In Venezuela, we have been dedicating our lives to restoring our nation’s political and economic freedoms. For years, millions of Venezuelans, under the leadership of the student movement and of young political activists, have been peacefully protesting against Nicolas Maduro’s dictatorial regime, with clear demands: Respect for our basic rights and freedoms, such as fair elections, freedom of speech, free enterprise, and rule of law. In response to the people’s demands, Maduro’s repressive groups such as the military and the national police have incarcerated, tortured, and even killed many Venezuelans. To be more precise, Maduro’s dictatorship has unrightfully incarcerated thousands, cold-bloodedly killed hundreds, and overall, forced more than five million Venezuelans into exile.
Economically, Venezuela’s G.D.P. per capita has declined by over 60 percent in the last five years, which is double the amount for the U.S. during the Great Depression. Moreover, Venezuela is experiencing the highest inflation rate in the world, at well above one million percent per year. Hyperinflation has reduced Venezuela’s minimum wage to $6 a month. Therefore, a Venezuelan worker’s purchasing power is less than two eggs per day, or 700 calories a day, which has resulted in an average weight loss of eight kilos (18 pounds) per year. In summary, Venezuela is the worst economic collapse in modern history of the Western hemisphere. Maduro’s regime condemned an entire nation of 30 million people to a humanitarian crisis unprecedented in our hemisphere. This situation needs to be fixed and it needs to be fixed now.
Today, thanks to hard work and dedication, we have the opportunity to achieve exactly that, a peaceful and constitutional transition towards democracy. We have this opportunity as we have strengthened our position both domestically and internationally. Within Venezuela, we count on an organized civil society lead by Juan Guaidó, the U.S.-recognized Interim President of Venezuela, according to article 233 of our constitution. Internationally, we were able to organize the support of 60-plus democratic states, and their diplomatic mechanisms have been highly effective in our efforts to pressure the Maduro regime. Together, Venezuelans and the international community, we are achieving something that many people considered impossible. Freeing the Venezuelan people from the Maduro regime. Overall, our roadmap is clear:
- End Maduro’s usurpation of power;
- Establish an interim government;
- And hold free elections.
This roadmap is aimed towards achieving a peaceful political transition towards democracy. However, this article is not about Venezuela’s political transition, but rather the fundamental component of it, which is rebuilding our economy so that we can provide decent and well-paying jobs to our people. In Venezuela, we are convinced that reigniting our economy is the fundamental component of achieving a successful transition from authoritarianism towards liberal democracy. As a result, Venezuela’s National Assembly has an economic plan entitled “Venezuela’s National Plan.”
The plan proposes the rearranging of Venezuela’s institutional framework by re-establishing property rights to promote innovation, free trade to increase the division of labor, and the rule of law to incentivize investment. In addition, the plan not only incorporates an immediate humanitarian aid program to alleviate Venezuela’s humanitarian crisis but also commits to stimulate Venezuela’s most important asset, its oil industry. Overall, our plan will rebuild Venezuela’s productive apparatus and will exponentially improve the living conditions of millions of Venezuelans. With Venezuela’s National Plan, our nation will exit this humanitarian crisis and begin its economic recovery towards the prosperous nation that it was always destined to be.
Immediate Humanitarian Aid Program
Fixing Venezuela’s humanitarian crisis is our immediate commitment. Right now, while you are reading this, there are millions of Venezuelans in endangering situations such as the immediate necessity of cancer treatment. With our humanitarian aid program, we will be able to deliver to the Venezuelan people first-priority goods such as antibiotics, dialysis treatment, and nutrients, among others.
By no means are we considering this humanitarian aid program as a long-term solution to Venezuela’s economic problems. Maduro’s policies have resulted in severe shortages of food and medicines, so this program will counteract this circumstance in the short-run in order to save the lives of millions. We are confident that our market-oriented policies will rebuild Venezuela’s economy so that no more humanitarian help will be needed in the future.
Monetary Stability
Venezuela has the highest inflation rate in the world. In 2018, Venezuela’s inflation rate exceeded one million percent, as prices doubled every few days. Monetary stability is crucial for markets, including the job market. As a result, Venezuela’s hyperinflation has resulted in wages declining dramatically, and economic agents losing all confidence in Venezuela’s national currency. Today, Venezuela’s minimum wage is the worst in the region.
With the help of international financing, Venezuela can achieve monetary stability. Venezuela needs to implement a currency board, which would allow the central bank to create domestic currency only when it has added the equivalent amount of dollars to its reserves. To achieve this, Venezuela needs international financial assistance, probably led by the International Monetary Fund, along with the restructuring of Venezuela’s public debt.
Price Liberalization
With monetary stability, Venezuela can liberalize its prices. Venezuela’s biggest structural problem is its current distorted system of relative prices. The Venezuelan economy is ‘operating’ with price caps in almost all its industries, from basic goods and services to the entire Venezuelan foreign exchange market. Price caps have considerably increased corruption, black market activity, and collusion between public officials and crime networks.
Price liberalization will eliminate Venezuela’s shortages of basic goods. In addition, the free fluctuation of prices allows market agents to coordinate their economic activities. Therefore, it will increase the overall productivity of the Venezuelan economy and increase the purchasing power of Venezuelan workers.
Restoring Venezuela’s Oil Industry
With a stable currency and an economy that allow for economic calculation among its agents, Venezuela can attract investment to reignite its industries, including its most important asset, the oil industry. Because of the politicization of the state-owned oil industry, the company is producing only 1.17 million barrels per day. Back in 1998, when Former President Hugo Chavez took office, Venezuela produced 3.5mbpd. To produce at the same levels of 1998, Venezuela needs a seven-year annual investment of 30 billion dollars, which has to be accomplished by opening the industry to private investments. Economically, opening the oil industry to foreign and domestic capital will revitalize Venezuela’s most internationally competitive industry. Politically, breaking the prejudicial relation of a petro-state is crucial for the proper functioning of liberal democracy.
Re-establishing Property Rights in Venezuela
On paper, article 115 of the Venezuelan constitution protects property rights in Venezuela. However, in practice, Venezuela has experienced widespread expropriations since 2001. Chavez nationalized steel companies, cement companies, and food suppliers, such as Lacteos Los Andes, and Café Fama de America, among others.
As of today, most industries in Venezuela have been nationalized. Industries that were productive are nowadays controlled by the military government of Venezuela. Because of this, property rights need to be restored in Venezuela. Among our proposals, we plan to give back all expropriated all to its real owners.
Conclusion
This is just a summary of the monumental challenge we have in Venezuela moving forward. I am planning to write more in detail about each part of our economic program. We have been fighting for years to have our freedoms back, and this plan does exactly that. We need to give Venezuelans back their economic freedoms such as the right to own property, the right to set prices, the right to trade with foreign entrepreneurs, and the right to live in an economy without subsidies, privileges, and monopolies.
I believe it is extremely important to communicate our economic plan to the world. We want the world to know that we are committed to implementing an institutional framework that will bring back stability and prosperity to our nation. We believe that rebuilding our economy is crucial to achieving a peaceful political transition. Above all, I firmly believe, from the bottom of my heart, that the days of a command economy are over in our nation. I am sure that Venezuela, a free Venezuela, with democratic institutions and a liberal economy, will become the most important economic miracle of the 21st Century.
Jorge Jraissati
Check out last month’s highly read interview that “In the Zeitgeist’”s Douglas Braff did with Jorge Jraissati on the crisis in Venezuela.
Jorge Jraissati is one of the most influential young political leaders of Venezuela. As President of Venezuelan Alliance, Jorge has been crucial in organizing the international community and its efforts to achieve a political change in Venezuela. Academically, Jorge graduated in Economics from the Wilkes Honors College at FAU. Moreover, Jorge is an alumnus of the Hoover Institution at Stanford, and a visiting fellow of the Abigail Adams Institute at Harvard University. According to Jorge, Venezuelan Alliance is “committed to raising awareness about the importance of free and democratic institutions by educating the public about Venezuela’s repressive regime.”
