Keys to salary recovery in Venezuela

The minimum wage in Venezuelalast increased to 130 bolivars in March 2022, when it was equivalent to 29.68 dollars, has been devalued by 82%, to reach the current 5.18 dollars, as a result of the inflationa situation that has prompted more than 2,000 labor protests this year, according to NGOs.

This level of salary, the “lowest fourth on the planet, behind Rwanda, Burundi and Uganda”is the result of a drop in the economy of a 80% between 2013 and 2021, the “third worst crisis in global economic history”, Manuel Sutherland, economist and director of the Center for Worker Research and Training (CIFO), told EFE.

Here are some keys to recover the value of wages.

A “Great National Deal”

According to Sutherland, employers, unions and the government must sit down “discuss at a dialogue and decision-making table on economic, political, electoral and social matters” for “reach an agreement” that generates favorable conditions to “stimulate production and productivity”of what “It depends on the salary.”

He assured that if there are no agreements that allow the parties to reach “A minimal economic peace, there will not be a truly sustainable wage increase.”

lifting of sanctions

Although the sanctions “did not cause the economic crisis nor the decrease in salary ”, explained, they do impede recovery “fluid” that the economy needs to be able to begin to improve wages, through a “insertion in the international market to sell the Petroleum and goods in a much more transparent, auditable, auditable and clean way”.

Then one must consider the “forward selling oil” for “constitute an emergency salary fund” with the income obtained in this way, which would allow us to start paying salaries of up to 150 dollars a month “immediately”.

Publication of official figures

the publication “exhaustive” of “all the data on economic matters” will allow the experts “make more accurate calculations on the state payroll” and the expenses that the State would need to make, which is “very difficult” to perform “if the numbers of oil income, expenses, expenses, sales, purchases are not known.”

On the other hand, it is imperative, even if “difficult”reduce the payroll of the State, of approximately “five and a half million workers”, of which “4.4 million are military employees”, something “really excessive and absurd”.

Reorient, recover and stabilize the economy

Sutherland indicated that the economy, currently “oriented towards imports, luxury services and bodegones”it must be redirected towards production, with measures such as “eliminate the overvaluation of the bolivar” and “limit the capabilities of the Central Bank to issue money”which, in turn, will reduce inflation, which reached 500% annualized, according to independent estimates.

Likewise, it is necessary to recover the financing, today restricted, which makes it difficult for there to be a comprehensive recovery of the economy and, therefore, wages rise, he added.

A progressive increase

According to the economist José Guerra, the salary can be set between 100 and 150 dollars a month to start, financed “with genuine income” obtained through oil exports -currently about “700,000 barrels per day”– and other products, taxes, customs revenues and parafiscal contributions, elements that total “About 26,000 million dollars for this year.”

And, if oil production recovers and there is access to external financing, increase income, progressively, to 400 dollars in 2024, something that “It should never be done with financing from the Central Bank”which was what led the country to suffer hyperinflation between 2017 and 2021, added Guerra, a member of the Venezuelan Finance Observatory (OVF).

Source: EFE