Maduro Strikes against Speculators, Proposes Profit Limits in Venezuela
ByEWAN ROBERTSON
Mérida, 11thNovember 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 consumers.
However these stores, including the countrys 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 continue.
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 dont 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 apackage of reforms
will come into effect this week to attempt to tackle shortages and price speculation.
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....