Caldera government imposes strict economic measures

Venezuelan Financial Affairs Secretary Luis Raul Matos has defended the strict economic measures taken recently to overcome the country’s financial crisis, saying the government was taking a “pragmatic” approach.

“We had a crisis,” Matos told a group of South Florida business leaders, describing the failure of a series of banks and massive capital flight that prompted the government of President Rafael Caldera to impose exchange controls.

The meeting with the local business, banking and trade community came one day after Venezuelan Finance Minister Julio Sosa Rodriguez announced a program to reduce inflation, cut the federal budget deficit and promote private investment to restore economic growth, Knight-Ridder reports. Matos’ visit was part of an international effort spearheaded by Sosa to improve Venezuela’s image, which has suffered in the wake of the banking crisis and the exchange controls.

“The government of Venezuela wants to incorporate itself into the global market,” Matos said.

South Florida is of particular interest to Venezuela because the two areas are top trade partners.

Matos, who heads the committee established to enforce exchange controls in Venezuela, said the program is a “logical and rational reaction.” Matos, who insisted that Venezuela did not need a “restrictive” exchange program, said the rules for obtaining authorization to purchase dollars had been streamlined since the program was first announced.

Foreign investors in the stock market would be allowed to repatriate their investments, Venezuelans would be allowed $4,000 a year for travel and restrictions on credit cards would be lifted in two weeks, he said. Matos also said controls would be lifted as soon as the economy has recovered. He said the government is not interested in owning banks and that banks seized by the government eventually will be returned to the private sector.