Venezuela’s Attempts at Recovery: The Petro, Gold Bars, and Rabbits
With an inflation rate nearing 500,000 percent, and more than two million citizens fleeing the country, the Venezuelan government may be lacking an effective economic plan, but they certainly don’t lack creativity.
In February, President Maduro’s government had announced the introduction of a new oil-backed cryptocurrency, called the petro, to raise cash during the economic meltdown. Although President Maduro claims to have raised $735 million with the launch of the petro, the nation lacks credibility, and it is difficult to verify whether or not his claims are correct.
According to Coinschedule, more than $20 billion was raised this year through the Initial Coin Offerings (ICO), with the purpose of raising funds to create a new digital asset. If Maduro’s numbers are correct, “the petro’s ICO would have been the fourth largest in the world in 2018.”
In August, the Venezuelan government announced the issuing of the “sovereign bolivar,” a new fiat currency backed by the petro. However, even Maduro’s own parliament calls this illegal, as the petro does not trade, and is rather being used illegally to mortgage the oil reserves in the nation. ICOindex.com, an ICO rating site, labeled the currency as “scam status.”
Back in March, “President Donald Trump issued an executive order banning any transactions within the United States involving any digital currency issued by, for, or on behalf of the government of Venezuela.”
Maduro also recently launched the Savings in Gold program, and stood in front of crowds trying to convince citizens to buy certificates that entitle them to 1.5g or 2.5g gold bars. Venezuela’s minister of industry, Tareck el Aissami, claims that 12 million bolivares soberanos were raised to reduce the government’s fiscal deficit.
The third effort was about seven months ago, when Maduro uploaded a video of himself on Twitter feeding chickens and collecting eggs.
During the video, he says “We can all produce (food). This is urban agriculture.”
“If (First Lady) Cilia and I can do it, why can’t everyone else?”
In early August, the price of a dozen eggs in supermarkets passed 2.6 million bolivars, roughly two weeks of a minimum wage salary.
In 2017, the Venezuelan government created a Rabbit Plan to tackle the country’s food shortages by distributing rabbits to the hungry population. However, the citizens quickly became attached to the animals, defeating the purpose of using them for meat.
According to Fox News, “after Maduro gave rabbits to 15 communities as a pilot program to feed the country, most people decided to keep the animals as pets.”
The agriculture minister, Freddy Bernal, stated that they “need a publicity campaign on radio, TV, in newspapers, in cartoons, everywhere, so that the people understand that rabbits aren’t pets but two and a half kilos of meat.”
However, the country’s constant shortages would even place a burden on rabbit breeding. With many companies exiting the country and skyrocketing prices, rabbit breeders could find it difficult to supply feed, metal wires, and rabbit medicine.
The Venezuelan economy does not seem to be recovering anytime soon, with a hike of 3,000 percent on the minimum wage last month, and the International Monetary Fund (IMF) predicting the hyperinflation to reach one million by the end of this year. Additionally, the country’s oil production is declining at an alarming rate of 50,000 barrels per day, questioning the dependency of the petro once more.