[News] Maduro Strikes against Speculators, Proposes Profit Limits in Venezuela

Anti-Imperialist News news at freedomarchives.org
Tue Nov 12 13:59:46 EST 2013

  Maduro Strikes against Speculators, Proposes Profit Limits in Venezuela


By Ewan Robertson

Mérida, 11^th November 2013 (Venezuelanalysis.com) -- President Nicolas 
Maduro has proposed setting maximum profit margins for businesses across 
the Venezuelan economy following the discovery of "grotesque" 
overpricing in the electric appliance sector.

The speculative practices were revealed last week after authorities 
inspected the pricing structures of chain stores selling electronic and 
household appliances. Like many businesses in Venezuela, these stores 
import goods from abroad using dollars granted by the government at the 
fixed rate (US $1 = 6.3 bolivars) and then sell these goods to local 

However these stores, including the country's largest electronic 
appliance chain Daka, were found to be marking-up products by up to 
1200% from the import cost, charging consumers what President Madruo 
called "grotesque prices".

Officials cited one example of a washing machine which cost 4,200 
bolivars to import at the official exchange rate being offered for sale 
at 47,000 bolivars. The current monthly minimum wage is 4,137 
bolivars, including food tickets.

In response, on Friday Maduro announced the temporary occupation of the 
Daka chain and the enforced sale of all its goods at a "fair price" 
related to their import cost. Other electronics chains such as JVG also 
had to open their doors and sell their products at a significantly 
reduced price.

Various managers of the Daka chain were arrested for their alleged role 
in the affair. Control of the stores will be returned to company owners 
once the goods have been sold, although regular price inspections will 

The announcement resulted in long queues outside stores as consumers 
sought to take advantage of the lower prices, with the National Guard 
and other authorities maintaining order.

However damages and looting were reported to have occurred in one Daka 
store in the city of Valencia on Saturday morning when some people 
forced entry into the shop. The Attorney General condemned the incident, 
and reported that arrests had been made.

The government has informed citizens that those who bought domestic or 
electric appliances at the speculative prices have the right to their 
money back.

"Each person who was robbed by those grotesque prices will get their 
money back, which belongs to the working person," President Maduro said 
from the presidential palace in Caracas yesterday.

Maduro also proposed that if granted temporary enabling law-making 
powers by parliament he will implement a limit on profit margins on 
sectors across the Venezuelan economy.

"Economic freedom means that I produce and sell with a minimal profit 
and I respect the consumer. Furthermore I receive the dollar that the 
state gives me, I bring the product and I sell it at a fair price, and I 
don't add an extra 1000% of grotesque profit," he explained.

Further, the Venezuelan head of state proposed tougher sanctions for 
those engaged in price speculation using state granted dollars, 
including prison sentences, saying that such individuals "are robbing 
the people".

In the televised address to the nation, the president also confirmed 
that a package of reforms <http://venezuelanalysis.com/news/10151> will 
come into effect this week to attempt to tackle shortages and price 

These include a beefed-up price inspection force, the new state-run 
National Corporation of Logistics and Transport to aid the supply of 
goods to factories and stores, and the new National Centre of Foreign 
Commerce to better coordinate the allocation of foreign currency to 
businesses and individuals.

*Economic problems continue*

Venezuela has been suffering some economic difficulties this year in 
part related to the "black market" dollar, which unofficial currency 
websites say has risen in value to almost ten times the official rate.

Other problems include shortages in a few basic foodstuffs and other 
goods, with the scarcity index 
<http://venezuelanalysis.com/analysis/10071> for October at 22.4%, the 
highest so far this year, and the annual inflation rate for Nov. 2012 -- 
Oct. 2013 at 54%. The minimum wage has increased 45% since April.

The government argues that this situation is the result of an "economic 
war" being waged by opposition-aligned business sectors in conjunction 
with actors opposed to the Bolivarian revolution in Colombia and the 
United States.

Officials say that Venezuelan business federations are behind strategies 
to hoard or deviate products to provoke shortages, while speculating on 
prices to drive inflation and cause discontent.

They also argue that unofficial currency websites such as dolartoday.com 
speculate on the value of the bolivar to create pricing distortions in 
the economy and to try and provoke a further devaluation of the official 

Yesterday Maduro argued that the pricing practices of electronic 
appliance chains form part of this "economic war".

"There aren't economic reasons for the phenomena of shortages and vulgar 
price increases that we have in the real economy. They're not economic, 
it's not because of the lack of granting foreign currency," he argued.

In October the government's Vice Minister for the Economic Area, Rafael 
Ramirez, said that this year the government is granting 2.6% more 
dollars to the private sector for imports than last year, when there 
were fewer shortages.

"Parasitic capitalism is responding to its class nature. It is a chain 
reaction directed by [Venezuelan business federations]...against the 
country's economy to try and destroy the Bolivarian revolution, roll 
back the inclusive model and [re]capture political power for the factors 
that led this country for 100 years" argued Maduro.

Some economists and critics of the government have disputed this thesis, 
arguing that current economic problems are due to imbalances caused by 
interventionist policies such as currency and price controls. They 
suggest that macroeconomic monetary and fiscal solutions are required.

Opponents of the Maduro presidency also blame "government mismanagement" 
for failure to resolve the country's economic problems. "Maduro, 
desperate because of his failure and incapacity to direct the country, 
takes measures that don't solve the economic crisis," tweeted opposition 
leader Henrique Capriles on Saturday.

Published on Nov 11th 2013 at 8.54pm

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863.9977 www.freedomarchives.org
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