Venezuela, led by a former bus driver who took over power following the exit of the country’s former dictator, has not done much to show that the man is capable of handling much more than a steering wheel. Nicolas Maduro drove the nation’s economy into the ground, leading to massive reports of lack of basic necessities among citizens, including food and medical care. Convinced that he could still save the country (and, most likely, face), he decided to introduce a digital currency that would make everything right. The Petro, which coincidentally mirrors almost exactly the Dash cryptocurrency, has not handled the task very well, so Maduro has taken the exact same steps he took with the Bolivar to try and improve the digital currency’s position. In less than two months, he has increased the price of the Petro, leading to even greater inflation and less economic stability.
Last month, Maduro increased the Petro’s price 150%, raising it from 3,600 bolivars to 9,000. Now, the Petro is valued at 36,000 bolivar – an increase of 300%. Compared to the U.S. dollar, however, the Petro is still worth only $60.
It is becoming more apparent that Maduro doesn’t understand the fundamentals of balancing an economy. Venezuela’s minimum wage is tied directly to the Petro and recent increases are going to produce higher minimum wages. However, businesses aren’t going to be willing to eat those costs and will raise their rates for all goods and services to make necessary adjustments.
Economists point out that the increase is going to further ruin an already-ruined economy. Given that the bolivar-to-petro valuation has changed – and not the dollar-to-petro – they assert that Petro is nothing more than an “instrument of depreciation.”
Venezuela is on the verge of collapse. The introduction of the Petro has done nothing to help the country turn around, but it has helped Maduro and a few of his cohorts continue to live a life of luxury while the citizens he swore to protect and serve are starving and succumbing to illnesses. Although he assured the people that he would not follow in the country’s former dictator’s footsteps, it is now more than apparent that Maduro’s only interest is his own self-preservation.
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