At 08:43 16/06/2007, Julio wrote:
Michael Lebowitz wrote:
The international reserves are now headed
back up and increased $409 million this
past week and now standing at $25.615
billion dollars.
What is the rationale given for holding 25b USD frozen in the form of
foreign financial assets rather than investing them in the development
of the people of Venezuela?
There already is very significant inflationary pressure precisely
because of all the funds being invested in development (new
industries, means of production, training, etc); what's increasingly
critical is to ensure that the money isn't being wasted-- eg., that
new factories actually produce, that processing operations get their
needed inputs rather these being exported because the producers can
get USD (in Colombia) and then can convert that into more Bolivares
than if they sold directly in Vzla. At this point, doing things like
buying Argentine bonds relieves pressure.
Note: I'm not implying that it's not a good idea for Venezuela *in
current historical conditions* to hold some reserves in the form of
foreign financial assets. I just wonder if Michael has some insight
into the thinking of Venezuela's central bankers (Maza Zavala?).
Actually, Maza may be out now--- retired. There are a few new folks
at the Central Bank (eg., Merentes, former Finance Minister), but
really it is government policy that is key. You (Julio) should ask
your old roommate Victor Alvarez about this because he has lots of
information and strong views (eg., on the effect of the refusal to
devalue the Bolivar). He's heading up the programme on the New
Productive Model at our institute (Centro Internacional Miranda) and
has an upcoming 3-day event (7-9 August) here exploring matters such
Vzla in the geopolitical context, state economic reforms in the
transition to socialism, etc which will incorporate Eric Toussaint
and Claudio Katz among others.
michael
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Michael A. Lebowitz
Professor Emeritus
Economics Department
Simon Fraser University
Burnaby, B.C., Canada V5A 1S6
Director, Programme in 'Transformative Practice and Human Development'
Centro Internacional Miranda, P.H.
Residencias Anauco Suites, Parque Central, final Av. Bolivar
Caracas, Venezuela
fax: 0212 5768274/0212 5777231
http//:centrointernacionalmiranda.gob.ve
[EMAIL PROTECTED]
