As Venezuela's economy sinks deeper into depression with a fourth consecutive year of recession that accompanies hyperinflation, some members of the ruling socialist party raise their voices to demand reforms.
A closed-door debate is taking place in the country, an all-powerful constituent badembly, the body stacked only with pro-government legislators created in August to put aside the Congress controlled by the opposition, on what to do with the economy. While the last word is from President Nicolás Maduro and his inner circle and most believe that the fault of the country's ills lies with the private sector and the US empire, it is increasingly difficult to ignore calls from the streets to face to generalized misery regardless of the origin.
Perhaps one of the noisiest voices calling for change is Jesus Faria, a former minister of trade and investment who is now a member of the constituent badembly. He has been urging the government to allow a free-floating exchange rate where market forces establish the best price for the bolivar. While he believes that other stronger and subsidized exchange rates must be maintained to protect the poor, it is a strange public stance for a self-proclaimed Marxist economist who was a young university student in East Berlin while still under Soviet rule.
We can not delay changes to the exchange rate policy any longer, "said Faria, 53, in an interview in the center of Caracas." A truly free exchange market must be established, where supply and demand meet to fix the price. "
Currently, Venezuela has an official rate of priority imports of 10 bolivars per dollar, largely reserved for government institutions or close allies stuck in the regime. seen essentially paralyzed he was selling dollars at about 3,345 bolivars, while the price of the floating street has shot up to more than 96,000 from just 4,500 a year ago.
Since he took over his last mentor and predecessor Hugo Chávez in 2014, Maduro resisted calls to devalue official rates or significantly cut subsidies on everything from gasoline to utility rates; and It has become infamous for saying that it is going to make important economic announcements without fulfilling. Although he added the denominations of new bills of up to 100,000 bolivars, he did nothing to solve the problems.
The most significant economic adjustment you have made to save cash for debt payments was to reduce imports of everything from food to medicines and capital goods that have been partly reflected in your approval rating of around of 25 percent. Even so, it has managed to divide the opposition even more and use its influence on all levels of government to increase its power.
After the constituent badembly took oath, Maduro delivered ideas for eight economic laws for discussion and approval, including a bill to promote foreign investment, a tax on the rich and one to open exchange houses around the country. Two have been approved and the others languish in the economy commission.
If Faria got away with it, an earlier market operated by brokerages that closed in 2010 could float again with more controls and balances to act as an escape valve for the economy and allow more imports from the private sector. It would also eliminate the dolartoday.com website as the main reference price of the bolivar. Maduro and his followers blame the website for the country's ills.
Chávez, who installed capital controls in Venezuela in 2003 after surviving a brief coup attempt and a two-month oil strike, was more adept at controlling the exchange rate. and make timely adjustments to reduce costs or weaken the currency. It allowed the brokerage market to flourish and used sales of government bonds to ease currency demand before abruptly shutting down the FX plan and jailing executives for alleged economic crimes amid accelerated inflation and a weaker bolivar.
Although there are still few signs that the market will reopen, a new brokerage regulator was appointed on November 9 and there are still some 50 firms with operating licenses in the country waiting for the opportunity to restart their businesses. The local financial industry continues to lobby for reforms in private conversations with government officials.
Any opening could benefit those who suffer the most, argues a constituent legislator colleague and former pollster Oscar Schemel.
"There is a lot of pressure to propose solutions to the economic crisis that is felt on the streets by leaders of grbadroots organizations, fishermen, workers, professionals and retirees," Schemel said in an interview.
That vision contrasts with other members of the badembly, including Eduardo Piqate, head of the economic commission.
"A debate is going on in the commission on the liberalization of currency controls, and I personally disagree with the idea," he said in an interview.
The presidential press office did not respond to questions about the discussions to relax the controls.
"The government fears that liberalization will lead to the depletion of reserves, which is not true," said Juan Domingo Cordero, who runs Rendivalores, a Caracas-based brokerage. The government needs a transparent foreign exchange transaction system, he said.
Francisco Rodríguez, chief economist at Torino Capital, who made recommendations to the government on economic reforms in recent years, said that while discussions to relax monetary controls are not new, they have become more noisy.