Venezuelan President Nicolás Maduro declared a two-month economic emergency on Friday. The measure grants the executive branch sweeping control over the national budget to finance and implement policies to stimulate the economy.
The order also calls for businesses to increase domestic production of basic goods and seeks greater control of distribution networks, reports the Wall Street Journal.
The move shows the depth of the recession in Venezuela, according to Reuters.
On Friday the Central Bank reported the economy contracted 7.1 percent and annual inflation hit 141.5 percent through September, the world's highest. It was the first data released by the bank in the past two years.
The decree does not list specific policy changes, but seeks to give Maduro the power to bypass the National Assembly on spending matters, explains the New York Times.
But the decree will be reviewed by lawmakers in the opposition-dominated National Assembly this week, who can accept or reject it. Opposition leader and National Assembly President Henry Ramos Allup said members of the president's economic team would be called to Congress.
If the National Assembly doesn't support the decree, Maduro could appeal to the chavista-packed Supreme Court, notes the BBC.
Analysts suggest the National Assembly won't support the decree, which could give Maduro the excuse to blame the body for the coming economic meltdown, writes WOLA expert David Smilde at Venezuelan Politics and Human Rights.
In his Friday state of the union speech before Congress Maduro acknowledged the need for some changes, including raising domestic fuel prices for the first time in 20 years and reform the tax regime. But he affirmed the continuity of the country's statist economic model despite notable difficulties, which he blamed on lower oil revenues and capitalist speculation. He didn't mention any other specific measures to target the economic crisis that has caused widespread shortages across the country.
Venezuela, which depends on oil for 95 percent of its foreign currency, saw its income drop more than 62 percent due to the sharp downturn in oil prices, Maduro said.
The speech ranged from defiant to conciliatory, reports the Guardian. At one point Maduro dared the opposition to privatize public housing, saying they would have to topple him first, but later he called for "national unity" to face the economic crisis.
In a sign of the changed political scene after December's midterm elections in which the opposition won by a landslide, Maduro's three-hour speech was followed by half-hour rebuttal by Ramos Allup, who said the country’s problems were the result of government mismanagement, rather than the so-called economic war the government says is being waged by its opponents.
"President, the model has been wrong, the model is erroneous, and there are the results," he said pointing to the Central Bank figures.
The live broadcast of Ramos Allup's speech was unprecedented media access for an opponent of the country's socialist revolution, reports the Associated Press.
That the speech happened at all, after a potential institutional crisis was averted last week (see last Thursday's post) is noteworthy, even if Maduro's words are not, according to WOLA expert David Smilde at Venezuelan Politics and Human Rights. That, along with Ramos Allup's response is a victory for Venezuelan democracy, he wrote.
Smilde emphasizes certain aspects of Maduro's speech that are worth taking notice of, especially a proposal to create a National Justice, Truth and Peace Commission to investigate the 2014 protests and push forward a peace process.
He also notes the deep race and class divisions that underly the political conflict in Venezuela, represented by Ramos Allup's rejection of a "mixed race" representation of national hero Simón Bolivar.
Today the government launched the National Council of the Productive Economy includes Vice President Aristobulo Isturiz and economic vice president Luis Salas, reports TeleSur. The council will work on finding ways to generate foreign currency income in the face of falling oil prices Maduro said on Friday. He called for structures that would allow varies stages and parts of the industrial and productive processes that currently or previously depended on imports, to be substituted.
The New York Times' new correspondent in Venezuela, Nicholas Casey, has a blog on his first month in Caracas, which gives interesting perspective of life on the ground.
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