Venezuelan President Nicolas Maduro on Monday pledged the creation of a “new monetary system” in defiance of what he called “the criminal dollar”, and also announced a 300 percent increase in the minimum wage.
The new monetary system will be based on Venezuela’s cryptocurrency, the petro, and will focus on strengthening and protecting the bolivar currency, Maduro told the Constituent Assembly after it confirmed him as president following a controversial swearing-in ceremony last week.
The minimum wage went from 4,500 bolivars to 18,000 bolivars (around $6.52), the first rise this year.
In 2018, the minimum wage was raised five times.
Maduro also pledged to “stabilise” the economy of the oil-producing country, which has halved during five years of recession. Annual inflation is nearly two million percent, and widespread shortages of food and medicine have spurred three million Venezuelans to emigrate since 2015.
Analyst, however, have low expectations and don’t believe these new measures will make a difference.
“This is not the first time President Maduro announced a raise or changes,” Ramon Pinango, a Venezuelan analyst, told Al Jazeera.
“[Unfortunately] these changes normally lead to a higher inflation, we already know that after these announcements are made, prices go higher the next day, we are facing hyperinflation and shortages,” he added.
In August, Maduro’s government introduced several economic measures to try to tackle the crisis, devaluing the bolivar currency and lifting the minimum wage and taxes. But economists say the measures were too limited to have a significant effect.
Sworn in for a six-year term on January 10, Maduro has faced growing international sanctions since winning re-election last May in a vote widely considered fraudulent by the opposition and international community.
This has cut Venezuela off from foreign financing and left his government with few friends abroad.
Critics in the US and Latin America, as well as political opponents at home, have called Maduro a dictator whose failed state-led policies have caused Venezuela’s worst ever economic crisis.
Maduro counters that he is a victim of a US-led “economic war” aimed at ousting him from power.
As Maduro’s second term got under way, the leader of the country’s opposition-led Congress, Juan Guaido, said last week he was willing to replace Maduro with the support of the military.
Rejection and calls for change
Maduro’s speech on Monday followed a wave of international criticism after Guaido was reportedly held by members of the intelligence service on Sunday.
Guaido was released shortly afterwards, with Information Minister Jorge Rodriguez saying the intelligence service had acted on their own, the Venezuelan-based broadcaster Telesur reported.
According to analysts this move shows a disruption at the higher levels of power in Venezuela.
“The way the government proceeded with Guaido just shows a disruption at the highest levels of power,” Lobos explained.
“Today we face huge political, economic, and social uncertainty,” he added.