Venezuela postpones pull-out of 100 bolivar note after chaos

CARACAS -- Venezuelan President Nicolas Maduro suspended on Saturday the elimination of the country's largest denomination bill, which had sparked cash shortages and nationwide unrest, saying the measure would be postponed until early January.

The surprise pulling of the 100 bolivar note from circulation this week -- before new larger bills were available -- led to vast lines at banks, looting at scores of shops, anti-government protests and at least one death.

Maduro, speaking from the presidential palace, blamed a "sabotage" campaign by enemies abroad for the delayed arrival of three planes carrying the new 500, 2,000 and 20,000 bolivar notes.

"One plane, contracted and paid for by Venezuela, was told in flight to change direction and go to another country," he said, without specifying who had given the orders. "There's another which was not given flyover permission."

The 100 bolivar bills, officially out of use since Thursday and worth just 4 US cents at the black market currency rate, can now be used until January 2, Maduro said.

Many Venezuelans had found themselves without the means to pay for food, gasoline or Christmas preparations in a country already reeling from a profound economic crisis.

About 40 percent of Venezuelans do not have bank accounts, and so cannot use electronic transactions as an alternative to cash.

Adding to the chaos, Venezuela has the world's highest rate of inflation, meaning large bags of cash must be humped around to pay for basic items.

'Stupid and destructive'

In the southern mining town of El Callao, a 14-year-old boy was shot dead during looting on Friday, authorities confirmed. An opposition legislator reported three fatalities.

The Democratic Unity opposition coalition said the socialist leader should resign for incompetence and for inflicting yet more suffering on Venezuelans.

"We have a government utterly stupid and destructive in economic management, whose only goal is to keep power at whatever price," said opposition leader Julio Borges.

Maduro had justified the 100 bolivar note's elimination as a way of strangling mafia and smugglers on the frontier with Colombia. He has also closed border crossings with Colombia and Brazil until January 2.

Earlier on Saturday, about 400 people in western Tachira state jumped fences and defied security personnel to surge into Colombia in search of food and medicines, which are scarce in Venezuela, witnesses said.

In southern Bolivar state, people broke into dozens of shops and warehouses in various towns, witnesses and business leaders said. Authorities declared a curfew in Ciudad Bolivar and the state governor said 135 people had been arrested.

Security forces fired teargas in Venezuela's largest second city, Maracaibo, to stop looters, witnesses said. Some protesters burned 100 bolivar bills.

Addressing thousands of supporters at a rally in Caracas, Maduro blamed the opposition for stirring violence and said some members of the Justice First and Popular Will parties were arrested for colluding with mafias.

The 54-year-old successor to Hugo Chavez, whose popularity has plunged during three years of recession, says domestic political foes supported by the United States are sabotaging the economy to undermine his government.

Critics say it is time for Maduro to go after 18 years of socialist policies have wrecked the economy. But authorities have stymied an opposition push for a referendum to remove him before the next presidential election due in late 2018.

source: interaksyon.com

Venezuela, where a hamburger is officially $170

CARACAS - If a visitor to Venezuela is unfortunate enough to pay for anything with a foreign credit card, the eye-watering cost might suggest they were in a city pricier than Tokyo or Zurich.

A hamburger sold for 1,700 Venezuelan bolivares is $170, or a 69,000-bolivar hotel room is $6,900 a night, based on the official rate of 10 bolivares for $1.

But of course no merchant is pricing at the official rate imposed under currency controls. It's the black market rate of 1,000 bolivares per dollar that's applied.

But for Venezuelans paid in hyperinflation-hit bolivares, and living in an economy relying on mostly imported goods or raw materials, conditions are unthinkably expensive.

Even for the middle class, most of it sliding into poverty, hamburgers and hotels are out-of-reach excesses.

"Everybody is knocked low," Michael Leal, a 34-year-old manager of an eyewear store in Caracas, told AFP. "We can't breathe."

Shuttered stores

In Chacao, a middle-class neighborhood in the capital, office workers lined up outside a nut store to buy the cheapest lunch they could afford. Nearby restaurants were all but empty.

Superficially it looked like the center of any other major Latin American city: skyscrapers, dense traffic, pedestrians in short sleeves bustling along the sidewalks.

But look closely and you can see the economic malaise. Many stores, particularly those that sold electronics, were shuttered.

"It's horrible now," said Marta Gonzalez, the 69-year-old manager of a corner beauty products store.

"Nobody is buying anything really. Just food," she said as a male customer used a debit card to pay for  a couple of razor blades.

A sign above the register said "We don't accept credit cards."

Lines for necessities

An upmarket shopping center nearby boasted a leafy rooftop terrace, a spacious Hard Rock cafe, chain stores for Zara, Swarovski and Armani Exchange.

They were all virtually deserted except for bored sales staff.

Instead a line of around 200 people was waiting patiently in front of a pharmacy.

They didn't know what for, exactly, just that the routine now was to line up for daily deliveries of one subsidized personal hygiene product or another -- toothpaste, for instance -- and grab their rationed amount before it ran out, usually within a couple of minutes.

"We do this every week. And we don't know what we're trying to buy," said Kevin Jaimes, a 21-year-old auto parts salesman waiting with his family.

"What's frustrating is when you get into a gigantic line but they run out before you get any."

The alternative then is to turn to black market merchants who sell goods at grossly inflated rates, often 100 times more than the subsidized price tag.

Jaimes lives with his family of seven, and tries to get by on a monthly salary of 35,000 bolivares -- in reality, around $35.

That sum is too paltry for him to even think about dropping into the cinema upstairs in the center, where tickets are 8,800 bolivares.

If somehow he could, he'd find the same sort of entertainment being shown in American multiplexes: "The Jungle Book," "Captain America: Civil War," and "Angry Birds."

But motion pictures and popcorn, while maybe an enticing diversion, are luxuries Venezuelans these days can ill afford.

source: interaksyon.com