Venezuela’s socialist government has arrested more than 100 “bourgeois” businessmen in a crackdown on alleged price-gouging at hundreds of shops and companies since the weekend, President Nicolas Maduro said on Thursday.
“They are barbaric, these capitalist parasites!” Maduro thundered in the latest of his lengthy daily speeches. “We have more than 100 of the bourgeoisie behind bars at the moment.”
The successor to the late Hugo Chavez also said his government was preparing a law to limit Venezuelan businesses’ profits to between 15 percent and 30 percent.
Officials say unscrupulous companies have been hiking prices of electronics and other goods more than 1,000 percent. Critics say failed socialist economic policies and restricted access to foreign currency are behind Venezuela’s runaway inflation.
“Goodyear has to lower its prices even more, 15 percent is not enough, the inspectors have go there straightaway,” Maduro said in his evening address, sending officials to check local operations of the U.S.-based tire manufacturer.
Since the weekend, soldiers and inspectors have gone into 1,400 shops, taken over operations at an electronics firm and a battery-making company, and rounded up a handful of looters.
The move – Maduro’s boldest since taking office in April – is reminiscent of the dramatic governing style of Chavez, who nationalized swaths of the OPEC member’s economy during his 14-year socialist rule.
Like Chavez, Maduro says he is defending the poor.
The inspections have shaken Venezuela three weeks before local elections that his opponents are casting as a referendum on the 50-year-old former bus driver. Maduro has made preserving Chavez’s legacy the mainstay of his government and has been matching his former mentor’s anti-capitalist rhetoric.
“It’s time to deepen the offensive, go to the bone in this economic war,” he said.
Only a few of the hundreds of shops targeted with surprise inspections had been found to be offering “fair prices,” officials say. Some businesses are voluntarily lowering prices – or staying closed – in case the inspectors come.
“We’ve reduced everything by 10 to 15 percent, but it’s not fair. I can’t make a profit now,” said the owner of one small electronics store, who asked not to be identified.
“I agree they should go for the big fish, the real speculators, but they risk hurting us all.”
Venezuela’s official inflation, 54 percent annually, is the highest in the Americas.
Maduro said the forced price discounts should lead to negative inflation of 15 percent in November and 50 percent in December – forecasts that brought immediate mockery from critics on Twitter.
CROWDS AT SHOPS
Around Caracas and other major cities, crowds of shoppers are flooding electronics, clothing and other outlets where price cuts are anticipated. There has been some violence.
The Venezuelan Observatory of Social Conflicts reported 39 incidents of looting or attempted looting since Friday. “We ask officials to moderate language in speeches that could be interpreted as calls to violence,” the local non-governmental organization said.
The rhetoric on both sides is becoming more strident.
The campaign to reduce prices and blame entrepreneurs may play well with Maduro’s power base among the poor and could help unite factions within the ruling Socialist Party.
Given Venezuelans’ anxiety over inflation, and scarcities of basic goods from toilet paper to milk, Maduro was risking a backlash at the December 8 nationwide municipal elections.
Plenty of Venezuelans have applauded his measures, saying price hikes were out of control, while others have expressed fears that Maduro could be uncorking dangerous forces.
Critics say the moves do not tackle the roots of Venezuela’s economic malaise, like an overvalued bolivar that forces many importers to buy black-market dollars and then pass those costs on to consumers.
The government has ordered local telecom companies to block various websites showing the bolivar at 10 times the official rate of 6.3 to the greenback on the illegal market.
Prominent pro-opposition columnist Nelson Bocaranda said Maduro’s economic policies were “chillingly similar” to those of Zimbabwean President Robert Mugabe. The African leader also used security forces to enforce a price crackdown in 2007.
Opposition party Justice First accused the state of hypocrisy, saying its stores were also hiking prices unjustifiably.
An imported sandwich toaster, for example, that costs $34.99 in the United States, was selling at a fivefold markup of 1,100 bolivars ($175 at the official exchange rate) in state supermarket chain Bicentenario, it said.
“This shows the economic chaos Maduro has got us in where prices have no logic. The government created this monster and now tries to pretend it will control it, but Venezuelans cannot be deceived by this electoral show,” Justice First said.
Like Chavez on several occasions, Maduro is seeking decree powers from Congress, which granted preliminary approval on Thursday. He says he needs the Enabling Law to fix the economy, but critics accuse Maduro of simply amassing power.