This Thursday, Economy Vice-President Tareck El Aissami tried to clarify the measures announced this Wednesday by Nicolás. He didn’t succeed. He spoke of a program of economic prosperity claiming that this isn’t “a package meant to enrich a few in detriment of the majority,” but a program to consolidate socialism and to “establish the foundations for the decisive birth of independence and economic sovereignty.” In other words, the measures don’t seek to boost productivity or prosperity, but merely “empower the people and their purchasing capacity,” consolidate protection (control) mechanism on low-income sector through the carnet de la patria and stabilize prices. That’s why he announced that on August 20, “all forms and expression of price re-labeling, boycott and overpricing will be buried.” Regarding the modifications to the Law on Foreign Exchange Crimes, El Aissami spoke of proposing new policies for exchange operators and foreign investors, that would allow them to circulate foreign currency in the country and repatriate their capitals. It was funny to see him talk about the reorganization of the Venezuelan Corporation of Guayana, ruined by chavismo, which now proposes a “rigorous centralized planning.” El Aissami announced they’ve requested banks to increase the cap for digital transactions and promised more announcements for coming weeks.
Between the BCV and Parliament
The Central Bank (BCV) and Petróleos de Venezuela (PDVSA) will study how the BCV will use the Orinoco Oil Strip’s Ayacucho II Block, according to its chairman Calixto Ortega Sánchez: “We’ll study and present options that allow us to monetize this asset on the country’s benefit, acting always in according to our constitutional and legal functions,” said Ortega. Lawmaker José Guerra remarked that according to the Constitution, underground hydrocarbons can’t be used to back any currency nor as guarantee for a financial instrument: “To do that, we’d need to reform the Constitution and the Hydrocarbons Law,” said Guerra. Meanwhile, Rafael Guzmán, head of the National Assembly’s (AN) Finance Committee, cautioned that the only power with the authority to derogate or modify the Law on Foreign Exchange Crimes is Parliament itself. Guzmán said that the measures announced by Nicolás were “supremely irresponsible,” emphasizing the absurdity of tying the bolivar to the petro, “a non-existence and sanctioned cryptoasset.” He insisted that carrying out the exchange reform without stopping the issuance of inorganic money and without a fiscal adjustment “would send the dollar through the roof and continue the tragedy of hyperinflation for Venezuelans.”
Carlos Erick Malpica Flores, nephew of Cilia Flores, was PDVSA’s finance vice-president when the operation to extend a Bs. 7.2 billion loan to Bs. 14 billion, for which the State paid $1.2 billion, was carried out. He was also National Treasurer. While Brazilian government authorities keep denouncing the increase of confirmed measles cases “imported” from Venezuela, María Yánez, director of the Native Peoples Ministry, spoke about an anti-malaria vaccination campaign that took place in Aripao parish, Bolívar state; sadly, that vaccine doesn’t exist! VTV host Miguel Pérez Pirela told Nicolás that criticism wasn’t a fashion and that “the pretenders are those who steal while holding public office.”
Presentador de VTV Miguel Pérez Pirela responde a Maduro: Las críticas no son modas ni shows. Showceros son quienes roban teniendo cargos públicos. pic.twitter.com/ysy4Yl1RiQ
— Gabriel Bastidas (@Gbastidas) July 26, 2018
Freddy Bernal represented the flip side of the coin, saying that he’s always been loyal to the process, to el finado and to Nicolás, so he blamed “the crooked right” for the possibility of being understood as disloyal. The BCV announced that the new currency auction through DICOM will take place this Friday.
#Atención | Convocatoria | Subasta Nº CS-S-024-18
Fecha de subasta: 27/07/2018
Fecha y hora de cierre de la subasta: 26/07/18 – 2:00PM
Fecha de publicación de resultados: 27/07/2018
— Banco Central de Venezuela (@BCV_ORG_VE) July 26, 2018
The fictional trial
The Supreme Tribunal of Justice in exile set the oral and public hearing of the trial against Nicolás for August 2, and it will take place in Bogota, Colombia. On July 19, the justices appointed by the National Assembly who had to flee the country, admitted the holding of the hearing, after Luisa Ortega Díaz filed an Appeal for Revocation against Nicolás for alleged crimes of corruption and money laundering. The TSJ in exile suspended Nicolás from his post as President in May and barred him from running for any political office, a ruling that has been ignored. Likewise, they declared the President’s vacancy because there’s sufficient merit to try him. Later, Ortega Díaz announced on Twitter that she’ll send a letter to the National Assembly to ask them to urged other countries to take measures against Nicolás’s decision “to illegally mortgage Venezuela’s international reserves,” because in her view, “that action materializes the looting of the nation and prolongs the genocide.”
#ANUNCIO Enviaré una comunicación a la @AsambleaVE para que inste a los distintos países a que tomen medidas contra la decisión de Maduro de hipotecar ilegalmente las reservas internacionales de #Venezuela. Esa acción materializa el saqueo a la nación y prolonga el genocidio
— Luisa Ortega Díaz (@lortegadiaz) July 26, 2018
A detail: the looting materialized when she was Prosecutor General and she justified the genocide several times before international instances. We currently have $8.8 billion in international reserves, 90% of which are monetary gold and the rest is foreign currency in cash.
Brief and serious
- As if it worked regularly, Hidrocapital announced that it’ll suspend water supply service for 18 hours (starting this Friday 27) in sectors of the Capital District, Vargas and Miranda, all dependant on the Tuy III System, to carry out maintenance work.
- According to Reporters Without Borders, Venezuela dropped six places in the global press freedom index and now ranks 143rd out of 180 countries studied. This is explained by all the journalists who have been arbitrarily detained, the expelled foreign reporters, trials for slander, the Alfredo Maneiro Corporation’s grip on newsprint, the blocks against digital media outlets and Conatel’s unyielding quest for censorship.
- National Assembly lawmakers marched to Corpoelec headquarters in Maracaibo to demand a better electric service. They demanded Minister Luis Motta Domínguez’s resignation “for his incompetence in trying to solve electric issues in Zulia and the rest of affected states.”
- Tracked down for the kidnapping of a shop owner a few months ago, Hernán López Ortuño (Hernancito) died early yesterday in Artigas. Infamous since 1995 for being involved in the murder of former bigleaguer Gustavo Polidor, a crime for which he was sentenced, but escaped the Catia Prison before that. In 1996, he participated in the Monagas sisters’ kidnapping that ended with two police officers injured and two people dead: one of the hostages and Hernancito’s accomplice. He spent his sentence in the General Penitentiary of Venezuela, where he became a leader (pran) and even studied.
Most economists interviewed yesterday by the media agreed that none of the announcements made by Nicolás and ratified by El Aissami solve the causes of hyperinflation, that the Executive wants to impose this reconversion without a monetary or fiscal policy. Similarly, they agreed that the petro is worthless as backing for anything, that the ANC lacks judicial authority to modify the Law on Foreign Exchange Crimes and that the reconversion can’t be applied in 15 days.
Caracas Chronicles is 100% reader-supported.
We’ve been able to hang on for 21 years in one of the craziest media landscapes in the world. We’ve seen different media outlets in Venezuela (and abroad) closing shop, something we’re looking to avoid at all costs. Your collaboration goes a long way in helping us weather the storm.Donate