By Humberto Márquez
CARACAS, Mar 4 1996 (IPS)

Venezuelan President Rafael Caldera, who had both negotiated and resisted a loan agreement with the International Monetary Fund (IMF), announced he was ready to adopt the “hard measures” recommended by the organism.

Caldera appeared ready to climb on the IMF bandwagon while he still has the chance, as the nation desperately needs the fresh funds, international support and economic reorganisation this would offer.

He finally gave in to the idea, “as the nation is going through an extraordinarily delicate moment and we need to confront difficulties which are both economic, fiscal, and of all other natures,” at the annual parliamentary budget meeting.

He is expected to peovide details of the measures on Mar.12.

The IMF is prepared to lend the nation three billion dollars, giving a green light to other multilateral agencies and a guide for private investors, helping the government to adopt the economic guidelines they have so far been lacking.

Both political and social strata have become impatient with the leader’s intransigence, and increasing numbers of former presidential candidates are calling for his resignation.

The negotiators have tired of the wrangling, the balance of power in parliament has changed, and the number of people claiming IMF help is not needed is swelling.

The ruling Convergence Party implied it had considered and rejected the IMF option.

“Venezuela does not need to go to the IMF, as it has 10 billion dollars of reserves, which is enough. What we need it a coherent programme,” reiterated former planning minister Miguel Rodriguez Monday.

Rodriguez designed the 1989 agreement with the IMF, under President Carlos Perez, and he insisted the nation needed fiscal discipline, rapid privatisation and new petrol prices.

The hardest measure to bring in immediately, for both population and government, would be the petrol price increase – the IMF claims it should be upped four-fold to wipe out the fiscal deficit.

Venezuela has the cheapest petrol prices in the world, at three US cents per litre, because of massive State subsidies, undertaking to keep the price down “until the people can afford to pay for it,” according to Caldera.

The flipside of the issue is that this will affect the cost of public transport, run by private companies, raising the ghost of the “Caracazo” disturbance of Feb. 1989, when the capital was sacked by a mob protesting over just such price increases.

The nation has suffered three years of recession, with increasing unemployment and yearly inflation of 73 percent, and both the business sector and the Catholic church have warned of a possible “social explosion.”

Economic stagnation has been reinforced by exchange controls imposed in June 1994 which have resulted in the rationing of hard currency, the development of a parallel market where the national currency has plummeted, and accelerated inflation and deinvestment.

Meanwhile the impoverished population are calling for the government to “do something” to control the situation, while the economic groups are urging the government to drop populism and the control policy, going back on the road to economic liberalisation.

The government is moving very slowly on all fronts, adding to the frustration and alarm of the private sector.

When asked to sum up the future of the nation in ten words, Carmelo Lauria, former banker and out-going leader of the Chamber of Deputies used only three; “I’m very scared.”

The president called for “understanding” from the working classes after Congress turned down a decree for a 155 dollar minimum salary as insufficient, undertaking to change the social security and severance pay systems.

Caldera called for Congress “solidarity” on these issues after he suspended his trip to negotiate with the IMF because of internal problems in parliament.

Venezuelan Congress is made up of five groups, none of which has an absolute majority.

Caldera was supported by a three party alliance until the Movement to Socialism recently formed a new alliance with the government’s most staunch opponents, the christian socialist COPEI and Radical Cause.

This new coalition, though covering a wide range of opinions, is agreed on the need for electoral, legal, economic and social reforms.

All parliament agree they need to back the government initiatives, but they also want to end the current paralysis of the nation.

When the mission to the IMF in Washington was suspended last week the government provoked a rush on the dollar, a loss in value of the Venezuelan foreign debt and the renunciation of two of its leading negotiators.

Now that parliament is getting restless Caldera finally seems ready to jump on the bandwagon.

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