Carlos Eduardo Ramirez / Reuters Venezuelan soldiers collect containers with gasoline abandoned by smugglers near the Colombian border in San Antonio, in the state of Tachira, February 17, 2016.

Venezuela, Devalued

Maduro Tries to Stave Off Collapse

Venezuela’s embattled President Nicolás Maduro may have bought himself some time on Wednesday when he raised gasoline prices and devalued the bolivar, but the South American country’s problems will likely worsen in the coming weeks unless he does something more.

For his part, Maduro defended the measures as being necessary to save the economy, which is expected to contract eight percent this year after a ten percent drop last year. Maduro blamed the crisis on flagging oil prices and a concerted effort by his country’s business elite to wreck his socialist revolution. Whatever the reason for the economic problems, his critics were outraged. “Venezuelans woke up poorer this morning with the president’s actions last night,” Deputy Rafael Guzmán said during an emergency session in the country’s National Assembly. “Why should the poorest Venezuelans have to pay?”

Carlos Garcia Rawlins / Reuters A can of Coca-Cola costs $5.56 or 35 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A 75-watt incandescent light bulb costs $13.51 or 85.12 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A Big Mac costs $14.60 or 92 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A kilogram (2.2 lbs) of raw carrots cost $19.05 or 120 bolivars in in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A box of 36 colored pencils cost $115 or 725 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A Barbie doll costs $194 or 1,226 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A Goodyear brand automobile tire costs $753 or 4,750 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A pair of Levi's 501 jeans cost $793 or 4,999 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters An Adidas Adipure Crazy running shoe is $1,198 or 7,547 bolivars in Caracas, September 29, 2014.
Carlos Garcia Rawlins / Reuters A Samsung 32" plasma TV costs $5,476 or 34,500 bolivars in Caracas, September 29, 2014.
As he spoke, lines were already snaking out of many gasoline stations as consumers rushed to fill their tanks before the new prices took effect on Friday. The increase, the first in 19 years, raised the price of 95-octane gasoline to six bolivars a liter ($0.60 at the official foreign exchange rate and less than a penny at the black market rate), up from 0.097 bolivar the day before.

The 60-fold increase might be shocking, but even now, Venezuela’s gasoline will remain the cheapest in the world. “It’s still cheaper than water,” Felipe Romero, a 38-year-old carpenter in the central industrial city of La Victoria, told me as he waited to fill up his tank. “But I used to be able to fill my car up for less than four bolivars. Now it’s going to cost me 240 bolivars.” By comparison, a beer costs 300 bolivars ($30 at the official rate, or $0.29 at the black market rate) and a loaf of bread 120 bolivars ($12 at the official rate, $0.11 at the black market rate). In other words, gasoline is still a relative bargain.

Maduro’s move came just days after he fired his

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