Venezuela Appliances Crackdown Spurs Uncertainty

Even by Venezuela’s volatile standards, it’s been a difficult few days.

Basic staples such as flour and vegetable oil have grown scarce throughout the country, the currency is plunging in a thriving black market and inflation that’s already among the highest in the world is accelerating.

Amid so much unease, President Nicolas Maduro has settled on radical, and some say self-defeating, solutions. In recent days he’s ordered the military to take over appliance stores, which he has told to slash prices, leading bargain hunters to form block-long lines across the country.

The populist measures seem designed to help Maduro’s party get over the hump of next month’s mayoral vote, its first electoral test since the president narrowly defeated opposition leader Henrique Capriles in April. But while the measures apparently are popular with voters, Maduro runs the risk of cannibalizing an already damaged economy.

Some analysts are now asking whether the late President Hugo Chavez’s socialist revolution has reached a point of no return, where what little private investment is left vanishes completely and Maduro has no choice but to fully embrace a statist model.

“It’s a very high-risk strategy,” said sociologist David Smilde, who has spent part of the past two decades teaching in Venezuela and is now a senior fellow at the U.S. think tank the Washington Office on Latin America. “If this week, it’s electronic stores, then the automotive sector, and you keep doing this for the four weeks until elections, you could do some real damage to the economy.”

It’s hard to overstate the grim predicament the government and country face.

Although Venezuela claims the world’s biggest proven oil reserves, the nation of 30 million is suffering shortages of everything from electricity to auto parts to medical equipment.

Nearly 73 percent of Venezuelans say they’re pessimistic about their country’s prospects, 20 points more than when Maduro was elected by a razor-thin margin that the opposition still disputes, according to a poll taken last month by the Venezuelan firm Datanalisis that was reported by local media. Another 67 percent see the country’s political situation as unstable.

Maduro has responded by appearing daily on the media to announce the confiscation of businesses he accuses of helping wage an “economic war” on Venezuela. Congress is expected to approve a bill as early as this week granting him special decree powers, which would give him authority to expand the crackdown.

This article appeared in print on page 3 of the November 14th, 2013 edition of Hamodia.