Venezuelan President Nicolas Maduro announced a 40 percent increase to the minimum wage from this month, a move that is expected to foment what many economists already consider hyperinflation in the oil-rich, but crisis-stricken nation.
In his televised year-end address, Maduro said the new wage level would protect workers against what he calls Washington’s “economic war” to sabotage socialism.
“Good news!” the former bus driver and union leader said, speaking next to a Venezuelan flag in a midday address.
Most economists say the government is fomenting a vicious cycle in a country already wrestling with the world’s fastest inflation.
To counter those price increases, Maduro has been raising the minimum wage, but quickening inflation coupled with a depreciating bolivar currency has plunged millions into poverty.
Venezuelans are now to earn about 797,510 bolivars a month, factoring in food tickets, or just over US$7 on the widely used black market index. Millions will still be unable to afford three meals a day, while the increase is likely to stoke inflation further.
Prices went up 1,369 percent between January and November last year, according to figures released earlier this month by the opposition-led Congress, which estimated last year’s rate would top 2,000 percent. The Venezuelan government no longer publishes inflation data on a regular basis.
Opposition politicians say Maduro’s refusal to overhaul Venezuela’s state-led economic model and stop excessive money printing will only create more misery this year.
Maduro, however, spent much of his half-hour address blaming others for the country’s woes. He said foreign and local media were spreading “negative propaganda,” while Venezuela was facing “attacks” on its currency and attempts to “sabotage” its oil industry.
A former oil minister excoriated Maduro in a newspaper column on Sunday, accusing the president of behaving like biblical King Herod and plunging the oil-rich nation into economic devastation.
Rafael Ramirez, who was the all-powerful head of the oil ministry and state energy company PDVSA for a decade, has long been a rival of Maduro.
In recent months, Ramirez has grown increasingly critical of Maduro’s handling of a fourth straight year of recession that has triggered malnutrition, widespread food and medicine shortages, the world’s steepest inflation, and a surge in emigration.
A furious Maduro ordered Ramirez to resign as the nation’s UN ambassador in New York last month after an article entitled the “The Storm” was perceived as an attack on his government.
Ramirez fled the US last month for an undisclosed location before Venezuela’s state prosecutor accused him of corruption during the time he commanded the world’s largest crude reserves.
In his sharpest critique to date, Ramirez on Sunday published a 3,000-word column in local newspaper Panorama, comparing Maduro to Herod, the Roman-appointed king of Judea who was accused of mass infanticide.
“You are killing the revolution,” Ramirez wrote, without using Maduro’s name.
“With a mix of arrogance, ignorance, incompetence, cynicism, and a lot of irresponsibility, you have brought our people to an unimaginable level of suffering and humiliation,” he added, also accusing Maduro’s inner circle of corruption and authoritarianism. “If our Commander [late president Hugo Chavez] were with us, standing in line for food, or walking the streets of Caracas seeing children looking through garbage, what would he do? And what would you tell him?”
The government did not respond to a request for comment about the article.
The political opposition says Ramirez is a hypocrite who is also responsible for Venezuela’s economic meltdown. They say he destroyed PDVSA by filling the company’s roster with political loyalists and letting at least US$11 billion go “missing” during his tenure.
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