Maduro plan to fix inflation stirs fears

CARACAS, VENEZUELA >> With President Nicolas Maduro’s radical new plan to curb runaway inflation poised to come into effect today, Venezuelans braced for what experts say could soon be a deeper plunge into economic chaos for this broken South American nation.

Maduro late Friday outlined a dramatic effort to curb inflation that has been spiralling towards 1,000,000 percent, raising the minimum wage by more than 3,000 percent and officially devaluing the already nearly worthless bolívar by more than 90 percent. He additionally said in a televised address that the currency, which was already scheduled to shed five zeros on Monday, would now be backed by Venezuela’s petro, a virtual currency linked to oil reserves that the government created in February and that experts have called a sham.

But analysts said the plan failed to address the fundamental problems causing inflation — the willy-nilly minting of bolivars, collapsing oil output, and a complete lack of confidence in the government.

Few Venezuelans appear to have faith in the fix, with many expressing broad fears that it may only make the situation worse. In the capital, Caracas, resident rushed to supermarkets and gas stations on a gloomy Sunday, desperate to stock up on basics. Some shop owners — unsure of what to charge their customers — fretted over whether to open their doors next week at all.

The divided opposition called for a national strike on Tuesday, asking businesses to remain closed and people to take to the streets.

In a country in a deep economic crisis, the announcements left people here wondering how much worse the situation could get.

“I don’t understand what Maduro said or what is happening, but everyone says things will get worse,” said Julio Ramirez, a 60-year-old worker in a crowded eastern Caracas supermarket on Sunday. “Tomorrow we will open but I don’t know what is going to happen after.”