Economic crisis means tough start to 2018 for Venezuelans

CARACAS: Luis Briceno built up a small bottle branding business over the last 25 years but in the maelstrom of Venezuela’s economic crisis he and many like him are facing closure.

“This New Year is criminal,” he said reflecting the anguish of millions of Venezuelans facing acute shortages sparked by falling oil prices, political unrest and corruption.

Socialist President Nicolas Maduro last week decreed a 40 per cent increase in the minimum wage to try to contain the crisis, after food protests broke out in several cities.

But Briceno believes it will only complicate things for his and other small businesses.

“It seems criminal, because ask the workers themselves if they want the government to increase the minimum wage and they say no, because the next day everything increases.”

Although he tries to avoid thinking about it, the 70-yearold businessman knows that the next few months will be crucial for his small firm, which is already battling a shortage of supplies and a hyperinf lationary spiral that the government said reached 2,616 per cent by the end of December.

To make matters worse, two of his three remaining employees are planning to join the lines of young emigrants fleeing the crisis. Not long ago, his firm used to employ 10.

In the business district of the capital, 53-year-old housewife Raquel Benarroch said she was saddened by the closure of scores of businesses that “will never open again.”

“Before, we saw the bottom of the abyss, now we see things much blacker than that.”

Despite Maduro’s

It seems criminal, because ask the workers themselves if they want the government to increase the minimum wage and they say no, because the next day everything increases. Luis Briceno

announcement of a minimum wage increase, most Venezuelans will still earn only about US$7 a month in salary and food vouchers, based on the commonly used black market exchange rate.

Bricelo said he pays above minimum wage to his employees, but he now has to increase the food voucher quotient, which represents 69 per cent of the total wage. His costs will rise, and so will costs all along the chain of production, he said.

The government says 13 million Venezuelan workers earn the minimum wage or receive the vouchers, out of a workforce of 19.5 million.

Ever-rising inflation means the basic income barely buys a basket of staples like kilo of meat, 30 eggs, a kilo of sugar and a kilo of onions.

“Every time you go shopping you buy less and your budget is limited to food,” 50-yearold tourism employee David Ascanio told AFP as he shopped in a Caracas market.

On Saturday, the government forced more than 200 supermarkets in the capital to lower prices, causing huge lines to form outside as Venezuelans jumped at the chance to stretch their meagre incomes. — AFP