Failed statism in Cuba is gaining ground in Venezuela

Failed statism in Cuba is gaining ground in Venezuela
Economy

Former Cuba's President Fidel Castro admitted on Wednesday that the
system he promoted in his country for decades is not feasible. Castro
said that "the Cuban model doesn't even work for us anymore."

This statement is important for Venezuela, where the government is
implementing a model aimed at reducing dramatically the private sector's
share in the economy, expand the role of the State and, according to
President Hugo Chávez, "bury capitalism."

Based on a report issued by the Central Bank of Venezuela, a comparison
of the results in the second quarter of 2010 with the results in the
same period in 2007, shows that the private GDP dropped by 5 percent.
For its part, public GDP has significantly increased to 25 percent.

Government policies such as seizures of businesses, the establishment of
a state-owned marketing network and the withdrawal of the private sector
in an adverse business climate characterized by government control pave
the way for the expansion of the public sector.

Emeterio Gómez, an economist and professor with the Central University
of Venezuela (UCV), considers that "Chávez adopted Marxism and class
struggle, but it must be noted that although the importance of the State
has grown, it has tried to create alternative forms of ownership, such
as communal ownership and social production enterprises."

Nevertheless, the UCV scholar said that these initiatives usually fail.

http://english.eluniversal.com/2010/09/10/en_eco_esp_failed-statism-in-cu_10A4450653.shtml