Anticapitalist strategy to protect Venezuela from the global financial crisis


Photo: File, ABN.


Caracas, Oct 10. ABN .- An expected sharp cyclical problems afflicting the contemporary capitalism, designed by the Bolivarian government to run the last few years, stands today as a wall around Venezuela, to face the rigors of the global financial crisis.

The plan, summarized in a document from the Ministry of People's Power for Finance (MPPF), to identify the eight steps that so far it's made of, and sits as one of its major achievements, the assurance of the international reserves of Venezuela.

Our international reserves are found today in about $ 40 billion and, after being removed from U.S. banks, in October 2005, which traditionally were deposited, are now "in good stewardship: 60% in Basel, Switzerland, 30 % In gold, and only 10% in other banks to which they are monitored from the Central Bank of Venezuela (BCV) to take preventive measures. "

The measures contained in the course of recent years are as follows:

Strategic Alliances

In the political-economic perspective to liberate Venezuela from their moorings that had kept for UNCID the yoke of capitalist financial mechanisms (IMF and World Bank and the World Trade Organization), President Chavez and his government have outlined a pattern of alliances strategic partnerships with a number of emerging economies such as Brazil, Russia, India, Iran, China and Belarus.

These alliances have begun to generate significant media, such as China, a country with which it has formed a fund for financing major, recently renovated for $ 6 billion (4 billion provided by China and 2 billion per Venezuela's government).

The Fund aims to promote projects of socio-economic development in our country under a production model based on socialist principles and cooperation. Address sectors such as infrastructure, agriculture, energy, mining and petrochemicals, among other important areas, "says the document.

Russia, after the last tour of President Chavez, in late September, it has emerged from a bank binational project between the two countries for similar purposes, and plans are moving forward with new projects and other allies.

Diversification of exports

Venezuela, which has been proposed to break with the unipolarity in the world of politics, also in the economic endeavors. It has provisions to diversify the destination of its exports of hydrocarbons (oil, gas, petrochemicals), beyond the traditional U.S. market.

In this line have been consolidated Initiatives placement of crude oil in the Caribbean countries, with Petrocaribe.

Also in China, it sold 350 thousand barrels per day of oil, with prospect of increasing to 500 thousand barrels in the near future.

There is also an alliance with GAZ-PROM and Lukoil of Russia, and a recent agreement with Portugal to supply 2 million cubic meters of gas annually. And the eventual placement of approximately 30 thousand barrels of oil

In parallel, agreements have been signed for joint exploitation of certain blocks in the Orinoco Oil Belt, with a dozen countries, which ensures new destinations for our oil.

Strengthening of the State

The Government's policy to ensure a healthy fiscal and financial system, is advanced through the coordination between the MPPPF and the Central Bank of Venezuela (BCV), in the areas: fiscal, monetary and banking.

In the first, since 2004 has been conducting a process of modernization of the National Integrated Customs and Tax Administration (SENIAT), which has led to an exponential increase in revenues, to the point where, today, this equates, and still exceeds the income from oil.

In the banking area, the Superintendency of Banks (SUDEB) has adopted a series of resolutions that govern relations of the financial system with private international banks, in the management of various financial instruments and assets held by such institutions.

In this regard, timely, was ordered private banks setting up a guarantee fund to support the Venezuelan assets held by U.S. commercial banks broken today: Merryl Lynch and Lehman Brothers.

Also, by a circular of September 23 last, "was ordered to create provisions equivalent to 50% of the assets' owned or in any securities issued, constituted, endorsed or guaranteed 'in U.S. investment banks."

Thanks to the forced sale of these securities, and other measures already implemented, "says the document-MPPPF of the country's financial system is a good shelter.

Reservations on time

Already in October 2005, and acting in anticipation of this capitalist financial crisis, the national executive decided to change the deposit of the country's international reserves.

Thus, ordered "to move most of its international reserves to the Bank for International Settlements in Basel, Switzerland, on the danger posed to take them deposited in banks in the United States, in addition to the reorientation of the savings toward country's currencies and economies safe, "says MPPPF.

As we say above, the saving of all Venezuelans, represented in international reserves, is located today at about $ 40 billion and, after being transferred from American banks, in October 2005, which traditionally were deposited, shall be lie "to good stewardship: 60% in Basel, Switzerland, 30% in gold, and only 10% in other banks to which they are monitored from the Central Bank of Venezuela (BCV) to take preventive measures.

Passive management

The document MPPPF attaches much significance in the strategy deployed by the country to cope with forecast the current crisis capitalist, to "the successful management of liabilities of the republic."

The liabilities are the values represented by certificates, bonds and other obligations payable monetarily.

The handling of these relevant values, such as the so-called Brady bonds, has enabled the country, at certain times, increase or reduce its cash flow in accordance with the requirements.

In this way, the document says of Finance, "Venezuela was able to access international capital markets for the first time since 2001, and the market in dollars for the first time since 1998."

In addition, it canceled its debts to the International Monetary Fund (IMF) and World Bank.

New economic architecture

With a focus on a new international economic arena, in December 2007 takes an important proposal of President Chavez: Birth of the Banco del Sur, to be a body called the "financial muscle" of regional integration, with a projected capital 20 billion dollars.

Also in 2008 is created by the Bank of the Bolivarian Alternative for the Americas (ALBA), at a time when it consolidates its integration mechanisms and query the Union of South American Nations (UNASUR).

CADIVI

Following the coup of April 2002 and the oil sabotage that followed the February 5, 2003, by an agreement between the National Executive and the Central Bank of Venezuela, adopted a system of restriction on the free convertibility of the currency to avoid the gradual reduction of international reserves and the deterioration of the value of the bolivar as the product of the oil sabotage of the opposition against PDVSA and capital flight.

Then comes the Currency Administration Commission (CADIVI) with the mission is managed efficiently and transparently exchange market nationally.

Thanks to the control of the currency market by CADIVI, Venezuela reached historic levels in its international reserves, exceeding the barrier of $ 30 billion.

In addition, the productive sectors are guaranteed allocation of foreign currency required to comply with their activities.

Public finance system

As early as 1999 and with strategic vision, the national executive thinks about the desirability of consolidating the public finance system, to strengthen the economic sovereignty of the country.

In this way, the Oct. 25 of that year was promulgated by Decree No. 411, the Framework Law that governs the Public Finance System of Venezuelan State, a tool that supports the integration of the public banking system within a single, coherent and power efficient than its capacity of technical and financial assistance.

Soon, the Bank of Venezuela will join this scheme, which comprise the Industrial Bank of Venezuela (BIV), Nice, bands, Agricultural Bank of Venezuela (BAV), Banco del Tesoro, People's Bank and Sovereign Bank for Women .

FONDEN

An important step in this strategy for economic sovereignty, is the creation in September 2005, the National Development Fund (Fund), whose function is to manage the surplus from oil revenues, once the necessary basis for monetary reserves of the country.

This organization funds projects in priority areas for the country as land and agriculture, health, infrastructure, education and housing, among others, and represents one of the pathways through which materializes social spending in Venezuela, which accounts for almost 60% of the total investment budget of the national executive.

In sum, a body of decisions and actions taken by the Bolivarian Government, to lead Venezuela on the path of economic sovereignty and social development, avoiding the problems inherent in the capitalist system that lurk in that way.