Christmas Shopping Comes First in Venezuela

The people on the streets in the run-up to Venezuela's Dec. 3 presidential elections are on a massive end-of-year shopping spree rather than keeping a solemn vigil to consider the political choices before them.

CARACAS, Nov 29 (IPS) – The people on the streets in the run-up to Venezuela’s Dec. 3 presidential elections are on a massive end-of-year shopping spree rather than keeping a solemn vigil to consider the political choices before them.

Transitory or not, the economic boom that has fuelled consumption has kept the economy out of the debate between the two contenders, President Hugo Chávez who is seeking reelection and Manuel Rosales. They have clashed rather over the models of society they propose, and on how to distribute the windfall oil revenues.

“I took a taxi to come to market to buy sugar, and I’ve bought milk, because it’s scarce,” Luisa Castejón, a retired teacher who lives in Los Frailes, a working class neighbourhood west of Caracas and two kilometres from where she shops, told IPS. “It’s not hoarding, and it’s not the government’s fault, it’s just that there’s a lot of money being spent out there,” she explained. Ana Fernández, a secretary in an insurance firm who was negotiating a loan in a nearby bank to buy a new car, said something similar. “The economists at the firm where I work recommended buying durable goods, because they say there’s a cash bubble,” she told IPS. “There is seven times more money on the streets than there are goods and services available in the market,” Luis León of the Datanálisis polling firm told IPS. Monetary liquidity, according to the Central Bank, stands at 110 trillion bolívares (52 billion dollars), equivalent to one-third of Venezuela’s gross domestic product (GDP).

Supermarkets, car salesrooms, and stores selling home appliances, clothes, cosmetics, building materials and Christmas decorations are flooded with customers. Consumption has rocketed 32 percent above 2005 levels, according to the Central Bank, and the upward trend has been accentuated over the last month, according to the retailers’ association.

The government paid out end-of-year bonuses in advance to the more than two million people who are state employees or who receive permanent payments from the “missions”, the government social programmes providing food, health, education and job training that have been implemented over the past three years.

As consumption has climbed, so have imports of all sorts of goods, from scarce powdered milk to Hummer vehicles, which are similar to the combat vehicles used by the United States in Iraq, costing over 200,000 dollars each.

Imports in the third quarter of 2006 were valued at 8.6 billion dollars, equivalent to the average annual figure for the last decade. This year they are expected to total 30 billion dollars, “a record, and an attempt to satisfy the expansion of demand for goods,” Domingo Maza, one of the directors of the Central Bank, told IPS.

Thirty billion dollars is equivalent to two-thirds of Venezuela’s oil income, which has also broken records this year due to high international prices for crude.

Venezuela’s GDP has grown steadily for 12 consecutive quarters, at an annual average of six percent. It grew 10 percent in the third quarter of 2006. “The economy has reached cruising speed, and will continue this way for several years,” said the normally laconic Planning Minister Jorge Giordani.

“We’re back in the oil boom days. There are plenty of financial resources, but no wealth is being generated. We can’t speak of sustained growth, even though many companies are operating at 90 percent of capacity,” said José Luis Betancourt, president of the Venezuelan Federation of Cambers of Commerce (Fedecámaras), which staunchly opposes Chávez.

Pedro Palma, an economist at the consulting firm MetroEconómica, told IPS that “the strong economic indicators show that we have emerged from the doldrums of 2002 and 2003, when the oil strike and the political crisis brought about a tremendous contraction (close to 20 percent), but per capita GDP is only now catching up with that of 1998,” when it stood at 4,600 dollars.

In contrast, Rodrigo Cabezas, chair of the congressional Finance Commission, believes that demand for oil and consequently prices will remain high, “as indicated by the economic growth of India and China,” he said.

All 167 seats in the single-chamber parliament are currently held by supporters of the government because the opposition boycotted the legislative elections a year ago.

Both Chávez and Rosales take it for granted that the strong economic growth will continue. But they differ on how that wealth should be distributed. The president announced increased spending on public works, productive programmes and stimulation of the cooperative economy, under the aegis of the state.

Rosales plans to offer incentives for private investment and to hand over one-fifth of the oil income directly to the poor, giving families between 280 and 460 dollars a month, to be paid into an account managed by a debit card.

“The empire (the United States) and its lackeys in Venezuela want to privatise the oil industry, which we have used to carry out the missions that the people of this country will not allow to be wrested from them,” Chávez proclaimed, while Rosales said people did not want handouts, they wanted good jobs and to be paid on the 15th and last days of each month.

The official unemployment rate in Venezuela is 10 percent, although opposition trade unions challenge this figure. But half the work force is employed in the informal economy, which is most painfully manifest in the crowds of street vendors blocking traffic flow in the centre of Caracas and other cities.

“This (boom) has been good for us, as we can pick up a little of the cash that’s so plentiful on the streets,” says Armando, who drives a motorcycle taxi, without legal registration, in Caracas. “Don’t put down my surname, I don’t want any problems with my Chavista friends,” he told IPS. How will he vote? “I hardly know anything about Rosales, although (the debit card) could be a good thing to have a steady income, but he might decide to kick us off the streets, whereas Chávez has let everyone work at whatever they want. In the meantime, I’m going after some ready cash for ‘hallacas’,” Venezuelan tamales that are traditional Christmas fare.

Armando is one of the undecided, or perhaps he represents the “hidden vote” that Rosales’ campaign headquarters sees as their chance to catch up on the strong lead that Chávez has over the opposition candidate. According to most polls, Chávez has at least a 10-point lead.

There are perhaps 20,000 motorcycle taxis in Caracas, and over a million cars, 40 or 50 percent more than two years ago. No new roads have been built, so for these heavy shopping days the city is flooded with people in or on vehicles, heading for the shopping malls, the cathedrals of consumption.

The traffic is also driven by oil: petrol, guzzled at the rate of 300,000 barrels a day in this country, is probably the cheapest in the world, at four cents of a dollar per litre.

Source: IPS