Chavez unveils economic measures (updated)

Caracas, Venezuela, 11 June 2008. In a much expected TV appearance tonight, Venezuelan President addressed the nation to unveil economic measures and some changes in his cabinet. Important local business men and women attended the meeting at Alba Hotel in Caracas. During the event and after citing John Kenneth Galbraith and the world food crisis, President Chavez announced his "Relaunching production: investing in Venezuela". This new economic programme aims at the implementation of local socialism.

1. The creation of a US$1,000 million fund to finance productive investments with social intent. Strategic alliances with China and Russia would be favoured by this  financial scheme to boost food production and agricultural industry, manufacturing of raw materials, infrastructure, and local joint ventures. Relaunching of some industrial initiatives and socialist factories.

2. An increase of public spending on locally produced goods.

3. An increase on direct subsidies for food production. A minimum price regulation for soy bean and sunflower. This will be accompanied by thewriting off of agriculture debt incurred by farmers of rice, coffee and corn who had contracted loans with the government.

4. Liberation of foreign exchange controls for the import of capital goods only. This benefit would apply for already registered companies and for requests up to 50 thousand dollars. Controls would remain for other Venezuelans who wish to buy foreign currencies.

5. Elimination of a 1.5 % tax on banking and financial transactions.

This new "Relaunching Production" programme was designed to counteract increasing food prices and local inflation. It expects to orchestrate efforts made by the government with foreign strategic alliances countries such as China, Iran and Russia. Furthermore, it offers the private sector and local business community an opportunity to engage in local production enterprises. 

There was expectation over the announcement of a cabinet reshuffle. Today, the vice president was re appointed at the Ministry for Housing. However, it is unclear whether there would be a new appointment at the vice presidency or else. The Finance Minister post is vacant as the current holder was elected by official party - PSUV - as its  governor candidate for Arugua state in elections to be held in November 2008. A cabinet reshuffle is expected soon.  

In reaction to the announcement, the president of Polar conglomerate and business man, Lorenzo Mendoza, hailed the economic programme as it allowed for the participation of the local private sector. Polar companies are devoted to food processing and packing as well as producing the locally brewed beer.

More news to come...

Sources: VTV, YVKE, Globovision, BBC Mundo, El Universal, Telesur, El Nacional, BBC,