The Venezuela of 2022 is perceived differently. Venezuelans make plans on weekends again. They begin to fill restaurants, shopping centers, night spots and parks. They no longer carry the supermarket carts so empty or find shortages on the shelves.
In Venezuela, according to the official press, 202,609 enterprises have been registered. Many sell everything, all day, because you have to work hard to get the basics. Venezuela has been ‘deteriorating’ since the end of 2021, when little by little, almost imperceptibly, the economy dollarized.
The increase in the price of oil means not only a relief for the government’s finances, but also a surprising improvement in its diplomatic position
Although deficiencies in health care and other basic services persist and average incomes remain very precarious, Venezuelans are now smiling because some have recovered a little purchasing power and with it hope.
The world scenario has also favored the battered Venezuelan economy. The increase in the price of oil means not only a relief for the Government’s finances, but a surprise improvement of its diplomatic position. The most convincing example is the approaches of the Joe Biden government with its recent announcement of relaxing the restrictions so that the oil company Chevron can explore in Venezuela.
But not only have people’s attitudes and economic prospects changed: the government of Nicolás Maduro has relaxed trade controls and at the exchange rate, and has even put up for sale part of the share ownership of companies confiscated (and bankrupt) since the government of Hugo Chávez.
Seen from Darwinian theory, it has simply adapted to the context in order to remain alive, that is, in power. For Luis Salamanca, political scientist and university professor, Maduro’s turn is not due to an ideological change but to the pragmatism necessary to perpetuate himself in Miraflores.
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In 2016 the economic crisis in Venezuelan households reached its peak. That year 70% of them lost an average of 8 kilos of weight
“Maduro is still ideologically Chavista, but he is a great opportunist, a great calculator. He is playing the keys to see how the country reacts and has managed to make this ‘Venezuela was fixed’ campaign flow ”.
According to experts, during the nine years of Maduro’s administration, the Venezuelan economy shrank by 80 percent. Much has been said about the causes: bankruptcy of the oil industry, nepotism, increased public spending without an increase in production capacity, embezzlement of billions of dollars of public resources, confiscations, centralization of the economy and multiple controls. to business.
In 2016 the economic crisis in Venezuelan households reached its peak. That year, 70 percent of them lost an average of 8 kilos of weight. Many ate, what they could, only once a day. Photos and videos also circulated on social networks showing how some people consumed waste, a situation present in several cities in the country.
first signs
In 2018, a year after US sanctions against Venezuelan officials were enacted, Maduro began to show his first signs of pragmatism. That year he announced an economic recovery plan that included increased public spending, of taxes associated with the purchase of products and a partial relaxation of the exchange rate.
In subsequent years, the decisions continued: he relaxed the main controls on production and prices, allowed for transactional dollarization to move forward, opened the free transit of products through customs, and recently carried out a monetary reconversion.
For Henkel García, director of the Econometric consulting company, these are not necessarily radical measures but a change in position: only by reversing the controls do some signs of improvement appear.
However, for García, the main factor for economic growth in 2021 is the rebound effect of the pandemic. “This caused the economy to contract significantly in 2020. Once the quarantine begins to relax, the previous levels are resumed and this leads to economic growth. If we grow 15% by 2022, which seems possible to me, and we add the growth of 2021, this year we would close with an economy lower than that of 2019. So, talking about economic recovery without putting this in context is not appropriate for me. ”.
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Once the quarantine begins to relax, the previous levels are resumed and this leads to economic growth.
In addition, experts point out that only the commercial and import sectors have recovered, which leaves out manufacturing, industry and production. They agree that growth is fragile because it lacks an institutional framework that supports it and a macroeconomic policyto consistent.
Maduro generally makes contradictory decisions: he relaxes controls, but he also increases public spending and thereby increases the inorganic money that drives inflation.
On the other hand, the phenomenon does not reach all levels of society. A study by the firm Anova Policy Research, published on May 6, concluded that the recovery has not increased the income of the poorest while the richest 10% improved their position.
Omar Zambrano, economist and founder of Anova, explains that this partial recovery has only deepened inequality. “The productive activities that are being activated are not generating jobs or substantial improvements in wages, he says, and therefore they are excluding a part”.
According to the Encovi Survey of the Andrés Bello Catholic University, carried out between February and March 2021, 94.5% of Venezuelans are income poor and 76.6% are in extreme poverty.
Certainly, access to services and employment opportunities in the capital contrasts with the reality of Venezuelans in the interior. According to the latest Encovi Survey of the Andrés Bello Catholic University, published in September and carried out between February and March 2021, 94.5 percent of Venezuelans are income poor and 76.6 percent are in extreme poverty. .
With this same system, the economy can grow, but, as García warns, “without institutions, the recovery has a limit.” Although for the expert, “determining that limit is impossible. There are elements that restrict, for example, the services sector. If the electrical energy improves here, that raises your ceiling. If there is a political change and an institutional reform is really carried out, where new actors begin to generate trust, that puts the maximum potential that we can have.”.
no political change
But nothing indicates that Maduro is interested in making an institutional change. On the contrary, everything would seem to indicate that its privatization measures would be aimed at give the economy a break, improve its image in the international context and show that from authoritarianism the country can function and even grow. All this on the assumption that, in a stable environment, with fewer causes for protest, remaining in power is always easier.
Salamanca warns that Maduro does not need to improve his deplorable popular image because “it does not depend on electoral competitiveness. Maduro depends on the control of the State, the control of the Supreme Court of Justice, the control of the National Electoral Council and the control of the Armed Forces.”
In addition, he recalls that, since the beginning of his administration nine years ago, he has had low popularity and the rejection of most Venezuelans, including a part of the citizenry that supports the Chavista project. “No president with such an opinion matrix can win a competitive election.”.
Maduro depends on the control of the State, the control of the Supreme Court of Justice, the control of the National Electoral Council and the control of the Armed Forces
None of the measures, however, indicates that Maduro is preparing to participate in elections that meet the minimum requirements of a democracy. But a more efficient economy would serve to calm the unrest of the population while he continues to control the State as an instrument to perpetuate himself, in one way or another, in power.
It all depends on whether what is currently happening is indeed some kind of embryonic bonanza, and on the effect of possible Washington measures on the oil industry.
Meanwhile, experts think that the perception of improvement that many Venezuelans have would be nothing more than a hope. Salamanca compares it to the tunnel effect: “You are in a long tunnel, a huge queue of vehicles, no car moves. Hours go by. You are among the last. Suddenly you see a vehicle moving at the head of the queue. What happens in your perception? Change. I’m going out now, this ordeal is finally going to end. Hours pass and you’re still in the tunnel. It was a tunnel exit illusion. We are still stuck there…”
AUTHOR: GRISHA VERA
CONNECTAS EDITOR (**)
Degree in Social Communication from the Central University of Venezuela. She is part of the Editorial Board of Connectas and has led journalistic projects in the media and colleagues in Venezuela and the region. She has focused on investigative journalism.
(**) It is a non-profit journalistic initiative that promotes the production, exchange, training and dissemination of information on key issues for the development of the Americas.
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