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Chavez Talks War, Devalues Currency

Over the past several years, Venezuelan President Hugo Chavez has accused the United States of plans to invade his country. Recently, he has even accused the governments of Colombia, and the Netherlands Antilles of assisting with this plan. In the last few months he has gone so far as to destroy bridges on the Colombian border, and suggests that U.S. planes were sent to Venezuela to provoke him. However, the most recent accusations were made as he announced the plan to devalue the Venezuelan currency, which could have a serious and negative impact on the Venezuelan people and the regional economy.

Last week at the Pentagon, deputy assistant secretary of defense for the Western Hemisphere Frank Mora denied that U.S. planes had entered Venezuelan airspace in the previous week, noting that Chavez’s allegations coincided with his announcement that the Venezuelan Bolivar would be devalued. Mora, Editor-in-Chief for the Brief stated, “[i]t is, in my view, [that this is] a diversion of attention away from a particularly domestic challenge . . . and trying to scapegoat the issue by once again accusing the United States government.”

Last week, Chavez accused the United States of flying military missions over his country’s airspace, the same day he announced a devaluation of the Venezuelan bolivar. The devaluation is intended to overcome a recession from the drop in oil prices, and the inflation caused by increased nationalization. However, it will undoubtedly further complicate the country’s trade relationship with Colombia as it drives up the prices of Colombian imports. This follows an order by Chavez in December to cut Colombian imports, allegedly in protest of their agreement to build U.S. military bases in Colombia.

The week leading up to the devaluation saw a rush among Venezuelan shoppers to quickly buy appliances before prices rise due to speculation, although Chavez said that he is going to “seize any businesses and shops that are participating in speculation.” In the meantime, a Chinese shipment of consumer goods is on its way to Venezuela to be sold in state-owned stores.

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