Thursday, January 28, 2010

Jan 28/10 | A "One" Minute Chavista Recipe for Chaos and Repression in Venezuela

This is the weapon of choice to go after students
Used with the routine and complicit silence of Presidents Lula, Bachelet
and that of SG Insulza and others still talking about the many elections 'won"


PMBComment | RCTV Internacional - a cable TV channel which was the successor of illegally shuttered (open broadcast) RCTV, was forced off the cable systems on Saturday night after it failed to transmit a "one minute cadena" by President Hugo Chavez.

A cadena, for those of you who still do not know, is the mandatory simulcast of a government message or program in all TV and radio stations. This practice has been hideously abused by Lt. Col. Chavez who commandeers the airwaves for whatever purpose, whenever he pleases, for however long he cares to blabber. The obligation to transmit the increasingly political and narcissistic programing was recently extended to a narrowly defined set of cable channels. The new regulation might have well been called the "Shut RCTV International Clause" as it essentially applies only to them. Reporters Without Borders issued a clear and informative condemnation when the new rules were announced.

For your information, below you will find the full transcript, first in English and then in Spanish, of the "one minute cadena" Hugo Chavez and his henchman - and fiercest internal rival - Diosdado Cabello used as a ploy to force RCTV International out. They knew perfectly well that the students would take to the streets, after all, the primary DNA letters of the very potent and popular student movement are RCTV, So we can conclude that the violence we have witnessed the last three days is part of a plan by the regime to radicalize matters and justify the use of only tool of government left for them to cling to power: repression

As it is customary with the capricious, cynical and lying Mr. Chavez, the cadena was not "one minute" as promised, but actually 10:30 minutes long...but in any case one of his shortest on record, and one with the most lethal consequences still to come. As you read, reflect upon the fact that media outlets have been shuttered, democracy is being dismantled, a country has been destroyed and lives have been lost and ruined by one who speaks such idiotic nonsense, NON STOP. PMB


THE "ONE" MINUTE SIMULCAST

23 JANUARY 2010


MINISTRY ANNOUNCER’S VOICE:

This is a broadcast from the Communication and Information Ministry of the People’s Power of the Bolivarian Republic of Venezuela and the radio and television network.

CHÁVEZ:

A simulcast… A simulcast! ... Long live Venezuela! ... Uproar! ... Uproar!

The Admirable Campaign has begun!

Oh, tremble ye oligarchs! ... Long live Bolivarian Freedom! … Such an uproar! … Such patriotic joy! … Oooh!

This is a message with the rollicking roar of the Bolivarian people at O’Leary Plaza. The Admirable Campaign has begun.

We make this announcement to Venezuela by national radio and television simulcast.

The people have taken to the streets. The streets belong to the people and not to the oligarchy.

Such an uproar!

January Twenty-Third!

January Twenty-Third. We are still in the midst of a national simulcast. We shall give it one more minute in order to say the following:

Here in the heart of the universal Caracas. The cradle of the South American Revolution. The cradle of Bolívar. The cradle of Miranda. The cradle of Guaicaipuro.

The cradle of Bolivarianism of the 21st Century. The cradle of Socialism of the 21st Century.

We send this message to all Venezuelan people.

To the youth of Venezuela. Youth! Divine Treasure!

This message as a call to unity, to the struggle, to study.

To choose the way of dignity for a people who are, and have always been, fundamentally young.

Young Venezuelans! The Fatherland belongs to you!

From this very moment on.

And all of you! It will be your lot to forge the grandiose paths of the 20th Century.

In order to turn Venezuela into a power on this continent.

My greetings to Venezuelan women of all ages, from all places.

Women! Without you the Fatherland would not be a Fatherland.

Forward with the women’s revolution.

In order to save the world. In order to achieve balance in society. Gender equality. Social equality.

I have always said so, the feminist that I am. As was Bolivar. As we should all be as revolutionaries and patriots.

Without women waging the battle there would be no victory. There would be no Fatherland.

Women to the forefront! Youth to the forefront! Venezuela’s students!

There ahead lies the pathway opening up. The road is yours. The Fatherland belongs to all of you.

Students! Long live the students!

[He then begins to sing]: “Long live the students…”

My voice is giving out. Oh, my God!

Cristóbal Jiménez, who does have a good voice, is somewhere over there. And Federico is somewhere around there with his Latin Combo.

There we have the students from the UNEFA. Let’s give a round of applause for them and to all the university students. To the secondary school students. To the elementary school students. To all the students. Students! A divine rank! Makers of the future! Builders of dreams and of the Fatherland!

To Venezuela’s workers! My call, as always, to unity and to the battle for socialism.

Men and women workers, laborers. Venezuela’s proletarians. United in the battle that is for all of you. For Venezuela’s working families.

For professionals. For intellectuals throughout Venezuela.

For decent people.

This message. Today, January Twenty-Third.

For thinkers, writers, sculptors.

My call to all of you.

To organic intellectuals.

To continue making your contribution. Your creativity. Your songs. Your poems. Everything, everything.

For the Venezuelan people.

For Venezuelan independence.

For Venezuelan cultural independence.

For the impulse of our roots as a Fatherland.

As an Indian Fatherland.

As a Black Fatherland.

As a Mestizo Fatherland.

As a Carib Fatherland.

A Message of unity to Venezuela’s genuine entrepreneurs and male and female producers

To work together. In order to bolster the economy, development and productivity.

To all men. To all women.

To farmers. To workers in the field. To women workers in the field. To fishermen, to fisherwomen.

To communal councils. To the people’s power.

To the communes.

To the indigenous peoples.

My call for unity in the struggle for this land’s millennial dignity.

My usual call to the Venezuelan military.

To follow the path shown by Bolivar.

With his example. With his life. With his sword. With his word.

Venezuelan military people. Today’s military people. Military patriots of yesterday and today.

Together with the people you are the new male and female liberators of the Fatherland of Simón Bolívar, America´s Great Liberator.

Finally, this message:

January Twenty-Third. Fifty-Two years after that day’s endeavor in Caracas. An endeavor of people in the streets.

An endeavor of hope. An endeavor of struggle. Of freedom.

This message from my heart:

Arriving as I did this morning before dawn. From way up there on the mountain. From way up there where one can almost reach the stars. Well over eleven thousand feet above sea level in Bolivia.

The people of Bolivia, who are also part of the Bolivarian Revolution, send their greetings to all of you. Greetings to all of you from Evo Morales, the Bolivarian President. An Aymara Indian. Liberating Bolivia is what Evo and Bolivian men and women are doing.

This special, very special, message from my heart to the girls and boys of Venezuela.

With all my love, the infinite love of a father. And also that of a comrade.

This message to the boys and girls taken from the shining thoughts of José Martí.

Everything we do is for you, little boys and girls of the Fatherland and we swear to you that we shall not fail in our determination so that all you will have a Fatherland that is great and free. Egalitarian, beautiful and good.

Little boys and girls of the Fatherland.

Well then.

Let us say goodbye t the simulcast with another rollicking roar.

Bolivarian uproar!

National Simulcast!

From O’Leary Plaza!

The Bolivarian Offensive has begun!

The Admirable Campaign!

Oh, tremble ye oligarchs!

Long live Freedom!


MINISTRY ANNOUNCER’S VOICE:

Thus concludes this broadcast from the Communication and Information Ministry of the People’s Power of the Bolivarian Republic of Venezuela and the radio and television network.


Translation by Indysurfer


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Monday, January 25, 2010

Jan 25/10 | Box Office Hit in Venezuela for 11 years running

DESBARATAR | DESTROY
IN 4-D
PALYING EVERYWHERE IN VENEZUELA 24/7

No Comments or reviews necessary


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Tuesday, January 19, 2010

Jan 19/10 | Piñera y la busqueda de un nuevo Secretario General para la OEA


Amistades peligrosas y costosas

PMBComentario: En respuesta a una pregunta sobre el futuro de José Miguel Insulza en vista del triunfo de Sebastian Piñera, he recibido desde Santiago un juicioso memorándum (ver abajo) que se preparó en Chile y que quizá explica - entre otras cosas - las recientes declaraciones del ahora Presidente-electo contrarias a la reelección del Secretario General. El análisis es contundente y demuestra claramente que hay suficientes razones alli para negarle la aspiración a un nuevo mandato a quien utilizó el importante cargo solo para promover - sin éxito alguno - su propia carrera política en Chile.

A este descuido, o abuso, del cargo se le agrega una larga lista de desaciertos y faltas que deberían sellar de una vez el tema y abrir el camino a una alternativa. Recordemos:
  1. El fracaso estruendoso en Honduras, donde hacerlo peor de lo que lo hizo Insulza seria practicamente imposible (por cierto, la intervención de sus emisarios a favor de Zelaya antes de su salida forzosa es algo aun pendiente de examen).
  2. Su exceso de entusiasmo en eso de convertir el retorno de Cuba a la OEA en una falsa prioridad para la región y la Organización. Como muestra de este error basta ver como desapareció de la escena el tema de Cuba una vez que los Estados Unidos logró vencer, en la ultima Asamblea General de la OEA, la teoría Insulza (compartida por los países del ALBA) de una entrada "sin condiciones" y casi que con excusas;
  3. Su patente cobardía ante un Hugo Chávez - violador de todos los preceptos de la OEA - quien con solo llamarlo "pendejo" (un honor viniendo el insulto de quien venia) lo silenció para siempre. Peor aun es comprobar que su silencio durante mucho tiempo obedeció a su deseo de no molestar a la izquierda dura chilena representada por el Senador Alejandro Navarro (a quien Insulza tildaba en privado de "chavista"). Según comentaba Insulza "es necesario el 3 o 4% de Navarro para derrotar a Piñera....y si aspiro ser el candidato de la Concertación no me lo puedo ganar de enemigo";
  4. Una gestión administrativa caótica, que termina con un importante déficit financiero y un personal profundamente desmoralizado y confundido en cuanto a las prioridades de la OEA y sus lineas de autoridad.

José Miguel Insulza, ocupó importantísimos cargos en sucesivos gobiernos de la Concertación, pero definitivamente - y a la luz de su desempeño en Washington - no era producto de exportación. La OEA requiere como Secretario General a alguien mucho mas competente y mucho menos agalludo. El cargo tiene sus limitaciones, pero también es una plataforma solida para emitir opiniones sesudas y fundamentadas no en las posiciones temporales de los países miembros, sino en los principios irrenunciables de la Organizacion

La OEA - con tanta necesidad de definir sus prioridades, ejecutar sus mandatos primordiales y eliminar su déficit financiero - no debe ser usada como plataforma de lanzamiento o reflote de carreras políticas. Por cierto, los errores de Insulza también lo son de quienes lo promovieron ayer como Secretario General y de quienes van hoy sin vergüenza a Caracas a mendigar a Chávez el voto de Venezuela y sus títeres del ALBA. Con lo duro que debe ser para Sebastian Piñera no apoyar a un compatriota se entiende que mas duro aun debe ser para el ver a un chileno dejar mal parado a Chile una y otra vez. PMB


Documento:

Materia: Secretario General de la OEA y actividades políticas.

I.- Disposiciones de la OEA infringidas.

1º Los artículos 107 y 109 de la Carta de la OEA establecen a la Secretaría General como el órgano central y permanente de la Organización de los Estados Americanos, además de larepresentación legal de la misma que cabe al Secretario General.

2º El artículo 118 de la Carta de la OEA, en su Capítulo XVI relativo a la Secretaría General,expresamente dispone que su Secretario General y su personal “se abstendrán de actuar en forma alguna que sea incompatible con su condición de funcionarios internacionalesresponsables únicamente ante la Organización”.

3º El artículo 27 de las Normas Generales para el funcionamiento de la Secretaría General de la OEA (en adelante, las “Normas Generales”), reitera que los miembros del personal de la Secretaría General tienen el carácter de funcionarios internacionales, así como que éstos “al aceptar el nombramiento para un cargo en la Secretaría General se comprometerán a realizar sus funciones y a regular su conducta de conformidad con la naturaleza, los propósitos e intereses de la Organización”. El Secretario General, es el más alto funcionario de la Organización (Art. 8º de las Normas Generales).

4º El artículo 30 de las Normas Generales, dispone que “los miembros del personal no podrán actuar ni pronunciarse públicamente en forma alguna que pueda lesionar o afectar a los Estados Miembros”.

5º El artículo 14 de las Normas Generales establece que el Secretario General es responsable del cumplimiento de las mismas.

A mayor abundamiento, el Artículo 134 de las Normas Generales, sobre “Abstención de otras actividades”, establece que el Secretario General se abstendrá de toda actividad, esté o no específicamente prohibida en estas Normas, que resulte o dé la impresión de resultar en:

a. Otorgamiento de trato preferente a cualquier organización o persona;

b. Pérdida de su independencia o ausencia de imparcialidad en sus respectivas actuaciones;

(…)

d. Perjuicio del buen nombre e integridad de la Secretaría General.

A mayor abundamiento, si se recurre al contenido normativo sobre comportamientofuncionario dispuesto por el Reglamento de Personal de la OEA, encontramos que su capítulo I sobre derechos y obligaciones, expresamente señala en su Regla 101.6, sobre “Actividades políticas”, que:

Los funcionarios podrán ejercer el derecho de sufragio y afiliarse a partidos políticos,pero no podrán participar en actividades políticas que, a juicio del Secretario General, sean incompatibles con la independencia y la imparcialidad inherentes a su condición de funcionario internacional o que puedan menoscabarlas. El pago de contribuciones a un partido político o a un candidato determinado no serán consideradas actividades prohibidas.

Además, los funcionarios de la OEA están obligados a firmar una declaración (Regla 101.7) en la cual se obligan a ejercer con lealtad, discreción y a conciencia las obligaciones que corresponden como funcionario de carácter internacional al servicio de la Secretaría General; así como a regular su conducta de acuerdo con los intereses de la Organizaciónde los Estados Americanos.

Esto es, la independencia e imparcialidad inherentes a la condición de funcionario internacional no pueden verse afectadas por el ejercicio de derechos políticos como el de sufragio o de afiliación a partidos políticos. Y en la aplicación es el propio Secretario General el llamado a moderarlas, de manera tal que siendo en definitiva el primer responsable de su recto cumplimiento, peor es el ejemplo que da a la organización. ¿ Significa esto que por el comportamiento del Sr. Insulza, ahora los funcionarios de la OEAse encuentran habilitados para interceder políticamente a favor de los candidatos a cargos de elección popular en el continente?

En atención a la naturaleza de su condición de funcionario internacional, el Señor Secretario General se encuentra mandatado por los representantes de los diversos Estados pertenecientes a la OEA para ejercer, de manera continua y exclusiva, funciones de interés del conjunto de los Estados que a ella pertenecen, siendo ajeno a lo anterior su abierta intervención política en los procesos electorales, pues aún en el ejercicio de sus derechos políticos, ellos no pueden perturbar la independencia e imparcialidad inherente a su cargo.

II.- La inmunidad de Insulza.

Existe un Acuerdo sobre Privilegios e Inmunidades de la OEA, en el que status de inmunidad de Secretario General equivale al de un “enviado diplomático”, lo que nos remite a Convención de Viena sobre relaciones diplomáticas.

La inmunidad acompaña a quién ostenta el cargo durante las 24 horas del día. Esa inmunidad le prohíbeinmiscuirse en los asuntos internos de ese Estado” (Art. 41 Convención deViena sobre Relaciones Diplomáticas), refiriéndose a aquel donde cumple funciones (de hecho, ese tratado se encuentra en la misma página de la OEA).

José Miguel Insulza vino a Chile y realizó actividades proselitistas. Se inmiscuyó en los asuntos internos de Chile, lo que no puede ni siquiera en vacaciones, pues la inmunidad le acompaña durante las 24 horas, esté o no de vacaciones.

En ese contexto, una línea argumental es entrar a acusar este doble estándar de Insulza.

III.- El Comité de Ética de la OEA:

Regulado en virtud de la orden ejecutiva No. 96-3, corresponde al Comité de Ética velar por la aplicación e interpretación de las políticas sobre conducta ética y conflicto de intereses de la Secretaría General, las que comprenden todas las normas, regulaciones y prácticas de la Secretaría General sobre los deberes de los miembros del personal en cuanto acomportamiento ético y carente de conflicto de intereses con relación a la Organización.

No obstante lo anterior, éste sería un órgano asesor del Secretario General, y da la impresión de que no cabe en el ámbito de fiscalización del Comité, particularmente si el Secretario General es responsable ante la Asamblea General (Art. 109 de la Carta de la OEA) delcumplimiento adecuado de las obligaciones y funciones de la Secretaría General. Por ello, se estima que un comportamiento inadecuado del Secretario General, sólo puede ser hecho valer por parte de dicha Asamblea o bien por el Consejo Permanente, mandatado por la primera. Ello, es lo que debiera solicitarse a la Presidenta de la República en un proyecto de acuerdo, dada su responsabilidad en materia de RR.EE.

IV.- ¿Qué dijo o hizo Insulza últimamente?

1) El abanderado de la Concertación estuvo este domingo en La Pintana y Puente Alto,acompañado del Secretario General de la OEA, José Miguel Insulza, de la Senadora SoledadAlvear y del Ministro de Obras Públicas, Sergio Bitar.

En su recorrido en caravana, Frei estuvo acompañado por el Secretario General de la OEA, José Miguel Insulza, quien después de saludar a los vecinos de Puente Alto, entregó su público apoyo al abanderado del bloque de Gobierno.

Frei, Insulza, Alvear y Bitar saludaron desde un camión a los vecinos que se les acercaron a expresarles su afecto. Con ellos estuvieron también los candidatos a Diputados OsvaldoAndrade y Walter Oliva, además de la esposa del abanderado presidencial, MartitaLarraechea, quienes después realizaron un “puerta a puerta” por el sector[1].

2) A propósito de la hipotética relación de Insulza con otras campañas electorales en el continente: No he declinado mi ciudadanía chilena porque la tuve perdida durante 15 años y eso no lo dejaría jamás. Mi derecho a dar opiniones en mi país de manera respetuosa tampoco lo declinaría. Nadie me obliga a declinar y no he ofendido a nadie. Mi candidato es Frei y punto[2].

3) Era una deuda mía con Eduardo y la cumplí con creces[3].

4) El portal Terra informó el 21 de octubre pasado:

Secretario general de OEA

Insulza respalda a Frei destacando su labor como Presidente

El ex ministro envió un video desde Washington donde destaca los logros del ex gobierno del democratacristiano.

SANTIAGO, octubre 21.- El secretario general de la Organización de los Estados Americanos (OEA), José Miguel Insulza, envió desde Washington un video para expresar su respaldo a la candidatura presidencial de Eduardo Frei.

El ministro de Relaciones Exteriores bajo la administración de Frei en La Moneda, destacó que los primeros cuatro años del actual senador en el gobierno "son el periodo de crecimiento más importante del que se tiene registro en Chile".

Insulza destacó los avances del gobierno de Frei en materia de Derechos Humanos. "Los principales éxitos en castigo a los culpables fueron durante este periodo, entre ellos el arresto y juicio del ex director de la DINA, Manuel Contreras".

El ex secretario de Estado también afirmó que el hoy abanderado oficialista promovió desde su gobierno "la reforma laboral más significativa que se recuerde".

[1] http://puertomonttconfrei.bligoo.com/content/view/661399/Frei-recibe-el-apoyo-de-Insulza-Bitar-y-Alvear.html

[2] Radio Agricultura. 17 de noviembre de 2009.

[3] Idem.



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Monday, January 11, 2010

Jan 11/10 | The Revolution Was Devalued: From Mismanaged Bonanza to Lasting Ruin

Venezuelan President Hugo Chavez
Bla bla bla...pure BS on BsF

PMBComment | The Bolivarian government of once-again-devalued Venezuela insists on ignoring the forces of the market and the lessons of recent history, they turn a blind eye on massive state fueled corruption and they are demonstrably weak managers - not a particularly encouraging combination of defects to manage a complex - and surely punitive - three tier exchange rate system. But what else is new?

Devaluations without accompanying fiscal and monetary actions tend to compound macro and micro distortions and result essentially in a collective loss of purchasing power (i.e. impoverishment of the masses). Furthermore, in a country like Venezuela, in which the elites - past and present - maintain the bulk of their savings offshore there is also a temporary "wealth" phenomena which results in a widening of the income differential. This is hardly the predictable policy outcome of self proclaimed "champions of the downtrodden". Venezuelans on the street compensate ignorance of sophisticated economic matters with acute intuition on day-to-day survival and profiteering strategies (see article below), and will react according to the cards they have each been dealt by this 60%+ (weighted average) devaluation. Inflation will rise, shortages will increase, speculation will be rampant and the popularity and sustainability of the regime will continue its downward trajectory.

In this first PMBComment of 2010, I would like to reiterate that I have never believed that Venezuela's Bolivarian predicament will have a "democratic, electoral, peaceful or constitutional" - i.e. pretty - solution. My skepticism does not mean that I do not wish such a wonderful finale, it simply denotes that I base my analysis of the future on facts not on fantasies. Lt. Col. Chávez's demeanor and nonsensical ramblings as he announced the devaluation of the oxymoron Bolivar Fuerte, leads me to conclude that he shares my profound skepticism about rosy endings. This year could well mark the final bursting of the Chávez bubble at home and around the world. Scandal after scandal demonstrate that the so called revolution was a slogan, nothing but a red loincloth with which to cover one of the most amazing instances of embezzlement in the world*. Hugo Chávez has brought lasting ruin to Venezuela and he might very well pay dearly for it in this very new year. PMB

Note * In 1967 when I first came across the Guinness Book of Records, General Marcos Perez Jimenez, the late military dictator overtrown in 1958, was the record holder in the category "Largest Embezzlement". If I remember correctly the amount stolen from public coffers was US$(1958) 50 Milllion...which pales by comparison to the share of $800 Billion that Chávez, his family and cronnies have stashed away for the fast approaching rainy days.


WSJ | JANUARY 11, 2010

Devaluation Sparks Chaos in Caracas

By JOHN LYONS and DARCY CROWE

CARACAS -- President Hugo Chávez's decision to devalue Venezuela's bolivar and impose a complicated new currency regime may paper over some growing cracks in the economy, but it is also setting the stage for bigger problems down the road for the country's oil-rich nation and its populist leader.

Over the weekend, there were signs that Mr. Chávez's slashing of the "strong bolivar" currency could create as many problems as it solves in Venezuela's economy, provoking a wave of anxiety that sent Venezuelans scurrying to spend cash they feared could soon be worthless.

At Caracas's middle-class Sambil shopping mall, lines at cashiers reached 50-deep. Carmen Blanco, a 28-year-old accountant, waited to buy a 42-inch flat-screen television she doesn't need because she already has one at home.

"It doesn't make any sense to keep my savings," Ms. Blanco said Saturday. "I'd love to see how things work in a normal country."

On Sunday, Mr. Chávez vowed to fight speculation and price increases that could result from the devaluation, which raises the price of imports.

Harried by recession and sliding popularity, Mr. Chávez on Friday weakened the bolivar to 4.3 per dollar from 2.15 in a bid to shore up government finances, which have been hit by weaker oil prices, and to stimulate economic growth ahead of key elections.

In order to protect the poor, his main constituency, from the move, Mr. Chávez announced the creation of another exchange rate of 2.6 bolivars per dollar for imports of food, medicine and other essential goods. Those rates will compete with a black-market rate, where the bolivar had plunged, forcing the official devaluation. On Friday, that black-market rate stood at about 6.25 per dollar.

Economists will be watching the black-market rate in the coming days to gauge whether companies and consumers have confidence in the new currency regime.

The complicated new currency system underscores the increasingly difficult economic and political trade-offs faced by Mr. Chávez, who has utilized rampant public spending, nationalization of key industries, and currency and price controls during more than a decade in power.

Rising oil prices granted Mr. Chávez a huge economic war chest to smooth out economic problems during most of his presidency. But with oil prices off record levels, inflation soaring and the economy stuck in recession, the era of easy choices appears to be over.

"As the going gets tougher, Chávez will become more blatant about the way he exercises power, and more blasé about attacking the opposition," says Kevin Casas-Zamora, a former vice president of Costa Rica who follows Venezuela as a senior fellow at the Brookings Institution.

Mr. Chávez, 55 years old, is gambling that the benefits of a weaker currency will offset faster inflation. Finance Minister Ali Rodriguez said devaluation may add five percentage points to the 27% inflation rate -- already among the fastest in the world.

[Inflation Pains]

In Mr. Chávez's favor, a weaker currency helps narrow a growing budget shortfall by instantly giving his oil-rich government more local currency to spend per barrel of oil exported by the state petroleum company, PDVSA. That is a key consideration with congressional elections looming in September.

Mr. Chávez has watched his popularity slide amid corruption scandals, a shrinking economy, rising crime and shortages of food and electricity. Increased spending could boost Mr. Chávez's popularity.

Mr. Chávez also predicted a weaker currency would breathe life into a domestic economy that depends on imports for everything from beef and milk to cars.

The measure may buttress the banking system, which has been rocked by the closure of several institutions amid an embezzling scandal. Many Venezuelan banks head into the devaluation holding large stocks of dollars.

Holders of dollar-denominated bonds issued by Venezuela and PDVSA will be encouraged by the move. Devaluation narrows Venezuela's financing gap to around 3% of economic output from around 7%, said Boris Segura, a Royal Bank of Scotland economist.

However, the devaluation does little to assuage the deeper problems plaguing the Venezuelan economy, economists say. Devaluation isn't enough to revive the domestic manufacturing base. Few investors are willing to brave Venezuela's maze of price caps, currency controls and the ever-present fear of nationalization.

Higher inflation from the move will also keep chipping away at the value of the bolivar, even at its new peg.

What is more, by keeping a subsidized dollar rate for importing food, medicine and essential items, Mr. Chávez removes any incentive for Venezuelans to produce what they need most.

—Dan Molinksi contributed to this article.

Write to John Lyons at john.lyons@wsj.com and Darcy Crowe at darcy.crowe@dowjones.com



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