Saturday, July 11, 2009
Is the oil boom over?
Well, it is mid year and despite all the dire predictions of collapse from some quarters Venezuela is still there. And no, its economy is not tanking.
However, it is certainly not doing very well either. After years of boom and ever increasing consumption Venezuelans are now starting to see their standard of living drop. Just a few tid bits:
Consumption at supermarkets is down 10% so far this year. Consumption of regulated staples such as rice and sugar is down 2%.
Overall consumer purchasing power is down about 3%.
Of course, this is not unexpected. Remember workers such as those at PDVSA and Pequiven got no raises at all this year. So their purchasing power has fallen by 10% in just the first half the year.
Inflation through the first half of the year was 10.8%. Workers earning the minimum wage only received an increase of 10% in the first half of the year so their purchasing power is also declining.
Unemployment has also started rising and the percentage of workers in the informal sector, as opposed to those having regular jobs, has increased. So jobs are now getting harder to find.
Given the above and given the .3% GDP growth in the first quarter it is fair to say that the Venezuelan economy has stalled.
Of course, it has stalled at what for Venezuela is a high level - Venezuelans have a much higher standard of living than they did ten years ago. Nevertheless, the standard of living of Venezuelans has stopped increasing even though they are very far from having a standard of living at all comparable to those who live in developed countries.
Further, with oil prices lower than in prior years it is no more obvious how Venezuela is going to get its economy growing again than how the U.S. will get its economy growing.
The oil bonanza has ended and so too has Venezuela's growth.
Why can't Venezuela seem to grow without increasing oil prices? The answer may be found here.
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However, it is certainly not doing very well either. After years of boom and ever increasing consumption Venezuelans are now starting to see their standard of living drop. Just a few tid bits:
Consumption at supermarkets is down 10% so far this year. Consumption of regulated staples such as rice and sugar is down 2%.
Overall consumer purchasing power is down about 3%.
Of course, this is not unexpected. Remember workers such as those at PDVSA and Pequiven got no raises at all this year. So their purchasing power has fallen by 10% in just the first half the year.
Inflation through the first half of the year was 10.8%. Workers earning the minimum wage only received an increase of 10% in the first half of the year so their purchasing power is also declining.
Unemployment has also started rising and the percentage of workers in the informal sector, as opposed to those having regular jobs, has increased. So jobs are now getting harder to find.
Given the above and given the .3% GDP growth in the first quarter it is fair to say that the Venezuelan economy has stalled.
Of course, it has stalled at what for Venezuela is a high level - Venezuelans have a much higher standard of living than they did ten years ago. Nevertheless, the standard of living of Venezuelans has stopped increasing even though they are very far from having a standard of living at all comparable to those who live in developed countries.
Further, with oil prices lower than in prior years it is no more obvious how Venezuela is going to get its economy growing again than how the U.S. will get its economy growing.
The oil bonanza has ended and so too has Venezuela's growth.
Why can't Venezuela seem to grow without increasing oil prices? The answer may be found here.
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Sunday, July 05, 2009
The tyranny of the institutions
Buzzwords and talking points is pretty much all I hear nowadays from the regional right, what is comical is seeing them shift from the echo chamber that they deem most pressing, it is not that they really believe in the things they claim, just that they naively believe that if they repeat it long enough and more often than not they will actually convince a single impartial soul.
In the 80's the buzzword was democracy, the left claimed that even though democracy was a positive ideal, the right was coercing democracy to install and cement their ideology. Knowing full well that whenever democracy overstayed its welcome they would change their priorities, the right no longer cares about democracy, Francisco, Daniel, Miguel they care about "institutions".
The new threat to the right is not armed resistance, but the charismatic populist, that is why term limits exist in every rightwing constitution. So in order to defeat the individual they seek groups of people that can be more easily coerced, therefore the institution is the cause celebre of today. Screw the will of the people, screw human rights,
The army is an institution (unless it is controlled by a populist) ergo it can shoot people at point blank in an airport.
The judiciary is an institution (unless it was selected by a congress elected with the aid of a populist) ergo it can depose the president without an excuse
The electoral body is an institution (unless they use machines, or in the case of Iran paper ballots) ergo it can negate the will of the people by not recounting the mexican election.
Now this is to educate them once and for all, institutions are no more or no less democratic than a populist, it is power hungry like a populist, it is biased like an ideologue, and it is as evil as any human being.
The people are the only institution that matters, because either you believe in the people or you do not. They are not perfect, but that is the true nature of democracy, not 9 fat cats in robes.
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In the 80's the buzzword was democracy, the left claimed that even though democracy was a positive ideal, the right was coercing democracy to install and cement their ideology. Knowing full well that whenever democracy overstayed its welcome they would change their priorities, the right no longer cares about democracy, Francisco, Daniel, Miguel they care about "institutions".
The new threat to the right is not armed resistance, but the charismatic populist, that is why term limits exist in every rightwing constitution. So in order to defeat the individual they seek groups of people that can be more easily coerced, therefore the institution is the cause celebre of today. Screw the will of the people, screw human rights,
The army is an institution (unless it is controlled by a populist) ergo it can shoot people at point blank in an airport.
The judiciary is an institution (unless it was selected by a congress elected with the aid of a populist) ergo it can depose the president without an excuse
The electoral body is an institution (unless they use machines, or in the case of Iran paper ballots) ergo it can negate the will of the people by not recounting the mexican election.
Now this is to educate them once and for all, institutions are no more or no less democratic than a populist, it is power hungry like a populist, it is biased like an ideologue, and it is as evil as any human being.
The people are the only institution that matters, because either you believe in the people or you do not. They are not perfect, but that is the true nature of democracy, not 9 fat cats in robes.
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