The â€œfearâ€ being instilled via the private media about Socialism of the 21st Century may have had its effects on rabid opposition types, but investors continue to buy stock in Venezuelan private companies.
One traditional aspect to look at is the stock exchange. This is where confidence in the economic future is most acutely expressed (at least for private businesses). The IBC Index of the Caracas Stock Exchange has just breached the 59,000 point barrier on January 5th 2007. This is an historical high and as with all stock market indices indicates confidence in the future of the economy and the prospects for private industry.
The phenomenon of the huge rises seen in the IBC Index receives no, or scant coverage in the media in Venezuela. For example, when the Dow Jones surpassed its record high of 11,700 and then the 12,000 barrier, headlines were apparent in the privately owned media in Venezuela. When the IBC Index passed its historical high of 31,000 in the run up to the December presidential elections, no mention was made that the index was breaking into new ground. The number was simply reported. Do you ever get the feeling that thereâ€™s something rotten in that State of Denmark, as Shakespeare wrote in â€œHamletâ€?
On December 31st 2002 in the middle of the oil industry sabotage and bossâ€™s lock-out, the IBC Index closed at 8079. Now, just over four years later, it has risen by a whopping 630%. In fact during December 2002, the â€œsmart moneyâ€ was already piling into Venezuelaâ€™s private companies stock and has continued to do so until today. In 2004, 2005 and 2006 the Venezuelan economy grew by over 10% per year. The Country Risk Indicator is at its lowest ever levels since it was invented in 1997, at around 250 points, after it reached more than 1200 points in the aftermath of the 2002-2003 â€œstrikeâ€. Record car sales have been made of over 300,000 units. Mortgage loans are now easier to obtain at a reasonable interest rate. Cement stocks sold out and is now being imported from Uruguay and Cuba. Class â€œEâ€â€™s income â€“ which represents some 16 million Venezuelans of the 27 million population - has risen in real terms by around 400% since 2003. So, itâ€™s all down to oil prices then? Well, no.