Venezuela's president admits economy has failed

Caracas (AFP) –


Under-fire Venezuela President Nicolas Maduro admitted his economic model has "failed" in the wake of food and medicine shortages and public service paralysis, such as Tuesday's power failure that affected 80 percent of Caracas.

"The production models we've tried so far have failed and the responsibility is ours, mine and yours," Maduro told his ruling PSUV party congress, as Venezuela looks to tackle chronic inflation the International Monetary Fund predicted would reach one million percent this year.

"Enough with the whining... we need to produce with or without (outside) aggression, with or without blockades, we need to make Venezuela an economic power," he added late Monday, with the country grappling with a four-year long recession.

"No more whining, I want solutions comrades!"

The socialist government has over recent years nationalized various industry sectors such as cement and steel, expropriated hundreds of businesses, including supermarket chains, and lately brought in the army to control street markets to guard against rising prices.

It has also fixed prices on various goods and imposed a monopoly on foreign exchange.

"I estimate it will take about two years to reach a high level of stability and see the first symptoms of new and economic prosperity, without for one second affecting social security and protection," added the president.

Maduro's economic recovery plan includes increasing oil production to "six million barrels a day by 2025 or before." Oil production has crashed from a high of 3.2 million barrels a day in 2008 to a 30-year low 1.5 million this year.

As well as the IMF's mind-boggling inflation prediction, it says Venezuela's GDP will plummet 18 percent this year, meaning a fourth consecutive year of double-digit falls.

The economic crisis has hit so hard that the public transport system has almost ground to a halt, with the government and local councils offering free rides in unsafe and uncomfortable pick-up trucks -- branded "kennels" by users -- after many bus service providers couldn't afford to keep their vehicles on the road.

Maduro, who blames Venezuela's woes on an "economic war" waged by the United States, called on PSUV supporters to help kick-start production and resist US "aggression."

Washington has imposed financial sanctions against Maduro and top government officials, as well as the state-owned oil company PDVSA. Venezuela's crude oil sales account for some 96 percent of the country's revenue.

Industry is operating at just 30 percent, perhaps best reflected by the farming sector which supplies barely a quarter of national consumption having provided 75 percent a few years ago, the National Farmers Federation said.