Veneuzuelanalysis.com | December 20, 2018
Members of the ANC approved the new budget for 2019. (@NicolasMaduro / Twitter)
Merida, December 19, 2018 (venezuelanalysis.com) –Ex-guerrilla fighter and high-ranking member of the ruling United Socialist Party (PSUV) Julio Escalona made waves Tuesday with a scathing speech calling for reflection and a “revitalisation” of the National Constituent Assembly (ANC) to which he also belongs, drawing attention to a series of failings in the institution.
The speech sparked an intense debate on social media, with many crediting him for bringing up these issues affecting the Venezuelan people.
“For those of us who spend time in the streets ─ which is nearly all of us as we don’t have cars, we use the metro ─ people practically insult us, people are angry because they consider that we aren’t doing our job,” Escalona claimed. “So far, we [the ANC deputies] haven’t known how to fulfil the expectation which was created in the Venezuelan people,” the veteran politician continued.
Venezuela’s ANC was elected in July 2017 to neutralise the violent anti-government street protests which rocked the country, ensure a legislative functioning of the country after the National Assembly was declared in contempt of court, and re-write the country’s constitution. It is dominated by Chavista deputies following a right wing boycott.
Whilst the violent street protests effectively disappeared and a series of laws have been enacted, any progress on a new constitution has been kept from the public’s attention, leading to much speculation regarding the body’s efficiency. Equally, many have pointed out that despite holding overarching political power in Venezuela, the ANC has failed to address a series of economic woes which the country is suffering from.
“The ANC has been absolutely disciplined [to date] and hasn’t wanted to go over the head of anyone in its attributions, least of all take over responsibilities from the National Executive, but there are problems and the people are making demands of us in the streets,” Escalona continued. “Being in the same boat [as one another] means being able to say what needs to be said, face to face, frankly, with loyalty,” he continued, addressing criticisms of a lack of internal debate in the body.
Escalona’s full intervention in the ANC (in Spanish) (ANTV / YouTube).
Other issues which Escalona drew attention to included the battery of fixed prices for staple goods which President Nicolas Maduro recently unveiled, which were allegedly agreed upon with private businessmen.
Venezuelans complain that these goods are impossible to find at the fixed prices and are only available at speculative prices. The policy of fixing prices on a range of vital goods has existed for many years in Venezuela and President Maduro doubled down after his economic revamp in August. However, according to Escalona, the policy is “not working.”
“I propose that we invite the corresponding official [who enacts this policy] to come here and explain to us why we insist on it. It’s failing, why insist [on it]?” he challenged.
The former guerrilla also criticised the on-going transfer of subsidised hard currency to the Venezuelan private sector, naming President of the Banesco Bank Juan Carlos Escotet and food and alcohol mogul Lorenzo Mendoza of Polar Corporation as principal benefactors.
“We talk about rentismo and post-rentismo, but what does that mean? Today, we are still transferring the oil rent to businessmen,” claimed the Deputy.
He also launched some fierce criticisms of the Ministry of Food, provoking notable applause with his proposal that it “disappear.”
“The private distribution networks organise the bachaqueo [reselling of subsidised goods at black market prices], smuggling, hoarding, and there aren’t enough raw materials for the communes or the small and midsize producers,” he explained in reference to the raw materials imported by the Ministry, most of which are assigned to private conglomerates.
Rather, the Ministry is “opposed to food [supply and production], it conspires against it,” he said, stressing that constitutional powers enable the ANC to depose any minister. “This isn’t a threat, but we can do it,” Escalona pointed out.
Finally, Escalona warned that whilst the Venezuelan people continue to back the ruling PSUV, there are local warning signs they should take note of.
The Venezuelan people are “holding firm and voting [for the PSUV]… They are people full of faith. But do you know what comes when people lose their faith? Fascism… Fascism is close to us, in Brazil but also in Colombia. We have to see these examples and take them very seriously,” he concluded.
2019 budget 423,000% larger than 2018
Escalona’s intervention all but stole the limelight during the extraordinary session of the ANC held in Caracas Tuesday which approved the 2019 national budget.
Next year’s budget, which was set at 1,528 billion Bolivares (BsS) or US $3.9 billion (at the current official exchange rate) is centred around five key strategy lines which government forces claim will contribute towards economic recovery in the Latin American country.
These lines include the strengthening of monetary and exchange rate policies; the creation of conditions for the carrying out of economic policies; the strengthening of international reserves; contributing to achieving financial stability; and sustaining existing social spending.
In local currency, 2019’s budget is 423,200 percent larger than 2018’s, which was set at 36,102 billion BsF (361 million BsS after August’s reconversion), mirroring a combination of the extreme devaluation of the currency and hyperinflation which the country has suffered during 2018 and a more ambitious expenditure this upcoming year.
Andres Eloy Mendez, the president of the ANC’s Economic Commission, told the nation that 2019’s budget was calculated based upon an oil output of 2 million barrels per day (bpd) at an average price of US $55-60 per barrel. Venezuela is, however, only producing 1.13 million bpd according to the latest OPEC figures.
According to ANC sources, the upcoming year’s budget will be financed by 47 percent from oil revenue, 20 percent from tax collection and 33 percent from international loans. It also looks to “refinance” 270 billion BsS of debt. This marks a clear shift in state financing from last year, with 2018’s budget being made up of a mere 10 percent from oil income and a “majority” from tax collection, according to official sources at the time.
With regards to social spending, 75.2 percent of the new budget is assigned to such policies as expanding existing public pension plans to cover 5 million citizens, creating 300,000 more public school spaces and maintaining other social programs such as the Great Housing Mission and the Local Committees of Food Supply and Production (CLAP). This is slightly up from the 72.5 percent of 2018’s budget assigned to the same area.
Following the approval of the budget, President Nicolas Maduro took to Twitter claiming that 2019 will be a year of “development and prosperity.”
Escalona was, for his part, more sceptical of the political direction of the budget, asking his fellow deputies “Where is the [famed slogan from ex-President Chavez] of “Commune or Nothing” in the budget? Where are the small producers [in it]?”
In a similar vein, ANC Deputy Gerson Hernandez told press that “The secondary benefactor of the 2019 budget, after the people, is the business sector.”