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Banking

Venezuela: Fatherland, socialism or death… and finance

Hugo Chávez is trying to commit Venezuela to 21st century socialism. In the meantime, private financial services are booming. Buoyed by the oil price, Chávez’s policies keep pumping out money. But can left-wing policies and capitalism work an economic miracle in the long term?

EVEN TOURISTS CANNOT escape Venezuela’s propaganda barrage. "Get to know Venezuela, where dreams are reborn" is one of the latest slogans from the People’s Power Ministry for Tourism. Dreams or nightmares? With the consumer price index at more than 20%, the Bolivarian republic has one of the world’s highest inflation rates. Access to foreign currency is limited by the state, so in the parallel market dollars normally cost two to three times the official exchange rate.

The "land of contrasts" cliché does not apply in this context. Venezuela is more like a land of parallels. And it is not only in the foreign exchange market (with all the influence that has) where the country is divided. The chasm extends throughout the nation’s economic and political life. Now, as president Hugo Chávez pushes for the revolution to be deepened, divisions seem to be widening even within the government.

The quirks are evident even as you pick up a local newspaper when boarding the plane in Europe. Half the back page celebrates the anniversary of the failed coup Chávez instigated in February 1992.

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