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Venezuela Bans Street Protests After Three Killed

Venezuela’s President Bans Street Protests After Three Killed
People take part in an opposition demonstration against the government of Venezuelan President Nicolas Maduro in Caracas on Feb. 12, 2014. Photographer: Juan Barreto/AFP/Getty Images

Feb. 13 (Bloomberg) -- Venezuelan President Nicolas Maduro banned street demonstrations and ordered the arrest of opposition leaders after at least three people died yesterday in clashes between protesters and government supporters.

Opposition party Voluntad Popular estimates about 50,000 Venezuelans marched through Caracas to protest shortages of basic goods and demand the release of students arrested in provincial towns this month. The government confronted them by calling on allies to take to the streets to celebrate youth day.

“They’re trying to provoke a coup,” Maduro said last night. “I’m not going to allow anyone to go out and march Thursday or Friday.”

The biggest demonstrations against the government since Maduro won elections in April come as Venezuelans cope with the fastest inflation in the world and 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 who was at the demonstrations.

Military Support

As the threat of more violence loomed, the South American country’s benchmark 9.25 percent dollar bond due in 2027 fell 0.60 cent to 66.03 cents on the dollar at 2:46 p.m. in New York. The yield on the bond rose 14 basis points, or 0.14 percentage point, to 15.24 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.

The government appears to have full support of the military, making a coup impossible, Gregory Weeks, political science professor at the University of North Carolina at Charlotte, said by phone.

“Regime change is really premature to talk about,” he said.

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

Arrest Warrant

Amarilys Gott, the national director for Voluntad Popular, said today an arrest warrant had been issued against its leader, Leopoldo Lopez.

The opposition party learned of the arrest warrant through “unofficial” means, Voluntad Popular coordinator Carlos Vecchio said today at a press conference in Caracas, adding that Lopez was at his home studying the order with his lawyers. He said about 100 student protesters have been detained across the country and that the party would announce further protests this week.

Maduro, a 51-year-old 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 to cut prices in November.

Maduro was elected in April by the narrowest margin in 45 years after President Hugo Chavez died of cancer. He pledged to reduce crime and deepen the socialist revolution started by his predecessor in 1999.

‘Inflation and Scarcity’

Inflation more than doubled in the past year to 56.3 percent in January, according to the central bank. At the same time, the central bank’s scarcity index rose to a record 28 percent, meaning that more than one in four basic goods was out of stock at any given time.

“More inflation and scarcity are coming,” opposition Governor Henrique Capriles, who lost to Maduro in the April election, said today at a news conference in Caracas. “That’s why the government needs these smokescreens to block out the problems.”

Capriles called on Maduro to release jailed students and to reject violent groups in the country.

The government last month partially devalued the bolivar as it struggles to preserve international reserves that have fallen to the lowest in 10 years. Airlines, incoming foreign investment and tourists will buy dollars at a rate that was last auctioned 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 about 87 bolivars, according to dolartoday.com, a website that tracks the rate on the Colombian border.

Miss Venezuela

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 trails only Honduras and Guatemala as the economy most damaged by violence, according to the World Economic Forum’s Global Competitiveness Report.

Voluntad Popular’s 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 a Caracas slum.

‘Fascist Hordes’

“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 three deaths and said the uprisings were designed to create chaos in Venezuela. Sixty-six people were injured nationwide, she said, adding that the country was in “absolute calm.”

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

Protesters yesterday shut down the main artery in Caracas’s Chacao district and set fire to tires. Riot police and the National Guard confronted groups of bare-chested youths with tear gas, rubber bullets and water cannon in the affluent neighborhood.

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.

Student protests were continuing today in parts of Caracas, newspapers El Nacional and El Universal reported.

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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