Thursday, June 19, 2003

A RADICAL OF THE MIDDLE?

Those who are politically between the extremes are commonly known as the passive, silent majority, but a radical of the middle is neither passive nor silent … but nor is he strident, aggressive or vulgar. 

A radical of the middle does not let a few extremists bring the country to the verge of a civil war. Like a good father, he would put them face to face in a cage in Bolívar Square, roped belly to belly, televised, until they came out friends and compatriots.

A radical of the middle believes the nation must hold responsible those who are responsible, “no matter what head must roll”. He would dismiss civil servants for their pure ineptitude and would imprison both those who are corrupt and those who by striking damage the nation’s vital interests.

A radical of the middle knows that the nation cannot survive without a strong and efficient State (not necessarily a big one) and a dynamic private sector. He knows that educational excellence is necessary for the country to advance, but that this has no value without a good general educational system, since a genius gets nowhere without good countrymen. To him, the grandeur and strength of a nation is measured in terms of the treatment it gives to its small and weak.

A radical of the middle is concerned both by the brain drain and by the “heart drain”. He sees the opportunities and the threats of globalization and does not accept proposals or impositions, no matter where they come from and regardless of how fashionable they may be, without analyzing them critically himself.

A radical of the middle knows that with the help of OPEC oil has generated fabulous income which, unfortunately, PDVSA and the governments have wasted... but he believes that there are better options than selling the kitchen sink. He is convinced that, on balance, the public debt will never be of any use; he wants to eliminate it and seek foreign investment, but only when the interests of national investment have been assured.

A radical of the middle knows that the country cannot be saved from the trenches and has marched against the government, but has also abstained himself from marching in opposition to the opposition. He respects the current Constitution and the right to make changes to it and, above all, Democracy itself… since it was designed precisely for him... as only he is able to duly represent the minorities at the extremes. His current slogan is “Neither Havana nor Miami… CARACAS”

Translated from El Universal, Caracas July 19, 2003



Thursday, June 05, 2003

An Unsustainable Sustainability

An Unsustainable Sustainability 

The latest fashion in the academic world of international finance is to calculate what is known as the Sustainable Debt Level (SDL). As you may have guessed, it has to do with the level of public debt a country can sustain without entering into a crisis. Normally the SDL is calculated based on the size of the economy (GNP) or on a country’s exports.

Whatever scientific approach is given to the SDL issue, it sure seems somewhat obscene to the citizenry of countries where it is evident that public debt engenders low or even no productivity.

If a credit is granted properly, the credit is repaid and then debt levels never become a problem. It is only the bad or mediocre loans that accumulate—those that do not generate their own repayment. So it could be said that what is really being calculated with the SDL is the level of bad debt that a country can get saddled with. Quite frankly, a developing country with real needs cannot afford the luxury of canceling even one cent in interest on a debt level arising from a series of credits that are nonproductive on the average.

From this perspective and since what we really mean is sustaining something that is unsustainable, this question remains: wouldn’t it be better to skip calculating this debt level and try to free ourselves once and for all from these mortgages, instead of condemning future generations to live forever under the weight of an SDL that has been perfectly calculated? How much torture can the torture victim take before passing out?

And who encouraged these countries to go into debt? Ask those who are well-acquainted with the temptation that credits pose to politicians. In China, they say that you wish for your enemies to live in interesting times. In Argentina, because of the suffering provoked by excessive debt, it would seem that what their enemies could have wished upon them was the trust and confidence of international markets.

On the day that our country Venezuela firmly and irrevocably sets upon the path of totally canceling its debt, on this day an enormous opportunity will open for all those private and collective initiatives that need financial oxygen. Unfortunately it will not be easy, since our politicians, while condemning past debts, have mastered the magic of simultaneously preaching the benefits of new credits.
And this article lead me here:



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