Venezuelan economy - new laws to confront capitalism coming this year In an interview with the national newspaper Panorama Finance Minister designate, Rodrigo Cabezas, outlined the new laws which will be postulated in the National Assembly during Chavez’s 2007 – 2013 mandate. The objective of these laws will be to restructure the economic system in Venezuela so that the primary aim of the revolution, “zero poverty by 2021”, can be attained, in line with the overall “mission of missions”, Mission Christ.

In an interview with the national newspaper Panorama Finance Minister designate, Rodrigo Cabezas, outlined the new laws which will be postulated in the National Assembly during Chavez’s 2007 – 2013 mandate.

The objective of these laws will be to restructure the economic system in Venezuela so that the primary aim of the revolution, “zero poverty by 2021”, can be attained, in line with the overall “mission of missions”, Mission Christ.

Cabezas indicated that strategies will be implemented to attack and contain certain problematic economic indicators such as unemployment, excess liquidity in the economy leading to inflation and above all poverty.

Cabezas singled out changes in the financial system, in industrial production and levels of imports. The first steps to this end will be the constitutional reform earmarked to be discussed by all sectors of the population, proposed and tabulated and finally voted on in a national referendum in line with constitution precepts.

“ I have placed my experience as an economist at the country’s disposition and as a militant socialist to help construct our vision of a democratic country where the Venezuelan people is the main protagonist and where there is sustained, equitable economic growth and social justice”, stated Cabezas.

“This means that we will confront head on various capitalist laws such as the concentration and centralization of wealth in a few hands as well as excess profits, so that we can reach the goal of zero poverty, which is the main aim of the revolution. What we intend to do in terms of finance and the economy is to put these two elements at the service of the just society we aspire to, while preserving freedom. That is, we are not going to limit freedom or liberty by legislating. Capitalism has theoretically given us freedom, but builds societies which are terribly unjust.”

“The challenge is to find in the Venezuelan Socialist model a point of equilibrium where freedom is preserved within the confines of participatory democracy and at the same time social justice is constructed. The role of the State will be to regulate, coordinate and guide contrary to the neoliberal vision.”

“The financial and banking sector has made excessive profits in the last two years and we are going to address the question of a contribution of the financial and banking sector to the State. That is to say how much of its profits will be shared with society, with the poor, with health and education via the State which is the representative of the people. This has been proposed and we hope to be able to work with the financial sector but without moving away from our primary objective of the revolution.”

Cabezas also confirmed that there will be more “financial intermediation” between the State and the financial sector since existing laws were totally inadequate when compared to other countries. This means a complete overhaul of the banking laws and the regulation of this sector by the State. Nowhere in the interview did Cabezas imply that the banks would be nationalized.

In 2006, around 67% of the profits accrued by Venezuelan banks came from bank charges which affect the whole population. Another area bordering on usury is the difference between the interest rates offered to savers and the cost of taking out a personal or commercial loan. In some cases the difference amounted to 28% in the case of non-regulated, or “private” mortgages not covered by the housing laws.

Reading between the lines of this interview it looks as if there will be more capital gains or corporate taxes on the banking and financial sector, as well as the private sector. New laws will have to be passed in the National Assembly after constitutional reforms have been implemented. At the same time the main blot of the landscape has been inflation which ended 2006 at 17% and was in some part caused by excess liquidity in the economy combined with speculation by food producers and distributors, a sector dominated by three major companies.

Andy Goodall
VSC Coordinator

Original Link:

http://www.aporrea.org/actualidad/n88801.html