VIO News Blog

October 9, 2008

Venezuelan Economy Strong Amid Global Financial Crisis

Filed under: Daily News Roundup — VenWorld @ 10:07 am
Tags: , , , , , , ,

Venezuela’s economy will remain strong despite the global financial crisis, according to analysts. Industries that were nationalized — such as oil, steel, and telecommunications — are insulated from market volatility, and Venezuela counts with $40 billion in foreign currency reserves and huge government discretionary funds. Experts are quoted as saying “it’s obviously not an emergency situation,” and, “Chavez has ample financial public assets to draw from even in the event of a sustained oil price fall.” Bloomberg reports that Central Bank Director Armando Leon also pointed to the strength of Venezuela’s financial system. Still, state spending on social programs has been curtailed slightly and government officials have a new policy of “zero waste.”

After the announcement in recent weeks that Venezuela may work with France and Russia to develop a peaceful nuclear energy program, Reuters reports that such a program is still years off. US Assistant Secretary of State Thomas Shannon reacted by saying, “We’re not opposed to the peaceful use of nuclear energy.” Nonetheless, Reuters plays up the false notion that Venezuela is a “foe” of the US and claims that President Chavez “spends oil wealth to counter U.S. influence.” Chavez has said that a possible nuclear program in Venezuela would be used for electricity and medicine.

A letter in response to a Washington Post editorial on Monday argues that the US should not ignore the region, nor should it punish countries with sanctions. Bolivia has been threatened with the removal of trade privileges after a White House drug report slammed that country — along with Venezuela — as “failing” to fight trafficking despite significant progress made under President Morales. The letter also states that elected governments in Latin America that have good relations with Venezuela are not merely “satellites” of the Chavez government.

Finally, oil prices are around $89 per barrel, a 40 percent decline since early July. The AP reports that President Chavez said some OPEC member countries are calling for an extraordinary meeting. Lowered demand has been a source of concern for traders, also. The value of crude is still more than three times higher than a decade ago, when President Chavez was first elected.

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