Tuesday 12 January 2010

New Way of Promoting Exports

Firstly the context: Our president devalued the Bolívar way too late (we have demanded that for a long time) and in a very clumsy fashion, with a dual but corruption-prone improvised system of 2.3Bs per $ for health and food imports, 4.3 for all the rest. He did it because he desperately needs cash to win the September elections for the National Assembly, which is now almost all pro-government. Hugo says now he wants to help exporters and support Venezuela's diversification, something we and many other Venezuelans have demanded at least since 1937. I wonder how he wants to do that when his government puts so many hurdles on the path of people trying to export, demand higher and higher illegal payments to give permits for export and on top of that declares the private industry people are a bunch of thieves and they are needed but only in the transitional period toward a state socialism.

And now the pearl: our minister of "Popular Power for Trade", Eduardo Samán, in red, on the left picture (on the right you have Trotsky, who doesn't have anything to do with this post), former teacher of farmacy and someone who according to the Social security never paid social contributions until he became an employee of this government at age 41, just announced he will implement a new idea:




















This year the government plans to put in the Venezuelan market 60000 cars made in China and Iran at a price calculated at 2.60 Bs (instead of 4.30), which would "push" prices down.

"We will break the power of the parallel dollar because we plan to sell...more than 60000 cars , machine machines, refrigerators, dish washers, kitchens, television sets all brought at a 2.3 B/$ rate". So I was right about the refrigerators. I wonder if they will also distribute electronic mixers.

Now I want readers to explain to me why that is a great idea for promoting exports in a country that is getting deeper into recession than the rest and has the highest inflation rate of the Western hemisphere.

Enlighten me!

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