1 de octubre de 1999

Fightning for one's country

Today, debates of the “cross-fire” or “opposite poles” type in which participants each defend opposite or extreme positions are very popular. I recently had the opportunity to be present during one of these debates, live, between to prestigious personalities from a European country. In simplified form, one represented “one trend” (the right), the other represented “the other trend” (the left) and the debate was about “exactly the opposite” (the third way).

The debate, needless to say, was excellent. I enjoyed the intellectual capacities of the debaters, as well as the abilities in the art of debate both of them displayed. Taking advantage of the presence of such distinguished personalities, of the serious academic environment in which the debate took place and the invitation to ask questions, I took it upon myself to ask the following:

Gentlemen: It is well known that in the country you come from, a tax that is often above 800% is levied on the value of gasoline. This type of tax is without a doubt the main reason why our country does not perceive more income from its oil exports. As a citizen of an oil producing country, I ask how, in your opinion, and from the perspective of “exactly the opposite”, the existence of these taxes can be explained in the context of the commercial aperture that is being developed worldwide?

That was the end of “cross-fire” and “opposite poles”. My question immediately fused the opinions of the debaters into one, as if by chemical reaction, and both seemed liberated from any type of academic requirements. Almost in unison both responded something like: Boy! (I am almost 50 years old now, but the response was basically as if I was being treated as “Boy”). You should know that these taxes are imposed in order to reduce gasoline consumption and save the world’s environments from contamination. Additionally, you should be aware of the fact that your country’s main problem is that it is wholly dependant on oil and in this sense it should thank us for any help we can give you in order to reduce this dependence.

This response, the result of a solid defense of national interest over and above any ideological consideration, was for me a true lesson in the policy of economic development. It clearly indicated that any country that cannot rally its people to fight the commercial war, body to body, that globalization has initiated, is utterly and completely lost.

The taxes on oil based products that I have mentioned above are no small matter. According to information obtained for June, courtesy of the Petrol Retailer’s Association of the United Kingdom, a liter of gasoline was sold at the pump for the equivalent of Bs. 661. The distribution of this amount is basically as follows: Bs. 47 (7%) for the distributor, Bs. 68 (11%) for the producer and Bs. 552 (83%) for the British tax authorities.

The taxes apparently have no limit. Governments such as the United Kingdom and Germany have recently formally approved future increases. The Sunday Telegraph of the 29th of August estimates that the gallon of gasoline in England in the year 2010 will be sold at £ 6.90, which is equivalent to Bs. 1,800 per liter. Out of this amount, the producer and the distributor must divide 10% since the taxman intends to keep about 90%.

There is no doubt that should these taxes not exist, Venezuela would today be selling more oil at better prices. There is also no doubt that these taxes represent a major threat to the future of our oil industry. In this sense, the problem should be one of national interest.

Not withstanding the above, there has been an absolute absence of formal protest in Venezuela. What is worse, only a tiny fraction of its citizens are aware of the problem. Worse still, the majority of those that work in the oil industry or that are experts therein, express surprise when confronted with the magnitude of these taxes.

Prices of oil have recently risen. These increases are historically very modest. The European press, however, is full of attacks on the “bad boys” of the OPEC. In The Observer of the 5th of September in England I read that the fault was attributed to “a number of far-flung dictatorships (and the odd democracy)….”, and the fact that OPEC had reduced its production somewhat “alarmed when the price of oil fell to its lowest level in 25 years and their petrol-addicted economies were suffering”.

In Venezuela, we see nothing in the way of response in the sense that the real “petrol-addicted” entities are the fiscal authorities of consumer nations. Our dailies basically limit themselves to reproducing articles that reflect preoccupation with possible inflationary pressures, making the uninformed Venezuelan feel like he is at fault for potential world crises.

It is high time that Venezuela begins to defend itself in a globalized world. For me, the negative effect to the country of having part of the value of our non-renewable assets commandeered by the taxmen in consumer nations is exactly as the same as if guerillas from a neighboring country come across the border and carry away a few barrels. Why do all our patriots have blinders on?

In the Daily Journal, Caracas, October 1, 1999