Sunday January 24, 2021
  • Venezuela
  • Mexico
  • Colombia
  • Chile
  • Brazil
  • Argentina
  • Podcast
Versión Español
PanAm Post
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact
No Result
View All Result
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact
No Result
View All Result
PanAm Post
No Result
View All Result

Home » Clinging to Power ‘Socialist’ Maduro turns to US Dollar

Clinging to Power ‘Socialist’ Maduro turns to US Dollar

Sabrina Martín by Sabrina Martín
November 21, 2019

0
0
SHARES
0
VIEWS
FacebookTwitterTelegramWhatsapp
In a television interview, the dictator said that dollarization acts as an “escape valve” that contributes to the “recovery and unfolding” of the productive forces. (EFE)

Spanish – Nicolas Maduro reverses his position and “thanks God for the dollarization in Venezuela.” Twenty years of strict exchange control destroyed Venezuela’s economy, and the country was in a tight spot without foreign exchange income. The regime has finally changed its opinion.

For more than two decades, Chavismo imposed laws, economic and penal sanctions on those who freely accessed the dollar. Besides, its exchange control killed more than 10,200 companies and devalued the Bolivar to its peak. However, Maduro, who had said that the dollar was a currency “without backing,” is now thanking God for the dollarization of the country.

RelatedArticles

Curiosities and Mysteries of the White House (Part 1/2)

Woman Who Accused Biden of Sexual Abuse Says Watching Him Take Office Was a “Nightmare”

January 22, 2021
Curiosities and Mysteries of the White House (Part 1/2)

With Trump out, Maduro Frontman Manages to Get House Arrest in Cape Verde

January 22, 2021

pic.twitter.com/BpeGbXE9rA

— Víctor Amaya (@victoramaya) November 18, 2019

In a television interview, the dictator said that dollarization acts as an “escape valve” that contributes to the “recovery and unfolding” of the productive forces. 

“This process called dollarization can serve for the recovery and unfolding of the country’s productive forces and the functioning of the economy. It is an escape valve; thank God it exists,” he stated.

Venezuelans were repulsed by Maduro’s declarations because they have suffered the onslaught of socialism and its controls. Thousands of Venezuelans have died because of the shortage of food and medicine caused by the exchange control and the obstacles that the industry faces in gaining access to foreign currency to import inputs.

Vídeo año 2015. Maduro: "En Venezuela no habrá dolarización" / Escupiendo para arriba como siempre. pic.twitter.com/8gr6KBJ8Ao

— Watcher (@Watcher_Ven) November 18, 2019

It was the regimes of Hugo Chavez and Nicolas Maduro that destroyed the country’s economy and waged war on the dollar and its commercialization. They created Cadivi, Dicom, cryptocurrencies like Petro, criminal laws against free access to currencies. They talked about access to foreign currencies like the yuan to disguise the devaluation and the strength of the dollar.

After drowning in international sanctions, Chavismo was forced to give in and allow Venezuelans to trade dollars. It is already common in the South American country to charge in U.S. currency for private medical consultations, insurance, tourist services, electrical appliances, real estate, restaurant bills, private education, and even commercial activities such as shopping in the market and transportation.

Maduro said that “all the economies of the world are dollarized” in some way. In the Venezuelan case, the Bolivar currency was stable in the 1970s. The situation is not new. “It was always dollarized (a sector of the Venezuelan economy). What has happened is that it was dollarized with the petrodollars of the State, and now the self-regulation of the economy has appeared,” he said.

We must remember that during these 20 years of socialism, Chavismo tried to “bury its head in the sand” and went so far as to block websites that estimated the price of the dollar on the black market. Chavez and Maduro criminalized those citizens who had free access to foreign currency. In fact, they referred to the currency as “Miami’s criminal and terrorist dollar.”

(AYER) Maduro::" Será arrestado todo aquel comerciante que fije precios usando DOLAR TODAY!. https://t.co/9ClS3gdWpe …..

(HOY) Maduro; " La DOLARIZACION" puede servir a la recuperación y despliegue delas fuerza$ Productiva$ del país y funcionamiento de la economía..????

— B.C.★ (@BELLAYROJiTA) November 18, 2019

However, although the country has become dollarized, the truth is that the majority of Venezuelans do not have access to dollars since salaries are still paid in Bolivars, the most devalued currency in the region.

Currently, according to Dolar Today, the dollar is quoted at 29,794.31 bolivars. The minimum wage in Venezuela is about five dollars a month, while the basic consumption basket is about 300 dollars.

According to Aurelio Concheso, an engineer and PanAm Post columnist, “the exchange liberation is nothing more than a desperate measure” after “hyperinflation reached 1,304,494% in one year, an enormous economic contraction, and a rigorous legal reserve fence that has stifled banks such that no possibility of lending to their clients even in the short term.”

According to him, Venezuela needs more than just dollarization that has been developing in the country. It also requires a massive injection of resources in hard currency (dollars, euros, or yen), private investment, commercial credit lines to importers, and loans from multilateral entities.

Economist Alicia Sepulveda explained to PanAm Post that lifting exchange control would mean letting the exchange rate fluctuate freely and allowing everyone to access and trade foreign exchange.

Over half of all transactions in Venezuela are in dollars

A study carried out by Ecoanalítica and published by Bloomberg revealed that more than half of the retail transactions in American currency in a country where salaries are set in bolivars and the minimum wage is less than five dollars a month.

The dollarization, which has rebounded in the country, is due to the recent relaxation of price controls. However, prices are so high that those who depend on wages in bolivars cannot afford anything.

The crisis in Venezuela has generated a massive migration of Venezuelans facing an unprecedented economic situation. More than four million have left the country because they have not been able to overcome the humanitarian crisis. In fact, the upturn of dollarization is also because thousands of citizens are dependent on remittances sent by their families from abroad.

In a report in the newspaper El Pais, Leonardo Vera, economist, and professor at the Central University, said, “on average, according to studies, Venezuelan families receive about 90 dollars a month in remittances or complementary payments.”

“In January 2019, 100 USD was a sufficient amount of money in Venezuela for one month’s expenses. Today, 100 USD barely lasts five or six days,” the report says.

As long as the situation does not improve in the South American country, Venezuelans will have to continue to face an improvised economy where only those who have access to foreign currency can survive. Those who do cannot access foreign currency live in misery because of the price of food increase in dollars and bolivars with every passing day, diminishing the purchasing power of citizens.

Previous Post

Latin America’s Marxists and the November 21st Strike in Colombia

Next Post

Chileans Protest Against System that Fueled their Prosperity

Sabrina Martín

Sabrina Martín

Sabrina Martín is a Venezuelan journalist, commentator, and editor based in Valencia with experience in corporate communication.

Related Posts

Curiosities and Mysteries of the White House (Part 1/2)
Elections

Woman Who Accused Biden of Sexual Abuse Says Watching Him Take Office Was a “Nightmare”

January 22, 2021
Curiosities and Mysteries of the White House (Part 1/2)
News

With Trump out, Maduro Frontman Manages to Get House Arrest in Cape Verde

January 22, 2021
Which Donald Trump policies Should Joe Biden Continue?
Analysis

Which Donald Trump policies Should Joe Biden Continue?

January 21, 2021
Biden Inauguration: Pandemic Show in a Fortified City
Policy

500 Children’s Lives at Risk due to Hospital Closure in Venezuela

January 20, 2021
Biden Inauguration: Pandemic Show in a Fortified City
Argentina

How the San Juan Earthquake Felt in Buenos Aires Triggered Peronism

January 20, 2021
Kirchnerism, Determined to Destroy the Argentine Real Estate Market
International Relations

Rocky Start to Biden-AMLO Relationship

January 19, 2021
Next Post
Chileans Protest, Prosperity

Chileans Protest Against System that Fueled their Prosperity

Discussion about this post

Subscribe free and never miss another breaking story

  • Venezuela
  • Mexico
  • Colombia
  • Chile
  • Brazil
  • Argentina
  • Podcast

© 2020 PanAm Post - Design & Develop by NEW DREAM GLOBAL CORP. - Privacy policy

No Result
View All Result
  • Home
  • Regions
    • South America
    • North America
    • Central America
    • Caribbean
  • Politics
  • Economics
  • Opinion
  • Podcast
  • Authors
  • Contact

© 2020 PanAm Post - Design & Develop by NEW DREAM GLOBAL CORP. - Privacy policy

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. Privacy and Cookie Policy.