A Gal Can Hope, Can't She?

A estas alturas del partido, why would any sane person still get worked up when President Maduro says he's going to announce economic reforms?

It happened again. President Maduro said he would, once again, make special economic announcements to, once again, protect Venezuelans’ income against speculation, and to, once again, promote local production and (why not) non-oil exports and to, once again, make reforms to increase tax collection.

As you already know (or can probably imagine), the announcement.

Maduro nos embarcó. Once again. He stood us up.

We shouldn’t be surprised. It’s happened so many times before. Plus, basic logic dictates that Maduro won’t announce any big economic reforms before the December 6 parliamentary elections. So why on earth was I on the edge of my seat?

Partly, because it’s my job. But mostly, it’s that the economy has gotten so bad that I’m constantly hoping to be proven wrong about this. The current economic crisis is by the far the worst I’ve ever seen. Not so much a recession as a depression. Possibly the worst downturn Venezuela has ever seen.

Let’s review,

  • The -10% GDP drop estimated by the IMF for 2015 would surpass every recession ever registered in Venezuela, including the -8.9% GDP drops of 1989 and of 2002. That’s right: worse than the paquetazo, worse than the paro.
  • We’re easily on track to easily surpass the 103.2% inflation level of 1996, making 2015 inflation the highest in our history. Nobody is forecasting a number below 150% for this year.
  • The government stopped printing the official shortages index in January 2014, but we only need to visit any supermarket or pharmacy to get a notion of how bad it’s gotten
  • Even after 4 adjustments just between February and November 2015, the new November minimum wage will only cover 20% of the cost of the latest basic food basket as calculated by Cenda in August.

However hapless the government may be, however clueless, common sense tends to suggest they’ll have to react somehow, at some point. Am I naive for expecting and hoping for serious economic reform? Maybe. But I think it’s also my civic duty to demand it. Too many people are suffering.

Every single public opinion survey shows that Venezuelans are demanding a change and that the opposition has a shot at at least a simple majority in the National Assembly, which would open many opportunities (here’s a detailed list in Spanish published in Prodavinci) for the reconstruction of our public institutions and our economy.

But first we need to grasp the scale of the crisis. And to do that, we need to listen to Maduro and his combo even if he leaves us waiting for hours and days.

Today, Finance Minister Marco Torres presented the 2016 Budget to the National Assembly. He left out all kinds of key facts and figures, like GDP and inflation data. Nothing major: only the the basic data points you need to have for a budget to make any sense. Still, I eagerly listened to everything he said. And while I did my job and waited for any kind of relevant economic information, I really hoped that the candidates for the National Assembly were be out there working on coherent and viable proposals, and convincing the hopeless about the importance winning a majority in the National Assembly.

I guess you can tell, I spend a lot of my time hoping. What I really hope, though, is that the opposition candidates won’t let Venezuelans down once again.


Anabella Abadi M.

Economist. Married to a Maracucho. Loves horror films and writing when she can't sleep.