World News
Venezuelan Socialist Maduro Seeks to Raise US Dollars with Appeal to Greed
CARACAS – When Jose Humberto Vivas needs to trade US dollars for Venezuelan bolivars, he usually flouts the nation’s rigid exchange controls by turning to illegal currency traders.
But last week, Vivas put a few hundred dollars in his wallet and headed to an exchange house regulated by Venezuela’s socialist government, lured by the seemingly improbable prospect of an official rate that is more inviting than the black market rate.
“I haven’t been here in years,” Vivas said as he stood in line outside Italcambio, a normally lifeless exchange house in downtown Caracas protected by tinted windows and an armed security guard who inspects customers’ IDs.
“There’s a long wait here . and it takes days to get the money transferred to your account, but it might be worth it,” said Vivas, who makes a living from selling dairy products.
Little noticed amid the turmoil unleashed by the opposition’s renewed push to oust President Nicolas Maduro, Venezuela’s central bank devalued the country’s currency on Jan. 28 by 50 percent, eclipsing the parallel black market rate.
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A girl sitting on a full gas container waits for her family to gather before they walk home after buying cooking gas in the Petare slum of Caracas, Venezuela, Sunday, Feb. 10, 2019. Residents pay 3 U.S. cents for each container of natural gas, which is subsidized by the government. (AP Photo/Rodrigo Abd)
The government now buys $1 for 3,303 bolivars, while the informal market buys them at 3,120 bolivars, according to the website DolarToday. It is the first time the official exchange rate has been higher than that of the black market since currency controls were put in place more than a decade ago, analysts said.
The controls were implemented in 2003 by Hugo Chavez, the late president who initiated Venezuela’s socialist system, and have frequently made the simple task of exchanging money into a stressful ordeal that involves searching for illegal currency dealers, logging into websites banned by the government, and sending wire transfers to foreign banks.
But as Maduro’s government runs out of hard currency amid an onslaught of international pressure and economic sanctions, it is tacking in a markedly capitalist direction, encouraging Venezuelans to sell their greenbacks to the local financial system.
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Pro-government supporters cheer as some hold up new banknotes and patriot identification cards during a rally in Caracas, Venezuela. Venezuela’s central bank devalued the country’s bolivar currency on Jan. 28, 2019 by 50 percent, eclipsing the parallel black market rate. (AP Photo/Ariana Cubillos, File)
In a statement issued Jan. 29, the Central Bank described the devaluation as an economic stabilization measure aimed at controlling hyperinflation by undermining the black market.
Analysts called it a desperate gambit to raise hard cash in a country now beset by severe U.S. oil sanctions that could cost the government up to $11 billion in revenue over the next 12 months. Without one of its most important sources of income, Venezuela will be hard-pressed to purchase food and other imports, potentially worsening shortages and deepening its economic collapse.
Russ Dallen, CEO at Caracas Capital Markets, said dollars could now come into Venezuela’s empty state coffers through state-regulated wire transfers from the estimated 3 million Venezuelan migrants who have fled the country’s instability. Up until now, they have mostly used black market traders to send an estimated $1 billion a year to loved ones, but could be enticed into the official system if the official exchange rate stays favorable.
“They are going for the diaspora dollars,” Dallen said of Maduro’s administration.
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Devalued Bolivar bank notes and coins, taped together, serve as makeshift rope at a roadblock set up by anti-government protesters in Caracas, Venezuela. Forced to meet interest payments on the few remaining loans and bonds the government hasn’t yet defaulted on, the government must finance its huge budget deficit by printing even more bolivars, further accelerating prices.
The government is also attempting to gain more dollars from rich Venezuelans and a few straggling tourists who use their foreign credit cards at the official exchange rate, something that would have been unfeasible a few weeks ago.
But the Strategy is Controversial.
Maduro’s opponents argue that selling dollars to the government is tantamount to funding repression. Others say the move will not eliminate the longstanding spread between the two rates, which has often allowed richer Venezuelans to take advantage of the distortion and pocket juicy profits.
Asdrubal Oliveros, an economic consultant based in Caracas, predicts the amount of money the Venezuelan government can raise through currency markets will fall short of what it needs to remedy its financial woes. Strict requirements mandated by U.S. sanctions could also force some foreign banks to stop funding credit card transactions in Venezuela altogether, as Bank of America recently announced.
The government and its state-owned entities currently owe around $150 billion to creditors around the world, while the country’s foreign currency reserves have fallen to just $8 billion.
Forced to meet interest payments on the few remaining loans and bonds the government hasn’t yet defaulted on, the Maduro administration must finance its huge budget deficit by printing even more bolivars, further accelerating prices.
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Venezuela’s central bank has been selling its artisan gold directly to Turkish refiners, according to two senior Venezuelan officials.
Last year, inflation in the South American country hit 1 million percent.
“Hyperinflation is a fiscal problem,” Oliveros said. “If you don’t control your expenditures and reduce deficits, you will not be able to tackle it.”
Meanwhile, other obstacles could limit the central bank’s efforts to raise dollars.
Currently, it takes four days — an eternity in today’s Venezuela — for the bolivars purchased at state-regulated exchange houses to be deposited into a person’s account. Cash exchanges have been impossible for months due to shortages of bolivar bills.
“Reliability, speed and convenience carry a lot of weight in currency exchanges,” Oliveros said.
Last week, dozens of people trying to sell small amounts of dollars and euros at the official rate were turned away from exchange houses after trading was suspended due to a glitch with the central bank’s currency platform.
“It’s so frustrating,” said Adolfo Estanford, a lawyer who had hoped to get $20 worth of bolivars. He said he needed the money for food and transport.
“Everything here is so improvised,” he said. “I feel like I’ve been made a fool of.”
By Manuel Rueda
The Associated Press
World News
Marine Le Pen’s National Rally Wins the First Round in France 2024 Election
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Exit polls in France showed that Marine Le Pen’s right-wing National Rally (RN) party made huge gains to win the first round of election on Sunday. However, the final outcome will depend on how people trade votes in the days before next week’s run-off.
Exit polls from Ipsos, Ifop, OpinionWay, and Elabe showed that the RN got about 34% of the vote. This was a big loss for President Emmanuel Macron, who called the early election after his party lost badly in the European Parliament elections earlier this month.
The National Rally (RN) easily won more votes than its opponents on the left and center, including Macron’s Together group, whose bloc was predicted to get 20.5% to 23% of the vote. Exit polls showed that the New Popular Front (NFP), a hastily put together left-wing alliance, would get about 29% of the vote.
The results of the exit polls matched what people said in polls before the election, which made Le Pen’s fans very happy. But they didn’t say for sure if the anti-immigrant, anti-EU National Rally (RN) will be able to “cohabit” with the pro-EU Macron in a government after the runoff election next Sunday.
Voters in France Angry at Macron
Many French people have looked down on the National Rally (RN) for a long time, but now it is closer to power than it has ever been. A party known for racism and antisemitism has tried to clean up its image, and it has worked. Voters are angry at Macron, the high cost of living, and rising concerns about immigration.
Fans of Marine Le Pen waved French flags and sang the Marseillaise in the northern French district of Henin-Beaumont. The crowd cheered as Le Pen said, “The French have shown they are ready to turn the page on a power that is disrespectful and destructive.”
The National Rally’s chances of taking power next week will rest on what political deals its opponents make in the next few days. Right-wing and left-wing parties used to work together to keep the National Rally (RN) out of power, but the “republican front,” which refers to this group, is less stable than ever.
If no candidate gets 50% of the vote in the first round, the top two candidates and anyone else with 12.5% of the registered voters immediately move on to the second round. The district goes to the person who gets the most votes in the runoff.
France is likely to have a record number of three-way runoffs because so many people voted on Sunday. Experts say that these are much better for the National Rally (RN) than two-way games. Almost right away on Sunday night, the horse trade began.
Macron asked people to support candidates who are “clearly republican and democratic.” Based on what he has said recently, this would rule out candidates from the National Rally (RN) and the hard-left France Unbowed (LFI) party. Leaders on the far left and the center left both asked their third-placed candidates to drop out.
Minority government
Jean-Luc Melenchon, leader of France Unbowed, said, “Our rule is simple and clear: not a single more vote for the National Rally.” But the center-right Republicans party, which split before the vote when some of its members joined the RN, didn’t say anything.
The president of the RN party, Jordan Bardella, who is 28 years old, said he was ready to be prime minister if his party gets a majority of seats. He has said he won’t try to make a minority government, and neither Macron nor the communist NFP will work with him.
“I will be a “cohabitation” Prime Minister, respectful of the constitution and of the office of President of the Republic, but uncompromising about the policies we will implement,” he said.
A few thousand anti-RN protesters met in Paris’s Republique square on Sunday night for a rally of the leftist alliance. The mood was gloomy.
Niya Khaldi, a 33-year-old teacher, said that the RN’s good results made her feel “disgust, sadness, and fear.”
“This is not how I normally act,” she said. “I think I came to reassure myself, to not feel alone.”
Election Runoff
The result on Sunday didn’t have much of an effect on the market. In early Asia-Pacific trade, the euro gained about 0.23%. Fiona Cincotta, a senior markets expert at City Index in London, said she was glad the outcome “didn’t come as a surprise.”
“Le Pen had a slightly smaller margin than some of the polls had pointed to, which may have helped the euro a little bit higher on the open,” she noted. “Now everyone is waiting for July 7 to see if the second round supports a clear majority or not. So it does feel like we’re on the edge of something.”
Some pollsters thought the RN would win the most seats in the National Assembly, but Elabe was the only one who thought the party would win all 289 seats in the run-off. Seat projections made after the first round of voting are often very wrong, and this race is no exception.
On Sunday night, Reuters reported there were no final results for the whole country yet, but they were due in the next few hours. In France, exit polls have usually been very accurate.
Voter turnout was high compared to previous parliamentary elections. This shows how passionate people are about politics after Macron made the shocking and politically risky decision to call a vote in parliament.
Mathieu Gallard, research head at Ipsos France, said that at 1500 GMT, nearly 60% of voters had turned out, up from 39.42% two years earlier. This was the highest comparable turnout since the 1986 legislative vote. It wasn’t clear when the official number of people who voted would be changed.
World News
Pakistan Seeks US Support for Counter-Terrorism Operation Azm-e-Istehkam
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(CTN News) – Pakistan’s Ambassador to the United States, Masood Khan, has urged Washington to provide Pakistan with sophisticated small arms and communication equipment to ensure the success of Operation Azm-e-Istehkam, a newly approved counter-terrorism initiative in the country.
The federal government recently approved the reinvigorated national counter-terrorism drive, which comprises three components: doctrinal, societal, and operational.
Ambassador Khan noted that work on the first two phases has already begun, with the third phase set to be implemented soon.
Addressing US policymakers, scholars, and corporate leaders at the Wilson Center in Washington, Khan emphasized the importance of strong security links, enhanced intelligence cooperation, and the resumption of sales of advanced military platforms between Pakistan and the US.
He argued that this is crucial for regional security and countering the rising tide of terrorism, which also threatens the interests of the US and its allies.
“Pakistan has launched Azm-i-Istehkam […] to oppose and dismantle terrorist networks. For that, we need sophisticated small arms and communication equipment,” said Ambassador Khan.
Pakistan–United States relations
The ambassador observed that the prospects of Pakistan-United States relations were bright, stating that the two countries “share values, our security and economic interests are interwoven, and it is the aspiration of our two peoples that strengthens our ties.”
He invited US investors and businesses to explore Pakistan’s potential in terms of demographic dividend, technological advancements, and market opportunities.
Khan also suggested that the US should consider Pakistan as a partner in its diplomatic efforts in Kabul and collaborate on counterterrorism and the rights of women and girls in Afghanistan.
He stressed that the bilateral relationship should be based on ground realities and not be hindered by a few issues.
“We should not base our engagement on the incongruity of expectations.
Our ties should be anchored in ground realities, even as we aim for stronger security and economic partnerships. Secondly, one or two issues should not hold the entire relationship hostage,” said the ambassador.
World News
China Urges Taiwanese to Visit Mainland ‘Without Worry’ Despite Execution Threat
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China has reassured Taiwanese citizens that they can visit the mainland “without the slightest worry”, despite Taiwan raising its travel alert to the second-highest level in response to Beijing’s new judicial guidelines targeting supporters of Taiwanese independence.
Last week, China published guidelines that could impose the death penalty for “particularly serious” cases involving “diehard” advocates of Taiwanese independence.
In response, Taiwan’s government urged the public to avoid “unnecessary travel” to mainland China and Hong Kong, and raised its travel warning to the “orange” level.
However, Zhu Fenglian, a spokeswoman for a Chinese body overseeing Taiwan affairs, stated that the new directives are “aimed solely at the very small number of supporters of ‘Taiwan independence’, who are engaged in malicious acts and utterances”.
She emphasized that “the vast majority of Taiwan compatriots involved in cross-strait exchanges and cooperation do not need to have the slightest worry when they come to or leave mainland China”.
“They can arrive in high spirits and leave fully satisfied with their stay,” Zhu added.
What’s Behind The China-Taiwan Tensions?
The tensions stem from the longstanding dispute over Taiwan’s status. Mainland China claims Taiwan as part of its territory and has refused to rule out using force to bring the democratic island under its control, while Taiwan sees itself as a sovereign state.
Beijing has not conducted top-level communications with Taipei since 2016, when the Democratic Progressive Party’s Tsai Ing-wen became Taiwan’s leader. China has since branded her successor, President Lai Ching-te, a “dangerous separatist”.
“The DPP authorities have fabricated excuses to deceive the people on the island and incite confrontation and opposition,” Zhu said in her statement.
Despite the political tensions, many Taiwanese continue to travel to mainland China for work, study, or business.
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