Coro, July 10th 2011 (Venezuelanalysis.com) – On Saturday Venezuelan president Hugo Chávez officially approved the issue of 45 billion bolivars (US$ 10.5 billion) in government bonds as set out in the Law of Additional Debt – passed by the National Assembly on the 9th of June.
The 45 billion bolivars will be used primarily for the maintenance and development of three of the nation’s main social programmes which were announced earlier this year. The Venezuelan head of state specified that 10 billion bolivars (US$2.3 billion) would be invested in Venezuela’s state housing mission whilst 10 billion would be used to promote national agricultural production and food sovereignty through mission Agro Venezuela.
A further 10 billion would be directed into the creation of infrastructure projects and the state’s new work mission, which aims to generate ‘productive, humanist and socialist’ jobs and to bring 3.5 million Venezuelans into employment before 2019.
“Today we are a comfortable country with a substantial capacity for public financial management …for domestic financing as well as external,” said Chávez, who also emphasised that Venezuela was not reliant on loans from financial organisations such as the International Monetary Fund (IMF).
In light of last year’s heavy rains a total of 5 billion bolivars (US$ 1.16 billion) would be used as a ‘contingency fund’ so that the government is able to respond to natural disasters and emergencies. The remaining 10 billion bolivars would be used to service and re-finance the nation’s existing debt.
China-Venezuela Development Fund
Chávez also announced the payment of US$2 billion to the China-Venezuela strategic development fund. Speaking from the Miraflores Palace in Caracas, the Venezuelan president explained that China would also make a payment of US$4 billion to the fund, which will be used for the continued construction of the railway line between Tinaco and Anaco and the completion of Metro line 2 in Los Teques in Miranda state, as well as for other infrastructural development works.
The payment to the fund will be made to China through the export of Venezuelan oil, boosting the existing amount that Venezuela exports to the Asian country from 400,000 barrels per day to 1 million barrels over the next 2 years.
“It is not true what the opposition says, that we are just giving oil to China, no. This is at the market price, which is currently set at $103 per barrel,” said the Venezuelan president, who added that the agreement was “another success” for Venezuelan foreign policy and coordinated entirely “independently of multilateral credit organisations”.