President Nicolas Maduro unveiled the economic measures while visiting an industrial site in the Venezuelan state of Barinas. Photo: Prensa Presidencial.
Venezuelan President Nicolas Maduro unveiled a series of economic measures on October 20 after the release of a new poll predicting a victory for the ruling United Socialist Party of Venezuela (PSUV) in December's parliamentary elections.
Among the measures are changes to Venezuela's Fair Price Law aimed at fighting speculation by private retailers, which has become rampant amid soaring inflation.
A new category of maximum price will apply to all goods and services, stipulating a 30% maximum profit for retailers determined on the basis of “real costs of production and commercialisation”.
Within this new schema, importers will be entitled to a maximum profit of 20%, while domestic producers will be allowed to take in a 30% maximum gain in an effort to stimulate national production.
By capping profits in each rung of the production chain, the government aims to halt the speculative spiral rapidly driving up the prices of everyday goods, which constantly erodes the purchasing power of Venezuela's popular sectors.
Maduro also announced a modification applying to food and health services, which the government says has been manipulated by private retailers. The new “Fair Price” registry will be determined unilaterally by Venezuela's National Superintendence of Fair Prices over the next 30 days.
To enforce the new “Fair Price” regime, Maduro also unveiled tougher punishments for speculation. These will be detected by evaluating the net income of private firms in light of new regulations on maximum price and profit.
The government will now impose steeper penalties on retailers who re-mark the price of goods, which may include jail time. The common practice of fixing prices on the basis of the parallel dollar will now be considered an offence.
Apart from measures against speculation, Maduro also announced a 30% across-the-board salary rise for public sector workers and armed forces personnel. This comes on the heels of a 30% rise in the national minimum wage announced last week.
The salary adjustment was coupled with an expansion of the national pension system, which now includes 110,000 more people under its umbrella. Pensions have been greatly expanded in recent years.
Maduro also said the ministries of industry and commerce would be fused to better coordinate efforts to combat speculation and guarantee the distribution of essential goods.
The measures come after a new poll found the PSUV leading by a wide margin in upcoming parliamentary elections this December.
Published by the private polling firm Hinterlaces on October 18, the poll found that 41% of respondents said they would vote for “Chavista” candidates who support the Bolivarian revolution backed by the Maduro government.
About 24% said they would vote for the opposition. A further 18% said they would not vote for either Chavistas or the opposition.
[Abridged from Venezuelanalysis.com.]