Venezuela Declares Economic Emergency

The new economy minister, Luis Salas (c) declares an economic emergency in Venezuela. Photo:

HAVANA TIMES — The Venezuelan government declared a 60-day economic emergency today that will include measures to speed up the import and distribution of food, consumer goods and medicines, announced the newly appointed Economy Minister, Luis Salas, reported dpa.

The measures to be taken should be of a “great magnitude and impact on society,” said Salas. He also noted that provisions may be taken “regarding budgetary resources for the continuity of the missions (social programs), to address the sectors of health, food and housing.”

The emergency is announced the same week that President Nicolas Maduro admitted that the country faces an “economic storm” exacerbated by the fall of the price of Venezuelan oil, which reached US $24, its lowest level in 12 years.

“We call on optimism for the country”, said Salas, who urged maintaining the “confidence in the revolutionary government, which is the people and will protect the people.”

Salas read the decree on state television a few hours before Maduro presents his assessment of his government’s efforts in 2015 to the National Assembly, now with an opposition majority.

The decree indicates that measures will be taken to tackle tax evasion, as well as accelerate import and distribution of food, consumer goods and medicines.

It will also require an increase in the production of state enterprises to ensure basic supplies.

“All measures necessary will be taken to ensure access to food and medicine. The measures are aimed at guaranteeing the well-being of the family,” he added.

Salas said the decree will be valid for 60 days, which may be extended for another 60.

The economy has been a fall during 2015 estimated between six and nine percent of GDP with inflation of over 250 percent, exacerbated by the collapse in the price of oil.

The year 2016 began with the same manifestations of shortages of products and inflation of last year, with long lines of shoppers looking for scarce goods.

Some economists note that the government should urgently increase the price of gasoline, which in Venezuela is the cheapest in the world at around US $0.01 a liter, with an annual subsidy of more than $10 billion dollars. Another need cited is a modified currency exchange control, which after 12 years of operation works with three official rates.

President Maduro said this week he will reactivate his efforts with partners in the Organization of Petroleum Exporting Countries (OPEC) to find a strategy to revive prices, an effort that did not bring results in 2015.

4 thoughts on “Venezuela Declares Economic Emergency

  • January 17, 2016 at 11:05 am

    Surprise! Venezuela is the world’s most miserable country (according to Steve Hanki, Professor of Applied Economics at The Johns Hopkins University). He has just released an annualized inflation estimate for the quarter that ended September 2015. The current implied annual inflation rate in Venezuela is 392%. That’s almost three times higher than the latest official estimate! Venezuela’s notoriously incompetent central bank is producing lying statistics – just like the Soviets used to fabricate. In the Soviet days

  • January 16, 2016 at 3:15 pm

    I hope for the Venezuelan people that there will be light at the end of this long dark tunnel but I don’t see this ending well.

  • January 16, 2016 at 10:14 am

    The solution to an economy that is failing because of centralized control and corruption is not more central decrees. Doing the same thing over and over again expecting a different result is the very definition of insanity. A government with the oil income stream of Venezuela can do much to help it’s people. The corruption and waste is off the charts.

  • January 16, 2016 at 8:57 am

    “…the price of gasoline, which in Venezuela is the cheapest in the world at around US $0.01 a liter, with an annual subsidy of more than $10 billion dollars. ”

    The economic crisis & corruption in Venezuela is a direct consequence of Chavez & Maduro’s policies. The economic insanity of such policies should disqualify Maduro & his cabinet from government. They are incapable of solving the problems Venezuela faces.

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