Economy
Hugo Chávez has made it clear that exchange controls will be a permanent measure to prevent "the oligarchy from taking the US dollars and depositing them in banks around the world."

However, based on official data, capital flight has continued at a rapid pace no matter exchange controls.

The asset and liability accounts and the item entitled "errors and omissions" of the balance of payments prepared by the Central Bank of Venezuela have enabled Ecoanalítica, a Venezuelan research firm, to determine that in the first half of the year, the outflow of capital stood at USD 8.69 billion, an amount 10 percent higher than the figure reported in the same period of 2009.

How there can be a capital flight of such an extent amidst an exchange control process?

Basically, the government sells dollar-denominated bonds that companies and individuals buy in Venezuelan bolivars and later sell abroad to get US dollars that fuel their accounts.

However, in the first half of the year, the Central Bank of Venezuela (BCV) only sold bonds amounting to USD 1 billion. In May the government closed brokerage houses and restricted the parallel foreign exchange market.

"It is true that the BCV issued USD 1 billion bonds, but there is not official information for the rest of the outflow of capital," Asdrúbal Oliveros, a director of Ecoanalítica, said.

"This year, the service of both domestic and foreign debt has increased from 4.5 percent of GDP to 7 percent of GDP this year," Oliveros added.

vsalmeron@eluniversal.com

Translated by Gerardo Cárdenas

Victor Salmeron
EL UNIVERSAL