Venezuela Weekly: Maduro’s Economic Announcements Generate More Concern than Confidence

Nicolás Maduro has announced that the rollout of new currency has been postponed to August 20 and that the Central Bank would be lopping off 5 zeros instead of three. Among other worries are what will happen to those items that currently cost less than Bs. 100,000 such as gasoline and public transportation fares. Maduro said there would be a number of other economic measures, such as a reform of the exchange control law, as well as the use of the “fatherland card” (tarjeta de la patria) for gasoline. Indeed he announced a census of all vehicles in the coming weeks as part of the new economic regime. Experts suggest this is the long anticipated beginning of gasoline rationing.

Maduro’s economic announcements included a couple of flailing attempts to prop-up Venezuela’s currency in the face of falling reserves: backing it with Venezuela’s own crypto coin, the “petro,” as well as with oil reserves that are already committed to a joint venture with Russia. Economist Francisco Rodriguez suggested these measures do not include what Venezuela most needs: a program for macroeconomic stability. The Finance Commission of the National Assembly rejected the measures announced by Maduro saying they did not address the root problem. In particular they argued that 25 days is not enough time for Venezuela’s banks to adjust their systems. They would, however, be in favor of eliminating the exchange control law.

  • The Fourth Congress of the Socialist Party (PSUV) continues on Monday. Over the weekend there were no significant moves, despite some pushes for democratization from below and from the from the edges (here and here), and for a change of government from insiders now on the outside (see here, here and here). However, there is one point on which they all agree: Chavismo should not give up power.
  • A week after returning to the political scene, Henrique Capriles expressed frustration suggesting there would be no future unless the opposition got organized.
  • Opposition member of the National Assembly Jose Manuel Olivares fled to Colombia after repeated threats against his family. Olivares is an oncologist and has participated in protests in Venezuela’s troubled health care sector. His departure means fifteen opposition leaders are now in exile.

Human rights

In an extended interview, nutritionist and food security expert Susana Raffalli suggested that 16 states had crossed the line into humanitarian crisis, with 15% of children in danger of dying from malnutrition. She suggests that “this is a slow-moving emergency. It kills by wearing-down. Families slowly decapitalize and the first to die are the children.” She suggests that it is vital that “non-traditional humanitarian actors” join those efforts that are already underway. Raffalli suggests that Venezuela is not yet close to a famine, in which 30% of children would be in danger of dying from malnutrition. In fact she suggests there has been a slight improvement, most likely as the result of remittances.

  • Three quarters of Venezuela’s newspapers have closed over the past five years, and 40 radio stations were shut down in 2017. The closures have left many regions in the interior without daily newspapers.

Venezuelan migration

  • WOLA published a report on regional responses to migration, with a series of recommendations for Colombia, Brazil and the United States. Chief among these is to honor the spirit of the Cartagena Declaration on Refugees, developing contextualized policies that reflect the uniqueness and urgency of the case.
  • A meeting of academics, Colombian government officials, the United Nations Development Program, the International Migration Organization, USAID, and the Bogotá Chamber of Commerce regarding Venezuelan migration took place in Colombia. They expressed alarm at the financial implications for the Colombian health system, education system, and unemployment rate.
  • Four Venezuelan digital media sites are collaborating with human rights groups Provea (Venezuela) and Dejusticia (Colombia) for a series on Venezuelan migration called Cúcuta: Salida de Emergencia (Cúcuta: Emergency Exit)

Violence

  • Douglas Rico, the Director of Venezuela’s Investigative Police (CICPC) said that in the first semester of 2018, homicide decreased by 27% versus the same period in 2017. The CICPC has not provided independent access to their data, so this drop cannot be confirmed. However, if my analysis from two years ago is correct, economic decline could well lead to a decrease in violence by reducing opportunities for crime and by leading to increasingly organized crime networks.

International Pressure and Engagement

  • A criminal complaint filed in Miami federal court details a $1.2 billion dollar money laundering scheme. The Miami Herald, citing unnamed sources, suggests that Nicolás Maduro is under investigation as part of the criminal network (they say he is Venezuelan Official 2 named here). The money was embezzled from PDVSA through exchange rate fraud and uncovered through a two-year, undercover investigation.

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]