Economist baccalaureate, Universidad Central de Venezuela, Caracas, 1983.
Economy Specialist, Economics Institute, Universidad de Colorado, Boulder 1991.
Economy MSc. Universidad de Illinois at Urbana-Champaign, 1993, Cum Laude.
The international reserves of the Central Bank of Venezuela Center are on the threshold that should have a central bank. At the time I am writing this (December 2014) the reserves are US $ 21,300 million, of which gold are US $ 17,000 million and liquid funds are about $ 800 million and the rest are in different assets. We can have an idea of how critical the situation is: in 2012 Venezuela imports carried by 1 billion of dollars per week.
What policymakers have made Venezuela has no name. After receiving higher oil revenues in the country's history in the period ranging from 1999 to 2014, estimated at US $ 850,000 million, today Venezuela is giving pity.
The country owe it to everyone, its total public debt is approaching $ 200,000 million and also spared a penny of that torrent of money received. This situation is due to the failure of an economic model that would make the state, instead of Venezuelans, the center of economic activity. This led to the expropriation of a group of companies that were profitable and in government hands have become a drag on public finances and also are a source of corruption.
The lack of dollars has popped a dysfunctional exchange system, which is based on the absurdity of having four exchange rates, a cheap overly Bs 6.30 per dollar and other excessively expensive, parallel to Bs 180 per dollar. That gap get the best and most profitable business in the world: those dollars buy cheap and then sell expensive. And so a group connected to power has made fortunes at the speed of sound.
But the absence of dollars has created a serious problem for the functioning of the economy in the absence of essential raw materials for production and finished goods necessarily be imported and are now in shortage in stores.
Falling oil prices stripped a reality: the extreme vulnerability of a Venezuelan economy literally monkey producer that does not export anything but oil and therefore is exposed to fluctuations in the price of this product in world markets.
Unfortunately in 2015 the situation will not be better than in 2014, due to the fact they will receive lower oil revenues. Foreign debt payments are over US $ 11,000 million in 2015.
When dollars are scarce, the result is obvious: the Bolivar (Venezuelan currency) is suffering a devaluation never seen before.
Jose Guerra is a Venezuelan Associated Professor and former Director of Economics School at Central University, Caracas.
Can be reached at: https://twitter.com/joseaguerra
