Entry into Mercosur will change Venezuelan economic structure

Venezuela's full entry into the Southern Common Market (Mercosur) implies challenges, opportunities and changes in the country's economic structure.

A few days before the official adhesion, planned for July 31, authorities are preparing analyses and strategies. Roy Daza, deputy of the Latin American Parliament (Parlatino), believes that this is "a big opportunity" for Venezuela because in the long term, the country will have access to a captive market of almost 400 million people to whom it will supply products made in the country. Besides, Mercosur represents the fourth or fifth world's largest economy.

Daza states that the incorporation to that market "is going to make us rethink about our economy and to solve the current problems of asymmetries and commercial imbalances via-à-vis other countries in the region." Until now, "this government and the previous ones have adopted a stance of obtaining revenues abroad" from oil sales. "And based on that, we define our budgetary system, which will always be a deficit budget because rentier economies are like that; it is part of our economic structure."

The lawmaker states that "being in an economy where oil is 650 times bigger than the other economy (the non-oil economy) is a reality, whether we like it or not. We have to change the economic structure of the country, we ought to."

According to Daza diversification of the Venezuelan economy "is part of the problem, but the main issue is to boost the productive economy and to bring it up to half the level of the rentier economy, at least. That would be a major productive revolution." Daza added that "it implies important investments, technical training and management ability that we do not have. This is the transition from rent-seeking capitalism to a productive Venezuela. The time has come."

Daza declares that another issue will be "the application of the Common External Tariff (CET), which requires some customization. This implies three challenges for our society: universities have to think in Mercosur terms; entrepreneurs have to stop focusing on applying for loans and should make investments because they are going to have guaranteed market access, and our working-class faces some challenges as well."

mleon@eluniversal.com

Translated by Karina Salas