J essica Dos Santos examines how the economic reforms announced one year ago have not exactly worked in bringing about "growth" and "prosperity."
It was August 17, 2018, a Friday evening, when President Nicola's Maduro announced a minimum wage increase to 1.800 Sovereign Bolivars, a sixty fold increase. The measure would come alongside an announced monetary reconversion.
As most other waged mortals, I was emboldened, and with my masterful "1+1 equals 2" reasoning I decided to spend all the money I had in my bank account and especially in my credit cards: "No worries, with my next paycheck I'll cover it all," I thought.
However, the next morning, when I went out, an endless number of shops were either closed or displaying their shiniest signs: "There's no chicken," "Electronic payment not working," etc. It seemed like nobody was willing to sell their products at current prices before having to restock at "reconverted" prices, which would be much higher.
Nevertheless, the major chains took the risk. That's how, for the first time in many years, I had the "luxury" of buying shampoo, soap, toothpaste, etc, in one single shopping trip. One way or another, for a brief moment, "normality" (as I used to know it, of course) had returned to my life.
In fact, that following Monday, when the reconversion came into effect, I went to the ATM and there was cash available. And the amounts per withdrawal allowed to pay for a whole week's worth of public transportation tickets, not just one afternoon!
Furthermore, that very Friday we found out that the measures were part of a plan that sounded so bombastic it brought us hope: "Economic Recovery, Growth and Prosperity Program."
The program had nine (later ten) main policy guidelines which all sounded very plausible, and in most people's heads there was one way or another of implementing them.
So, what has happened in the year since the unveiling of this seemingly spectacular suitor, who looked like the perfect candidate to father a bunch of kids?
Let's go point by point (with quotes from Maduro's televised address on August 17, 2018):
1. "Fiscal balance: we will collect a lot more money for the social development of the country."
Ok: As of right now none of this has been achieved. The tax legislation on large estates will only come into effect in October. But, on the other hand, we have taxes pegged to the Petro [cryptocurrency] as a sort of "disguised dollarization" that is killing any small business that looks to stay on its feet and operating legally. Furthermore, the collected taxes are not reflected anywhere: potholes still rule the streets, traffic lights remain unreliable, garbage is not collected on time, etc.
2. "A new foreign exchange policy: the National Constituent Assembly abolished the illicit exchange law and we will have a new, unique, floating exchange rate. We're going to defeat the criminal [black market] dollar."