Economics & a taxi driver
Posted by ddelaney on March 4, 2009
Venezuela‘s hard truth; Hugo Chavez built his revolution on the back of the oil boom. But crude’s slide has him backtracking, Marina Jiménez writes
By Marina Jiménez
3 March 2009
The Globe and Mail
“…Mr. Merendes, the former finance minister, believes the government would rather run up a big deficit than cut social spending. “Chavez will lose some support during economic hard times but not as much as other leaders,” he predicts, quoting the popular refrain: Con hambre, sin empleo, con Chavez me resteo. With hunger, and without work, with Chavez I struggle.”
By the numbers
$90-billion
Amount the Venezuelan government received in oil revenue last year, a figure that is expected to decrease by two-thirds in 2009.
$42-billion
Venezuela’s foreign reserves, which may be used to cover the lack of oil revenue this year. If that’s the case, the fund will run out by the end of this year.
$20-billion
Amount of investment needed to develop Venezuela’s Orinoco Basin projects.
$700
Average monthly wage in Venezuela
(All in U.S. dollars.)
I came across this story today and felt it would be good to pass along so that people can get a sense of how the low oil prices affects Venezuela, the 5th largest producer. Chavez was able to spend large amounts of money on social spending when oil prices went sky high. As the economic crisis started to hit, he denied that Venezuela would be affected. Swore up and down that the Venezuelan economy, with the “bolivar fuerte” (strong Bolivar) as its currency, was practically immune. Then oil prices began to plummet. Only then did the illusion (self-delusion) start to fade and he admitted that Venezuela would be affected. But the U.S. was to blame of course (fair point), so he was able to rally against that. The rest—earning top spot in terms of highest inflation in the region, shortages of foods that Venezuela is less and less able to import, not planning on reducing spending substantially (while still maintaining a social program)—Chavez can’t really blame on something, or someone, else. We’ll see if low oil prices does force Chavez reduce spending, if not this year, then next, when he exhausts foreign reserves. Friends of mine joked that it’s all over for him if he raises the price of gas here. They just may be right. However, Chavez, while many things, isn’t stupid. A lot of people say he’ll have to devalue the bolivar fuerte at some point. I’m sure he’ll wait that out too. Most predictions claim he’ll wait until the end of this year. I’d rather not be around for it.
Taxi driver
Taxi drivers here have not been as chatty as other countries I have lived in. I really believe that most are pretty skeptical that I speak Spanish. I find that here, more than in other Latin American countries, people get too caught up in how foreign I look and expect to hear an equally foreign language pouring out of my mouth. Seems that they don’t really realize I’m speaking to them in their language. Listen to me! Anyway, as a result cab rides tend to be rather quiet then (except with the couple of cabbies that I know; I met one through a friend).
Today, on the way home from the UNHCR, a driver from the cab company I trust asked if I spoke English. I said yes, and Spanish, too. He knew some English from living in Miami and Spain. That began an interesting conversation in Spanglish, which was mostly Spanish with a few choice words in English and a few gestures on his part when he didn’t want me to just provide him with a word in English.
In Spain he got to know “ingleses,” or some English people. Apparently, he worked with some English motorcycle design (artistic body work) company. He races a motorcycle himself. I commented that it was dangerous, to which he admitted it can be. “But las mujeres!” (the women!) and he kissed his fingertips as if he was a French chef serving a meal with “Bon appétit!” He has high hopes for his 9-year old son to speak English. Then “he have two idiomas” (languages). He motioned his hands to show eating. “Two way eat,” he explained. “English is dollar,” he continued. The dollar is valued everywhere (I nearly added, “Almost”, given the Venezuelan economy’s relationship with the dollar). He apparently lost a very good job opportunity because he didn’t speak English, which is common among middle-aged individuals I learned through some of my adult students, and he doesn’t want that for his son. Unfortunately, they live in a municipality south of the city, San Francisco, so he hasn’t been able to enroll his son at CEVAZ; it’s just too far. I encouraged my taxista to encourage his son. He insisted on discounting my fare for that ride and even waited to see that I entered my house all right…
