CARACAS, (Reuters) – Half of payments for food, medicine and services in Venezuela’s capital Caracas are made using dollars, according to a report published yesterday by two local consulting firms.
The study from Anova Policy and the Venezuelan Finance Observatory, which gathered data from 354 establishments in Caracas, found that 34.3% of foreign-currency cash payments accounted for 34.3% of purchases made this month in supermarkets, pharmacies, hardware stores, and other businesses, up from 27.5% in December.
Remaining payments in foreign currency were made with cards or via bank transfers, the report said.
The amounts of foreign currency in circulation have risen since the government of President Nicolas Maduro relaxed economic controls in 2019 to help businesses struggling under U.S. sanctions and economic turmoil, with Maduro describing the dollar as an “escape valve.”
The study said transactions in Venezuela’s bolivar continued, even as high inflation eroded its value.
Venezuela’s government is hoping to strengthen the bolivar after inflation slowed late last year and is considering taxing foreign currency transactions, though analysts and business leaders say such tax would not guarantee bolivar’s recovery.
“People will want bolivars when they see that inflation is stable,” said Jose Guerra, an economist and a member of the Finance Observatory.
Venezuela must strengthen separation of powers -E.U. election observers report
CARACAS, (Reuters) – Venezuela must reinforce its separation of powers, especially the independence of its judicial branch, to give more autonomy to its electoral commission and improve the voting process, the European Union’s electoral observation mission said yesterday.
The recommendation is among 23 included in the mission’s final report on regional and local elections that took place last November, the first time in 15 years that EU observers were present at a Venezuela vote.
The judicial independence of courts in Venezuela has been under scrutiny by non-governmental organizations and the Organization of American States, which say even the supreme court operates in coordination with the government of President Nicolas Maduro.
The Supreme Court ordered a re-run of the November contest for governor of Barinas state, disqualifying opposition candidate Freddy Superlano, who looked set to win. Decisions about whether candidates can run are typically made by the electoral commission.
The opposition won the seat in January, in a rescheduled vote that was unobserved by the mission because visas for their staff had already expired.
“In ordering a repeat of the elections in Barinas for Jan. 9, 2022, the (supreme court) interfered in the responsibilities of the (national electoral commission),” the mission’s report said.
Maduro’s government has long faced criticisms from the United States and others that it engages in anti-democratic practices.
The EU – which had not sent electoral observers to Venezuela since 2006 – faced criticism from some opposition figures who said its presence implicitly legitimized the November vote.
“This report neither gives nor takes away legitimacy… it only gives recommendations,” said mission head and Portuguese parliamentarian Isabel Santos in a virtual news conference from Brussels.
Santos said she planned to hand over the report in person but the electoral commission did not respond to her requests to set a date, so the 8-page report was presented virtually to them on Monday.
The Ministry of Information did not immediately respond to a request for comment.