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.