What Venezuela’s economy needs

November 27, 2004


Over ten years ago, I had lunch once or twice a week with a cousin. At these lunches we talked about many things, but we always came back to what needed to be done with the Venezuelan economy. We came up with a list of problems that needed to be addressed. Unfortunately, after almost 12 years, the list has not changed much. Here is a more modern version of the list. I will try to discuss it item by item as time allows. They are in no particular order, except for the first one which I believe attacks most of the problems of our economy. If I had someones ear (even Chavez) this is what I would suggest:


1)      Dollarize the economy. Completely eliminate the Bolivar.

2)      Approve a pension fund bill that allows retirement at 65 for everyone and 60 if you have worked for 35 years. Pension plans would be based on contributions from workers.

3)      Emphasize primary education over university education. Strengthen technical and trade schools. Start food programs at elementary schools. Force universities to impose time limits on years of attendance to open spaces and save money.

4)      Create a meritocratic system for civil service managers.

5)      Give title to land in city barrios and farmlands occupied by squatters.

6)      Give away Government farmlands to farmers and give them title after a certain period of time.

7)      Reduce the size of the military.

8)      Design a plan to turn PDVSA into the largest oil company in the world. Give all citizens a direct stake in a fraction of the company.

9)      Privatize the country’s electrical network.

10)  Liberate the price of gasoline. Subsidize public transport to convert to natural gas. Use profits from new gasoline prices to start a long term stabilization fund with strict controls.

11)  Start a long range housing program with private sector help.

12)  Start a long range highway program with private sector help.

13)  Turn all health facilities to local Governments, including the budgets.

14)  Reduce import Duties.

15)  Allow for hourly and part time positions.


I am sure there was more, this is as far as my memory reaches now. Will add more if I remember.

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