Caracas Chronicles

CARACAS – Amid the ongoing rout in oil prices, President Nicolás Maduro reassured Venezuelans once again that the nation is well placed to withstand the crisis. “Thanks to the revolution’s prudent stewardship of the most recent capitalist oil boom, our Macroeconomic Stabilization Fund still has $167.6 billion on hand to cushion this blow,” Maduro said, adding “the revolution finally put an end to the imperialists’ reckless vice of gambling the pueblo’s future on oil prices continuing to rise forever!”

President Maduro reasserted his year-old policy of making up much of the budgetary shortfall arising from lower oil prices by drawing down savings in the Stabilization Fund – known as FIEM, for its Spanish acronym.

“For years our opponents slammed us for saving part of the oil windfall instead of giving in to the temptation to spend it all at once. But today we see the wisdom of the Eternal Comandante’s vision. We owe it to him that we’re able to weather this storm in peace,” the president said.

But critics in the National Assembly noted that FIEM’s balance has fallen almost $30 billion from its high of $196.3 bn. in August 2014, with some worrying the government may need to draw down the fund by as much as a further $60 billion this year if oil prices fail to recover. “That would leave us with barely $100 billion in FIEM, a national disgrace!” charged opposition congressman José Guerra, who often speaks for the opposition on economic issues.

Others in the opposition slammed the Maduro Government for seeking to take credit for the fund, which was actually enacted in 1998 just before the current government took power. “Now president Maduro talks as though FIEM had been their idea,” said Julio Borges, minority leader in the National Assembly following PSUV’s landslide victory in December’s parliamentary election. “Chavistas forgot that FIEM was around long before them.”

President Maduro dismissed the claim as ludicrous, saying “of course the pelucones” a favorite term of abuse here, “enacted FIEM…when oil was at $10 a barrel! It took the visionary leadership of our Eternal Commander Hugo Chávez to stick with it when oil prices rose, bucking the temptation to just spend all of the windfall. Because just imagine what would have happened if a pelucón had been in power at that time! They would’ve spent it all…and then some! We’d be going into this recent oil slump with no savings, probably deep in debt. Who knows, people might even be talking about default at this point, ¡que Dios no lo quiera!”

Nonetheless, markets remain jittery. The bolivar slid to Bs.1.92 to the dollar in free market trading, from as little as Bs.1.44 at the peak of the oil market, with some analysts worried it may soon test the psychologically important Bs.2.00 barrier. Local market watchers worried about the spike’s impact on inflation, with some forecasting it could reach a worrying 8% at the end of 2016, as GDP growth slumps to just 1.8% this year, down significantly from the 4.7% average of the 2009-2014 oil boom years.