Chavez defines his new economy

May 4, 2003

In his Sunday radio and TV address, President Chavez defined quite well his “new economy” when he said: ” The state does not pretend to monopolize foreign currency, but to compete with the private sector”. Now the rules are simple, the Government controls prices, does not give foreign currency to importers of anything, but it imports, at preferential rates, anything it wants and sells it at whatever price it wants. In fact, Chavez said that the Government is importing 1,300 Tons of chicken from Brazil. Now, the price of chicken is currently controlled at a level that producers lose money when they grow chickens, so it is cheaper to import them, but only if you can do it at the controlled rate and only the Government gets that. Chavez also said that the exchange control office has approved US$ 78 million to importers. It may be true, but the banking system has yet to hand out a single dollar to importers. Exchange controls were imposed over 100 days ago, so in any case $78 million is very little in a country that imported last year more than US$ 16 billion in goods.

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