Page 11 - Aruba Today
P. 11
WORLD NEWS A11
Friday 19 February 2016
Venezuela taking tiny steps toward fixing economy
HANNAH DREIER year, according to the Ca- A motorcyclist pays about two Bolivars (3 cents of a dollar) after The Maduro administration
Associated Press racas-based consultancy filling his scooter’s tank at a gas station in Caracas, Venezuela. says it is looking for ways
CARACAS, Venezuela (AP) Ecoanalítica. Venezuela’s government is raising gasoline prices sixtyfold, the to work out distortions at
— Venezuela’s President But analysts say a much first increase of any kind in more than 17 years as the country home while aggressively
Nicolas Maduro has an- steeper hike is needed to struggles with an economic collapse. Yet drivers will still be able pushing other oil countries
nounced long-awaited chip away at the country’s to fill their tanks for pennies. to drive up oil prices. On
economic reforms, but budget deficit of around 25 Wednesday, Maduro said
analysts say they’ll barely percent of gross domestic (AP Photo/Fernando Llano) the country had made
have any effect in rescuing product. The new scheme progress toward reaching
the economy. means drivers will pay did nothing to alleviate pay 10 bolivars for gas; it’s an agreement with key al-
The socialist president dimes instead of pennies to my sense of desperation the always waiting in lines lies to freeze production.
raised gasoline prices fill a gas tank, and the fixed and sadness,” 50-year-old and getting up at 4 in the But with $10 billion in bond
and devalued one of the price will continue to be María Quintero said. “We morning to buy a little bit of payments coming due this
oil country’s multiple ex- eroded by raging inflation. don’t care if we have to rice.” year, analysts say there are
change rates Wednesday. Maduro also changed the few paths for Venezuela to
He assured supporters the strongest of Venezuela’s avoid default.
steps don’t amount to a exchange rates, lowering it “Maduro did not explain
dramatic austerity scheme. from 6.3 bolivars per dollar how the state is going to
Analysts agree. They say to 10. That rate is supposed pay its debt, pay for prima-
the modest adjustments to be available only for vi- ry materials, and guaran-
have no hope of bringing tal imports like food and
in the money Venezuela medicine. tee food for the people,”
needs to save its crashing The weakest of the official
economy. rates, which trades at 200 said Luis Vicente León,
“Whatever Maduro does bolivars to the dollar, is still
now, it’s going to be too just a fifth of the black mar- president of the local poll-
little, too late,” said Bruce ket rate, leaving the door
Magid, dean of the inter- open to arbitrage and cor- ing firm Datanalisis. “It’s just
national business school ruption.
at Brandeis University, who The newly ascendant op- impossible that these mea-
previously worked as a position says the problem is
banker in Caracas. that the government itself sures will be able to resolve
Even a recovery in the cannot stop stealing. a problem of this scale.”q
price of oil would probably Opposition leader Jesus
not be enough to save the Torrealba said the mea-
economy at this point, he sures would do nothing to
said. “It buys him more time. stop the opportunities for
But it doesn’t do anything rampant theft created by
to address the underlying Venezuela’s byzantine cur-
structural problems, which rency scheme.
is the country has stopped “This crisis is the result of
producing and exporting years and years of looting
anything,” he said. the public coffers,” he told
Underlining the gravity of reporters. “These new mea-
the situation, the Central sures do nothing to rectify
Bank said Thursday said in- the obscene chasm be-
flation hit 181 percent last tween exchange rates.”
year, and the economy Gas price increased con-
shrank by nearly 6 percent. jure the specter of violence
The International Monetary in Venezuela because of a
Fund predicts inflation will days-long Caracas riot in
top 700 percent by the end 1989 that followed the an-
of the year. nouncement of austerity
Venezuela has been measures including a gas
spending more than $12 bil- hike.
lion a year to subsidize gas- On Thursday, however, mo-
oline. The hike could save torists were calmly waiting
the state oil company the to buy what continues to
equivalent of more than be the world’s cheapest
1 percent of the country’s gas.
gross domestic product this “These announcements
