Venezuela to spend $2B on Programs
Caracas, Venezuela –– Venezuela will spend $2 billion on job programs, health care and education to compensate for a 30 percent drop in the value of its currency, President Hugo Chavez said.
Chavez acknowledged in a television address Thursday night that suppressing inflation would be difficult this year after the government abandoned a fixed-currency exchange system on Feb. 13. The Venezuelan bolivar then plunged in value against the U.S. dollar.
Chavez, elected in 1998 with an overwhelming mandate to help the poor, said controlling inflation was one of his key accomplishments. Last year, it was about 12 percent, the lowest level in more than a decade.
Venezuela's economy has suffered because of slumping global demand for crude oil. Oil generates 40 percent of government income and 80 percent of export revenue for this impoverished South American country.
Half of the $2 billion pledge will be spent building homes for more than 130,000 families and repairing schools and hospitals. Another $900 million will fund education, food programs and health care, Chavez said.
The government also will invest $190 million supporting small and medium businesses by, among other things, granting them loans under preferential financial conditions.
That $190 million will come from central bank foreign exchange gains and should create about 250,000 jobs this year, Chavez said. The government estimates unemployment at about 12 percent.
Chavez again promised to moderate his verbal attacks on critics such as the news media, Roman Catholic Church and business leaders. The opposition blames his combative, leftist rhetoric for spooking investors and prompting the flight of hundreds of millions of dollars in capital before the currency was floated.
When that exchange system was implemented, Chavez also announced a 22 percent budget cut and 7 percent public spending cut because of a projected $11 billion deficit.
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