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Economy
Recognizing Venezuela's efforts to cope with inflation and sanctions through the creation of a public cryptocurrency, Russian officials have however rejected the proposal to use the oil-backed currency in bilateral trade. According to Russian media, Moscow has recently offered Caracas a series of measures to repair the country's economy, but the petro is not among the recommendations.
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Russia recommends traditional economic reforms
The Russian Federation has taken measures to help its South American strategic ally overcome the deep economic and financial crisis. A high-level delegation visited Caracas in November and presented a plan to improve the Venezuelan economy. Moscow's ideas have recently been made public by the Russian media. It turns out that petro is not part of the Russian strategy.
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The group of experts of the Russian government, chaired by the Deputy Minister of Finance Sergei Storchak, provided the Venezuelan authorities with a list of economic measures. It is now up to the administration of Nicolas Maduro to implement them. He recently won the presidential election and officially took office last Thursday, beginning a new six-year term as head of state of the poor country. Maduro was re-elected despite inflation at 1.3 million percent last year that forced 3 million Venezuelans to emigrate from their land of origin to neighboring countries.
The economic recovery plan contains five key recommendations. The first measure proposed by the Russian economists is to introduce an unconditional basic income for the suffering Venezuelan families, as reported by The Bell. Money can be provided by revoking the fuel subsidies currently paid by the Venezuelan government.
The second tip is to "close the money press", in other words stop financing the budget deficit with newly printed money. In August of last year, the Maduro government canceled five zeros to rename the national fiat currency. However, without efforts to reduce the deficit, the "sovereign bolivar" lost 95% of its value against the US dollar.
The Russians advise Caracas to focus on indirect taxes
The Russian delegation urged Caracas to conduct a tax reform. The Moscow emissaries told the Venezuelan authorities that they should follow Russia's example and focus on indirect taxation instead of relying on direct taxes. They also advised Venezuelan officials to increase oil production and diversify the country's exports.
<img class = "aligncenter wp-image-274782 size-full” title=”Russia is not ready for the Petro, proposes a plan to help Venezuela without it” src=”https://news.bitcoin.com/wp-content/uploads/2019/01/shutterstock_769293829.jpg” alt=”Russia is not ready for the Petro, proposes a plan to help Venezuela without "width =" 1000 "height =" 667 "srcset =" https://news.bitcoin.com/wp-content/uploads/2019/01 / shutterstock_769293829. jpg 1000w, https://news.bitcoin.com/wp-content/uploads/2019/01/shutterstock_769293829-300×200.jpg 300w, https://news.bitcoin.com/wp-content/uploads/2019/01/ shutterstock_769293829-768×512.jpg 768w, https://news.bitcoin.com/wp-content/uploads/2019/01/shutterstock_769293829-696×464.jpg 696w, https://news.bitcoin.com/wp-content/uploads/ 2019/01 / shutterstock_769293829-630×420.jpg 630w "sizes =" (maximum width: 1000px) 100vw, 1000px”/>
Arguably due to diplomacy, Russian representatives gave a positive assessment of Venezuelan attempts to resolve the problems with hyperinflation and foreign sanctions using petro-based cryptography, supported by oil. But according to the Russian press, they also told their Venezuelan colleagues that Russia is not ready to accept digital currency as a unit of account in bilateral trade.
Following meetings with the Russian delegation, President Maduro, who also recently visited Moscow, said that his country relies on Russia to ensure its economic independence. Venezuelan officials have not yet commented on their willingness to implement the Russian recommendations, but Caracas has already managed to get economic aid from Russia. Moscow will invest $ 5 million in its oil industry and will supply 600,000 tons of wheat. This is on top of the $ 17 billion loan that, according to Reuters, the Russian government and the state oil company Rosneft have given in Venezuela since 2016.
What is your opinion on the economic measures proposed by Russia? Do you think that Venezuela will implement the reforms? Tell us in the comments section below.
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