By Luis Manuel Aguana
What's first, the egg or the
chicken? It is a question that has been asked by countless thinkers and the
answer always ends up being the same: the one that suits whoever asks the question.
The permanent insistence that it is the economy rather than politics that will
get Venezuela out of this tragedy confuses many and screws the regime, not to
mention adding more mess (if that is possible) to the discussion of how to get
out of this regime.
In a note from 2015 I set out the
correct order, not explained by me but by the 1998 Nobel Prize in Economics,
Amartya Sen (see La Primacía de las Libertades Políticas, http://ticsddhh.blogspot.com/2015/07/la-primacia-de-las-libertades-politicas.html): a guarantee of civil and political freedoms, human
rights and democracy, so that in an ecosystem of freedoms, the economy can find
its way to recover. That is, the political problem is solved first, then the
economic problem. In that order!
It seems that this is difficult for
many people to understand, that one does not know whether they are willing or
not to complicate the already complex panorama to get out of this tragedy. At
other times, in the midst of despair, we hear versions of qualified
international specialists who, with their technical and economic opinions,
alter the proposed order, and instead of helping to solve the complex
underlying problem, they deepen it, prolonging the agony of the country,
because in the end they do not solve the core of the matter, which is none
other than the recovery of freedoms.
In a note from the journalist Alex Vallenilla of the Revista Zeta, the
alert is given to the imminent destruction of the Bolivar as currency (see Alex Vallenilla, El Fin del Bolivar es inminente http://revistazeta.net/2017/08/21/fin-del-bolivar-inminente/). For Venezuelans,
this is not newsworthy news. Every day, our monetary sign is devalued and we
Venezuelans cannot do anything about it. But while it is true that we cannot
stop inflation if we can try to defend ourselves from it, and that is why the
natural refuge is the incessant search for foreign currency and its most
representative exponent, the American dollar, which makes the purchase price of
this currency does not stop rising permanently.
Vallenilla's note is based on an article by Steve Hanke of the Cato
Institute, published in Forbes, which indicates that the Venezuelan economy is
already dollarized without even the government having made the official
decision to do so. Everything is bought and sold against the dollar. The Maduro
regime ended up pulverizing the economy, leaving our currency worthless and the
highest inflation rate on the planet: 1,195%. (see Forbes.com 08/15/2017 -
Steve Hanke, Stop Venezuela’s Economic Death Spiral – Dollarize Now
Hanke's recommendation as an
economist is to finish taking the official step of dollarizing the economy. He
says he knows from experience: “I know because I
operated as a State Counselor in Montenegro when it dumped the worthless
Yugoslav dinar in 1999 and replaced it with the Deutsche mark. I also watched
the successful dollarization of Ecuador in 2001, when I was operating as an
adviser to the Minister of Economy and Finance”.
Hanke explains what he believes are
the advantages of such a decision: “Countries that are
officially dollarized produce lower, less variable inflation rates and higher,
more stable economic growth rates than comparable countries with central banks
that issue domestic currencies.”. He justifies
them with this blunt judgment:
“Stability might not be everything, but
everything is nothing without stability”.
In other words, this economist
understands only to reach economic stability without first going through
political stability. This is part of a common economic reasoning that political
stability would continue after economic stability; an assumption of political
stability not given in Venezuela, a country that is being forced to change its
system from one based on a liberal democracy to another based on a statizing castro-communism.
And all that with Venezuelan oil money. We Venezuelans reject and will continue
to reject this change that is being imposed by a criminal and narco militarized
minority through a fraudulent constitutional change. The Venezuelan case is not a booklet and
cannot be based on previous experiences.
In the supposedly denied of assuming
the recipe of dollarization, the regime could gain time to live through this
way, although many of the economic barbarities that have committed could not
continue to be made by losing control of the currency issue and other important
variables of the economy, stabilizing the frightening inflation of the country
and improving the rates of economic growth, as Hanke indicates. But they won't
do that for ideological reasons or perhaps even ignorance (see statements of
Aristóbulo Isturiz in YVKE Mundial http://www.radiomundial.com.ve/article/venezuela-no-ser%C3%A1-dolarizada).
But there are negative collateral
consequences, as Orlando Zamora points out: “By dollarizing, Venezuela adopts both the value of income and the costs
of the most industrialized country in the world, but its citizens are highly
unproductive, lacking the technology of the first world and their salaries in
dollars will be low, as happens in Ecuador because of their productive gap.
They will pay the interest rates and commissions of the mighty country” (see
Orlando Zamora, 03/27/2017, Is dollarization a solution for a Venezuela in
ruins?
https://konzapata.com/2017/03/es-la-dolarizacion-una-solucion-para-una-venezuela-en-ruinas/). Regardless of the measure, we have come, whether we
like it or not, to a deadly spiral, as Steve Hanke referred to it in Forbes.
It is definitely true that the
economy is destroyed, with or without officialising a dollarization that in
practice is already happening. And to top it off, the regime has illegally and
irresponsibly placed the function of deciding the economic matter in the hands
of a fraudulent Constituent Assembly, which, in accordance with powers backed
by complicit bayonets, can take the decision to dollarize the economy,
artificially prolonging the serious political problem of Venezuelans.
And
although I do not believe that the ideologized talibans of the PSUV in the
Constituent Assembly as Isturiz, proceed with a measure like that, as they have
already said, the worsening of the economic crisis will probably force them to
continue to escape forward, keeping in power at all costs, as they have done so
far, using artifices as a measure such as this, backed by qualified
international opinions and by a desperate population. What to do? As the Nobel
Prize winner Amartya Sen said: to solve the political problem, which is our
real problem. But that must be done as soon as possible, using all the help we
can find...
Caracas,
September 7,2017
Email: luismanuel.aguana@gmail.com
Twitter:@laguana
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