Venezuela Launches Reforms to Tackle Economic War

Venezuela’s president, Nicolas Maduro, announced that in the coming year the country would undergo a major change in economic policies to address the “economic war” being waged against it.

Maduro gave information as part of an end-of-year assessment of his administration at a press conference Tuesday.

Recalling the violent demonstrations encouraged by radical right-wing factions in February demanding the president's “exit” from office, Maduro said that in addition to the loss of 43 people, killed during the violence and damage to public infrastructure, that those so-called “guarimbas” marked the beginning of the most recent phase of the economic war conducted against Venezuela.

The “guarimbas” took place just two months after Maduro’s United Socialist Party won fairly-held local elections.

Referring to the inflation in the country, Maduro said “Inflation is not a neutral number, but is a result of an economic war.” He compared the current situation to 2002, when Venezuela's business confederation and right-wing unions organized a prolonged strike prior to attempting a coup against former President Hugo Chavez.

“This year's destabilization was the most violent attempt to overthrow the Venezuelan government since the coup attempt of 2002,” added Maduro.

The Venezuelan leader said that while the violence was controlled, second half of the year brough on an “escalation of the economic war.”

Maduro suggested that the dramatic drop in oil prices – at least 50 percent in 6 months – is part of a wider attack, primarily toward Russia’s economy, which is also directed at South America´s leading oil producer. The president referenced an interview with U.S. President Barack Obama, when he acknowledged coordinating attempts against Russia's oil-based economy.

Washington in the economic war against Venezuela, as it has done with Cuba or more recently as Barack Obama acknowledged it had run against Russian economy.

“Their goal is to destroy OPEC, destroy oil prices, which will have other collateral effect that will be disastrous for the South, for the world. It is a war,” Maduro claimed.

The Venezuelan president outlined a two-years plan aimed at “changing the economic model,” including three phases of six months, two years, and four years.

Part of immediate reforms announced include the appointment of a board of directors of the Venezuelan state oil company, PDVSA, with “a plan to diversify national and international investments of the oil company.”

Maduro also outlined the 7-point economic policy to be implemented starting Jan. 3, which includes:

1. Optimizing investments in social programs, infrastructure, etc, while stabilizing prices;

2. Maintain and increase investments in the socialist economy;

3. Guaranteeing the necessary resources for the functioning of the economy, especially the provision of foreign currency;

4. Adjust policies in order to better combat smuggling;

5. Building a broad productive alliance including special economic zones;

6. Setting up a new productive model for state and occupied enterprises; and

7. Activating the new central agency for the planning and re-activating of the economy.

These measures will be overseen by a team appointed by the new state agency, who will implement the measures including:

1. The implementation of a new, unified exchange system;

2. The implementation of a fiscal reform;

3. The optimization of public investment;

4. The strengthening of foreign currency reserves & creation of a reserve investment system in bolivars (Venezuela's currency);

5. The application of a system of fair prices;

6. The control of the excess liquidity, in order to help stabilize prices;

7. The implementation of special economic zones.