Location Venezuela Venezuela

Maduro Reduces Subsidies to Fund Social Programs

In a national address, Maduro announced moves to “regulate the market” and bring the nation’s “criminal” inflation under control.

Venezuelan President Nicolas Maduro reduced subsidies on gasoline in the country to between one and six bolivars a liter, Tuesday, a move that will ensure extra money can be ploughed into the country’s social missions, including education and housing.

The president explained that he was moving the country toward a new system of just prices in order to tackle the nation’s “criminal inflation.”

He added that he had two main priorities when adjusting the price plan: to ensure a fair price, and also the running of state oil company PDVSA.

“I want to ask the people that this system is received and supported,” he said.

The 25% of the population with the highest income consumes nine times more gas than the poorest 25%, according to Ecoanalitica.

Since 1997, Venezuela’s government regulated gasoline prices haven’t budged from 0.098 bolivars (Bs) a liter. That’s less than US$0.02 and easily the cheapest in the world, followed by fellow oil producers Kuwait and Saudi Arabia.

The revelation came as the president announced a new economic plan to overcome the “criminal inflation” that has plagued the country.

In a national address, Maduro explained three strategic moves to “control and regulate the market.”

The first strategy is to “dismantle all the systems and subsystems of economic war at the national, regional and local level.”

Next, the country must “overcome all the functioning mechanisms of the old rentier state,” including weaning the state off its reliance on the oil industry.

Finally, the state must “develop the Bolivarian economic agenda to improve the distributive system.”

“Either we have a distributive system run by mafias and parasites, or we change,” he added.

As part of the new strategy, Maduro outlined 14 “motors” to make the economy more dynamic, including a massive push toward urban agriculture.

These motors, or initiatives to develop and drive the economy forward, are: agroalimentary; pharmaceuticals and health; industry; exportations; communal and social economy; oil; petrochemical; mining; tourism; construction; foresty; military industry; telecommunications and technology; and banking and finance.

Maduro spoke at length about the plan to develop tourist infrastructure in Venezuela, improving hotels and sites to attract international visitors.

“Venezuela is a paradise for tourism. There’s still very little international tourism,” he said, noting that former Cuban president Fidel Castro had been successful in improving Cuba’s tourism industry.

Maduro also emphasized the new importance of foresty and carpentry.

“We are going to have a capacity of producing double the amount of paper needed in Venezuela for books and newspapers, to export and break the dependency on importing,” he said.

The president discussed the economic situation the country is going through and made a range of announcements, promising that Venezuela would get through its difficulties.

One month since the national productivity council was created, Maduro claimed it had been “successful” and he said he would extend it to all the states.

“In parliament the different sectors of the right wing are competing to see who can get rid of Maduro the quickest,” he claimed, noting however that “the whole distribution system has to be recreated from scratch.”

A key difficulty has been the low price of oil, “the lowest in 45 years,” Maduro said.

“Our national income has dropped by an insane amount,” the leader of the oil-dependent country said. He held up a graph that showed income from oil dropping from US$3 billion in January 2014 to US$77 million in January this year.

On Tuesday various oil-producing countries announced they would cap production at January levels.

“It has been a lot of effort to get to Doha and reach an agreement,” Maduro added.

Maduro ultimately attributed three key elements to the current economic problems in the country: economic war waged by the right wing, the drop in oil prices and problems with currency manipulation.


Leave a Reply

Your email address will not be published. Required fields are marked *