EVENTS THAT HAVE ADVERSELY IMPACTED DEMOCRACY AND HINDERED THE PROGRESS OF OUR NATION HAVE ALSO DISRUPTED THE CONTINUITY OF THE GUAYANA DEVELOPMENT PROGRAMME
THE MISSED OPPORTUNITY, AND WITH IT, THE LOSS OF DEMOCRACY AND THE REPUBLIC
BRIEF HISTORY OF DR MIGUEL RODRÍGUEZ
Dr Miguel Rodríguez, Minister of State, Head of CORDIPLAN between 1989 and 1992 during the second government of Carlos Andrés Pérez.
MIGUEL RODRÍGUEZ, PROPOSALS TO SOLVE THE VENEZUELAN ECONOMIC CRISIS, VENEZUELAN FINANCE OBSERVATORY, ECONOMIC STABILIZATION PROGRAMMES. VIDEO PART II
https://www.youtube.com/watch?v=itzXxv-d5Uk
As evidenced, the Guayana Region Development Programme, its planning and execution, although interrupted, has constituted a powerful platform for the Integral Development of the Nation. There is no doubt about the need for its continuity as a great support for the upcoming process of reconstruction of the country.
A summary of the analysis carried out by Dr Miguel Rodríguez in his CONFERENCE: PROPOSALS TO SOLVE THE VENEZUELAN ECONOMIC CRISIS, ECONOMIC STABILIZATION PROGRAMMES, VENEZUELAN FINANCE OBSERVATORY, and his AUDIO ON ECONOMY, DEVELOPMENT, POLITICS AND HISTORY OF VENEZUELA, is presented.
The following were the most outstanding aspects of the management of Dr Miguel Rodríguez as Minister of Planning:
- The oil programme was accelerated, which was the only one since the time of Pérez Jiménez that in two years increased oil production by 700,000 barrels.
With the Comprehensive Development Programme designed and implemented by Dr Miguel Rodríguez in 1989, a second positive trend of sustained growth in historical oil production in Venezuela can be observed, which generated inertia in the increase in production experienced until 1997. This trend can be seen in box.
Oil production in Venezuela with the Development Programme designed and implemented by Dr Miguel Rodríguez, in box, period 1989-1997
Dr Miguel Rodríguez, along with Andrés Sosa Pietri, President of Petróleos de Venezuela, PDVSA, made it possible to achieve the only trend of sustained growth in oil production achieved by the Venezuelan State in the history of oil production. This achievement was possible thanks to the Comprehensive Development Programme designed and implemented by Dr Miguel Rodríguez in 1989.
OIL PRODUCTION IN VENEZUELA, 1950-2012
https://commons.wikimedia.org/wiki/File:Venezuela_Oil_Production.png
Graphed data from OPEC website. Pre-1960 data is from US Bureau of Mines Minerals Yearbooks
Gráfico elaborado por https://commons.wikimedia.org/wiki/User:Plazak
The same information on Oil Production in Venezuela between 1943 and 2004 can be obtained in the work of Ramón Espinasa: The rise and collapse of PDVSA thirty years after nationalization. |
- He introduced the creation of the Macroeconomic Stabilization Fund, the Venezuelan Sovereign Fund, to Congress in 1991, before Norway introduced in Congress, and approved the resources for its fund. “The life of oil is the volatility of prices, that is why we should have a macroeconomic stabilization fund that would become a sovereign fund, not discretionary like the Investment Fund of Venezuela, but a parametric fund that would sterilize price increases from a reasonable price of oil that would inject into the economy the profits derived only from the increase in oil production”.
Dr Miguel Rodríguez was the first to propose this systematic sovereign fund in the world. Norway today has a trillion dollars in that fund. Venezuela would have hundreds of billions of dollars in its fund. Venezuela would be a fully developed country if this fund had been approved in Congress. We would have had the most extraordinary, developed, thriving, totally democratic country in the last 23 years.
- The program of economic adjustments proposed and undertaken that sought to refinance the external debt and prevent the country from going bankrupt had great success in the economic field, by managing to lower inflation and promote growth that reached 9% year-on-year of GDP in just three years, projecting values above 10% for subsequent years.
In this way, the phenomenal crisis of the average debt received from Jaime Lusinchi in his 5 years of government, which was 4,500 million dollars per year, was addressed. The commitment to service the debt was fulfilled with the payment of 6,500 million dollars in letters of credit, to restructure the economy for stabilization, and the next step, to carry out the Economic Development Programme that immediately had to be undertaken.
RECADI CEASED OPERATIONS AND WAS DISSOLVED IN 1989, WHEN THE DIFFERENTIAL EXCHANGE RATE SYSTEM WAS ABOLISHED.
- That was The Great Turn, the development planning to turn Venezuela into a producer of 10 million barrels of oil and derivatives per day, and into a great exporter of industrial, mining, tourism, high-tech, and agricultural products, which is what corresponds to an economically and socially developed country.
A solid democracy is built, consolidated and sustained on the basis of an assertive long-term development plan. The Venezuelan political sector blocked these reforms and destroyed in 1993, the great development programme designed and initiated by Dr Miguel Rodríguez, after Venezuela achieved the highest level of economic growth in the world, as recognized by the prestigious Fortune Magazine.
Headline of El Nacional on the economic growth of Venezuela. Source: Fortune Magazine, November-December 1991
THE MISSED OPPORTUNITY, AND WITH IT, THE LOSS OF DEMOCRACY AND THE REPUBLIC
VISION OF THE ECONOMIST DR MIGUEL RODRÍGUEZ ON THE PROCESS OF PLANNING FOR DEVELOPMENT, AND HIS CONTRIBUTION TO THE ESSENTIAL TRANSFORMATION OF VENEZUELA INTO AN ECONOMICALLY, SOCIALLY DEVELOPED, AND FULLY DEMOCRATIC COUNTRY
The Vision of the Economist Dr Miguel Rodríguez was to turn Venezuela into a large exporting country of products from different productive and service sectors. To do this, policies had to be introduced that would produce a structural change, first, by expanding the oil sector, but expanding other sectors of the economy that could become export sectors.
Significant efforts in this direction, which should have continued, were made in Guayana to produce that great structural change that would definitively turn Venezuela into a country with high economic growth, since it had the resources to do what Japan, South Korea, and China did.
MAIN EVENTS THAT TO THE DETRIMENT OF DEMOCRACY AND THE DEVELOPMENT OF THE NATION AFFECTED THE CONTINUITY OF THE PROGRESS ACHIEVED IN THE DEVELOPMENT OF THE GUAYANA PROGRAMME
- The contraction of the economy in 1979 during the government of Luis Herrera Campíns when oil prices increased again. These reached levels never seen before, with an average, during the 5 years of his government period, above 30 dollars per barrel.
Luis Herrera Campíns rescinds the programme for the diversification of the economy that had been initiated, markedly affecting Ciudad Guayana between 1979 and 1983. There was no justification for paralyzing the economy, the Guayana projects, the fundamental projects that were running.
The strategy of economic cooling of the government of Luis Herrera Campíns had a very drastic impact in the Guayana region with the first devaluation of the bolivar after having been maintained for decades at a fixed exchange rate of 4.30 bolivars per dollar.
The Differential Exchange Regime Office (RECADI) was an exchange control system in Venezuela implemented during the government of Luis Herrera Campíns that operated between February 28, 1983 (ten days after Black Friday) and February 10, 1989, to regulate the delivery of foreign currency.
It was established to manage a system of differential exchange rates and capital controls.
On June 15, 1987, in compliance with presidential decree No. 1,544, RECADI ceased operations and was dissolved in 1989, when the differential exchange rate system was abolished.
On February 24, 1989, an investigation was opened by presidential order against RECADI for alleged financial fraud. RECADI constituted a gap in the history of Venezuelan corruption.
Black Friday represents a milestone that changed the economic history of Venezuela. Until that day, the stability and reliability that had characterized the bolivar since the second decade of the 20th century was officially maintained, whose last free price against the dollar was at the fixed value of 4.30 bolivars. Since then, the constant devaluation of the bolivar, complications with the payment of the external debt, the accelerated deterioration of purchasing power and the implementation of RECADI, have made the stability of the Venezuelan currency disappear.
The economy begins to fall rapidly with the contraction of public spending and the paralysis of very important investment projects in the country. Beginning in 1981, the largest capital flight in the history of Latin America began, involving all funds in dollars deposited in
Banco Central de Venezuela, BCV, TWELVE BILLION DOLLARS IN RESERVES ($ 12 BILLION)
Fondo de Inversiones de Venezuela, FIV, NINE BILLION DOLLARS ($ 9 BILLION)
Petróleos de Venezuela, PDVSA, NINE BILLION DOLLARS ($ 9 BILLION)
The public sector had approximately THIRTY BILLION DOLLARS ($ 30 BILLION) in international banking deposited at the end of 1981 with the paralyzed economy falling into a tailspin. The liabilities did not reach 15 billion dollars. They had approximately 2 and a half times the amount of dollars deposited in the bank than what was owed to the bank.
Capital flight was the real origin of the external indebtedness, it was not because of the Guayana companies. There, in the government of Luis Herrera Campíns, the process of the disaster in Venezuela began, which continued in the first two years of the government of Jaime Lusinchi. Even with high oil prices, the same story repeats itself.
There was free currency convertibility, an economic policy disaster that began to liquidate the Venezuelan economy and open all the space to that immense and perverse redistribution of wealth, which represents, at the current value of the dollar, a total amount in the order of 145 billion dollars (US $ 145,000 MM).
- In 1992 the coup was present. Two military coups were frustrated.
- The defenestration of Carlos Andrés Pérez in the years 1992 and 1993.
- The terrible crisis from which Venezuela has not been able to emerge has its origin in the 1990s. Venezuelan democracy was destroyed in the years 1992-1993 after Venezuela, in 1991, achieved the highest level of economic growth in the world, according to the prestigious Fortune Magazine (November-December 1991).
- The platform for sustainable development designed and implemented by the Economist Dr Miguel Rodríguez, and with it, the democracy and the life of most Venezuelans, was destroyed by the vested interests of some political parties, from the right and from the left, together with some high-ranking businessmen, among others, from the media. These, with the fracture of democracy, prepared the scene that led to the loss of the Republic.
- The Guayana Programme was once again severely affected starting in 1993, after the events that led to the ouster of Carlos Andrés Pérez, and later, during the second government of Rafael Caldera.
- In the 1990s, Venezuela’s GDP per capita was half that of Argentina, and 40% less than that of Chile, largely due to the disaster of the economic policies of Rafael Caldera government and the virulent contraction of GDP per capita in that disastrous five-year period of more than 13%. These events, and others that will happen in this decade, accelerate situations that have a negative impact on the economic and social development of Ciudad Guayana and the Nation.
THE UNSUCCESSFUL PRIVATIZATION ATTEMPT OF ALUMINIUM COMPANIES
The privatization process of the Steel Company, SIDOR, was successful. The way in which the privatization process is carried out in the case of the aluminium companies in the years 1996 -1998:
Senior government officials under President Rafael Caldera's administration, tasked with overseeing the privatization process, presented aluminium companies to potential investors as having minimal value. They justified this by emphasizing that selling these aluminium companies was imperative for the country due to the government's inability to finance the substantial investments needed to modernize the entities within the Venezuelan Aluminium Corporation, which were slated for privatization. They also cautioned that these companies would likely cease operations within a year due to their deteriorating condition, making them unattractive for acquisition or donation.
VENEZUELA: El sector del aluminio no tiene quien lo compre
VENEZUELA: Agresiva privatización acompaña plan de ajustes
Ejecutivo ratificó privatización de las empresas del aluminio para I trimestre de 1998
VENEZUELA: Comienza cuenta regresiva para privatizar el aluminio
FRACASA VENTA DE EMPRESAS DE ALUMINIO EN VENEZUELA
PLANT IMPROVEMENTS AND CONSTRUCTION OF THE V-LINE IN VENALUM
The V-Line construction project and installation of all HAL-230 Hydro Technology cells were completed in early 1990s.
In the same way, the modernization project of the cells of complexes I and II was carried out with the following improvements:
- installation of busbar system for magnetic compensation of the cells
- alumina point feeding system
- aluminium fluoride system
- automated cell control system
- cell information and supervision system
- improvements were also made to the auxiliary systems of the cell rooms: cranes, material handling systems, gas treatment system for environmental protection
With the new line of cells, the V-Line, and with the modernization of cells in the Complexes, the Venalum reduction area was updated to the state of the art in reduction technology in the world. Venalum was then preparing to reap the fruits of that investment since that decade. This technology, today, in the year 2022, is efficient, productive and above all profitable, not being far from the state of the art.
Additionally, improvements were made that should accompany the reduction process: in the carbon area to introduce improvements in the anode quality, and in the casting area: furnaces, casting tables for the manufacture of cylinders for extrusion, among other improvements.
The year 1990 also served for the successful start-up, commissioning and performance of the Venezuelan Aluminium Reduction Technology, The V-350 Cell, designed by Venalum engineers, and whose purpose was the design of a CVG Venalum proprietary technology that serve as technology for new aluminium projects, both, for Venalum and for projects with international private investment in Venezuela, an initiative that was supported by the Minister of State and President of the Venezuelan Corporation of Guayana, Engineer Leopoldo Sucre Figarella.
Plaque of recognition of the Minister of State President of the Venezuelan Corporation of Guayana, Engineer Leopoldo Sucre Figarella on the startup of The V-350 Cell on June 9, 1990. Photo: CINTAL
Bauxilum is the company resulting from the merger in March 1994 of the Bauxite Mine, Bauxiven (created in 1979) and the Alumina Plant, Interalumina (created in 1977).
Subsequently, Venalum, Alcasa, Bauxilum and Carbonorca were integrated into the Aluminium Corporation of Venezuela, CAVSA, holder of shares for the sale process of the companies.
In practical results, for the year 2005 CVG Bauxilum closes with a historical production record by producing 1,950,000 tons of alumina that year. Additionally, Los Pijiguaos bauxite mine reached a production figure of 5,927 millions tons or 98.8% of its installed capacity in 2006 (historical production record), demonstrating the optimal conditions of the refiner’s systems, as well as the technical and managerial capacity that Bauxilum had in almost all its history. At least, until that time.
As mentioned above, CVG Venalum was, at that time, recently modernized, and with new technologies incorporated in the construction of the V Line.
If they say that Venalum was so deteriorated, why 10 years after that failed privatization process, the plant still operated at its installed capacity of 430,000 t/year, and with world-class efficiency and productivity results until the year 2008 when the power supply was suspended?
Between January 1998 and December 2008, Venalum’s sales revenues were in the order of 8 billion US$ (8,000 MM US$).
The operating conditions of CVG Venalum, as well as its management and administration, demonstrated the magnitude of the extraordinary business that results from the integrated aluminium industry when it is managed and administered with criteria of excellence.
In 1994, CVG Venalum’s Research and Development Team, simultaneously with its activities, dedicated itself to promoting the aluminium sector as one of the most important options to accompany oil in supporting the national economy, with the organization of the 1st. National Seminar of the Aluminium Sector, Sensa 94.
Publicación Enlace
During the time of the privatization process, 1996-1998, CVG Venalum Research and Development Team focused on structuring a National Aluminium Plan, as well as on promoting the aluminium industry, and the expansion of installed capacity. This work shows an important advance during 1999, and in the year 2000 the Research and Development Centre of CVG Venalum coordinates the representation of the Venezuelan Aluminium Sector in our National Pavilion at EXPO 2000 Hannover in Germany, and in the Aluminium Symposium 2000 in Puerto Ordaz.
In both events, the promotion of the country’s potential for the efficient production of aluminum is formally relaunched, thus reversing the smear campaign that had been maintained on this important link in the national economy. Likewise, the new Project of the V Line of CVG Alcasa, based on the use of National Technology, The V-350 Cell, is presented for the first time, also considering important aspects for the recovery of CVG Alcasa.
The image of the Venezuelan Aluminium Sector was again strengthened in 2003 through participations organized by the Research and Development Centre of CVG Venalum in the Aluminium and Energy Congress in South Africa, and the Congress of the Commodities Research Unit (CRU) in the United States, where the international community of the aluminium business was formally shown the new approach that Venezuela would be giving to the sector. In 2004, Venalum also participated in the TMS 2004 Congress (United States) where the CVG Venalum Expansion Plan, which includes the Sixth and Seventh Lines, is shared with the international community.
In 2004, at the request of Marubeni Corporation, a meeting was held between this corporation, CVG and CVG Venalum to discuss in Puerto Ordaz with the Japan Bank for International Cooperation (JBIC) about the financial proposal tentatively offered by Marubeni Corporation for the construction of the VI Line of CVG Venalum.
Banca japonesa quiere financiar proyectos de CVG
https://www.voltairenet.org/article122748.html
Venezuelan Aluminium Industry, C.A., CVG Venalum. In the background, the design of the capacity expansion project for lines VI and VII. Photo and Design: CINTAL
As it has been shown around the world, well-managed aluminium business never becomes an economic burden on the state. With its income and savings, in the short, medium, and long term, it guarantees the coverage of all its operating, administrative, and financial costs, the payment of taxes to the government, major maintenance and improvements to the plant, as well as the economic muscle to be able to finance with its own resources its projects to expand production capacity, growth, and diversification.
Industria Venezolana de Aluminio, CVG Venalum, still in times of operational, technical, and managerial excellence. Source: La Noticia, CVG Venalum, Año 2, Nº 04, Enero-Febrero de 2003
CONCLUSIONS
The GUAYANA DEVELOPMENT PROGRAMME is clear evidence of Development Planning of extraordinary validity linked and materialized with the benefits of the hydroelectric potential provided by the Caroní River.
This methodological design must be applied to all productive and service sectors: food, agriculture, livestock, fishing, iron and steel, forest-wood, mining products, high technology, among others.
Given our current scenario, and that the program of economic adjustments proposed and undertaken in 1989 by Dr Miguel Rodríguez, which sought to refinance the external debt and prevent Venezuela from going bankrupt, had great success in lowering inflation and promoting growth that reached 9% year-on-year of the GDP in just three years, it is essential, as this is the only successful experience of its kind in the history of the Venezuelan economy, the guidance and leadership of Dr Miguel Rodríguez to structure the Economic Recovery and Transition Plan.
The Vision of the Economist Dr Miguel Rodríguez, of turning Venezuela into a large exporting country of products from different productive and service sectors, should serve as an orientation and guide for the Planning process for Sustainable Development through the introduction of policies that generate the necessary structural change within the oil sector, as well as in other sectors of the economy that could become export sectors.
Important efforts in this sense which should have continued, were made in Guayana in order to produce that great structural change that would definitely turn Venezuela into a country with high economic growth, since it had the resources to do what Japan, South Korea, and China, had been doing.
Thanks to the management of Dr Miguel Rodríguez, the entire Lower Caroní Development Programme was accelerated. All resources were injected into Macagua II. Dr Miguel Rodríguez fully assembled the investment programme for the Caruachi Hydroelectric Power Plant. With the Tocoma Hydroelectric Plant, we would already have at least two reduction plants of more than half a million tons of aluminium per year each, accompanying Venalum and Alcasa in full production, as well as the entire aluminium chain that Venezuela installed.
This was the great opportunity to shield once and for all the Sustainable Development of Venezuela, with these two successful and emblematic figures: Dr Miguel Rodríguez, and Ing Leopoldo Sucre Figarella, forming a team to reaffirm and guarantee the validity and continuity of the GUAYANA DEVELOPMENT PROGRAMME, which gave the country great strength on the threshold of the 21st century.
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