Venezuela Weekly: Economic Plan Fuels Domestic Anxiety, ‘National Strike’ Sees Mixed Response

A wide-ranging economic package announced by President Nicolas Maduro began entering into effect on Monday’s bank holiday, and the opposition attempted to capitalize on widespread economic uncertainty by calling on Venezuelans to hold a national strike today.

This comes as the crisis continues to spill over into the rest of the region, with Ecuador and Peru stiffening immigration controls, and Brazil sending additional security forces to its border after an angry mob drove migrants back into Venezuela and set fire to their belongings. The Ecuadorian government has convoked a regional meeting of affected governments for September 17-18, and invited Venezuelan authorities to participate as well.

In a Friday evening announcement broadcast on state television, Maduro announced that he would raise the monthly minimum wage by nearly 6,000 percent (effective September 1), and would peg prices to the government’s beleaguered “Petro” cryptocurrency. To ease the impact of the wage hike, Maduro claimed the government would subsidize wages for small and mid-sized businesses for the first three months of this plan.

These measures are on top of a previously announced monetary overhaul plan that went into effect on Monday (a government-declared bank holiday), which saw a new “Sovereign Bolivar” replace the “Strong Bolivar” with five zeros lopped off from the old currency. They also come on the heels of Maduro’s announced plan to increase gas prices, to be phased in gradually over the next two years. Those who have participated in a govern-run registry and signed up for the “Fatherland Card” (carnet de la patria) would be exempt from these hikes, which has caused analysts and human rights groups like PROVEA to criticize the measure as an effort to promote the card as a method of furthering the ruling PSUV’s political control.

The plan has not been received well by economists. Experts consulted by Efecto Cocuyo note that while it has some elements designed to curb hyperinflation, Maduro’s announcement is unlikely to reverse the country’s economic tailspin. Economist Francisco Rodriguez told the Washington Post: “There are many serious problems with the plan, but I essentially think it will fail because no one believes the government will stop printing money. People will keep raising their prices and the government won’t be able to keep its promises.” The Guardian’s economics editor Larry Elliott writes that the plan seems destined to fail because while it makes a break from a previous currency seen as worthless, this new currency is not credible nor is it likely to be accompanied by a strategy to foster consumer and business confidence, and it is also unlikely that the international outlook for Venezuela’s economy will improve.

Immediately following Maduro’s Friday announcement, sectors of the Venezuelan opposition called for a “national strike” on Tuesday. The plan for the strike was first declared on Saturday by the leaders of the three opposition parties acting independently of the embattled MUD coalition: Primero Justicia (PJ), Voluntad Popular (VP) y La Causa R. It was subsequently endorsed on Monday by the Frente Amplio Venezuela Libre opposition umbrella group of civil society, trade groups, academic sectors, and some dissident Chavistas. However, El Nacional reports that spokespeople expressed concerns that the announced strike was “rushed,” and Frente representative Karen Quintero characterized the strike as  “the beginning of a greater cycle of unity among the Venezuelan people” rather than a turning point in itself. Meanwhile Venezuela’s main business association, the Federation of Chambers of Commerce (Fedecámaras), did not take a position on the national strike, though Fedecámaras President Carlos Larrazábal condemned Maduro’s economic plan as “incoherent” in remarks to the press. The National Council of Commerce and Services (Consecomercio), a major retail industry group, also declined to endorse the strike, instead calling on businesses to hold meetings with their employees to outline plans for how to respond to the government’s minimum wage hike.  Local associations of transportation workers in Caracas also declined to participate in the strike.

Perhaps owing to this discord among opposition sectors, so far the national strike appears to have had lackluster participation. Efecto Cocuyo reports that businesses and stores across Caracas opened their doors and lines for public transportation formed as usual. The news site has published images of traffic circulating and shops open in western Caracas, though workers at some establishments say there are in fact less people making purchases due largely to greater uncertainty. One shop owner in the Mercado Municipal de Quinta Crespo told Efecto Cocuyo that he was unaware the opposition had even called for a strike. Reuters confirms that “Venezuela’s streets were quieter than normal on Tuesday but many businesses remained open.”

International Pressure and Engagement

On Monday, OAS Secretary General Luis Almagro Tweeted a public letter to National Assembly President Omar Barboza in which he criticized the opposition politician for not backing a symbolic sentence issued on August 15 in which the Supreme Court (TSJ) in exile sentenced Maduro to over 18 years in prison on corruption charges.  Almagro, in an attempt to boost the legitimacy of the TSJ in exile, asserted that “the validity of legitimate public powers cannot be ignored except by dictators and their accomplices.” He appeared to be reacting to a public statement made by Barboza in which the legislator questioned the strategy behind the sentence, saying “the problem is not [about] making decisions to make them, but rather to know if we can execute them or not.” Barboza also said the opposition should “take care and be responsible,” because such actions could put the credibility of the National Assembly at risk.

In response to Almagro’s letter, lawmaker Luis Emilio Rondón of Barboza’s Un Nuevo Tiempo party responded by commenting to local press that the opposition “does not receive instructions from any power center of the world,” and that “the interests of the country are above any particular and personal interest.” (UPDATE: Since publication the opposition-controlled National Assembly has approved a resolution in support of the TSJ in exile ruling, and calling on the armed forces to comply with it as well.)

This exchange is just the latest public spat between Almagro and sectors of the opposition. Almagro criticized the MUD for participating in October 2017 regional elections, and in November he attacked the main opposition parties for participating in the negotiations process in the Dominican Republic—before the talks fell through in December.

It’s also worth noting that Barboza is not the only one to question the Panama-based group of jurists’ actions. Others in civil society, like PROVEA’s Marino Alvarado, have questioned the fact that the exile TSJ, ostensibly a civilian court, sentenced Maduro to serve its sentence in the Ramo Verde military prison. The NGO Acceso a la Justicia has also raised concerns about the number of judges that the group has appointed, alleging that the exile TSJ has gone beyond its mandate from the National Assembly. The NGO points out that the legislature only named 13 primary judges and 20 “suplentes,” complementing an additional 19 judges and 12 suplentes already in office. By making decisions on its own accord, the group alleges that the TSJ in exile has assumed powers that don’t correspond to it.

Venezuelan Migration

Last week, in response to domestic pressures, the Peruvian and Ecuadorian governments both announced new restrictions for Venezuelans seeking to enter the country. As of August 18 in Ecuador, and August 25 in Peru, both countries will require Venezuelans to present valid passports at border checkpoints, whereas before they could enter with just a national ID card. The move has received pushback from human rights organizations. Ecuador’s Human Rights Ombudsman has presented a legal challenge to the proposal, alleging that it violates current immigration law, and a judge is due to rule on the issue this Friday. In Peru, the National Coordinator of Human Rights (a coalition of human rights advocacy organizations) has issued a statement condemning the plan, arguing that It stands in contrast to a recent Inter-American Commission resolution.

Meanwhile the situation on the Brazil-Venezuela border has also dominated headlines in recent days, following a riot in which a mass of Brazilians broke up a camp of Venezuelans in the border town of Pacaraima, destroying their belongings and forcing them back across the border. Victims told O Globo that important documents were destroyed in the riot, and that their identification cards and work permits were burnt along with other belongings. In response the government of President Michel Temer has agreed to deploy 120 soldiers from the National Public Security Force and 30 health volunteers to the border, according to Veja. Videos of the incident clearly show military personnel looking on as the riot continues apace, highlighting concerns about the involvement of Brazil’s military in the humanitarian response.

On Tuesday, Ecuador’s government convened a summit of regional governments to better understand the situation and share information on the crisis. Ecuador’s Foreign Ministry will host the summit on September 17-18, and has announced it will invite officials from Argentina, Brasil, Bolivia, Colombia, Costa Rica, Chile, Mexico, Peru, Paraguay, Panama, the Dominican Republic, Uruguay, and Venezuela.

Human Rights

  • In a Sunday night interview on CNN en Español, Argentine President Mauricio Macri claimed that plans to petition the International Criminal Court to investigate crimes against humanity in Venezuela are “in process.” Macri said that he had spoken to the governments of Chile and Colombia about submitting a joint petition, and that the Paraguayan government could back it as well.
  • IPYS Venezuela, Venezuela Inteligente, and the Open Observatory of Network Interference (OONI) have published a new report looking specifically at the issue of media censorship in Venezuela. The report finds that media censorship in thecountry is “pervasive,” and that DNS tampering is the main method of blocking independent websites.
  • Espacio Público published a report that found 161 cases of violations of freedom of expression between January and June 2018. These include: harassment against public workers (mostly from the health sector), censorship linked to the cessation of circulation of printed materials, restrictions by media regulatory agencies, as well as cyber attacks on digital platforms.
  • In addition to the 12 people already in detention (including lawmaker Juan Requesens), authorities arrested 14 others in the last week in connection with the failed assassination attempt against Maduro. These include a National Guard colonel and general.

The goal of Venezuela Weekly is to provide a news digest that is brief yet highlights concrete information. As such most of our links will be to local and regional Spanish-language press. English-language links will be highlighted in bold.

Did I miss something important or get something wrong? Let me know at [email protected]