Venezuela's Economic Recovery Hinges on Democratic Rebuilding, Experts Say

At the "Transparent and Sustainable Public Finance" forum, held in Madrid and organized by Voces para la Democracia Venezolana, a clear consensus emerged: Venezuela's path to economic recovery is paved with democratic reconstruction. Esteemed economists, including José Manuel Puente of IESA and IE University, and Christi Rangel from Transparencia Venezuela, articulated a fundamental principle: economic revival cannot be divorced from political and institutional rebuilding.

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The country's economic recovery will first come with the reconstruction of democracy.

Puente underscored that the sequence of actions is critical. He argued forcefully that resolving the political conflict and restoring institutional legitimacy must be the absolute first steps. Only then can a program of economic and institutional reforms be implemented to foster growth, curb rampant inflation, and ensure the availability of goods. Without this foundational political stability, he warned, any semblance of well-being for the Venezuelan population remains elusive. This perspective highlights a deep-seated frustration among many Venezuelans and observers who see the current political deadlock as the primary impediment to national progress.

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The country's recovery will depend on democratic reconstruction and a program of economic and institutional reforms that allow for the recovery of growth, reduction of inflation, and normalization of supply.

The forum also shed stark light on Venezuela's dire institutional health. The country's abysmal performance on the 2023 World Budgetary Transparency Index, where it scored zero alongside Yemen and Afghanistan, is a damning indictment of its fiscal governance. The cessation of publishing basic budget documents, audit reports, and central bank data paints a grim picture. As Puente noted, Venezuela needs to "rebuild the budgetary institution from scratch." This lack of transparency is not merely an administrative failure; it fuels corruption and deters the foreign investment crucial for recovery.

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While that does not happen, there will be no well-being for the population.

Furthermore, the issue of Venezuela's staggering debt, estimated between $160 to $180 billion, remains opaque due to the lack of official figures. This financial isolation and the uncertainty surrounding its true debt burden complicate any potential restructuring efforts. From our vantage point at El Nacional, these discussions in Madrid resonate deeply. They reflect the anxieties and hopes of a nation yearning for stability, transparency, and a return to democratic norms as the essential prerequisites for any meaningful economic improvement. The international community's focus often remains on the immediate economic indicators, but for Venezuelans, the restoration of democratic institutions is the non-negotiable first step towards a brighter future.

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The sequence is fundamental.