Saturday, April 25, 2009

You know money is tight when... 

they start telling workers in the country's most important industry they won't get any raises this year.

That is just what PDVSA president Rafael Ramirez just did - he told all 75,000 PDVSA employees there will be no increases for them this year.

Now, that might not be such a big deal if it were a country with inflation of just a few percent. But Venezuela had inflation of over 30% last year and will likely have it be at least between 20% and 30% this year. Nice consumer goods (TVs, cell phones, cars, appliances, etc) are likely to go up in price way more than that and indeed some already have. So while oil workers in Venezuela are well paid, and in fact probably way over paid, they are definitely going to be taking a pretty big hair cut this year.

Given that most people in the oil industry inclined to oppose Chavez left in 2003 it is unlikely that this will lead to any seditious action.

Still, Chavez would probably do well to shut up about how Venezuela is "blindado" against the world wide recession. It is no such thing.


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