Lets talk about investment…


It’s heartwarming to see Martin Sanchez of Aporrea and Venezuelanalysis suddenly take an interest in investment. His latest dispatch is breathless about DaimlerChrysler’s announcement that they will invest $20 million to “expand production” in their Valencia plant, apparently for export.

I’m glad Martin agrees with me about the importance of investment in general, including private sector investment. I wonder if he’s had a look at the Central Bank’s own figures on overall investment in the Chavez era. Since it is a bit of a pain to see the data, I took the time to do it for him…

100% official Venezuelan government sources:
Central Bank for the Gross Fixed Capital Formation statistics and the 2001 Census for the population data.

[Note: I only go up to 2002, because that’s the latest data our bureaucratic hare of a Central Bank has published. I use the BCV’s own inflation-adjustment, the 1984-base bolivar.]

Just to put Martin’s write-up in a bit of perspective, $20 million, works out to less than 12 constant 1984 bolivars per person per year, so less than a dollar a year per capita. That’s less than half of 1% of the total gross fixed capital formation in Venezuela in 2002.

Don’t get me wrong, I’m thrilled for those Valencia auto workers who get to keep their jobs. But we need to recognize they’re a distinct minority. If you want to discuss investment in Venezuela, lets do it openly, with the facts on the table, not as a propaganda exercise. Un poco de seriedad, por dios…

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