…except the president, at least for the time being
AS A solution to rampant inflation, banning price rises and jailing shopkeepers has limited potential. But President Nicolás Maduro is undaunted. In the past year Venezuela’s consumer-price index has risen by more than 50%, one of the world’s fastest rates. Basic goods such as milk, rice, cooking oil and toilet paper are rarely found on supermarket shelves. With support for the ruling United Socialist Party of Venezuela (PSUV) crumbling ahead of local elections due next month, Mr Maduro decreed on November 8th that as part of an “economic war” with unscrupulous businessmen, prices of electrical appliances were to be cut to their level of a month earlier. For good measure he had a couple of dozen shopowners and managers arrested for “usury”.
Shops were besieged by bargain hunters. In the country’s third city, Valencia, looters ransacked an outlet belonging to the Daka electricals chain. Even members of the national guard, deployed along with partisan militiamen to keep order, were filmed loading looted goods onto pickup trucks. Several days later people were still queuing in their dozens and even hundreds, in the hope of picking up a discounted television or fridge. Mr Maduro’s subsequent announcements that he would extend the decree to other goods, such as shoes, toys and mobile phones, has jangled nerves across the retail sector. The ultimate aim is to impose price controls on the entire economy, as well as placing limits on profit margins. Special courts are to be set up to try usurers.
Henrique Capriles, an opposition governor who lost to Mr Maduro by a thin and disputed margin in April’s presidential election, told Colombian television that the government’s price-slashing was a desperate attempt to avoid defeat in December. “Every time Maduro opens his mouth, investments shift to other countries,” he said. Government spokesmen said the opposition Democratic Unity (MUD) alliance was defending hoarders and speculators. The president even accused MUD leaders of infiltrating queues of would-be shoppers to foment violence. “If you go too far, Iris Varela [the prisons minister] has a cell ready for you,” he warned.
Shopkeepers are not the only nervous ones. Never far from Venezuelans’ minds are the events of February 1989, when fraying living standards and a government austerity plan led to riots and looting in which hundreds were killed. The then-president, Carlos Andrés Pérez, was fatally weakened. Today, each side accuses the other of seeking to create chaos in order to seize or retain power. Just as Pérez was brought down by manoeuvring within his own party, Mr Maduro faces dissent within the PSUV. Some in the regime, including factions of the army, might welcome a chance to “impose order” and rearrange the chairs around the cabinet table.
Mr Maduro looks increasingly out of his depth. “If I’m bringing down the price of appliances by 1,000%, that has to have an impact on November’s inflation figure, right?” he asked during a state-television broadcast at the weekend. “Or not?” The camera panned to government ministers, none of whom moved a muscle.