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Venezuela: Economic Emergency Decree

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In response to the deepening economic crisis in the country, measures are being taken to cope with the effects of recession.

Venezuela: Economic Emergency Decree

Venezuelan President Nicolás Maduro

Last Friday, January 15th, Venezuelan president Nicolás Maduro declared a 60-day nationwide economic emergency due to the increasing crisis that has been affecting the South American nation quite some time.

Maduro’s declaration took place in his much-anticipated annual address to inform the state of the nation to the lawmakers of the National Assembly.

The Venezuelan leader expressed his commitment to continue with the economic statist model started by his predecessor Hugo Chávez in 1999 despite the severe privations and difficulties that the slumps in oil prices and capitalist speculation have originated in the country.

Part of the emergency decree are measures like an increase in taxes and the payment over food imports and welfare services.

Venezuelan government had to adopt the Economic Emergency edict after the disclosure of information of the central bank of the nation (after over a year, since December, 2015) where it was reported that annual inflation hit 141.5% through September and national economy shrank 7.1%.

Last 18 months of crisis in oil market have axed Venezuela’s incomes in about 60%. The country has one the world’s largest proven oil reserves.

Economic analysts have concluded that, given the macroeconomic backdrop, Maduro’s government will hardly be able to continue servicing the external debt the country has. However, Luis Salas, Minister of Economy said: “We want to reaffirm the people’s trust in the revolutionary government”.

Venezuelan government must not only face the effects of world’s crisis (and their own), but also it must cope with MUD (Mesa de la Unidad Democrática) leading opposition in the National Assembly for the first time since 1999 when Hugo Chávez became president of the nation and PSUV (Partido Socialista Unido de Venezuela) started a transformation process in the country characterized for social programs in benefit of the popular classes.

MUD have openly declared their will to oust Nicolás Maduro from power within the next six months despite considering the fact that Maduro’s presidential term ends in 2019.

Opposition forces in the South American nation have continuously been accusing the government of mismanaging the economy of the country leading it to a deep crisis and instability.

Written by Lisbeth Mechter

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