People in Venezuela do things for themselves absent from government-issued currencies

Source: DW

Venezuelans launch new currencies amid economic crisis

March 2, 2018

A rural community and a Caracas slum have created their own currencies in response to Venezuela’s rapid inflation. Proponents have pinned their hopes on these local-based alternatives, but critics say they aren’t viable.

Venezuela Bolivar (Reuters/U. Marcelino)

The rural city of Elorza, in the southwestern state of Apure, is known as the “capital of Venezuelan folklore” and on Monday, it inaugurated its yearly festivities for the patron Saint Joseph with a fresh new currency.

Locals and out-of-towners will be permitted to use the city’s namesake currency, “the elorza,” to buy artisanal goods, food, drinks, to attend traditional music concerts and bet on cockfights, among other activities. Money will flow on the city’s yearly festival, despite the deep economic crisis that plagues the South American country.

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The mayor of Elorza, Solfredis Solorzano, a member of the governing PSUV party, introduced the currency measure so that the country’s hyperinflation and shortage of bolivares, Venezuela’s official currency, would not be an impediment to carrying out the celebrations. The local press announced that 50,000 and 100,000 elorzas would be available to exchange for bolivares.

The controversial experiment has met some resistance. In an interview with Venezuelan online media outlet, the head of the Finance Commission of the Venezuelan Parliament and opposition politician, Jose Guerra, denounced that if Solorzano was not punished for his unilateral currency action, it could lead the way for other communities to launch their own money, without any kind of official backing.

“This is a crime. No one can launch a new currency, except the Venezuelan Central Bank,” said Guerra, adding that the Central Bank’s own inability to provide the economy with “the required number” of bolivares was fostering this kind of illicit activity.

Venezuela has launched new banknotes to keep up with rapid inflation – New banknotes in Venezuela (Reuters/M. Bello)

‘Socialist’ alternative currencies

The premise for communities issuing their own currency in Venezuela comes from one of Hugo Chavez’s strongholds in Caracas. In 2017, the civil association Fuerza Patriotica Alexis Vive (FPAV) was inspired by the late president’s “socialist commune” concept to establish and mint a new currency in the community of El Panal 2021. Located in the 23 de Enero (23 of January) slum, the new currency was named “the panal” and the issuing bank “BanPanal.”

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The people of Venezuela have a completely different idea about how to take care of their own needs compared to people living in America. The people in Venezuela do things for themselves absent of the government and absent from government-issued currencies. They create their own currencies, they grow their own food, and they produce what they need for themselves at the local level in their own communities removing themselves from government control. Creating local currencies keeps wealth in their communities and operates independent of the bolivar currency, so it doesn’t matter if the bolivar deflates because of a US-backed currency war on the bolivar. The people of Venezuela are not going to be held hostage to multi national corporations and predatory capitalism.

Viva Venezuelan people!





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