Venezuelan President Nicolas Maduro on Monday raised the minimum wage by 300 percent to 18,000 bolivars per month, around $6.70, as part of routine wage hikes in an economy suffering from annual inflation approaching 2 million percent.
Nicolas Maduro announced the move in a speech in Caracas. Economists had low expectations for the speech given that the leftist president has repeatedly balked at making significant changes to the country’s dysfunctional socialist system.
Sworn in for a six-year term on January 10th 2019, Nicolas Maduro has faced growing international sanctions since winning re-election last May in a vote widely considered fraudulent. This has cut Venezuela off from foreign financing and left his government with few friends abroad.
Critics in the United States and Latin America, as well as political opponents at home, have called Maduro a dictator whose failed state-led policies have caused Venezuela’s worst ever economic crisis. Nicolas Maduro counters that he is victim of a U.S.-led “economic war” aimed at ousting him from power.
The size of the economy has halved during five years of recession, annual inflation is nearly 2 million percent, and widespread shortages of food and medicine have spurred three million Venezuelans to emigrate since 2015.
In August, Maduro’s government introduced several economic measures to try to tackle the crisis, devaluing the bolivar currency and lifting the minimum wage and taxes. But economists say the measures were too limited to have a significant impact.
As Maduro’s second term got underway, the leader of the country’s opposition-led Congress, Juan Guaido, said last week he was willing to replace Nicolas Maduro with the support of the military. Several government officials have said Guaido should be arrested for treason and on Sunday he was briefly detained by intelligence agents.