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2016-12-20 14:15:43
Nicol s Maduro s latest act of economic sabotage: cancelling the 100-bol var
note
ANYTHING India does, Venezuela can do worse. Last month, in a dramatic effort
to curb corruption, India s government cancelled all its high-denomination
banknotes without warning. Since 98% of transactions in India are done in cash,
commerce seized up. It is a huge mess, but India will after a while print
enough replacement notes. And it has a plausible plan to help its many poor
people join the cashless digital economy.
Not so Venezuela. President Nicol s Maduro says that the constant shortages of
more or less everything in Venezuela are caused by evil speculators. (They are
actually caused by his price controls.) Mr Maduro claims that mafias in
Colombia are stockpiling lorryloads of bol vars, the Venezuelan currency, and
sneaking across the border to buy up price-controlled goods. Given Venezuela s
soaring inflation, this seems improbable. The idea that anybody would want to
hoard a currency that has lost 60% of its value in the past two months is
absurd, says David Smilde of the Washington Office on Latin America, a
think-tank.
Nonetheless, on December 11th Mr Maduro announced that the 100-bol var note
would cease to be legal tender within 72 hours. It is the most valuable note in
circulation, accounting for 77% of the nation s cash. (On the black market, it
is worth three American cents.) The government says people can deposit the old
notes in banks and they will be replaced with new ones in denominations as high
as 20,000 bol vars. Eventually.
Massive queues of ordinary people who use cash to survive quickly formed
outside banks. They brought boxes of old banknotes and waited hours to deposit
them. Venezuela is one of the most crime-ridden countries on Earth but few
muggers bothered to rob people of their soon-to-be-worthless cash. Tempers
frayed, however, and fights broke out. It s an abuse, says one disgruntled
queuer after standing two hours in a line at a Caracas shopping mall to pay in
the equivalent of less than $20. The government deliberately wastes our time,
grumbles Bianca Manrique, a doctor.
This month Mr Maduro s regime also seized millions of toys from a toymaker
that, it said, was charging too much. The government will distribute them to
children and try to take the credit. Mr Maduro may see himself as Saint Nick,
but few Venezuelans are convinced.