The Mirror of Russian Oligarchs
The recent establishment of the "Public Asset Evaluation Commission" by the National Executive marks a turning point that, for those of us closely following the Venezuelan economy, awakens both a faint hope and profound caution. And for good reason. After years of expropriation policies that turned the state into an inefficient owner of industrial graveyards, the "pragmatic" shift towards liquidating or privatizing "non-strategic assets" seems to acknowledge that the model of absolute control has collapsed under its own weight.
TL;DR
- Venezuela's "Public Asset Evaluation Commission" signals a shift towards privatizing non-strategic assets, acknowledging the failure of absolute state control.
- The Russian experience of the 1990s, through voucher privatization and "loans for shares" schemes, resulted in wealth transfer to insiders and the rise of oligarchs.
- A key risk for Venezuela is a lack of transparency and institutional framework, potentially leading to "crony capitalism" where political proximity, not merit, determines success.
- To ensure successful privatization, Venezuela needs independent regulators, transparent public auctions with international valuation, and mechanisms for citizen participation (e.g., pension funds, stock market).
- Debt-equity swaps are suggested as a tool to reduce liabilities but must be conducted with market valuations and transparency to avoid repeating the "loans for shares" model.
- Ultimately, successful privatization hinges on rebuilding laws, institutions, and transparency to foster genuine economic prosperity and national viability.