Venezuela: Maduros Last Chance

Hunger, hyperinflation and mass exodus: with a radical reform programme, Venezuela's government wants to fight against the collapse of the country. Can this work?

Venezuela: Maduros Last Chance
  • Page 1 — Maduros Last Chance
  • Page 2 — Maduro wants to save, but his announcements are vague
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    In Venezuela re has been a new and quite popular app for a few days: "SouveränenWährungsrechner". The Venezuelan central bank has released program toger with a software company that has developed some patriotischeProdukte, such as "fun race with Venezuelan folk heroes".

    Unfortunately, currency Calculator app may not be very much. You type in how many bolívars you have, strong bolívars, soheißt previous national currency. Then screen shows how many Bolívar Soberanos is worth. Sovereign Bolívar: This is name of NeueWährung in country since this week. From 100,000 strong bolívars becomes so exactly one SouveränerBolívar, one strokes five zeros away. In eurozone, a sovereign bolívar would be well worth a euro cents.

    Five Nullenauf Money bills – that's part of an ambitious economic reform plan that Venezuelan President Nicolás Maduro announced a few days ago. He knocked on it as usual pompous sayings ("Here have no Expertenmitgewirkt, who do not hear call of people!"), and at least: he Hatganz obviously seen that he must Veränderungenvornehmen a few radicals if economy is not completely To collapse.

    Famines, scarcity of many kinds of food, medicines and sogaran drinking water can no longer be discussed with his fleet slogans ("In truth, people are only starving for socialism!"). A mass exodus of well over two million Venezuelans has been deployed, some South American neighbours are already defending mselves and want to close ir borders. The economy is estimated to have shrunk by one-third between 2013 and 2017.

    Maduro's power dwindles despite repression

    So far, hatMaduro protests against this collapse have been crushed by brutal police, intelligence and military violence. Parliament made it close to Schlägertruppsbesetzen, media houses, opposition activists were exiled to prison gestecktund, reports of torture make rounds. But even that, observers in Caracas, president can not go on forever: if economy of formerly prosperous country of land is completely in front of Hundegeht, n at some point he might also have support of military and Seinereigenen Party comrades Lose.

    In a bus in Caracas © Carlos Garcia Rawlins/Reuters

    Now, DieWirtschaftsreform. The five coated zeros are most visible part of Maduro program and y are a classic in combating very hoherInflation. Historically, y are also known from Italy or Brazil, when esdort a very rapid depreciation of money and new banknotes had to be put into circulation all time. All experience says it's no use. If Mannicht also does something about inflation, it goes ungebremstweiter, and many zeros are back soon.

    DieReform, however, temporarily facilitates daily life in Venezuela, because re are still money bills that can be used: In past months, Esnotwendig was able to put several kilos of banknotes on table for a piece of pizza. No man still had time to count this money, and no ATM warausreichend fitted. Barter and, as a secret parallel currency, dollar bills from USA entered Venezuela.

    Some components of Maduro plan do not sound so bad allerdingsfür classically trained economists. In past, economic advisers of Presidents had already announced that inflation should be ignored as a purely western Erfindungund; That rapid loss of value of Bolívar Fuerteein conspiracy of foreign powers or a calculation error unzureichendsozialistischer employees in statistical offices. But now it is to be seen that Maduro and SeineLeute have seen: y must combat causes of Inflationtatsächlich.

    At moment, inflation rate is more than 100,000 percent a year – in is moderating it is a one or two percent comparison. Such a hilarious inflation makes a currency almost useless, because money must be spent Blitzschnell, because it has only for a very short time over head. Under such circumstances, hardly anyone can do business in peace or even plan for long term. Countless entrepreneurs of country have refore given up. In Venezuela, for example, monetary devaluation happens so quickly, because everyone expects country's almost bankrotteRegierung to, as wildly as it is, to raise press in order to contest its own expenditure. That's what she did, too.

    Date Of Update: 25 August 2018, 12:00

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