June 20, 2006

The Unforgettable Bash

is my Tio Pepe's column in today's Universal.
The unforgettable bash
by José Toro Hardy

We Venezuelans are enjoying one of the greatest bashes of our history. Taking advantage of our swollen oil revenues, which are not the outcome of anyone's effort but rather of oil prices higher than we'd ever dreamed, we have gone on a collective consumption binge, forgetting that no society can survive if it doesn't produce.

Far from sowing the oil, as Arturo Uslar Pietri so often recommended, it seems like the governing leadership has coined a marvelous new formula to consume it directly, chugging it from the well. There's no longer any question of taking on great investments or winning markets. There's no need to worry about the feasibility of any project. Who cares? We have more money than we know what to do with.

The old sing-song about the need to be efficient and productive was just the babble of the old PDVSA, that discredited oil meritocracy that wanted to swindle Venezuelans into believing that the hydrocarbon industry is a knowledge-intensive business. None of that seems to make sense anymore. Now PDVSA belongs to everyone and therefore we all have the right to take a swing at that piñata. And not just all Venezuelans. All revolutionaries all around the world as well.

A magical new formula seems to have sprung from the government's labs. It allows us to turn oil into a sort of fascinating elixir that can be consumed directly, causing a feeling of collective happiness.

Nobody can doubt the efficiency of this new formula. Its results are out in the open. For instance, last year, thanks to the effects of this portentous beverage, Venezuela's GDP grew by 9.5%. And yet, that amazing result was achieved creating just 38,000 new jobs. So we have a mechanism that demonstrates the very high productivity of these new economic policies. I'm convinced that those who designed them should be awarded the Nobel Prize in Economics and honorary doctorates from all the best universities.

Chugging our petroleum straight out of the well, as though we're drinking milk from a cow's udder, has considerable advantages. For instance, so far this year, public spending has risen 67% from a year earlier, and in the first quarter imports totaled almost $6 billion. What more could we want?

The instant gratification our society gets is indubitable. For example, so far this year, retail sales have risen 29.8% and wholesaling has grown 51.8%. Other numbers ratify the virtues of the new model. Just in January 2006, car sales grew 112.7% compared to the same month the previous year. And that's nothing. Home appliance sales rose 136%, while textile, clothing, footwear and leather items grew 40.4%. Again, what more could we want?

Venezuelans are swimming in money. Liquidity in the hands of the public exceeds Bs.80 trillion . Who the hell cares that the Central Bank lost Bs.300 billion ($140 million) on the sale of domestic bonds aimed at mopping up excess liquidity to slow down inflation.

This society is finally shaking off all of the economists' pedantries. When it comes down to it, how does it affect us that the government grabbed over $10 billion out of the international reserves and transferred them to Fonden? In fact, to show that you can do that and much more, the government has decided to withdraw another billion dollars out of reserves to send them to a social fund. So what? Haven't the BCV directors told us that Central Banks don't go bankrupt?

The government's detractors insist on scaring us telling us that investment (public and private) is insufficient. Who cares about investing if we're all consuming like never before? Isn't the point of investing to obtain profits so you can consume more later? Well, we're already consuming more, without having to invest. Why worry?

It reminds me of an old story about a fisherman from Margarita:

"Why would I work more?" asks the fisherman.

"So you have money later on and you can retire and rest," said the gringo he was talking to.

"But that's what I'm doing now," replied the fisherman.

And where does all this leave us? Well, tomorrow will take care of itself. For now we're having a hell of a bash; it's an election year. Later on we'll have to pick up the broken glass.