Briefcase Companies and Phantom Importers

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.

By Luis Britto Garcia- aporrea.org

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Luis Britto Garcia (courtesy)
Luis Britto Garcia (courtesy)
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Translator’s note: A “briefcase company” refers to companies that only exist on paper, or are using a front company to pocket money. In Venezuela, they are often associated with a business-class mafia.

The fraud of the briefcase companies dealt a heavy blow to Venezuela when they requested, obtained and then disappeared some 20,000 million dollars at a preferential rate for fictitious imports, according to Edmée Betancourt, or 60,000 million dollars of currency in the past few years, according to President Maduro.

Who has obtained such colossal sums of money and for what?

The 15 companies that received the most dollars at a preferential rate between 2004-2012 were, in order of magnitude: An importer of automobiles, General Motors Venezolana C.C. With $5,910,439,377; A steel company of the state, SIDOR C.C, with $4,731,508,369; An importer of cellular phones, TELCEL C.A. with $3,784,071,474; another importer of vehicles, TOYOTA DE VENEZUELA C.A. with, $2,958,628,451; A transnational food company, Cargill de Venezuela S.R.L with $2,012,237,681; another importer of cars, Chrysler de Venezuela U.C. with $1,973,764,842; A grain processor Polar, Provencesa, with $1,898,326,767; The US transnational airline, American Airlines, with $1,862,644,921, another cellphone importer, Digitel, with $1,848,880,390.

Between 2004-2012, of the 100 most favored firms to receive currency at preferential rates, 45% was constituted of communications, services and transportation businesses, that received $5.514 million (68.13% of the total) while Venezuelan agricultural and industry received only $25.925 million (31.78% of the total.)

Of the 15 most favored firms to receive currency at preferential rates, ten are transnationals or, enclaves of transnationals. Within the ten most privileged, 79.22% are firms with foreign equity, and only 15.64% are from national capital. Should the limited currency obtained with the sale of public well being, like hydrocarbons, aid in the importation of international capital? Subsidizing transnationals and foreign shareholders is not a ‘primary need.’

POLAR and its affiliated businesses, like Provencesa, Cervecería Polar C.C., Pepsi Cola de Venezuela, and Alimentos Polar C.S. Together receive $3,022,465, 869, becoming the fourth largest business grouping to receive the most currency in 9 years. Is it really imperative to give preferential subsidies to businesses that sell liquor and sugar water, when through their participation in the 2002 lockout they cut the supply of food in order to force the people to rise up [against Chavez] in response to hunger?

We will not even discuss here the happy granting of remittances to supposed relatives abroad, nor the sums of money that are assigned to those who reserve travel at the official exchange rate and then, sell their dollars in the informal market and never actually travel, nor the flood of currency that has left to pay for nonexistent imports from phantom companies.

One can follow the order of [government] priorities easily enough from the list of allotments granted to real businesses. One dollar conceded at a privileged rate, much inferior with respect to the [international] market, should be granted only for fundamental basic needs. But between these 15 favored companies with the greatest quantity of preferential dollars, there are five importers of automobiles, essentially vehicles for individuals. Can we accept that in a country that is already congested with vehicles, the first priority would be to subsidize a product reserved for the personal consumption of the middle and upper class?

In the list above there are also five telecommunications companies, above all cell phone companies. Is it indispensable to have such a massive importation of cell phones for the development of a socialist economy, considering that Venezuela already has more cell phones than inhabitants?

The fact that a public company, SIDOR, receives [a subsidized] $4,731,508,369, when they themselves should be producing dollars, is also worth paying attention to.

But what is of the utmost importance is that the favored firms are given this preferential currency to import products, but they then resell them in the market at atrociously overvalued prices, greater, even than what they could have expected if they sold their dollars straight back onto the black market.

The currency obtained through the exploitation of hydrocarbons are the fundamental instrument of Venezuelan authorities to follow through on their social politics of development. It will be hard to meet those goals if they are diverting money towards importing transnational luxury goods.

It is essential that we thoroughly review these politics. A while back, we advanced proposals…. for an integral public audit of the grants of currency, and the state's assumption of importing essential goods for subsistence and for the development of the country.

Transnationals, foreign cellphone and passenger car companies are not basic needs. If these errors are not corrected, the people will want to fix the problem and those who are making it. Morality and understanding are our basic needs.

***

Luis Britto Garcia is a renowned Venezuelan writer, analyst, and playwright.

Translated and adapted for venezuelanalysis.com by Cory Fischer-Hoffman.

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