Finance minister chides Venezuela's dollar "nymphomaniacs"

CARACAS Wed Feb 13, 2013 10:41am EST

1 of 3. A worker arranges Colgate products on a shelf at a supermarket in Caracas February 12, 2013. Venezuela's latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. On Friday Venezuela devalued the bolivar by 32 percent, its fifth such move in a decade. For U.S. companies that do substantial business in the country, such as Colgate-Palmolive Co, Avon Products Inc, Procter & Gamble Co and Kimberly-Clark Corp , that means their earnings in bolivars are now worth less when converted back to dollars.

Credit: Reuters/Jorge Silva

CARACAS (Reuters) - President Hugo Chavez's finance minister lashed critics of last week's controversial Venezuela currency devaluation as "cretins" on Wednesday and chided Venezuelans for behaving like "nymphomaniacs" towards the U.S. dollar.

A 32 percent devaluation of the bolivar currency, from 4.3 to 6.4 to the dollar, announced last Friday came into effect on Wednesday amid national controversy over the rights and wrongs of the fifth such measure in a decade of socialist economics.

Implementing the devaluation is the biggest test yet for the leadership of Vice President Nicolas Maduro, who has been running Venezuela since Chavez's disappearance from public view for cancer surgery in Cuba two months ago.

Experts from within the leftist government as well as from Wall Street all saw the devaluation as necessary to correct economic distortions. Yet it is widely unpopular on the street, where many Venezuelans fear they will pay for it with higher local prices.

There has been unusual criticism from some within "Chavista" circles. And opposition parties have mockingly accused the government for implementing its own version of an old-style, right-wing International Monetary Fund economic "package".

Finance Minister Jorge Giordani, a 72-year-old hard-left academic who used to be nicknamed 'the Monk', rejected those arguments.

"If it's a package, where's the privatization? Where's the worsening of labor laws? Where's the interference of the IMF? That's absurd," Giordani said.

"They're questioning our use of the word adjustment. They are real cretins! If someone is 100 kg overweight, he'd better adjust or he'll have a stroke or heart attack," he added in an interview with state-run newspaper Caracas City.


Despite 14 years of Chavez's socialist rule, Venezuela remains a highly materialistic, Westernized society. Those who can, try to save money in U.S. dollars, though ten years of currency controls have made finding greenbacks an odyssey for many.

"There's a culture, a popular fantasy over the dollar," Giordani said, noting that no foreign currency was needed to benefit from government social programs offering free education and schooling, or subsidized housing.

"You don't even need to have seen a dollar in your life, but ... we all have this insatiability for the dollar, like a dollarized nymphomania. It's a sickness."

The devaluation will increase the OPEC nation's local currency revenue from oil sales, and thus, insists Giordani and other officials, enable it to continue prioritizing social programs for its 29 million people.

It will also, however, increase the price of imported goods while the black market rate for U.S. dollars is more than three times the new official level.

"The question is not whether the devaluation is necessary or not. It is. The problem is why after 14 years it continues to be the only real economic policy within the framework of developing a socialist model," pro-government analyst Nicmer Evans wrote.

"The revolution has had extraordinary success in the political and social sphere, but in the economy it has not advanced one centimeter."

On blogs and websites, some government supporters have been increasingly pining for Chavez, who has not been heard from nor seen in public since his December 11 cancer surgery in Havana.

That was his fourth operation since mid-2011 for the disease first diagnosed in his pelvic area.

Officials have given little new information about Chavez's state in the last couple of weeks, after previously expressing optimism he was recovering. They did, however, angrily deny a report in Spain's ABC newspaper that Chavez had lost his ability to speak permanently, and would never return to rule.

"That human rubbish should respect our Commander Chavez, who is making a dignified battle for his health. He will live and he will conquer!" Foreign Minister Elias Jaua wrote on Twitter.

Should the 58-year-old Chavez not recover, Maduro, 50, is his preferred successor and would almost certainly run for the presidency. He is likely to face opposition leader Henrique Capriles, the 40-year-old governor of Miranda state.

(Additional reporting by Mario Naranjo; Editing by Daniel Wallis)

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