Michael Rowan
Special for El Universal
With an investment of $48 billion in the next 5 years, poverty
can be eliminated in Venezuela. To allow the state to accommodate
this effort, the investment can be sequenced by year as $4,
8, 12, 12, and 12 billion. By 2011, virtually no one in Venezuela
will be poor.
To impact poverty, the investment can be distributed so that
the bottom 10% receive $1,000 per capita per year, the next
poorest 10% receive $900 per capita, and so forth, and the
top 10% receive $100 per capita. This distribution is facilitated
to compensate for the de facto situation in which the top
10% now receive half of national income and the bottom 10%
receive less than 2% in an oil state where all the people
nominally own the natural resources. That de facto situation
continues seven years into a revolution for the poor, which
needs to be reformed to achieve its objective.
What the poor need is money. Trust them to know how to invest
it in housing, health, education and security. The bottom
60% of Venezuelan families now lives on $2 per person per
day or less, which is the international poverty line. The
distribution will triple their income for five years, at which
point it can be adjusted to help those few who remain poor.
The mechanism to facilitate this distribution is an oil fund,
as exists in Alaska, Alberta, Norway and Kazakhstan. Oil funds
distribute benefits directly to populations very efficiently.
If the state taxed 1% of the oil fund distributions, it would
make taxpayers of every family. This would help formalize
the economy along with the personal bank accounts and credit
families would open to receive and invest funds.
The world oil barrel price is likely to exceed $50 for the
next five years. With efficient management, the state can
maintain the public goods in security, health, education,
infrastructure and the missions that are required while dedicating
$48 billion to eliminate poverty once and for all. In fact,
economic growth of $200 billion can be expected as the poor
invest and spend their new income -- $30 billion of which
would return to the state in VAT tax alone. The revolution
against poverty can succeed if the poor are given a fair share
of oil benefits. And the state can easily afford it.
mrowan@cantv.net
Michael Rowan's column is published every Tuesday
