Venezuelans Skeptical of Maduro’s Latest Measures to Salvage Economy

[Dashinka 24,759]

By

Kejal Vyas,

Maolis Castro and

Juan Forero

Updated Aug. 21, 2018 6:15 p.m. ET

 

CARACAS, Venezuela—When Henrique Rosales got to the automated-teller machine on Tuesday to withdraw Venezuela’s new currency, he found it dispensed a maximum of 10 sovereign bolivars a day, the equivalent of 15 U.S. cents.

“This money is going to disappear out of my hands in no time,” said the 29-year-old waiter, who said he hasn’t seen cash in five months. He hasn’t been able to pay for bus fare and walks several miles a day from his hilltop slum to the seafood eatery where he works. “I’m realizing the government has no plan to get us out of this nightmare. What a disaster.”

Mr. Rosales was among many Venezuelans engulfed in confusion and anger as the government of President Nicolás Maduro rolled out its latest economic overhaul as part of its struggle to keep up with hyperinflation. Mr. Maduro called the measures “a really impressive magical formula” intended to stabilize the economy, including a new, highly devalued currency as well as tax and wage increases.

The sovereign bolivar is almost the same as the old currency, named the strong bolivar, except the new bills are missing five zeros. This was the government’s answer to a broken economic model that has seen prices double every few weeks.

Many shopkeepers said they had no idea how much to charge customers, while others, like construction worker Pablo Delgado, 44, doubted that a country suffering through dire food shortages and faltering public services would soon see a return to stability.

“For me,” he said, “none of this is going to make any difference. Maduro says prices aren’t going to rise. But three days after his announcement, we have seen that they’re rising.”

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In addition to the dizzying currency changes, the government also called for the minimum wage to go up to about $30 a month from the less than $1 a month workers now make—a decision many battered businesses say would bankrupt them. The government said it would help small business make those payments by shelling out more bolivars, while auctioning dollars three times a week to maintain a stable exchange rate.

But there is little in the plan to suggest that the Socialist government—blamed for dismantling a once-wealthy nation—would loosen its grip on the economy. Mr. Maduro was expected to announce new price caps on 50 basic products, extending a system of controls many economists say have choked the private sector. Venezuela is in default of $6 billion in debt, can’t pay to keep up its once-vaunted oil sector and is unable to reliably provide services like water and transportation.

 

Many Venezuelans doubt businesses will receive the relief Mr. Maduro has pledged. The president is pegging the new currency to the petro, an oil-backed cryptocurrency launched by Venezuela this year that doesn’t even circulate. The U.S. Treasury has banned the petro, calling it an effort to defraud investors.

Many economists say Mr. Maduro’s program will only exacerbate inflation that the International Monetary Fund says will top 1,000,000% by year’s end.

 

https://www.wsj.com/articles/venezuelans-skeptical-of-maduros-latest-measures-to-salvage-economy-1534860108

[TBoneTX 46,041]

If Maduro ever were to appear in public, the Army couldn't possibly shoot enough enraged civilians before they lynched him (or strangled him with their bare hands) then and there.

[Dashinka 24,759]

4 hours ago, TBoneTX said:

If Maduro ever were to appear in public, the Army couldn't possibly shoot enough enraged civilians before they lynched him (or strangled him with their bare hands) then and there.

Cuba would just find a replacement.  Gotta keep that Socialist myth alive.

[smilesammich 10,727]

13 minutes ago, Bill & Katya said:

Gotta keep that Socialist myth alive.

you're doing a good job perpetuating that myth right here, high five!

[Dashinka 24,759]

1 hour ago, smilesammich said:

you're doing a good job perpetuating that myth right here, high five!

Where is the proof that socialism, or democratic socialism, or communism works?  Heck, even in Europe there are signs that social democracies are having trouble sustaining their overwelhming costs.

[Voice of Reason 10,298]

1 hour ago, Bill & Katya said:

Where is the proof that socialism, or democratic socialism, or communism works?  Heck, even in Europe there are signs that social democracies are having trouble sustaining their overwelhming costs.

Shhhhh.  Please don't confuse people's fantasies with facts.