Skip to Navigation

News: Economy

Venezuela Unveils Emergency Economic Decree to Confront Deepening Crisis

Caracas, January 18, 2016 (venezuelanalysis.com) – The Venezuelan government of Nicolas Maduro unveiled an emergency economic decree Friday, which, pending its approval by parliament, would grant the executive sweeping powers to pass legislation aimed at tackling the country’s deep economic crisis. 

While itself containing no new laws, the decree outlines a range of emergency measures proposed by President Maduro in order to “safeguard…access to essential goods and services, mitigate the effects of induced inflation, speculation, the fictitious value of currency, as well as to counteract the war of oil prices.” 

In the face of the dramatic reduction in state revenues triggered by the global collapse of oil prices, the decree authorizes the president to allocate budgetary resources towards promoting “investment in productive infrastructure, industrial and agriculture, as well as the supply of food and other essential products”. 

The executive would also be empowered to allocate additional resources to bolster the country’s social welfare state, including health, education, food, housing, in addition to the social missions.

Another target of the decree is tax evasion, an historic problem in the oil-exporting nation that President Maduro’s new economic team has pledged to take on. 

In order to guarantee access to vital goods such as food and medicines, the decree would enable the executive to temporarily suspend customs requirements and modify financial architecture with the aim of incentivizing specific imports. 

At the same time, the emergency decree authorizes the president to take steps towards jumpstarting national production, including ordering public and private enterprises to “increase production levels”, encouraging foreign investment in the productive sector, as well as incorporating small and medium producers from the communal, state, and private sectors into the mission system.

As a state of exception– which permits the suspension of certain constitutional guarantees with the exception of those pertaining to human rights– the economic emergency decree must be debated and approved by parliament within eight days of its publication. 

For its part, the National Assembly’s new opposition-majority bloc has criticized the decree for its timing and lack of specific details. 

“The president had two years with an enabling law without having made reforms in a deep way, and now they come with this,” complained Julio Borges, leader of the opposition legislative bloc. 

He added that a parliamentary commission will petition the government for further details on the decree and the economic crisis in coming days. 

Borges provoked the ire of many in the socialist-led government over his recently proposed law to privatize the over 1 million homes built under the Great Venezuelan Housing Mission, appearing to confirm the fears of many concerning the neoliberal orientation of the new parliament.

 

Published on Jan 18th 2016 at 9.07pm