Sunday, February 09, 2014

Maduro and Import Substitution

Toyota has stopped production in Venezuela, citing its inability to get the hard currency necessary to import parts. Nicolás Maduro is angry about it and blames Toyota for not having developed an import substitution plan years ago.

“Pareciera que su único plan a veces, de algunos de estos gerenticos, es dólares, dólares y dólares ¿Y la capacidad productiva para sustituir importaciones? ¿Dónde está la capacidad para crear los productos en Venezuela si ya tienen 10 años?”, preguntó el jefe de Estado.

I agree fully with the idea that Venezuela should be able to produce its own parts, but Maduro has this exactly backwards. Rail at them as you will, but companies are trying to profit and it makes no sense to criticize them for doing so. A much better question is why, after 10 years, Venezuela produces virtually nothing but oil. Where has the Venezuelan state been in terms of nurturing business that can foster backward linkages?

Basically, Maduro is mad that Toyota is not developing Venezuelan nationalism, and perhaps a socialist ethos to forge backward linkages even if it is not profitable. From his perspective, that would be the ideal scenario, but objectively we should never expect Toyota to do so.


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