Venezuelan gov't prepares to take economic steps
The Cabinet cherishes devaluation of the local currency
"Some adjustments have been proposed; I understand the government will make them and gradually announce them as decisions are made. In this new battle against inflation, the feasibility of an adjustment of prices of goods and services will be assessed," Rodrigo Cabezas, ex Minister of Finance and Speaker of the Latin American Parliament, told Unión Radio.
"Our main task is preserving growth; that is crucial in any decision of economic policy to be made and involving tax, exchange, trade, and price control matters," he added.
Cabezas thinks that devaluation should be used as a tool to make the domestic economy more competitive. "The rest would be resorting to the scheme of the past 30 years concerning devaluation to improve tax revenues with an inflationary impact, as usual."
In any case, the economic cabinet weighs devaluation to increase revenues by getting more bolivars per petrodollar and solve in this way part of the existent unbalance between income and expenses in public accounts, amounting to 16% of the Gross Domestic Product (GDP).
Furthermore, overvaluation would dwindle. In the past couple of years, the government has kept a fixed exchange rate. In the meantime, inflation averages 20%. As a result, the US dollar is very cheap and import is more profitable that domestic production.
They are marching in step to the same tune. There is a coordinated effort to position the idea. The Twitter hashtag #YoSoyVictimaDeLaGuarimba (I'm a victim of "guarimbas", or protest barricades) can be read on all pro-government Twitter accounts, including those of the ruling United Socialist Party of Venezuela (PSUV), the National Assembly's Press Office, the state-run food distribution network PDVAL, state airline Conviasa, the Venezuelan embassies in foreign countries, radio stations and the huge media network responsive to the Government's interests and messages.