- The Washington Times - Tuesday, February 18, 2003

CARACAS, Venezuela Morela Manganelli is worried about getting medicine for the more than 850 children being treated at the National Foundation of Friends of Children With Cancer.
It's not a lack of funds, said Mrs. Manganelli, the foundation's spokeswoman. It's a lack of U.S. dollars.
President Hugo Chavez suspended dollar sales Jan. 22 to stop a drastic devaluation of the Venezuelan bolivar. Dollar sales will resume in March, once a fixed-rate exchange scheme is hammered out, Mr. Chavez said.
That's of little comfort to Mrs. Manganelli, who says the foundation has a one-month supply of imported medicine left.
"We have to buy [medicine] with dollars, and we're having serious problems with imports because of the new policy. The situation is critical," she said.
Thousands of businesses and thousands more citizens are struggling in this import-dependent nation, which just emerged from a two-month strike against Mr. Chavez that devastated the economy.
Venezuela imports 60 percent of its food, most medicines, essential manufacturing elements and almost all finished goods. Dollars must pay for those imports.
Mr. Chavez imposed the temporary ban to foil what he called an "economic coup," including capital flight and panic dollar buying, precipitated by the strike, which effectively ended in non-oil sectors early this month.
"Not one more dollar for coup plotters," he has said repeatedly, vowing to use his control over money to bankrupt his political enemies, including many in the private sector.
"We have defeated the conspirators, terrorists and coup plotters, but we must remain alert," Mr. Chavez asserted during a speech to hundreds of soldiers and supporters last week.
Foes of his government accuse the president of using the policy to help establish a Cuban-style dictatorship. A government committee appointed by Mr. Chavez will determine who gets dollars and who doesn't.
All dollar-seekers, individuals and businesses alike, must register with the government. Mr. Chavez says priority will be given to those importing food and medicine.
It could take several weeks for the committee to get to work. After that, dollar requests can take up to 45 days to process.
"It's totally strangling the economy," said Jose Pineda, chief economist for the Venezuelan American Chamber of Commerce and Industry, which represents over 1,000 businesses.
"Most businesses have an average of 30 percent of normal inventories and these are falling every day because of the slowdown caused by the import problem," said Mr. Pineda.
Banks are denying access to transfers from abroad until the government issues its regulations. As a result, many businesses that depend on those transfers are laying off workers despite a government ban on firings designed to keep unemployment down.
Venezuela's Labor Ministry has received more than 30,000 complaints from workers laid off since December. Analysts expect the jobless rate to swell enormously from its official quote of 17 percent.
According to the Fedeindustria business chamber, strike fallout and continuing recession will cost 200,000 jobs and close more than 20,000 small- and medium-size businesses by August.
More than half of Venezuelans work in the so-called "informal sector," hawking wares on sidewalks, shining shoes or baking homemade cakes sold to motorists in traffic jams.
At the nonprofit cancer center, Mrs. Manganelli said that patients who miss one month of treatment lose benefits gained over two years. "They start from zero," she said.
All sorts of imported drugs are increasingly scarce, said Douglas Natera, president of the Venezuelan Medical Federation, which represents public-hospital employees.
"There's medicine to last two weeks. If that's used and more supplies don't arrive, hospitals will have to be closed," Mr. Natera said.
Even business travelers will have new rules to live by that will restrict business trips abroad and set limits on how many dollars travelers can take abroad.
"There are no longer any dollars for the happy travelers," Mr. Chavez said. He announced on Feb. 6 that each dollar will cost 1,598 bolivars. That's a break for Venezuelans, as black-market trading puts the dollar as high as 2,500 bolivars.
Inflation is rising because Venezuelans are paying more to buy dollars. Shopkeepers, in turn, charge more for their products.
To brake rising prices, the government slapped price controls on more than 220 basic goods ranging from powdered milk to beef and rice. But Venezuela's consumer protection agency is understaffed and incapable of enforcing the controls.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide