Venezuela expands crackdown on prices

Venezuelans mobbed appliance and other stores Monday to cash in on price cuts ordered by the leftist government as local elections loom, AFP reports. President Nicolas Maduro, who ordered the crackdown over the weekend against inflation he says is running at 54 percent, appealed for calm. He accused the opposition of trying to provoke violence at stores sanctioned for allegedly raising prices illegally. So far 28 people have been arrested, and warrants were issued for 10 more. Three stores have been occupied by Venezuelan authorities. The measure initially affected appliance stores but over the weekend Maduro, successor to the late firebrand Hugo Chavez, expanded it to textiles, footwear, toys, hardware and automobiles. He also said he would use special powers that he is seeking from the National Assembly to impose caps on private sector profits. "I am going to ask for norms and the maximum penalty allowed under the constitution for these types of crimes because we have to stabilize the functioning of the economy," he said Sunday. The government intervention comes less than a month before municipal elections that are seen as a key test of strength six months after Maduro's contested election to replace Chavez. Under Maduro, besides soaring inflation, shortages of basic goods are widespread. And frequent power outages have drawn attention to the oil-rich country's fraying infrastructure. Rampant crime and corruption also have eroded a social fabric already stressed by Venezuela's deep social and political divisions. The leftist government's latest confrontation with the private sector began Friday with Maduro's announcement that he had ordered "the occupation" of the Daka chain of electronics and appliance stores, and the sale of all its inventory to the public "at a fair price." "Let nothing be left on the shelves, and nothing in the warehouses," he said. Crowds quickly formed outside stores around the country, as word spread. National Guard troops were posted at the doors to control the crowds. But in Valencia, the country's third largest city, people smashed windows and tried to make off with goods. Maduro also appealed for calm Saturday night, noting the incident in Valencia and urging the public not to be provoked by "infiltrators." At other stores, people formed long lines and slept in the streets to keep their places as troops took names and allowed people in to shop in small groups. Venezuela's government imposes strict currency controls and the country imports most of what it consumes. It makes a limited number of dollars available for imports at 6.3 bolivars to the dollar. But on the parallel gray market rate, the dollar costs eight times as much. Business people complain they cannot get enough dollars at the official rate and are forced to buy them on the black market to buy imported goods, which causes prices to soar. But the government says it does provide enough dollars and accuses some in the business sector of speculation. "Maduro's measure is good for us, but I suppose its bad for the businesses," said Ana Garcia, a young office worker who had spent two hours in a line Monday morning outside a store in eastern Caracas. "If store owners really did import their products with dollars bought at the official rate, and then priced their goods at the parallel rate, then they are making a mockery of the people," she said. As she spoke, shoppers passed carrying plasma TVs, microwaves and washing machines purchased at less than half price. Maduro said Monday that the opposition held two meetings to infiltrate lines outside stores and "generate violence." He urged pro-government groups to help monitor stores. Members of a consumer rights group called Indepabis, accompanied by security forces, inspected appliance stores to make sure prices had in fact been lowered. In some cases store owners were arrested, news reports said. "This is legalized looting," said a man as he walked out of a store toting a television set that he bought for 18,000 bolivars, down from 37,000 bolivars last week. Jorge Roig, head of a national business federation, Fedecamaras, acknowledged that cost of imported goods are overpriced, but said the focus should be on those with preferential access to dollars at the official rate. "Those who overprice are those who have the luck to be given dollars. They have to look at who the lucky ones are," he said on Televen.