As the economy deteriorates, Venezuelans are increasingly livid with the government and may want Maduro gone [Xinhua]
President Nicolas Maduro suspended the removal of the country’s highest bank note on Saturday after hundreds of Venezuelans jumped the border into Colombia in spite of a government ban.
Maduro is extending the use of the 100 bolivar bill until January 2.
The unrest began on Friday after Maduro ordered the removal of the country’s highest bank note from the market a day prior as well as the closure of border crossings into Colombia and Brazil.
Replacement bills were not made available before the removal – which left traders with useless bank notes and the public cash-strapped ahead of the Christmas season.
The initial move exacerbated the plight of most Venezuelans who have struggled for the past year as low global oil prices saw the country’s fortunes dwindle.
In just the past year, food protests have increased exponentially as prices skyrocketed.
The crime rate has soared with violent robberies taking place including hundreds of looting incidents.
Venezuelans now face multiple daily power outages while businesses shut down and factory output drops significantly.
Even for those who can afford to buy food, staple scarcity has become a major challenge for the government.
Riots broke out in the city of Tachira, and scores of shops were looted by angry protesters.
Meanwhile, Maduro blamed a foreign “sabotage campaign” for the delayed arrival of the new 500, 2,000 and 20,000 bolivar notes, Reuters reported.
An estimated 40 per cent of Venezuelans do not resort to banking services thus relying on cash for their day to day transactions.
Venezuela has been unable to sufficiently import its most basic needs as the drastic drop in oil prices since 2014 has created an enormous financial shortfall. Oil revenues have fallen from nearly $90 billion to about $20 billion as foreign debt has mushroomed to around $140 billion.
Venezuela, like some emerging economies, has based nearly its entire GDP growth on oil exports. With an oil glut now entering its third year, the International Monetary Fund forecasts that inflation in 2016 will hit more than 720 per cent and that the economy will contract by 8 per cent.
Some analysts say the inflation rate could hit as high as 1,700 per cent in 2017.
The crisis has led the government to opening the border crossings with neighboring countries such as Colombia, to allow desperate Venezuelans to cross over and purchase their dietary and medicinal needs that have gone absent from the shelves back home.
It is unclear how the recent border closures will impact Venezuelans in the long run.
The BRICS Post with inputs from Agencies
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