From: rich@pencil.cs.missouri.edu (Rich Winkel)
Subject: VENEZUELA DEBT: WORST YET TO COME
Followup-To: alt.activism.d
Originator: rich@pencil.cs.missouri.edu
Organization: PACH
Date: Sat, 29 Aug 1992 05:10:47 GMT

/** reg.samerica: 143.0 **/
** Topic: IPS:Venezuela: Debt **
** Written 11:27 am  Aug 23, 1992 by hrcoord in cdp:reg.samerica **
From: Human Rights Coordinator <hrcoord>
Subject: IPS:Venezuela: Debt

/* Written 12:03 am  Aug 23, 1992 by newsdesk in
cdp:ips.englibrary */ Copyright Inter Press Service 1992, all
rights reserved.  Permission to re- print within 7 days of
original date only with permission from 'newsdesk'.

Title: VENEZUELA: DEBT -- TEN YEARS LATER, THE WORST IS YET TO
COME

an inter press service feature

by estrella gutierrez

caracas, aug 19 (ips) -- ten years after the outbreak of the
foreign debt crisis rocked the world, cold, hard statistics in
venezuela present a dramatic fact: the infant mortality rate has
begun to grow again since 1989.

this is an unprecedented break from previous trends in a country
whose population has seen its real wages slump by 35 percent
between 1981 and 1991  while the percentage of venezuelans living
in extreme poverty has gone up from 17 to 35 within the same
period, according to independent statistics.

the venezuela of the petrol boom, abundant financial resources,
sustained by a paternalistic state, flamboyant social mobilization
and levels of egalitarianism rarely seen in this region, gave way,
almost without transition, to economic stagnation and
deteriorating living conditions, which generated this year's
convulsions.

the genesis of the change has a date for venezuelans: feb. 18,
1983, the day on which the local currency, the bolivar, was
devalued for the first time in over 20 years, in a manner plagued
by errors, which resulted in ''a black friday.''

latin america's fourth largest debtor will end 1992 with foreign
debt commitments of 28,500 million dollars, barely 1,500 million
dollars less than in 1982, following a decade in which it paid
29.5 billion dollars and contracted new debts to the sum of 11.5
billion dollars.

researcher gustavo marquez explained that 1983's inevitable
devaluation became something ''calamitous and scandalous, with
date and all, and hides the fact that there was not one black
friday, but various black years which culminated on that day and
whose effects are still being felt.''

marquez, the director of the research unit of the institute of
higher administration studies, has just completed a study on
poverty and social policies in venezuela, which has led him to
conclude that ''the worst is yet to come.''

in an interview with ips, marques rejected the thesis that the
crisis is imputable to the foreign debt, which amounts to less
than three years' exports. ''the debt is a totally exogenous
event, which masks the fact that the origin of the problems is
internal,'' he said. (more)
----

venezuela: debt (2)

''it is a problem which has to do with the economy and politics of
the venezuelan state,'' which, based on the 1973 oil boom, took a
decision that changed the country's future by becoming a producer
of heavy industries in addition to its traditional role of
providing education, health and social security services.''

black friday broke a framework in which everyone was happy: a
private sector which paid no taxes nor suffered from inflation, a
public services sector nurtured on current expenditure and another
productive sector which lived off the external debt.

''someone has to pay the bill,'' and, in actual fact, it is the
lower income groups which have been doing so. they are suffering
the first consequence : inflation.

''in venezuela there is a severe phenomenon -- inflation affects
from food to all other sectors,'' marquez said, pointing out that
in 1989, the first year of an economic deregulation and
liberalization plan, ''inflation averaged 84 percent and food
prices increased by 130 percent.''

the second consequence was the stagnation of the economy which,
from 1979, only began growing again in 1990, ''and the poor are
once again those who suffer, because fewer and worse jobs are
being generated.''

the third result cannot be seen in the statistics, but is much
more pernicious. the budget earmarks equal percentages to
education and health, but the enormous swelling of the bureaucracy
and staff has led to an overwhelming deterioration in the quality
and availability of these services.

the result is the return of diseases which had been eradicated,
such as tuberculosis, cholera and malaria, because in 1981, for
example, the health ministry stopped fumigating urban areas so
that it could take on more staff.

''the government's increasing dilemma was not between providing
the population with services or granting resources to public
enterprises, but giving more power to one of the bureaucracies
which control one sector or another,'' marquez explained.

the people remain the ''eternal absentee from the discussion and
suffer the effects of a distorted framework,'' in which the debt
can be very convenient. for example, it enabled jaime lusinchi,
the previous president, to use the excuse that ''the banks
deceived me.''

''it's tantamount to saying 'i have no problems at home, the
problems lie with others','' while the population begins to
participate in the only way it can: burning buses in the streets,
as the convulsed months of 1992 have shown, marquez said. (more)
----

venezuela: debt (3)

this is a phenomenon which, according to the expert, has remained
and is more serious than the bloody disturbances of february 1989
''fruit of the blunder of deciding on increases at the end of a
month,'' or the coup attempt in february of this year, an incident
from which the sectors most opposed to change have sought to
derive benefit.

the debt has ''set dates'' for this crisis, but its solution
requires a profound reform of the state which, on one hand, will
have to become smaller, but which will also have to increase its
checking mechanisms because ''this is a gigantic state which
regulates nothing.''

the process of modernization launched by president carlos andres
perez in february 1989 has two poles, according to marquez. in one
of them, stabilizing the economy, it has had significant success
and ''few economies have reacted so quickly, even more so given
the level of deterioration to which it had sunk.''

structural reforms like those applied in trade have also been big
successes, as was the december 1990 debt negotiation, ''because it
was done rapidly, transparently and well.''

where outright failure occurred was in changing the state, said
marquez, who added that privatization ''was ludicrous'' because it
centred on selling off one of the world's two or three
communications companies which were running at a loss and an
airline with five planes.

''this undermines the durability of the successes achieved in
stabilization,'' such as increased employment and the reduction of
the informal sector, and it is tragic for the population , because
services have neither been rehabilitated nor upgraded, he pointed
out.

marquez' study, done with conservative figures, shows that, along
with the ''unmeasurable'' but evident collapse of services, there
have also been tragic changes in the composition of venezuelan
society.

the drop in real salaries, which experienced a turnaround only in
1990, produced a breakdown in society, in which those who have
less see that, unlike before, their destiny depends to a large
extent on where they started.

up to 1981, poverty in venezuela was text-book poverty:
uneducated parents, single mothers and large families. by 1991,
the poor no longer fell into these categories, they are also
families with both parents, are more educated and have fewer
children. (more)
----
** End of text from cdp:reg.samerica **

Newsgroups: misc.activism.progressive