[Note: For critical context on the —ahem— hidden agenda behind this post, be sure to read this.]

Venezuela is in desperate need of economic stability. The brutal costs of economic chaos are all around us. As we weather the storm, it’s not too early to start asking what we can do to ensure no such calamity can ever befall us again.

In the short term, Venezuela needs stabilization: emergency measures to reactivate the economy and address the humanitarian crisis. But the conversation cannot stop there. Once the economy comes out of its current, acute crisis, Venezuela will need to get serious about the fundamental institutional reforms needed to make sure economic chaos can never destroy millions of Venezuelans’ livelihoods again.

All of the economic dislocations Venezuela faces today have their roots in the way the state handles money.

The comprehensive reform proposal here will do just that, ensuring economic stability for this generation and generations to come.

Our starting point is a simple but powerful observation: all of the economic dislocations Venezuela faces today have their roots in the way the state handles money. The path to prosperity passes through stability, and the road to stability passes through an ambitious, comprehensive reform of the public sector’s financial management framework.

The impact of mismanaging the State’s finances is all around us. You see it in the queue outside the bakery shop, you see it in the bare cupboards in stores and the stagnant productivity of farms and factories. It’s not just a problem. It’s the problem.

Over the past several months, Caracas Chronicles has conducted a far-reaching analysis of the major problems with Venezuela’s current public sector financial management framework.

Here, we set out the seven most important solutions in language anyone can understand.

Some of our recommendations will strike readers as ambitious. Utopian, even. But this is not the time to think small. If the evidence of the last few years doesn’t convince us that we need a complete rethink of the way the state handles its money, nothing ever will.

Reform 1: Balance the budget over the medium-term

Let’s start at the very beginning. Venezuela’s macroeconomic chaos is a direct outcome of persistent deficits. In the last 17 years, the government has run deficits in good times and bad. It has run deficits with the oil market was in triple digits, deficits that run against any imaginable type of economic rationality.

It’s the need to finance such deficits that has led, first, to the ballooning of the public sector debt, and later on to the collapse in the value of the bolivar, as a cash-strapped government has ordered the Central Bank to create money to finance deficits no lender would cover willingly.

There are good reasons to run countercyclical deficits even in the best run economies.

Ending this destructive pattern of persistent deficits does not mean that the budget needs to be balanced every single year. There are good reasons to run countercyclical deficits even in the best run economies. Over the span of the economic cycle, though, primary balance is essential: running a deficit is fine when things are tough, but only if your commitment to balance it with a surplus during the fat years is credible.

But that means that budgeting on a one-year horizon just isn’t good enough to make sure the nation’s goals are aligned with its budgetary practice.

To fight short-termism and ensure a rough balance, budget planning must be inscribed in a multi-year framework, one long enough to take in the whole of the business cycle. It’s over the medium term that balancing the budget is essential, if not overall — some investment plans take years to bear fruit — then certainly in terms of ordinary income and ordinary spending.

The multi-year framework should play another role too: it should be the moment when we stand back, once every few years, and ensure that we really are devoting natural resource rents to investment rather than ordinary spending. That’s the responsible approach to Natural Resource management. Our oil reserves, the biggest in the world, should lead to the accomplishment of medium to long-term State goals and not just the goals of the current government.

Reform 2: Bring rationality and oversight to public sector debt

A second major driver of the current crisis is debt, or rather, the irrational over-reliance on debt at the peak of the oil cycle. Hunger and disease this year has been driven by a parallel collapse in food and medicines production and food and medicines imports, and the import collapse has been driven by the need to set aside dollars that might have been used to import food and medicines to service debt contracted during the high-oil years.

The State cannot be allowed to take on financial debt without legislative oversight.

This dynamic needs to be short-circuited by ensuring public indebtedness cannot rise beyond what the size of the economy, investment needs and revenue generation capacity can justify. The key here is effective oversight: the State cannot be allowed to take on financial debt without legislative oversight. Secret bilateral debt deals not subject to effective oversight must be explicitly ruled out.

In fact, at the risk of being accused of radicalism, we recommend going further and stating explicitly that the State shall not recognize any debt obligation not previously subjected to a vote in the National Assembly.

Reform 3: Getting serious about the National Budget

The drift away from legality has been so intense these last few years, fundamental reforms will be needed to establish some simple, basic ground rules with regard to the budget. Ground rules like “yes, there has to be a National Budget” and “yes, the president must present it to the National Assembly by a given date,” and “yes, that budget must explicitly set out the longer term goals of fiscal policy and actually explain how the government expects to meet them within a framework of fiscal responsibility and budgetary balance.”

Getting serious about the National Budget means accepting that there is only one budget.

Getting serious about the National Budget means accepting that there is only one budget. It means taking seriously the idea that the State can only spend money if that expenditure has been authorized in a budget law.

It’s a simple principle — too simple, you might think, to need stating. But after 17 years when we’ve seen an explosion of workarounds to this principle — from PDVSA’s social budget to the off-budget funds like Fonden and the Fondo Chino — it apparently does need stating.

Of course, there can be extraordinary circumstances that were genuinely unforeseen at the time the budget was drafted, and any public sector financial management framework must include safeguards to ensure those genuinely unforeseen spending needs can be met.

What must be ruled out, we believe, is the routine use of “créditos adicionales” to cover entirely predictable expenses. Explicitly ruling out this old and destructive practice would constitute nothing short of a revolution in the way the Venezuelan State manages its finances, as would establishing the principle that such “additional credits” must, like the budget law they amend, always be subject to parliamentary approval.

Reform 4: Building accountability into the fabric of budgeting

If accountability is to be more than theoretical, every single line item in the spending side of the National Budget explicitly sets out, in numeric terms, the objective of that expenditure and names — actually names — the flesh-and-bones officials responsible for delivering that result. And within six months after a budget has closed, a mechanism must be established to check which officials followed through and which did not.

Every single official entrusted with the sacred duty of spending on behalf of the collectivity who must be held accountable.

Why? Because budget accountability needs to go beyond the macro-level of allowing people to vote governments in and out. That is far too coarse an oversight device. Accountability must be granular: it’s not just the President who is accountable to the nation in some abstract sense, it’s every single official entrusted with the sacred duty of spending on behalf of the collectivity who must be held accountable. We envision a website to centralize this information, allowing anyone to search out the actual identity of the officials in charge of delivering projects that affect them. Radical? Yes it is. But an idea whose time has come. Some call it “transparency”.

Reform 5: Empowering an Autonomous Central Bank to Target Inflation

Terminology can be confusing, so let’s start with the basics: a Central Bank is not a bank. Not in the usual sense of the word. Its role isn’t to take in deposits and make credit available. A central bank is a regulatory institution that looks after the value of the nation’s currency.

The Central Bank must be formally empowered to focus narrowly on price and monetary stability.

The Central Bank’s autonomy needs to be legally protected so we never again face ‘innocent’ requests for a millardito that becomes six and then becomes a never-ending place source for covering public sector deficits no investor in her right mind would cover by choice. A truly autonomous Central Bank can never become the place the rest of the public sector turns to when it’s running short of cash.

Our call is for the Central Bank to be recognized as Venezuela’s autonomous monetary authority, nothing more, nothing less. The Central Bank must be formally empowered to focus narrowly on price and monetary stability by formulating and executing monetary policies; by participating in the design and execution of foreign exchange policies; by regulating credits portfolios and interest rates, and by managing international reserves.

Autonomy cannot be used as cover for a free-spirited, como va viniendo vamos viendo approach to Central Banking. Autonomy is about having the space to take your formal mandate seriously and guarding it against encroachment zealously.

With great autonomy comes great responsibility. An autonomous Central Bank must be held accountable for its successes and its failures, given that it must focus on price and monetary stability. Let’s not forget that the Central Bank manages the money-printing machines.

It might sound like a lot of work, but Venezuela’s Central Bank should report on the actions, goals and results of its policies, preferably to the National Assembly. It should also issue periodic reports on the behavior of Venezuela’s macroeconomic variables and respective technical analysis.

Reform 6: Coordinating policy in the service of stability

The last few years have established the paramount need for economic stability. What the nation needs now is a clear mandate for the institutions charged with managing the public sector’s finances to coordinate effectively to deliver on that objective.

A call for effective policy coordination must never be allowed to become a pretext to pressure the Central Bank to support irresponsibly policies.

Coordination between the Finance Ministry and the Central Bank is both necessary and potentially problematic. The temptation for Executive overreach will always be there, which is why a call for effective policy coordination must never be allowed to become a pretext to pressure the Central Bank to support irresponsibly policies.

For that reason, we propose to marry the mandate to coordinate with an explicit ban on Central Bank being subject to directives from the Executive Power or of financing of public sector deficits: these goals are compatible, so long as the overall objective — stability — is clearly established.

Reform 7: Ending the Oil Boom and Bust Cycle

We’re endlessly told that the economic cataclysm of the last three years has its roots in the oil cycle. That’s not quite true: it has its roots in the fiscal mismanagement of the oil cycle. Rather than making provisions for the inevitable eventual bust, Venezuela spent all of the proceeds from the 2002-2014 oil boom of close to US$ 800 billion — and then some. Failing to save some of the excedent when the takings were good was the original sin that led to the current disaster. When the oil market soured, Venezuela was left badly unprepared.

The mechanism we propose will include guaranteed payments to state and local governments during oil downturns.

It doesn’t have to be this way. That’s why we propose a radical new mechanism to save excess oil revenues in high oil years and hold them in reserve, to be tapped during low oil years. The system could even out the inevitable booms and busts of the oil market, making the fiscal income from oil more predictable and the impact of oil downturns easier to absorb.

A mechanism to smooth out the oil cycle will need broad buy in, not just from central government but from regional governments too, which is why the mechanism we propose will include guaranteed payments to state and local governments during oil downturns. The operating rules for this fund shall observe the basic principles of efficiency, equity and non-discrimination between public entities. Judiciously applied, this mechanism could end the cycle of oil boom and bust forever.

A Reform Agenda Whose Time Has Come

These seven reforms must be at the heart of any incoming government’s economic agenda. Venezuelans are yearning for economic stability, but economic stability can only be achieved through far-reaching institutional reforms to create a framework for managing the nation’s money responsibly for the future.

These are the seven pillars on which a new, stable, prosperous economy can be built.

Balancing the budget over the medium term, bringing rationality and oversight to public sector debt, getting serious about the National Budget, building accountability into budgeting, empowering an autonomous central bank to target inflation, coordinating policy in the service of stability and ending the oil boom-and-bust cycle are the seven pillars on which a new, stable, prosperous economy can be built.

33 COMMENTS

  1. Congratulations for having thought this out. It deserves to be a centre piece of a future democratic agenda.

    I was interested in your “accountability” mechanism; the naming of individuals responsible for spending budgetary items.

    In the mature systems that I am aware of (mainly Canada and Scandinavia), responsibility is at the Ministerial level. While governments will sometimes claim that it’s the fault of civil servants rather than the government, the tradition is that “the buck stops with the Minister”, he or she must resign if improprieties are discovered at ANY level within the Ministry.

    That isn’t arbitrary, because ministers are part of the government while civil servants aren’t. It would be easy for Maduro to keep blaming unnamed fulanos de tal, rather than his own ministers and Cabinet, for each successive misuse of government funds for private purposes.

    Good work on this complex topic!

  2. I am sorry but you can not have this plan realistically implemented without fixing the root of most of these problems in the Political side.
    Any Government that adheres to fiscally responsibility policies by choice will be ousted quickly the next voting cycle, giving way to populism or end in Dictatorships as we can see in almost all Democracies which practice Universal Suffrage as the means to access to power.
    So before any of those 7 pillars can be in place you need to have Election Reform to filter out the Low or No Information vote in a post-truth age.
    Second, one of the major sources of economic instability has been the foreign exchange monetary policy.
    Why don’t simply adopt the US$ as official currency to immediately stop inflation, boost foreign investment stop capital flight and ease international trade?
    All (as in 100%) of countries around the world which have adopted the US$ as official currency have almost no inflation, including Zimbabwe, Ecuador, El Salvador, Panama, etc.

    TLDR;
    1. Election Reform (To have competent leaders)
    2. Economic Transparency (To end corruption)
    3. US$ Currency Adoption (To stabilize and attract investment)

    These are my 3 Pillars.
    Simple.

    • Toro, the problem is that your modest proposal for doing away with Universal Suffrage would lead to the disproportional disenfranchisement of non-whites. Do you imagine the international community would stand idly by as a primarily white electorate lorded over the mestizos/Moreno/afro populace? Do you think those demographic groups would allow this?

      The current world order is also wholly dependent on ignorant electorates. In order to buy votes, leaders spend taxpayer money and borrow heavily against future taxation. To say your experiment would make you an international pariah would probably be putting it lightly.

      There are no simple answers for places like Venezuela. The “good” news is that your country is in such shambles that even a moderately competent government will be able to grow your economy at rates not possible anywhere else in the world. Think of Peru as their civil war was winding down.

    • “Why don’t simply adopt the US$ as official currency to immediately stop inflation, boost foreign investment stop capital flight and ease international trade?”

      Did you ever hear of Argentina?

  3. All of the seven points are excellent but the most important point, unifying the currency and removing price controls (and instead providing direct subsidies to the most vulnerable of the population) has to be the first and most important measure taken to normalize the economic situation. Without that, none of the others will work.

        • It’s a silly article. And the mention of Venezuela is actually rather odd. Anti-Chavistas say that the current government is not legitimate (probably because it is not), which would register Venezuela as being in danger of losing it’s “liberal democracy” according to the methodology of the paper cited.

          In other words, what if wildly pro-democracy individuals in a European country were railing against the EU as an anti-democratic construct? What if wildly pro-democracy Americans were railing against the corruption of their elected representatives? This would be an indication, according to their brain dead methodology, that democracy was at risk in those countries. These are useful idiots who are spreading anti-democracy propaganda on behalf of anti-democratic forces and doing it in the name of protecting democracy.

          If you want proof that democracy can’t really work where the electorate is too ignorant, there are plenty of third world examples. There’s no need to link to a paper that seeks to delegitimizate opposition to the status quo powers.

          • I posted earlier a reply to your comment here, but it never appeared. This Blog seems to be as bad as the Maduro government, they are either censoring comments or are technically incompetent with WordPress.

          • I understand your frustration. The same thing has happened to me a couple of times. The first time I had written one of my long winded comments on a phone after hitting submit it disappeared into the ether. I certainly didn’t want to go through writing the whole thing up again. A couple of days later I saw mention from other commenters that the same thing has happened to them. I don’t think it’s censorship, I think it’s technical issues. My advice to you is to type out any longer comments on a different medium (wordpad, etc.) and then copy and paste it here.

            Also, I just realized now that you and Francisco Toro are two different people.

  4. All very sensible and rational, but we’re dealing with an historically irrational/corrupt society, reflected in its institutions. CAP II tried only a smattering of these recommendations, which got him his quick defenestration. And now, things are even more complicated, with the political presence of the cancerous Commie/PSUV Prosperity cannot depend on oil fat years savings, since, barring Middle East conflagration, this is probably not in the cards going forward. Economic diversification away from oil, perhaps toward tourism, is necessary, but, even then, if successful, stability, rather than prosperity, is the likely outcome.

  5. Great piece with a concise but comprehensive listing of those basic principles which application can help a country achieve and maintain economic stability and a platform from which to grow and improve the living standards of its population……!!

    My own favourite principle is that which you designate as ‘budgetary accountability’ …although I dream that its scope of application might be extended beyond the one you describe …….and be made into a cornerstone for more responsible governance….

    I compare it to how budgets are handled in a well organized business corporation , you first prepare and submit a detailed plan to the board specifying all those plans and programs and activities you propose to advance and perform in the next year and the following years……., the goals you intend to accomplish by carrying it out , the schedule for executing the plan and of course the resources which will be used to achieve it including a budget of how much money it will cost to carry them out .

    The board usually with the help of a team of expert from outside management validates the Plan and gives it its approval …..upon which approval management has the duty of carrying it out using those resources which it has been allocated for the purpose .

    Periodically the plans execution is subjected to a Board review to see how far and well its been advanced , to check whether there is going to be a budget overrun or a schedule delay and take whatever corrective or remedial action is needed….!!

    If at the years end the plan has run into trouble or hasn met it goals then the board can decide to cancell or modify it but more importantly whether those in management fail to complete it as planned deserve to be fired or demoted for their failure…..

    If we transpose these practice to the handling of public programs and funds one would want to have an institutionalized review by team of recognized non partisan experts to judge on the proposed plans merits and viability , then on its approval to have the same team of experts scrutinize its execution and whether there are any failings in the execution that need correcting or even call for the plans partial cancellation.

    All govt policies and plans are periodically subject to this scrutiny and valuation ……where the experts monitoring reveal a failure then the management ( govt ministers) are subject to demotion upon the censure of the body approving the plan , where the plan is considered by the experts to fall short of the requirements of a good policy proposal then the number of legislative votes needed to approve its funds may be more than if it meets with the experts full approval …….!!

    There is much more to be said about this line of ideas but it would take too much space ….and the bloggers patience to read them.

    • Except there is a big significant difference.
      In the world of Business and Corporations, you get at the top level management positions after climbing the ladder through years of experience, proven competence and education. They are judged in terms of performance through facts, short and long term, not Charisma.
      In the Venezuelan Political System, like many other countries a Colombian Bus driver or a Criminal with no experience can get elected for the “CEO position” no problem.
      So you have to fix Venezuela’s Top Public Management first, specifically how they get “hired” (aka Elected)
      You are not even close to fixing Venezuela without first acknowledging and more importantly, coming to a solution to this systemic problem.

      • Youve hit the nail on the head: Just imagine (if you can) a set of institutionalized rules whereby
        1. Every candidate or party must present a Plan setting out the policies it will follow if it gets elected , in full detail…….., not only specifying the goals to be achieved but the way of achieving them …..
        2. The plan is vetted by one or more teams of non partisan experts (chosen using technocratic criteria dissociated from popular politics) and scored depending on its feasability etc.any outlandish promises are so declared and pointed out.
        3. The people making the basic political decisions are segregated from those who are entrusted with the task of executing each plan , the first are elected by popular vote , the second using technocratic methods.
        4. The plans performance are monitored periodically and rated for its success or failure in achieving the SPECIFIC promised goals ……., where they fail to meet a minimum standard (as per the judgment of non partisan institutionally appointed experts) then those proposing the plan must rectify the plan as per the experts recommendations or have their continuance in office put to a vote . ( the bigger the failure the lower the threshold for their demotion) ….
        5. If the failure is great enough the demoted officials can be barred for life or for an extended period from any participation in electoral politics.

        The above may seem utopic but in different periods and places they have all been applied………, the thing is to subject political parties and actors to a set of rules which makes them accountable for their decisions regardless of their capacity to subourn or extort a popular vote in their favour…..!!

      • Toro, it’s like you’re having a spiritual struggle right before our eyes. You just haven’t made that final leap, to realizing that government is nought but a necessary evil. Maybe once you abandon your plan for instituting Diego Crow laws, you can move on to rejecting the evils of Stateism, all of its works and all of its empty promises.

  6. Better plan than I could dream up by myself. I share the skepticism that the populace would stay the course, and not be lured away to support another Chavez, Kirchner, Peron or comparable bigmouth who would hollow out institutions in favor of their personal predilections and prejudices (which they would call “policies”). However, in order to provide a hope for better times you have to start somewhere, and this plan would be a good start.

  7. That’s a plan for stability not prosperity! Prosperity needs a lot more than that. Stability is only a necessary condition, an important one, of course.

  8. This a good framework of principles. I would add decentralization of taxation and political authority as a fundamentally necessary financial reform.

    Of course, at this point, virtually any plan appears superior to the status quo.

  9. Maybe its a bit out of the scope of this article, but, have you considered

    a) Use of unconditional cash transfers to ALL citizens living in Venezuela, funded by the equal distribution of the net income of the sum of natural resources revenue?

    b) Mandatory health, education and pension funds, funded by a)?

    (these two have already been discussed in CC, “The Extorres plan” I think (or was it Amieres?)

    c) Ending the whole “situado constitucional” madness and using a three tiered taxation system in which taxes are paid on the municipality one resides / industry and/or factories are stablished, then the municipality takes a third of that, and the other 2/3s are sent to the Regional state government, there, all taxes from that state’s municipalities are gathered, then split in half and the remaining half is sent to the National government. This way there will be almost no centralization and the National Government can’t subdue “enemy” municipalities or states via budget manipulation/restriction. The Municipal and Regional governments would have to use the received funding to develop projects BUT those projects must be under the supervision of the NA to ensure no money is ill spent.

    This is kind of OT but by having that money AWAY from the hands that may (and WILL) misuse it is the best way to 1) ensure is not robbed/ill spent 2)guarantee stable social services (health/education/retirement) WITHOUT burdening the government, which in the end would provide more stability.

    I know that can be achieved with the proper laws, but let’s face it, this is Venezuela, where the law is just a word and the rules don’t matter. You can always “darle la vuelta” to something. I always tell my students “you must design stuff as if the end user WILL be a total moron COMPLETELY determined to find out how to misuse it and/or break it and then tell you it’s all YOUR fault because you didn’t design it “good enough””. By doing this, no turnaround may move funds back and forth to and from shady deals.

  10. I don’t disagree with anything that was stated in the plan but it is only one aspect of what Venezuela needs. At this point they needed everything. The question is where you start to rebuild the country. What comes first the chicken or the egg?

    I think you need a different approach and priorities to stabilize the country. People are starving and dying. Humanitarian needs should be the 1st task to address. Unfortunately, it cannot be addressed under the current political situation as they are unwilling to recognize the problems and accept international aid that is available to meet these needs.

    So before anything else the political situation needs to be addressed. It is the fundamental problem from which all other Venezuela needs have evolved. Once that is address all else is possible.

    The current regime in like a person addicted to drugs. Only their drugs of choice are fanaticism, power, and greed. People addicted to drugs deny they have an issue and cannot see what others see. There are several course of action to deal with this problem. Education so that they eventually accept personal responsibility, family interdiction to make them aware and force them into treatment or legal interdiction arrest, incarceration and forced treatment, or the ultimate interdiction ….. death.

    It is obvious that self-acceptance of the issue will never happen. Family interdiction from the National Assembly and people protesting in the street has been attempted and to date has failed. The only thing left is legal interdiction.

    The world is attempting another level of legal interdiction from a variety of sources, agencies, organizations and countries. Even countries formerly aligned with the current regime’s political views have stepped back and are distancing themselves from their former allies.

    The next step would be “Death” and no one wants to go there. Nobody wants the death and destruction that a civil war will cause.

    The only hope is continued and increasing world intervention.

  11. “… we recommend going further and stating explicitly that the State shall not recognize any debt obligation not previously subjected to a vote in the National Assembly. ”

    If the National Assembly would pass that measure, even if the tribunal strikes it down, how would Maduro ever manage to do business in the international community? Now that Venezuela is rapidly being considered the failed state that it is, the Chavistas are on borrowed time. No one can do business with a worthless currency. The only thing keeping them in power are the petro dollars sill dribbling in. With Maduro on the way out, if his business dealings were declared null and void (sans Assembly approval) by the party most likely to assume power, it’s hard to imagine foreign companies and governments not being reticent to play ball with Venezuela, when contracts will retroactively become useless.

    Affecting policy changes from WITHIN the country is apparently beyond the scope and ability and wherewithal of the Assembly. Affecting policy changes by changing the rules of engagement OUTSIDE the country, by the means just describe, might hasten the inevitable fall.

  12. Correction: This just in:

    The South American economic bloc Mercosur has suspended Venezuela for failing to meet its basic standards.

    The bloc’s founding members – Brazil, Argentina, Paraguay and Uruguay – made the decision after concluding Venezuela had not incorporated key rules on trade and human rights into national law.

    Venezuela, which joined the bloc in 2012, has argued that some accords conflict with its domestic legislation.

    On Friday it said it rejected any decision to suspend it from the bloc.

    “Venezuela does not recognise this null and void action sustained by the law of the jungle of some officials who are destroying Mercosur,” Foreign Minister Delcy Rodriguez said on her Twitter account.

    So the OAS finally took action.

    • I don’t think the OAS has anything to do with Mercosur. The OAS represents yet another, separate problem for this government.

      “If the National Assembly would pass that measure, even if the tribunal strikes it down, how would Maduro ever manage to do business in the international community? ”

      This is a good idea but it seems like it can now wait. I have long thought that the opposition should communicate to countries like China that the current government is illegitimate and that further debts by it will not be honored by future governments. This could potentially infuriate the banksters who basically run the world (they don’t want this kind of precedent), which is probably why it hasn’t seriously been discussed. What occurs to me now though, is that with hyper inflation seemingly imminent, it would be better to not give the Chavistas a scapegoat for the coming collapse. This weapon can be kept for a later date, or never deployed if it turns out it is not needed.

  13. Here is an idea…
    (1) Dollarize the economy tomorrow.
    (2) Hire Norway as a trustee for a sovereign trust fund from oil revenue. Give them a 50 year contract.

    That will stop all of the pilfering and corruption. VZ will get regular dividends to run the country. Heck, the trustee can pay
    (a) Oil infrastructure
    (b) schools, medicare, and pensions directly from the trust.

    Of course it won’t pay as much as the thieves want. But cutting out the fraud will mean that what is paid will go a lot further.

  14. What occurs to me now though, is that with hyper inflation seemingly imminent, it would be better to not give the Chavistas a scapegoat for the coming collapse. This weapon can be kept for a later date, or never deployed if it turns out it is not needed.

    ————-

    Right you are. It wasn’t needed. From what family is telling me in Caracas and what is booming over social media is that the debit cc system, and likely the whole financial system, is in free-fall as of later yesterday. Total collapse might be too big a term, but one wonders how far that is off. Remember what some Chavista jughead said last year, that there is no such thing as inflation.

  15. Fiscal mismanagement is far from the only economic problem in Venezuela.

    There is also massive corruption.

    And destruction of productive enterprises by state takeovers.

    And the gigantic expansion of state employment.

    And restrictive labor laws.

    None of these are comparable in immediate damage to what the fiscal folly of chavismo has done, but they are enough to drag down an economy over time.

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