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WORLD NEWS Monday 20 august 2018

Venezuelans jittery ahead of sudden economic reforms

By SCOTT SMITH production plunging to lev-
Associated Press els last seen in 1947.
CARACAS, Venezuela (AP) “The bolivar’s redenomi-
— Residents across Ven- nation will be like going
ezuela’s capital spent a under the knife of one of
nervous weekend bracing Caracas’ famed plastic
for dramatic measures that surgeons,” Johns Hopkins
President Nicolas Maduro University economist Steve
has announced to res- Hanke wrote on www.
cue a downward-spiraling forbes.com . “Appearanc-
economy, including a es change, but, in reality,
more-than-3,000 percent nothing changes. That’s
hike in the minimum wage. what’s in store for the boli-
The changes start to kick in var: a face-lift.”
Monday with the introduc- Lines on Saturday were lon-
tion of a new currency that ger than normal at a Ca-
lops five zeros off the coun- racas street market, where
try’s fast-depreciating bills. people stocked up due to
Maduro says he’ll also raise uncertainty about what
gasoline prices to interna- will come this week. Many
tional levels — a combina- were frustrated by bank
tion of measures critics say card readers that were
will only make things worse. slow to register or that failed
Opposition leaders seized altogether, forcing some to
on tension among resi- leave their goods walking Butchers sell low quality meat and bones at Las Pulgas market in Maracaibo, Venezuela, Sunday,
dents, calling for a nation- away empty-handed. Aug. 19, 2018.
wide strike and protest “You have to be patient,” Associated Press
Tuesday. They hope to a shop worker selling grains the 100,000-bolivar note, Friday a more-than-3,000 “It’s a chaotic scenario.”
draw masses into the streets told a growing line of cus- equal to less than 3 cents percent leap in the mini- A coalition of opposition
against Maduro’s socialist tomers. Many other stores on the commonly used mum wage, bringing it up leaders and union officials
ruling party — something remained closed, uncer- black market exchange to around $30 at the widely said Sunday they are call-
they’ve failed to do in over tain what prices to set for rate. A cup of coffee cost used black market rate. It’s ing for a strike and protest
a year. their goods. more than 2 million bolivars. unclear when the change on Tuesday.
Banks will close Monday Venezuela was once The new paper bills will will start. “The measures announced
as they prepare to release among Latin America’s have two coins and pa- Adding to confusion, Mad- on Friday are not any eco-
the “sovereign bolivar,” the most prosperous nations, per denominations ranging uro said he wants to peg nomic recovery plan for
new currency printed with holding the world’s largest from 2 up to 500. The low- wages, prices and pen- the country,” opposition
five fewer zeroes in a bid proven oil reserves, but a est represents the buying sions to the petro — a cryp- leader Andres Velasquez
to tame soaring inflation. recent fall in oil prices ac- power of 200,000 current tocurrency announced in said. “On the contrary, they
Maduro’s government says companied by corruption bolivars while the highest February but which has yet represent more hunger,
that in late-September, the and mismanagement un- stands in for 50 million. to start circulating. He said more ruin, more poverty,
world’s cheapest gas will der two decades of social- The old and new currencies one petro would equal more suffering, more pain,
rise to international levels to ist rule have left the econ- will remain in circulation to- $60, with the goal of mov- more inflation, more dete-
curtail rampant smuggling omy in a historic economic gether during a transitional ing toward a single floating rioration of the economy.”
across borders. and political crisis. period. exchange rate in the future Business owners say they
Maduro said Friday that Inflation this year could top The government made tied to the digital currency. fear the sudden wage hike
the minimum wage will also 1 million percent, accord- a similar move in 2008, “The next few days will be would make them unable
soon jump dramatically. ing to economists at the In- when then-President Hugo very confusing for both to pay employees without
Economists say the pack- ternational Monetary Fund. Chavez issued new cur- consumers and the private sharply increasing prices,
age of measures is likely to Inflation has made it diffi- rency that eliminated three sector, especially commer- despite Maduro’s call to
accelerate hyperinflation cult to find paper money. zeros to combat soaring in- cial retailers,” said Asdrubal help small and mid-sized
rather than address its core The largest bill under the flation. Oliveros, director of Cara- businesses for the first three
economic troubles, like oil outgoing cash system was Maduro also announced cas-based Ecoanalitica. months.q