With a sustained seven-year drop in the Gross Domestic Product (GDP), that is, 400 percent, growing 8 percent in 2022 is still just a small lifesaver in the midst of the sea of difficulties that Venezuela is going through. Its undeniable recovery is marked, as always, by the improvement of the oil industry, but not because of a boost from the rest of the sectors of the national economy.
The small recovery of the oil industry and the placement of imported products on the shelves, as well as the resurgence of stores, malls, restaurants and stores, show a better face of the country that remained in four years of hyperinflation. The use of the dollar has become common as well as electronic means of payment.
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To pay in an establishment you can use several methods. Dollars in cash, debit cards, international transfers through the Zelle platform, cryptocurrencies or the local system developed in the country called mobile payment, which through a mobile application allows money to be transferred instantly. This did not happen a few years ago in the midst of the deep crisis.
However, economists are still suspicious because the entire production system must be encouraged. If in the first quarter of 2021 the rise in GDP was 6.8 percent and the same period in 2022 was 7.8 percent, the variation is undoubtedly positive, but fueled by public spending.
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“You have to understand that GDP growth oriented towards public spending is not necessarily productive and investment-oriented,” economist and university professor Aarón Olmos explains to EL TIEMPO, recalling that the living forces of the economy fed by the public and private sectors, of goods and services need to walk and maintain market balances.
“We must understand that GDP growth oriented towards public spending is not necessarily productive and investment-oriented”
“What happens in Venezuela is that the improvement in oil production capacity, the transfer of bonds and salary increases by the State project positive growth indicators, together with the dollar-bolivar relationship that has remained stable. But the productive sectors is still at half speed, the legal reserve remains at 73 percent and bank credit is not activated, so we have to be careful with that growth,” reiterates Olmos.
Studies by the Andrés Bello Catholic University (Ucab) and the Venezuelan Finance Observatory (OVF) also coincide in this unproductive recovery. The professor of that house of studies, Ómar Zambrano, has explained in several conferences that the “non-productive recovery” is seen when the numbers speak of the low participation in the labor market. Only 53.8 percent of citizens between 15 and 64 years of age work.
President of the Chamber of Commerce and Industries of the Caroní Municipality @camcaroni Catherine Wilson warns that the slight economic growth that is perceived in the country could be lost if corrective measures are not taken to show the value of the dollar in the country https://t.co/sZjTsCK97O pic.twitter.com/GGnDkHTm3T
— Consecomercio (@consecomercio) May 23, 2022
The latest OVF report on remuneration in Caracas shows the following data: a manager earns 210 dollars per month, an average professional 136 dollars and a worker 80.2 dollars, averaging between the three about 89 dollars, being the lowest in Latin America and the Caribbean.
While for a family of four, 117.14 bolivars or 21.85 dollars per week are needed to cover “the caloric load of survival”, equivalent to 60 percent of food needs. The cost of a half kilo gas cylinder is 50 bolívares or 10.77 dollars. according to the OVF.
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And when it comes to transportation, a Venezuelan needs at least 200 bolívares per month or 43.10 dollars to pay for the passage in the public system.
growing inequality
This growth is then marked by an inequality that is difficult to reduce. “There are some social improvements but as always, not everyone receives the same benefit”, is the opinion of the priest Manuel Antonio Teixeira, rector of the Institute of Theology for Religious (Iter).
Teixeira, dedicated to accompanying communities in popular sectors of Caracas, emphasizes that the situation of vulnerability of the population is still great because even if there is more access to food, it does not translate into a balanced diet. Tnor in greater educational opportunities.
For the priest and university professor, the improvement should not only be economic because “the improvement has to do with a whole reality that includes education, medicines, food, the possibility of saving to improve the home. More social structures where there is more security. Now that reality is uneven.
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As long as there are no correct policies at the macroeconomic level, there is no guarantee of stability over time. For example, to date the international reserves of the Central Bank of Venezuela have decreased by 180,000,000 dollars due to the systematic intervention in the foreign exchange market to try to prevent the dollar from increasing. For the economist José Guerra, it is “a suicidal policy”.
More than 800,000,000 dollars have been “burned” in this task of controlling the exchange rate, keeping it between 4.30 and 5 bolívares.
The professor at the University of Carabobo (UC), Pablo Polo, estimates that some 2.8 million dollars have been put into circulation, which does not make the stability of the dollar against the bolivar strange. Polo wonders if this kind of stability is sustainable over time.
The Executive recently announced what the national producers wanted to hear: the elimination of the tax exemption for imported products. In total there are 1,262 goods that must now pay taxes when brought into the country, this would allow a more loyal competition between the national market, whose products were more expensive than foreign ones, allowing an opportunity not seen in many years.
Nicolás Maduro has said that economic growth is inevitable and that foreign investment is welcomeeven announced the listing of between 5 and 10 percent of state companies on the Caracas Stock Exchange, showing a change in the socialist model proposed by Hugo Chávez, who had nationalized and expropriated these companies.
Economists believe that positive steps have been taken for the “resurrection” of the country, but that corrective measures must be taken in time to prevent the little that has been achieved from falling. Even the Economic Commission for Latin America and the Caribbean (ECLAC) has predicted that Venezuela will be one of the countries that grows the most this year.
ANA RODRIGUEZ BRAZON
WEATHER CORRESPONDENT
CARACAS
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