Venezuela's socialist government decreed an "economic emergency" on Friday that will expand its powers and published the first data in a year that shows the depth of a recession fuelled by low oil prices and a sputtering state-led model.
The central bank, which has been lambasted by critics of President Nicolas Maduro's government for hiding statistics since the end of 2014, said the South American OPEC nation's economy shrank 4.5 percent in the first nine months last year.
Inflation soared in that period to an annual rate of 141.5 percent, the world's worst.
Venezuela's oil-dependent economy is forecast to perform abysmally again in 2016. Maduro lost control of the National Assembly in a December election due to voter ire over the crisis.
The government's decree, which the opposition-led assembly says it has the power to approve or reject, sets a 60-day "economic emergency" and would give Maduro wider powers to intervene in companies or limit access to currency.
"We are confronting a true storm," Maduro said during his state-of-the-nation address to Congress. "This is not Maduro's storm, as some believe, it is a situation throughout the country that affects every Venezuelan family."
He vowed the country would continue servicing foreign debt despite slipping international reserves, negating growing Wall Street pessimism about a potential default this year.
He also insisted "the time has come" to raise heavily subsidized fuel prices. Economists say doing so is vital to fortifying foreign reserves, but it is a politically costly move that Maduro has avoided despite repeated promises.
National Assembly President Henry Ramos, a longstanding opposition leader, offered a jocular 40-minute response in which he chided Maduro and his policies and laughed off the heckling of Socialist Party lawmakers.
"What angst there is here!" Ramos, 72, said at one point, sticking his tongue out at jeering legislators, during the rare opposition speech broadcast on state television.
WALL STREET GLOOM
Maduro, a former bus driver and foreign minister who was elected to replace Hugo Chavez in 2013, has stuck to his mentor's policies of strict currency and price controls.
With massive shopping lines in Venezuela and widespread shortages of basics from milk to medicines, the government faces mounting pressure to change what critics call a failed model.
Venezuela depends on oil for 96 percent of hard currency revenues. The average price for its basket of oil and refined products fell this week to $24.38, the lowest level in more than 12 years.
"The biggest loser in Latin America of the decline in oil prices is clearly Venezuela. At this point, a credit event in 2016 seems difficult to avoid," Barclays said in a research note.
The heaviest payments in Venezuela's roughly $10 billion foreign debt bill for 2016 come in October and November.
The government blames its woes on the global oil scenario and what it says is economic sabotage by its foes.
"Venezuela is suffering a new generation economic war promoted by web pages which fix the bolivar-dollar relation without any criteria or economic substance," the central bank complained, referring to the Dolar Today website, which publishes a black market currency price to the fury of the government.
The opposition coalition says policy incompetence is responsible for Venezuela's economic mess. It has said it wants to find a constitutional way this year to remove Maduro.
"An emergency economic degree without clear objectives ... is only going to worsen the situation," tweeted local economist Luis Oliveros, a frequent government critic.
According to the central bank, Venezuela's current account deficit was $5.05 billion in the third quarter, hurt by the tumble in prices for its main export.
(Additional reporting by Diego Ore, Eyanir Chinea, Brian Ellsworth and Girish Gupta.
( uk.reuters.com )
Venezuela: A Dictatorship Masquerading as a Democracy
Nicolas Maduro, Venezuela’s president, recently announced
that if the opposition were to gain a majority in the National Assembly
in elections this Sunday, “We would not give up the revolution and … we
would govern with the people in a civil-military union.” To ensure that
no one would accuse him of not being a true democrat, he clarified
that “we would do this with the constitution in hand.” The president
conveniently ignored the small detail that the constitution does not
have any provision for a “civil-military” government, nor does it give
the government the option of disregarding the outcome of an election.
What Maduro did stress,
however, was that if the revolution fails, “there will be a massacre”—a
threat he has repeatedly made throughout the campaign. He usually
follows such threats with reassurances that this violence will not ensue
since it is impossible for opposition candidates to win enough votes
for a legislative majority, which Maduro’s party has enjoyed for the
past 17 years.
Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
Nicolas Maduro, Venezuela’s president, recently announced
that if the opposition were to gain a majority in the National Assembly
in elections this Sunday, “We would not give up the revolution and … we
would govern with the people in a civil-military union.” To ensure that
no one would accuse him of not being a true democrat, he clarified
that “we would do this with the constitution in hand.” The president
conveniently ignored the small detail that the constitution does not
have any provision for a “civil-military” government, nor does it give
the government the option of disregarding the outcome of an election.
What Maduro did stress,
however, was that if the revolution fails, “there will be a massacre”—a
threat he has repeatedly made throughout the campaign. He usually
follows such threats with reassurances that this violence will not ensue
since it is impossible for opposition candidates to win enough votes
for a legislative majority, which Maduro’s party has enjoyed for the
past 17 years.
Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
Nicolas Maduro, Venezuela’s president, recently announced
that if the opposition were to gain a majority in the National Assembly
in elections this Sunday, “We would not give up the revolution and … we
would govern with the people in a civil-military union.” To ensure that
no one would accuse him of not being a true democrat, he clarified
that “we would do this with the constitution in hand.” The president
conveniently ignored the small detail that the constitution does not
have any provision for a “civil-military” government, nor does it give
the government the option of disregarding the outcome of an election.
What Maduro did stress,
however, was that if the revolution fails, “there will be a massacre”—a
threat he has repeatedly made throughout the campaign. He usually
follows such threats with reassurances that this violence will not ensue
since it is impossible for opposition candidates to win enough votes
for a legislative majority, which Maduro’s party has enjoyed for the
past 17 years.
Maduro, in fact, frequently dismisses
the very notion of an opposition victory as, in his cryptic words, a
“negated and transmuted scenario.” His self-assurance is surprising
considering that almost all opinion polls show an overwhelming public rejection of the government in general and the president in particular. So why is Maduro so
Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
Moisés Naím
More from this author...Read more at: http://carnegieendowment.org/2015/12/04/venezuela-dictatorship-masquerading-as-democracy/imt2
