Chavez’s Devaluation Leaves Venezuelans Jittery About His “Socialism of the 21st Century”
Ray Walser /
President Hugo Chavez, architect of Latin America’s so-called “Socialism of the 21st Century,” roiled Venezuela’s economic waters with his decision to devalue the Bolivar, the national currency, on January 8.
Under a new exchange regime, the first devaluation in five years, Venezuela will operate a three-tiered exchanges rate system. For the average consumer of imported goods, prices will automatically double. Imported foods and medicines get an exemption. Reuters reports that Venezuelans are responding to Chavez’s edict with panic buying and hoarding.
The Venezuelan economy, despite its massive reserves of petroleum, continues to struggle to invest in its future and sustain populist policies of subsidies, wealth redistribution, government-run enterprises, and foreign giveaways that have become the hallmarks of Chavez’s 11th years as president. The devaluation comes on the heals of ever-more-frequent power outages due to drought and the Chavez regime’s mismanagement of Venezuela’s hydroelectric generation system. (more…)