lnp3 at panix.com
Tue Sep 24 08:52:43 MDT 2002
(Although many of us had high hopes that Venezuela could move forward
through a mixed economy, it seems that once again we are witnessing what
happens when a revolution stops short of transforming the mode of
production. The local capitalist class--assisted by imperialism--will
strangle any progressive initiative and alienate the popular classes from
NY Times, Sept. 24, 2002
Venezuela Economy Falters, Despite Abundant Oil
By JUAN FORERO
CARACAS, Venezuela When Pasquale Iachini and Alfonso Marozzi arrived here
from Italy half a century ago, they started small, buying an old Fiat truck
to transport dirt and supplies. Venezuela boomed in the years that
followed, and their company, Yamaro Construction, grew into a leading
builder of bridges, highways and other public projects.
But now, the government of Hugo Chávez is pinched for cash, the economy is
sliding fast and company officials are worried. Yamaro's payroll, once
1,000 strong, is down to 400 workers, and three major road projects are at
a standstill, casualties of nonpayment by the government.
"The private sector is not investing, and the public sector has no capacity
to do so," said Armando Iachini, 38, a son of the co-founder who helps run
the company. "There are projects we want to start, but we cannot get them
going because of a lack of resources."
The outlook is not likely to improve anytime soon, economists say, as
Venezuela is convulsed by the deepest and most troubling economic recession
it has experienced in more than a decade.
The economic fortunes of oil-rich developing countries often soar and dive
with swings in the price of crude, but this crisis in Venezuela is
different: it comes when oil prices are high now above $30 a barrel and
rising, and could shoot up further if the United States attacks Iraq.
What is destabilizing the economy here now is politics, not petroleum. The
left-leaning Mr. Chávez, survivor of one coup already, is still struggling
to keep at bay the big-business groups and old-line politicians who are
bent on removing him from office.
Huge protests turned violent in April in the days surrounding the abortive
coup; the upheaval claimed 18 lives. Mr. Chávez returned to power after two
days, but his adversaries have not given up, and are now pressing for a
referendum on the president's rule.
The turmoil has turned the economy bleak. It contracted by 7.1 percent in
the first half of the year, according to government figures, including a
drop of nearly 10 percent in the second quarter. Unemployment reached 16.2
percent at the end of June, and inflation, which had been slowing for
years, shot up again, to double last year's rate.
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