Maduro initiates plan of action against crime and names new economic team

Venezuelan president restructures currency exchange system but promises no devaluation

Venezuela's President Nicolás Maduro, front left, greets supporters upon his arrival for his annual state-of-the-nation address to the National Assembly.
Venezuela's President Nicolás Maduro, front left, greets supporters upon his arrival for his annual state-of-the-nation address to the National Assembly.Fernando Llano / AP

Venezuelan President Nicolás Maduro announced on Wednesday night unveiled a new government economic team while at the same time rejecting speculation that there would be a currency devaluation this year.

In his state of the union address before the National Assembly, Maduro said that he wanted to strengthen the economic model introduced by his mentor and predecessor, the late Hugo Chávez, and called for a plan of action against the nation’s soaring crime rate.

“We need to rebuild Venezuela from the basic social values and with respect for life,” the 51-year-old leftist president said as part of an eagerly awaited announcement of planned economic measures. Maduro said that the official exchange rate – 6.30 bolivars to the dollar – would remain intact, but announced that the government’s currency control division (Cadivi) would be eliminated. All subsidized dollar exchanges will now be handled by Foreign Trade’s national center, he said.

At the same time, Sicad, another agency created last year to authorize dollar purchases for certain sectors to purchase imports at preferential rates, will be strengthened, but the agency will now offer those rates at almost double the official exchange – 11.3 bolivars to the dollar.

Many analysts considered this move a “devaluation in disguise” because it will limit the number of imports and create more shortages in the near future.

In recent months Venezuela has been plagued by severe food shortages and the lack of basic items, such as toilet paper. The Maduro government has blamed such scarcities on businesses who are siding with the opposition. But many observers believe the lack of dollars has made it difficult for imports to enter the country.

You can be sure that we are going to be inspecting every business, sooner or later"

Maduro named an army general, who took part in the unsuccessful February 4, 1992 coup launched by Chávez against President Carlos Andrés Pérez’s government, as his new finance minister. Rodolfo Marco, who previously held the post of public banks minister, replace Nelson Merentes, who will return to his role as president of Venezuela’s Central Bank (BCV).

Merentes had sparked some concern among Chávez hardliners when he pushed for flexibility in the exchange rates, including the idea of allowing citizens to purchase dollars on the free market and initiating talks with some business owners to help them come up with hard cash for their import purchases. But in the end, the government has opted to maintain its exchange rate restrictions.

“They made a mistake with ‘the great one’ [one of Maduro’s favorite monikers for Chávez.] The Bolivarian revolution was not buried with his death,” the president said, adding that the government will continue to go after businesses that engage in price gouging.

The new Fair Prices Law, which Maduro introduced by decree after he was given temporary special powers by parliament, enforces a maximum 30-percent profit margin for businesses. “You can be sure that we are going to be inspecting everyone, sooner or later,” he said.

Maduro also commissioned his two vice presidents, Héctor Rodríguez and Jorge Arreaza, to present a plan of action by February 4 – the 22nd anniversary of Chávez’s attempted coup – to combat crime in Venezuela.

The move comes just weeks after angry outcries and pleas were made by many sectors following the January 6 murders of a soap opera actress and former beauty queen, Mónica Speer, and her ex-husband, who were both gunned down on the side of a road after a tire had blown out on their vehicle.

Last year, there were more than 24,700 murders in Venezuela, according figures supplied by the NGO Venezuelan Observatory for Violence.

Part of a new anti-crime strategy will be to cut down on violence in television programming. “This year there will be a social pacification plan,” Maduro said.