The inflation, the indebtedness, the exchange anchorage and the destruction of the productive capacities were only some of the ingredients that struck economic dynamics in the 2009. According to Sary Levy-Carciente, dean of the Faculty of Economic and Social Sciences of the Central University of Venezuela (UCV) and Jose War, director of the School of Economy of this house of studies, “the applied economic policy during 2009 was inconsistent with the aim of overcoming the recession that was begun to watch from the first trimester of 2009”.

Maria Ramirez Hair
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The annual balance of the academic ones of the UCV concludes that it is necessary refocuses of the economic model. Photo AFP

According to Sary Levy-Carciente, dean of the Faculty of Economic and Social Sciences of the Central University of Venezuela (UCV) and Jose War, director of the School of Economy of this house of studies, “the applied economic policy during 2009 was inconsistent with the aim of overcoming the recession that was begun to watch from the first trimester of 2009”.

In the report “Perspective Economic Balance 2009 and 2010”, the analysts indicate that “the economic measures announced the 21 of March of reduction of the cost, increase of the taxes and diminution in the allocation of currencies, played in favor of the accentuation of the tendency the deceleration that showed Producto Interno Bruto (PIB)”.

The asseveration is forceful. “With certainty, it can be argued that the entrance of the Venezuelan economy in the recession bears close relation to the menu from designed and applied actions of policy in 2009”, they aim.

Massive indebtedness
In the balance, they maintain that in the absence of monetary policy, due to the exchange anchorage, “the government resorted to a massive indebtedness that to the 2009 closing registered a considerable increase. Although the statistics of the Ministry of Economy and Finances only contain information until June of 2009, information of the positionings of liabilities of the public sector indicate that during this year the national debt, including Pdvsa, approximately underwent an increase of US$ 25,000 million (33%) in relation to the previous year”.

The nationalizations continued. The 21 of May, the President of the Republic announced the nationalization of the briqueteras Matesi, Orinoco Iron, Venprecar and Comsigua, to deepen the control of the national ferrosiderúrgica chain that initiates with the extraction of the iron mineral and the peletización, in charge of the state Ferrominera Orinoco.

He added to the list of nationalizations to Ceramics Carabobo and Tubos de Acero of Venezuela (Tavsa).

He announced the expropriation of nutritional industries, between which they emphasize Coffee Madrid and FAMA of America; he took part earth in a process of “recovery”, according to announced by the Ministry of Agriculture and Earth; among others measures that implied the taking of “strategic” areas.

Economy in loss
In agreement with the balance of Levy and Guerra, preliminary indicators to the November closing and beginnings of December suggest it Venezuelan economy closed 2009 with a considered contraction of 2.5%, which suggests during the fourth trimester the economy continued reflecting the declination observed from the second trimester.

“From the point of view of the added demand, the diminution that experimented the total investment (more than 7.0%) reflects that the contraction of the GIP cannot be valued like a simple recession, but like a destruction of productive capacities that from the point of view of the generation of the GIP imposes limitations to the sustained growth of the economy”, they indicate.

From which in the balance certainty is left of which the economic model that comes applying that supposes an extension of the roll of the State like producer and regulator replacing the deprived sector, “it indicates fundamental restrictions for his operation, insofar as the cost of the government is not able to reanimate nor to replace a deprived investment, which does not count on stimuli for his fortification”.

Moderate inflation
With regard to the inflation, that reached to 23% to the month of November in agreement with the Central bank of Venezuela and that is considered in 26,5% to the 2009 closing, the analysis concludes that the variation of prices throughout 2009 accused a moderation in its rate of growth.

Three factors took part in this behavior, in agreement with the balance: the contraction of the private consumption; the accentuation of the control of prices with the concomitant intimidation to the commercial sector; and the important stabilization of the prices of the basic goods in the international market.

However, they add, “they stay the inflationary pressures of the national economy intact”, because when isolating itself of the national index of prices, seasonal elements and controlled prices, the Inflationary Nucleus tends to suitably reflect the underlying inflationary tensions in the economy.

In a scene in which the inflation continues eating away the pocket of the Venezuelan, the real remunerations perceived by the workers “denoted a diminution of approximately 10%, situation that was reflected in the fall of the consumption”.

Banking scandal
The year end became cloudy with eight banking interventions that put to shake to the Venezuelan ahorristas. The Bolivars, BanPro, the Canary Islands, Allied, Baninvest, Power station, Real and BaNorte were taken part eight financial institutions -.

Of these, Bolivar, Allied and Central Universal Bank megred next to Banfoandes to give to birth to the state Bank Bicentennial.

According to the analysts, from the economic point of view, “the intervention of the banks could contribute to exacerbate the recession insofar as it increases the demand by cash and in this way the banking credit is dissuaded. to persist the uncertainty about the solution and liquidity of certain banks with complete certainty it will be translated in diminution of the credit”.

Organisms like the Economic Commission for Latin America and the Caribbean (Cepal) have noticed the little dynamism of the Venezuelan economy and the high inflation of the country, that will continue being this highest year of Latin America.

Necessary change

Sary Levy-Carciente, dean of the Faculty of Economic and Social Sciences of the Central University of Venezuela (UCV) and Jose War, director of the School of Economy of this house of studies, maintain in their annual balance that no longer is enough with the design of exchange, fiscal and monetary measures, that much lack do; “it is fundamental refocuses of the economic model when replacing itself the enterprise Be in favor of another one of social character that conjugates the paper of the government like supplier of goods and services essential public, with a powerful private sector that generates remunerated uses good and that it has like north to take the opportunities that the world-wide economy will offer when this one unfolding its potential of growth, once the recession is surpassed definitively”.

In numbers

Inflation: Until November of 2009, the accumulated inflation of the country was located in 23%, in agreement with the Central bank of Venezuela (BCV). The economists agree in which she will not surpass 30.9%, registered in 2008.

The GIP: The Gross Internal Product registers two consecutive trimesters with negative results: -2,4% in second trimester and -4,5% in the third party, according to numbers of the BCV. Minister of Economy and Finanzas, Alí Rodriguez Araque, considered the past week that the GIP will close in 2009 with a backward movement of 2%.

Rate of unemployment: In November, the rate of unemployment arrived at 7.5%, amount superior to the registered one in the same month of 2008 of 6.1%, and to the one of November of 2007 of 6.3%. To the month of November, 971,390 active people were unemployed people, in agreement with the statistics of the National Institute of Estadísticas (INE).