Brother, can you spare a little billion US$?

November 10, 2003


President Chavez demonstrated, once again, his ignorance yesterday on economic matters, when he stated that he had asked the Venezuelan Central Bank for “another little billion (of US$)” saying he had been having that discussion with the Central Bank for the last three months and that the Bank did not want to give it to him. Chavez even went further saying that if the Central Bank did not give it to him, he would go to the Supreme Court (??). Chavez said something what I have wondered about before in my writings here and in the local newspapers, what is the point of having US$ 21 billion in reserves if you can not use it?. I have questioned for months the policy of having exchange controls and accumulating international reserves at the expense of the Venezuelan economy. Reserves are meant to be managed not accumulated. I am sure that it was Chavez himself who set the country on this irresponsible policy due to his power and lack of understanding. Unfortunately, I have not heard anyone from the opposition reply to Chavez telling him the difference between international reserves and Government revenues. I think something simple like explaining what would happen if all the 21 “little billions” were given away to him, what would happen to the country, would make the point very clear. Over the years I have found that even educated people do not know that while having international reserves is good, it does not mean much in terms of solving the fiscal problems of a nation. Few people even know what international reserves are. I would bet most Venezuelan politicians don’t understand the issue, but at least they don’t say anything about it. Moreover, after five years as President you would think Chavez would have learned something from the members of his cabinet. Chavez wants the “little billion” (millardito) to promote agriculture, and that is a whole other story about the President’s ignorance…..

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