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Politics in Depth Team
Answer
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Name
Tomasz
-
Profession
Question
As-Salam Alikom,
The main matter that causes financial turmoil is inflation. Inflation is due to an increase in the money supply which causes increase in prices.
What is Venezuela doing to evade this flaw in all western and western style financial systems?
Thank you.
Answer
You ask a very important question. Unfortunately, Venezuela is a country with high rates of inflation, especially in comparison with the rest of Latin American countries.
The government of Hugo Chavez has taken several measures to counter this consistent “flaw” as you call it.
The main reason of this problem is the lack of internal production of basic good such as medicines, foods, and the like.
The strategy of our government aims at producing these goods in Venezuela. On the other hand, there are other measures implemented to fight against speculation of prices, which also a severe problem in our society.
For example, in Venezuela, the price of gasoline is extremely cheap in comparison; however, taxi drivers are just as expensive or perhaps more than any other country in the region.
As you probably know, in Venezuela we have a currency exchange control, so the price of the US Dollar is fixed.
This scenario, in a society with high inflation provide an alternative policy to fight against inflation, because the government commission in charge of selling US dollars at the official exchange rate (which is a low price against the black market official exchange rate) could assign these US dollar to import machinery and other products that could help boost our national industry to produce our own goods
Name
Shahzeb
- India
Profession
Sales Professional
Question
May Peace be upon you!
What is the impact of current global recession on Venezuela's economy?
Answer
Peace be upon you as well. The main impact of the global recession is the decrease in the price of oil in Venezuela.
However, Venezuela has a solid financial because it has earned enough profits from the exportation of oil, when the price of this material was higher.
For example, Venezuela’s international reserves were 43 billion dollars at the end of 2008, for an economy like Venezuela that amount of reserves is much greater than other countries in comparison. Also, Venezuela is a country that has consistently paid its international debt obligations.
Name
Amrotzino
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Profession
Question
How do you think El Caracazo win grounds in Venezuela? and how President Chavez dealt with the problem of the influence of MNCs?
Answer
El Caracazo was a popular uprising against neo-liberalist economic policies implemented in Venezuela in the year 1989.
The result of this uprising was a brutal repression from Venezuela’s National Guards and police corps. The population was angered by these policies and by the way the government, against the will of the people, decided to carry out these measures.
As a result, the military uprising in year 1992, led by Hugo Chavez, was highly welcomed by the population. Eventually, the history is well known, Chavez was freed from prison in 1995 and in 1997 he ran for president of the country. His victory marked the collapse of the previous political regime in Venezuela.
Name
Muslim
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Profession
Question
What Muslim countries can learn from the Venezuelan economic experience?
Answer
Good question.
I believe the most important thing to learn about the Venezuela economic experience is that any country can carry out its own sovereign policies and expect good results from those measures.
There are several Muslim countries that produce oil and they should work closely with Venezuela within the framework of OPEC for the stabilization of the price of oil.
That is to the benefit of every nation, producers and consumers. Also, Venezuela and Muslim country could work together in developing mechanism to help countries with high level of dependency of energy, especially developing countries.
Name
Muhammed abdelatif
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Profession
Accountant
Question
How did the financial crisis effect Venezula?
Answer
It has really affected Venezuela at this point. Some economists suggest that the effects of the financial crisis will not affect the real economy for some time.
However, Venezuela has started to take some important measures. For example, President Chavez has made a call to public institution to be austere in their spending.
Also, he has made several calls to the public to save more money and stop consuming unnecessary goods. However, as I said earlier, Venezuela is not really affected up until this point except for the decrease in revenues from the exportation of oil.
You must remember that President Hugo Chavez’s government has developed extensive social programs to help poor people; his government has built many hospitals, school and several infrastructure projects.
Therefore, in Venezuela, it is the state that carries the burden of these programs. However, President Chavez has mentioned that these social programs will not be affected by the financial crisis.
Name
Editor
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Profession
Question
It seems that the major problem facing most of developing countries is how to get free from the bonds of IMF and WB, how Venezuela-given its fragile political nature and relatively weak economy- succeeded in limiting the manipulation of these two institutions?
Answer
Venezuela has always being a country with low level of external debt, especially in comparison with other countries in the region.
Even before the financial crisis was even mentioned, the government of Hugo Chavez developed alternative economic measures that were against the principles of the IMF and WB directives.
Venezuela has paid off all its debt with the IMF and, two or three years ago (if I remember well), the Chavez government announced the Venezuela will retired from the IMF.
Venezuela develops its own political economy without the advice or conditions of any international institution.
Nevertheless, we are aware that is not the case of other countries in the region, for example Ecuador. This country announced, not long ago, that it will no longer be able to pay its external debt.
Name
Editor-Amr Taha
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Profession
Question
The session has ended. We would like to thank Mr. Martin Saatdjian for taking the time to answer your questions, and all those who participated in the dialogue.
We apologize for not being able to answer all the questions due to time limitation.
