Venezuela’s opposition yesterday said it would not approve President Nicolas Maduro’s “economic emergency” decree in congress as it did not offer solutions for the Opec nation’s increasingly disastrous recession.
Underlying the grave situation in Venezuela - where the oil price plunge has compounded dysfunctional policies - the International Monetary Fund forecast an 8% drop in GDP and 720% inflation this year.
“With this government’s policies, we have no possibility (of resolving the crisis),” Jose Guerra, who heads the opposition-led congressional commission examining Maduro’s decree, told local TV. “It cannot be approved.”
Maduro’s decree, issued a week ago, would give the socialist government wider powers to control the budget, companies and currency.
But the opposition says he already has sufficient powers and insists he the real problem.
The president, who succeeded his mentor Hugo Chavez in 2013, lost control of the National Assembly in a December election due to voter ire over the economic crisis. The opposition coalition has vowed to find a legal way to remove him, via resignation or a referendum, by mid-2016.
Oil and economic ministers were summoned to the assembly on Thursday to discuss the decree, but pulled out due to a dispute over media access. “They fear showing their face to Venezuelans,” Guerra said, adding that the opposition would take legal actions to compel the ministers to appear.
With Venezuelans sick of soaring prices and long lines for scarce products at supermarkets and pharmacies, Maduro blames an “economic war” by his foes, as well as the oil collapse.
Venezuela depends on crude for 96% of hard currency revenues, but its oil barrel has plunged to $24 - the lowest in more than 12 years - compared with an average of $44 in 2015 and $88 in 2014. Imports have plummeted, leading to shortages, but the state has honoured debt payments.
With about $10bn in foreign debt due during 2016, markets are jittery about the possibility of a default, particularly at the back end of the year, when the heaviest payments are due.
The IMF said “longstanding policy distortions and fiscal imbalances” were combining with the oil drop to create an expected 18% fall in output over 2015 and 2016 - the third-sharpest in the world.
“Prices continue to spiral out of control, and we expect inflation to rise to 720% this year, from a world-high inflation of about 275% in 2015,” it added in estimates at the high end of predictions.