*UPDATE at bottom. Lately, information coming out of Venezuela confirms that officials from the Hugo Chavez regime are totally unaccountable, above the law for all practical purposes. It sort of started when Congressman Carlos Ramos revealed there was a $29 billion fiscal hole in FONDEN, which is basically an out-of-budget fund that Hugo Chavez uses with absolute discretion to fund his pet projects and global revolution. In what has become known as the FONDEN papers, fellow blogger Miguel Octavio has delved more and more into the details of the dodgy fund.
In the meantime we have been treated to information about much smaller, but equally scandalous, expenditure. For example, a contract to provide to the Chavez regime electronic IDs, worth some $40 million, between Gemalto, a French public company with ADRs traded over in the USA, and a totally unknown Cuban briefcase-company called ALBET, which is meant to be some sort of subsidiary of Cuba's "university of technology" UCI. In this respect, Congressman Ramos also picked up the story, and decided to investigate a little.
Then, there's the sponsorship contract between PDVSA and Williams F1 team. In this instance, the amounts are believed to be between £110.5 million and £154.7 million (over 5 years). Again we find Congressman Ramos -it seems he is about the only elected official in Venezuela concerned about corruption- questioning the legality of this contract.
More recently though, copy of contract between China and Venezuela -to increase amount of a fund aptly called Chinese fund- has also been leaked. As Miguel reports, if what's stated in the documents is to be taken at face value, Venezuela, or rather Hugo Chavez acting unilaterally and without Congress' approval, wants to borrow $116 billion from China. In Miguel's own words:
The Republic borrows US$ 20.8 billion from the Chinese. PDVSA “pays” for this loan to the tune of US$ 15.7 billion per year, clearly an inordinate amount of money for the loan received. The Chinese collect interest and capital and any “excess”, of which there is a lot, returns to the Government, not to PDVSA, via parallel funds, which bypass the controls and approvals of Venezuelan Laws.
It's hundreds of millions here, thousands of billions there, maddening figures. Had these amounts of public money been put to legally intended use, Venezuelans, all 26 million of them, would most definitely be laughing any mention of crisis or capitalism failure. For it must be borne in mind: all these borrowing and spending without oversight, circumventing laws and Congress through dodgy funds and paying mechanisms, comes on the back of the highest ever windfall of oil income in the history of Venezuela.
Since Hugo Chavez took power in 1999, Venezuela's debt has mushroomed:
- Internal debt has gone from 3.8 billion Bs to 83 billion Bs ($31.9 billion, 2010 figures).
- External debt has gone from $37.7 billion to $54.5 billion (2009 figures).
The above excluding commitments entered into with the Chinese fund as referred above, and in addition to the nearly $2,000 billion estimated GDP since 1999. Some estimates put the combined budget of the Chavez period at about $1,000 billion.
*UPDATE: Miguel writes in with new debt figures: Venezuela's total debt has gone from $39.5 billion in 2000, to $104.5 billion in 2011.