Venezuelan Gov. Denies Economic Debacle
HAVANA TIMES – Venezuela’s government denied Wednesday that the country is facing an economic debacle, describing a New York Times article on the devaluation of the Bolivar as “libel”, DPA reported.
“Despite the false economic debacle the article describes, in the course of recent months Venezuela has made historical strides in social matters which are to be held up as examples for many countries around the world. These include the implementation of a decorous housing plan for the entire population which, in a little over three years, has built nearly a million homes,” a communiqué issued by the Venezuelan Foreign Ministry retorted.
The statement points out that the US newspaper published a note which relies on the “habitual line of libel and uncorroborated information regarding Venezuela, its people and its government.”
It adds that its “delirious lies and decontextualized anecdotes about the country’s economic situation” include a vindictive analysis of the country’s currency, claiming a black market exchange rate of 1 dollar to 800 Bolivars, which contrasts starkly with the lowest exchange rate offered by the regulated exchange mechanism, 6.30 Bolivars.
The statement claims the newspaper offers “ill-intentioned estimates about Venezuela’s exchange rates and quotes alleged interviews dealing with day-to-day situations, such as product purchases and cash withdrawals from ATMs.”
It affirms that the newspaper fails to mention that the parallel exchange rate, which “they assume to be valid, is taken from a webpage (dolartoday.com) which carries out acts of cyber-terrorism from Miami and Cucuta, where the political opposition operates with the aim of provoking Venezuelans and disturbing the economy, and never base any calculation on exchange transactions in Venezuela.”
It adds that the article also fails to mention that the preferential exchange rate of 6.30 Bolivars to one dollar is in place solely for the purchase of prioritized items, such as food and medicines, and that it “has guaranteed proper nutrition and good health for all Venezuelans, an achievement recognized not only by Venezuelan authorities, but also by the United Nations Food and Agriculture Organization (FAO).”
Similarly, the statement makes reference to the government’s continuous raise in wages, decreed by President Maduro, and government plans to ensure the people have “access to essential food products at fair prices.”
The Venezuelan Central Bank ceased to publish official inflation rates, which some independent studies place above 100 percent this year.
Venezuela is Cuba’s most important ally economically, supplying all of the country’s imported oil at a very favorable rate.
The place is an economic waste land. No amount of spin changes the facts on the ground. Maduro social policies and crony capitalism have destroyed the economy.
The officially published inflation rate is 68%, but unofficial estimations form a number of economists peg the rate much higher. Economist Steve Hanke has calculated the Venezuelan inflation rate in August was 808%. It’s probably even hight now, as the fundamental problems have only gotten worse.
There are several reasons for the extremely high inflation rate, which will soon enter hyperinflation before ht end of the year. All of them have to do with gross mismanagement, massive printing and spending of cash, capital flight, and corruption.
As described above “the preferential exchange rate of 6.30 Bolivars to one dollar is in place solely for the purchase of prioritized items, such as food and medicines” …well, that’s the official line. In reality, the preferential exchange rate is there for the friends and supports of the Maduro regime. An importer with connections can get a permit to borrow several hundred thousand US dollars, at the low, low exchange rate of 6.30 Bolivars. Then, he goes to the black market and exchanges these dollars for Bolivars at the highest rates, 200+ Bolivars to the US$. Rinse and repeat. Suddenly, this importer has made millions in profits. The net effect has been to transfer even more wealth out of the country, drive the Bolivar even further down in value and spur even higher inflation.
Yes, Venezuela is experiencing an economic debacle. When it all comes crashing down, Maduro & his cronies will be long gone. The poor will be left to suffer and clean up the mess that the fraud called the “Bolivarian Revolution” has left in it’s wake.