Chavez Orders Move to Boost Venezuela’s Exports, Maduro SaysJose Orozco and Nathan Crooks
Venezuela’s cancer-stricken President Hugo Chavez, who still has breathing problems, approved from Cuba an economic plan to boost exports that will be announced this weekend, said Vice President Nicolas Maduro.
“Chavez reviewed the budget, financing, economic development and the theme of promoting exporters,” Maduro said on state television at about 12:30 a.m. in Caracas, after returning from Havana. “We’re going to develop the export capacity of our economy, and not just through our great oil enterprise.”
The measures will allow the government to manage its budget in a way that will ensure the implementation of social and development policies this year, he said, without providing details. Chavez, whose status is now “favorable,” has overcome a lung infection even as breathing problems continue after a Dec. 11 surgery in Havana that aimed to extract a malignant lesion in his pelvis, Information Minister Ernesto Villegas said today on state television.
The economic plan may include the devaluation of the currency to help Venezuela pare the world’s second-largest budget deficit, said Asdrubal Oliveros, the director of Caracas-based financial consulting firm Ecoanalitica, after listening to Maduro’s comment. Economists at banks from Goldman Sachs Group Inc. to Barclays Plc have said that it’s inevitable to devalue the currency to prevent a recession.
“Clearly, when you talk about stimulating the export market, you’re talking about the exchange rate,” Oliveros said in a phone interview today. “For political reasons, the government won’t talk about a devaluation.”
The government may employ a “timid” devaluation to get them through 2013, said Oliveros.
While a weaker bolivar would swell government revenue by increasing the bolivar-based value of the country’s oil exports, it would risk pushing up consumer prices that are already rising 20 percent a year.
Barclays’ Alejandro Grisanti, Goldman Sach’s Alberto Ramos and HSBC Holdings Plc’s Ramiro Blazquez predicted earlier this month the government will weaken the bolivar as much as 50 percent by March 31. Still, they said the power vacuum created by Chavez’s absence could delay the decision.
Chavez, who is being treated for an undisclosed type of cancer, hasn’t been seen in public since his fourth cancer-related surgery last month.
The former paratrooper is now receiving complementary medical treatments for the cancer, Villegas said.
“He has a smile and a face full of light,” Maduro said in his midnight speech. “He’s optimistic and full of faith.”