Nicolas Maduro Current Affairs - 2019

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Venezuela Crisis

The Venezuela crisis is deepening with passing time. European Union, Australia, US, New Zealand have recognised Juan Guaidó, the opposition leader as the president.

Juan Guaidó, the opposition leader, has said that President Nicolás Maduro is illegitimate and has asserted himself as Venezuela’s interim president.

What’s the crisis?

Both Juan Guaidó and Nicolás Maduro have debatable claims to legitimacy. As a result, the whole issue has become messy.

Venezuela has been grappling with crisis spiral for years with growing political discontent further fuelled by skyrocketing hyperinflation, power cuts and shortages of food and medicine. The recent crisis haunting Venezuela is Who is the President?

How did the Presidential Crisis begin?

On 23rd January the leader of the legislature, Juan Guaidó, declared himself acting president and said he would assume the powers of the executive branch from there onwards. This was a challenge to President Nicolás Maduro, who had been sworn into a second six-year term in office just two weeks previously. President Maduro condemned this as a ploy by the US to oust him.

Nicolás Maduro was first elected as President with a thin margin of 1.6 percentage votes in April 2013 after the death of his predecessor, Hugo Chávez. Nicolás Maduro was re-elected to the office of president for a second six-year term in highly controversial elections in May 2018, which most opposition parties boycotted.

After being re-elected Nicolás Maduro announced that announced he would serve out his remaining first term and only then be sworn in for a second term.

The National Assembly leader Juan Guaidó argues that because the election was not fair. Articles 233 and 333 of Venezuela’s constitution empower the head of the National Assembly takes over as acting president under such circumstances. Juan Guaidó has staked the claim to be the acting president, as he was the head of the legislature.

Month: Categories: InternationalUPSC

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Petro: Venezuela becomes first country to launch virtual currency

Venezuela become first sovereign country to officially launch its own cryptocurrency called Petro backed by oil, gas, gold and diamond reserves to circumvent US-led financial sanctions. Venezuelan President Nicolas Maduro has claimed that the pre-mined cryptocurrency Petrohas raised US $735 million on the first day of its pre-sale.

Key Facts

The Petro aims to help Venezuela to advance in issues of monetary sovereignty, to make financial transactions and overcome financial blockade. It is based on blockchain technology. Its value will be pegged to price of barrel of Venezuelan oil from the previous day. Government will accept Petro as a form of payment of national taxes, fees, contributions and public services

Venezuelian government will issue 100 million coins of Petro of which 38.4 million is available for pre-sale and 44 million coins will be offered in Initial Coin Offerings (ICO) in March 2018. The rest 17.6 million coins will be retained by Venezuelan Superintendency of Currency and Related Activities (SUPCACVEN).

Petro Gold

With encouraging response to Petro, Venezuelan government is planning to launch another cryptocurrency based on gold called Petro Gold which will be backed by gold. It will be more powerful and strengthen the Petro. But Petro Gold will, be not the first cryptocurrency based on gold. Many such currencies are traded in market including one called RMG created by The Royal Mint in Britain.

Comment

The success of Petro depends a lot on how global crypto-community responds to its offer. Moreover, governments and regulators across the globe have already started warning investors against the financial and legal risks associated with digital or crypto-currencies. However, Venezuela is successful in managing digital assets, it will be able to circumvent sanctions imposed on it and it could open new ways for other sanctioned countries to be financially stable despite the curbs.

Background

Venezuela, an OPEC member has one of the largest oil reserves in the world. It has over 300 billion barrels oil reserves — largest in the world. The socialist country earns 95% of its forex from oil exports is going through one of the biggest financial crisis in its history. With new official cryptocurrency, Venezuela hopes to overcome economic blockade imposed by United States which has resulted in 99% depreciation of value of its fiat currency Bolivar.

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