Private-sector employers shrunk by 14.5% in a year
In December 2012, there were 345,386 employers while in 2011 they amounted to 404,116
Figures published by the National Statistics Institute (INE) show that the number of private employers dropped 14.5% over the past year. Upon comparing these results with those from December 2011, the institute found that 58,730 employers were lost from one year to the other. Twelve months ago, 404,116 companies were present in the job market; now, only 345,386 businesses remain.
The gap is even bigger if the results from December 2012 are compared with those of December 2006, when President Hugo Chávez was elected for a new term. The fall in employer numbers was 41.1% over six years. Back in December 2006, a total of 586,711 private employers existed.
Private-sector representatives do not believe that this situation is due to chance; they claim that it is a result of the "hostile environment" to which businesses are subject. Since 2002, the relationship with the government is nothing short of sterile. For example, in over a decade, no dialogue has been
established between business chamber Fedecámaras and the executive branch of government. Instead, the official sector has striven to discredit the business organization.
In addition, price controls and exchange-rate restrictions enervate business competitiveness. If that were not enough, other factors further the damage, such as expropriations, tax assessments, and fines against private initiatives, all of which ultimately weaken investment and lead to less jobs.
Some experts on the job market believe that this situation partly explains why informal employment has not fallen below 40% even though the National Statistics Institute claims that "the evolution of employment continues to head toward consolidation of economic activities that generate more jobs," in referring to growth in the formal employment sector over the past 14 years.
According to the official entity, 12.9 million people held jobs last December. From that amount, 58% was employed by the formal sector while 42% was involved in the informal sector of the economy.
This means that, despite all efforts, 5,428,791 people do not have stable jobs, a trend that has numerically remained constant over recent years. The National Institute of Statistics attributes this situation to a significant portion of the informal sector using modern technology and meeting social employment standards. It also notes that this sector now has the possibility of adhering to the social-security program.
The private sector has stressed to the government the need to assess policies as a whole. The official sector has publicly acknowledged the role of the private sector in the country's development. Nevertheless, words have not turned into action, and nothing seems to evidence changes in relations between both sides.
Translated by Félix Rojas Alva
Cristian Fonseca, a businessman in La Candelaria district downtown Caracas, was doing the accounts in his small shop office on Sunday December 21, 2008. The Christmas shopping season kept him working late hours into the night. It was around 11 p.m. and his phone rang. A friend broke the bad news to him over the telephone.