Venezuelan: shopkeepers alarmed by Maduro’s latest economic moves

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

Venezuelan shopkeepers alarmed by Maduro’s latest economic moves

  • The socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro crypto currency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.
  • Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

Carlos Garcia Rawlins | Reuters
Venezuela’s President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

After Venezuelan President Nicolas Maduro’s 60-fold increase to the minimum wage, storeowners on Saturday wrestled with an anguishing decision: Close up shop or hit customers with steep price hikes at the risk of sinking the business.

In a set of sweeping announcements that shocked many Venezuelans, the socialist Maduro on Friday ordered a 96 percent currency devaluation, pegged the bolivar currency to the government’s petro cryptocurrency and boosted taxes as part of a plan aimed at pulling the OPEC member out of its economic tailspin.

The measures especially spooked shopkeepers already struggling to stay afloat due to hyperinflation, government-set prices for goods ranging from flour to diapers, and strict currency controls that crimp imports. Many stores were closed on Saturday as owners hunkered down to consider the implications.

Economists warned that some companies would go under, unable to shoulder the massive increase in monthly minimum wage from 3 million bolivars to 180 million bolivars, or roughly $0.5 to $30. That will likely increase unemployment and further fuel mass emigration that has overwhelmed neighboring South American countries.

Jhonny Herrera, 41, owner of a hardware store on the windswept Paraguana Peninsula in northern Venezuela, said he would have to fire two employees because he cannot afford to pay them, leaving him with just one worker. When Venezuela was enjoying a decade-long oil bonanza, he had 10 employees.

“I have thought about closing for good and leaving, all the more so now with these increases. I have held back due to my 14 year-old-son, who I would leave here because I need to emigrate first,” said Herrera, surrounded by stores that have been shuttered after their owners fled the country.

To soften the blow, Maduro vowed that the government would cover three months of the wage increase for small and medium-sized companies. But he did not provide details and it remains unclear how his cash-starved government would afford such a hefty payout or whether the chaotic administration has the logistical capacity to pay wages on time.

The Information Ministry did not respond to a request for an explanation of the plan. Venezuela’s opposition called for protests and a national strike on Tuesday, although recent attempts by the fractured coalition to rally Venezuelans have had little impact.

Maduro no longer can count on armed forces' support

Venezuela’s Maduro can no longer count on armed forces’ support  

Venezuela’s main business chamber, Fedecamaras, said it did not have any estimates on the effects of the measure yet, although local economists predicted a heavy toll.

“A minimum wage of 180 million bolivars in this current situation implies the closure of thousands of companies and the unemployment of many people,” said economist Luis Oliveros.

Bakery owner Luis Carballo, a 59-year-old who has worked in the bread sector for 45 years, said he would try to stay afloat but was full of dread.

“I have to increase prices … And if I don’t sell, production drops, and I have to suspend some of my employees. I feel really badly,” said Carballo, as he handed loaves to customers in the Andean city of San Cristobal.

Outside another bakery in San Cristobal, security guard Victor Martinez fretted with a friend about the measures. “This is worsening the situation. I’m scared of losing my job,” said Martinez.

39 Dead After Earthquake Hits Indonesian Resort Island

(THIS ARTICLE IS COURTESY OF CNBC NEWS)

 

39 dead after earthquake hits Indonesian resort island

  • A strong earthquake struck the Indonesian tourist island of Lombok on Sunday.
  • The latest quake triggered a brief tsunami warning.
  • A magnitude 6.4 quake hit Lombok on July 29, killing 16 people.

A Balinese temple is seen partially collapsed in Badung in Bali island on August 5, 2018 after a major earthquake rocked neighbouring Lombok island.

Gung Aji Ngurah | AFP | Getty Images
A Balinese temple is seen partially collapsed in Badung in Bali island on August 5, 2018 after a major earthquake rocked neighbouring Lombok island.

MATARAM, Indonesia (AP) — A powerful earthquake struck the Indonesian tourist island of Lombok on Sunday, killing at least 39 people and shaking neighboring Bali, one week after another quake on Lombok killed more than a dozen.

The latest quake, which triggered a brief tsunami warning, damaged buildings as far away as Denpasar on Bali, including a department store and the airport terminal, where ceiling panels were shaken loose, authorities said.

Video showed screaming people running in panic from houses in a Bali neighborhood and vehicles rocking. On Lombok, soldiers and other rescuers carried injured people on stretchers and carpets to an evacuation center.

Muhammad Rum, head of the disaster management agency in West Nusa Tenggara province, which includes Lombok, told Indonesian TV the death toll had risen to 39. Earlier, officials had said at least three people had died.

The quake, recorded at magnitude 7.0 by the U.S. Geological Survey, struck early Sunday evening at a depth of 10.5 kilometers (6 miles) in the northern part of Lombok.

“I was watching TV when I felt a big shake,” said Harian, a Lombok woman who uses one name. “The lamp was shaking and people were shouting ‘Get out.’ I ran out into the dark because the power cut off.”

A tsunami warning was lifted after waves just 15 centimeters (6 inches) high were recorded in three villages, said the head of Indonesia’s Meteorology, Climatology and Geophysics Agency, Dwikorita Karnawati.

National Disaster Mitigation Agency spokesman Sutopo Purwo Nugroho said the quake was felt strongly across Lombok and Bali and had damaged houses on both islands.

Iwan Asmara, a Lombok disaster official, said frightened people poured out of their homes to move to higher ground, particularly in North Lombok and Mataram, the capital of West Nusa Tenggara province.

The Bali and Lombok airports continued operating Sunday night, according to the director general of civil aviation. There had been a half hour evacuation at the Lombok airport following the quake because the electricity went off. TV showed crying women consoling each other outside Lombok’s airport.

The island was already reeling from a magnitude 6.4 quake on July 29, which killed 16 people.

Like Bali, Lombok is known for pristine beaches and mountains. Hotels and other buildings in both locations are not allowed to exceed the height of coconut trees.

Indonesia is prone to earthquakes due to its location on the Pacific “Ring of Fire,” an arc of volcanoes and fault lines in the Pacific Basin. In December 2004, a massive magnitude 9.1 earthquake off Sumatra island triggered a tsunami that killed 230,000 people in a dozen countries.