in that paragraph is what is more problematic. What he tries to say is that it is the "government" that should "tighten its belt" and make cuts and that the Venezuelan people shouldn't have to feel the impact of the crisis. Sorry, but that isn't even remotely possible and in fact feeds a huge myth Venezuelans suffer from.

What Borges is in fact implying above is that the Venezuelan government has been spending a very large portion of its money on something other than the Venezuelan people. That is, it spends its money on the aquisition of arms, or gives it to other countries, or simply steals it. To be sure, Venezuela does buy arms, it does give money to other countries, and it does have corruption. But to pretend that that is anywhere near what most of their money has been spent on is a huge lie. And I mean a really huge lie.

In reality, the VAST majority of the oil wealth that has poured into Venezuela gets spent by and for VENEZUELANS. Don't believe me? Then just look at CADIVI where you can see that the overwhelming amount of money they gave out got spent on importing cars, food, and consumer goods and that huge sums were also spent on credit cards and travel. Then go look at the governments budget for 2009 (you can download it from here). You will note that while the government spends about 8 billion bolivares on the military it spends WAY more that that on general education, higher education, on the Ministry of Finance, on health, etc. In fact, out of a budget of 167 billion bolivares only about 5% is spent on the military.

The result of this is that the government and the Venezuelan people can't be seperated as Borges implies. If the Venezuelan has to cut back on spending, as it may have to do, then the Venezuelan people will have to receive less services and consume less because it is on THEM, THE VENEZUELAN PEOPLE, that the government spends the overwhelming amount of resources on.

Sadly by trying to demagogue this issue Borges is just perputuating a huge and long standing myth in Venezuela - they they are rich, or would be rich if someone (the government, foreigners, corrupt officials, etc) would stop stealing all their money. However, in the main the money isn't being stolen by anyone, it is simply being spent and if there is going to be less money coming in in the future then Venezuelans, the government and the people alike, will simply have to spend less. That is the reality, no matter how much Borges tries to BS for political reasons. That was the reality in the 1970s, in the 1980s, and now, no matter how much Borges tries to distort it.

And of course, that larger picture non-sense leads to the other non-sense in that paragraph such as a devaulation and tax increases are not needed. Seriously Julio - you really think Venezuela can keep going on and prosper with its currency the way it is?????? And please, Julio, feel free to go through the budget and tell us what YOU would cut!! (BTW, in a post to be done shortly I will propose what I would do if I were the Venezuelan government)

The opposition to Chavez has very little presence in the national government due to brilliant decisions such as boycotting elections. Still, the opposition COULD play a very valuable role. It could, in an honest way, point out things that the Chavez administration is doing wrong. It could put together a coherent plan of how it thinks things could be done better and how the country could be developed. Most importantly, it could seek to elevate the level of discourse on politics and public policy in Venezuela - that is explain things like economics in a thorough, coherent, and honest way that allows the general public to gain a greater understanding of those subjects and why the things that are happening are in fact happening.

Sadly, instead of doing that we see one of the most educated, rational and level headed members of the opposition put out lies, misinformation and distortions that obfuscate and mislead rather than illuminate.

As a pretty strong Ni-Ni when I look at some of the Chavista insanity and then I look at this insanity coming from Borges I can only think one thing - Venezuela is screwed.


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