Caracas, Venezuela, November 24, 2005 – President Hugo Chavez announced last night $100 Billion would be spent by the Venezuelan government in the country over the next 5 years. This $100 Billion will be on top of the governments existing spending. Chavez said, “With this $100 billion, or $20 billion a year, we are going to push special projects.”
Speaking in the Venezuelan city of Maracaibo, Chavez outlined the spending proposal. The main aim is to make Venezuela’s infrastructure better, especially in the less developed parts of the country, away from Caracas. Projects suggested by Chavez include a new bridge across Lake Maracaibo, port development, and a railway to connect the city of Maracaibo with Barquisimeto.
Chavez said the money would come from different sources. $10 billion a year will come directly from the state oil firm PDVSA and $2 billion from Pequiven, the state petrochemicals company. Another $5 billion is from National Development Fund, FONDEN. This fund was set up this year with excess foreign currency reserves. The final $3 billion a year will come from the Miranda Fund. Chavez said, “The plan from 2006 to 2010 is for around $100 billion for those five years, and that is apart from the budget.”
The $20 billion a year investment plan represents a two-thirds increase over Venezuela’s $30 billion central government budget for 2004.
This spending announcement comes weeks before elections for the Venezuelan National Assembly on December 4. Large infrastructure projects have historically been viewed in Venezuela as part of the success of a government. The Venezuelan opposition has claimed the Chavez government has not built enough grand projects in the past. Critics have also said the government’s spending plans will cause higher inflation.