Economy
In early October, top officials announced strategies to revitalize the production sector and to reverse the trend recorded during the first half of the year, however, despite the measures implemented, government authorities ratified that the restrictions on foreign exchange authorizations will continue in 2010.

The decline in strategic economic sectors such as manufacturing and trade in the first half of the year was due in part to a fall in the authorization of US dollars. However, Alí Rodríguez Araque, the Minister of Economy and Finance, said emphatically during a meeting at the National Assembly Finance Committee that "the government must streamline imports."

For this reason, the government considers that the 2010 foreign exchange budget will be 40 percent lower than the amount authorized this year. National tax superintendent José David Cabello presented import estimates to establish the amount of collection. In his presentation of tax revenues that will be used to finance Venezuelan expenditures in 2010, the top official said that the collection of value added tax (VAT) related to imports and customs revenues will be lower than in 2009. "This is due to the fact that the foreign exchange budget in 2010 will decline 40 percent compared to 2009."

According to the estimates on tax management presented to the lawmakers, total foreign purchases in 2009 will amount to USD 40 billion. Cabello also said that as a result of restrictions, the VAT related to imports will decrease 36 percent and the customs revenue will drop 33 percent. The national superintendent added that despite the impact, government officials have to make a thorough review of the budget. In this context, Cabello said, "imports must be downsized, so that purchases can be used to increase industrial growth."

Meanwhile, the minister of Finance insisted that "the government has authorized dollars for imports of essential goods." He told legislators that "for instance, at the economic board we received requests to authorize USD 2 million to import lollipops (...) No comment," he added.

According to the data published by the Foreign Exchange Administration Commission (Cadivi), the government authorized USD 29.9 billion until September, a 47 percent decrease compared to last year. Given the restrictions to have access to US dollars at the official exchange rate, Venezuelan companies have purchased foreign exchange at the unofficial market and through this option importers have paid USD 9.4 billion, according to estimates of the research firm Ecoanalítica.

Enhanced effectiveness
The Minister of Finance reiterated that oil revenues will amount to USD 18.33 billion, non-oil revenues will total USD 39.07 billion and debt will add up to USD 16.42 billion. Although each ministry will have to report its budget to the National Assembly, Rodríguez Araque said that "it is necessary to optimize the capabilities of public administration. There is still too much to cut. The tendency to waste resources persists and we face a battle: to enhance effectiveness of public spending."

Translated by Gerardo Cárdenas

Mayela Armas / Ernesto J. Tovar
EL UNIVERSAL