BART JONES, Associated Press Writer
AP Online
05-14-1999
Venezuela President Shrinking Gov't
CARACAS, Venezuela (AP) -- It's arguably Latin America's most bloated bureaucracy -- over a million people, including operators for automatic elevators, secretaries on perpetual coffee breaks and messengers whose main errand is to fetch a paycheck.
President Hugo Chavez is vowing to impose a
crash diet on Venezuela's fat government, which is blamed for stoking inflation, increasing poverty, thwarting economic growth and eating up a third of the national budget.
As the first president from outside Venezuela's traditional political parties, Chavez owes few favors to the political patronage machine that swelled the bureaucracy, giving him a special opportunity to trim it.
But laying off thousands of workers could alienate many of the same people who catapulted him to the presidency seven years after his failed 1992 coup attempt. And critics charge the president's moves so far constitute mere window dressing.
``The question is whether he's ready to pay the political price,'' political analyst Alfredo Keller said. ``I'm not sure he's willing to accept boos instead of cheers.''
Venezuela's bureaucracy ballooned in recent decades as the country's huge oil reserves -- the world's largest outside the Middle East -- produced billions of dollars in revenue.
Three or four doormen often attend a single door. State-run Viasa airline -- before it went bankrupt in 1997 -- had 12 airplanes and 291
pilots, or 24
pilots per plane. Public hospitals often employ a dozen or more ambulance drivers, even when they have only one ambulance.
Today, Venezuela's oil boom has turned to bust. The government is saddled with a record $8 billion fiscal deficit and most of the population of 23 million lives in poverty.
State employees account for one in six workers. The government employs 6.1 percent of the population, compared to
Brazil's 4.5 percent and Colombia's 2.2 percent.
Chavez, who took office in February pledging to shake up a corruption-ridden political system, says he will sell off government-owned cars, yachts, houses and most of the 128 airplanes it uses just to shuffle around officials.
He also has begun reassigning political police after investigators found that agents designated to protect former officials were instead chauffeuring wives to beauty parlors and maids to supermarkets.
Those moves
may carry symbolic weight, but many experts say the real solution is trimming the payroll, privatizing state companies and casting off unproductive enterprises.
Chavez has said he has no intention of throwing public workers into the street, but instead will transfer them to more productive endeavors, such as helping build public works and developing the tourism sector. It remains far from clear how this could be accomplished.
Chavez came to power promising to bring a ``human
face'' to what he called ``savage capitalism.'' But fears that he will return Venezuela to a statist economic model so far have not materialized -- and many of his policies appear to be market friendly.
His administration is preparing to privatize three electric utilities, for instance, and he has announced plans to cut the budget deficit in half.
Some analysts think Chavez's popularity -- a recent poll put his approval rating at 80 percent -- could help him convince Venezuelans of the need for layoffs.
Peruvian President Alberto Fujimori laid off tens of thousands of state workers in the early 1990s and until recently remained popular. But that was largely because he also slashed hyperinflation and decimated the Shining Path rebels.
Similar firings could provoke violent unrest in Venezuela, where the official unemployment rate is 12 percent and where half of all workers are in the so-called informal economy, selling their wares in flea markets and on street corners.
A 1989 hike in gasoline prices and bus fares provoked mass riots in which hundreds of people were killed.
``People are tired of being told that we're going to sacrifice one generation so that another can live,'' said political scientist Amalio Belmonte.
It's also difficult to fire government employees, with party-controlled unions putting up a thick web of obstacles. And Venezuelan labor laws require hefty severance payments, possibly beyond the government's means.
Chavez
may also be loath to alienate voters in an election year. On July 25 Venezuelans will elect a constituent assembly to write a new constitution, which in turn is to be voted on in a national referendum early next year.
Many experts think the obstacles will keep him from making major changes -- at least in the short run.
``He can't make a deep transformation,'' Belmonte said.
The information contained in the AP News report
may not be published, broadcast or redistributed without the prior written authority of The Associated Press.
Copyright 1999 The Associated Press All Rights Reserved
Venezuela President Shrinking Gov'tBART JONES, Associated Press Writer
AP Online
05-14-1999
Venezuela President Shrinking Gov't
CARACAS, Venezuela (AP) -- It's arguably Latin America's most bloated bureaucracy -- over a million people, including operators for automatic elevators, secretaries on perpetual coffee breaks and messengers whose main errand is to fetch a paycheck.
President Hugo Chavez is vowing to impose a
crash diet on Venezuela's fat government, which is blamed for stoking inflation, increasing poverty, thwarting economic growth and eating up a third of the national budget.
As the first president from outside Venezuela's traditional political parties, Chavez owes few favors to the political patronage machine that swelled the bureaucracy, giving him a special opportunity to trim it.
But laying off thousands of workers could alienate many of the same people who catapulted him to the presidency seven years after his failed 1992 coup attempt. And critics charge the president's moves so far constitute mere window dressing.
``The question is whether he's ready to pay the political price,'' political analyst Alfredo Keller said. ``I'm not sure he's willing to accept boos instead of cheers.''
Venezuela's bureaucracy ballooned in recent decades as the country's huge oil reserves -- the world's largest outside the Middle East -- produced billions of dollars in revenue.
Three or four doormen often attend a single door. State-run Viasa airline -- before it went bankrupt in 1997 -- had 12 airplanes and 291
pilots, or 24
pilots per plane. Public hospitals often employ a dozen or more ambulance drivers, even when they have only one ambulance.
Today, Venezuela's oil boom has turned to bust. The government is saddled with a record $8 billion fiscal deficit and most of the population of 23 million lives in poverty.
State employees account for one in six workers. The government employs 6.1 percent of the population, compared to
Brazil's 4.5 percent and Colombia's 2.2 percent.
Chavez, who took office in February pledging to shake up a corruption-ridden political system, says he will sell off government-owned cars, yachts, houses and most of the 128 airplanes it uses just to shuffle around officials.
He also has begun reassigning political police after investigators found that agents designated to protect former officials were instead chauffeuring wives to beauty parlors and maids to supermarkets.
Those moves
may carry symbolic weight, but many experts say the real solution is trimming the payroll, privatizing state companies and casting off unproductive enterprises.
Chavez has said he has no intention of throwing public workers into the street, but instead will transfer them to more productive endeavors, such as helping build public works and developing the tourism sector. It remains far from clear how this could be accomplished.
Chavez came to power promising to bring a ``human
face'' to what he called ``savage capitalism.'' But fears that he will return Venezuela to a statist economic model so far have not materialized -- and many of his policies appear to be market friendly.
His administration is preparing to privatize three electric utilities, for instance, and he has announced plans to cut the budget deficit in half.
Some analysts think Chavez's popularity -- a recent poll put his approval rating at 80 percent -- could help him convince Venezuelans of the need for layoffs.
Peruvian President Alberto Fujimori laid off tens of thousands of state workers in the early 1990s and until recently remained popular. But that was largely because he also slashed hyperinflation and decimated the Shining Path rebels.
Similar firings could provoke violent unrest in Venezuela, where the official unemployment rate is 12 percent and where half of all workers are in the so-called informal economy, selling their wares in flea markets and on street corners.
A 1989 hike in gasoline prices and bus fares provoked mass riots in which hundreds of people were killed.
``People are tired of being told that we're going to sacrifice one generation so that another can live,'' said political scientist Amalio Belmonte.
It's also difficult to fire government employees, with party-controlled unions putting up a thick web of obstacles. And Venezuelan labor laws require hefty severance payments, possibly beyond the government's means.
Chavez
may also be loath to alienate voters in an election year. On July 25 Venezuelans will elect a constituent assembly to write a new constitution, which in turn is to be voted on in a national referendum early next year.
Many experts think the obstacles will keep him from making major changes -- at least in the short run.
``He can't make a deep transformation,'' Belmonte said.
The information contained in the AP News report
may not be published, broadcast or redistributed without the prior written authority of The Associated Press.
Copyright 1999 The Associated Press All Rights Reserved
