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| Caribbean-Latin America |
| Chavez Gets $17 Billion to Use Abroad - no oversight |
| 2005-07-30 |
| Plunder oil revenues, use them to spread socialism/communism in south America. As with the money Chavez & Castro funnelled to Lula's party in Brazil. Add in the murder of protesters at home. This is a serious problem developing, folks. Venezuela will divert as much as $17bn this year and next from its oil export income bonanza into an opaque parallel budget for "development" projects, mostly elsewhere in Latin America, economists said yesterday. Legislators loyal to President Hugo Chávez approved a law last week that sets a ceiling on the international reserves that can be held by Venezuela's central bank (BCV). The reserves currently stand at $30bn (€25bn, £17bn). "Excess" foreign earnings in the world's fifth- largest oil exporter must now be deposited into a special fund called Fonden. The fund is expected to receive its first deposit of $6bn in the next few weeks, and because oil prices are forecast to remain high during the next two years, it is likely to be topped up with about $1bn per month. But the money will be spent largely at the president's discretion, fuelling doubts about the transparency of public finances. Santander Investment, the Spanish bank, said in a report yesterday that Venezuela's fiscal policy did not show "any sign" of accountability. "This is likely to be reinforced by the change of the BCV law that will allow the government to accumulate approximately $17bn [between 2005 and 2006] to finance social programmes and public investments." Much of that looks likely to be spent abroad, adding clout to Mr Chávez's foreign policy goal of extending his "socialist" economic model across Latin America. On Tuesday Mr Chávez suggested that the first tranche of the fund was already earmarked for Southern Cone countries. "The law authorises us to use [the money] only abroad. We want to use it, and invest part of the $6bn in Uruguay, Argentina and Paraguay." Last week Venezuela said it would buy as much as $500m in Ecuadorean sovereign bonds. Earlier this year, Venezuela bought $300m of Argentine debt and it is considering another $200m. One analyst said the parallel budget was designed to win wider political backing for Mr Chávez's critical stance against the US. "Financially, the acquisition of Ecuadorean and Argentine bonds is a bad idea," said Orlando Ochoa, an independent economic consultant in Caracas. "But its objective is not financial. It is aimed at gaining political support in the region for Venezuela's challenge to Washington in the hemisphere." |
| Posted by:too true |
| #3 The good news is that 12 billion of the 17 billion will be skimmed and Swissified for personal use of the band of buds. Of the remaining 5 billion 2 billion will be spent on Mexican racehorses and the like. That does leave a dangerous amount tho. |
| Posted by: Shipman 2005-07-30 15:11 |
| #2 The kommunist government of Kuba finally has found a sucker to float its artifical ekonomy after Soviet Russia bailed out. Good investment to befriend Chavez... everything is in the timing. |
| Posted by: Threth Greregum9255 2005-07-30 12:46 |
| #1 great, well at least Chile is there. |
| Posted by: bk 2005-07-30 11:33 |