By Francisco Rodríguez of Bank of America Merrill Lynch, Sep 16th 2014
In a provocative article published last week Venezuelan economists Ricardo Hausmann and Miguel Angel Santos make an argument that if authorities adopted a set of common-sense policies, they argue, these would include defaulting on the country’s foreign debt and making bondholders bear part of the burden of adjustment. Francisco Rodríguez argues that Venezuela should not default on its debt because default Venezuela is not insolvent.
Yesterday the Venezuelan Central Bank reported that inflation has dropped steadily from 5.7% in May of 2014 to 3.9% in the month of August, representing 63.4% accumulated inflation since August of last year. Now under new management, state-owned oil and gas company PDVSA is reportedly seeking US$10 billion dollars for the sale of the Citgo Petroleum Corporation.
Tomorrow Ecuadorian foreign minister Ricardo Patiño will meet with the Venezuelan president in Caracas to discuss the creation of an official Observatory of Transnational Companies. Nicolas Maduro also plans to meet with private and public sectors of the economy.
Venezuelan writer Luis Britto Garcia argues that even before we critique the misuse of dollars by Venezuela’s flourishing phantom companies, we must look at what legitimate transnationals are allotted the most dollars through the government subsidy, and what their offered services say about the government’s priorities.
On Sunday, Venezuelan President Nicolas Maduro announced the formation of a presidential council of farmers, fishers and rural producers working alongside a state-run food distribution company, aimed at addressing nutrition, food scarcity, and rural production in Venezuela.
As Venezuelan president Nicolas Maduro combats corruption, reassigns half of ministry positions, launches “a new stage of the revolution,” and even hints at a minimum wage increase for November, the question remains what economic steps will be taken to reverse the high inflation that critics are quick to associate with his leadership.
By Cory Fischer-Hoffman- venezuelanalysis.com, Sep 3rd 2014
Amidst the ongoing “economic war” in Venezuela, 200 people from various political collectives marched to Fedecamaras headquarters to place a spotlight on how the largest business confederation may be contributing to scarcity, inflation and speculation in Venezuela.