Maduro’s price control policies force government to stock shelves

Military promises more consumer goods after Venezuelan buying frenzy

People in Caracas have been buying appliances for the past two weeks.
People in Caracas have been buying appliances for the past two weeks.EFE

The Venezuelan government has found itself in a difficult predicament as it tries to keep consumer goods available for sale at stores and businesses which have been temporarily taken over by the state after their owners were accused of price gouging.

It all began earlier this month when President Nicolás Maduro ordered the military to take over a popular appliance chain, Daka, which has five outlets across Venezuela. Prices were dropped from 60-90 percent on all items, setting off a buyers’ frenzy at the stores and looting at one outlet. Some store managers were also arrested on charges related to consumer speculation.

The Daka chain will be run by the government through the Indepabis state agency for the time being, but since last Friday there were no more televisions, washing machines and refrigerators available one store. And no one knows when new stocks of merchandise will become available.

The Maduro government finds itself in a difficult predicament. It doesn’t want its takeover of the privately owned stores to lead to their closure — and much less on the eve of crucial December 8 local elections which are being seen as a bellwether for Venezuelans’ approval of Maduro’s eight-month old government.

According to figures from the National Statistics Institute (INE), more than 107,000 businesses have closed in Venezuela for different reasons over the past three years. The number of manufacturers has dropped by 36 percent since 1998, the INE figures show.

Nevertheless, the government has tried to play down unemployment figures by excluding those in the temporary workforce and those who take part in the so-called state-run humanitarian “missions” in poor neighborhoods.

At the end of October, the government reported that unemployment stood at 7.6 percent. But there are very few analysts who don’t believe that this figure will rise if professional business associations keep their promise to shut up shop unless the government stops enforcing price controls.

Days after the Daka takeover, Maduro signed a far-reaching consumer protection law that established profit margins businesses can make. “We will never ask a businessman to sell at a loss,” said Vice President Jorge Arreaza, in response to critics’ claims that the government is making decisions in order to kill off the private sector.

This may be the one reason that will force the government to keep stores well-stocked. “We are guaranteeing that people will continue to have jobs. Be assured that there will be consumer goods. From next weekend, there will be sales for all Venezuelans,” said Major General Hebert García Plaza, chief of the military arm that oversees the economy.

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