The "coexistence" of the new and old monetary cone, the subsidy and rationing of gasoline, and the Petro as an accounting unit.
"I prepared this economic recovery plan myself", - Nicolás Maduro
With that phrase we open a debate; How a person who does not have university studies assures that he prepared a plan to recover the economy of the country with the highest inflation in the world, the lowest wages in the continent, a shortage of basic products unique in its history, and a GDP in freefall?
It's a bit weird, but that's Venezuela.
On Monday, the president of Venezuela, released a series of economic announcements, meaningless and that will surely take the country "straight to the precipice". (if it is not already)
These are the ads:
- The "coexistence" of the new and old monetary cone.
- The subsidy and rationing of gasoline.
- The Petro as an accounting unit.
These new economic measures have generated much confusion and fear in Venezuelans,
Maduro's decision to take gasoline at international prices, give a subsidy to fuel for the population that has the census of the country registered, as well as the establishment of a bimonetary system in which the Sovereign Bolivar and the Petro Cryptomeda will coexist, were rejected by analysts and businessmen warning that the measures could accelerate inflation and aggravate the living conditions of the population.
"I think that even for those who know about economics, what Maduro announced yesterday is not very clear. It seems that the economic plan is a combination of what they did in Brazil with the Royal Plan with strong tendencies to Robert Mugabe, because it is certainly talking about two units of accounts such as the Petro and the sovereign bolivar, and on the other hand it is threatening the private sector again that if prices increase, they will regret it. The first thing to do is to stabilize and attack the fiscal deficit, something that Maduro has not made any reference to."- Econ. Luis Oliveros.
Price of gasoline
In relation to the subsidy of gasoline, the State is forcing Venezuelans to register their vehicles in the Carnet de la Patria, to achieve an "indirect rationing."
"I already created a system of direct subsidy of gasoline and all hydrocarbons to the people of Venezuela and to public transport, but (the fuel) has to be placed at the international price so that the smuggling is over. Thank God we have the country's card for these direct subsidy processes. I have approved the direct subsidy to all private, public, cars, vans."- Nicolas Maduro.
According to the Minister of Land Transport, the subsidy will be as it has been selling the issue of the bonds with the national identity card, you register your car and depending on the storage capacity of the State you will deposit one (1) tank per month of gas.
The president wants to place the prices of gasoline at international prices, but it is unknown what those prices will be and if the default conversion rate (DICOM) will increase.
"I believe that the current situation requires an increase in the price of gasoline due to the fiscal issue; However, I think we should also talk about direct subsidies but not tied to political blackmail."- Econ Luis Oliveros.
With what you pay for the liter of fuel you can not buy half a dozen eggs that are worth more than a dollar on the black market.
Recall that the current price of gasoline in Venezuela is the cheapest in the world with a value of USD 0.01 to fill a tank of 52 liters; with the new increase a tank like that could cost USD 40 at the official exchange rate of the Dicom dollar.
The Petro as an accounting unit.
The announcement with less common sense was that the state oil company PDVSA will use the Petro as an accounting unit, the Sovereign Bolivar will be anchored to the Petro and the Central Bank of Venezuela will have to fix the official figure of the operation and anchoring of the Sovereign Bolivar with the Petro, which will be the referential and accounting value for Petróleos de Venezuela (PDVSA).
«Starting next Monday, Venezuela will have a second accounting unit based on the price, the value of Petro. It will be a second accounting unit of the Republic and will begin to operate as a mandatory accounting unit of our oil industry PDVSA. "- Nicolas Maduro
This makes very little sense, because according to the government, the price of the petroleum is equivalent to one barrel of oil, but the White Paper of the petroleum says that the market value will be in Bolivares, that is, the Bolivar is based on something that is supports in the Bolivar. The Bolivar will be supported by something that nobody accepts, something that does not exist.
The "coexistence" of monetary cones.
The president said that both the Bolivar Fuerte currently circulating and the new Sovereign Bolivar, will circulate at the same time, a situation that has already confused the population.
"Here what is going to happen is that the tickets that circulate at present can be used with the new ones. Here the problem is that people have to be very aware of the difference of the tickets. By removing zeros from many of the notes, they will have a decimal value, that will help to exact the prices, but it can generate confusion. "- Nicolás Maduro.
That is to say that from August 20 a person needs to buy a product that costs Bs 5,010,000, which is equivalent to Bs.S 50.10, it can be canceled with a 50 sovereign bolivars bill and a current 10,000 bolivars bill , something confusing for the majority of the population that only received socialist education in the missions or simply did not receive any type of education.
"The current bill of 1,000 bolivars will be 0.01 Bs.S, that of 2,000, 0.02 Bs.S; the 5,000 will be 0.05 Bs.S; the one of 10,000, 0.10 Bs.S; the 20,000, 0.20 Bs.S and the 100,000 bolivars, 1 Bs.S."- Calixto Ortega. President BCV.