The second reconversion in a decade came into force this Monday and the highest denomination banknote, 500 sovereign bolivars (50 million strong bolivars) pays for about $7 at the official rate. Yesterday, all official spokespeople forgot to mention the bolivar’s huge depreciation, tax increases and how the colossal wage hike will only be sustainable by printing many more bolivars, because, without international financing and with declining oil production, there’s no way to get the necessary dollars to revitalize what they’ve already destroyed. The withdrawal cap for ATMs was 10 sovereign bolivars (one million strong bolivars) right when the black market dollar is worth eleven million times more than it did when Hugo Chávez came to power in January 1999, at Bs.F 0.547 or 547 old, plain bolivars.
Cuando Chavez llegó al poder, el $ estaba a 0.547 BsF (547 de los viejos). Cuando Maduro llegó estaba a 26 BsF: 48 veces más caro. Ahora Maduro devaluó a 6.000.000, 231.000 veces mas caro que como lo encontró y 11.000.000 de veces más caro q cuando llegó Chávez. https://t.co/YklQGXLok5
— Ricardo Hausmann (@ricardo_hausman) August 20, 2018
The underground backing
Vice-president Delcy Rodríguez reported on the progress of the first day of reconversion, claiming that there were “400,000 point of sale operations” and the average of 200,000 reconversion bonuses per hour, deposited for carnet de la patria holders. Calling the petro “the protector father of the sovereign bolivar,” she mocked those who estimate that increasing the minimum wage from Bs.F 3,000,000 to Bs.F 180,000,000 will have an impact on inflation and denied it, with the brilliant argument that if Nicolás will finance the payroll of companies for 90 days, prices can’t increase.
Certain that “there can’t be any excuses for this program to be successful” (sic), Rodríguez spoke of the defeat of induced hyperinflation and the “rioter” dollar and she had the nerve to claim that the dollar is backed by war (encouraged by the tweets of American vice-president Mike Pence,) saying the dollar is “a ghost currency supported by a great war machine,” while the solid bolivar is supported by extra-heavy oil buried underground and without a single oil rig around.
— VTV CANAL 8 (@VTVcanal8) August 20, 2018
According to the IMF, inflation in Venezuela could reach a staggering 1,000,000% this year ALONE. Nicolás Maduro and his regime have driven a once-prosperous country to economic ruin and humanitarian crisis. Read this, from the @WSJ Editorial Board: https://t.co/QTXTfNZ8Qa
— Vice President Mike Pence (@VP) August 20, 2018
By the way: the government increased the VAT to 16% for all products, not just sumptuary goods as they had claimed even this Sunday.
Carlos Larrazábal, chairman of the Venezuelan Federation of Chambers of Commerce (Fedecámaras), said that the measures announced by Nicolás will increase the economy’s instability: “The announcements create uncertainty, they’re improvised, without consultation and they’re not being properly communicated to the people,” he said, emphasizing that the exponential wage hike could destroy companies’s already weakened equity. For this sector, Nicolás’s plan won’t be able to beat down hyperinflation, create economic growth or recover foreign financing, adding that tethering the bolivar to the petro is a serious mistake, considering the volatility of oil prices. Fedecámaras didn’t support the 24-hour strike called for this Tuesday, saying that there are enough reasons to protest, so they think that “each citizen will make the decision to join that initiative or not.”
Angry because the opposition’s saying that Nicolás’s “recovery” plan will fail, Diosdado Cabello claimed that “there’s not a single voice in the Venezuelan right-wing who can make a proposal.” That’s a lie, but remember, lying is a compulsion. The failures of recent weeks aren’t enough for PSUV, so today they’ll march in support of the plan and also the ANC will hold a session so that Tareck El Aissami presents the proposed laws, to a body with no authority to legislate. He also convened the 4th PSUV Congress so that they present this weekend another block of proposals for the recovery program, before restating that they’re the only guarantee of peace and they “have never left anyone behind.” Thinking that the current uncertainty is natural, he cautioned that “the petro will be issued in a few days,” that he thinks it’s best to wait a little. After defining resellers as “economic assassins,” he threatened that they’ll be merciless with those who increase prices. It was memorable to see him talk about the exodus of Colombian citizens returning to Venezuela.
American oil company ConocoPhilips announced an agreement with PDVSA to recover $2.04 billion after the dispute for the expropriation of a part of their assets: PDVSA accepted to pay $500 million 90 days after the singing of the agreement and the remainder every three months in four years and a half, so Conoco accepted to suspend their legal actions in the International Chamber of Commerce’s International Court of Arbitration. It would fantastic if Nicolás could explain where’s the money to pay Conoco going to come from, amidst default and after all the complaints they’ve made about “blocked accounts.” Meanwhile, Argentine President Mauricio Macri said that possibly he, along with other countries, will request the International Criminal Court to investigate alleged crimes against humanity committed in Venezuela. Macri said that there are more agreements in the region about taking more concrete measures, remarking that Nicolás “hasn’t changed at all, he made a lot of people who thought they could be mediators waste their time,” adding that he’s not very optimistic about our situation in the short term.
The UN demanded respect for the rights of Venezuelans who flee the country and that they’re treated with dignity by host nations. Lawmaker Gaby Arellano asked the region’s governments to activate the protocols that international institutions use for a humanitarian emergency like the one we’re experiencing. From the Colombia-Venezuela border, Arellano emphasized that Venezuelans aren’t migrants but refugees.
— Gaby Arellano (@gabyarellanoVE) August 20, 2018
Horacio García, head of Argentina’s Immigration Department, said that starting September, they’ll implement a new plan for a stricter control on immigrant flows, to regularize the situation of those who enter the country illegally. Sergio Etchegoyen, Brazil’s Institutional Security Minister, said that “closing the border with Venezuela after the incidents that took place during the weekend, is unthinkable and would be illegal,” this before Roraima State authorities filed an urgent request before the Supreme Court asking for the temporary suspension of Venezuelan immigration. OAS chief Luis Almagro said that he requested an urgent meeting of the Permanent Council to discuss the Venezuelan migration crisis.
— Luis Almagro (@Almagro_OEA2015) August 20, 2018
Shortly after, the Colombian government said that this request is an acknowledgement that our migration crisis causes a regional impact and requires a multilateral treatment.
La oportuna solicitud de una reunión urgente del consejo permanente de la OEA, que hace el Secretario General Almagro, es el adecuado reconocimiento de que la crisis migratoria de Venezuela produce un impacto regional y requiere tratamiento multilateral https://t.co/vu8atCK8SW
— Cancillería Colombia (@CancilleriaCol) August 20, 2018
This Monday, lawmaker Juan Requesens was denied the visit of his lawyers again; but according to imposed prosecutor general Saab and Ombudsman Ruíz, due process is respected here.
— Rafaela Requesens (@RRequesens) August 20, 2018
Additionally, the Frente Amplio Venezuela Libre joined the call for a 24-hour strike made by Primero Justicia, Voluntad Popular and Causa Radical for this Tuesday, August 21. We don’t know if the session the National Assembly convened for today will be held after the ANC session announced by Diosdado Cabello. About Almagro’s “scolding” of National Assembly Speaker Omar Barboza, I’ll just say that his position doesn’t give him the authority to determine what to do with the TSJ in exile’s rulings and much less discredit the only legitimate power we have. His notable solidarity with our cause isn’t a Letter of Marque.
Carta al Presidente de la @AsambleaVE @OmarBarbozaDip: La vigencia de los poderes públicos legítimos no puede ser desconocida sino x los dictadores y sus cómplices. Quien en uso de investiduras institucionales elige este camino se transforma en compañero de atropellos #Venezuela pic.twitter.com/JmqjFQzIO5
— Luis Almagro (@Almagro_OEA2015) August 20, 2018