When Maduro's predecessor came to power, many believed that the poorest people in Venezuela finally had a champion.
Although the lot of the poorest people has improved in small ways, the truth in the Chavez tenure, is that the strongman did a lot of things wrong, and squandered the incredible resources of his country in pursuit of his personal glory.
But Maduro's hardline, including higher taxes or limiting company profits, including what many see as a stunt ahead of local elections, i.e., giving away for a reduced price some non necessary items, which Maduro insisted were overpriced by greedy companies, will do little to revert the very serious slide of the Venezuelan economy.
The limit of profitability then, has been established by Maduro at 15-30 percent for private companies. His National Foreign Trade Center, will also allocate the US dollars at a pegged rate of 6.3 bolivars. The problem is, that dual currency systems never fail to undermine an economy, especially when a parallel black market exists, just like in Argentina, that does a brisk business. In the black market, the bolivar is trading at one/tenth of its official rate.
The truth however, is more than just the local corruption of businesses, which he accuses of profiting at the often exhorbitant rates of nearly 1000%, but it is a problem that spans the entire economy and affects every sector.
In fact, inflation just hit 54% a crippling rate for any economy let alone the Venezuelan one.
Those kind of measures therefore, smack of populism, of wanting to have the approval of the masses, and do little to fix what are deep and pervasive woes in the economy.
The issue, say the people who oppose the now 15 year old socialist rule, is that such a system, socialism, does nothing but hurt the economy. The problem they say, stems more from internal corruption in the political system, where many businesses have been nationalized and are now basically run/owned by relatives of political bigwigs. With many if not all vital sectors nationalized, the country has nowhere to go but down, until corruption and nepotism are stemmed. And the chance of the latter happening are slim to none.
Op-Ed
Source : Al Jazeera 11.22.13
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