Despite Riots, Venezuela Will Stress Austerity

CARACAS, Venezuela —  Shaken by four days of bloody price riots that left more than 200 dead and thousands injured, Venezuelan President Carlos Andres Perez vowed Thursday to stick to the tough austerity measures that triggered the violence and called on the industrial nations to work out “decent and rational” debt arrangements with Latin America before more such social explosions occur.

Although calm prevailed throughout most of the nation, sporadic disturbances continued in the shantytown slums of western Caracas where another 20 people reportedly were killed in armed clashes with army troops and police during the night.

In one daylight confrontation Thursday, a crowd of about 100 slum-dwellers poured down a shantytown hillside, throwing rocks at waiting police who fired back with undetermined results. Occasional shots could be heard elsewhere throughout the day as police and army marksmen aimed fire at suspected snipers on the tops of buildings.

As night fell and the 6 p.m. curfew began, there were prolonged bursts of automatic weapons fire in the plush downtown district called Parque Central, where the city’s cultural center and major hotels are located.

But only a few hours earlier, as he boarded a helicopter to survey the strife-torn slums, Perez said that except for the “pockets of disorder” in the slums, the country “is returning to normal.”

By implication he blamed “remnants” of extreme left revolutionaries for some of the disorder. “These phantasmagoric remnants of subversives are still not convinced that this is a democratic country,” said Perez, who was inaugurated only a month ago.

Although many social scientists and foreign diplomats here believe the rioting and looting were leaderless and began spontaneously in response to sharp government-announced price increases, Perez insisted that at least some acts “were induced, and this has to be punished severely.”

Emotionally, he described one incident in which army Maj. Felipe Acosta Caries, 36, was killed in an ambush on the Pan American Highway near the Caracas working-class district of El Valle late Wednesday or early Thursday.

Perez said that he was “preoccupied with and ashamed of” the violence and called the heavy loss of life “an absurdity” that happened “without any understandable reason.”

Economists here said that one of the major reasons for the rioting can be traced to the fact that 40% to 50% of the people of Caracas live beneath the poverty line of 5,000 bolivars ($143) a month and simply cannot survive the price boosts.

Upon returning from his helicopter tour of the capital city, the beleaguered president vowed to stand fast with his belt-tightening measures, which included substantial increases in the prices of long-subsidized goods.

“We have to keep on with the measures that we have proposed in order to get Venezuela out of this economic situation,” Perez said.

Faced with a $33-billion foreign debt burden which his government is trying to refinance, Perez called on the major lending countries “to find decent and rational formulas in order that Latin America can respect its debt commitments.”

The alternative, he said, is to “face a grave social situation such as the one which provoked the explosion here.”

The rigid austerity measures were required as a condition of a new agreement with the International Monetary Fund, which was signed in Washington while rioters looted stores in Caracas on Tuesday. The agreement will give Venezuela an immediate $453 million with another $4.3 billion on tap over the next three years.

Meanwhile, the Venezuelan air force moved into its second day of an around-the-clock airlift of food to the capital in what may be a futile attempt to stave off severe shortages by the weekend. As many as 95% of the grocery stores and food markets in some parts of the city were destroyed by looters Monday and Tuesday, further exacerbating shortages that had been developing in anticipation of price increases.

“This weekend there may be some hunger in the city,” said an economist who has been following the crisis. He said that even before the rioting, there had been sporadic shortages of milk, rice, bread, salt, soap and toilet paper in the stores as merchants withheld goods in anticipation of higher prices.

BEHIND VENEZUELA’S UNREST--RISING PRICES

Old price New price Percent Item Quantity in dollars in dollars Change Bread 1.1 lbs. 0.51 0.86 66.7% Pasta 2.2 lbs. 0.39 0.69 77.8 Milk 1.05 quarts 0.23 0.43 87.5 Soft Drinks 8 ounces 0.11 0.17 50.0 Gasoline 1 gal. (premium) 0.16 0.30 83.3 Taxicab Avg. ride 0.11 0.22 100.0 Toilet Paper 4-roll pkg. 0.69 1.09 60.0