Bishops and experts comment on the nature and implications of the recent currency devaluation
Just days after the introduction of the new economic measures by the government of Nicolás Maduro on 17 August this year, there is a sense of complete confusion and helplessness in Venezuelan society, both among the larger economic concerns and among the ordinary small traders.
The effects of the new measures are by no means clear, nor indeed is their practical implementation. The government has stated that it will cover the extra financial charges on the private sector for the first 90 days, but it doesn’t say how it will do so. It has also promised that it will not apply the new rate of VAT – which has increased from 12% to 16% – to foods and medicines. However the Official Gazette which has been published states that the tax will be a general one and makes no mention of any such exemptions.
What seems certain is that the new measures will lead to a savage increase in inflation, and in consequence to still more poverty and hunger for the ordinary people. The 60-fold increase in the national minimum wage, which has also been announced, is so enormous that it is feared that many companies and small businesses, which are already struggling to survive, will be forced either to close or to sack a large part of their workforce.
So what is the aim of these measures? Is it to destroy the private sector, with the result that the population will have to depend entirely on the support of the State – which comes in different forms today: the new “Sovereign Bolívar” (representing a 96% devaluation of the previous currency), the official State ID card (the “carnet de la patria”) or the “bono de reconversión” (a convertible voucher/cash card enabling every adult possessing this official State ID card to obtain 600 of these newly revalued Bolívars)? As for the ID card, it has been announced that as from December this will be essential for buying gasoline at the pump, the only alternative being to pay international prices (i.e. in dollars) for people whose wages are in bolívars. A few days ago a government spokesman stated: “The middle classes will have to fall into line and obtain the “carnet de la patria”.” – in a clear reference to the state control the government is seeking to exercise over the whole of society.
The opposition has called for protests throughout the country against what they describe as a “paquetazo”, a package of economic measures – an allusion to other disastrous economic measures in the past which were in that instance recommended by the IMF but which caused social upheavals in Venezuela.
Speaking to the international Catholic pastoral charity and pontifical foundation Aid to the Church in Need (ACN), Carlos Larrazábal, who is president of the Federación de Cámaras de Comercios y Producción de Venezuela – the Venezuelan Chamber of Commerce – complained that the measures announced were ill-thought-out, made without consultation and are not being properly communicated to the people. He also warned that the productive sector is at grave risk of collapse, on account of the way in which the measures have been implemented. “We are going through the most serious economic crisis in our history, with hyperinflation, a dramatic fall in production, unemployment, collapse of the petroleum sector, destruction of the productive sector – all of it due to the imposition of a 21st-century socialist economic model.”
Archbishop José Luis Azuaje of Maracaibo, who is also president of the Venezuelan Bishops’ Conference, insisted to ACN that “those in government are isolating themselves from the institutions and the people”. And speaking about the latest measures, he added: “The concept of repression does not merely mean beating up an individual or group of people, it also means depriving them of what they need, of food, of electricity, of the necessary public services for basic human dignity; it means the present playing around with the price of fuel. That is why we said in our most recent communiqué that a spiral of violence has been created; there are elements bent on disrupting the peaceful life of the citizens, making it impossible for them to work and earn their daily bread, with the result that people feel deeply assaulted in their human dignity. It’s as though those in power are living untroubled, in a sort of bubble, while those who have to go out every day and earn their daily bread for the sake of their children and their future are finding themselves thwarted at every verse and turn.”
Also speaking to ACN, Emeritus Archbishop Diego Padrón of Cumaná, who was until recently president of the Venezuelan episcopal conference, explained: “My personal opinion is that these measures have been taken very lightly, which gives the impression that they reflect a reaction without proper consideration of the global situation. They have created great confusion among the population, since it is not easy to understand what the currency devaluation will mean for them. I’m not convinced that these measures are going to improve the situation of the people. The simple changing of numbers is not going to resolve the social issues surrounding food, wages, medicines, employment and security. The general anxiety has increased exponentially in the last five days, during which the sense of uncertainty and frustration have overwhelmed people’s spirits to an incredible extent.”
Emeritus Bishop Ramón Ovidio Pérez Morales of Los Teques, who is the president of the Plenary National Council of the Venezuelan bishops, had this to say about the situation: “These measures are aimed at realising the socialist project and imposing the communist model, cost what it may, even in terms of the suffering of the people. It is destroying every possibility of private enterprise and aimed at the subjection of the people through control of their most basic necessities. The suffering of the population matters little in this almost religious or ideological fanaticism, to which is added incompetence, corruption and the fear of relinquishing power. This is a case of a project aimed at totalitarian control. It is very serious, it is not just a matter of improvisation, or a simple matter of a mistaken direction, it’s like a pincers, closing on people, with everything carefully directed towards the realisation of an ideological Marxist-communist project. In 2007, when constitutional reform was proposed, the bishops explained carefully what it was all about, that it was not something accidental but a plan to impose a project that was already failed, unconstitutional and morally unacceptable. If this is going to cause suffering to the people, it matters little to them; what matters is imposing political control. The exodus of millions of Venezuelans would cause concern to any government, but not to this one – the exodus is part of the logic of the project. And fewer people means less opposition. It is the difference between the bad and the malign.”
Image: Border of Venezuela Colombia in 2018 - Thousands of Venezuelans are leaving the country due to the economic and politicial instability.
For his part Archbishop Ulises Gutiérrez of Bolívar City was unequivocal in his comments on Twitter: “This madness that we are witnessing can only have one outcome: a radical change in the model and its agents. Venezuela cannot take any more.”
Father Saúl Ron Braasch of the Venezuelan bishops’ Justice and Peace Commission is working together with Caritas to mitigate the effects of this grave humanitarian crisis, encouraging solidarity and helping the ever growing number of families who are falling into a situation of total deprivation of food and medicines. At the same time they are steering resources to the six Venezuelan states that have suffered flooding as a result of rivers overflowing, following incessant rainfall in the headwaters of the Orinoco River. The government is refusing to declare an emergency, in exactly the same way that it is also refusing to allow international humanitarian aid to enter the country. “The Church is helping the situation of the people. In the case of Caritas, this includes such things as monitoring levels of malnutrition, for example, and it has cared for such cases in major areas such as Zulia, Miranda, Caracas and Vargas. The Church has been very effective in helping these people, because it has gone beyond merely monitoring and evaluating the level of malnutrition. It has also helped people with the aid goods it has received from outside the country. These are the good aspects. But the negative aspects still outweigh them: the malnutrition is increasing, the endemic problems are growing still worse. The Church cannot take over the role of the State, which should be doing this work. The Church is subsidiary. But the fact is that the Church herself is not getting the help she should be getting!”