Venezuela’s Maduro Bans Street Protests After Three Died

Venezuelan President Nicolas Maduro banned street demonstrations after at least three people died yesterday as protesters clashed with government supporters.

About 50,000 pro-opposition Venezuelans marched through Caracas to protest product shortages, violence and to demand the release of students arrested in provincial towns this month, said Amarilys Gott, national director for Voluntad Popular, a party that helped organize the movement. The government confronted them by calling on its allies to take to the streets to celebrate youth day.

The biggest demonstrations against the government since Maduro won elections in April by the narrowest margin in 45 years come as Venezuelans cope with the fastest inflation in the world and a drop in international reserves exacerbates shortages of everything from medicine to food. The country’s economic decline and the government’s attempt to suppress demonstrations may spill over into general violence nationwide, said Diego Moya-Ocampos, a political analyst at IHS Global Insight consultancy who was present at the protests.

“They’re trying to provoke a coup. I alert the people of Latin America and the Caribbean. The revolution will triumph,” Maduro said. “I’m not going to allow anyone to go out and march Thursday or Friday.”

Maduro said he ordered his education and interior ministers to hold talks with students across the country and called for peace.

Political Divide

At the same time, Maduro said arrest warrants have been issued for opposition politicians Ivan Carratu Molina and Fernando Gerbasi, who had been recorded in a telephone call saying they expected the protests to turn violent.

“We won’t stop until we change this government,” opposition lawmaker Maria Corina Machado told reporters yesterday in Caracas. “We will continue taking to the streets, no one will intimidate us.”

Maduro, a former bus driver, has blamed inflation and shortages that helped spark protests on an “economic war” waged by the “parasitic bourgeoisie.” He sent regulators backed by military troops to more than 1,000 electronics stores and furniture and toy stores to cut prices in November.

Consumer prices rose 3.3 percent last month, compared to a 3.6 percent median estimate of seven analysts surveyed by Bloomberg. Prices rose 56.3 percent from a year earlier, the central bank said.

The central bank’s scarcity index reached 28 percent in January, the highest since it was created in 2005, meaning that more than one in four basic goods was out of stock at any given time.

Economy, Crime

The government last month partially devalued the bolivar, which lost 73 percent of its value on the black market last year. It moved airlines, incoming foreign investment and travel allowances to a second legal rate that last auctioned dollars at 11.36 bolivars per dollar compared to the official rate of 6.3 bolivars per dollar.

On the black market, one dollar sells for around 84 bolivars, according to dolartoday.com, a website that tracks the rate on the Colombian border.

The economic deterioration has been accompanied by an increase in violence. The murder on Jan. 6 of Monica Spear, a well-known actress and former Miss Venezuela, and her husband attracted world attention to the problem that has plagued Venezuelans for years.

Venezuela is in the No. 3 spot, after Honduras and Guatemala, as the economy most damaged by violence, according to the World Economic Forum’s Global Competitiveness Report 2013-2014.

Confrontations, Rhetoric

Voluntad Popular leader Leopoldo Lopez accused armed government-supporters of attacking 30 students after a protest ended yesterday. The students were throwing rocks at the Prosecutor General’s office, he told reporters yesterday in Caracas.

National Assembly President Diosdado Cabello said on state television that one of the people killed was a member of a pro-government political group from 23 de Enero slum.

“The assassination of our comrade will not go unpunished,” he said. “It’s the work of fascist hordes from the irrational right-wing.”

Prosecutor General Luisa Ortega confirmed two killings in remarks made on state television, saying the uprisings were designed to create chaos in Venezuela. Twenty-three people were injured nationwide, she said.

Colombian television station NTN24, which had been covering the opposition protests, was removed from DirecTV’s channel lineup in Venezuela.

Military’s Position

Demonstrations continued into the evening as riot police and the National Guard confronted groups of bare-chested youths with teargas, rubber bullets and water cannon in the affluent Chacao district of eastern Caracas.

Protesters shut down the main artery of Chacao and set fire to tires. The National Guard arrived around 6 p.m. local time and deploying teargas.

Residents of several parts of the city were heard banging pots and pans -- a form of protest in Latin America known as a “cacerolazo.”

Violence broke out at the end of the opposition march near the Prosecutor General’s office in Caracas, according to Voluntad Popular. Lopez said he called for peaceful protests.

“A coup can only happen if the military goes against the government, and I have yet to see any signs that the Venezuelan military is anything but 100 percent in support of the government,” Gregory Weeks, political science professor at the University of North Carolina at Charlotte, said by phone. “Regime change is really premature to talk about.”

Investors’ Response

Chacao Mayor Ramon Muchacho said in a post on his Twitter account that a third person was killed in the municipality and another injured as “irregular groups” generated violence in the area.

“The conditions on all fronts are deteriorating rapidly. Anything can happen,” Michael Shifter, president of the Inter-American Dialogue, said in an e-mailed response to questions.

The South American country’s benchmark 9.25 percent dollar bond due in 2027 rose 0.58 cent to 66.62 cents on the dollar yesterday in New York. The yield on the bond fell 14 basis points to 15.10 percent.

“The prospect of the militarization of a political conflict will scare investors already worried by the increasingly dire economic situation,” Russ Dallen, the Miami-based head trader at Caracas Capital Markets, said yesterday in an e-mailed response to questions.

To contact the reporters on this story: Anatoly Kurmanaev in Caracas at akurmanaev1@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net; Nathan Crooks in Caracas at ncrooks@bloomberg.net

To contact the editor responsible for this story: Andre Soliani at asoliani@bloomberg.net

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