[News] Venezuelan Private Sector Siphoned Off $259B in Public Funds

[Anti-Imperialist News]

http://www.telesurtv.net/english/news/Venezuelan-Private-Sector-Siphoned-Off-259B-in-Public-Funds-20160619-0026.html 



  Venezuelan Private Sector Siphoned Off $259B in Public Funds

June 19, 2016

Critics of the Venezuelan government have repeatedly accused it of 
failing to take measures 
<http://www.telesurtv.net/english/news/Venezuela-Sacred-Heart-Sisters-Deny-Govt-to-Blame-for-Shortages-20160610-0048.html> 
to deal with shortages, but an investigation by teleSUR reveals that the 
private sector may have siphoned off up to US$259 billion from state 
coffers by taking advantage of different exchange rates and failing to 
produce the goods they claimed they would.

The economy of Venezuela, which holds the world's largest oil reserves, 
is intimately tied to oil production.

As is common with states that have economies built around a single 
commodity, the availability of dollars means it was often cheaper to 
import goods instead of producing them domestically.

Despite its fertile agricultural lands, this meant food was also 
imported from its neighbors.

In order to keep prices for essential goods at an affordable level, the 
government implemented an exchange rate system that effectively 
subsidized the provision of dollars for imports of key goods.

A private business would request cheap dollars from the Venezuelan 
Central Bank with the stated aim of using them to import food or raw 
material for food production. The Central Bank would provide the dollars 
at the preferential rate reserved for essential goods of 6.3 Bolivars to 
one U.S. dollar.

These private business would then lie about what was imported or 
produced in order to allegedly stash dollars away in offshore accounts 
or sell the goods at the illegal black-market rate of approximately 500 
bolivars to one U.S. dollar.

The Venezuelan government claims that in some cases, business that were 
given dollars never imported anything at all, hoarding the cash instead.

This kind of illegal behavior repeated thousands of times by the private 
sector is in many ways responsible for the shortages seen on shelves and 
the exorbitant prices.

In 2013, the then head of the Venezuelan Central Bank, Edmee Betancourt, 
said that the country had lost between $15 and $20 billion the previous 
year through such fraudulent import deals.

In total, government supporters estimate that US$259 billion were lost 
or siphoned away between 2003 and 2013.

The Central Bank's own figures show that between 2003 and 2013, the 
Venezuelan private sector increased its holdings in foreign bank 
accounts by over US$122 billion, or almost 230 percent. It is likely 
that many of the 750 offshore companies linked to Venezuela in the 
database released from the Panama Papers have been used to recycle this 
money.

Venezuela's largest food manufacturer, Polar, whose owner is opposes the 
government, has interrupted production several times in recent weeks 
because, it says, the government hasn't given it the dollars it needs to 
import its raw materials.

However, over the years Polar has been one of the very biggest 
recipients of preferential dollars for imports.

Indeed, one of the challenges facing the government is that Venezuela's 
traditional elite still own most of the companies that do the importing, 
giving them ammunition in its economic war against the government.

-- 
Freedom Archives 522 Valencia Street San Francisco, CA 94110 415 
863.9977 www.freedomarchives.org
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://freedomarchives.org/pipermail/news_freedomarchives.org/attachments/20160620/fd428651/attachment.htm>