This blog has been trying to follow the ongoing debate about where economic policy is headed under Rafael Ramírez. Today, for example, we eagerly awaited a presidential address where – we hoped – new measures would be announced.
We were fools. Nothing of substance was announced.
All Maduro said was that every company that had gotten dollars this year would be audited, that new fiscal measures would be coming, and that he would start bombing the clouds because he was worried about the drought. But in between announcing money for agriculture, and repeating the canard that inflation was caused by the opposition, the most telling thing about this address was its utter lack of meaning.
The void in content means there is a struggle inside the Maduro cabinet. The radical wing that opposes Rafael Ramírez’s dismantling of much of the Chavista economic model is not going to go away quietly into the red, very red night.
Just a few days ago, Aristóbulo Istúriz, the governor of the (large) state of Anzoátegui, candidly admitted that currency exchange controls would never be lifted. “If we lift them,” he told the opposition, “you would overthrow us because you would take all the nation’s dollars overseas… The exchange controls are not an economic measure, they are a political one.”
So, if exchange controls are not going to be lifted, what exactly do pragmatists propose? A new Cadivi? How is this going to solve the country’s problems if this practically ensures long life for the black market?
The government is dithering, and in the meantime, it is cranking up the bill-printing machines to pay the cost of its indecision. That is why inflation in the last month soared to 5.5%, according to unofficial reports. (The Central Bank is not even pretending to be professional anymore)
The burden of proof continues to be on the side of those arguing that reasonable economic policies are just around the corner. It’s time for the “pragmatists” to give us proof of their existence, and show us what they’re made of. Until that happens, we remain deeply skeptical about any major shift in chavista economic policy.
In the meantime, Venezuela will continue to muddle through, deeply enmeshed in an economic crisis while the government blames the opposition for causing the inflation that is being fueled by its indecision.