Hugo Faría: Chavez's plan is a copy of policies adopted by past administrations--This is just a return to the import-replacement model

EDUARDO CAMEL ANDERSON EL UNIVERSAL

Venezuelan economist Hugo Faría considers that the new economic plan announced by the Vice Minister of Industry and Commerce (based upon credits at preferential rates, purchases by the government and an "endogenous development") is just a return to "the policy of replacement of imports -a policy that have already failed in the country."

Faría -professor at Instituto de Estudios Superiores de Administración, IESA, a top-ranked business school in Venezuela- wonders how many producers and farmers have received soft credits before? He adds that Venezuela had a very successful economy until 1957, when people did not have any of those facilities but low tariffs, when the Central Bank worked as a small currency board and there were just a few state-owned businesses."

From his point of view, "the real solution to poverty is a high and sustained rate of economic growth. To reach that goal, evidence has proven that the appropriate recipe includes economic freedom, an efficient judicial system, low inflation, reduced taxes, and public expenses focused on education, health and national security."

Hugo Faría explains that "the model proposed by Chávez supporters is a copy of "Puntofijismo" (a pact previously adopted by Venezuela's two main political parties to share power). "We do not have an alternative proposal to what we had before."

"We face a repetition of past mistakes: destruction of the legal framework, destruction of the currency through devaluations, increase in current expenditures, a higher interference of the government in the market, approval of laws to block international trade, memberships in obsolete organizations, such as the OPEC, and financing education demand instead of financing its offer," concluded Faría.